To do business in China, transnational corporations have to negotiate with local Chinese partners. Many TNCs have now come to the realization that the Chinese have their own negotiation style, and that they are, though less advanced in other areas, rather good at negotiation. Without adequate understanding of the characteristics and skills that the Chinese demonstrate at the negotiation table, TNCs are unlikely to succeed in striking a desirable deal with Chinese partners and in developing business in China. The aim of this chapter is to set out how to understand the Chinese negotiation style and how to negotiate with Chinese business partners.

First a theoretical debate on negotiation is briefly introduced, with a focus on cross-cultural theory, which can serve as an analytical framework for the Chinese negotiation style. Then, in section 2, we discuss the cultural roots of the negotiation style, which helps us understand why Chinese negotiators behave the way they do. In section 3 we illustrate the main characteristics of the Chinese negotiation style, and in section 4 we highlight some general rules that may serve as broad guidelines for TNCs in their negotiations with Chinese business partners.