1. Negotiation goal
For many the aim of negotiation is a substantive result and material gain. In China the deal is about the relationship and there is no other way to succeed in doing trade than through a close alliance, so consider investing a lot of time in this pre-negotiation phase.
The aim of negotiation is not the signed agreement and unexpected circumstances are resolved through the relationship; the agreement is more a sign of the meaning to do business together than a legally binding record. Trust is the foundation of the contract and the fact that you have signed a contract does not actually imply that the deal is closed; it implies that a relationship has been recognised.
2. Negotiation approach and communication style
The Chinese negotiation approach is one of collaboration and problem solving whilst still fixed on the bottom line.
The communication style is expressed by using titles, following protocol and being very respectful and alert in discussions. Always start with a formal approach, using first names and an informal style is risky and can be viewed offensive and interpreted as an act of disrespect.
When you negotiate, read between the lines to determine the exact meaning. It is unusual to hear a direct no and you will more likely be told "it is difficult" which in fact does mean that you have no chance of success. Do not expect to receive direct clear replies, because you will try to resolve a situation that "is difficult" when in fact it can't be fixed.
3. Time perception
A lot of time is expended in developing a relationship which is a symbol of respect and which is expected to be reciprocated. For Westerners time is sacred and the Chinese usually take advantage of this fact. Preparation is therefore vital, create options and let your counterpart know that they are is not the only party who can walk away from the deal. Do not forget that "tomorrow" or "next week" often doesn't literally mean the following day or week; instead this could mean "in the future".
4. Negotiation style
What for most Westerners may appear to be innocent mingling is in fact their way of gathering information.
Chinese negotiators are competent in the art of positioning & framing, the intricacies of pricing and the use of time as a negotiation tactic. They have good negotiation skills and will often use negotiation tactics to humiliate or shame the other party in order to create stress and gain the upper hand. Take the blame if a problem arises whether you are accountable or not and do not counter with disrespect.
Your entire team is advised to attend the appointments and it's very important to arrange for someone with a position of authority within your business to make the introductions and to escort you during meetings. Without obvious official support, you will be sending out the wrong message about how genuinely you view the negotiations.
5. Team based negotiations
The Chinese almost always negotiate in a team. It is not always clear who the manager is and who has total authority to decide matters. Although decisions are made by consensus, there is usually one leading authority who may not be very involved during negotiations. Gain the attention of their senior negotiator and direct your most persuasive and logical discussions towards him. The rest of the team usually plays the role of an advisory body.
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