Model of Business Negotiation in China

Business negotiation techniques differ all around the world, but no major arena is quite like China for western businesses. The more holistic approach to the deal that the Chinese business people use on a regular basis, is much more involved than the more technical approach that is preferred by most of the western business community. While negotiations in China still rely on the technical information, as the western business negotiations do, they also take into consideration Guanxi, renqing, and mianzi, which can slow the pace of the negotiations in comparison. By getting more involved and integrating the personal lives of the negotiators, there is a believe and development of a new layer of trust. The biggest variation in business negotiation in China as compared to North America or Europe, is that they view the signing of the contract as merely a component in negotiations, and not the conclusion. Realizing these differences and working to understand why and how the Chinese business people tend to negotiate, can help your business to be more success in the approach and process as a whole.

The increased complexity of negotiating in China can be navigated by taking an understanding for the reasons of each of these impeding factors for “efficient” negotiations, as the western business have become accustomed to. The political and legal framework that is present, and has been around for several decades, creates an environment of distrust and lays down the reason for getting to know someone on a personal level. Beyond the personal vetting and sense of reciprocity that Guanxi imposes on the relationship, the negotiations in China are unique because of the adaptations that had to be made during all of the political turmoil. The resulting model of business negotiation, is not specifically different, just that there are more steps to take to reach similar results. The Chinese businesses realize that they are in a unique position and want to ensure that their business is not negatively impacted by the deal. Negotiating within these rules will allow your firm to navigate the “preliminary” negotiations and get the contract signed, but then the real negotiations start.

Where negotiations in the west, and throughout most of the world, end with the signing of a contract, the Chinese business people see the signing of a contract as the beginning of further negotiations. While this may seem sneaky or manipulative to businesses that are not familiar with this environment, it is not done in malice and is done to improve the deal. Remembering this key piece of information, and planning to re-negotiate even after the deal is signed will give your organization the competitive advantage over your peers that do not keep this in mind.

Feature of Business Negotiation

With the development of economic globalization, especially after the accession to WTO, China’s international trade becomes more and more frequent. Any business can not be separated from the negotiations. So business negotiation plays a very important role.

1.1 Concept of business negotiation

Business negotiation is an activity that buyers and sellers take in order to facilitate trading, or to resolve disputes and achieve their own economic interests. Production and development of Business negotiation is under the conditions of the commodity economy, and it has become essential to modern social and economic life. It can be said that there is no commercial negotiations, will not be able to carry out economic activities. (Bazerman, 2006)

1.2 Feature of business negotiation

Business negotiation is a science. It is an art that use of multi-disciplinary knowledge in the business. Operators use it to carry out commercial activities, and compared with other business activities, it has the following features.

a. Breadth and uncertainties of negotiating

Negotiations are the cross-regional, cross-border. For example the purchase and sale of goods, in theory, could be sold to any one of us. As a seller, he has a broad range of commodity sales; as a buyer, he procures goods throughout the Commodity States, even in the world. In addition, in order to make the transaction more favorable, they have extensive contacts with trading partners. However, whether the seller or the buyer, each transaction is done with a specific transaction object. The specific transaction object is uncertain in the absence of competition.

b. Co-operation and exclusion of the negotiating parties

In the purchase and sale negotiations, the seller wants to try to set prices higher, and the buyer would like to try hard to hold down prices; the supply side hopes delivery is as long as possible and the buyer requires to take delivery of the goods as soon as possible.

These reflect exclusionary acts on both sides in the negotiations. Without this exclusion, there is no need for negotiations. Conversely, if only this exclusion, there is no consultation and cooperation, and negotiations will not continue.

In the negotiations, both parties get meet from the other side, the two sides are thinking each other’s requirements and strategy as the starting point, so the negotiation is cooperative. The purpose of the negotiations is to reach an agreement, not to defeat the other side. In the negotiations, the two sides should continue to adjust their own actions and attitudes, to make the necessary concessions, but also understand each other’s requirements, so that negotiations can be successful, and finally both sides reach a quite satisfactory agreement.

c. Random and variability of negotiations

With economic operation in the intense competition and rapidly changing market, as an important component of economic activity, the commercial negotiation, its progress and change are closely related with the main way of thinking and behavior of negotiator. Thus, it changes faster and richer in economic activity, that it is more difficult to predict. And as a result of negotiating structure, environment and strategy, the negotiation will show a variety of changes in the form.

In negotiations, the greater the random, the more variables, controllability becomes smaller, which brings a greater challenge for the negotiating parties, and puts forward higher requirements for t

Real Estate & Business Negotiating Tips – These Will Save You Time, Money & Aggravation

Almost every one, sooner or later would find himself/herself in a situation where he has to negotiate for the things he likes and wants.

