Influencers from Around the World – Three Keys to Consider when Negotiating with the Chinese

Marco Germani has been guest writing for
Influence PEOPLE for four years. He’s written his own book on persuasion and
applies the principles of influence daily as he travels the world selling wine.
I encourage you to reach out to Marco on Facebook
and LinkedIn.
Brian Ahearn, CMCT®
Chief Influence Officer
Helping You Learn to Hear “Yes”.
Keys to Consider when Negotiating with the Chinese
A few years ago I attended an influence workshop
put on by Robert Cialdini, Ph.D., where the last part of the seminar was
dedicated to applying the principles of persuasion to different cultures around
the world. My understanding was the principles were immutable and universally
accepted all over the planet but in fact Dr. Cialdini explained that in
different cultures some principles are much more effective than others.


As an export manager in the wine business,
spending over 70% of my time traveling around the world and making deals, I
started to pay attention to this aspect and I realized that Dr. Cialdini was
absolutely right! What works in Italy is sometimes less effective in Germany or
in South Korea, and the best way to carry out negotiations in the United States
could be totally ineffective in Japan.
 In this week’s post I would like to focus on
China, a country which I’ve had the chance to visit many times over the past
seven years and which can be considered one of a kind in many aspects,
including the way Chinese negotiate and persuade. This subject could be very
vast but I would like to point out three main differences in the Chinese way of
negotiating because this understanding can make a big difference if you ever
find yourself doing business in China.
1. The
concept of “face” (Mian Zi)
“Losing face” is considered one of the worst
things that can happen to a Chinese person. Being diminished or worse, ridiculed,
in front of others, is the ultimate humiliation in China and this must always
be taken into account when negotiating. If yielding to your conditions could
even remotely generate the feeling that your counterpart was wrong, proposed
something inconsistent, or that makes him clearly “lose the game” when
negotiating, the deal simply will not happen. This extension of the principle
of social proof is a very sensitive subject in Asia and Chinese people in
particular seem to care about it even more.
A Chinese boss would never criticize or
admonish a subordinate in front of others, as this would cause him to lose
face. When bargaining in a street market a Chinese vendor would prefer to lose
the sale rather than accept your first price.
Taking this into account means always giving a
way out to your counterpart in order to help him “save face.” It is surprising
how many Westerns ignore this point and have trouble negotiating with the Chinese.
If the negotiation is seen as a battle, in which a party wins and the other
loses, in China the two parties are almost always bound to lose simultaneously.
The “win-win” concept introduced by the late Stephen Covey in his best seller The Seven Habits of Highly Effective People is
more relevant in China than elsewhere. It can be the deal maker or deal breaker,
whether in a business or personal negotiation with a Chinese individual.
2. The
concept of relationship (Guan-xi)
Business IS all about relationships and
everybody knows it. In the newest edition of The Pyramid of Sale by Brian Tracy and other renowned sales
trainers contend that the pyramid base is building relationships and trust with
the customers, whereas in the past it was the presentation of the product.
In China this concept goes even further. The
nearly untranslatable word  “guan-xi”
literally means “network of relationships” but it has a deeper meaning,
including how well you are perceived by influential people in your network and
how you are able to help your business counterparts network with the influential
people you know.
When starting to negotiate with a Chinese
person, the fact that you have common friends, or the fact that you have relationships
with relevant people who might turn out to be useful to your counterpart, can
give you a huge advantage. I consider this an extension of the principle of liking
even though it has a deeper and subtler meaning.
The skilled negotiator, when entering into a
discussion with a Chinese person, will take care to inform the other of the influential
people he knows or has business relationships with, letting the other
understand that, if the deal between the two of them is made, this influential
network will be put at his disposal as a natural consequence of starting a
partnership.  The problem with this
attitude, which is widely used by Chinese people when negotiating with
Westerns, is this; the information shared is seldom accurate and often purely
instrumental to get a vantage point in the discussion.
Let’s pretend I am trying to sell wine to a
dealer in China. He might state that, if I accept his conditions and start a
partnership with him, that he would introduce me to his best friend, the buyer
of the largest Chinese retail chain, whom, thanks to his introduction, will
seriously consider doing business with me as well. This is obviously just a negotiation
technique, which appeals to the greediness of Western business people and in
part to their ingenuity.
3. The
concept of circular thinking
The last crucial information to know about
when negotiating with the Chinese is the difference between the Western
“linear” thinking and Eastern “circular” thinking.  A few years ago I was involved in a long
negotiation with a Chinese buyer of frozen pizza, produced by an Italian
factory and to be distributed in several regions of China. This was going to generate
a considerable amount of business for the seller. The negotiation went on for
weeks and it seemed like we never reach an agreement. Every time there was a
new issue popping out: exclusivity, special recipe for the Chinese market,
color of the label on the package, selling price, payment terms, etc. In the
end, and after several meetings with the owner of the company in China, a
contract was finally written and it seemed to suit both partners. We celebrated
together in one of those infamous Chinese banquets for more than five hours
with alcohol flowing freely.
A couple of days later, when the Italian CEO
had already left China, I was incredulous when the Chinese buyer called me and
he said he would like to meet me to again discuss several points of the
contract. It seemed like all of the past efforts were useless and we were back
to point zero. This was because I did not understand at the time the concept of
“circular thinking.” For Western businessman reviewing an already signed contract
means there’s something wrong with it which needs to be changed but for a Chinese
businessman this might only mean they really would like to review the points
and have them restated, not necessarily that they don’t agree with them or they
want to change them. It is part of their culture and the process makes them
feel safer and reassured. This must always be taken into account when
negotiating with the Chinese. Reviewing over and over already established points
is not a bad sign or a waste of time, it is just part of the natural process of
negotiation in China!
As said, the subject is much wider than this
and I have treated it extensively in my eBook Business con la Cina (Bruno Editore – 2010, only available in
Italian at the moment but maybe one day I’ll have it translated into English).
For those who speak Italian, you can find it here



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