Negotiating Business Deals in China

Session 3
Ta-Wei Chao, Singapore, 2018

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The Poetics of Language: The
Chinese Communication
Style

2
 Driving Forces of the Poetics of
Chinese Negotiating Language
Due to the essence of Chinese pictographic language and the other
historical driving forces, Chinese frequently demonstrate their talent
of manipulating language during the negotiations.

Pictographic
Language
2

1 Power of Language When

Demonstrating The
Tradition of Mastering The Poetic of Political Authority
Calligraphy, Confucius’ Chinese
Works and Classical Language
Literatures among
3
Intellectuals
4

Usage of Symbols in
The Political Process
3
 Don’t Take “Yes” as a yes(1)
The Chinese usually tend to use a neutral or positive way to express
the negative meanings.

Chinese Speaking Meaning On the Surface

Hai Bu Cuo “seems not wrong”

Hai Hao “seems fairly all right”
Hai Xing or “appears fairly passable”
Hai Ke Yi
Kan Kan or “Let us take a look,” or
YanJiu YanJiu “Let us study it”
4
 Don’t Take “Yes” as a yes(2)
So, have to put those words which you hear during the negotiations
back to their unique contexts to approach the real meaning below the
surface of words.

Chinese Speaking Most of the time, it may mean..

Hai Bu Cuo
Hai Hao
Hai Xing or
Hai Ke Yi
No…
Kan Kan or
YanJiu YanJiu
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 Don’t Take “Yes” as a yes(3)
If the Chinese are pushed more and more, they may compose even
more complicated sentences to say “no” indirectly if they find they
can not do it in short.

Sure, I will “strive”

Of course, I will “try
for it…but it seems
my best”…but “my
quite obvious that
best” is always not
my boss will not
enough…
approve it, right?

I will strive for asking my boss

I will try my best to complete it.
to approve your request…
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 The Non Verbal Communication
Compared with the verbal communication, the non-verbal
communication is the other important influential factors in cross-
cultural negotiations.

•Non-verbal communication occupies an important role in

the effective understanding of another person’s message.
•It refers to ‘ the use of subtle signs, signals or cues in
human interaction ‘.
•It is, therefore, important for one to be aware of the
cultural differences in the divergent interpretation of non-
verbal signals, such as body movement.

Source : Goh (1996)

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 The Non Verbal Communication
The Chinese didn’t show their real feelings by body gestures often,
compared with the other cultures around the world.

• From childhood, the Chinese • To many westerners, the

are taught to control the
expression of their emotions.
• This habit has been blamed
for the high incidence of
• This makes it difficult for the
stomach ailments in China.
Chinese seem to have
expressionless faces which
betray none of the thinking
going on underneath.
negotiators to read how their
words are being received.

Source : Blackman (1997)

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 Body Languages (1)
First, for the westerners, the Chinese meaning of “Nodding” should
be paid attention to specially.

Nodding Tone of voice

•Body languages are yet another •Due to the fact that the Chinese
grey and complex area of cross- generally avoid confrontational or
culture communication. aggressive behavior, it becomes
•The western party should not natural to voice is preferred in
interpret a Chinese nod for a ‘yes’. negotiations.
Very often, such a nod may mean
no more than that ‘I hear what you
are saying’
•Without necessarily meaning that ‘I
agree with what you are saying’.
Source : Goh (1996) 9

Besides, the meaning of Eye-Contact is also very different from the
one in the Western cultures.
Feet-Pointing
•The Chinese regard it as bad
manners for one to point one’s feet
at one another, or for one to reveal
the soles of one’s feet to the
person opposite one. Such
insensitivity and lack of respect
may even amount to an insulting
and offensive behavior.
Source : Goh (1996)
Body Languages (2)
Eye-Contact
•While westerners regard eye-
contact as essential is showing
one’s sincerity and earnestness,
the Chinese consider a general
lack of eye-contact as social
courtesy.
•Talking to someone without
looking straight into another’s
eyes is regarded as showing
respect and politeness.
10
 Recommendations for Communicating
with Chinese Effectively
•Use Simple Words and Grammar
•Structuralize Your Arguments
•Don’t Mix Too Many Points at One Time
•Focus on “HOW” than “WHAT”
•Reduce Those Descriptions Which Are Too Theoretical and Abstractive
•Pay Attention to Those Implicit and Explicit Hypothesis and Conditions.
•Avoid Those Questions Needed to be Answered Immediately and Definitely.
•Reframe Your Words.
•Use Graphics and Symbols to Facilitate Your Discussion.
•Not to Interrupt.

