Chinese business negotiation styles and their impacts on the success of business with indian counterparts

1. Introduction

With China’s accession to the WTO and the upcoming 2008 Olympic Games, China will become a new modern country and we will have increasing chances to cooperate with other countries, such as India, from all over the world. Business between China and India is becoming more and more frequent and important, and China will have more opportunities to negotiate with India. The commercial activity cannot go smoothly without negotiation. Business negotiation cannot be separated from culture. Business negotiation is a series of actions, and culture is a lubricant to the process. Knowing about the other sides’ culture will yield twice the result with half the effort. Also, different cultural values could bring barriers and problems in business negotiation. To understand different negotiation styles of us and India is significant. In this paper, I will analyze the negotiation styles of China and India, and find out the difference between them. Analyzing the business relationship between them and give some suggestions about their negotiation.

2. Studies on the negotiation styles of the Chinese and Indian people

2.1 Chinese business negotiation styles

Every people have his or her own negotiation styles, to master his or her negotiation styles will be of great help to the successful business. As a result, what we should understand first is the meaning of Negotiation Styles.

“The negotiation style refers to the words and deeds behaved by negotiators in the course of negotiation. It is closely related to cultural traditions and cultural background, and obviously different from thoughts, characteristics of tactics and behaviors of the negotiators in the other side.” (Ma, 2004, p.450)

Generally speaking, China is considered a friendly country. Dating back from Confucius age, propriety (Li jiao) has been paid great attention to. Chinese people are friendly, generous and helpful. Mostly, the Chinese people would warm their guests in either business or travel. The Chinese businessman is accustomed to “try peaceful means before resorting to force” (Xian li hou bing). When they do business with foreign counterparts, they are very likely to build a good relationship at the first time. In Chinese, there is a phrase “La guan xi”. If the two sides have cooperated before, the Chinese may possibly remind of the relationship between the two sides, which also has a Chinese phrase called “La jiao qing”. Acting in good faith occupies a great position in the mind of Chinese businessman, and the Chinese value a lot on emotion. Frequently, the Chinese’s sincere and warm attitudes help them win a good impression before they do business with others. Nevertheless, “try peaceful means before resorting to force” also means the Chinese would have their tough attitude as well, especially when they are in a hard situation. They are reserved, seldom showing their attitude directly. Even though they master all details of the negotiation, they would invite their partner indirectly to lay his cards on the table. When the negotiation has reached an impasse or some barrier, the Chinese would attempt to break the deadlock by making generous and thoughtful decision to maintain the relationship. They are easy to give accommodation for the sake of friendship.

2.2 India business negotiation styles

Indians are warm and welcoming people who enjoy harmonious relationship. Once one has built a comfortable relationship with the local counterpart, the formal negotiation process can begin.

In business, they are good at serving their own interests through trickery, desiring for quick success and instant benefits and scheming for convenience. (Richard, 2004, p.222) As a result, they prefer dealing with samples. Indians are also patient. In the business negotiation, they often spend a lot of time until they make a final decision. The Indians love bargaining. (Waterloo, 2002, p.318) Strangely, in their minds, justice means the counterpart who has more money or who is more popular should pay the bill. When negotiating, they would say naturally,” your capital is much more than us, so you must pay for…”India is an ancient culture with splashes of modernity throughout its business sector. Making researches on each company thoroughly and finding out the nature of their management style are necessary. Many large companies in India are family owned and operated. Don’t assume that good relations with one family member could constitute access to the source of commercial power. Internal rivalries between family members are bitter, personal, and long-standing.

2.3 China and India business relationship

There exists a long traditional friendship between the Chinese and Indian people. People of both countries have had great sympathy with each other and supported each other in the struggle for national independence. On 30, December 1949, the two countries built up relationship.

Both China and India are huge markets. They are engaged in economic reforms and, with more economic development in both countries, more varieties of commodity could be offered for exchange. Economic cooperation in the fields of steel, petroleum, space, software, etc. has been developed. (Cheng, 2005, pp.90-91)

Since 2002, leaders of the two countries have visited each other frequently, which promoted business between them greatly. China is expected to surpass America, becoming the biggest business partner of India. Both China and India enjoy the most promising foreground all over the world. In 2005, the total trade between China and India reached US $ 18.7 billion, increased by 38% than the last year. China has supported India’s participation in the APEC, while India has always supported China in the Human Rights Commission. Both China and India are huge markets. They are engaged in economic reforms and, with more economic development in both countries, more varieties of commodity could be offered for exchange. They share common interests as follow:

The most important common interest between China and India is a peaceful and stable environment for their economic and social development.

It is also in the common interest of both China and India to develop more trade and economic cooperation among themselves. Trade between the two countries grew quite fast in the last decade. (Zhang,