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Negotiating online with Chinese counterparts (part 1 of 3)


Whether you are based in New York, Shanghai or Frankfort, you are probably conducting much of your negotiation online – particularly email, but also via SMS, fax, video-chat, and conference calls. Technology is supposed to shorten distance and enhance communication – but more than a few frustrated purchasing managers and entrepreneurs have good reason to think that the opposite is true. Online negotiation often seems the most direct route to misunderstanding and conflict.

Noamn Ebner, Assistant Professor & Online Program Chair at Creighton University School of Law has just written an interesting paper titled Negotiation Via Email. He focuses on eight elements of email communication:

1. Increased contentiousness

2. Diminished information sharing

3. Diminished inter-party process cooperation

4. Diminished privacy

5. Diminished trust

6. Increased effects of negative attribution

7. Diminished party commitment and investment

8. Diminished focus

While this is an interesting list, it does not even scratch the surface of what western negotiators have to consider when conducting long-distance negotiations with counter-parties in China. Unfortunately, this includes cases where the western side has representatives in China who must communicate with team members back in HQ.

Americans and other Westerners negotiating in China via email, phone, and online platforms face a unique set of challenges and obstacles to reaching an effective agreement.

US-China Online Negotiating Issues:

1. Technology and language. Online communication brings up two main obstacles to international understanding – language barrier and technology gaps. Chinese decision-makers are often uncomfortable discussing complex technical issues in English, and language difficulties are exacerbated on the phone (no body language or non-verbal cues). Email brings up the translator issue – where you are not dealing the real decision-maker, but rather a series of intermediaries of unknown influence and intent. Technology is also a problem – the main technologies that we depend on for social networking do not work at all in China, and the ones that Chinese people use are not common here. Twitter, Facebook, and most Google tools are non-starters. Gmail is a pretty good bet, but by no means a sure thing. Skype is fairly reliable, but is in the process of changing hands in China so no one knows what the future will hold. Do yourself a favor and learn to use WeChat early.

2. Immediacy vs. permanence – We all know how important it is to build a warm, cordial relationship with Chinese counter-parties and phone conversations can go far in building real personal bonds. But only email offers the level of permanence and accountability that western organizations require – but which many Chinese counter-parties avoid.

3. Security, corruption & electronic trail. The question is not “are they listening?” but rather “what are they listening for?” These days it should be assumed that your online communications are being monitored (or at least collected) by governments on all sides of the conversation. Governments use keywords to collect and categorize, so you have to be aware what words are going to raise red flags.

4. Timing. Not only does email and online communication have the potential to slow things down, but it can also make simple exchanges much more complex. Email has a quickness problem (press the send key and it is gone), a slowness problem (it can take days to respond to simple inquiries), a permanence problem ( it stays around forever in a digital, archived format) and a fragility problem (never got it, spam folders, attachment was stripped, that service is down lately). If you are relying on email, it is a good idea to follow up with a phone call or text.

5. Complexity. Westerners feel that Chinese make negotiations more complex than they need to be, and they are not wrong. Westerners tend to negotiate for a transaction – Chinese for a broader set of goals. Chinese objectives may include building close connections and cordial relationships – but they may be to access your technology or secure a competitive advantage. Online negotiation involves multiple channels and an unknown number of counter-parties. You do not know who is seeing your email or reading your messages – and they have the same doubts about your side of the conversation. It is hard enough doing business when you are sharing meals and looking into each other’s faces – when you are trying to juggle a range of proposals, conditions and personalities online, the complexity multiplies.

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