Source : Peter (2004) and the trainer’s real experiences.

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The Features of Chinese
Negotiating Process

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 Chinese Negotiation Process
The Chinese negotiating processes could be broken down into two
three phases and each one owns its special features.

Pre-Negotiation Formal-Negotiation Post-Negotiation

- Sound Tasking - Opening phase - Implementation

Discussion
- Networking - Technical Discussions
- Re-negotiation
- Trust Building - Haggling Processes
- Contract Revision (or,
- Atmosphere Creating - Deal Finalization maybe not)
- Social Activities - Contract Signing - Social Activities
- Social Activities

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 Pre-Negotiation:
Small Talks and Relationship Building
Compared with a more direct way of negotiation in the other cultures,
in China, leveraging the small talks to build trust and relationship
before formal negotiation is fairly important..
•The Chinese attach great importance to
trust building in business
negotiation…In Chinese culture, trust is
high within but low outside family and
kinship border…however, business
partner cannot always be immediate or
extended family members. (Ghauri and
Fang, 1999)
•So, a series of small talks to build trust
and relationship is one of the notable
features in Chinese negotiations.

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 Formal-Negotiation:
First Principle Then Details
Structuring several key principles in the beginning to guide the
following negotiations is also a very unique feature in the Chinese
negotiations.

“In the opening phase, the Chinese insist on principles they claim
are not negotiable, such as ‘attribution must be done in Beijing’ or ‘
delivery time must be 20 months and no less’”.
“Their principles are actually no more than demands which have
been agreed upon by the team, and which serve to structure the
negotiation so that one side gets its needs met without having to
take into account the needs of the other side”

Source : Blackman (1997)

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 Formal-Negotiation:
Fierce Haggling Process
Compared with the western negotiation process, one of the most
notable feature of a Chinese negotiation is the haggling process.
(Blackman, 1997)

“The marketplace “To Preserve

is a battlefield” Face”
Haggling
Process

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 Post-Negotiation: The Chinese Notion of
“Contract” and Possible Renegotiations
For the western businessmen and women, one of the most important
things which you need to know when doing business in China is
understanding the “Chinese meaning” of “Contract”.
1. So, there are always contract re-
negotiations even after signing
“The basic Chinese mentality the formal contract in China.
of contracting is problem-
2. For the western businessmen and
solving based on the changing women, you have to be ready for
situations instead of contracts” this since there are many failures
of Foreign-China JV cases are
“…The PRC condition and caused by this kind of
Confucian tradition provide the misunderstanding about the
answers…” definition of “contract”.
- From Ghauri and Fang (1999) 3. Example: A Sweden-China JV
case.
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The Features of Chinese
Negotiating Logistics

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 Room and Table
Today, negotiating in modern China is not so much different from
doing it in the West in terms of the room or table setting.

Classical Way Modern Way

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 Seat Arrangement
In China, people respect one’s social status and organizational
position and it will be reflected by their seating according to their
power hierarchy.
•Chinese prefer meetings to be formal,
although dress is usually comfortable.
Leader
•Seating will be according to hierarchy.
The leader always sits in the middle of
the table.
China
•A the same time, the leader are usually
several minutes late and his/ her staff
West
will stand up when his/ her coming in
the meeting room.
•The senior man must be shown great
respect and attention at all times, even
though he takes little part.
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 Negotiation Team Size
The western negotiators will easily and usually find that the team size
of Chinese negotiators is bigger than theirs.

