Business practices can differ depending on cultural regions, and this is especially true with negotiations. Different communication and negotiation styles can cause misunderstandings that, in the worst case, can lead to the termination of your business relationships. To prevent this from happening to you and to ensure that you’re as well prepared as possible for your negotiations with Chinese people, we’d like to give you some important tips in the following blog post.
China is truly a land of superlatives. The former emerging nation has developed incredibly fast, today claiming the second-highest economic output in the world. China maintains intensive economic relationships with regions such as Japan, Brazil and the European Union.
Thanks to these intensive economic cooperations, it’s no longer possible to imagine trade without negotiations with Chinese business partners. That’s why we’re devoting a two-part series to this important topic. In today’s first part, we’d like to give you some initial practical tips and important background information on how to prepare for negotiation discussions with the Chinese. This is essential, as the importance of preparation is often regrettably underestimated.
The right preparation
The establishment of a harmonic and trusting relationship with a corresponding business partner [guanxi] is a fundamental prerequisite for the realization of negotiations in China. This means that you should give yourself and your Chinese partner the chance to get to know each other not only on a professional level, but also on a personal one. With that said, you should invest plenty of time in the establishment of your relationships. Always maintain contact and don’t limit yourself only to virtual means of communication. Meet in person as often as possible [e.g., for meals] and address private topics – hobbies and families are always a good choice.
This “relationship work” before actual negotiations is very important, as harmonic relationships with business partners are much more important than mere facts and figures in China. Striving for harmony is firmly rooted in Chinese values, including in the business world. This also provides you with solid mutual trust that will help you better deal with potential problems or conflicts over the course of your negotiations.
Setting up your negotiation team
Particular care and attention are necessary for this step. Chinese negotiation teams often consist of a large group of experts from a variety of fields, as well as important managers and decision-makers within the company. As the Chinese tend to prefer negotiations to occur on equal footing, your team members should ideally hold high positions and/or positions on a level comparable to your Chinese partners in the project and/or company. Also make sure your team members aren’t too young. The right composition of your negotiation team with regard to rank, age and competency is extremely important, as this is how you show respect and interest in cooperation.
We’d also like to give you three more tips that could pay off when it comes to negotiation preparation:
- Familiarize yourself thoroughly with the Chinese market [e.g., potential competitors] and try to find out over the course of the getting-to-know-you phase what your Chinese counterpart’s possible goals could be.
- Small gifts for the host are welcome in China and serve to foster the relationship. But be careful with the size of the gift – if it’s too valuable, it could be perceived as an attempt at corruption, which is strictly forbidden in China. You typically can’t go wrong with small souvenirs from your homeland or high-quality spirits.
- Prepare enough business cards that state your name and position in both English and Chinese. Keep in mind that business cards are more than just pieces of paper with contact data on them in China; they’re more like individual status symbols.
As you can see, the preparation phase should not be underestimated when it comes to negotiations with Chinese people. In the second part of our series, you’ll learn what needs to be kept in mind during the implementation and follow-up of negotiations. In the meantime, you can find more information about our offer for cross-cultural training on China at the following link.