NEGOCIATING WITH CHINESE PEOPLE

• Due to the vastness of China, different Chinese have varying business styles.  The Cantonese tend to be more Westernized due to the influences of Hong Kong and constant contact with Western traders for hundreds of years. They are more accustomed to doing business with foreigners and are more efficient.  However, Cantonese business people can often be more adamant about having things their own way and so foreigners should be firm about their position in a negotiation. 
• Chinese usually conduct business over lunch and dinner, and deals are often concluded over a meal.  Entertaining is a critical part of Chinese business culture.
• Chinese pay a great deal of attention to details.  Most negotiations are divided into two phases: technical and business issues.  The Chinese will utilize their technical experts to focus on the technical phase until they are satisfied with basic issues or quality and usefulness.  Make sure to include at least one technical expert in your negotiation team. 
• It should be noted that the Chinese often hesitate to provide information out of concern that someone will use it against them.  Use mutual contacts to assist if you are concerned about establishing trust and credibility with your Chinese counterpart, if negotiations stall, or you encounter disagreements.
• Government officials who are responsible for negotiating deals often do not have the authority to commit financial resources.  Be flexible and creative in your approach, but do not lose sight of your business interests.  In many instances, even small changes to existing agreements cannot be made without the approval of senior officials.
• Chinese do not like to say no or to be the bearers of negative news.  They will hint indirectly in the conversation.  Similarly, you will hear a yes response to almost everything.  You should be careful of these empty yes as it may not always draw positive conclusions.  Verify what has been said to you.  It is important that all parties maintain "face".  If you think the answer to an issue is really no, verify your feeling by asking questions that can be answered positively.

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.