Managing conflicts with your Chinese suppliers

Andrew Hupert, a consultant who helps Western companies in their negotiations with Chinese counter-parties, just published The Fragile Bridge: Conflict Management in Chinese Business (this link direct you to the Amazon page of the Kindle book).

Andrew also blogs at ChineseNegotiation.com, and I have been enjoying his analyses and tips for several years. So I was happy to get my hands on his book. I was not disappointed.

It is easy to read, with plenty of examples and a bit of humour. It dissects China-vs.-the-West concepts and the way they impact negotiations… And create conflicts.

I must say Andrew does an excellent job of putting the reader in the Chinese party’s shoes. That’s what makes this book so interesting.

I took notes about a few factors that make conflict nearly unavoidable between Chinese and Western businesses:

Race to the bottom vs. race to the top.

Chinese have made their money providing low cost manufacturing services cheaper than anyone else does. Westerners usually make their money adding value to unique or high value services (finance, advertising, design). Their basic formulas are at odds. The Chinese might say all the right things about wanting to build a brand or the importance of having top quality products and services while you are toasting one another at a banquet, but once you are gone they go back to their default setting — cutting costs.

Very true. If you need a Chinese manufacturer with a focus on reliability/quality, be prepared to search for a while.

Pay it forward vs. pay me back.

Americans and Europeans settle disputes by looking back at the cause. Chinese settle disputes by looking forward to the next deal.

Great insight. When an importer complains about poor quality, the supplier usually offers a discount on the next order… which sounds like a joke to the buyer, who doesn’t want to give more orders to a company that proved its lack of reliability.

Synchronous vs. sequential time management techniques.

Chinese are synchronous, and thus comfortable talking about multiple subjects at once while Americans and North Europeans are sequential and like to settle matter A, then move on to B, and once that is decided to takle issue C.

Westerners get nervous when partners start discussing the next deal before delivering on the current one — Chinese don’t understand why foreigners are not willing to keep the flow of business going once the relationship has already been established.

I have seen this many times. The Chinese side may know that they made a mistake, but truly feel that it is not a reason for putting a business relationship on hold.

Many Chinese see themselves as empire builders who seek to assemble a loose-knit collection of businesses and contacts that they can employ as opportunities arise.

Subcontracting can spell disaster for quality-sensitive manufacturing.

Yes! Be careful about manufacturers who don’t make your orders in-house. That is the most common source of poor quality in China, I would bet.

Presentation of the book by the author:

China is a paradox when it comes to conflict and disagreement. Local Chinese talk about harmony, but seem quick to enter into disputes. They put a premium on “preserving face” but don’t seem to care about their reputation… or your opinion. Chinese say that relationships are key to their society, but are willing to betray a partner for pocket change. The number of conflicts is much lower than in the West, but a much higher percentage of them seem to spin out of control and undermine profitable partnerships. The Chinese culture values hospitality and graciousness, but it’s also fertile ground for blunders, faux pas, and accidental insensitivity.

This book is about managing conflict – not resolving conflict – for a very good reason. Because of the way Westerners and Chinese approach relationships, business, and conflict, disagreements in China have a very good chance of being unresolvable. This book aims to help you avoid conflict when you can and minimize the damage to your bottom line when you can’t.

I strongly advise you to put your hand on this book. Here is the link again: The Fragile Bridge: Conflict Management in Chinese Business.

An excellent sequel to this book would be the same subject… written for a Chinese audience!

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Comments

  1. Daniel says

    I am a Chinese American live in san Francisco Bay area for over ten years. I do agree with you that the China manufacturer business approach with Western. The word ‘relationships’ mentioned in the paragraph “Chinese say that relationships are key to their society” is difficult to understand by Western people. Apparently it is talking about the business relationship; in fact; it is something about the the contaction of buyer and manufacturer in the other side.