The How To Issue

How to Strike a Deal in China: Juan Antonio Fernandez


How to Strike a Deal in China: Juan Antonio Fernandez

If there’s a nation that enjoys negotiations, it is China. Foreign businesspeople can feel confused and frustrated by the process, but once they’re familiar, they might even enjoy it. Get as much information as possible about the company. Know the key players and their personal objectives. Once you’re at the negotiation table, be patient. The Chinese expect a long negotiation and if they perceive you’re in a hurry, they will use it in their favor. Also, use breaks during the meeting to get more information. One executive told us he pretended to smoke to have an excuse for informal conversation outside the negotiation room. Sometimes you’ll need to play hard and try to leave the room, but if the Chinese party actually lets you go, it means you’ve crossed a line. Finally, choose your interpreter carefully and find someone professional and trustworthy. I once saw the other party offer my interpreter a commission if she helped him get a favorable deal—they didn’t know she was also my wife.
 
After the contract is signed and the merchandise is ready to be shipped, some Chinese will ask for further concessions. One European exporter told us he disconnects his phone a couple of days before the merchandise will be shipped. For many Westerners, signing the contract is the conclusion of the negotiation, but for the Chinese it is just one step in the process. The contract is a document of intentions, and if business conditions change they expect changes in the agreement. You have to be patient and build relationships. — As told to Venessa Wong 

Fernandez is a professor at the China Europe International Business School in Shanghai.

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