Business Negotiation Guide for China

Chinese Business Shake Hands

Business Negotiation Guide for China

You’ll find it beneficial to bring your own interpreter, if possible, to help you understand the subtleties of everything being said during meetings.

Speak in short, simple, sentences free of jargon and slang. Pause frequently, so that people will be able to understand everything you’ve said.

You will have to make presentations to different levels of the organization.

Before you arrive, have at least 20 copies of your proposal ready for distribution.

Presentation materials of any kind should be only in black and white. Colors may be attributed special meanings in Chinese culture.

Except for those educated in the West, Chinese business people largely rely on subjective feelings and personal experiences in forming opinions and solving problems.

Belief in the Communist party line will be a dominant influence in all negotiations.

Empirical evidence and other objective facts will be accepted only if they do not contradict Communist party doctrine and one’s feelings.

Local decisions are made by the head of the collective.

In Chinese business culture, the collectivist way of thinking still prevails, even in sectors experimenting with free enterprise.

“Saving face” is an important concept to understand the Chinese. In Chinese business culture, a person’s reputation and social standing rests on this concept. Causing embarrassment or loss of composure, even unintentionally, can be disastrous for business negotiations. So be careful to avoid causing someone to “lose face” by insulting, criticizing or embarrassing him or her in front of others, or by treating the person with less than the proper respect due his status in the organization.

The Chinese are very keen about exchanging business cards, so be sure to bring a plentiful supply. Ensure that one side is in English and the other is in Chinese, preferably in the local dialect. Include your professional title on your business card, especially if you have the seniority to make decisions. In Chinese business culture, the main point of exchanging business cards is to determine who will be the key decision-makers on your side.

If your company is the oldest or largest in your country, or has another prestigious distinction, ensure that this is stated on your card.

Present your card with two hands, and ensure that the Chinese side is facing the recipient.

When receiving a business card, make a show of examining it carefully for a few moments; then, carefully place it into your card case or on the table, if you are seated at one.

Not reading a business card that has been presented to you, then stuffing it directly into your back pocket, will be a breach of protocol.

In accordance with Chinese business protocol, people are expected to enter the meeting room in hierarchical order. For example, the Chinese will assume that the first foreigner to enter the room is head of the delegation.

Since there is such a strong emphasis on hierarchy in Chinese business culture, ensure that you bring a senior member of your organization to lead the negotiations on your behalf. The Chinese will do the same.

The hierarchy within a Chinese organization is complicated. It is often difficult to identify who makes the final decision. Thus, treat everybody with equal respect and be prepared to present your material to many different people at varying levels of authority.

Only the senior members of your group are expected to lead the discussion. Interruptions of any kind from subordinates are considered inappropriate by Chinese.

Written contracts are secondary in China to personal commitments between associates. Some executives prefer to sign a principal agreement and let their subordinates work out the details at a later time. Chinese usually feel that single contracts are just one component of a larger relationship.

In Chinese business culture, humility is a virtue. Exaggerated claims are regarded with suspicion and, in most instances, will be investigated.

The Chinese will not usually come out directly and say “no” to a proposal. They will find many indirect ways to reply. Ambivalent answers such as “perhaps”, “I’m not sure”, “I’ll think about it”, or “We’ll see” usually mean “no.”

Be patient, show little emotion, and calmly accept that delays will occur. Moreover, do not mention deadlines.

Several trips to China will probably be necessary before the business arrangements are finalized. Chinese businesspeople prefer to establish a strong relationship before closing a deal. With this in mind, keep your return plans flexible in case negotiations do not proceed according to schedule. Even after the contract is signed, the Chinese will often continue to press for a better deal.

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