Tips for Negotiating in China - China Business Connect

China is the fastest growing economy in the world and the second biggest economy in the world after US.

China?s burgeoning economic prowess makes it a lucrative country for trade and consequently, businesses around the world are endeavoring to cement economic ties with this economic behemoth. In China, business deals are made or broken on the whims of the negotiation styles of the businessmen or business delegations. Far too many businesses have failed to take advantage of the lucrative opportunities which China offers, owing to the lack of proper understanding of how to negotiate with the Chinese. In this article, we will address this issue and highlight some of the proven techniques to successfully negotiate with the Chinese.

In order to understand the underlying principles behind some of the techniques which are going to be highlighted later, we need to first understand the cultural patterns of the Chinese people. The Chinese culture is in stark contrast to the American and the European cultures where individuality, egalitarianism, quick meetings, informality, direct information exchange, aggression, short term business relationships and impatience are the important traits of the society. Conversely, negotiating with the Chinese people require an approach which fosters collectivism, holistic thinking, long term business relationships, formality, indirect information exchange, endurance, long meetings and social capital. Due to these basic differences, negotiating with the Chinese businesses can be an uphill task for businessmen if they do not conform to these cultural traits.

Now that we have discussed the basic underlying cultural patterns and differences, let us highlight some ways which can be instrumental in successfully negotiating with the Chinese. One of the foremost things to remember while negotiating with the Chinese is to pay attention to GUANXI, which refers to one?s social connections in the society or the social capital. The Chinese pay close attention to their friends and close associations. They remember favors and return them. Thus it is important to pay attention to this element while negotiating with the Chinese and create deep associations with them in the first place.

Secondly, it is very important to have an intermediary if you expect to strike a business deal with your Chinese counterparts. It is rare for the Chinese to open up to strangers. Thus, it is important to have someone, from among their own ranks, as an intermediary to convene the negotiation process, bridge the differences and build trust between the parties.
Moreover, it is imperative that you establish interpersonal harmony with the Chinese through multiple home visits, dinners, souvenirs etc. The Chinese do not rush into business deals like the Westerners before completely trusting their counterparts. Thus it is of extreme importance to build trust with the Chinese people.

Another thing to remember is to think in a holistic manner, the Chinese always think about the bigger picture and consider all the aspects of any negotiation process. So expect the negotiation process to take a long time to complete.

Then, there is the trait of displaying thrift. The Chinese expect concessions from both the sides sitting on the negotiation table so you can expect a lot of haggling while negotiating with the Chinese.

One of the most important things to remember is that the Chinese prize their social standing and as such can go to extreme lengths to save face, thus if you insult them, even unintentionally, or renege on your commitment, this would be tantamount to a disaster while negotiating with the Chinese.
Lastly, the Chinese display endurance in their negotiations. Consequently you should prepare yourself to reciprocate this endurance and be prepared for lengthy, multiple meetings where loads of questions would be thrown at you. Make sure that you do your research thoroughly and answer their questions in a satisfactory manner.

If you are looking forward to meet your Chinese counterparts for the sake of a business meeting, or for any other social event, make sure you keep these points in mind in order to have a fruitful time at the negotiating table with the Chinese people.

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