According to Kerry Stevenson, MD of Symposium, since the start of China's ''going out'' initiative in 2003, Australia has been a favourite foreign investment option – much of it due to our booming resource industry. Ms Stevenson believes people’s fear of the crackdown could have a negative effect on Australia and China as a whole.
“There is no evidence to suggest the new rules are anything more than the Chinese government becoming more proactive in managing risks associated with outbound investments,”
Ms Stevenson believes how we manage our relationships with Chinese investors is the key to maintaining good long-term investment relationships.
This sentiment is echoed by Leonie McKeon, Managing Director at the Chinese Language and Cultural Advice.
Ahead of appearing at Symposium’s Resources and Energy Symposium in Broken Hill next month, Ms McKeon has identified her top ten tips for negotiating with Chinese in business. Ms McKeon believes that spending time building strong relationships with the Chinese is what will lead to lifelong business ties.
McKeon’s top ten tips for negotiating with Chinese:
1. Understand the Chinese negotiating culture
The physical surroundings that Chinese people are born into play a big part in how they feel about negotiation. It is common in China to see open air markets and people bargaining to get the best deal possible. Most Chinese people feel quite comfortable about the process of negotiation as this is a normal part of their everyday life. A well-known saying in China is “Everything is negotiable”.
2. Spend time developing and maintaining ‘guanxi’
The closest English meanings for ‘guanxi’ are relationships, connections and one’s social ties. Relationship in Chinese culture means a business relationship, and carries the same importance as a strong friendship, marriage or partnership. Solid ‘guanxi’ can be with you for the rest of your life, and like any relationship, it takes some effort to maintain. Developing and maintaining ‘guanxi’ is a vital part of the negotiation process. The Chinese often say ‘no relationship no business.’
3. Understand Chinese hierarchy
Chinese culture is a hierarchical culture; therefore you need to understand the hierarchy of the Chinese people with whom you are negotiating. This hierarchy will determine how you address people, where you sit in the meeting room and how you introduce your group.
4. Understand ‘face’
‘Face’ is different to the notion of ‘self-esteem’
5. Think carefully about ‘what you say’ and ‘how you say it’
Chinese negotiators are often highly sensitive to perceived slights and insults. Two Australian business people can argue the point and say exactly what they feel, and after a confronting meeting can still end up being good friends. This kind of confrontation will not be well received by Chinese business people. If you feel that you have no choice but to issue an ultimatum or lay down the law, make sure it’s worth it. Doing this without thought may seriously damage your relationship and therefore be detrimental to the business deal.
6. Avoid asking direct questions
Asking very direct questions can cause loss of ‘face’. A strategy to avoid asking questions in such a direct manner is to change the structure of your questions. Instead of asking yes/no questions it is better to ask more open-ended questions.
7. A ‘no’ can look like a ‘yes’
In communication, Chinese people often use a circular style to express rejection or refusal. Looking at this example, ‘Under the current circumstance, we would like to discuss this matter when the opportunity arises’, this sentence uses very positive words to send a ‘no’ message. This kind of answer can leave you with an optimistic view that things are moving forward, however it is a gentle rejection.
8. Keep harmony and avoid conflict
To a Chinese person, a harmonious society will bring development, peace and prosperity, whereas conflicts are not treated as problems of communication but rather as detractors from harmony. As a result, aiming to establish a conflict free interpersonal and social relationship is the ultimate goal for Chinese business interactions.
9. Translate you materials
Before a negotiation you need to have all of relevant materials translated. This paves the way for smooth communication. Make sure you use a reputable company to do the translation job, as an unclear translation has the potential to destroy a business deal.
10. Engage a professional interpreter
Always have your own interpreter rather than relying on the interpreter from the Chinese side. You need to engage a professional interpreter, as just because someone is Chinese doesn’t necessarily mean they can interpret. The more you prepare the interpreter for the interpretation assignment the smoother things will be. Good preparation means providing the interpreter with your presentations and meeting agendas so that they can research any unfamiliar terms and ask you questions prior to meetings.
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