Negotiating with the Chinese

I recently stumbled across this video given at the Google campus regarding negotiating with the Chinese.  While much has changed since this presentation in 2006 (Google is no longer in China and the consensus of  inexorable healthy Chinese growth is now questioned) the perspectives on Chinese and American negotiating goals most likely have not.

 I was a party to business negotiations in Taiwan in 2001 and personally experienced some of  the negotiating tactics discussed in this video. Fortunately I had brushed up on some of this before the event and wasn't flustered by the time delaying or subtle put downs employed.


If any of my readers can confirm or deny any of the topics covered in this video I'd love to hear from you.





ht: biztechday.com

An example of how not to negotiate

Negotiation is an art and sometimes the battle is won or lost before discussions even begin.  The recent Copenhagen negotations on climate matters provides an excellent example.

From the Guardian, a journalist claims the Chinese wrecked the climate deal (2009, December 22)
A few choice words from a very interesting article:

.. But I saw Obama fighting desperately to salvage a deal, and the Chinese delegate saying "no", over and over again . . .
 . . . What I saw was profoundly shocking. The Chinese premier, Wen Jinbao, did not deign to attend the meetings personally, instead sending a second-tier official in the country's foreign ministry to sit opposite Obama himself. The diplomatic snub was obvious and brutal, as was the practical implication: several times during the session, the world's most powerful heads of state were forced to wait around as the Chinese delegate went off to make telephone calls to his "superiors". . .

 . . . So how did China manage to pull off this coup? First, it was in an extremely strong negotiating position. China didn't need a deal. . . .

. . . This does not mean China is not serious about global warming. It is strong in both the wind and solar industries. But China's growth, and growing global political and economic dominance, is based largely on cheap coal. China knows it is becoming an uncontested superpower; indeed its newfound muscular confidence was on striking display in Copenhagen. Its coal-based economy doubles every decade, and its power increases commensurately. Its leadership will not alter this magic formula unless they absolutely have to. . .

The bit in red  is the most critical. The Chinese didn't need a deal but they knew President Obama and other western leaders were desperate for one and they knew this. 

Always have a BATNA -- A Best Alternative To a Negotiated Agreement (I forgot where I read this, if you know, please let me know, I need to re read the book) .   If you cannot conceive of an alternative to the deal or contract you will negotiate poorly. Your opponent will most likely sense your situation as well and push you harder.  If you aren't willing to walk away from a deal your probabilities of not getting a good deal go up dramatically. 

Energy costs are a very important factor in numerous industries and the Chinese know this.  Why in their minds should they negotiate away this advantage? The Chinese suceeded in making President Obama and leaders of the rest of the Western world look foolish which will color future negotiations.  A very successful trip for the Chinese.