Топик: Особенности ведения бизнеса в Китае (The peculiarities of marketing strategy development in China)

After about one year of discussions and travelling back and forth between different

departments ,he was told by the Chinese that they were willing to buy his technology.

He telegraphed his office that the contract of $500 million has been concluded.

The chief executive wired back immediately that he was on his way to sign the

formal contract .And the next morning a high ranking official from the Ministry

of Foreign Trade and Economic Relations approached to him and said, “Now that

we are willing to buy your technology we can start negotiations“.

The negotiators,therefore should have a plenty of time,patience and strong nerves.Many

of the negotiators have tried to set deadline and give other ultimatums to Chinese negotiators,but it normally does not help.

Price The Western firms should be very careful in calculating the price for their technology.It is the most difficult and cruicial factor.If a foreign firm reduces its price

radically,say by 15-20 percent ,the Chinese negotiators get suspicious and there is a

risk that the firm will lose its credibility.The Chinese get more convinced of “evils of

capitalism”and would try to press the firm even more.

The concessions given on price should be remained behind the all stages of negotiations

except for the last one.The timing of such concessions is important as,if given too early,

they can have too early.The Chinese do not like to pay for the personnel of selling firm.

When they hear the costs of the foreigners,they get very sucpicious,and allegations about

the “evils of capitalism”rise again.Therefore it is advisable for the Western firms should

hide these costs in their offers and include them at the cost of production,technology

development or project administration cost.

CONCLUSIONS

Having tried to describe the process of project sales negotiation between Western firms

and their Chinese counterparts we reveal that the common course of negotiation implies

its specifications that have not been known before for investors.

The issues that are most sensitive in the negotiation process are the equity shares management control.These two issues have also been a great concern while investing to China since the Westerners do usually rely on Chinese counterparts when dealing with

the local governments and environment .But it is not so.The control over the process of management should be in their hands.Chiefly ,the Chinese want a local chief executive

while foreign firms want to send their own staff.

In most the deals in China, buy-back and export is the matter of lengthy period with many stages.While foreign firms are entering China due to the size of its market,

the Chinese,in its turn see the foreign firms as the source of technology and foreign exchange earnings.