Negotiations are part of our lives. The fact is that right from the early life, negotiations are forced upon us. As a child we are asked of a certain behavior in exchange for toys/sweets/ an outing /a movie etc. etc. Same is true when we are teenagers or adults. We negotiate and trade for the things and services we want in exchange for what the other party wants.

As negotiations are part social, personal and business life, it would help if we understood the process of negotiations and how to handle such situations for a successful outcome. Here are the fine points:

1. Negotiations is a process by which two or more than two parties, with different needs and wants try to find an acceptable resolution to satisfy their needs and wants.

2. Though the interests, needs and wants are different for the parties involved, the process should not be viewed and approached as unpleasant.

3. Parties involved should be committed to have a resolution of the issues. It is impossible to negotiate with those who are not ready to negotiate and resolve the issues.

4. Party negotiating, should have access to the data, facts and figures that are relevant to the negotiations prior and during the negotiations.

5. In negotiations, one should remain open and flexible. Unfortunately, many negotiations fail simply because, the parties involved view the term flexibility, applicable to the other side only.

6. Negotiations should be conducted with an open mind and without preconceived ideas and positions.

7. The process should not be confrontational for a friendly resolution of the issues.

8. At the beginning of the negotiations, the rough guidelines of the negotiations and the results to be achieved should be established. These should remain the guidelines and not the hard line positions.

9. One should try to establish as to what and why the other party wants. Try to understand their point of view. Your position and what you are prepared to give, should remain confidential to the last minute for successful negotiations.

10. Business negotiations should be approached as pure business. One should never approach it as a compromise of ones principles as such stand will not be healthy for a successful outcome.

11. Never state or view the outcome of negotiations as a win or loss. Both parties should be able to see it as a win-win scenario.

12. Try to detach your self from the issue of personalities involved in the issues. Stay focused upon the issues and commitment to have a resolution through negotiations.

13. At all levels of negotiations, give attention to the body language; that is not listening to only what is said and proposed but keenly observing how it is said and proposed.

14. For a successful, pleasant and lasting results of the outcome of negotiations, especially where the parties involved are likely to face each other in day today life, the resolution of negotiations should be without undue pressure. It should be fair and mutually rewarding.

15. One must understand that in many situations, the parties involved may have to justify the results of negotiations to others who are affected by the outcome. Allow them enough reasons to feel good about the results achieved.

16. Before the process of negotiations begin, all parties involved should know as to what the other party wants and the reasons for their concerns and wants.

17. Have several options, for the negotiations to be successful. For every option, point out to the other side the benefits of the proposal and how acceptance of the proposal could help them also.

18. Be prepared to revise your stand and make modified proposals and point out not only the benefits of the proposal but also the consequences, if your proposal is not accepted. Make sure such details are not perceived as threats by the other side, otherwise it could do a serious damage to the atmosphere of negotiations.

19. Negotiations should be conducted in a calm and friendly and unemotional manner for a successful outcome. Parties involved should not be under undue stress or pressure to reach a decision as one is likely to behave illogically and make negotiations difficult and the resolution unlikely.

20. Negotiations should be conducted with mutual respect and without anger, abuse or hurting other side’s pride or social position.

21. Parties involved should be able to devote full and uninterrupted attention to the negotiations.

22. If the negotiations involve complex issues which are beyond the scope of the parties negotiating, experts and consultants should be immediately available for consultations.

23. For negotiations to be successful there must be a time limit to the negotiations to achieve results. The set time limit should be reasonable and acceptable to all the parties and should be established before the negotiations begin. Negotiations involving several issues and of complex nature would need more time and should be allocated the time frame accordingly.

24. Do not lose hope or enthusiasm if the progress during negotiations appears slow. In most negotiations, agreements are reached during the tail end of the negotiations.

25. If your point is lost among the different issues and concerns, do not lose cool, simply restate your position calmly and ask for the response.

26. Try to negotiate one point at a time and not the whole as one issue…that is to negotiate one issue as if no other issues exist.

27. Tackle easy issues first where there is likely to be a meeting of mind and then build on the success of these to negotiate more difficult points.

28. While making certain demands, do explain what they are and why do you want those? Also make sure at every stage that the other side understands exactly what you want to convey, and what you are prepared to give for getting your demands fulfilled.

