Tuesday, May 5, 2009

Tips for Negotiating in Hong Kong and China

In March Jodie and I went for a holiday in Bali and tagged on 5 days in Hong Kong to meet with potential suppliers for Shoes of Prey. I did some reading on negotiating in China and Hong Kong and we went prepared to:

Contrary to what we read, the suppliers we met with weren't in suits, didn't use two hands for business cards and some didn't even have their own business cards! However, we did get a very open reception with everyone we met with, people took us seriously and were more than happy to meet with us. Our efforts were worth it.

When we got home we followed up and sent Australian themed gifts to the two suppliers who were so generous with their time and who we're hoping to work with.

Has anyone else negotiated in China? What were your experiences like?


  1. While I haven't been at a Chinese negotiating table myself (do you put the contract on a lazy susan and swivel it to the other party?) my visit to several Chinese businesses last year did yield a few useful grains.

    In our (my classmates') reading, we picked up much the same as you did. Take note of: strict behavioural guidelines, rigid customs, appropriate seating, inoffensive gifts...
    The reality, as explained by our hosts, is that the expectations of Western foreigners are much lower (I blame Pauline Hanson and Bill Pullman). As long as you're seen to be courteous, you're well presented, you don't make Confucious jokes and you eat all of your dog brain soup with a smile, you're going to be fine.

    Expectation is your safety net in a first meeting. This works the other way round too - we're pretty forgiving of foreign customs/quirks.

    Two specific tips I picked up though: if you're giving whisky, avoid the Black Label. And never give your Chinese host a green hat...

  2. Thanks for your thoughts Jared. Sounds like while it's not expected it might be worth following the customs to make an extra good impression. And blue label Johnnie Walker rather than black, ouch! ;)

  3. My 2cents...

    I have personally found that dealings with wholesalers / manufacturers in China / HK has been fairly casual and relaxed.

    On every occasion, I have dealt with people who are not dressed in suits.

    The new generation business leaders in China/HK are more westernised and get to the point a lot quicker.

    The older generation did have "business games" where you had to match the host for every shot of Chinese Rice Wine and other weird rituals.

    But, I think everyone is a lot of practical in this day and age. The main thing is that there is money on the table (not literally) and that everyone will profit from the business deal.


  4. Thanks Dan, that's all good to hear.

    I'm glad I can tone down on the Chinese Rice Wine shot practice I've been doing for the last few weeks in preparation for our next trip to Hong Kong in a week's time! *phew*!

  5. Congratulations Foxy and Mike - I will be an avid reader of your blog and your escapades.

    From my experience in China, here's what I have gleaned :
    - Be patient. What usually takes 1 or 2 emails in Australia to sort out could take 1-2 hour phone calls.
    - Show respect. No explanation needed.
    - The relationship is everything. Good move on the Scotch.
    - Never put your business partner in a position where they will lose face. Tricky in negotiations, but you must allow them to look in control, even if they're not.

  6. Thanks Sonego. We've definitely found that being patient is important. Particularly with the language barrier, phone calls work better than emails and face to face meetings work even better than phone calls. Quite a few trips to HK are in order by the looks.

    And thanks for the tip on not letting your business partner lose face. We'll keep that in mind.