Negotiating with Chinese clients

As you would have read in our previous post, conducting business with Chinese clients is usually a respectful, delicate and lengthy process. In this post, we’re discussing the finer pointers of negotiation and some tips how to drive a positive outcome for you and your business when dealing with Chinese clients.

In Western business culture, most business relationships start and finish the same way. Person A approaches Person B wanting to do business. Person A makes Person B a proposal. Person A and B discuss the details in a step-by-step manner. Person A and B agree and sign a contract. Person A and Person B begin their business relationship.

 

 

However, negotiating in China has been described as running a race without knowing where the finish line is. Once you understand the roots of Chinese culture, it’s easier to understand the differences in basic cultural values and ways of thinking.

For example:

• Westerners tend to be more individualistic, whereas the Chinese are more collective
• Westerners emphasise equality while the Chinese value hierarchy
• Westerners are fact-orientated while the Chinese focus on relationships
• Westerners look for results while the Chinese believe the way and the means are more important than the end
• Westerners value open debate until a consensus is reached, while the Chinese are diligent during the back-and-forth of a bargaining process

Do your research and entrust a local intermediary

You wouldn’t go into a meeting in your own country unprepared, would you? The exact same thing rings true for China; in fact, it’s a totally different ball game. Understanding the context and environment in which business takes places is critical. Local staff, local contacts and external (intermediaries) are indispensable – a capable team can help to bridge cultural differences and help interpret and evaluate the nuances of the negotiation process in a Chinese context. With their local connections, these intermediaries can also develop useful back channels that can smooth negotiations.

Manage expectations

As we mentioned in our previous posts, the Chinese place great importance on the concept of ‘face’. They don’t want to ‘lose face’, and they also don’t want to cause you to ‘lose face’ … they’ll rarely disagree with you in meetings – they will emphasise positivity and cooperation. Just because you’re being treated with respect and kindness, don’t assume you’re on your way to sealing a deal. Great effort must be made to understand this aspect of Chinese culture.

Keep your emotions in check

Just because things aren’t going your way, keep your emotions in check. Offering unrealistic terms, threatening to walk out of negotiations, or behaving in a bull-at-the-gate manner, are frowned upon in China. Be patient, remain dignified and show respect. It’s also unwise to act on impulse.

Be patient

Consensus is valued, where all parties come to an agreement rather than having decisions made unilaterally or by a majority. Therefore, if you’re negotiating a deal, expect a lengthy round of bargaining and discussion. If an agreement is taking longer than expected, be firm about your limits and objectives, but show your willingness to work with your counterparts to find a mutually agreeable solution.

 

Have you negotiated a business deal with Chinese clients? Were there any barriers in the negotiations and how did you overcome these? Please share your experiences below.