By Brierley Penn
Cathy Quinn, Chair of Minter Ellison Rudd Watts, shared her success strategies for Chinese investment transactions in New Zealand at the China Business Summit this morning. Most importantly, she reminded the audience that it is vital to both understand and invest in your relationship with Chinese counterparts. “We’re the little guys, so we need to understand how the big guys see things from their end.”
“The Chinese are very shrewd negotiators,” she reminded the audience. “Negotiation is just part of life in China. So they have centuries of experience that they bring to the table when we?re dealing with them.”
Quinn said that it is important to understand the other party’s objectives from the outset of negotiation, and to assume nothing in this regard. “It’s important to start with asking them to explain what their objective is. The Chinese are very patient, and we don’t have any understanding of what that means in comparison.”
She highlighted that often, when a team is sent to New Zealand for negotiation or discussion, the key person from the Chinese end isn’t present in the discussions. When the team on the ground is under orders from an external party, they can often take what appears to be an unreasonable approach. The decision-making process is then escalated outside the room at a later date. For this reason, Quinn suggested that it is equally important for the New Zealand party to have an ability to escalate the final decision up their own chain of control, in order not to lose face.
Finally, Quinn reminded New Zealand businesses to: “Understand how your Chinese counterparts operate, and build their frameworks into your deal timeline. It can often be much more time-consuming from their end to get regulatory or board approval.”
Mismatches between the scale of transactions to which parties are accustomed, and the frameworks in which they operate can result in challenges when executing transactions with Chinese investors. Taking the time to understand and invest continuously in the relationship-building process will assist in ensuring that these challenges do not become insurmountable.