This chapter:

• Outlines the protocol and suggests tactics for negotiations between the Chinese and foreigners – the correct observance of which should improve the chances of the latter securing a successful outcome.
• Assumes a basic knowledge and understanding of negotiating techniques in general, onto which such specific protocol and tactics may be grafted.
• Concentrates, therefore, purely on the aspects peculiar to China.

Whilst the degree of formality may vary – according to the nature and importance of the occasion and relationship between the individuals involved – the underpinning influences, behaviours and protocols are the same.

Influence, behaviour or protocol	See chapter
Attitude to foreigners	2
Business hierarchy	3
Business meetings	6
Collectivism	3
Conflict management	3
Connections (guanxi)	3
Consensus	3
Exchanging gifts and favours	4
Face (mianzi)	3
General behaviour	3
Legal Environment	1
Long-term commitment	1
Modesty and humility (keqi)	3
Non-verbal communication	3
Note-taking	6 and 7
Open door policy	1
Relations with the West	2
Ritual behaviour	3
Saying ‘no’	3
The Opium Wars and Unequal Treaties	2
The Superior Man	1

Of these, the key is guanxi: remember, as stated earlier, that the Chinese may set greater store by building a working relationship with you than crossing every ‘T’ and dotting every ‘I’ of an agreement. For the Chinese, personal trust is more important than paper-based contractual terms.

Caveat

I can neither guarantee the success nor be held responsible for the failure of the protocols and techniques described in this chapter.

Apology and acknowledgement

I have so often used and recommended – and hence been influenced by – Scott Seligman’s excellent book Dealing with the Chinese (see bibliography) during my China workshops at Farnham Castle International Briefing and Conference Centre that I hope I may be forgiven for following a similar approach, especially in the structure and choice of headings, without intentionally cloning its content as my own.

Rather, I have genuinely attempted to present my own views – in my own words and based on my own experience – albeit under Seligman’s headings which I have tried to use merely as ‘springboards’.

Examples

The protocols and techniques described below are illustrated with only a few examples, since they are followed by a comprehensive case study.

PREPARING FOR AND CONDUCTING NEGOTIATIONS

Preparing for and conducting negotiations is really no different from any other business meeting except in one respect:

Your negotiating team should have the following:

Composition	Characteristics
bi-lingual note-taker China business expert China legal expert experienced negotiator financial expert interpreter senior empowered decision-maker subject-matter technical expert	a few grey hairs conciliatory culturally aware (non-jingoistic/non-xenophobic) equanimous impervious to flattery patient

These lists are deliberately in alphabetical order, rather than of priority, since:

• the roles are not mutually exclusive: the same person may fill several, or vice-versa
• not everyone may possess all the characteristics, although jointly the team should.

CHINESE NEGOTIATING TACTICS

When dealing with them, you might find that Chinese negotiators may try to…

• 1.control the arrangements
• 2.exploit your and their weaknesses
• 3.exploit your remorse
• 4.trip you up
• 5.embarrass you
• 6.play you off against your competitors
• 7.approach you via a third party
• 8.pretend to be annoyed with you
• 9.go over old ground with you
• 10.quote their law at you
• 11.manage your expectations

as detailed below.

The extent and manner to which any tactic or response is used or appropriate, respectively, may depend on whether the negotiations are:

• unilateral: only one party is trying to buy or sell
• bilateral: both parties are interested in buying and selling or working in a government-to-government partnership.

In the latter case, negotiations are more likely to be conducted by the Chinese as between equals in a symmetrical manner (that is: with as much give as take).

Responding to Chinese tactics

Most of the negotiating tactics that the Chinese might employ may:

• involve ‘face’
• be countered by your:
  • playing the Chinese at their own game
  • not rising to the bait.

I suggest the following guidelines for responding to Chinese negotiators:

1. If they try to control the arrangements

Traditionally, the Chinese prefer to conduct and host negotiations with foreigners in China, in an attempt to cast them in a supplicatory role and thereby make them feel subservient.

Besides costing the foreigners time and money, the Chinese can play for time.

