Online
Marketplace

Auto
Parts & Accessories

Baby
& Children's Products

Computer
Products

Electronic
Components

Electronics

Fashion
Accessories

Garments
& Textiles

Gifts &
Premiums

Hardware
& DIY

Home
Products

LED
& Solar Products

LEDs
& Optoelectronics

Machinery
& Parts

Medical
& Health Products

Mobile
Electronics

Security
Products

Sports
& Leisure

Telecom
Products

Underwear
& Swimwear

Trade Shows

China Sourcing Fairs

Electronics & Components

Fashion Accessories

Garments & Textiles

Gifts & Premiums

Hardware & Building Materials

Home Products

Mobile Electronics

Security Products

Underwear & Swimwear

Global Sourcing Fair

Mobile & Wireless

India Sourcing Fairs

Garments & Accessories

Korea Sourcing Fairs

Electronics & Components

Trade Show Center

China Int'l Optoelectronic Expo

China (Shenzhen) International Brand Clothing &
Accessories Fair

IIC-China

Shenzhen
Int'l Machinery Manufacturing Industry Exhibition

Magazines

Magazines

Sourcing Reports

Other
Services

Product
Alerts

Sourcing News & Advice

Private Sourcing Events

Buyer Support

About Us

Reliable exporters: find them and meet them

Path: Sourcing News & Advice
>> Import from
China Advice >> Negotiating in a slowing
China

Sourcing News & Advice
Home

Industry
News

Surveys

Import from China
Advice

Ask
the Experts

Buyer's
Guide

Negotiating in a slowing China

Posted: November 14, 2014

by Andrew Hupert

Will weaker Chinese growth strengthen your negotiating
position?

The Chinese economy has been slowing for the
last few quarters, and whether it is a controlled application of bureaucratic
brakes or the start of a skid into a recessionary ditch, some international
business people see China’s deceleration as an opportunity. International
negotiators who believe that a slowing Chinese economy gives foreigners more
leverage are, however, over-optimistic at best. There may be isolated cases
were individual private Chinese businesses will be motivated to sweeten their
offers in the face of a domestic slowdown, but it would be unwise to assume that
Chinese counterparties are all feeling desperate. Westerners who calculate
that the bureaucracy is going to become more welcoming to foreign businesses
need to realize that a couple of years of slower growth will probably make their
challenges in Beijing more severe.

Three things western negotiators need to know
about Chinese counterparties in a slow growth environment

There’s a filter bubble. Chinese bureaucrats and SOE bosses
don’t see reality the same way American and European MNC managers do. Within
China the official party line is that everything is going according to plan.
It’s rebalancing and the expected results of a successful anti-corruption
campaign. Everything is fine. Don’t assume that your Chinese counterparty is
as nervous or anxious as you would be at the start of a sustained recession.
He may still feel that time is on his side.

It’s your fault. Official Chinese media has a stock
response to any and all bad news in the Middle Kingdom – blame outside agents.
From the protests in HK to border disputes with neighbors to generalized
economic trends, it’s a safe bet that foreigners are being pinned with
responsibility for anything that goes wrong. Even if your direct counterparty
doesn’t blame you personally, he is subjected to persistent official whispers
that Westerners are responsible for his problems. Don’t position yourself
as a white knight when he’s hearing that you are a black hand.

Fundamentals haven’t changed that much. Unless you are
dealing with a Tier 3 property developer or one of the big state-owned banks,
the chances are your counterparty isn’t feeling too much pain yet. That may
change in the long run – but it may not. Let’s be honest – the Western
business press loves the China bear story. The headlines you are reading
sometimes make it seem like the Chinese economy is in a lot worse shape than
it is. The dour mainstream view is something along the lines of 4% growth by
2020. That’s not bad by international standards, and most Chinese managers
still like their odds in the domestic market. The Beijing bureaucracy is as
difficult as it’s ever been. Few people in Chinese business or the Party see
global integration as a solution – more often it’s considered part of the
problem.

Propaganda is never the whole truth.

There are two opposing themes being pushed, and
reality lies somewhere between the extremes. The official Chinese media is
saying that everything will be great as long as people trust the center and
guard against corruption and foreign influence. The mainstream international
business press loves blood in the streets – and if there’s a China spin on the
headline, so much the better.

Western negotiators feel bruised and aggrieved
by what they consider to be unfair treatment at the hands of Chinese regulators,
but some American and European businessmen are being too quick to declare that
the tables are turning. If your China business plan makes sense, then push for
the best deal you can get and capitalize on the recent slowdown if it works in
your situation. Don’t go in assuming that Chinese counterparties are going to
be desperate, conciliatory or see you as a solution.

Andrew
Hupert runs ChinaSolved.com, an online
platform that helps the international business community achieve greater success
when doing business in China. He also writes ChineseNegotiation.com.
He can be reached at [email-masked].

Read more Sourcing
News & Advice

RSS Feed

Subscribe to get the latest China sourcing news and
advice

Ask the Experts

Feedback

Send us your comments and suggestions, or share your sourcing
experiences.

Find Suppliers Online

Browse Product Categories

New Products

Top
Products

Top China Suppliers

Source by Country

Top 20 Products by Industry

Wholesale Directory

Wholesale Products

Español

Buyer Tools

Download Sourcing e-Magazines

Buy
Sourcing Reports

Monthly Sourcing Highlights

Sourcing News & Advice

Magazines
Mobile App

Global
Sources Direct

Supplier Tools

Reach Qualified Buyers

Sign up for a Free Trial

Become a Verified Supplier

多渠道曝光/推广

供应商成功故事

免费网上广告注册

高效参展

About Us

About Global Sources

Our
Services

Our
Quality Commitment

Buyer Testimonials

Investor Relations

Videos

Meet Suppliers Face-to-Face

Sourcing
Fairs

Private Sourcing Events

Buyer Support

What
Every Buyer Needs to Know

Ask the Sourcing Experts

Learn to
Source from China

Help

User
Guide

Help
& FAQ

Contact Global Sources

Site
Map

Follow Us

Facebook Twitter Google + LinkedIn RSS

Global Sources Sourcing Sites: GlobalSources.com | CantonFair | 环球资源内贸网

Global Sources Other Country Sites: Hong Kong

Global Sources Management Site: 世界经理人

Global Sources eMedia Sites: EE
Times – Asia | EE
Times – India | EDN
Asia | IIC-China

電子技術設計 | 电子工程专辑 | 電子工程專輯 | 电子技术设计
| 国际电子商情 | 电子圈微报 | 元器件规格书网

Copyright © Trade Media Holdings Ltd. Copyright ©
Trade Media Ltd. All rights reserved.

Terms of Use Privacy Policy Security Measures IP Policy