One Billion Customers - James McGregor [31]
The Chinese are adept and subtle readers of foreign attitudes. The issue of basic respect is extremely important. It is okay to be tough and steadfast, but disastrous to be insulting.
Humor can lighten up stressful times in negotiations. The Chinese have a very good sense of humor, especially if you are poking fun at yourself, not them. But notions of equality, mutual benefit, and respect are one-sided in China. You are expected to be very sensitive to Chinese feelings, but don’t expect the same in return. You are, after all, a barbarian on their turf.
A natural outgrowth of this is that Chinese have no problem pushing lopsided proposals and engaging in angry theatrics. The Chinese have a “no blush” gene when it comes to negotiations. No matter how egregious the demand, the Chinese can say it with a straight face. They will ask you for anything because you just may be stupid enough to agree to it. Many do. Western attorneys in China make a good living unraveling these contracts.
Chinese negotiators are masters at pushing the impression that you need them far more than they need you. It’s all about gaining the psychological upper hand. Many foreign businesspeople who negotiate in China bring along too much goodwill and trust. Chinese negotiators have no qualms about exploiting that by outright lying. That ability is a tremendous advantage for them. For the Chinese, outcomes are more important than truth. That’s why Li Hongzhang could promise not to kill the Taiping revolutionaries, then turn right around and have them beheaded. You may be told that some obscure regulation prohibits your counterpart from granting you something when no such regulation exists. That is why the devil will always be in the details. You will need expertise to verify virtually everything your Chinese counterpart tells you.
It is almost to the status of Olympic sport in China to seek advantage by pitting foreigners against each other. The tactics employed in Beijing’s Negotiating Building in the early days of modern commerce still endure in government and private deals. On multibillion-dollar infrastructure projects, such as the Three Gorges Dam, Siemens, GE, Mitsubishi, and other giants were expertly pitted against one another, with contracts going to not only the companies with the best price and product, but to those who transferred the most technology and financed the deal themselves. Even so, when subsequent rounds of bidding occurred, it wasn’t unusual for the company that secured the first contracts to not even be invited to participate.
How do you deal with this? One way is to adopt Barshefsky’s notion of a roadmap. She assuaged the insecurities of Chinese trade negotiators, and provided them with arguments to work through their system, by providing a roadmap that framed China’s WTO obligations in terms of a “win-win” for China. This helped inoculate Chinese proponents of WTO against critics who would predictably accuse them of selling out their country to foreign interests. Lay out for your Chinese counterpart a step-by-step technology transfer and domestic manufacturing plan that provides what China is seeking but keeps you in the game for the long term. If that isn’t possible, make your money on the first deal and move on.
Many foreign executives set themselves up for China’s divide-and-conquer tactics. Company CEOs love to come charging into China insisting on meeting with the country’s top leaders, or at least the senior ministers responsible for their industry. They go into these meetings with little more than vague ideas and a determination to do business in China. The Chinese love these people. In many cases, the foreign CEOs will end meetings with an unfocused commitment to some sort of business deal. They then fly home, leaving their underlings to fill out the details. The Chinese know the boss wants the deal, so they squeeze the underlings