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Applying Negotiation Skills During The Five Step Process To Achieving Successful Transactions In China
1. Negotiation objective
For many the aim of negotiation is a substantive outcome and material gain. In China the transaction is about the relationship and there is no better method to succeed in doing business than through a close alliance, so consider investing a lot of time in this pre-negotiation stage.
The aim of negotiation is not the signed contract and unforeseen circumstances are resolved through the partnership; the contract is more a sign of the intent to do business together than a legally binding record. Trust is the foundation of the agreement and the fact that you have signed a contract does not actually mean that the transaction is closed; it means that an alliance has been established.
2. Negotiation approach and communication style
The Chinese negotiation style is one of collaboration and problem solving whilst still focused on profit.
The communication style is expressed by using titles, following procedure and being highly respectful and aware in discussions. Always start with a formal approach, using first names and relaxed style is risky and can be considered offensive and viewed as an act of disrespect.
When you negotiate, listen carefully to ascertain the true meaning. It is unusual to hear a direct no and you will more likely be told "it is difficult" which in fact does mean you must not pursue it. Do not expect to receive direct clear responses, 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 spent in building up a relationship which is a symbol of respect and which is expected to be reciprocated. For Westerners time is valuable and the Chinese usually take advantage of this fact. Preparation is therefore important, create alternatives and let your counterpart know that they are is not the only one who can walk away from the transaction. Bear in mind that "tomorrow" or "next week" often doesn't literally mean the following day or week; instead this could mean "in the future".
4. Negotiation approach
What for most Westerners may appear to be innocent socialising 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 delays as a negotiation tactic. They have excellent negotiation skills and will often use negotiation tactics to humiliate or shame the other party in order to create pressure and gain the upper hand. Take the blame if a problem develops whether you are responsible or not and do not counter with disrespect.
Your whole team is advised to attend the meetings and it's vital to arrange for someone with a position of authority within your business to make the introductions and to accompany you during meetings. Without obvious official support, you will be delivering 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 complete authority to decide issues. Although decisions are made by consensus, there is usually one leading authority who may not be very involved during negotiations. Gain the attention of their lead negotiator and direct your most persuasive and logical discussions towards him. The rest of the team normally plays the role of an advisory body.
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