Academic journal article The Journal of Business Communication

The Chinese Approach to International Business Negotiation

Academic journal article The Journal of Business Communication

The Chinese Approach to International Business Negotiation

Article excerpt

While a new, market-driven China has been emerging fast in the global marketplace, Western companies have often reported frustration and confusion when negotiating in China. To identify the roots of the problems, this study investigated what Chinese negotiators are trained to do in the global marketplace by examining China's international business negotiation textbooks used in their training programs. The results indicate the following: (a) The win-win, win-lose, cooperative egoism, and concessive negotiation strategies are taught in China with the win-win recommended and the cooperative egoism controversially recommended, and Chinese negotiators are also trained to probe the counterparts' strategies and then act accordingly; (b) Chinese negotiators are taught a large variety of communication techniques for negotiation arrayed along a continuum from the relationship-based win-win strategy to the pure competition-based win-lose mentality; however, the win-win techniques are taught and used far more frequently; and (c) the Chinese textbooks clearly reflect China's foreign trade and economic cooperation principles: equality, mutual understanding mutual trust, mutual benefit, and long-term cooperation. At the same time, the textbook authors may see a need to emphasize the win-win strategy because in nearly half the cited real-life cases it was not used.

Keywords: Chinese Business Communication, Cross-Cultural Negotiation, International Negotiation, Negotiation

During the last 22 years, China has made great economic progress and has opened itself to foreign investment. By June 1999, China had approved more than 332,700 foreign-funded enterprises such as automobile, chemical, computer, electronics, food, beverage, retailing, banking, and insurance, with foreign investments of more than $286 billion (Che, 1999). According to the International Monetary Fund's (IMF) 1999 World Economic Outlook, China has maintained an average annual GDP growth rate of 9.8% from 1979 to 1998, with a projected growth around 7% for 1999 and 2000, respectively.

While a new, market-driven China has been emerging fast in the global marketplace, numerous U.S. and other Western companies, large and small, have encountered problems when negotiating business ventures with their counterparts in China (see, for example, Barnathan, 1994; Clifford, Roberts, & Engardio, 1997; Goldberg, 1988; Leung & Yeung, 1995; Mann, 1989; Webber, 1989; Zirin, 1997). U.S. business managers have complained that many times they have been intimidated by U.S. specialists on Chinese culture when attending workshops on how to do business with the Chinese. Many of these specialists were alert only to what might annoy the Chinese and gave little thought to ways of getting ahead of them (Pye, 1982).

Stewart and Keown's (1989) survey of 50 traders with China found the following characteristics: Ca) The most important pre-negotiation contacts came from requests from China and from regular sales calls; (b) the Chinese negotiating team typically was twice as large as the Western team; (c) one-third of the negotiation time was spent on talking about technical specifications and another third was spent on price; and (d) although both sides tended to use a cooperative strategy; the Chinese team could make sudden demands, apparently to put the Western team in a disadvantageous position. Stewart and Keown point out that Sun Tzu's (256B.C./1984) Art of War taught the Chinese long ago the value of unsettling the mind and upsetting the plans of one's opponent. Therefore, they conclude that negotiating processes in China are likely to continue to be full of surprises.

Another survey (Leung & Yeung, 1995) of 163 Hong Kong-based small international companies doing business in China reported that personal relationship is still an important factor for the success of business negotiations with China. Social meetings in restaurants and sending gifts are the two most popular means of building up a relationship (guanxi), followed by sending samples and proposals in the prenegotiating stage. …

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