How to successfully negotiate with Chinese counterparts (learnings from the trenches in China and around the world)

When you advise the world-leading companies and governments for over two decades you learn many things. When you help build China as a country for over a decade, you get the master class training of bargaining and negotiating deals (provided you speak Chinese, constantly study the culture, and succeed as one of the few foreigners in arguably one of the toughest, most brutal business environments).

Why read further? Because I paid my price to understand China and Chinese practices more than most foreigners

Chinese were my daily teachers

When I arrived in China in 2002, I could not speak a single word of Chinese. I was put into a class with predominately Asians who were reading the Chinese newspaper already. It was a rough start! But I made up my mind to succeed and persist. After a few months, I chose to only hang out with Chinese locals, only spoke Chinese, lived like a Chinese. Every Chinese person became my Chinese teacher - from a worker to CEO, even children. Yes, it was a humbling, but instructive experience.

Soon my teachers elevated to the greatest Chinese thinkers, philosophers, military strategist. I studied their writings in Chinese. And with my experience, my reputation and acceptance grew in Chinese society.

Risking my life in commitment to China

When SARS hit China 2003, and most foreigners left the country I stayed. In the height of turmoil, fear, false news and despair I remained in Beijing. “We live together. We die together. I will not leave you”, I told my Chinese friends. Then I called my mother and said “Good-bye”. At that moment, I was not sure if I would make it through the next months alive. It is an interesting, sobering experience when you look death eye-to-eye… And I have met death a number of times later…

God blessed my work and service in China

I survived. Not all did. Later I became one of the first foreigners to lead the operations of a state-owned government organization. Helped Huawei to become a successful global company. Developed and directed famous CSR & Sustainability programs for ZTE. Won industry awards developing cutting edge industry standards, transformed entire supply chains for British Telecom. Took a Chinese company public on the London stock exchange (dealing with some of the cockiest UK investors). Saved companies from bankruptcies and saved ten thousands of jobs and livelihoods. Directed organization turnarounds. Guided health care, pharma & biotechnology programs that impacted the lives of tens of millions of people. Guided the design of smart factories & transportation. Helped cities, industrial parks and infrastructure grow at eye-popping speed. God was very gracious with his guidance and support!

In China, every day meant negotiating for life necessities

In the early years many Chinese saw a foreign face and wanted to take advantage of it. Every single item, service, purchase – I negotiated. Again, the respect grew. Soon my Chinese friends asked me to buy for them (because I negotiated much lower prices than most). I even served as tour guide between projects. Yes, I showed China to Chinese people and negotiated transport, accommodation and purchases across China. I have been to almost every place of interest in China. In some instances, I had to negotiate for our belongings (and safety) with local mafia and bandits. It was an interesting, instructive time.

Chinese culture is too rich, too deep, to astonishing for most foreigners ever to comprehend

If you are foreigner, you will never understand Chinese. The culture is so complex, so multi-facet that a lifetime is not enough to figure out how Chinese think and feel. You will not. Do not think a few books will help you make the difference. It won’t. Sadly, many popular book authors about China do not even speak Chinese, which is the absolute necessity and key to understand the Chinese culture more.

I love Chinese people. I love Chinese culture. I have the highest admiration for its history and accomplishments. The difference: I have spent two decades learning about China. And you can only truly appreciate what you understand!

Research, prepare and practice, before you negotiate with Chinese!

Chinese are very diligent and hard-working.

They will research your organization and you as individuals in detail. They will talk to your competitors, suppliers, co-workers, they may even ally with your personal opponents (inside and outside your company). They will know your individual strengths & weaknesses. Depending on the importance of the deal, they may learn more about you than you may want your spouse to know.

A lesson from a Chinese teenager? (An anecdote)

I vividly remember a time when I was invited at CEO friend’s home. We were eating dinner. His 16-year-old daughter wanted to sleep over at her “school mate”, which my friend suspected to be her boyfriend. My friend categorically refuse to allow it. His daughter did not fight. She just dropped the issue and seemingly played with her phone. Shortly after my friend received a text message from his daughter. I glanced over the text and knew he was in trouble. His daughter reminded her dad briefly that she knew about his “closer relationship” with his secretary. And she expressed concern that her mother/ his wife may not fully agree on that either. Immediately, the dad changed his thinking and convinced the mother that a sleep over of her daughter would be actually not such a bad idea… “In fact, so that her daughter and her school friend could study more for school exams”.

All reached an agreement without any fight and any word verbally spoken. By the way, the wife knows about her husband’s secretary (through a common friend). The wife monitors the situation and will intervene at her timing. The Chinese way…

Now, do your really think you can stand the ground against experienced professional Chinese negotiators? They will “eat you for breakfast”!

There are key rules for negotiation. You need to apply those and prepare in addition for the Chinese negotiation masters!

I share some of the key principles of how to negotiate partnership, joint venture and transaction deals in separate workshops and on projects.

When dealing with Chinese counterparts, you must get additional special training, guidance and ongoing support specific to the Chinese business culture.

In summary:

• Understand that with the Chinese you face world class natural negotiators. (Do not be deceived by outward physical appearance! That can be part of the tactics…)
• Diligently prepare. Get an expert advisor on your team. He must speak Chinese and know the culture.
• Be aware that a Chinese native on your team may be a potential ally to the savvy Chinese opponent - and thus a potential risk and liability.
• Plan and strategize beforehand with your leadership and China expert.
• Form a team with key roles. Recruit the right people with the right skillsets for your team.
• Assign clear responsibilities. Determine your negotiation strategy and tactics.
• Assume and practice different scenarios. Practice until you are all aligned.
• Assign enough time budget for the people to meet and prepare.
• Expect negotiations to take considerably longer and unpredictable turns.
• Understand that some/ many arguments will be deliberately illogic.
• Be prepared to go into a prolonged battle. Be prepared to apply the laws of military warfare. The Chinese are masters in it!
• Keep your cool. And regain it fast as you will certainly lose it!
• And finally, understand a signed contract for the Chinese only means a confirmed intent to collaborate. Expect the Chinese to constantly re-interpret and re-negotiate terms throughout the lifetime of the contract…!

Disclaimer:

This article explicitly expresses only the personal views and experiences of the author. It does not reflect views of any current/ former employers or clients.

Connect with the Author:

If you work in Real Estate, Infrastructure or Construction as leader, engineer, program manager, functional expert, consultant, government advisor and/ or supplier, reach out to Alex Steinberg through WhatsApp at +966531824178 or email at [email protected]