Negotiation with chinese – cultural influence and best practises

NEGOTIATION WITH CHINESE – CULTURAL INFLUENCE AND

BEST PRACTISES

1

For additional information about Business with China

please visit www.China-Business-Connect.com

www.China-Business-Connect.com

Chinese has been an important business destination for western companies over the many years.

China opened her markets to the world in 1978 for trade and since then it has been a favourite for many western business establishments.

But doing business with Chinese firms is not an easy task as negotiating with them is quite difficult.

2


CHINESE CULTURAL ROOTS AND NEGOTIATION

• importance of interpersonal relationships,

• family orientation,

• respect for seniority and hierarchy,

• pursuit of harmony,

• avoidance of conflict

• concept of face

3



Another factor that influences Chinese negotiating style is Chinese war stratagems.

Ancient Chinese war tactics and stratagems have influenced modern Chinese business thinking a lot. The 36 Chinese stratagems can be mapped directly to their negotiation tactics and they apply their war tactics to business field as well.

The business strategies like attacking the opponent’s vulnerabilities, playing home court, manipulating friendship, hospitality, etc. against the foreign traders are influenced by the use of stratagems for handling hostile opponents.

4



Chinese culture and history has a deep impact on their business style and negotiation skills.

Their cultural heritage, socio-economic and political changes, history of invasion and civil war had a deep and long lasting influence on business culture. Chinese culture is highly influence with Confucianism, a 2500 year old philosophy that is root of Chinese culture and ethics.

The various virtues of Confucianism which are base of Chinese negotiation style includes:

5

http://china-business-connect.com/

http://china-business-connect.com/


NEGOTIATION WITH CHINESE – IMPORTANT ASPECTS

Individual vs. public interest – Unlike western people Chinese are more oriented towards building a relationship rather than just getting the work done.

Western firms often follow individualistic approach and are concerned about their personal gain whereas Chinese often consider the impact of the negotiation on a higher level.

They look into how the deal will affect all the parties involved, the public interest and effect on the government. Hence it is essential to look beyond individual benefits while negotiating with Chinese.

6



Long term relationship – While negotiating Chinese look for building a long term relationship and a business partner and not just a one-time deal.

Hence it very important to build a trust and mutual respect with them.

Along with that they also evaluate the business firms on their dedication and capability to have a long lasting business relationship.

7



Concept of face – Face or social standing in terms of prestige, honour and reputation is very critical in Chinese society.

Chinese likes to be treated as their ‘face’, anything impacting their social status (losing the face) can lead the negotiations go void.

8



Negotiation style – Chinese believe in gathering as much information about their prospective business partners as they can.

They tend to indulge in discussions and discuss minor details and long term strategies.

9



Re-Negotiation – Chinese like to re-negotiate to get more concessions once the contract is finalized.

The like to go over the contract and the points finalizes once again and re-negotiate the terms.

This may be frustrating for a westerner but they should be flexible enough while negotiating with Chinese and be ready for this.

10


SUMMARY ON NEGOTIATION WITH CHINESE

Chinese are highly influenced with their culture and past, and that shows in the business negotiations as well.

Since their culture differs a lot from western culture, their style of doing business also is quite different and that leads to tough negotiations while partnering them.

It is very important to understand their phycology and their culture before starting any negotiations with them.

Also they demand a lot of mutual respect and trust and that is the core of doing business with them

11

1

For additional information about Business with China please visit www.China-Business-Connect.com