In recent years, the People's Republic of China has grown to become an important economic factor worldwide. The financial crisis has not changed this, quite the contrary. Moreover, recent political developments in America have made China an increasingly important partner for Europe. The rapid growth in China has slowed down during the political turmoil and uncertainties of the recent past - although it is still growing at an above-average rate of around 6 % to 7 % ("the new normal"). The Chinese market remains attractive for German investors and cooperation partners, especially because of its considerable domestic market potential. Conversely, we see a trend that Chinese companies are in many cases beginning to invest in Europe and especially in German-speaking countries.
Not only global players such as Volkswagen, BASF, Bayer, Coca Cola, Henkel or Procter & Gamble, to name but a few, are represented in the Middle Kingdom. German small and medium-sized enterprises are now also very strongly involved and in many different ways. But is this giant empire really a rapidly developing and hopeful future market that justifies sustained and protracted investment? China is not China. The People's Republic is a world apart, with a history dating back more than 4000 years, different languages and dialects, and different social frameworks and behaviour. The size of the country, the gradual opening to the West and rapid economic growth make China a significant growth market with high attractiveness for foreign investors. According to Volkswagen, China is the fastest-growing market in the world. But not every economic engagement is crowned with success. Many companies have not achieved the quick returns they had hoped for. What mistakes do Western entrepreneurs make in their engagement in China? What are the special features of negotiating and doing business as well as running a company on the ground?
The middleman
Western business people have little chance of closing a deal in China without the middleman, also called "Zhong-jian Ren". This middleman is familiar with the specific, personal and reciprocal relationship system that prevails in China and goes beyond conventional networking in the Western sense. In the West, we often tend to trust others until we have reason not to.
In China, it's a little different: in business, you can't build trust, because any kind of business relationship doesn't even happen without trust. Instead, trust has to be conveyed with the help of "guanxi". This Chinese
term refers to the network of personal relationships in China, meaning it stands for mutual give and take. This means, for example, that a business partner whom you trust will refer you to business partners whom he trusts in turn. The crucial first step in China in this phase of the negotiation, also called the "exploratory phase", helps you to establish the personal contacts with the respective company or manager.
A talented Chinese middleman is indispensable even after the first meeting. Think of what happens during a typical negotiation session between Chinese and Western business people. Instead of saying no outright, Chinese business people prefer to change the subject, keep quiet, ask another question or respond by using ambiguous or vaguely positive expressions that have a slightly negative undertone.
A native Chinese speaker can accurately interpret and explain the moods, facial expressions and body language that Chinese negotiators display during a formal meeting. Often, only the middleman can determine what is happening. If an impatient negotiator from the Western world wants to know what the Chinese think of the proposal, they will invariably answer in an evasive way, such as "Let's see" or "Let's check it out" - even if they think there is something wrong with the proposal. This is one of the situations where the middleman can intervene, because his job is not so much to translate words as to mediate between cultures.
It often happens that both parties can openly say things to the middleman that they would not be able to convey to each other directly. In China, it is the middleman, not the actual negotiating partner, who first brings up the business topic to be discussed. He or she can also often reconcile differences. In fact, a good middleman can significantly reduce complex situations and significant disagreements.
