One Billion Customers - James McGregor [33]
The country is a shifting plate of sand. When it comes to negotiating business deals, you will find government entities more steeped in cultural proclivities than today’s more practical private entrepreneurs. Nonetheless, that Chinese Wharton-grad MBA seeking a software partnership with your company will be as wily as Zhou Enlai was in pitting foreign competitors against one another. The state-industry boss with a multibillion-dollar state-of-the-art manufacturing juggernaut will stretch the truth to obtain a desired outcome, just as much as Li Hongzhang did with the Taiping rebels.
One thing that hasn’t changed at all is Chinese sensibilities. If you are shrewd, you can even use this to your advantage. Charlene Barshefsky got it right. She showed proper respect and deference to the Chinese, but she didn’t get caught up in the shtick. She went toe-to-toe with Zhu Rongji in negotiations, but he respected her because she knew her stuff and she constantly demonstrated that what she was doing was good for China.
Finally, corporate executives should learn from Clinton’s mistake. In tying China’s MFN renewal to human rights issues, he cobbled together what he needed at home politically and then applied it to China. The result was a disaster. Many corporations make a similar mistake. They look at their company’s internal needs and then apply that to their Chinese plans. That is only step one. Just as a foreign businessperson needs to understand the thinking and motivations of their Chinese counterparts, a company must understand what China as a country needs and wants. Only by blending that into your business model will you be successful.
There’s more than a little history behind this.
The Little Red Book of Business
Fatigue, food, and drink are negotiating tools. If your Chinese counterpart wants to finalize a deal after a mao-tai-soaked banquet, it is better to throw up on the contract than sign it.
The Chinese government uses competition from foreign businesses to reform its own system and companies.
To be truly powerful in China is to be able to avoid responsibility for your decisions.
The Chinese now understand the outside world much better than the outside world understands them.
China is seriously schizophrenic: It is confident, reasonable, and eager to become a world-class competitor while also paranoid and insecure about the outside world.
China is modernizing, not Westernizing. The country’s goal is to modernize but retain the Chinese “essence,” which it is still struggling to define.
China has lots of slogans but no leading ideology, other than to make itself rich and powerful by relentlessly pursuing international trade and commerce.
Chinese negotiators are masters of making you feel you need them more than they need you.
The Chinese often try to extract a payment, in the form of a lopsided deal, for the opportunity to do business in China.
The Chinese will ask you for anything because you just may be stupid enough to agree to it. Many are.
You will never be successful walking into a meeting cold. Know who you are dealing with and what they really want and need.
The Chinese always need to get concessions from you.
Don’t take what your Chinese counterpart tells you to be the truth. They will often cite regulations or rules or practices that are nonexistent just to put you in a box in working out the deal.
The Chinese try to play you as being “unfriendly” to China if you don’t give them what they need. Don’t be afraid to tell them that friendly business is based on a fair deal for all.
Foreign businesspeople who come to China often have too much goodwill, too much trust, and too little patience.
Pay attention to political trends and the priorities of the Chinese government so that you can fit your