Negotiations Training

The Growing Role of China in the Business World:
Negotiating with Chinese Counterparts

Despite many of the political controversies involved, many North American businesses are opting to work more closely with Chinese enterprises in various business arenas. Whether utilizing a Chinese manufacturing facility to manufacture and assemble various components on a consumer product or working with a call center to provide remote technical support, business dealings with the Chinese are on the rise.

If you are unfamiliar with many of the negotiating practices of the Chinese, it is helpful to get a better feel for what you should expect when negotiating with internal or external counterparts. Given the many intricacies involved, it is helpful to truly dive into this topic. However, we offer a few simple tips to help make this process easier to deal with during your next Chinese negotiation.

• Relationships Go a Long Way - Relationships are very important and will play a role in how much cooperation you may receive during a negotiation. Some believe that there is a virtual bank of goodwill that each person has with another party. The greater your relationship, the larger your "balance" may be. Requesting favors from another party during a negotiation may cause you to make "withdrawals" from your account. Focus your requests on those areas that may be more difficult to normally negotiate.
• All Negotiations Should be Confirmed in Writing - This is a standard caveat that applies to negotiations in just about any country. However, when negotiating with a Chinese businessman, written confirmation will help eliminate and miscommunication and will confirm agreements.
• Tone is Important - Negotiations should not be approach in an adversarial manner. Utilize a respectful demeanor and tone of voice to maintain good will with the other party.
• Realize that Contracts are Sometimes Flexible - In Chinese culture, some contracts are followed explicitly and letter by letter. Others are seen as more of "guiding documents" rather than firm agreements. Know what is to be expected of any contract you are negotiating. The stronger your relationship with the other party, the more likely the contract will be followed as written.
• Learn to Exercise Patience - The negotiation process will not move along as quickly during a Chinese negotiation as it will in the United States. It is prudent to exercise patience and be willing to wait for a negotiation to unfold.
• Remember to be Respectful - We mentioned this before. Politeness and respect are important, even when called upon to be a bit persistent in achieving a particular goal. What you don't want to do is damage a relationship as it may make future negotiations more difficult.