Negotiating in China

In Kissinger’s book, Ending the Vietnam War : A History of America’s Involvement in and Extrication from the Vietnam War, he recounts the following observation. The American delegation made arrangements to occupy 3 floors in a prominent hotel in Paris. The Vietnamese delegation, on the other hand, bought a chateau. The message was clear. We are here for as long as it takes.

Time is the most powerful element in negotiation. Everything is variable over time. If you have more time you have more power. Don’t rush the process. You will experience tactics designed to prolong the process and wear down your emotional stamina, including the old wine and dine until you can’t eat or drink anymore. It is a necessary evil and you are better off preparing yourself to endure rather than trying to avoid.

The word negotiation doesn’t translate into Mandarin, the closest translation is Tan Pan (I’m told since I don’t speak Mandarin). While similar in meaning, Tan Pan has a beginning and middle, however, is absent of the end. The message is clear.  You need to be there for as long as it takes.  Anybody doing business in China needs to recognize the deal has no end.  The contract, while viewed as the end of any western negotiation, is just the beginning of the discussion (or Tan Pan). Expect and plan for constant negotiation throughout the life of the contract/relationship.

Negotiating in China takes time. Both to reach an understanding to begin a business relationship, as well as the time needed to service that relationship throughout the lifespan of the deal. If you try to short-circuit the time investment you will find yourself at a huge disadvantage.

Cultural norms are important, but only address one level of the profile. You need to be able to read the personal circumstance influencing the outcome of a particular deal. Think about the cultural norms assigned to us, and yet the diversity of each region, town, person etc. You know what the market says, you’re interested in what THIS person is thinking. Negotiation is personal! What is important to him. Where does he have flexibility. None of that information comes from understanding cultural norms. It comes from the ability to read and analyze all of the contextual information (voice, verbal, visual). In China actions speak louder than words….. when you speak, they listen.  Shouldn’t you listen when they speak?

What observations do you have from your international dealings?

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