Five More Keys to Negotiating With the Chinese

By Bill Quarless
October 2007

{Note: This column appears in the October 2007 issue of Response. Click here to read it on the Response site.}

One year ago, I wrote my first column for Response, entitled, "Five Keys to Negotiating With the Chinese," which revealed how the Chinese think during business negotiations. In this anniversary column, I'm adding five more keys to my original list.

In America, we value the tough, aggressive negotiator. In China, the exact opposite is true. They value harmony, friendship and trust. The process of completing a deal is often more important than the deal itself. That's why I advise my clients to:

1. Think Long Term

When you negotiate with the Chinese, your goal should be to develop a long-term personal relationship - and you should communicate that intention clearly. Good feelings of friendship play to the harmonious Chinese culture. Fast-talking Americans looking for a quick buck don't get very far. Also, keep in mind that it may take several dinners (and several more drinks) to accomplish your goal. Your Chinese counterparts just won't trust you until they know you. "Yi bu yi bu lai" (or "step by step") is a commonly heard phrase.

2. Speak 'Chinglish'

The greatest challenge Americans face in China is communicating clearly. Most Chinese people won't ask for clarification if they don't understand you: they'll just nod politely. Our company is frequently hired by DRTV companies that want us to intervene and salvage a project. The first thing we do is visit the factory to discover the problem. In 80 percent of these cases, the problem was caused by a simple miscommunication. So don't be afraid to use their grammar and their level of vocabulary, also called "Chinglish." Trust me: they won't think you're talking down to them. They'll appreciate your efforts, and your risk of misunderstandings will be substantially reduced.

3. Learn Chinese, Use Chopsticks

I also recommend learning how to say a few words in Mandarin or Cantonese. This demonstrates your interest in Chinese culture and will be much appreciated by your hosts. Even a horribly botched pronunciation can serve this purpose! It will certainly result in a smile, and it may just separate you from your egocentric competitors. Likewise, refusing a fork and eating with chopsticks communicates something positive about your character. The more you understand and appreciate Chinese customs, the more your Chinese partners will appreciate and trust you.

4. Haggle

The Chinese love a bargain. Shops in Hong Kong and China are plastered with "SALE" signs. Products are often marked up an extra 30 percent so they can fly off the shelves with a 20 percent discount, leaving the merchant with his original profit plus 10 percent. In other words, negotiation is expected, and prices are almost always padded. The Chinese never seem happy unless they believe they got a great deal. Have your preplanned concessions at the ready, so you can close the deal and leave everyone with big smiles on their faces - including you.

5. Sell Yourself

Getting the best price (and service) from a Chinese factory may very well depend on your perceived business value. If your DRTV product will be sold at Wal-Mart, say so. You may just go from fourth in line to the top priority. Many American businessmen underestimate the value of selling themselves to a factory. But exciting a factory and showing them the power of direct response sales can heavily influence their pricing, speed, attention to quality and enthusiasm for your product.

Put these five techniques into practice, and you'll see the difference when you negotiate China production for your next DRTV product. Of course, if you don't have the time, energy or presence in China to do it yourself, an experienced production management firm can handle the negotiations on your behalf. Zhu ni hao yun! (Good Luck!)