1. Negotiation goal
For many the aim of negotiation is a substantive result and material gain. In China the transaction is about the relationship and there is no better way to succeed in doing business than through a close partnership, so consider investing a lot of time in this pre-negotiation phase.
The aim of negotiation is not the signed agreement and unforeseen circumstances are resolved through the partnership; the agreement is more a sign of the intent to do business together than a legally binding document. Trust is the foundation of the contract and the fact that you have signed a contract does not actually imply that the transaction is closed; it means that a relationship has been established.
2. Negotiation attitude and communication style
The Chinese negotiation approach is one of collaboration and problem solving whilst still fixed on profit.
The communication style is expressed by using titles, following procedure and being very respectful and aware in conversation. Always start with a formal approach, using first names and an informal style is risky and can be viewed offensive and viewed as an act of disrespect.
When you negotiate, listen carefully to determine the true meaning. It is unusual to be told a direct no and you will more likely be told "it is difficult" which in fact does mean that you have no chance of success. Do not expect to receive direct clear answers, because you will try to fix a situation that "is difficult" when in fact it can't be resolved.
3. Time perception
A lot of time is expended in building up a relationship which is a sign of respect and which is expected to be reciprocated. For Westerners time is sacred and the Chinese usually take advantage of this fact. Preparation is therefore vital, create alternatives and let your counterpart know that they are is not the only one who can walk away from the deal. Bear in mind that "tomorrow" or "next week" often doesn't literally imply the following day or week; instead this could mean "in the future".
4. Negotiation style
What for most Westerners may appear to be innocent mingling is in fact their way of collecting information.
Chinese negotiators are competent in the art of positioning & framing, the complexities of pricing and the use of time as a negotiation tactic. They have excellent negotiation skills and will often use negotiation tactics to embarrass or shame the other party in order to create stress and gain the upper hand. Take the blame if a problem arises whether you are responsible or not and do not counter with disrespect.
Your whole team is advised to attend the appointments and it's vital to arrange for someone with a rank of authority within your business to make the introductions and to escort you during meetings. Without obvious official support, you will be sending out the wrong message about how seriously 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 total authority to decide issues. Although decisions are made by consensus, there is normally one leading authority who may not be very involved during negotiations. Gain the attention of their senior negotiator and direct your most persuasive and logical discussions towards him. The rest of the team usually plays the role of an advisory body.
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