China Negotiation Mistakes - ChinaSolved.com's Least Wanted List

10 China Negotiating
Mistakes to Avoid
The ChinaSolved.com “Least Wanted List”

About Andrew Hupert
• 10+ years in China,
– 3 in Taiwan & HK

• Principal at Best Practices China ltd
– Specialist in US-China Negotiation
– Corporate training, consulting, and
project management

• Publisher of ChinaSolved.com
• Author – Guanxi for the Busy
American and The Fragile Bridge

All Rights Reserved. Copyright @2014.
Property of ChinaSolved

Negotiate Successfully in China
• Negotiating successfully in China means
building relationships and staying in
control of your goals.
• Don’t make the same
mistakes that others
have made.

All Rights Reserved. @ copyright 2013.
Property of Andrew Hupert

10 Avoidable China Errors
1 Flying blind.
2 Building on a weak foundation.
3 Declaring “Mission Accomplished”.
4 Losing control of the agenda.
5 Training your competition.
6 Coasting on past successes or good starts.
7 Searching for common ground.
8 Playing by US HR rules.
9 Delegating the strategy role.
10 Forgetting that it's only guanxi until you get caught.

China Negotiating
Mistake #1:
Flying blind.


Flying blind.
You don’t have to have all the answers in
China – but you do have to know the right
questions, and have some way of gauging the
answers other people are giving you.


Flying blind.
• Problem: You don’t know enough about the
China business environment to make sound
decisions on your own.

• Remedy: Develop a business intelligence
strategy that will keep you up to speed in the
areas you care about.


China Negotiating Mistake #2:
Building on a
weak foundation.


Building on a weak foundation.
• Your most important China negotiation takes
place in your own HQ.
• If your stakeholders at home aren’t 100%
committed to the China business, you will
spend too much time explaining and
reassuring your own people.
• Your Chinese negotiating counterparties will
sense it and take advantage.

Building on a weak foundation.
• Problem: Lack of unified home front when
negotiating with Chinese counterparties.
• Remedy: Negotiate internally first, and
develop a unified strategy for managing the
China business.


Declaring
“Mission
Accomplished”


Declaring “Mission Accomplished”
• Chinese negotiators focus on the relationship
– not the contract. In the West we stop
negotiating when the paperwork is signed.

• In China negotiations start at “Hello” and end
when your relationship is over.


Declaring “Mission Accomplished”
• Problem: Americans view negotiation as the
prelude to business – to Chinese it is the
business. In China relationships count more
than transactions.
• Remedy: Prepare and budget the time,
money, and sanity for non-stop bargaining.
You know that they will ask for more, so you
should prepare your own wish-list.

Losing control
of the agenda.


Losing control of the agenda.
• Guanxi is great to have and China holds the
promise of tremendous opportunities – just as
long as you never lose focus or control of your
own agenda.


Losing control of the agenda.
• Problem: Westerners who are too sensitive
about offending Chinese partners and associates
end up squandering resources and allowing
others to hijack their agenda. In China it is easy
to lose focus.
• Remedy: Good planning and appropriate time
horizons will keep you focused on your plans.
Listen and learn from Chinese associates, but
don’t be too quick to throw out your business
plan.


Training
your own
competition.


Training your competition
• Develop strong relationships with the right
partners early.
• No one gets more honest as the amount of
cash on the table grows larger.


Training your competition
• Problem: Newcomers to China often trust the
wrong people with their company and assets.
• Remedy: To get the right partner, you must be
the right partner.



Coasting on
past successes
or good starts.


Coasting on past
successes or good starts.
• Don’t confuse hospitality or cordiality with
win-win negotiation.
• In the West we say, “what have you done for
me lately.” In China they say, “what can you
do for me tomorrow.”


Coasting on past
successes or good starts.
• Problem: Western negotiators often lower
their guard when early-stage meetings seem
relaxed and friendly. Chinese often save the
worst for last.
• Remedy: Coordinate with your entire team in
advance. Make sure you have the authority to
hit the brakes or change the scope of the deal.


Searching for
common ground.


Searching for common ground.
• Plan on building bridges - not discovering
common ground.
• Value is found in differences – not superficial
similarities.
• Foster good cross-cultural communication
skills with a focus on high-context, non-verbal
cues.

Searching for common ground.
• Problem: Westerners think that they are
being “politically correct” by minimizing the
differences between cultures – but instead
they are inviting false expectations and
conflict.
• Remedy: Understand what you want and who
you are dealing with. Encourage more
communication and make fewer assumptions.

Playing by US
HR rules.


Playing by US HR rules.
• The West is a buyer’s market for managerial
talent, but in China experienced managers are
in short supply and high demand.
• Forget about paying for performance, and
start building an extended-family type
environment to keep your managers happy.


Playing by US HR rules.
• Problem: US HR management approaches
don’t work in China. Businesses in China live
or die by their middle managers, and western
approaches tend to drive away their best
assets.
• Remedy: Obtain, Train and Retain high quality
teams.

Delegating the
strategy role.


Delegating the strategy role.
• Knowledge is a superpower -- blind trust is
kryptonite.
• Ask for advice and input, but don’t surrender
the initiative. Figure out how to integrate
China business goals with your broader
company strategy.
• Have good methods for moving information
up to your own decision-makers in HQ.

Delegating the strategy role.
• Problem: Don’t allow partners, suppliers,
advisers or even key hires hijack your China
strategy.
• Remedy: Develop a business intelligence plan
and a broad range of information sources.
Your goal is to be able to process advice and
recommendations from trusted associates.

It's only guanxi
until you get caught


It's only guanxi until you get caught.
• Local customs may never help you, but if you
get them wrong they can hurt you A LOT. The
big 3 business customs are:

• Guanxi
• Face.
• Harmony


It's only guanxi until you get caught.
• Problem: Western negotiators in China
must know the difference between
GUANXI and CORRUPTION.

• Remedy: Customs are important, but
they don’t replace laws or regulations.
Know the law on both sides of the water
and don’t break it.

Guanxi for the Busy American
• A professional’s guide to
building relationships in
China.
• Written for the Western
negotiator who needs
to transact and execute.
• Available on Kindle,
iBook and all major eformats.
Property of ChinaSolved. All Rights
Reserved. Copyright 2013

The Fragile Bridge
• Conflict Management in
Chinese Business .
• Building relationships is
easy – maintaining
them is hard. Learn to
do it right.
• Available on Kindle,
iBook and all major eformats.
Property of ChinaSolved. All Rights
Reserved. Copyright 2013

Online Course:
Negotiate Successfully in China
• ChinaSolved presents a
new online course for
professionals who want
to achieve greater
success in Chinese
negotiation.

Available on

Udemy.com


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