1. Negotiation objective
For many the aim of negotiation is a substantive outcome and material gain. In China the transaction is all about the relationship and there is no other method to succeed in doing trade than through a close partnership, so think about investing a lot of time in this pre-negotiation stage.
The aim of negotiation is not the signed contract and unforeseen events are resolved through the relationship; the contract is more a sign of the meaning to do business together than a legally binding document. Trust is the basis of the agreement and the fact that you have signed a contract does not actually mean that the transaction is sealed; it implies that an alliance has been recognised.
2. Negotiation attitude and communication approach
The Chinese negotiation style is one of collaboration and problem solving whilst still focused on profit.
The communication approach is expressed by using titles, following protocol and being highly respectful and alert in conversation. Always start with an official approach, using first names and relaxed style is risky and can be considered offensive and viewed as an insult.
When you negotiate, read between the lines to ascertain the exact meaning. It is unusual to be told a direct no and you will more likely hear "it is difficult" which in fact does mean you must not pursue it. Do not expect to receive direct clear answers, because you will try to fix something that "is difficult" when in fact it can't be fixed.
3. Time perception
A lot of time is spent in developing a relationship which is a sign of respect and which is supposed to be reciprocated. For Westerners time is valuable and the Chinese usually take advantage of this fact. Preparation is therefore important, create alternatives and let the otherside know that they are is not the only party who can walk away from the transaction. Do not forget that "tomorrow" or "next week" often doesn't literally imply the following day or week; but this could mean "in the future".
4. Negotiation approach
What for most Westerners may appear to be innocent socialising is in fact their way of collecting information.
Chinese negotiators are well versed in the art of positioning & framing, the intricacies of pricing and the use of delays as a negotiation tactic. They have good negotiation skills and will often use negotiation tactics to embarrass or shame their counterpart in order to create pressure and gain the upper hand. Take the blame if a problem develops whether you are responsible or not and do not react with disrespect.
Your entire team is advised to attend the meetings and it's very important to arrange for someone with a rank of authority within your organisation to make the introductions and to accompany you during meetings. Without obvious official support, you will be delivering the wrong message about how seriously you view the negotiations.
5. Team based negotiations
The Chinese almost never negotiate unaccompanied. It is not always clear who the manager is and who has complete authority to decide matters. Although decisions are made by consensus, there is normally one leading authority who may not be very active during negotiations. Gain the attention of their lead negotiator and direct your most persuasive and logical discussions towards him. The rest of the team normally plays the role of an advisory body.
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