Doing business with associates in other countries can be challenging at the best of times. Many experts tout obvious words of advice such as carrying plenty of business cards and wearing a conservative suit. But more tailored advice is needed when working in a place with a completely different business culture. China, in particular, has become such a large trading partner to many western countries and if working there, it’s important to gain an understanding of how they do business. Using this understanding when negotiating can help you achieve the outcomes you’re looking for.
Personal etiquette is always an important thing to master when doing business with other cultures. However, etiquette is not the silver bullet – a much more important factor is knowing the true values of the culture and where they have come from. If you understand, appreciate and respect this, it will shine through in any business dealing or negotiation.
It’s a good idea to learn some phrases for politeness and to show that you have made an effort. This will earn you some respect, which is a big theme in Chinese culture. For the more detailed discussions, hiring a seasoned translator is vital and can mean the difference between success and failure. A good translator will ensure that your words are passed on using the appropriate cultural context, which can make or break a relationship.
The end to end negotiation process as we know it in the western world is very different to how it is done in China. For this reason, it’s important to leave your preconceived notions of the negotiation process at the door. Instead, accepting that the process is often a much longer, drawn-out affair is the first port of call. Patience is certainly a virtue. Once you have accepted this, you can work on building trust slowly – the Chinese don’t value paper contracts nearly as much as they value long-term relationships, which can only be built on trust and respect over time.
Another key aspect of Chinese culture is the issue of ‘losing face’. The Chinese do not like to lose face in public and will always do what they can to portray themselves and even their counterparts in a good light. This is a good quality but can also have an adverse effect if you bank on their compliments and fall into a false sense of security. In fact, this is often a strategy that Chinese negotiators will use when dealing with their western counterparts. Whilst we may be used to a more direct and perhaps brash approach, the Chinese can be much more passive at the table. The reality is that any discrepancies or issues they have will be voiced behind closed doors so always remember this when conducting negotiations.
In China, it is common to be negotiating with a number of parties, rather than just one person (the key decision maker, as we would normally call them). Decisions are often clouded in secrecy and it may take some effort on your part to determine who is actually the real key decision maker. This is a cultural trait but also a good tactic when it comes to negotiation. It is also one of the reasons that negotiations can be such a drawn out process – new decision makers and bosses will be introduced and consulted, usually objecting to previously agreed terms in order to commence renegotiation.
Therefore, it is important that you have a clear strategy when negotiating in China. Knowing exactly what outcome you are looking for is the first step. Having a backup list of demands that may not be as important, but playing to the fact that they are crucial will help you gain leverage and also show a high level of compromise (and hence respect) when you back down on many of these so-called high priority demands.
Exercising patience will yield the greatest results and ensure you manage expectations along the way. When a new term is introduced, don’t be tempted to blow a fuse, simply take it back to the team and consider how to renegotiate. Controlling your emotions is paramount and by playing by the same rules, you will not only save yourself the stress but also gain a reputation for being a worthy negotiator.
This may sound like an unnecessary complex array of games, but it is merely a different cultural process. The better versed you are in the Chinese negotiation process and the more you understand how their culture dictates negotiation tactics, the better your presence of mind and usually the better the outcome.
See 10 things I wish I had known before coming to China.