29. Keep some trump cards to rescue the negotiations, if they hit some serious setbacks.

30. For a lasting outcome of the negotiations (except for those cases where the outcome finishes further interaction, for example in cases such as buying / selling a property, where legal contract binds the people and there need not be any further interaction) parties involved should be allowed a reasonable time, to digest the terms and benefits of the proposed outcome of the negotiations before agreeing to accept the final outcome of negotiations. If it is not allowed and one party feels that the other side has taken advantage of them, they will hold a grudge against others. This is likely to breed the feelings of distrust and make the environment hostile. Going forward, negotiations of any future tradeoffs / conflicts will become extremely difficult

31. Both real and perceived values of the outcome of the negotiations should be a Win-Win scenario.

32. If negotiations do not bring out a successful resolution, do not blame the other side or an individual for the failure in public. It should be avoided in private also as it is likely to create an atmosphere of hostility and jeopardize any future settlements.

What Makes a Successful Business Negotiator?


Two people are engaged in a negotiation – one achieves his/her objective(s) and is pleased, whilst the other walks away disappointed with the outcome.

How often have you felt dissatisfied with an agreement that you have reached? Have you ever entered into an agreement only to feel remorse soon after sealing the deal?


What then distinguishes success vs failure in business negotiations? Do we ascribe our business negotiation success to the characteristics & personality traits that we were born with, or are there conscious developmental actions that we can take to improve our negotiated outcomes? Many of us find ourselves in positions where we have to negotiate professionally on a daily basis. Most of us recognise the importance of preparation to achieve success in almost anything we do.

It is therefore quite interesting to note that the majority of business negotiators do not spend adequate time preparing for negotiations. It is a well established fact that professional sports people spend significantly more time preparing for competition than they spend in competition. Should it be any different for business negotiators?


Research conducted by The Negotiation Academy has found that from a group of 430 business negotiators surveyed, the average time spent in preparation as a ratio against time spent in actual negotiations amounts to an average of 35%. In other words, business negotiators only spend approximately 1/3 as much time preparing for negotiation as they actually spend in negotiation.

Let us add some perspective to this startling statistic. If you were a professional sports person, this would mean that you spent only 1/3 as much time training & preparing as you do competing. Small wonder then that so many people are disappointed with their negotiated outcomes. It follows that the number 1 contributor to successful business negotiation outcomes is the quality of our preparation for the negotiation.

The Top 5 Components of Preparation:

1. Understand Yourself

Before we even begin to understand and apply best- and leading practice negotiation, it is imperative that we first invest in understanding ourselves. Any professional sports person will tell you that the cornerstone of improvement is gaining an understanding of your own strengths & weaknesses. The idea is to optimise your strengths and find ways to minimise the impact of weaknesses. In negotiation, it is important that we make use of personal profiling tools, such as the Hermann Brain Dominance Instrument, to highlight our areas of preference within the context of negotiations. This is like the golfer being videotaped with a view to having his or her swing analysed. It enables us to have a reference point from which to plot our skills development.

2. Vision

What is the vision or ultimate goal behind the negotiation? Is your negotiation really about price or is it about the value that can be derived/added? What are the main motivating factors behind your counterparty’s position in the negotiation? What common ground, if any, exists between your vision and your counterparty’s vision? It is important to understand the drivers or silent motivations behind the positions of all parties to the negotiation. It is only by asking questions that we will uncover the real motivations behind these positions assumed by our counterparties.

3. Value

What are the key deal objectives being pursued in this negotiation? What are the facts and figures supporting the negotiation environment? What alternatives does each party have, if any? Once again we should try to identify, prioritise & weigh the objectives of all parties to the negotiation. Once this has been achieved, we are in a position to highlight those objectives that are shared and at the same time, we can prepare ourselves to deal with those objectives that are likely to cause conflict.

4. Process

Have you spent time thinking about an agenda for your upcoming negotiation? Will you note all the concessions that you will give & receive? Will you ensure that the negotiation is minuted? Do you have tools/templates at your disposal to support the effectiveness and efficiency of the negotiation cycle in its entirety? It is important to ensure that you are well organised for your upcoming negotiation. Write down the key questions that you need to ask during the negotiation, lest you get sidetracked and forget to extract critical information.

5. Relationship

Never forget that we all negotiate with people. It is easy to forget that we deal with individuals who have goals & aspirations not unlike our own goals & aspirations. It is not always just about the facts & figures. The research is clear that people are more likely to deal with those whom they trust & like, than those with whom they have no rapport or share no similarities with. Try to focus on those elements that you share with your negotiation counterparties, and do not forget to focus on the human elements – all of which constitute the Climate of the negotiation.

The clear answer to what makes a successful business negotiator is…..preparation, preparation, preparation.


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