Note: Nevertheless: being physically close to the real decision-makers with whom the Chinese negotiators will necessarily have to consult may speed up the process. This is because it is neither usual nor the done thing for the former to attend detailed discussions; but rather appear only at the very end, when all is agreed – such as: for the final banquet and official ‘signing ceremony’.

How the Chinese may try to do it

• a).Quibble over minor details in the initial stages and then cram all the important points into the final stages.
• b).Delay proceedings and/or take time out, ostensibly to confer in private
• c).Never leave you alone.

What the Chinese may hope to achieve

• a)Coerce you into compromising – out of sheer desperation to reach some form of agreement before returning home, rather than none at all.
• b).Test your bottom line under pressure.
• c).Make you think that you have upset them, and thereby force you to reveal your bottom-line concessions in an attempt to save your ‘face’.

How you should respond

• a).Play the Chinese at their own game by insisting that some of the negotiations take place in your home country
• b).Tell the Chinese your timetable ab initio, and stick to it (unless you really have to reach agreement before returning home)

2. If they try to exploit your and their weaknesses

The Chinese may try to discover and exploit your ‘Achilles’ heel’ as well as reveal and exploit their own.

How the Chinese may try to do it

• a)Play on your personal and corporate fear of failing to reach agreement.
• b)Contrast China’s ‘poverty’ and lack of commercial experience with your company’s wealth and experience.
• c)Flatter you.

What the Chinese may hope to achieve

Persuade you to concede terms that you would otherwise not accept, out of desperation and/or to save your ‘face’ by reaching some form of agreement before returning home, rather than none at all.

How you should respond

• a)Resist taking the bait: if they see that you are impervious to such tactics, the Chinese may desist.
• b)If you really have to reach agreement before returning home, do not let the Chinese know.

3. If they try to exploit your remorse

The decline and fall of the Chinese Empire, and thus of China’s preeminence in the world, is in no small wise due to the incursions of and invasions by foreign powers during the second half of the nineteenth and first half of the twentieth centuries (see Chapter 2).

How the Chinese may try to do it

Remind you of any damage done to China by your country.

What the Chinese may hope to achieve

Persuade you to ‘make amends’ by conceding terms that you might otherwise not accept, in order to save the ‘face’ of your country.

How you should respond

• a).Refuse to discuss, and disassociate yourself from, such issues: if they see that you are impervious to such tactics, the Chinese may desist.
• b).Insist on ‘sticking to the point’.

4. If they try to trip you up

The Chinese are inveterate note-takers.

How the Chinese may try to do it

• a)Quote back at you something you and/or your colleague(s) once said and/or agreed, on and/or off the record, in- and/or outside the negotiating room.
• b)Equally: forget something they and/or their colleague(s) once said and/or agreed, on and/or off the record, in- and/or outside the negotiating room.

What the Chinese may hope to achieve

Persuade you to concede to their terms, by honouring what you and/or your colleague(s) said and/or agreed on an earlier occasion – depending on whether it supports or conflicts with your present stance – in order to save your ‘face’.

How you should respond

• a)Play the Chinese at their own game by keeping your own detailed notes, in order to ‘retaliate’.
• b)Never speak off the record.
• c)Avoid talking business outside the negotiating room.

5. If they try to embarrass you

The Chinese lay great emphasis on formal courtesy, as manifested in their observance of ritual etiquette, from which business is not exempt.

How the Chinese may try to do it Accuse you on a trumped-up charge of:

• a).breaking the ‘ground rules’ that you agreed at the outset
• b).unfriendly behaviour
• c).being devious.

What the Chinese may hope to achieve

• a).Fool you into thinking that you have genuinely offended them; and thus…
• b).Persuade you to ‘make amends’ by conceding terms that you would otherwise not accept, in order to save your ‘face’.

How you should respond

• a).Remember that the accusations are probably a ploy rather than genuine.
• b).Keep your own detailed notes, in order to refute accusations of being devious.
• c)Resist taking the bait: if they see that you are impervious to such tactics, the Chinese may desist.