•Due to the principle of sharing the

Silent…Silent… responsibilities collectively, the Chinese
tend to invite all the related
departments to participate in the
negotiation session.
China •So, the Chinese negotiation team will
normally bigger than the western one.
West
•However, the majority of the
participants in Chinese negotiation
team may not say anything during the
whole negotiation because of their
limited delegations.
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 After-Meeting Social Activities
The other significant feature in Chinese negotiating process is the
number of social activities out of the formal negotiating meetings.

Karaoke
Great
Wall Tour

PeiKing Endless
Duck Bottoms
Dinner Up

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Negotiation Implications

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 Value the Chance of Face-to-Face Contacts
before Formal Negotiation
Send someone to meet your Chinese counterpart to build at least a
minimum degree of connections and create a good atmosphere to go
further before negotiations.

見面三分情 Meeting face to face will build at least certain connections

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 Take Advantage of
Small and Informal Talks
Due to the tendency of Chinese anti-public confrontations, you
usually need to leverage the small and informal talks to understand
the real meaning and hidden agenda of your Chinese counterpart.
From outside to approach the core step by step…

Mountain
Climbing on A Coffee
Sunday Break

core Golf Trip in

Da Lian
A Dinner

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 Know and Practice
The Chinese Etiquettes Appropriately
As a foreigner, although you don’t have to 100% comply with Chinese
habits and etiquettes, knowing and using it appropriately will still help
you with building relationship with your Chinese business partner.
Example: Chinese Business Cards Exchange Etiquettes
•Business cards are exchanged after the •Hold the card in both hands when
initial introduction. offering it, Chinese side facing the
recipient.
•Have one side of your business card
translated into Chinese using simplified •Examine a business card before putting
Chinese characters that are printed in it on the table next to you or in a
gold ink since gold is an auspicious business card case.
colour.
•Never write on someone's card unless
•Your business card should include your so directed.
title. If your company is the oldest or
largest in your country, that fact should
be on your card as well.
Source : http://www.kwintessential.co.uk
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 Use Social Activities to Engage Your
Chinese Counterpart
Try to participate in the social activities hosted by the Chinese as
often as possible since it really works. However, still need to bear in
mind that you may need to sign a contract the next day…

Let’s Talk About It Deeply Later…

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 Put Words Back to the Context and
Do Read Between Lines
Since the Chinese are famous for their indirectness, you do need to
practice and sharpen your skills of reading between lines.

Questions about Context Other Tricks

• Leverage your go-betweens or local
employees to know the hidden agenda
How? or interpret the information.
• Take advantage of small or informal
What? When? talks to verify your judgments.
• If really necessary, ask specific/ close
questions instead of open ones to
make sure the information you get.
Who? Why? (But do use it cautiously)
• Try to know the Chinese culture and
28 history as much as possible.
 View the Contract Culturally
Due to the Chinese special point of view about contracts, do adjust
your original thoughts about contracts to fit the Chinese business
environment.

- … - …

But Do Know
Still Treat the
That It May Not
Contract
Guarantee
Seriously
Everything

View the contract as View the contract

a guarantee as nothing
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 And Be Ready for Managing the Possible
Changes in the Post-Negotiation
Besides, do know how to deal with the possible changes delicately.
It’s a balance between stubbornness/ submission and firmness/
flexibility.
•First, you still have to pay attention on what you signed on the contract since “the
Chinese may change it afterward” doesn’t simultaneously mean that they won’t
leverage what you singed and promised to ask you for fulfilling it.
•When your Chinese counterpart would like to Change the contract, remember
that relationship always helps. So, keep on cultivating your relationship with your
Chinese business partner even after signing the contract.
•Besides, your Chinese business partner rarely change the contract without
reasons. It should be some business or political situation changed. So, when
facing the demand of re-negotiation, try to understand your Chinese counterpart’s
new concern and try to know if there is any alternative to decrease your damage.
•Think about things in a more long-term perspective since you are dealing with a
race who owns thousands-year history.
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The Art of Entertainment:
Diner and KTV in Chinese
Negotiations

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 Why Is It Important?
In China, people often say that most of the deals are made on the
dining tables. In the real practice, it is also aligned with Mr. Chao’s
actual business experience in China.

