Will your negotiation skills back home equip you for negotiating in China? Well they're important, but they're not quite enough. You'll also need a good grasp of the cultural differences or you'll be mystified by unexpected responses and they'll run circles around you. So here are a few key principles for negotiating in the land of the dragon.

1. Be Objective

Many stories about China are exaggerated, one way or the other. We've heard of fabulous deals, providing goods and services at a fraction of local costs. We've heard of toxic Chinese products and business tycoons who will cheat you at the drop of a hat. But China is neither black nor white, and a successful business person needs to strip away the political agendas that get in the way of sound business decisions.

We should also be wary of snap judgments by people who bail out impatiently with accusations of rampant deception and contracts never honoured. Certainly we should heed all warnings of danger, and be constantly on our guard. But we must seek a realistic view, neither wearing rose-coloured glasses nor seeing treachery in every misunderstanding.

It's important to be realistic regarding issues of honesty. As in any country, there is no shortage of scoundrels in China. Neither is there a shortage of good and respectable citizens at all levels striving to meet high standards. Nothing unusual about that. But cultural differences make it easy to misinterpret strategic manoeuvres on their part. We may see it as outright deception when – in their own view of proper behaviour – they are acting honourably but cleverly. And they may see our own clever manoeuvres as questionable behaviour within their ethical system. The point is not to judge each other and kill the deal, but to find that common ground which produces a good contract for both parties. That requires us to find a delicate balance between giving our opponents the benefit of the doubt when we fail to fathom the purpose of their actions, and avoiding the risk that someone will take advantage of our trust.

We need to be careful about old advice. Any economy, in the years before it gets properly regulated, has a lot of leeway, and plenty of opportunities for unscrupulous dealers to rip you off. So consultants used to give sound advice to clients – watch out for treachery and dishonesty. Serious caution is still good advice, but times are changing at an amazing pace. The Chinese have aspirations of becoming world economic leaders, and they fully recognize the need for strict professionalism and integrity to meet their goals. It's not much of a stretch, since there's no lack of professional pride in Chinese history. You'll find that your major cautionary task in this century, apart from normal vigilance, is to identify the modern high-quality firms and separate them from the rogue elements. At the same time, the Chinese economy is still in flux, and there are still enough bandits out there to warrant serious caution.

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