Ideas that add up #65

Westerners are often surprised at how often Chinese [business counterparts] seem to be willing to ‘destroy value’ by screwing up a potential long-term relationship. It may, in fact, be that the Chinese has already met his objectives when he got your business model or new product design. To him, there is no conflict to be resolved. They never planned on following through with the deal in the first place.

Andrew Hupert’s blog on business negotiation in China

Remember it well. What follows is the scary bit, the “Balance of Power Shift”…

The problem facing the newly empowered Chinese partner is – what to do with the Westerner afterwards? The Chinese side learned what they needed, upgraded the facility, or acquired a useful new product — but the American or European side still expects to retain operational authority and receive the lion’s share of revenue and power. Neither Chinese law nor tradition give the weaker side too many options, so the local partner resorts to a tried and true method for disposing of a partner that is no longer needed.

All they have to do is start a fight and let it spin out of control. They lose face, their culture is insulted, and their traditions are disrespected – all due to the arrogance and ignorance of the Western side. No matter how minor or innocent the disagreement may have been when it started, the end result is always the same: the relationship is damaged beyond repair, and the partnership is over.  The Western side eventually gives up and goes home — or escalates the conflict and tries (in vain) to assert claims of ownership or authority.  Either way, the result is the same for the Chinese negotiator.  The Western players exits the scene, and the Chinese side stays put — but now free to make use of their former partners’ technology, designs, know-how — and maybe even their capital.

From Hupert’s The Fragile Bridge: Conflict Management in Chinese Business

So ends, amid shrieking and vitriol, the “potential long-term relationship”.

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