One Billion Customers - James McGregor [32]
If you aren’t careful, your CEO may become accepted as a “friend” of China. That is both good and bad. China categorizes foreigners as “friends” or “unfriendly.” If your CEO is considered a “friend” of China, you will certainly have better access to officials and they will speak more frankly with you. As a “friend,” you will be considered an enlightened foreigner who understands the complexities of China. But friendship in China carries heavy obligations. In China, it is considered almost immoral to turn down the request of a true friend. George H. W. Bush became a “friend” of China when he ran the U.S.-China liaison office in 1974 and 1975. When he became president the Chinese leadership called on his friendship obligation to help them emerge from the international condemnation that resulted from the Tiananmen Massacre, and Bush obliged.
If you don’t give them what they want, the Chinese will quickly label you “unfriendly” to China. Your goal is to be friendly but not foolish. Don’t be afraid to tell your Chinese counterparts that this is business, not friendship, but that you can do friendly business if both sides get a fair deal.
Just below the omnipotent exterior often projected by Chinese bureaucrats and businesspeople, there often lies a reservoir of insecurity and fear of making mistakes that results from a social system ruled by shame. Chinese politics and the country’s commercial system are brutal and Chinese negotiators go to great lengths to protect themselves from criticism that could result in their dismissal or disgrace. Government officials especially try to avoid making decisions for which they can later be held accountable. Thus they like to diffuse decision making through many layers so that no one person can be blamed. In negotiations, this Chinese preoccupation with “face” can be crippling for them. Foreigners who are not fixated with “face” have a tremendous advantage. If the talks meet an impasse caused by the Chinese side, it is easy for the foreigner to accept blame and move discussions ahead. You also lose nothing by treating even the most obnoxious Chinese negotiator with exaggerated respect. Treat them with the inflated importance they expect, but look out for your own bottom line. Engage in the theatrics, but don’t let it slide over into substance.
Barshefsky’s “win-win” formula, while still rare, is living on beyond the WTO talks. Chinese WTO negotiator Long Yongtu became secretary general of the Boao Forum for Asia, an annual conference organized by the Chinese government that is modeled on the World Economic Forum. He gives speeches throughout Asia advising governments that they shouldn’t look at trade negotiations as giving things away, but rather as gaining access to trading and business systems that will bring prosperity. His motto for the Boao Forum: “Asians Seeking a Win-Win.”
After slogging through so much history, it is only prudent to question how much of this stuff is relevant today, and how much will remain relevant tomorrow.
I have asked this question of many friends who are veteran China business hands. Their general consensus answer is that negotiating your way through the China business landscape is increasingly similar to the rest of the world, but core Chinese business behaviors and ways of thinking are encoded by history and culture, almost into the genes. It is those elements that I have focused on in this chapter.
Foreigners are now mostly comfortably accepted as residents in China, and