6. If they try to play you off against your competitors

Besides genuine competition, the Chinese are not averse to ‘inventing’ fictitious competitors.

How the Chinese may try to do it

Either:

• a)Imply that:
  • you are less generous and/or co-operative
  • your products and/or services are more attractive than the competition.

Or:

• b)Imply that they are not negotiating (any longer) with your competitors.
• c)Share your competitors’ ‘secrets’ with you.

What the Chinese may hope to achieve

Either:

• a).Persuade you to equal or better the competition’s terms which you would otherwise not accept, out of sheer desperation to reach some form of agreement before returning home, rather than none at all.
• b).Test your bottom line under pressure.

Or:

• c).Coax from you genuinely confidential information, by lulling you into a false sense of security.

How you should respond

• a).Know your competitors; and play to your strengths (even by contrasting these with your competitors’ weaknesses, if your corporate culture so allows).
• b).Resist taking the bait: if they see that you are impervious to such tactics, the Chinese may desist.

7. If they approach you via a third party

The Chinese may use third parties to convey delicate messages or ‘test the waters’.

What the Chinese may hope to achieve

Save their own ‘face’ if the intermediary fails, by denying (s)he was authorised to act on their behalf.

How you should respond

Play the Chinese at their own game by using a go-between yourself.

8. If they try to pretend to be annoyed with you

In theory: following Confucius’ teaching that the ‘Superior Man’ should not lose his temper – the Chinese disapprove of outbursts of anger.

In practice: they are not averse to affecting anger if it will help them get their own way.

How the Chinese may try to do it

Accuse you of some trumped-up charge.

What the Chinese may hope to achieve

• a)Fool you into thinking that you have genuinely offended them; and thus…
• b)Persuade you to make amends by conceding terms that you would otherwise not accept, in order to save your ‘face’.
• c)Find a ‘face saving’ pretence to de-rail the negotiations.

How you should respond

• a).Remember that the accusations are probably a ploy rather than genuine.
• b).Resist taking the bait: if they see that you are impervious to such tactics, the Chinese may desist.
• c).Play the Chinese at their own game.

9. If they try to go over old ground with you

Following the adage ‘If at first you don’t succeed: try, try again’, the Chinese may continue to raise the same issues until the very last minute, even as they are saying goodbye.

How the Chinese may try to do it

Raise an issue that was apparently resolved earlier (in your favour), but as if it were not.

What the Chinese may hope to achieve

• a)Fool you into thinking that the issue was not resolved; and thus…
• b)Persuade you to concede terms that you would otherwise not accept, out of desperation and/or to save your ‘face’ by reaching some form of agreement before returning home, rather than none at all.

How you should respond

• a).Keep your own detailed notes, in order to remind the Chinese of what was agreed and when.
• b).Refuse to discuss the issue.
• c).Play the Chinese at their own game by agreeing to discuss the issue again so long as they will reconsider an issue previously resolved in their favour.

10. If they try to quote their law at you

The Chinese may assume they are more familiar than you with their commercial law; and exploit your ignorance of the same to justify anything they want and you do not and vice-versa.

How the Chinese may try to do it

• a).Quote (allegedly) unpublished commercial codes.
• b).Say that their superiors may only accept certain contractual terms (e.g. standard wordings).

What the Chinese may hope to achieve

Fool you into conceding terms that you would otherwise not accept, to save your ‘face’ (i.e. hide your ignorance).

How you should respond

• a).Retain a legal expert.
• b).Obtain copies of the Chinese commercial codes.
• c).Play the Chinese at their own game by telling them your superiors may never accept certain contractual terms.

11. If they try to manage your expectations

Either raise your expectations or lower your expectations.

What the Chinese may hope to achieve

Either persuade you to concede terms that you would otherwise not accept, through fear of losing an apparent done-deal at the last moment.

Or:

• a)Hide their inability to deliver as much as you had originally hoped.
• b)Increase your gratitude for whatever crumbs eventually fall from the Chinese table.

