The China Venture

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his own norms and qualifications, or even by criticising others. Through these, he presents himself as very self-confident, competent and wealthy. The Chinese looks at self -presentation differently. In China somebody is noticed by others because he gets respect, he belongs to an important family, or he is a member of an influential group or because he has the support of other people. A potential conflict exists when the Chinese considers the Europeans’ behaviour as embarrassing or overdone. On the other hand, the Europeans cannot stand the self- presentation of the Chinese because they see their status gesture as ridiculous. Moreover they feel hurt by some topics raised by the Chinese. 3.4.2.5 Negotiation process and its communication problems There is a clear difference between the European and Chinese communication process. Europeans are used to explain their final goal, give reasons for it and whenever possible defend it. From their point of view, it is the business of the negotiating partner to make his position clear and to give reasons for his target. Both partners have different goals. The final acceptable result will be somewhere in the middle of the two positions. They reach it by clarifying the differences, make compromises and concessions to each other. The whole process is accompanied by relevant and logical arguments. The trick of the whole procedure is to receive more concessions than to give. The Chinese do not follow this strategy. For them it is not effective enough, too direct and not very clever to show at the beginning your own goals to the partner. A Chinese wants to know his partner first and get an idea of him so that he can assess if he is the right person to work with. For these reasons the Chinese communication strategy does not start with the building up of positions and clarifying divergence but starts with agreements where the negotiating partners have a lot in common. Up to here they try to widen the spectrum of agreements. The negotiation begins only when there is a subject where the divergence is low and the chance is high to come to an agreement. The more delicate a subject and the bigger the differences, the more they will postpone discussion on the subject. The reason is simple. The more time spent on negotiations, the higher the possibility that the counterpart will agree and make concessions. Moreover, the longer the negotiations go, the better the Chinese get to know the partner and his strengths and weaknesses. With this strategy the goals of the Chinese appear 132
only after a certain time and even then, is made known step by step. 134 If difficulties arise during the negotiation process and the partners do not come to a solution or when a position is not acceptable, the Chinese leave the subject aside and go on to the next topic or change the level of discussion. It might appear to you that Chinese wants to drag out the discussions in order to wear down your patience gradually. In fact, the decision-making process in China is often slower than in Europe. The Chinese wants to avoid disharmony and may require inputs from national, provincial and local levels. 135 This interruption of the discussion does not mean, that the Chinese is giving up. If the subject is important for them, they will come back to it again at a later time. Chinese can be very persistent and do not just give up. German and Swiss mana gers often have problems with this style of negotiation. They are used to discuss a subject until they get to a result. However, Chinese often change the topic although they did not find a solution. In their eyes a change in the discussion level helps to relax and can lead to a better atmosphere, making it easier to make progress in the negotiation. This tactic can be very stressful for Europeans who are determined and want to come straight to the point. It is necessary to be patient in negotiations with the Chinese. Fierce outbursts will not earn you any respect. Patience, flexibility and creativity are the keys in negotiating successfully in China. Be prepared for tough negotiations. Adhere to your principles and objectives. Maintain a quiet and dignified manner. If problems develop, you should be firm about your limits and your willingness to work with your counterparts to find a mutually agreeable solution. As we can see, Chinese and German or Swiss communication strategies differ considerably. Both sides have different ideas of clever negotiation. By the respectful toughness and persistence of the Chinese, European managers get the feeling that they want to pull the wool over their eyes in a systematic way. However, the Chinese do have visible patterns and rules in their communication strategy. When these patterns are recognised, it is a lot easier for Europeans to negotiate with the Chinese. 136 It is advisable to allow your counterpart to set the tone and level for frankness and to follow his lead. Remember, the friendlier Chinese talk about a subject the more important it is for them. 137 134 Zailing/Reisch, 1994, p. 85. 135 Dunung, 1995, p. 116. 136 Dunung, 1995, p. 86. 137 Heiniger, 1997, p. 134. 133
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The China Venture: Business Environ
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Table of Contents List of Figures .
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3.2.3.2 Special Funds for Setting U
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3.4.1.1 National Culture ..........
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List of Tables TABLE 2-1: THE AREAS
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GBP Pounds Sterling GDB Guangdong D
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1. Introduction: The China Venture
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After a short discussion with the p
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co-operate with other firms, especi
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The Chinese operating legal system
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First of all, Britain’s predomina
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democratic centralism, all governme
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The courts are the state organs exe
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more than three hundred intermedia
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2.2.8 Company Law China’s first n
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Things seem have to become a lot cl
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2.3.1.1 Financial sector developmen
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securities, trading, initial public
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underdeveloped compared with market
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established in January 1996 by 59 p
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Chinese Banks Foreign Banks Financi
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system formulation has been put on
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The separation of production and co
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swap centres (see also above). From
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investors with little experience an
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them, while a branch with a shortag
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Loans, public offerings of shares,
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is often to acquire foreign capital
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2.3.3.2 Debt financing As getting t
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the approval of special authorities
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control compared to national enterp
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usiness in China and related issues
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3. Pre-Entry Strategic Consideratio
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While the testing for the general r
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of relevant contacts to suppliers a
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partner companies with free servici
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strengths which his own company lac
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Central Committee of the Communist
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environment for foreign investment
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legal and regulatory environment of
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3.2.4.3 Legal Framework for Foreign
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• China’s entry into membership
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• stipulates that advanced techno
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Government approval. Foreign invest
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Co-operative Joint Venture Status P
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Reflecting on these points the foll
Page 93 and 94: Success Factors concerning Products
Page 95 and 96: Success Factors concerning Company
Page 97 and 98: high-technology are eligible for th
Page 99 and 100: Available Distribution Channels A m
Page 101 and 102: Available Distribution Channels Mar
Page 105 and 106: Illustrative Case Studies The follo
Page 109 and 110: Which Aspects should SME's Focus on
Page 111 and 112: Strategy No. 1: Have Cash A comfort
Page 113 and 114: expenses have a detrimental effect
Page 115 and 116: As a conclusion, network oriented m
Page 117 and 118: 3.2.13 Case Study: Swisstec, Lyss 3
Page 119 and 120: factor which makes the foreign firm
Page 121 and 122: developed within the SME, its impac
Page 123 and 124: 3.3.1.3 The Role of Technology Mana
Page 125 and 126: Indirect export and direct export a
Page 127 and 128: maintenance or the use of establish
Page 129 and 130: Government Central Exploiting Sales
Page 131 and 132: in the most advanced provinces and
Page 133 and 134: network through which the products
Page 135 and 136: Siemens or Motorola, they may have
Page 137 and 138: Chinese partners. He also began to
Page 139 and 140: orders. However, a country may also
Page 141 and 142: Germany/Switzerland China democrati
Page 143: 3.4.2.4 Conversation at the first m
Page 147 and 148: 3.4.3 Experiences of European Compa
Page 149 and 150: ones who atte nded a course. They s
Page 151 and 152: Another Chinese tactic is, as menti
Page 153 and 154: 4. Post-Entry Strategic Considerati
Page 155 and 156: and the other one in China. The com
Page 157 and 158: experience in operating production
Page 159 and 160: In these two cases, the companies m
Page 161 and 162: 5. References Aharoni, Y. (1966): T
Page 163 and 164: Dony, A. G. (1998): Market Entry St
Page 165 and 166: Islam, I. / Chowdhury, A. (1997): A
Page 167 and 168: Madura, J. (1993): International Fi
Page 169 and 170: Semkow, B. W. (ed.) (1995): China F
Page 171 and 172: 6. Appendix 6.1 Fact Sheet People
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