Deloitte estimates that every fifth CEO in Russia is a woman. With trade between China and Russia increasing, many of them find themselves at the negotiating table with Chinese partners. Oleg Remyga, Head of China Studies at SKOLKOVO Moscow School of Management, shares his insights for successful negotiations.
For a long time, Confucianism was the prevailing political philosophy in China. It shaped a vertical patriarchal society: the emperor was the head of the country and ruled on a Mandate of Heaven and the father was the head of the family or the clan, with his son in subordination to him. Nevertheless, women played an important role in finding harmony both in the state and in the family. This is because women, the yin, were an equivalent complement to the male yang. The balance between opposing yin and yang served as the foundation of cosmogony in Chinese philosophy.
This is largely the reason why the idea of gender equality prospered as China opened to the West in the beginning of the 20th century and why this idea consolidated in communist ideology later in 1949: Mao Zedong once proclaimed that women hold up half the sky. As a result, the first entrepreneur in the 1980s in the PRC was a woman, with modern entrepreneurship in China generally driven by women. They face some discrimination only in terms of the wage gap (women in senior management make 23% less than men), but definitely not as far as status is concerned: women share the same role as men, and this is also true for negotiating with Western partners.
From Hong Kong to Russian-speaking Provinces
There are undoubtedly subtle differences across China’s regions and generations. The older generation of the over 60s is more traditional. It still subscribes to some remnants of patriarchy mixed with communist ideology: these people look down on female partners, even though they actively try to conceal it. The group in the middle comprising people between 35 and 60 grew up and evolved their businesses in communist China and sees women as equals. The younger generation of people under 35 grew up in a different open China. Many of them studied in the West and speak English well, so they share Western attitudes to gender equality. Dealing with young people is the easiest: they understand our culture code, and if they are from North-Eastern provinces, they also might understand Russian.
As for regional differences within China, there are also three basic groups. The first is North-Eastern China. It borders with Russia and many residents speak Russian. Dealing with them is easy and there are no special regional gender considerations: it is only age that affects attitudes to gender. The second region is central China spanning from Beijing to Shanghai and beyond to the South. It is a traditional region which was most receptive to communist ideology. There are no differences between the genders there, but difficulties in understanding Western culture do exist and there is far less interest in Russia. South China epitomized by Hong Kong is the most bold and global-minded region, which is traditionally involved in export. Its residents are the easiest to communicate with, virtually not differing at all from Europeans.
By all means, this classification offers only a generalized view and should not be used as a universal instrument to define gender aspects of cross-cultural communication. Nevertheless, this approach could be useful in the initial stages of preparing to deal with partners from China.
Equality, Empathy, and Concessions
Fundamental research conducted in the USA, UK and Canada, which analyzed data from negotiations between female executives and their partners from China, identified three basic principles.
- Equality. There is no statistically significant effect of gender on negotiation results: culture codes and standards of behavior in China are practically the same when dealing with Western companies led by men and women.
- Empathy. Guanxi, or the history behind an informal relationship when values are discussed and a personal connection is made, plays a big role in dealing with partners from China. Statistically, negotiations involving female executives are more productive because they are more emphatic and emotional than men, making it generally easier for them to build guanxi, especially if their Chinese counterpart is a woman as well.
- Concessions. If the party from China is lead by a man, and the one from the Western country is lead by a woman, the man will be more likely to give concessions in the negotiations — this is the patriarchal heritage at work. In that case, negotiations will go a bit more smoothly.
Clearly, every situation is different and you cannot expect to succeed just because the delegation is lead by a woman. Other factors are much more important.
Preparation: Designation of Roles within the Delegation and Selection of Gifts
Both male and female executives should begin preparing for a meeting with partners from China at least a month in advance. It is common courtesy to send the agenda in advance and translate any working files or documentation into Chinese. Ideally, the company website should also be translated to demonstrate that you are interested in a long-term partnership. Business cards should be both in English and Chinese and should have a QR code to help your partners find you in WeChat, a messaging application used instead of e-mail in China.
It is important to pay special attention to who will be a part of the delegation and what role they will have. In China, all associates accompanying a female lead negotiator are perceived as her advisors. The most they can do is share their opinion if the woman leading the negotiation gives them the floor. If the team begins to undermine the leader during negotiations and argue with her, this will warrant the Chinese party to impose their own conditions on the deal.