DOS AND DON’TS FOR NEGOTIATING WITH THE CHINESE

Here are some guidelines for negotiating with the Chinese:

Do…

• prepare beforehand
• remember that the final decision(s) may be made by persons not at the meeting(s)
• inflate your price
• play to the Chinese strengths
• look for opportunities to empathise with the Chinese
• display long-term commitment to China
• go over every detail of the contract
• be prepared for much back-tracking, repetition, ambiguity and inevitable misunderstandings
• take detailed notes
• be able to walk away from the table
• know where the exits are
• control your emotions
• check your ego at the door
• be careful what you say to the media.

Do not

• try to resolve problems individually
• concede too easily
• hesitate to cut your losses
• reject a Chinese position out of hand
• assume that the Chinese may make decisions for economic reasons alone
• assume there is such a thing as ‘China pic’
• speak off the record
• lose your temper
• lose your patience
• embarrass the Chinese
• gloat at a successful agreement

as detailed below.

Do

When negotiating with the Chinese, do…

Prepare beforehand

How	You must ensure that you gain immediate access to the key Chinese negotiators.
	See also pages 126-132.
Why	Otherwise you may subsequently need to be referred to higher-level officials – who may disregard any agreements you have already reached, and oblige you to start again from scratch.

Remember that final decisions may be made by persons not at the meeting(s).

How	Having gained access to the key Chinese negotiators, you should help them devise language acceptable to their key decision makers.
Why	Even if you gain immediate access to the key Chinese negotiators, any agreements you reach with them may still need to be reviewed and ratified by their superiors.

(Link to above: Chinese negotiating tactics (1) Control the arrangements.)

Inflate your price

How	Without being wholly out of line with the competition, you should inflate your price slightly and then give away a lesser amount (say 15% and 10%, respectively), so that both you and the Chinese ‘win’.
Why	1.Otherwise, the Chinese may assume that your quote is flexible; and, consequently, continue to haggle until they secure some concession.
	2.Such concession may also give ‘face’ to the key Chinese negotiators by allowing them to report some good news to their superiors – who, in turn, may be more kindly disposed to ratifying any agreements you reach.

(Link to above: Chinese negotiating tactics (6) Play you off against your competitors.)

Play to the Chinese strengths

How	Similarly, your arguments should give ‘face’ to the Chinese.
Why	The Chinese may remember, resent and retaliate against your taking advantage of their weaknesses.

Look for opportunities for empathy

How	You should be prepared to talk around a subject rather than address it directly.
Why	Some Chinese may still consider it good manners to take an indirect approach – although others may be less sensitive and more direct.

Display long-term commitment to China

How	You should never express (or allow the Chinese to sense) any doubts that you may have about the ultimate feasibility of the object of your negotiations.
Why	The Chinese may misinterpret your hesitancy as insincerity. See also Chapter 1: Open Door Policy and Chapter 9: Long Term Commitment.

(Link to above: Chinese negotiating tactics (5) Embarrass you.)

Go over every detail of the contract

How	You should ensure that you discuss all the issues, taking all the time necessary and allowed.
Why	Otherwise, the Chinese may:
	1.Not fully understand the language nor, consequently, the terms and/or conditions of the contract.
	2.Identify but consequently keep quiet about some ambiguity in the contract that may subsequently benefit them and/or disadvantage you.

(Link to above: Chinese negotiating tactics (9) Go over old ground.)

Be prepared for much back-tracking, repetition, ambiguity and inevitable misunderstandings

How	You should avoid ‘pointing the finger’ and remember that the person you rebuke today may be your JV partner tomorrow!

(Link to above: Chinese negotiating tactics (1) Control the arrangements.)

Take detailed notes

How	See also Chapter 6: Note-taking.
Why	As a consequence of the previous two ‘Dos’.

(Link to above: Chinese negotiating tactics (4) Trip you up (5) Embarass you (9) Go over old ground.

Be able to walk away from the table

How	You should never put or get yourself into a position where (the Chinese sense that) you need to have an agreement.
Why	Otherwise, the Chinese may try to: 1.Exploit your position. 2.Push you to the verge of aborting the negotiations as a ploy for them to determine your true bottom line, or pull out without their losing ‘face’, when what they may really be after is information to use as a weapon to strike a deal with a competitor.

