China: How to negotiate and other Chinese business practices

By Marian Stetson-...

You've got the meeting set up in Shanghai. Congratulations. With visa and bilingual business cards in hand, a Mandarin phrase book with a practiced toast, and appropriate gift for your Chinese host, what's next to seal the deal in China?

Old China hands and any Chinese will tell you to invest in relationships. Chinese culture is relationship-driven (guan xi) and people-oriented. Friendship first, then business will follow.

Relationships in China are based on mutual trust and respect; equality, commitment and common goals, communication and compromise. It takes time and effort to build relationships, which Western companies (Motorola, Vodaphone, Intel to name a few) have found to be the case.

In Chinese culture, communication is a continuous process, critical for building relationships, in addition to the exchange of information.

Below are insights that successful expatriate managing directors; leaders of global teams, and explorers of business opportunities follow to build business in China.

Communication strategies

Persuasion - There may be sensible and intellectual discussions, but individuals know their place in the team or organization (hierarchy), e.g., contributing or deciding role. They know when to stop or when pushing too hard may be offensive or counterproductive.

Feedback - Chinese generally do not volunteer information or give feedback. If you want feedback, ask persistently and politely.

Negative feedback - Chinese do not want to convey bad news. Giving negative feedback is perceived as confrontation that causes loss of face.

Positive feedback - This is well received if done in a low-key way and shared by the team. Chinese prefer to receive praise privately. Similarly, Chinese are not comfortable giving praise.

Self-glorification or promotion - Expressing one's attributes or accomplishments runs contrary to Chinese values of modesty and humility. The norm is to be self-deprecating, and any praise should come from others.

Sending a company letter ahead of your meeting that gives bio data with accomplishments (academic titles, positions held, major deals or projects completed) of the visiting team members is appropriate.

Confrontation - Chinese avoid confrontation altogether. This is done to save face and preserve group harmony (as confronting can translate to there being a winner and a loser). Individuals should discuss different viewpoints and try to build consensus.

This holistic culture does not compartmentalize work and personal feelings. Its important to note everything is personal.