Special Things to Consider When Negotiating in China
By Eric Castro
Chinese people arrive on time for meetings and other occasions (and sometimes 5 or 10 minutes in advance). It is considered rude to arrive late for engagements of any kind. Traveling from one point to another in many cities in China can be extremely time-consuming due to traffic delays. Make sure you leave early enough to make it to your destination on time.
Take time to get to know your counterparts. You will need to establish a high level of trust in your partner. Business style in China relies on personal relationships based on trust rather than legalized, impersonal obligations. Don’t rush things.
China is a developing country, but be prepared for prices which in some cases exceed those for comparable goods and services in your local place. Doing business in China is not cheap. Accommodation, meals, entertainment, rent, business services and other necessities are expensive. Look into the costs before you go.
Physical conditions in China cities can be difficult sometimes, with heat, cold, dust, crowding, noise, traffic, and their sheer size. Be prepared for this. China best foreign hotels afford a wonderful refuge from the stress of such an environment, as well as providing business centers with modern computer and communication facilities.
For serious transactions and information-gathering, you will require a guide or an interpreter. (These may be provided by your China hosts for sightseeing and shopping, but for business you should find your own.) China based consultants can help you in this respect. Local guides can also provide important cultural guidance on an on-going basis as they accompany you during your stay.
People from China use intermediaries to make personal introductions, to carry bad news and to settle disputes. It is possible to carry on an acrimonious argument without ever facing your opponent. Everything goes back and forth through a third party who communicates each side’s position without displaying the unpleasant emotions that may be involved (though these emotions may be reported). Result: the hard feelings and embarrassment that accompany a dispute and even threaten the underlying relationship are mitigated. This is a highly civilized system - explore it.
Entertaining is a very important part of doing business in China. You should be prepared to spend more money on entertainment than would be normal at home. For your China counterpart, entertainment is an important step in getting to know you and in establishing good relations - long before a letter of intent or contract is signed. In China, this entertainment commonly involves banquets, speeches, whiskey from China (look out!) and karaoke.
Banquets are an integral part of deal-making in China. On these occasions, you can’t go wrong by taking cues from your counterpart from China. Sit where your host suggests; try the food that is offered; make a reciprocal speech and toast. If karaoke is part of the evening, gather your courage and sing your favorite song. Your host will enjoy it! If you don’t know any songs, learn the words to a couple of popular English songs before you leave for China. (’Red River Valley’ is a great choice, since the melody is exactly the same as a very popular Chinese folksong. Your Chinese hosts will be stunned that you know Chinese folk-music, and in English translation to boot!).
Foreigners can expect a lot of goodwill from the Chinese. Your China friends may make disparaging remarks about China “backwardness”, but don’t take this as an invitation to add your own criticisms. If you can think of a positive thing to say on such occasions, it will be appreciated.
This article was researched and produced by Posicionarte for China Trading Company , 2007
Author Bio:
Eric Castro Mattas, is chief editor of Posicionarte researching and producing articles for China Trading Company. If you need products from China please visit http://www.chinatrading-company.com
June 27th, 2007 at 3:14 pm
Chinese arriving on time? I must be living in the wrong part of the country then.
June 28th, 2007 at 4:43 am
Government officials in China make a point of arriving late for meeting and then bustle in telling everyone “Sorry, very busy, very busy….’ Then they leave as soon as possible.
People in private companies in China don’t go to the same extreme but they definitely do not arrive early. That makes them seem too eager, and weak.
Apart from that all the rest is on the money.
July 6th, 2007 at 3:15 pm
Hmm, yes. I do agree and grand entrance does help. I will not reveal all my secrets & tricks, but it does help to have a tranlator.
Helps enlarge your following and also helpful to avoid or solve any misunderstandings. Its a good buffer.
As for being late. I think in Beijing at least, everyone is more relaxed. They are also getting used to the impossible traffic.
July 10th, 2007 at 4:08 pm
I agree with Doc Ben. A translator is a must. Also, I tell everyone to master a couple of Chinese phrases to say in the beginning of the meeting. The purpose of this is twofold. One it shows your hosts that you have taken the time to study their culture and two they will be unsure of how much of what they are saying you will understand and they will not try as blatantly to pull the wool over your eyes.