Using Negotiation Skills During The Five Step Process To Attaining Successful Transactions In China

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1. Negotiation objective

For many the purpose of negotiation is a substantive outcome and material gain. In China the transaction is all about the relationship and there is no other way to succeed in doing trade than through a close alliance, so think about investing a lot of time in this pre-negotiation stage.

The goal of negotiation is not the signed contract and unforeseen events 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 basis of the agreement and the fact that you have signed an agreement does not actually mean that the transaction is sealed; it implies that a relationship has been recognised.

2. Negotiation approach and communication approach

The Chinese negotiation style is one of teamwork and problem solving whilst still focused on profit.

The communication approach is expressed by using titles, following protocol and being very respectful and alert in discussions. Always start with an official approach, using first names and relaxed style is dangerous and can be considered offensive and viewed as an insult.

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 hear "it is difficult" which in fact does mean you must not pursue it. Do not anticipate 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 expended in developing a relationship which is a symbol of respect and which is supposed to be reciprocated. For Westerners time is valuable and the Chinese usually exploit 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 deal. Do not forget that "tomorrow" or "next week" often doesn't literally mean the following day or week; but this could mean "in the future".

4. Negotiation approach

What for most Westerners may seem 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 time as a negotiation tactic. They have good negotiation skills and will often use negotiation tactics to humiliate or shame their counterpart in order to create pressure and gain the advantage. 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 appointments and it's very important to arrange for someone with a position of authority within your organisation to make the introductions and to accompany you during meetings. Without visible 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 total authority to decide matters. Although decisions are made by consensus, there is usually 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 arguments towards him. The rest of the team normally plays the role of an advisory body.

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