Long Term Partners – Or Short Term Opportunists?

Know Your Chinese Negotiating Counterparty

A Common Question:

• Are Chinese negotiators long term planners – or short term opportunists?

A Common Question:

• Are Chinese negotiators long term planners – or short term opportunists?

• “I’ve heard that Chinese businessmen think about business in terms of decades or generations …”

A Common Question:

• Are Chinese negotiators long term planners – or short term opportunists?

• “I’ve heard that Chinese businessmen think about business in terms of decades or generations …

SO HOW COME I JUST GOT DUMPED BY MY CHINESE SUPPLIER OR PARTNER?”

Chinese Dealmakers: 3 Options

• Plan A: A long-term, win-win, mutually beneficial relationship .

Chinese Dealmakers: 3 Options

• Plan A: A long-term, win-win, mutually beneficial relationship .

• Plan B: A one-off, win-lose transaction that maximizes the gain right away.

Chinese Dealmakers: 3 Options

• Plan A: A long-term, win-win, mutually beneficial relationship .

• Plan B: A one-off, win-lose transaction that maximizes the gain right away.

• Plan F… as in FAILURE. He invests the time, effort, and resources to develop a long-term relationship, but the deal is a failure and he gets nothing.

Chinese Dealmakers DO NOT LIKE PLAN F!!!

• Your counterparty will switch from Plan A (long-term partner) to Plan B (one-off transaction) quickly and without warning.

Chinese Dealmakers: DO NOT LIKE PLAN F!!!

• Your counterparty will switch from Plan A (long-term partner) to Plan B (one-off transaction) quickly and without warning.– He wants to recoup his time, investment and

opportunity cost.

Chinese Dealmakers: DO NOT LIKE PLAN F!!!

• Your counterparty will switch from Plan A (long-term partner) to Plan B (one-off transaction) quickly and without warning.– He wants to recoup his time, investment and

opportunity cost.– As far as he’s concerned, it’s your fault for

disappointing and/or betraying him.

What spoils the deal?

• Somehow, you didn’t live up to your end.

• There are 3 possible reasons:

1. Your product or service.

• You or your product offering were found wanting from the very first encounter.

• Not every first date ends in a marriage proposal.

2. It’s not me. It’s you.

• The Chinese side originally thought there was something there – but now it’s just not working out.

• Maybe you were too aggressive, too impatient, too greedy or too cheap.

• The Chinese side switches from Plan A to Plan B to cut losses and recoup costs.

• He may just stop returning calls.

3. You have outlived your usefulness.

• You started out with technology, processes or business methods that he didn’t understand, and needed you – even at inflated costs.

• Now he understands the tech and holds the IP (intellectual property), but you are still demanding most of the profit – and all of the respect.

Beware the “Downgrade”

• To a Chinese negotiator with a long-term perspective, it doesn’t really matter if your betrayal or disappointment occurs in the first five minutes or after doing business for years.

• You can be downgraded you from value-adding partner to one-off pest as soon as the circumstances require it.

Originally posted 1/2012ChineseNegotiation.com

• Know Your Chinese Counterparty: Long Term Planners or Short Term Opportunists?

• http://www.chinesenegotiation.com/2012/01/know-your-chinese-counterparty-long-term-planners-or-short-term-opportunists/

Guanxi for the Busy American

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