One of the biggest challenges many organizations face when they first make the move into the China market is the art of brokering the deal. The rules are completely different and a China business consultant can help you not just close the deal, but come out ahead. There are three major elements that you need to understand:
Let China Business Consultant Help You Negotiate the Chinese Way
There is No Win-Win
The first thing to understand within Chinese negotiations is that there is no such thing as a win-win. The Chinese could often care less about long-term partnerships. They want to get the most out of the deal now. And, in China, it’s understood that both sides are trying to come out ahead. Americans often fail to understand this essential aspect of Chinese negotiations and will give away far too much in order to show good faith or build relationships. The traditional American negotiation of give-and-take does not apply here.
Time is Against You
The Chinese are also incredibly patient. They’re on their home turf and have plenty of time and many other deals in the works. They also know your organization has probably given you a deadline to close the deal as you certainly can’t stay in China indefinitely. They’ll use this against you to make concessions and include provisions in their favor before your deadline is up.
Remember, a Chinese company is probably hiring someone specifically to deal with the negotiation. That is their only job and the cost is very low. The American company probably sent someone important with a high salary and much other work to do. So the Chinese company has no real need to finish the deal. They’ll simply have the negotiator come up with continuous issues, logical or not, until the American side is worn out and just caves in to whatever the Chinese company wants.
They may also pretend everything is finished and agreed upon, and then, when signing day comes, they bring in a completely new set of changes to be made. As Chinese business consultants, we see the time tactics come up again and again.
Making Up Laws and Regulations
You would think this would be easy to spot, but it’s not. Chinese laws and regulations are always changing. In addition, different regions or even cities can have completely different regulations. There is really no way for you to know as a foreign business. You’ll need to rely on your Chinese business consultant’s expertise to sift fact from fiction.
Chinese companies will make all kinds of demands that work in their favor to be included in the contract and will often cite this law or that regulation. But none of this should be taken at face value. In Chinese negotiation, you need to question everything. And, who knows, maybe it is a law and now you’ll need to take that into consideration in your business plan.
Negotiating in China is like negotiating in another world. You definitely want to go in well-prepared for the tactics mentioned above, and many more. Your China business consultant is going to be aware of all these strategies and, more than just warn you about them, they’re going to be able to give you tactics to counter them.
Casey W. Xiao-Morris is a veteran China Business Consultant at Leverage China, LLC., helping her clients succeed in China’s market. Casey can be reached at cxmorris@LeverageChina.com.