Preparing gifts is a must. It would be best to get something related to Russian culture, corporate souvenirs, locally produced items, or the company’s own products, especially if the negotiations are about exporting to China. Stay away from white and green when selecting gifts: in China, the former symbolizes death (as do the numbers containing the digit 4), while the latter stands for marital infidelity. You should also avoid jewelry boxes and similar items reminiscent of burial.
The selection of a Chinese-speaking mediator who will escort the delegation and guide its leader is critically important. If you are just planning to conduct quick negotiations on price with a selected supplier, then this would be less pressing: in many companies, managers speak English and it would suffice to have a good interpreter. On the other hand, if you expect to build a strategic relationship, you will need a reliable interpreter who is also a culture expert well-versed in both tradition and language: one glaring mistake in tone could cost you the negotiation and make the woman heading the delegation look like a laowai — an incompetent foreigner and barbarian. It would be preferable to work with a Russian professional who has experience working in China than going to a local interpreter who could promote his own interests during the negotiations.
The Meeting: Dress code and Delegating Unofficial Responsibilities
The rules of conduct at a meeting are generally the same for female and male executives. Invite your partner to enter the meeting room first, greet them with a handshake instead of a bow, give and receive business cards with both hands. It is not customary to open the door for women, pull out chairs for them, or offer them your seat, so you should not expect any special treatment if a woman is in charge of the delegation.
Women should wear conservative and formal business attire: dresses with a conservative neckline and sleeves or a suit paired with flat shoes. Jewelry is welcome, but nothing too extravagant or expensive. It should make you look dignified and reflect on the good standing of the company. It is a good idea to opt for conservative natural make-up and skip the perfume. Don't try to integrate elements of Chinese traditional style in your clothing: in China people have high respect for their culture and their country and they expect the same from their partners.
While negotiating in China, it is customary for the official meeting to transition into a dinner with informal conversation. Alcohol is usually served at dinner, and this is where women should be especially careful: people in China do not like it when women smoke or drink. This might be construed as misconduct. It would be better to delegate this task to her male deputy or interpreter, allowing her to both show respect to the host and save face.
Tactics: Composure and Dialog with the Chief Negotiator
Confucian influence is still present in China despite the communist principles, meaning hierarchy and defined roles for every member of society still have priority in China. This is also true for negotiations. It is important to address the head of the delegation that makes the strategic decisions. If a person who is careless or even unkempt in his clothing joins the meeting and your partners from China treat him with respect, that means he is clearly important and you are just being tested. He is the one you should be dealing with from then on.
Good conduct means being calm, constructive, consistent, and reserved. If the delegation of your Chinese partner is lead by a woman, you should be ready for an emotional roller coaster: she might shout, take offense, or call your prices downright humiliating. This is nothing but a show designed to emotionally unhinge the negotiation partner and ensure that the company gets the best deal. A female executive from Russia should remember that this is a conscious strategy and avoid reacting emotionally to it. She should get in the mindset for bargaining and drawing out the negotiations. Negotiators should not use force under any circumstances or pressure their counterparts into accepting commitments, especially if it isn't the head of the company.
Empathy is an important element to success, with guanxi playing a big role as a purely Chinese informal communication model relevant for Western partners as well. Guanxi is an attempt to use a relationship built on trust to identify common objectives, strategies, goals, and principles. This means that anything related to values, both business values and personal values (like family values, which is especially appropriate for women), can give an opportunity to strike the right note with partners from China. It is best not to discuss politics, criticize the Chinese or the Russian government, or be critical of national traditions and conduct. Expressing interest in China, on the other hand, is more than welcome: the local culture is a great conversation topic. Guanxi also serves as a mechanism to agree on all the terms of the transaction. While a contract is something that businessmen in China can disregard, they would never do that with personal relationships. If you have built a strong guanxi, you can forgo the contract all together: guanxi is that important in China.
The general approach to meeting partners from the PRC is to be client-oriented. It doesn’t matter if you are a man or a woman. Learn everything about the company you are planning on entering into a contract with and understand its development strategy for the Russian market. Find out who you will be meeting. What status do they hold in the company hierarchy and what interests do they have? Take advice from the expert in Chinese culture and interpreting who is accompanying you. He might make adjustments to your actions directly at the meeting to make them more culturally appropriate. Finally, develop solutions in advance, so that during the negotiations you can focus on the details and building a relationship.