After three teaching trips to China, I’ve just begun to learn how exciting and challenging negotiating can be between Chinese and Americans. What are some of the biggest traps? How can you cope with them? I’ve begun to learn some of the answers to that increasingly important question.^^

What Americans Believe. Americans tend to believe that a deal is settled once the parties agree- much like plans to build a car are settled once the engineers finish their work.

What Chinese Believe. Chinese tend to believe that a deal is an important step in the early stage of a relationship, but that the deal is subject to change as circumstances change- much as a couple getting married expects the terms of the relationship to change as circumstances change.

When Worlds Collide. For Americans and Chinese alike, this cultural difference can create frustration and resentment if the parties are not aware of the difference.

Example: The Vanishing Contract Case. For example, a Chinese firm told a US computer firm it planned to buy ten computers for a trade fair. While the US representatives made arrangements to supply the computers, the Chinese learned that their government would not permit more than one computer to come into China. When the US representatives returned to ask about delivery instructions, the Chinese firm executives said the US firm should bring one computer and try to sell it themselves at the trade fair. Perhaps there would be another Chinese buyer later. The Americans felt wronged and said so; the Chinese were shocked- after all, circumstances had changed.

Americans can feel the Chinese negotiators are breaking their promises, nibbling for more, being greedy, or acting in irrational ways that make planning impossible.

Chinese can feel that American negotiators are being rigid and untrusting, shortsighted and inflexible in ways that make an ongoing working relationship impossible.

Implications. The success of a number of US.-Chinese trading relationships suggests that these misunderstandings are not inevitable or tragic. The problems they present, though, raise a number of implications for both sides.

Prepare. Prepare for the special challenges of dealing with the other culture by learning more about the history, language, style, and character of the people there.

•—-For Americans, a good place to start is Tony Fang’s “Chinese Business Negotiation Style” and Dean Allen Foster’s “Bargaining Across Borders.”

•—-For Chinese, a good introduction to American style might be James C. Freund’s “Smart Negotiating” and Herb Cohen’s “You Can Negotiate Anything!”

Use Interest-Based Bargaining. Since you can’t become expert about their culture, develop your interest-based bargaining skills, which can adapt well to either culture. (By interest-based bargaining, I mean focusing on the reasons why you each want what you say you want. Then find creative ways to satisfy them.) For example, in the Vanishing Contract case, the Americans could say, “we are very disappointed, and must make sure we satisfy our need to profit from the work we’ve done and cover the costs we’ve incurred. One way to do that might be to have your firm buy one now and some later, and use your endorsement and contacts to help us find others in China who can buy the rest soon.” Chinese may value an interest-based approach in part because it permits flexibility and face saving. Americans may value it because it favors problem solving and does not require one to compromise underlying needs. “Getting To Yes” by Fischer, Ury, and Patton is a good introduction to this approach.

Face and Interest-Based Bargaining.

Concern about losing face may make it more difficult for the Chinese negotiator to discuss his interests. (It may be hard to say, for example, that the Bank has no US dollars for us, and safer to say the weather prevents it now.) Of course, Chinese are not unique in wanting to save face. Finding a face-saving way to discuss problems can help. One way: “We’re sorry to hear the weather is causing a problem that hurts everyone. We know you and we have a common interest in getting the computers where they can be best used soon. One way to do that might be to do X. I wonder if there might be even better ways?” This approach allows the other person to signal more without losing face. “Well,” he might reply, “perhaps sending the computers from your Canadian office would help.” This might eventually reveal the suggestion that the Chinese can get Canadian dollars more easily.

Bring a Liaison. Bring someone with you who knows the other culture and language well and who can help you translate the cultural significance of the other side’s actions. A number of consulting firms specialize in Chinese-US trade. A colleague who has lived and worked in the other country for several years may be a good liaison, especially if the colleague had a chance to work with real decision makers and understands how they do business.

Don’t Copy Them. Don’t try to copy the other side’s approach. You will confuse them. Also, you probably have more in common than you may think.

Use Your Frustration. Expect to feel frustration and confusion. Treat the feeling as if it were a light on the dashboard, signaling that there may be a problem of cultural confusion at work. Spotting it as a possibility may save you a great deal of pain. Once you spot it, check with others who can shed light on the culture.


*I FORESAW IT is a mnemonic that lists ten questions a negotiator should ask and answer before a negotiation. For details, go to the Home page, move the mouse to the heading “Articles,” and you will see a subheading for “I FORESAW IT” where you can read how it works. You can also find a copy of a handy I FORESAW IT template by clicking on the I FORESAW IT tab on the left side of the Home page.