Negotiating with Chinese
Eva Li


Ihave some good news and some bad news. Bad news: doing business with the Chinese, you have lost at everything. The good news is, Iwill help you win this war. This book contains a7-year experience innegotiating with the Chinese. The detailed review ofall the necessary aspects for successful negotiations at any level. You will learn what is the difference between the style ofnegotiating with the Chinese from ours and how tobenefit from it. Make the Chinese play byyour rules.





Negotiating with Chinese



Eva Li



 Aleksandr Dyakov



Eva Li,2017

Aleksandr Dyakov, ,2017



ISBN978-5-4483-9274-0

     Ridero


Astrict guide toeffective negotiation with the Chinese




Introduction


Ihave some good news and some bad news.

Sticking totradition, Ill start with the bad news. You have lost at everything. Whether it is working, negotiating or doing business with the Chinese, you have lost at everything, bydefinition.

The good news is, Iwill help you win thiswar.

Whyme?

Because it was Iwho took the risk ofleaving everything behind with aless then mediocre command ofChinese and going toChina with aone-way ticket and $300inmy pocket. Ihad nothing there: no friends, no place tolive and no job. Moreover, everything Iknew about the Chinese was limited tomy university lectures. Ihad no other choice but tomake arrangements with the Chinese intheir language. And Idid agoodjob.

Iacquired all my knowledge, skills and capabilities inthe field, rather than inside acomfortable office. And, bythe way, Iwas speaking fluent Chinese within amonth.

Why not them?

People who major inChinese usually become translators, guides, teachers or FEA managers. None ofthem learn how tosurvive among the Chinese incombat mode. Ido, however, respect all ofthe above mentioned occupations.

Numerous articles have been written on how tonegotiate with the Chinese, but, weirdly enough, they all repeat one another and speak from aWesterners point ofview. The Chinese are different. Completely. But not asingle article givesus the actual picture. They mostly use general words and formulas, which do not work inpractice. Ilearned this from firsthand experience, and more than once. For instance, not asingle article will tell you athing about the psychological age ofthe Chinese, or why, from ahistorical standpoint, their behavior seems so strange, inconsistent and unusual tous. Not aword. Not even ahint.

Negotiating with and thinking like the Chinese, reading their minds, doing business with them, choosing the right approach toworking with them and making them play bymy rules are the skills Iacquired not at auniversity desk, but inreal life. True, we learned alot from our university lectures, but they never taughtus how toapply this information inreal life. So, Ilearned on my own. After graduation, I, like most ofmy schoolmates, had two main options: either finding ajob as atranslator or guide or purchasing agent, or going toChina tocontinue studying. But Ichose athird option. Isimply went toChina with no particular plan, tolearn about the Chinese intheir natural habitat.

It was only later that Ienrolled inuniversity inBeijing, having got toknow the Chinese from the inside and having discovered them for what they really are. Istudied for ayear and Iwent towork with agood understanding ofhow todeal with the Chinese.

Many people who work with the Chinese often ask me, Why do they act the way they do and what can we do about it? Ihave often seen Western executives stall negotiations with their Chinese partners or agree tounfavorable terms (e.g. quality, deadlines, payments, etc.). When Ihear such stories, Icant help but wonder why it happens. Then again, some things that Ifind obvious are not as obvious toothers.

Icame up with this course after two incidents, which happened around the same time. These are the stories Iwould like tobegin my course with, as they illustrate very well the essence ofnegotiating with the Dragon.

One ofthe stories happened tome and the other toacolleague ofmine named Denis. We were doing business with two different Chinese companies, Leon and Electron respectively (all the names have been changed). We negotiated on different terms and ended up with different results: the price Iwas topay was reduced from USD 7.15toUSD 6and Deniss was raised from USD 64toUSD75.

The backstory goes like this. Leon charged me with USD 7.15and refused point blank togo any lower. They said things like we shall not discuss this any further, we are incurring major losses, we have raised the wage ofour employees and production costs have grown, which are typical Chinese excuses when they want toclose the deal. Ibelieve many ofyou have come across such bargaining. And you probably agreed tothe terms and the high prices.

Meanwhile, Electron charged Denis with USD 64(he was buying adifferent product), sent an invoice and refused tolower the price making pretty much the same excuses.

Then the day arrived. We had both wanted amarkdown on our respective products, but bythe end ofthe day, we had two very different outcomes: Iwas topay only USD 6and Denis USD75.

Electron explained that the price increase came from the firms new management team that had anew vision and policy for the company.

Electron was able topull this off, because:

1. Denis did not speak Chinese (negotiations were held inEnglish);

2. Denis was unfamiliar with the Chinese mentality;

3. Denis was unfamiliar with the way the Chinese think;

4. Denis did not know how touse Chinese cultural specifics tohis advantage;

5. Unfortunately, Denis lacked strength ofcharacter (Iwill explain why this is important inChapter3).



So, why did Leon ultimately quote alower price, even though they had refused so much as todiscuss the matter?

You will find the answer inthis course.

Iwill help you learn about the Chinese and what they are like, what hides behind their fixed gaze, what kind ofperson you should have as your negotiator, and, finally, what mistakes you should not make when negotiating and how toavoid them. You will learn how tomake the Chinese play bythe rules. Your rules.




Chapter 1. The Chinese. Who are they?



This chapter is about the Chinese mentality and outlook. We shall also look through some key notions that are essential for effective negotiations.




Ethnocentrism


For awhile, the Chinese were cut off from the rest ofthe world (China is surrounded bymountains and sea). They were also more advanced than other peoples were at the time. So, it is no surprise that the Chinese thought themselves superior toand better than anyone else. Inother words, they believed tobe the center ofthe world. The Chinese believed they were the only society worth studying and so did not bother toexplore their neighboring lands, which, as they believed, were inhabited exclusively bybarbarians. This is where ethnocentrism comes from, as well as the countrys name, ??, or Middle Nation.

Ancient Chinese maps locate the country inthe center ofthe world, too. Even when the Europeans came toChina, they had toplace it inthe center oftheir maps, toavoid displeasing the emperor.

Certain oftheir moral and ideological superiority over all other peoples, the Chinese found it hard tolearn new things, which is why the country retained many ancient features until the 19century.

Nevertheless, they were able tolearn from the West, adopt its best practices, adjust them totheir needs and thus evolve even further, nourishing the belief that they were the superior nation.

They keep proving it today,too:

1. Almost every country has transferred its production toChina;

2. The Chinese can copy anything you show them, but cheaper;

3. The Chinese still believe they are superior toevery nation inthe world and they still see everyone else as barbarians.

Keep this inmind at all times when you do business with the Chinese. From their point ofview, you are abarbarian, aprimitive being, meaning they can and will deceive you and can and will break all verbal and written contracts (we will return tothe specifics ofthe term contract later). When negotiating with Chinese suppliers, remember this: they will never see you as an equal; you will never be one ofthem; they will always be thinking ofways toprofit at your expense.

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




Continuity


Iwas the only one inmy year toattend lectures on ancient Chinese literature. This was my schoolmates Unforgivable Mistake#1.




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