How to Negotiate Effectively with Chinese Companies - Practical Tips

China is a vast and rapidly changing country overflowing with economic opportunities for locals and foreigners alike. What special insights do outsiders need to prepare for international negotiations in China?

Four Characteristics That Complicate Business Negotiations in China:

1. Strong Emphasis on Relationships: Deals tend to rely heavily on the relationship between the parties involved; social gatherings are common during the negotiation process.
2. High Commitment and Flexible Contracts: Your new Chinese partner is likely to expect you to invest heavily in the relationship, often without fixed terms, and to respond to their changing needs.
3. Long and Slow Deal-Making Process: The Chinese focus on building relationships rather than contracts tends to lengthen the negotiation process. Westerners approve their counterparts only after making a deal, while Chinese make a deal only when a certain level of friendship is reached.
4. Widespread Opportunism: Despite the importance placed on relationships, negotiators in China today keep their options open and may abandon a deal when a sweeter deal appears.

Tips for Successful Negotiation:

• Develop relationships and focus on building trust
• Show respect and maintain a cooperative approach
• Be prepared for compromise and long negotiations
• Prepare for gifts and reciprocate appropriately