Negotiation with Chinese: Practical Guide for Western Managers

Even so Chinese businessmen are more aware of international rules and etiquette, in recent years, the cultural differences will still remain as a major barrier to successful business with Chinese during the next century at least. Many managers believe no specific attention is needed for doing business, and actually the capability to understand and manage cultural relationship is defined by the Cultural Intelligence (CQ – which is a fairly new concept defined by C. Earley in Harvard Business Review Oct.2004 (http://hbr.org/2004/10/cultural-intelligence). The lack of cultural awareness has been the root cause of many failures in China and is often attributed to unfair business but rarely to behavioral differences. We expect below to give some basic principle of negotiations with Chinese that would greatly help getting successful deals oversea.

Preparation:

  •  Date: Avoid main Chinese holidays like national day, autumn festival and Chinese New Year. –
  • Language: Learn some basic Chinese, always very appreciated, few examples: Nihao (means hello, pronounced “nee haow”), Xiexie (means thanks, pronounced “she-yeh she-yeh”),… Google Translate gives good pronunciations for learning purpose. –
  • Topic: Read recent positive news from China (achievements, sports, industrial development): this is very valuable during dinner to show that you know about China, and gives your Chinese partners a sense of proud and happy. It is better to avoid controversy topics, don’t speak about national politics with Chinese, and especially China’s own problems like pollution or corruption.
  • Energy: Be prepared for long meeting, especially for difficult and complex subjects, better to start the meeting well rested without too much jetlag.

Meeting:

  • Schedule: Be punctual to meeting, if late, inform your contact as soon as possible. –
  • Agenda: As always, it is better to prepare and propose the meeting agenda well in advance, avoiding surprises and increasing meeting efficiency. – Gift: Always positive to prepare gifts. At minimal, one for the host, alcohol or chocolate is a good pick. Gift values should be similar in price than they are offering (reciprocity concept). The gifts shall be wrapped in red or gold paper preferably and black, white shall be avoided. –
  • Naming: When calling your Chinese contacts: Mr./Ms. + last name or Last name + first name, if they have an English name, it is normally enough by itself, no need for the last name. –
  • Business card exchange: During the first contact, hold with 2 hands, take time to read the title while holding it, importance is a bit over exaggerated, but still better to do. Try to give more attention on the highest ranked host, title is very important in China. Last, it is not recommended to write, even the date, on the business card, better to do it after the meeting.
  • Meeting room: Sit preferably in front of the door when you are the visitor. Historically reason was coming from old tradition with assassin coming from the door to kill visitors. Being in front, you see them coming. The host normally sit at the middle of the table.
  • Giving face: Ensuring that you are never personal on negative matters, consider yourself and your Chinese counterpart as part of a corporation/team with shared responsibility for any decisions and actions. Bringing a problem personal will never improve the negotiation in China. If you come in team, it is preferred the meeting is leaded by your highest executive. It shows respect to your counterpart.
  • Eye fixing: Looking straight in the eyes might be regarding as impolite and lack of respect. Eye contact is still important thus, but not fixing. –
  • Yes or No: Asian are famous for never saying no. This is actually not that straight. A “No” can be seen as a failure and a face issue. As such they tend to express their refusal in a different way, try to observe the body language and the words used. A “it’s ok” for example is meaning a partial acceptance and it is better to discuss further the case. In many situations, reformulating your questions with different words is a great way to confirm the answer. –
  • Conversation: Unlike Latin habits, do not interrupt Chinese until they stop talking. Be patient and never show anger
  • Negotiation: Chinese are tough negotiators varying the style to get results. Be prepare to some concessions, it will give face to the negotiator and help getting the deal.

Dinner:

  • Dining and drinking is a very important part of the process of negotiation. Accepting lunch or dinner proposal is a must and part of the business process, a refusal can be misinterpreted. There is a saying in China that “business is done on dining tables”. It is better to plan in advance and to accept the invitation. If needed, initiate dining invitation by yourself. – Always accept the proposed food (should happen even more for things you don’t want to eat). There is a trick that you can still leave what you don’t like inside the plate. – Don’t eat on the provided plate (like westerners do), put food in the bowl and use the chopsticks in the bowl. The plate is used for rubbish. – Don’t stick the chopsticks in the rice, or fruits, even to put it in the mouth, this is equivalent to death symbol. If you cannot use chopsticks, most restaurants can provide knife and fork.
  • Ganbei: Somehow equivalent to cheer, it means drinking alcohol bottom-up for toast. Nowadays, the liquor is often replaced by wine or beer, still bottom-up, be prepared. Chinese believe that “friendship is built by drinking together”, and will find many reasons to Ganbei with you, from cooperation to friendship and partnership. The main purpose is to emphasis positive aspects of the business and your active participation find topics to cheer will be highly appreciated. – Don’t be surprised by Chinese managers asking for your salary or cheering for money. Money is a popular subject like health in Europe. – Don’t discuss about business at dinner unless your Chinese counter-part is asking for. Dinner is a place to build relationship; any other topics can be addressed, especially about the Chinese boss’ achievements and success. Again politic shall be avoided unless you get close relationship.

Of course, there are many more specific manners, please check here for more details: http://en.wikipedia.org/wiki/Customs_and_etiquette_in_Chinese_dining Overall, the dinner place is beneficial to build business relationship and this is a very important concept. It will increase the trust level as well as the deal success rate from the meeting. Those tips has for purpose to prepare you to go to China and doesn’t include all, the key is awareness, modesty and respects: – Awareness of the differences, reading signs like body languages, change of tone… – Modesty, no need to try to impress your counterpart, inferiority feeling will not have positive effect. – Respect: consider your counterpart as your equivalent and adapt to their traditions.

Fabien Gaussorgues, SAOS General Manager

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