(Link to above: Chinese negotiating tactics (2) Exploit your weaknesses.)

Know where the exits are

How	The Chinese may leave you a way out. However, they may not necessarily want you to take it.
Why	1.You should leave the Chinese an exit as a way of their saving ‘face’, a sign of your trust and, consequently, a potential means of building good will. If they take it, the sooner you find out the better. 2.Leaving yourself an exit may be more tricky, because – unless they have left one for you already (see above) – the Chinese may mis-interpret it as a lack of commitment on your part.

(Link to above: Do be able to walk away from the table.)

Control your emotions

Why	The Chinese are:
	1.not only conditioned to control their own emotions
	2.but also reputedly able to read your emotions which may put you at a disadvantage in the ‘poker game’ of business negotiations.

Check your ego at the door

(Link to above: Chinese negotiating tactics (2) Exploit your weaknesses.)

Be careful what you say to the media

Why	The Chinese:
	1.Do not publicise (i.e. leak) agreements until they are signed, sealed and delivered.
	2.Dislike surprises and hate public embarrassment.

(Link to above: Chinese negotiating tactics (5) Embarrass you.)

Do not

When negotiating with the Chinese, do NOT…

Try to resolve problems individually

Instead	You should follow the Chinese example of: 1.first listening to all the problems 2.only then deciding what concessions if any you are prepared to give and always keep a couple of concessions up your sleeve, in case you need to offer them to close the deal.
Why	The Chinese may: 1.Not only be non-plussed by your zeal to please them; but also use it later to embarrass you. 2.Prove difficult to be persuaded to back-track on previous concessions – even though they may try to do the same to you. 3.Use silence as a negotiating tool.

(Link to above: Chinese negotiating tactics (5) Embarrass you (9) Go over old ground.)

Concede too easily

Instead	You should follow the Chinese example of not giving up anything without a fight – however unimportant to you – since you can use it to extract something from them.
Why	1.The Chinese may not give up something without a fight – however unimportant to them – since they may use it to extract something from you. 2.By conceding something unimportant easily, you may run the risk of: convincing the Chinese that you do not value it losing its value as a bargaining chip.

(Link to above: Chinese negotiating tactics (2) Exploit your weaknesses.)

Hesitate to cut your losses

Why	The Chinese may not be able to deliver what they promise.

(Link to above: Chinese negotiating tactics (11) Manage your expectations.)

Reject a Chinese position out of hand

Instead	You should counter any preposterous proposition by the Chinese by: 1.Drawing them into a discussion. 2.Steering them in a more constructive direction.
Why	1.A rebuff may cause the Chinese a loss of ‘face’. 2.‘Parry’ is more effective than ‘thrust’.

Assume that the Chinese may make decisions for economic reasons alone

Why	1.Profit is a relatively new motivator in China. 2.The Chinese have traditionally made decisions for political reasons. 3.Even if the project goes ‘belly up’, the technology may remain in China.

Assume there is such a thing as ‘China pic’

Instead	You should not: 1.Overestimate the ability of your Chinese negotiators to resolve the objections of their political rivals. 2.Underestimate the ability of such rivals to scupper the negotiations.
Why	There is no such thing as a corporate China when it comes to doing business: everyone is out for what (s)he can get for themselves or their guanxi circle.

Speak off the record

Instead	See also: Chapter 6
Why	Note-taking. See also: Chapter 6 Note-taking.

(Link to above – Do take detailed notes.)

Lose your temper

Instead	You should:
	1.Always be polite, softly spoken and gentle.
	2.Nevertheless: very occasionally, anger can be used to good effect between you and the Chinese (playing them at their own game).
Why	The Chinese strongly disapprove of outbursts of anger, which they consider a sign of weakness – following the teaching of Confucius that, come what may, the ‘Superior Man’ should:
	1.Never lose his temper, which is a loss of ’face’. 2.Always exercise self-control.

(Link to above – Do control your emotions. Chinese negotiating tactics (8) Pretend to be annoyed with you.)

