Business Negotiations in China
Business Negotiations in China
Business negotiations in China can be a challenging task. Chinese are strategists who see business as battle. Many Chinese businessmen and –women use the teachings of Sun Tzu for negotiating. In “The Art of War”, Sun Tzu describes strategies for war.
Becoming successful with business negotiations in China can be split up in three main stages. The first stage starts at home. Preparing yourself will optimise your chance in succeeding. The second stage happens at the meeting, either in China or at home. The third stage takes place after both parties have returned home. This article will focus on stage two. It provides important tips and tricks during business negotiations in China.
What are the six most important aspects of business negotiations in China?
- Set your goals;
- Leave your believes at home;
- Give and receive face;
- Read between the lines;
- Think about Chinese business etiquette;
- Stick to the goals you set in the beginning.
We also wrote an article on preparing for negotiations in China, read it here.
Set your goals
Setting goals in life is important. Setting goals for business negotiations in China is crucial. Without clearly defined goals, you will return home with entirely different results than you would have hoped for. To western people, the Chinese seem to change their plan often. Although it seems illogical, you can presume that they wanted to end at their “changed plan” from the beginning.
With set goals, you can steer the negotiations in the direction you desire. You are the captain of your faith. When in doubt about how realistic or “Chinable” your goals are, then have them checked by an expert.
Leave your believes at home
Leaving believes at home sounds vaguely broad, however that is because it is broad. For example, your believe in democracy might trigger discussions, which will create a distance between you and your counterpart. Your believe in right & wrong might lead you to feel that your counterpart is a bad person. Your believe in what an actual deal is might lead you to believe you reached a deal, when all you did was sign a contract.
All of these believes are useless to your end goal and they are potential risks to your success. For which reason are you in China? Convincing people of your believes, or reaching a successful deal in China? Always keep this in mind.
Give and receive face
Giving face (MiànZi) is a difficult concept to grasp for Western people. Explaining the concept requires a separate article, but in short it is about giving honour and respect. However, it is not just a casual compliment here and there. It is a crucial rule for successful business in China. Making sure you respect seating arrangements. Making sure you remember important names of your counterparts. Mentioning those persons separately in your speeches.
Above all, it is important to never lose your temper. If you feel someone is blaming you for something you did not do, chances are very big that it is for a good reason, albeit unrelated. Perhaps it is to spare your boss or maybe it is to gain face in the eyes of his colleagues: Taking wrongful blame in a graceful manner will earn you respect (face), which you can cash in later. Face is the most important currency in Chinese negotiations.
Read between the lines
The Chinese language is beautiful in many ways. As a language, it has a second layer in which the opposite of what is said is actually being expressed. This use is unfamiliar to most of the Western people. This “second layer” is our preferred part of the Chinese language. Two simple examples: Yes, can actually mean no and compliments can actually be meant as insults. Reading between the lines and understanding what is not being said, is a crucial skill for become successful with business negotiations in China.
Reading between the lines is a skill difficult to learn, however it is easily acquired by bringing an expert with you. Someone specialised in observing what happens can provide you with crucial information. Such information highly increases your chance of succeeding.
Keep Chinese (business) etiquette in mind
Chinese etiquettes strongly differ from Western etiquettes. Not just the table manners are entirely different: everything is different. This is quite understandable considering China is based on a 5.000-year-old civilization with minimal contact to the West.
For example, becoming friends or even family is very important. Alcohol can be a key aspect in this process. Even though drinking is starting to be banished from state-owned companies by the current government, it still plays an important role in Chinese business. If you wish to stay away from alcohol, try and see if someone in your organization likes a drink or two, and would consider taking up your role.
The next example creates much more confusion for Westerners. In China a contract is not just a legal document; it is the expression of wanting to come to a deal. Therefore, it can always be changed. It is not as permanent as it is in the West. These are just two examples of (business) etiquettes to consider, there are many more.
Stick to your set goals
The most important tip of all is to stick to your set goals. If it requires you to change your flight and extend your stay in China, then do so. If it requires returning home without a deal and return another time, then do so. Be patient and follow your strategy.
Want to know if your goals are “Chinable”? Want to learn more in-depth knowledge about business negotiations in China? There are experts available who can easily earn back their costs. They know how far you can go in negotiations. They can assist you with knowing what is (im)possible and they can teach you what is important. Some experts can even handle negotiations on your behalf.
Interested in hiring an expert? Contact us to learn who our negotiating experts are and what they can do for you.
When our founder Peter Pronk visited China for the first time in 1995 he immediately fell in love with China and the Chinese people. he became inspired by China’s fascinating history and fast growth and decided to become a part of it. Through the career that followed he learned and experienced what the (cultural) differences between the West and China are. In 2007 he moved to Beijing where he has lived ever since. His interest in and passion for studying China’s history inspired Peter to found 1421 Consulting Group in 2011. Nowadays Peter works as a consultant on several projects.
What happened in the year 1421?
From 1421 to 1423, during the Ming Dynasty of China under Emperor Zhu Di (朱棣) the fleets of Admiral Zheng He (鄭和), commanded by the Chinese captains, discovered Australia, New Zealand, the Americas, Antarctica, the Northeast Passage; and circumnavigated Greenland.
Due to this endeavour we can conclude that “1421 is the year that the Chinese discover the world”.