In recent years, the People's Republic of China has grown to become a major economic factor worldwide. The financial crisis has done nothing to change this - quite the opposite. In addition, 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 turbulence and uncertainties of the recent past - albeit with a still above-average increase of around 6% to 7% ("the new normal"). The Chinese market remains attractive for German investors and cooperation partners, particularly due to its considerable domestic market potential. Conversely, we are seeing a trend towards Chinese companies beginning to invest in Europe and, in particular, in German-speaking countries.
Not only global players such as Volkswagen, BASF, Bayer, Coca Cola, Henkel and Procter & Gamble, to name but a few, are represented in China. German SMEs are now also heavily involved in many different ways. But is this huge country really a rapidly developing and promising future market that justifies sustained and long-term investment? China is not China. The People's Republic is a world of its own, with over 4000 years of history, different languages and dialects as well as different social conditions and behaviors. The size of the country, its gradual opening to the West and rapid economic growth make China a significant growth market that is highly attractive to foreign investors. According to Volkswagen, China is the fastest-growing market in the world. However, not every economic commitment is crowned with success. Many companies have not achieved the quick returns they had hoped for. What mistakes do Western entrepreneurs make when investing in China? What are the special features of negotiating and doing business as well as running a company locally?
The middleman
Western business people have little chance of closing a deal in China without the middleman, also known as "Zhong-jian Ren". This middleman is familiar with the specific, personal and reciprocal relationship system that prevails in China and goes beyond traditional networking in the Western sense. In the West, we often tend to trust others until we have reason to stop doing so.
In China, things are a little different: you cannot build trust in business, as any kind of business relationship cannot be established without trust. Instead, trust must be conveyed with the help of "guanxi". This Chinese
The term refers to the network of personal relationships in China, i.e. 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 they in turn trust. The crucial first step in China in this phase of the negotiation, also known as the "exploratory phase", helps you to establish personal contacts with the respective company or managing director.
A talented Chinese intermediary is essential even after the first meeting. Think of what happens during a typical negotiation session between Chinese and Western business people. Instead of outright saying no, Chinese business people prefer to change the subject, keep quiet, ask a different question or respond by using ambiguous or vaguely positive expressions that have a slightly negative undertone.
A native Chinese speaker is able to accurately interpret and explain the moods, facial expressions and body language that Chinese negotiating partners display during a formal meeting. Often, only the intermediary 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 respond in an evasive manner, 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 in which 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 tell the intermediary things that they could not convey to each other directly. In China, it is the intermediary, not the actual negotiating partner, who first introduces the business topic to be discussed. He can also often reconcile differences. In fact, a good intermediary can significantly reduce complex situations and major differences of opinion.
