You've got the meeting set up in the Pearl River Delta region. 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.
Negotiation strategies
- Chinese negotiating style - While Westerners are generally results-oriented (focusing on tasks at hand, specific terms and conditions, and time efficiency) Chinese are relationship-oriented. They focus on harmony and flexibility, and are patient in getting the job done. They do all they can to avoid 'tong chuan yi meng' which translates to 'same bed, different dreams'. Chinese are known to be tough negotiators. (See, also: "Chinese authority Dr. Kerry Brown on China's issues and western ways")
- Building trust - Begin to build trust based on mutual respect, modesty, equality and harmony. Chinese are not comfortable being rushed, or jumping right into business discussions without proper introduction. They believe getting to know each other and building trust is necessary in negotiations.
- Rationale - Chinese take time to understand the reason, logic and motivating factors in a holistic manner - connecting the dots. They must be convinced there's a win-win deal to be made. They think long term. A bottom line approach or a quick fix may be perceived as simplistic and short-term thinking.
- Cultural priorities - In negotiations, Chinese cultural priorities are relationship first followed by rationale, and legal. Check your cultural assumptions in relation to these priorities - they may be in reverse order.
- Style - Chinese listen more than they talk. They may appear to be delaying, but they are gathering pertinent details on issues and personalities. The indirect, unemotional style accompanied by vagueness allows room for maneuverability and outs. Silence is ‘constructive ambiguity'. It is rude to interrupt. To build a productive relationship each side must accept different styles of team building and group dynamics.
- Compromise - Chinese know what they want and are willing to compromise. ‘Give and take' is a means to achieve harmony in Chinese culture. As such, compromise is not considered weak or giving in.
- Revisiting agreed items or terms - It is not unusual for Chinese to revisit items previously discussed and agreed upon, and try to renegotiate. If this happens, graciously enter into talks, be flexible and well prepared for what you are willing and unwilling to do, and prepare your organization that there may have to be changes.
Subtleties matter
- Attitude matters and yours will be constantly read by the Chinese. Your patience, professionalism, and courtesy are sending messages of your personal integrity. Understand that you must take many small steps before taking a larger steps. Focus on developing a consensus.
- Know and stick with your company's policy on ethics. Major Chinese businesses are familiar with the U.S. Foreign Corrupt Practices Act. You may be tested, but in the words of Professor Baocheng Liu, "Do not be a loose girl; be a fine lady" with consistent ethical practices.
- Listen empathetically and observe. Pay attention to details. Note Chinese body language and hidden meanings.
- Understand cross-cultural communication barriers such as cultural frames, traditions, etiquette, time and place, status and power, English comprehension level.
- Always bring your own interpreter, even when the Chinese offer to provide one for you.
- The one who speaks least in a meeting may actually be the most powerful. Be sure to know the position and affiliation (company, Communist party) of those you're dealing with.
- Don't rush to give your opinion or advice. Take the time to diagnose and understand the problem first. Respect viewpoints of others.
- Make your ‘self' easy to understand. Speak clearly, concisely, and slowly. Avoid asking ‘or' questions (you may get a ‘both' answer). Ask questions and clarify politely.
- Focus on issues. Take the blame out of discussions. Don't insist you are right even if you are. Leave room for ‘outs' (face-saving maneuvers).
- Be tactful when you must say no. A direct and blunt no may be perceived as a slap in the face. Use wording such as like "It's very difficult for me to.....", "It's really not possible to...."
- Try not to overuse the word ‘you'; instead use the third person ‘one'. Pronouns aren't used as much in Mandarin as in English, and as the listener, hearing ‘you' could be taken personally. For example, instead of "You should not jump to conclusions without all of the facts...", say, "One should not jump to conclusions..."
- Err on the side of being more formal in meetings. Sit straight and be attentive. Slouching and relaxing postures are considered bad manners. It's impolite to cause disruptions such as standing up to stretch and walking around the room. Do not interrupt. Unless the presenter or the leader makes a point to allow so, asking questions during a presentation is considered interrupting and rude. Whenever possible, use laser pointers. Avoid pointing with any one finger; use whole-hand gestures instead.
However your meetings go with your Chinese counterparts, focus on building the relationship for the long term, and extending your guan-xi network. Patience, politeness and persistence will bring opportunities for you and your Chinese customers, suppliers or coworkers.
Recognize that social-personal relationships drive business culture in a holistic way. They're cultivated over time. Remember, relationships first and results will follow.
A. David Wan also contributed to this article.
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Peter Talbot
Posted at 5:22 am on March 15, 2011
If you are using a Mandarin phrase book in the Pearl River Delta (Guangdong), you are going to be losing your price points quickly. It’s a Cantonese area, and sensitivity to who is in the room (Mandarin for the Government and Party folks; Cantonese in the very important social events later is possible) is going to mean you won’t use that book much. Fact is, you are a foreign devil. It’s not even an insult, just a fact, like a species designation (Waiguaren).
As an American you are suspect of being tempermental, spendthrift and almost naive about motives and business practices. You will be treated with kid gloves in the room unless the corner office of your contact has made clear that you are not to be encouraged, in which case you will be treated peremptorily even to the point of rudeness by lower level staff wishing to please their ambivalent superiors. How you react to this is key. If you realize that they are acting out a kind of theatre meant primarily for internal consumption, you may by patient toleration of personal attack prove to the superiors watching that you can (a) control your temper (a rare thing in an American); (b) understand local politics (a rarer thing in a foreigner) and (c) that your relationship with them may be more important than ill will about being insulted by a corporal sent to torture you.
Being treated with kid gloves is not necessarily a better outcome: this is the normal polite elevation of the foreign that Chinese often exhibit. It’s kind of like the politeness you have in Church or Synagogue: a fear of heavenly ill will if you are not on your best behavior. It tells you nothing about whether your business will bear fruit or even be recognized as valuable: that comes much later when contract drafts are circulated.
Most important: contracts mean nothing in China. Nothing. Signing one is pretty much the same as exchanging name cards here: it means they admit to knowing you. Expect to renegotiate your contract on a continuous basis. The reason is not a disrespect to you necessarily, it springs from a deeper sense that all communications are primarily rhetorical and all business is really an excuse to have good food in good company. Long term projections in China are very difficult and rarely more than slogans to be used as conveniences or ignored.
The Chinese believe that all prices are extravagant, regardless of your cost plus calculations. They believe that all monied expenses are waste, regardless of perceived value added. However, they value sweat equity and the proof of watching you or your people produce in active group effort beyond their merits. There is money to be made here, but the margins will always be under pressure and the micromanagement required to be successful over time is extensive.
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Silicon Valley | North America
Posted at 4:13 am on October 19, 2009
Brian – Your comment is noted. However, I know the author and her work / experience to be helpful to many. Also, it is a bit remarkable to place a label on an entire ethnicity or population.
I suspect few side with your position. Mark Z
Brian Garland
Posted at 2:34 pm on October 18, 2009
The information above regarding how to deal with the Chinese is seriously flawed and misleading….Chinese are not honorable and will always attempt to exert arrogance into their business dealings. My advice to anyone contemplating doing business in China is real simple…DON’T DO IT…..They are tricky to deal with and will always attempt to rip…..BG