Lose your patience

Why	Joint ventures, even when all parties may appear willing, can take several years to negotiate.

(Link to above – Do control your emotions. See also – Chapter 1: Open Door Policy and Chapter 9: Long Term Commitment.)

Embarrass the Chinese

Why	You and/or the Chinese will lose ‘face’.

Gloat at a successful agreement

Instead	Be happy, by all means, but not triumphal.
Why	If you have ‘won’ then the Chinese have ‘lost’, which will:
	1.Cause them a loss of ’face’.
	2.Earn them the opprobrium of their superiors.

OVERCOMING OBJECTIONS

Scott D. Seligman (op. cit., pp. 146-8) suggests the following supplementary tactics for overcoming objections where not already included above.

• 1.Appeal to a higher-level decision-maker.
• 2.Ask the right question; push the right button.
• 3.Be ‘Mr nice guy’.
• 4.Show respect; be modest.
• 5.Take risks
• 6.Use your guanxi to go through the back door (zou houmen).

When all else fails, try the three ‘Fs’ – be: Firm, Fair and Friendly.

Post script

Only after writing this chapter was I able to obtain a copy of Carolyn Blackman’s masterpiece Negotiating China (see Bibliography). Had I done so beforehand I might not have dared attempt the subject!

Protagonists

The four protagonists in this case study are:

Nationality	Protagonist	Relationship to others
foreign	businessman living in China
Chinese	potential joint-venture or JV partner	known to the businessman and with whom he already enjoyed good and direct relations
Chinese	intermediary	unknown to the businessman or his home office; but known to the JV partner
foreign	third party, not living in China	known to the intermediary and businessman’s home office

All have been anonymised to protect their identities. However, the facts are wholly true and genuine.

Day 1 – Tuesday

One Tuesday, the businessman received, via the third party, an unsolicited approach from the intermediary, who offered to set up a deal with the potential JV partner.

As it happened, the businessman had already arranged a meeting with the potential JV partner early on the following Monday morning (Day 5).

Day 2 – Wednesday

On the Wednesday, when the businessman checked the intermediary’s credentials:

• The intermediary explained that he:
  • would be present at the scheduled meeting with the potential JV partner, whom he claimed to know well
  • wished to help the businessman better understand the potential JV partner’s position so that both parties might reach a mutually beneficial agreement.
• The potential JV partner denied all knowledge of the intermediary’s role.

Day 3 – Thursday

On the Thursday morning, after consulting his home office, the businessman reluctantly agreed to meet the intermediary on the following morning (Friday – Day 4), for the following reasons.

Purpose	Protagonist	Reason
placate the	potential JV partner	just in case the intermediary really were able to jeopardise the meeting
save the ‘face’ of the	intermediary	by not saying ‘no’ (which might have shut the door to further negotiation)
please the	third party

At the same time, the businessman made it clear to the intermediary that he would only agree to his attending the scheduled meeting with the potential JV partner if the latter also agreed (which, at the time, they had not).

Day 4 – Friday

On the Friday morning, the meeting took place in the businessman’s office.

True to Chinese negotiating tactics to try to gain the upper hand, the intermediary took along an interpreter – probably for the following reasons:

In order to…	Because…
counter the twin disadvantages of being (1) the guest and (2) not on his own territory– by ‘upping the numbers’ with an ally	most such meetings are normally hosted by the Chinese and on their own territory; thus…
	he expected to be outnumbered by ‘hostile’ people
gain ‘thinking time', whilst the proceedings were being translated	most educated Chinese in his position have some command of English
advise him sotto voce in Chinese on how best to negotiate with foreigners	even If the intermediary did not know, the interpreter might (through his work exposing him to foreigners); and…
	the businessman was unlikely to know Chinese well enough fully to understand what was being said; thus…
	this would help save the intermediary's ‘face'.

