Applying Negotiation Skills During The Five Stage Process To Ensuring Successful Transactions In China

1. Negotiation objective

For many the purpose of negotiation is a substantive outcome and material gain. In China the deal is about the relationship and there is no better method to succeed in doing business than through a close partnership, so think about investing a lot of time in this pre-negotiation stage.

The goal of negotiation is not the signed contract and unexpected circumstances are resolved through the partnership; the contract is more a sign of the intent to do business together than a legally binding document. Trust is the basis of the agreement and the fact that you have signed an agreement does not actually mean that the deal is closed; it means that an alliance has been established.

2. Negotiation attitude and communication approach

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

The communication style is expressed by using titles, following procedure and being highly respectful and aware in conversation. Always start with an official approach, using first names and relaxed style is dangerous and can be considered offensive and interpreted as an act of disrespect.

When you negotiate, listen carefully to ascertain the true 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 anticipate to receive direct clear responses, because you will try to resolve a situation that "is difficult" when in fact it can't be resolved.

3. Time perception

A lot of time is spent in building up a relationship which is a sign 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 options and let your counterpart know that they are is not the only one who can walk away from the table. Bear in mind 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 seem to be innocent socialising is in fact their way of gathering information.

Chinese negotiators are competent in the art of positioning & framing, the complexities of pricing and the use of delays as a negotiation tactic. They have excellent negotiation skills and will often use negotiation tactics to embarrass or shame their counterpart in order to create pressure and gain the advantage. Take the blame if a problem develops whether you are accountable or not and do not counter with disrespect.

Your whole team is advised to attend the meetings and it's vital to arrange for someone with a rank 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 genuinely you view the negotiations.

5. Team based negotiations

The Chinese almost always negotiate in a team. It is not always clear who the leader is and who has complete authority to decide issues. 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 arguments towards him. The rest of the team normally plays the role of an advisory body.

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