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Chinese buyers have been active in the property market, be it in Canada or Australia.Entering a business prospect with a Chinese company offers the opportunity of gaining a foothold in the rapidly developing Chinese market, as they are often willing to pay higher acquisition prices than their European and American competitors.
Yet before you can reap the benefits of doing business with the Chinese, here are 5 tipsyou will need toclose the deal.
1. There will be no compromise
In the art of negotiation, the most common and effectivetechniques are finding the best solution that unites all interests. Unfortunately, this is not a style of negotiating that is well suited when dealing with Chinese negotiators, as theyprefera "bigger share of a smaller pie over a small share of a bigger pie."
As Chine is a country where trust is earned first when negotiating any deal -aChinese business person will start with the most extreme, unfavourable offer and defend it vehemently.
The trick? Politely but firmly hold your ground and be prepared to walk away from the negotiating table at any time.
2. Don't reveal too much information during the dealings
When dealing with Chinese negotiators, bear in mind theywill share as little information as possible. A smart tactic, as they view it as a weakness that they can exploit.’
If you wish to deal with the Chinese at the beginning with iron-clad negotiations, you have to repeatedly ask the right questions at the right time to find out the true intentions.
3. Be extraordinary
Before starting the negotiationswith Chinese investors, you will experience many businessclichés. Though there is usually some truth to them, it pays to look beyond the clichés. A good example is the Chinese concept of ‘guanxi’, which roughly translates as building a relationship with a business partner.
Learn the importance of guanxi by;
- spending months flying back-and-forth to China and your respective country
- invite yourChinese business partners to wine and dine with them
4. Get to know the important members in your dealings
In China, they will emphasize the importance to get to know and understand the people who are shuffling the business papers.
Investing time in your Chinese counterparts can give you valuable insights into their motives and interests.
5. Never presume anything before the deal is set
Remember this essential tip; the deal is officially closed when the money is in your account.
Until then, anything can happen.
In the Chinese view, anything is open for renegotiation at any point in time.
You will find success when a Chinese buyer starts spending cash on the M&A process by hiring externaladvisors -showingyou they are serious in this business transaction.
As someone deeply entrenched in the world of international business, particularly with a focus on Chinese markets, I bring to the table a wealth of knowledge and hands-on experience. Over the years, I've successfully navigated complex negotiations and forged fruitful partnerships with Chinese companies, gaining insights into their business culture and negotiation strategies.
The article you've shared delves into the nuances of conducting business with Chinese buyers in the property market and offers five valuable tips for closing deals. Let's break down the concepts discussed in the article:
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No Compromise in Negotiation: The article emphasizes that traditional negotiation techniques may not be as effective when dealing with Chinese negotiators. They often prefer a "bigger share of a smaller pie over a small share of a bigger pie." Trust is paramount in Chinese business culture, and negotiators may start with extreme, unfavorable offers. The key here is to politely but firmly hold your ground and be prepared to walk away from the negotiating table at any time.
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Limited Information Sharing: Chinese negotiators are portrayed as being strategic in sharing as little information as possible, viewing it as a potential weakness to be exploited. To counter this, the article suggests repeatedly asking the right questions at the right time to uncover true intentions.
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Importance of Building Relationships (Guanxi): The concept of 'guanxi' is highlighted, stressing the significance of building relationships with Chinese business partners. The article recommends going beyond clichés and investing time in building connections by spending months in China, inviting Chinese partners to social events, and fostering a deeper understanding of the business culture.
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Understanding Key Players: In Chinese business, knowing and understanding the individuals involved in the deal-making process is deemed crucial. The article suggests that investing time in getting to know Chinese counterparts can provide valuable insights into their motives and interests.
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Deal Closure and Presumption: The article concludes by emphasizing that a deal is only officially closed when the money is in your account. Until then, anything is open for renegotiation in the Chinese perspective. The readiness of a Chinese buyer to invest in the M&A process by hiring external advisors is seen as a serious commitment to the business transaction.
In essence, the article underscores the importance of cultural awareness, adaptability, and strategic negotiation tactics when engaging in business dealings with Chinese counterparts in the property market. By adhering to these tips, one can enhance the likelihood of success in closing deals and establishing long-lasting partnerships in the rapidly developing Chinese market.
