Pathways to successful business negotiations in China
Print Edition
ANY business looking to settle in China can be confident that they will be involved in many a Chinese business deal. Whether you experience any success is, among other things dependent on your ability to negotiate, Chinese style. It is a different ball game entirely to the cold-faced, briefcase-clutching, pen-in-hand, over-in-an-hour negotiations that many Westerners are used to.
It is a game that needs to be played, and you will be expected to play well. Maxxelli Consulting offers some steps so that you can enter into negotiations in China with confidence.
Building Relationships
The contract is only a small component of Chinese business deals and is by no means the crucial element. It is the overall relationship that drives the current and future business relations between two parties. You should strive to establish relationships with business partners that are firmly grounded in respect, reciprocity and trust. It takes time to create these conditions, but to do business without them is unthinkable.
Care for your connections. It is not enough to simply build an initial relationship with a client and then assume the hard work is over. Especially in China, once relationships have been forged, it is vital that you maintain and nurture them. Whether this means going for the occasional tea with your business partner or going for repeated cocktails with them in smart bars, you need to demonstrate your dedication.
Put in the time to show your clients that you value the relationship you have with them, and maintain regular contact with them. As a result, negotiations will be a far more pleasant experience.
Tap into what is of value to your business partner. A useful ruse is to ascertain and provide services that will be invaluable to your business partner, and more importantly, to their family.
Once we know these, we are well placed to offer further advice and services. They may not be directly related to the business deal, nay they may be utterly unrelated, but they are certain to be appreciated. If you take the time to build strong, personal relationships, then exchanges like these will come naturally.
Exercise due diligence. Pay heed to who exactly will be sitting on the other side of the table, and try to determine why they are sitting there. The usual company checks used by default in the West simply will not suffice in China, and you need to be wary of companies who are there purely to harvest information.
Use your local Chinese network to find out more information about prospective business partners. Learn about their financial status, their prospective plans and their background in the industry.
What to expect
There are a multitude of clever tactics that local businesspeople will use in negotiations. This is when you really need to be switched on to what is going on around you, and be prepared for any curveballs that might come your way. The following three are some common ploys that we have witnessed being used during negotiations.
Do not let them wear you out. Negotiations take a long time. Chinese businesspeople will notice any weaknesses you exhibit, so if you are visibly tiring of abstract negotiations, they will play on this and use it to their advantage.
It is always astute to turn up to meetings prepared for a long and drawn out affair, and armed with discreet sustenance for when times get tough.
Maintain your earlier stance to prove the fortitude of your conviction. Stay firm, and keep your resolve. Make sure they know that once an agreement has been made, it is final and no longer negotiable.
Saving the best bits until last. In the West, patience is a virtue. In Chinese business negotiations, it is nothing short of a necessity. Not only will you need patience to endure and prevail through the previous two frustrating gambits; you also need such restraint to ensure you do not act prematurely on anything. Negotiating is a very delicate affair, and brashness can really damage your position. One of the worst things you can do is dive straight in with what you want to gain from the meeting, as this will likely displease your potential Chinese partner and put them off further negotiations.
Let meetings progress naturally, because the real meat of the meet will almost always come at the very end.
In our next article, we’ll consider tactical strategies on how to play the game from your side of the negotiating table.
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