Negotiating with Chinese. Eva Li

(we will return to the specifics of the term «contract» later). When negotiating with Chinese suppliers, remember this: they will never see you as an equal; you will never be one of them; they will always be thinking of ways to profit at your expense.

      This is why you have to be alert. You can kid yourself all you want, but do not expect equality when it comes to the Chinese, ever. Consider this or do not work with them at all. Period.

      Continuity

      I was the only one in my year to attend lectures on ancient Chinese literature. This was my schoolmates’ Unforgivable Mistake #1.

      What do some boring old books written before the Common Era have to do with our topic, you ask? This literature course and, more importantly, my impeccable knowledge of the ancient Chinese writings from the university booklist helped me reduce the price from USD 7.5 to USD 6.

      This ultimate figure yielded an annual profit of USD 115,000 against USD 57,500 (given the USD 7,15 price). As you can see, the difference is dramatic. Ever since 2009, I have been hearing all kinds of people, including orientalists, say, «What’s the point in reading some ancient books? They are obsolete». This is Unforgivable Mistake #2. There is only one good reason to read these books: they are still relevant in China.

      China, of course, is not the oldest civilization, but it is a truly remarkable country, which has been enjoying a continued existence for a few thousand years now. China has preserved its foundation, or matrix. The main indicator is the continuity of its history, with only some minor gaps. None of the existing countries can say the same about themselves.

      China’s age is still a matter of dispute. We shall use the classic 5,000 years mark. It means that the Chinese culture has existed, uninterrupted, for that long. Since history and archeology are among the most important subjects in Chinese schools, any regular Chinese person knows their history from the very beginning of the Chinese civilization. This entails a plain truth, ignoring which is one of the most unforgivable negotiation mistakes: things that were relevant in China 5,000 years ago are still relevant today!

      This is why all those ancient books are still very important. The Chinese carry their wisdom in their genes and apply them in present-day business matters. Knowing the ideas and principles written down in these books is a major competitive advantage over both your competitors and the Chinese.

      The West has come to realize this already, and the success of those who rely on these books in their negotiations with the Dragon is hard to ignore. Thanks to their knowledge, firms rush to the top of their segments.

      Which books am I talking about? No, I am not forcing you to study the entire Four Books and Five Classics of Confucianism, although it would not hurt.

      First of all, it is worth reading «The Art of War» and «The Thirty-Six Stratagems». Even though these books are dedicated to war strategy, they explain very well the Chinese manner of negotiation. The Chinese study them while they are still in school and apply the principles with great skill both in business and in matters of love (more on that in Chapter 2).

      Remember: things that were relevant in China 5,000 years ago are still relevant today!

      Do not make Unforgivable Mistakes.

      Traditionalism

      Traditionalism is very strong in the Chinese culture; it even survives revolutions. It is growing even stronger these days amid China’s Confucian socialism. Various norms, rules, and principles comprise the Chinese’s historical memory code, which has remained intact for 150 years. This is the main distinguishing feature of the Chinese culture. As a result, ancient Chinese traditions are very much alive in modern China. The Chinese still abide by the same rules and norms they followed many years ago.

      China can digest anything. It digested the Mongols, who invaded China and established the Yuan dynasty, and it digested the Manchus, who also invaded the country and established the Qing dynasty, but in the end, both dynasties are considered the most «Chinese» of all. Moreover, China even digested the West and communism. It is no coincidence that sinologists unofficially regard China’s communist party as yet another dynasty.

      The patterns of behavior, thinking, and outlook, which were established before Confucius and were later cultivated by him, are clearly traceable in today’s interpersonal relationships, business matters and negotiations. The most important thing for Chinese employees is laoban – their boss, director, i.e. the person in charge. He is their emperor. Whatever he says should be done, will be done. Regular clerks are 100% subordinate to him and fulfill all his orders. Even if you get hold of his contact information (which is highly unlikely), you will not be able to reach him. His employees will carefully protect his peace.

      At the negotiation table he is mostly silent, listening attentively and paying attention to everything. He is unlikely to address you directly, and he will probably tell the negotiator what to say on his behalf.

      Decisions are also made only by the laoban. This is why it is important to develop guanxi, or connections with him (more on that in chapter 2), so that he knows you in person and has an understanding of who you are. This connection helps ease the negotiation process, among other things.

      Seek out the laoban or get ready for some lengthy negotiations.

      Conformism

      Conformism is compliance with a certain set of rules or norms, and a tendency to stay within their margins. Every kind of relationship is regulated, whether inside the family or between the sexes, co-workers, holidaymakers, friends and neighbors.

      Conformism caused me a lot of trouble when I left everything behind and arrived in China for the first time. The Chinese largely rely on template thinking and on stereotypes, so if anything outside the template occurs, they usually find it extremely unsettling. Flustered and at a loss, they do not know what to do and how to deal with whatever the issue is.

      Want to get a new credit card? You’ll have to wait for 2 hours. Want to transfer some money via Western Union? You’ll have to wait for 2 hours. Want to extend your visa? Again, 2 hours.

      Two vivid examples come to mind.

      I went to a bank once to open a Chinese account. The teller, a Chinese woman, took my passport and, without checking with me first, scanned my Schengen visa, thinking it was the main page with all the data she needed. Then she pointed at the words «Schengen Visa», written in Roman characters, and asked me, which of the two words was my given name and which was my surname.

      Another time, I was extending my visa at a visa center. A Chinese clerk took my passport to copy my details into his computer, when he almost literally froze over my date of birth, because Chinese dates go like this: year, month, date.

      To make things worse, helping a Chinese person in such a case is out of the question, or else they will lose face, closing the door on any further cooperation.

      So, if you want something from a Chinese supplier, do not use words; simply send them a relevant picture, blueprint, video, etc.

      If you still need to explain something, keep it simple, very simple, perhaps even split it into several parts, and by all means send a picture, a scheme, anything with concrete figures. Do not, however, forget to explain these figures in the letter, keeping it as simple as possible, and the Chinese will most certainly understand you.

      Do not load them with several unrelated questions. Stick to one question, one topic, and one letter. This will help avoid any confusion. True, it is hard. But it will be much harder to sort out a whole shipping container of damaged goods, because the Chinese misunderstood something and did everything according to their usual template. Remember that the Chinese think stereotypically, which means the following: you are a barbarian; the best things in the world are Chinese; it is possible to deceive you; they do everything the way they are used to; making changes requires additional thinking, which is tiresome, so it is easier to say, «We can’t do it».