Applying Negotiation Skills During The 5 Stage Program To Achieving Successful Transactions In China

1. Negotiation objective

For many the objective of negotiation is a substantive result and material gain. In China the deal is all about the relationship and there is no other method to succeed in doing trade than through a close alliance, so think about investing a lot of time in this pre-negotiation stage.

The goal of negotiation is not the signed agreement and unexpected events are resolved through the relationship; the contract is more a sign of the meaning to do business together than a legally binding record. Trust is the basis of the agreement and the fact that you have signed an agreement does not actually imply that the deal is sealed; it implies that an alliance has been recognised.

2. Negotiation approach and communication approach

The Chinese negotiation style is one of teamwork and problem solving whilst still fixed on the bottom line.

The communication approach is expressed by using titles, following protocol and being highly respectful and alert in discussions. Always start with an official approach, using first names and relaxed style is dangerous and can be viewed offensive and interpreted as an insult.

When you negotiate, read between the lines to ascertain the exact meaning. It is unusual to hear a direct no and you will more likely hear "it is difficult" which in fact does mean you must not pursue it. Do not anticipate to receive direct clear replies, because you will try to resolve something that "is difficult" when in fact it can't be fixed.

3. Time perception

A lot of time is spent in developing a relationship which is a symbol of respect and which is supposed to be reciprocated. For Westerners time is valuable and the Chinese usually exploit this fact. Preparation is therefore vital, create options and let the otherside know that they are is not the only party who can walk away from the transaction. Do not forget that "tomorrow" or "next week" often doesn't literally mean the following day or week; but this could mean "in the future".

4. Negotiation approach

What for most Westerners may seem to be innocent mingling is in fact their way of gathering information.

Chinese negotiators are well versed in the art of positioning & framing, the intricacies of pricing and the use of delays as a negotiation tactic. They have good negotiation skills and will often use negotiation tactics to humiliate or shame their counterpart in order to create pressure and gain the advantage. Take the blame if a problem arises whether you are accountable or not and do not react with disrespect.

Your entire team is advised to attend the meetings and it's very important to arrange for someone with a position of authority within your organisation to make the introductions and to accompany you during meetings. Without visible official support, you will be sending out the wrong message about how genuinely you view the negotiations.

5. Team based negotiations

The Chinese almost never negotiate unaccompanied. It is not always clear who the manager is and who has complete authority to decide matters. Although decisions are made by consensus, there is usually one leading authority who may not be very active during negotiations. Gain the attention of their lead negotiator and direct your most persuasive and logical arguments towards him. The rest of the team usually plays the role of an advisory body.

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