Chinese Business Negotiation Style

(1). Six Dimensions of Chinese Business Negotiation Style

In  this section, I will talk about six dimensions of Chinese business  negotiation style which represent six primary patterns of Chinese  business negotiating behaviors: political, legal, technical,  commercial, social, and strategic dimensions. Political behavior  concerns how Chinese business decision- making process is influenced by  Chinese politics; legal behavior deals with the Chinese attitude toward  contracting and other legal arrangement; technical behavior concerns  the Chinese attitude toward technology, technical specification,  quality and so on; commercial behavior refers to how the Chinese  bargain about price and other economic arrangements; social behavior  refers to how the Chinese establish trust toward the other part through  personal contacts and other forms of social interactions both verbal  and non verbal during the negotiation process; and finally, strategic  behavior shows how the Chinese manipulate various negotiating  stratagems.


This dimensional analysis also suggests that  Chinese negotiating style involve both rational and strategic patterns.  Political, legal, technical, commercial and social patterns or  dimensions represent rational Chinese negotiating behavior, whereas the  strategic pattern or dimension constitutes strategic Chinese  negotiating behavior – or say Chinese negotiating tactics.


1. political behavior:


The  Chinese government is the real negotiator, customer, and ultimate  decision maker; Chinese companies must follow the government’s plan and  policies to do business.

The frontline Chinese negotiators  have a limited mandate and fear criticism; inter-organizational  communication within the Chinese negotiating organization is usually  poor, and the Chinese negotiating team tends to be large.

Business  in China, whether Chinese or foreign, is under the control of the  Chinese government; Chinese business is governed by the “political  book”. Chinese patterners are protected under the “umbrella” of Chinese  bureaucracy.

2. Legal behavior:


The  Chinese view contracting as an intial intention and an onging  problem-solving framework rather than a one-off nicely wrapped legal  package.

The Chinese awareness of law is normally blunt, and  its legal system is young. Chinese lawyers seldom participate in  face-to-face meetings, although recently they have begun to  increasingly appear.

The Chinese tend to insist that arbitration, if any, is to be held in china.

3. Technical behavior:


The Chinese want to cooperate with large, technologically strong companies.

The Chinese want to buy the most advanced and research-and-

development-oriented technology, apart from price, technology is other major issue in Chinese business negotiation.

The  basic Chinese attitude toward foreign technology transfer to China is  to exchange the Chinese market for foreign technology. However, when  talk about the above three point, when must notice that the attitude of  Chinese companies toward technology is changing: most Chinese companies  are the more and more profit-oriented.


4. Commercial behavior:


The Chinese tend to choose large and financially strong foreign companies with which to cooperate.

The  Chinese are extremely price sensitive; Chinese business negotiation is  essentially a negotiation about price and technology.

The Chinese companies insist on having the majority share of equity in a Sino-foreign business joint venture.


5. Social behavior:


There  is a pre-negotiation phase in the Chinese business negotiation process  in which the Chinese try to establish trust and confidence in the other  party through information gathering, personal contacts and other social  activities.

The Chinese attach great importance to sincerity and reputation on the part of foreign side.

Chinese  negotiating style is generally people-oriented and permeated with such  Confucian notions of guanxi, renqing, li, face, family, age, hierarchy,  and harmony etc.


6. Strategic behavior:


“ji” or “Chinese stratagems” exists in the mentality of Chinese negotiation.

The Chinese may employ negotiating tactics deliberately or inadvertently.

Chinese  business negotiating tactics empirically evident in the supplementary  materials I gave to you. But here I must mind you that we Chinese  people are clever, friendly but we have our own moral standard or  behavioral code which guided us what we can do and what we cannot do.


When  comparing the six dimensions of Chinese business negotiating style with  the western theory of business negotiation, you may find that there are  stark contrasts in the political, legal and strategic dimensions of  Chinese business negotiating behaviors. Most remarkable is the strong  political feature in Chinese business negotiation. The decisive  influence of the Chinese government and Chinese bureaucracy on the  behavior of Chinese negotiators constitutes a major difference between  Chinese and western business negotiating styles.

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