“The Chinese also love going for a drink and

engaging in Karaoke and expect you to join them. The
purpose is the same – to see people’s other side, the
human side.”
- Citation from the interview with Nils Toft, managing director of CBD, a Denmark-
based industrial firm, who have been successful in business in China

“Here, our way of communication is drinking.”

- Citation from a Consultant’s dialogue with his client in the north-west of China.
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 Why Is It Not Easy?
However, like the other cultures, the Chinese have their own very
unique ways of entertainment. So, there are some tricks deserved to
be leant by the foreigners for doing it successfully.

Rooted in
Chinese Owns Unique
Culture Features

Many Hidden A Lot of

Rules Alcohol…

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 How to Sit During the Dinner?
In China, people’s respect for the social status and position will be
reflected on their thoughts about seat arrangements.

Descending by Key Person Descending by • The key person will sit the seat where
importance importance
he directly faces the door and which is
the farthest from the door.
• The key person is not necessarily the
guest or the client. It will depend on
the situation at that time.
• The others will sit sequentially
according to their importance. (those
ones who are more important will sit
closer to the key person)
• The hosts and the guests will sit in turn
Door for facilitating their interactions.
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 How to Eat During the Dinner?
As a foreigner, you don’t need to know every detail about Chinese
dining table etiquettes. But, some knowledge about them will help you
to behave appropriately.
• Eat well to demonstrate that you are
enjoying the food.
• The host begins eating first.
• Avoid eating the last piece from the
serving tray.
• Do not put bones in your bowl. Place
them on the table or in a special bowl
for that purpose.
• There are no strict rules about
finishing all the food in your bowl.
• Learn to use chopsticks.
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 How to Drink During the Dinner? (1)
Drinking is one of the most important factors on the Chinese dining
table and knowing how to do that is one of the key factors to complete
a successful business dinner.
• There is usually a first-round toast
2
initiated by the key person.
3
• Then, you need to toast to others
proactively to show your amity to them.
(from those ones beside you->then
1
jump to the key person-> then go back
to others)
• During the toast, there are some key
etiquettes needed to be paid attention
to. (Demo in the class)
• Normally speaking, bottoms up is
Door always viewed as a sign of respect.
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 How to Drink During the Dinner? (2)
As foreigner, 100% following the Chinese rule of “Bottoms Up” should
be quite painful. So, the key is how to deal with it intelligently.

Of course, Bottoms Up really Do think about what you will do

“give face” to your counterpart
But… tomorrow…

Sure, saying that you can not We still have ways to avoid
drink any more really make you But… drinking and “preserve face” at
“lose face” the same time

Certainly, drinking bravely in People will respect more the one

China will gain the respect
But… who can drink wisely..
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 How to Avoid Drinking During the Dinner?

Top Secrets!!!
It Will Be Shown Directly during the Class

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 What is KTV (1)?
Accompanied with China’s economic development and
transformation, KTV has gradually become one of the most important
entertainments in Chinese business affairs over the past 20 years.

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 What is KTV (2)?
Influenced by the Taiwanese entertaining culture and brought by the
Taiwanese businessmen in the early stage of China’s economic
reformation, KTV become a normal practice after business dinner.

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 What is KTV (3)?
Some foreigners are very impressed by what the Chinese people
behave in KTV since it’s so different from the stereotype of Chinese –
conservative, silent, shy...etc.

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 What Will Happen in KTV?
Generally speaking, the Chinese people sing songs in KTV. However,
they always do more than that…

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 What Will Happen in KTV? (2)
Anyway, KTV is a quite good place to help you to build relationship
and trust with your Chinese business partners. You will be highly
encouraged to join it.

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 As A Negotiator, How to Behave in KTV?
However, as businessmen and women, never forget what your original
purpose is even when you finished a bottle of Mao Tai…

Participate. Participate. Participate.

Do Practice Several Songs Beforehand to Perform.

Don’t Need to Be Reserved.

Same as Dinner, Keep on Networking.

However, Don’t Forget What Your Real Purpose Is!!!!!

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