HOW TO NEGOTIATE WITH CHINESES

Good strategy and cultural knowledge are essential when it comes to doing business with foreign companies. In some cases, business and commercial culture have many similarities to ours. In others, knowing idiosyncrasies may be essential to closing a good deal.

For Chinese entrepreneurs, this becomes even more important when it comes to expanding partnerships and seeking stakeholders beyond companies from more cosmopolitan environments such as Beijing and Shanghai.

For many investment analysts, it is in the second and third tier cities that the best opportunities are today. Big companies already stand out in less popular cantons and one cannot ignore the potential that this represents. However, characteristics that are already important in these environments most permeated by Eastern culture become even more powerful in such contexts.

“Tan pan” is the Chinese word for negotiation. It combines the characters that mean "argue" and "judge". It is a confidence-building mechanism designed to achieve mutual benefits. The Chinese consider negotiation a long-term process that allows, through dialogue, each party to judge or evaluate the interlocutor and their capabilities, reaching a common understanding on a particular issue, condition or transaction.

In practice, this refers to a style of long-lasting relationships that are built over time, not necessarily structured from immediate contracts.

We are always very concerned about temporality, structuring each step of a negotiation into a workflow that must be strictly adhered to. The Chinese, in turn, are concerned about building lasting relationships that will bring long-term gains for both parties. Balancing both trends is important, but not always easy to do when trading.

Negotiating with Chinese always requires prior study of the context, so that questions are well asked and future problems avoided. It is normal for foreigners to underestimate the level of linkage between Chinese business and politics. Lack of clarity about industrial policy, government regulations and relevant business parties at the national, provincial and local levels may result in an incorrect approach. Negotiations may be interrupted when corporate interests clash with local arrangements without much apparent explanation.

It is a culture that values the dedication and transparency. Sometimes simple attitudes like adapting to the time zone on the other side of the world working overnight can make all the difference to building trust. On the other hand, number play or little manipulation tricks can destroy a consolidated relationship overnight.

Chinese prefer to negotiate with their peers. Having a native interpreter with full command of the language can tremendously benefit anyone wishing to venture into this market. And knowing that the decision by partners of the same nationality will always weigh on these negotiations can avoid unpleasant surprises.

Finally, as long as a negotiation may be, price will always be an essential element for Chinese entrepreneurs and customers. Convincing the other party that they are offering the lowest possible price is always a challenge. It is not uncommon for negotiations that already seemed well underway to return to their beginning by the unexpected request for price revision of a product or service. Therefore, quoting clearly and transparently is essential to building trust.

It's not easy, but considering that a contract never ends a negotiation when it comes to Chinese, as the relationship can go on for years with gains for both parties, it's a worthwhile investment. In a way, negotiation is like a marriage in the East. Once trust is gained, future profits for both parties are more than certain.

It is important to take all this into account. After all, China is expected to close the year with more than $ 5.6 trillion in retail sales in 2019, 100 billion higher than the United States. Prospects speak of the possibility of the country becoming the largest economy in the world by 2030. It is better to know how to deal with the giant before it goes over. Is not it?

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