1. Individualitic 5. Will Take Risk

2. Informality 6. Have a Definite Plan

3. Employs Humor 7. Time Conscious or Schedule Conscious

4. “Offer Counter-Offer 8. Dislikes Lulls

XIII Doing Business in China

Reality has painted a picture of the Chinese negotiator as bewilderingly complex. This might be in part due to the fact that (according to the experts) China seems to take a “learn as you go” approach to adapting to the dominant market paradigm. Or one might say a “learn as you go” approach its new highly successful mixed economy. However, in brief what seems to be clear is that the Chinese business culture is dominated by three things: the PRC situation, Confucianism, and Chinese stratagems.

The PRC condition (Guoqing) refers to the distinctive characteristics of contemporary social political system and conditions of the People’s Republic of China (PRC). The PRC condition involves variables such as Chinese politics, China’s socialist planned economic system, legal framework, technology development, great size, still learning as they move along at an amazingly fast pace, uneven development, and rapid change

Confucianism (Rujia) is a form of ethical philosophy plus a practical philosophy of human relationships and conduct. It includes six basic values: Moral cultivation, importance of interpersonal relationships (concepts of trust, tradition-or adherence to tradition and a deep respect for culture that is adhered to by means of cultural rituals or traditions), family orientation, respect for age and hierarchy, avoidance of conflict

a need for harmony, and concept of face (or what is usually referred to in business transactions in the Far East as not causing anyone to lose face (that is not causing anyone to feel embarrassed).

The Chinese stratagem (Ji) is a strategic component in Chinese culture. Sun Tzu’s Art of War is the best introduction to the strategic Chinese thinking, or Chinese stratagems. Chinese stratagems assert the superiority of using human wisdom and indirect means rather than power strategies and “posturing.” To give you an idea of why an ancient Chinese military general is referred to toady as the basis of a Chinese cultural style for international business transactions I will quote some portions of Sun Tzu writings:

The strategist that can best free him or herself from his/her natural, cultural predispositions

will achieve the greatest strategic freedom and will become more competitive! Sun Tzu said

that the key to becoming a great general is the ability state your vision in such a way that people

own it as their own (ideals, inspiration, motivation, knowledge). You must demonstrate an ability

to speak for the present and the near future (that is a future the followers will be willing to devote their time and energy toward realizing. The key to success and effectively managing resources that your forces desparately rely on managing the situation creatively, which leads to ultimate success by means of winning without conflict. In short his basic strategy was: be clever; use your advantages; reduce waste; avoid actions counterproductive to your ultimate values and goals; know opponent’s mission, values and sytle; be flexible, creative and spontaneous.

Negotiating Style

1. The initial stages of the encounter are meant for relationship building and information gathering

and is not thought of as pursuing a “deal.”

2. Business encounters are best when approached through intermediary or personal connection.

3. Westerners are familiar with the concept “Saving Face” from doing business with Japan. The

concept is equally important in China (do everything possible to avoid disturbing harmony).

4. Chinese negotiations are team oriented (even if the team is not apparent in the negotiation

session). Decisions usually involve the entire group (one individual is not empowered to make a decision for the group.

5. There are still many elements of Confucianism in the culture (formalities are important, consciousness of hierarchical relationships)

6. They are good listeners (quietness similar to the Japanese style).

7. Relationships and circumstances are more important than what’s on paper.

8. High Context and non-verbal cues