They are scrutable if a U.S. firm is patient and prepared
The dining rooms of the Min Zu (Nationalities) and Peking hotels are jammed these nights with foreign businessmen dawdling over dinner because there is little else to do in the Chinese capital after dark. But an American hoping to compare notes with a Western colleague on the art of negotiating in the Middle Kingdom will be disappointed. Fearful of tipping off competitors, each company group huddles by itself and speaks in hushed tones. Says a U.S. businessman: "You sit there surrounded by Westerners all whispering about their deals, but you never find out what they are up to—nor do you tell anybody who you are or why you are in Peking."
That is only one of the surprises and difficulties facing U.S. companies trying to push through a new Open Door to China trade. Some other challenges: preparing reams of technical material for Chinese bureaucrats who will want to debate every minute specification of a widget; staying reasonably sober through Peking banquets that may include as many as ten bottoms-up toasts drunk in 110-proof mao tais; determining just how big the China market really is in the first place.
Since last fall, new U.S. deals with China—to build hotels, open iron mines, sell planes, oil drilling equipment and even Coca-Cola—have been popping like firecrackers at a Chinese New Year celebration. U.S. exports to China leaped from $171.5 million in 1977 to $823.6 million last year, and forecasts of the 1985 volume range up to $6 billion.
Skeptics suspect that those predictions may be too euphoric. Peking has very little interest in importing consumer goods; those Cokes will be mainly for tourists.
China is avid to buy foreign technology, but how much it will be able to pay for is inscrutable. The still poor country has little to sell abroad, and it is most uncertain what sums it can borrow, from whom and on what terms. Finally, veteran China traders suspect that in many cases what now appear to be three sales will turn out to be only one, for which the Chinese have invited three companies, unknown to each other, to negotiate and submit what amount to competing bids—a strategy not unknown in the West.
Still, the China market can be huge for those companies that know how to tap it. Unfortunately, not many Americans have yet acquired expertise in the art, and some of the advice the neophyte China trader will get is conflicting or just plain wrong. Some traders insist that an American should avoid all attempts at humor in dealing with the Chinese; others assert that Chinese negotiators enjoy a hearty laugh. One American advises colleagues not to wear suits and ties, for fear of embarrassing the Chinese, who will almost certainly be dressed to a person in Mao jackets. Nonsense, say older China hands: the Chinese are rather impressed by a dark pin-striped suit.