Negotiating in China

Kevin Rudd is an expert and Julia Gillard has just demonstrated doing it properly can pay off in spades. Chinese Language and Cultural Advice managing director Leonie McKeon tells us how to conduct successful negotiations in China.


Spend time developing and maintaining ‘guanxi’

The closest English meanings for ‘guanxi’ are relationships, connections and one’s social ties. Relationship in Chinese culture means a business relationship, and carries the same importance as a strong friendship, marriage or partnership. Solid ‘guanxi’ can be with you for the rest of your life, and like any relationship, it takes some effort to maintain. Developing and maintaining ‘guanxi’ is a vital part of the negotiation process. The Chinese often say ‘no relationship no business.’

Understand Chinese hierarchy

Chinese culture is a hierarchical culture; therefore you need to understand the hierarchy of the Chinese people with whom you are negotiating. This hierarchy will determine how you address people, where you sit in the meeting room, and how you introduce your group.

Understand ‘face’

‘Face’ is different to the notion of ‘self-esteem’. Self-esteem is about “how I feel about myself”, but ‘face’ is more about “how others feel about me”. ‘In Chinese society it is important to be respected by the group in which you belong, as the focus is on the individual’s position within his/her own social group.  ‘Face’ is always gained, lost, or given in front of others. A Chinese person’s reputation rests on how much ‘face’ he/she gains. It defines a person’s place in their social network. Sources of face can be wealth, intelligence, skills, position and solid social connections.

Asking very direct questions can cause loss of ‘face’. A strategy to avoid asking questions in such a direct manner is to change the structure of your questions. Instead of asking yes/no questions it is better to ask more open-ended questions.

You can give ‘face’ by pronouncing a Chinese person’s name correctly, and also knowing where the family name is situated in the name.

A ‘no’ can look like a ‘yes’

In communication, Chinese people often use a circular style to express rejection or refusal. Looking at this example, ‘Under the current circumstance, we would like to discuss this matter when the opportunity arises’, this sentence uses very positive words to send a ‘no’ message. This kind of answer can leave you with an optimistic view that things are moving forward, however it is a gentle rejection.

Translate your materials

Before meeting with your Chinese counterparts, you will need to have all of relevant materials translated. This paves the way for smooth communication. Make sure you use a reputable company to do the translation job, as an unclear translation has the potential to destroy a business deal.

Engage a professional interpreter

Always have your own interpreter rather than relying on the interpreter from the Chinese side. You need to engage a professional interpreter, as just because someone is Chinese doesn’t necessarily mean they can interpret. The more you prepare the interpreter for the interpretation assignment the smoother things will be. Good preparation means providing the interpreter with your presentations and meeting agendas so that they can research any unfamiliar terms and ask you questions prior to meetings.

Understand the Chinese negotiating culture

The physical surroundings that Chinese people are born into play a big part in how they feel about negotiation. It is common in China to see open air markets and people bargaining striving to get the best deal possible. Most Chinese people feel quite comfortable about the process of negotiation as this is a normal part of their everyday life. A well-known saying in China is “Everything is negotiable

Negotiating strategies from the Art of War

Chinese culture encapsulates the practice of negotiation in The 36 Chinese Strategies, which comes from “The Art of War”. Most Chinese people know and unconsciously use these strategies to negotiate.

They are widely known and applied in the contemporary business world.  A way of thinking about the 36 Strategies is that they are like idioms such as ‘don’t cry over spilt milk.’  Just like these idioms, the 36 Chinese strategies are learnt through families, friends, and to a lesser degree, at school. Knowing the 36 Strategies is a crucial part of knowing how to understand and conduct business with Chinese people.

An example of one of the 36 Strategies: Strategy 3: ‘Murder with a Borrowed Knife’. This means: To preserve your own strength by getting others to help you achieve your goals. For example: In a business negotiation the head person will not be the one who raises questions such as ‘Can you reduce the price?’ The person who asks this will be someone with much less status. The head person is therefore preserving his/her own strength.

 By: Leonie McKeon, Managing Director, Chinese Language and Cultural Advice

Contact us at Chinese Language and Cultural Advice
Phone: 08 8352 6128

Chinese Language and Cultural Advice in conjunction with Chamber of Commerce and Industry of Western Australia are conducting a full-day workshop on Wednesday 8 May in Perth.

For details of the event click here.