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 tips you will need to close the deal.
1. There will be no compromise
In the art of negotiation, the most common and effective techniques 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 they prefer a "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 - a Chinese 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 they will 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 negotiations with Chinese investors, you will experience many business clichés. 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 your Chinese 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 external advisors - showing you they are serious in this business transaction.