Playing the intermediary at his own game (i.e. in order to level the playing field), the businessman then also invited his Chinese bilingual personal assistant to attend – for the following reasons:

In order to…	Because…
even up the numbers	this suggested subtly to the intermediary that the businessman knew the basic ‘rules of the game’ and was, therefore, no ‘greenhorn'
advise him sotto voce in English on how best to negotiate with the Chinese	the intermediary was unlikely to know English well enough fully to understand what was being said; thus…
	this would help save the businessman's ‘face'
monitor the performance of the intermediary's interpreter	it was apparent from the outset that the interpreter might not have a good enough command of English correctly to translate the businessman's nuances; and… this would keep in check the interpreter's advice to the intermediary
demonstrate his seniority and re-enforce his ‘face'	had the businessman not done so, the intermediary might have concluded that the former was not senior enough to warrant one and, thus, not his equal

Proposal

The preliminaries over, the intermediary claimed:

• The potential JV partner had three pet major building projects (the details of which are outside the scope of this case study).
• If the businessman were to finance just one, the potential JV partner might consider agreeing to a joint venture.
• Were another company also to finance one, the potential JV partner would have to choose between the businessman and that other company.
• Were the businessman or that other company to finance two, there would be no contest (i.e. assuming that the total value of both projects exceeded that of the remaining one).
• Were the businessman or that other company to finance all three, well then…!
• He was giving the businessman first refusal – since, having done his homework, he considered the businessman’s company to be the ideal candidate for the potential JV partner.

Response

The businessman:

politely…	in order to…
listened attentively AND… took copious notes AND… used appropriate searching questions	dissemble his incredulity at the sheer scale of ‘cheek’ of the proposal with feigned interest, AND…
	ensure (the intermediary saw that) he accurately recorded the details of the proposal
modestly explained that he could not decide, but would have to refer to his home office (immediately)	save his own ‘face'
	since the Chinese: have made an art of public demonstrations of modesty prefer collective over individual decisionmaking as a means of taking advantage of collective wisdom do not (like to) make off the cuff decisions the intermediary would recognise this ploy as typically Chinese and thus accept it with good grace
warmly thanked the intermediary for the opportunity of first refusal for such projects	build the intermediary's ‘face’ in true Chinese style by expressions of flattery and gratitude (albeit false) in front of others
promised to let him have an early answer (rather than say ‘no')	save his own face
	keep the door open
	since the Chinese refuse politely in a number of ways (including lying) without exactly saying ‘no’ in order to: save face avoid shutting the proverbial door to further renegotiation leave room for further manoeuvre the intermediary would recognise this ploy as typically Chinese and thus accept it with good grace

Outcome

After the intermediary left, the businessman’s Chinese personal assistant expressed her shock that what had just happened was undoubtedly a request for a substantial bribe.

The businessman immediately reported to his home office, which agreed that he had acted wholly appropriately.

Later that afternoon, about 4 p.m., the potential JV partner’s secretary telephoned the businessman’s personal assistant to cancel the meeting scheduled for early the following Monday morning (Day 5), pleading a last-minute summons to a high-level governmental meeting. Such an excuse is not uncommon and frequently genuine – which, in this case, it was subsequently confirmed to be.

On informing his home office, the businessman was informed that the third party had already told them that the intermediary had complained of his lack of cooperation – a charge that the home office flatly denied.

Happy ending

Some two to three months later, the businessman invited the potential JV partner to a banquet, which they accepted.

Some 18 months later, the businessman happened to meet by chance a contemporary from school who – to cut a long story short – turned out to have been the third party! After a brief conversation, the third party retracted his view of the businessman’s performance: he had no idea of the intermediary’s proposal, which shocked him.

Footnote

Even if the businessman had conceded, there was no guarantee that the joint venture would have been successful. Chequebook negotiating has reputedly worked occasionally in the past; but the Chinese are reluctant to bite the hand that feeds them: in other words, while they can still dangle carrots and receive presents, why hand over the carrots?

As a Chinese university professor once said to me: why should the Chinese use their own money – of which he claimed that they had more than sufficient – while the West is prepared to hand theirs over by the barrowful?

APPLICATION

The following protocols are specifically referred to again in subsequent chapters, as follows:

Topic	See chapter
Negotiating techniques	6,7