Direct words and indirect meaning
When in a business discussion with Chinese people, you should be careful not to always presume that what is said is always meant literally. Initial agreement from colleagues or business partners to a proposal can sometimes be intended more as a statement of good feeling and the desire to continue the relationship than as a final commitment.
Because of the central role of guanxi in business, the appearance of cooperation can be as important as, or more important than, its substance. While this may sometimes seem hollow and excessive to foreigners, the positive side is an emphasis on a long time horizon and strategic alliances that keep paying dividends rather than one-off deals.
For example, imagine you are leading a proposal for a new project. You sit down at the table and unwrap your proposition, to the general approval of your team. Everyone is nodding and supporting the points that you raise, and you are struck by ease and speed with which the meeting seemingly reaches consensus. However, after the meeting, several team members pursue agendas and projects that are incompatible with the proposal you put forward.
While you may be tempted to think that you are being sabotaged and that you lack the respect of your colleagues the opposite is likely true. They don’t want to undermine your leadership in front of everyone, even though they may not agree with your proposal. They may be signaling openness to form a good working relationship with you by putting off disagreement for a more private forum. Chances are you missed their objections because they may have been raised subtly, at a different time and in a more casual environment.
Alternatively, their nodding in the meeting may have simply meant, ‘I understand your point’. A good idea is to ask the key decision-makers each in turn for their personal agreement that this is a good idea and what will happen by when. By doing this you can get a sense of their level of commitment to the proposal. This can give a much clearer signal as to whether it will happen or get left behind when other more important issues come up.
Negotiating contracts after signing
Perhaps you are entering a negotiation for an important deal with a new supplier. You submit your preferred terms and, after several seemingly unrelated topics of conversation, your terms are accepted without review. The supplier signs the contract and proceeds to a generous round of handshakes and photographs. The following Monday you receive a hefty red-lined document with significant amendments to the terms of your agreement.
In China the signing of a contract can sometimes even be the opening of a negotiation. By signing, the supplier is agreeing in principal to do business with you and expressing the belief that you will be able to come to mutual terms eventually. The spirit of the agreement, and the relationship formed by it, can be more important than the specifics which no one expects to be executed to the letter anyway.
This is especially true when dealing with state-owned enterprises (SOEs), when the Chinese party can act as if they are the law. Given that the courts will invariably side with them, this is not far from the truth. Some SOEs can even be insulted by the idea of negotiating clauses with a lawyer – after all, from their point of view, what is the point of a lawyer and a detailed contract?
When will it happen?
Timing, in particular, is an area where foreigners presume specific agreement but where the Chinese consider details to be flexible. You should come with the awareness that a shipment in 90 days could easily turn into 120, realizing that if you can give this kind of flexibility to your Chinese counterparts it is likely to be returned. On another occasion, if you had a critical need to receive the goods sooner than normal, your supplier would have an obligation to help.
Consideration of flexibility is one thing, but relationships also need to be two-way. Allowing your partners to be consistently late may encourage them to be lazy or even deliberately slow. Like any business relationship, sometimes you will still have to push back against your partners to enforce agreements or influence outcomes.
Another area where indirect actions can smooth things along is with potential confrontations. Chinese dislike the loss of face that comes from difficult confrontations, and may work hard to avoid it.
For example, instead of having a fraught, tense and prolonged high-level ‘negotiation’ meeting between both sides’ senior executives on a potential deal, smart subordinates on either side may have already worked out an acceptable agreement between themselves. This can even result in the actual ‘negotiation meeting’ between senior people being a simple matter of reading out and formally agreeing to what has actually already been agreed behind the scenes
Giving the appearance of consensus helps protect people’s feelings and reputations. That doesn’t mean that people will sacrifice their advantage or even withhold their opinions, but that they work towards their desired outcomes and express themselves in a different way to you may expect.
Building a bridge
These situations can be frustrating, and even slightly duplicitous, to Westerners who often hold ‘straight talk’ in high esteem. However, when Chinese people do business they don’t mistake polite silence or smiling handshakes for complete assent. They know how to hear what is actually being meant in the interaction. A smart Westerner will look out for these interactions and, if things seem too easy or their opposite numbers hesitant, consider whether they need to clarify or consider a different approach.
About the author – Sarah Hager
Sarah is an analyst and corporate trainer with professional experience spanning three countries. She has worked with a number of international, local, and joint-venture companies in China and is expert at creating buy-in from stakeholders across cultural boundaries. Her passion lies in building real relationships and helping people to understand the world from diverse perspectives.