Ghauri and Fang (2001)

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Ghauri and Lang (2001) - Negotiating with the Chinese: a sociocultural analysis

The authors have devised a "ping pong" model of Chinese bargaining, which refers to the continuous back and forth bargaining process of negotiations.

Pre-negotiation

Early contacts with the Chinese government is necessary, to show that you have the most advanced technology, are willing to sell or transfer it and have the capacity to deliver on time. Lobbying and good presentations to the Chinese is important - you have to sell yourself continuously over a lengthy period of time to show you are sincere and reliable, as well as the best.

This is followed by informal discussions and trust building activities, where the Chinese find out what you are like outside the business field. They do not want to do business with someone they do not like or trust.

Formal Negotiation

The Chinese rarely if ever use a lawyer in negotiations. Persuasion techniques are important, such as maintaining face and seeing through deception.

For example a Chinese man argued that a US firm's technology did not work well in a project in Thailand. The US counterpart said nothing, but contacted the Chinese afterwards stating that nothing was said to cause embarrassment, but they could have the number in the Thailand branch to check for themselves. This apparently worked and the Chinese were more friendly.

Post negotiations

Contracts are flexible in China and so they will change them, causing more negotiations. For example, they will agree to the original contract even if they do not agree in order to save face. Problem-solving is based on changing situations instead of contracts.

The four Ps