Negotiations are generally smoother if you visit the relevant factory because your physical presence gives a loud statement of your seriousness. Without this message from you, you are likely to get no better than standard pricing and co-operation.
To establish a business relationship, Chinese management generally prefer face-to-face contact. They enjoy taking prospects out to lunch or dinner and showing them around their facilities. The cultural influences defined set of elements that underpins the Chinese negotiation style.
How precisely do the Chinese negotiate contracts and other agreements? Do they follow conventions similar to those of European negotiators? To the Japanese? Is there a pattern or style to their negotiations? These are the types of issues examined and resolved in following eight important elements of the Chinese negotiation style in the order most Westerners will encounter them:
1. Guanxi (Personal Connections)
While Americans put a premium on networking, information, and institutions, the Chinese place a premium on individuals' social capital within their group of friends, relatives, and close associates.
2. Zhongjian Ren (The Intermediary)
Business deals for Americans in China don't have a chance without the zhongjian ren, the intermediary. In the United States, we tend to trust others until or unless we're given reason not to. In China, suspicion and distrust characterize all meetings with strangers.
3. Shehui Dengji (Social Status)
American-style, "just call me Mary" casualness does not play well in a country where the Confucian values of obedience and deference to one's superiors remain strong. The formality goes much deeper, however—unfathomably so, to many Westerners.
4. Renji Hexie (Interpersonal Harmony)
The Chinese sayings, "A man without a smile should not open a shop." and "Sweet temper and friendliness produce money." speak volumes about the importance of harmonious relations between business partners.
5. Zhengti Guannian (Holistic Thinking)
The Chinese think in terms of the whole while Americans think sequentially and individualistically, breaking up complex negotiation tasks into a series of smaller issues: price, quantity, warranty, delivery, and so forth. Chinese negotiators tend to talk about those issues all at once, skipping among them, and, from the Americans' point of view, seemingly never settling anything.
6. Jiejian (Thrift)
China's long history of economic and political instability has taught its people to save their money, a practice known as jiejian. The focus on savings results, in business negotiations, in a lot of bargaining over price—usually through haggling. Chinese negotiators will pad their offers with more room to maneuver than most Americans are used to, and they will make concessions on price with great reluctance and only after lengthy discussions.
7. Mianzi ("Face" or Social Capital)
In Chinese business culture, a person's reputation and social standing rest on saving face. If Westerners cause the Chinese embarrassment or loss of composure, even unintentionally, it can be disastrous for business negotiations.
8. Chiku Nailao (Endurance, Relentlessness, or Eating Bitterness and Enduring Labor)
The Chinese are famous for their work ethic. But they take diligence one step further—to endurance. Where Americans place high value on talent as a key to success, the Chinese see chiku nailao as much more important and honorable.
Below is the View from Both Sides which indicates the basic cultural values and ways of thinking:
| American | Chinese |
|---|---|
| individualist | collectivist |
| egalitarian | hierarchical |
| information oriented | relationship oriented |
| reductionist | holistic |
| sequential | circular |
| seeks the truth | seeks the way |
| the argument culture | the haggling culture |
How they approach the negotiation process
| American | Chinese |
|---|---|
| quick meetings | long courting process |
| informal | formal |
| make cold calls | draw on intermediaries |
Information Exchange
| American | Chinese |
|---|---|
| full authority | long courting process |
| direct | formal |
| proposals first | explanations first |
Means of Persuasion
| American | Chinese |
|---|---|
| aggressive | questioning |
| impatient | enduring |
Terms of Agreement
| American | Chinese |
|---|---|
| forging a "good deal" | forging a longterm relationship |
Numbers in Chinese Culture
Numbers in Chinese culture play a significant role based on the belief that certain numbers are lucky or unlucky. In Chinese culture, the luck of numbers is based on the Chinese word that the number name sounds similar to other Chinese words. People try to get lucky numbers or lucky number combinations in their phone numbers, street addresses, residence floor (in a multi-storey building), driver's license number, license plate number, bank account number, etc. Number definitions:
One - (1): represents unity. And it is one of favourable numbers.
Two - (2): represents "good things come in pair" as the Mandarin speaks. And according to the Cantonese "2" means "easy".
Three - (3): represents "live" and all related to living things.
Four - (4): represents the "death" and always related to unlucky things.
Five - (5): represents "me" or "nothing".
Six - (6): represents the salary or the income.
Seven - (7): represents "together".
Eight - (8): represents the prosperity, wealthiness, and fortune.
Nine - (9): represents the "longevity" or lost-lasting.
Zero - (0): means complete or as a whole.
