Becky in Beijing
I will never forget my first trip to China five years ago. Everything that I thought I knew about China and its culture was completely wrong. I had always interpreted the Chinese expression “don’t be polite” to mean that the Chinese didn’t value politeness. On the contrary – the Chinese professionals and even random people on the streets of Beijing and Nanjing were extremely courteous and helpful. Actually, that expression is mean to put people at ease and roughly translates to “you’re welcome”. With the exception of Dublin, Ireland I have never been in such a large city where people treated me with such respect and courtesy.
Fast-forward to last week. I was attending a local event for international business executives accompanied by my Taiwanese client. As she and I made our rounds through the room talking with our international peers, we would frequently fall into Chinese cycle of giving and rejecting compliments (sometimes in English and sometimes in my broken Chinese). Ching-Yen would say how smart I was. I would, of course, deflect her compliment “oh no – you are much smarter than me”. Ching-Yen would deflect my compliment with something else and around we would go in the Chinese cultural pattern. While I will always consider myself a “wai-guo-ren” (foreigner) to Chinese culture, I am a student always eager to learn my experiences and those of others. Speaking of others, here’s a great article from my friend, Mike Black on Understanding Chinese Culture.
When any of us first interface with a new business culture, it is easy to look through our own cultural lens and make assumptions about the other culture. Obviously it helps to read up on the new culture or engage with someone who knows the culture and can advise you on how to navigate business in-country. But even with help, you are still bound to make some cultural errors. Nowhere does this surface more than in business negotiations. With this in mind, here are some tips for entrepreneurs conducting their first relationship and business negotiations with a Chinese partner or client:
Relationship First, Deal Second
One of the key differences between negotiating with Chinese nationals compared with Americans is that the Chinese want to build a relationship first, then do business second. In the U.S., we approach business in the opposite order. We negotiate the deal first and once the teams are formed we implement the deal while getting to know each other in the process. A relationship beyond the agreement’s deliverables is not even required. This means that your Chinese contacts will likely want to spend days showing you the local sights, taking you out to dinner, and having many non-business conversations before you ever begin any serious discussions about the business deal you are trying to close. It is very important to go through these relationship-building steps for a Chinese business person will feel comfortable enough with you to start the real business talks.
Tune in to my next article (Part 2) where I will give more advice about negotiating with the Chinese.
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Thanks for the link to my article Becky. Your point about negotiation is well stated. It has to be confusing for people from the west who go there without preparing. I imagine if you aren’t prepared, it feels like a tactic to delay negotiation when in fact spending time together is the quickest way to speed things up.
I am looking forward to part 2. Any hints about what you will cover?
Thanks for your comment, Mike. I agree – I think that the relationship-building stage is often misunderstood. Part 2 will be tips on preparing for Chinese negotiations, how time can be used against Westerners (how to counter that disadvantage), and then how to end negotiations.
Relationship building and deal making are to some extent part of the same process in China – they are inseparable. Much of what you talk about while drinking all that tea and going to dinners is laying the groundwork for the deal that finally emerges. (Or in some cases the relationship building process tells one or both parties they do not want a deal and discussions come to an end.) Formal conference room discussions often just confirm the arrangements that have been worked out during informal encounters. This Chinese style process tends to be quite fluid and time consuming. Americans, who are generally bottom line result driven, need to adjust expectations and adapt their style to be effective in China.