The ART of the DEAL: Chinese and Western Approaches

Dealseeking and bargaining go hand in hand. The back and forth between buyer and seller persists in every culture, it is the nature of trading.

The only thing that differs is the approach to the back and forth. I think Western businesspeople prefer a straightforward approach. They don’t enjoy haggling. Negotiation, in other words, is a symptom of how flawed humans are at communicating, how flawed humans are as moral beings- in an ideal world- if only both sides of a negotiation could be 100% transparent as to their real interests, humans could trade frictionlessly, rapidly, and fairly. And cut out a lot of fees and middlemen to boot. That is the Western dream- that is how Westerners imagine this problem; and in places maybe like idyllic New Zealand one can imagine how this type of transactional purity can occur. But because we are flawed, negotiation is the burden we must bear.

I think that Chinese, however, do have a different mindset, an approach that encourages gamesmanship in negotiation, one that relishes it. Negotiation is to business what sex is to reproduction. Negotiation, in fact is the fun part. In trying to get a deal done, the Chinese way involves feigning, indeed a measure of misdirection. The Chinese way might involve a lowball offer, just to get things warmed up, or indeed, just to tip the other party off balance. There might be an agreement on the price, in lightning speed, but with a twist, that the terms have to be heavily modified, i.e. “I’ll agree to $500,000,000. But, I have to be able to pay you in eight quarterly instalments over four years. Oh yeah, and my nephew needs a job.”

There is a thrill to the chase. And if there is a greater Chinese comfort with “truthiness,” that facts are fungible, and/or context matters a great deal, it is for the reason that truthiness (not the harsh daylight of truth) makes the game of dealmaking more fun. The "art of deal:" is that the smoothness with which one can take a deal from cocktail napkin to boardroom? No. That is the urban myth. The "art" of dealmaking is pushing the concept of good faith- that does not mean dealing in bad faith- it means knowing all the formal/legalistic consequences, knowing all the reputational risks- and still pushing it- that is the "art."

It can be smooth. But it doesn't have to be smooth to be artful (and fun).