Chinese Case

Just One More Small Thing

Liu Baiyu

     After a whole week of intense business and technical negotiations, a Chinese company and a Canadian company finally reached an agreement on exporting a set of large complete mechanical equipment for USD3.1 million to China.The two parties were very happy and scheduled to sign the contract at 9:18 a.m. the next day Before signing the contract,Mr.Liu,the Chairman of theChinese company, decided to have a courtesy meeting with both delegations.

    The next morning at 9 am in the conference room of the Chinese company, the Chairman of the Chinese party sincerely thanked the delegations of both parties for their efforts on that week and especially thanked the Canadian side for its sincere cooperation. The representatives of both parties applauded warmly. Then Mr. Liu suddenly said, “Just one more small thing. Before I lef the office, Mr. Wang, the chief engineer of our company, had reported to me, the cost of food and local transportation of our training delegation with seven engineers in Canada would be borne by the Chinese side. Due to the financial policy, the company has a little budget for them. Since this is the first time for them to go to Canada, they may not used to local food and it's not convenient for them to go to work by public bus, which may influence their technical training, and then affect their performance as technicians to train other Chinese employees after they return home. May I suggest that the Canadian side be responsible for the food and local transportation during their technician training in Canada? They will stay there only for half a month, which is not much money in total, so it is not a big deal for your company. Besides, the engineers will be grateful, study hard and conduct effective training for the other staff after they return to China, which can also benefit the operation of your company’s equipment. How is it,Mr. Blair?”

      Mr. Blair, the head of the Canadian delegation, was taken aback by the request because all the terms and conditions of the contract had been agreed upon the day before. He had not expected the Chinese party to have a new request. He did a quick mental calculation that he would pay more than ten thousand US dollars. But before he came to China, he had heard about the importance of the “face" of Chinese people. The $3.1 million contract versus the $10,000 face! Blair thought for a moment, and said with a smile, though unwillingly, “Mr. Chairman, we are glad to meet your last request.”

Questions

1. What kind of negotiating tactics did the Chinese chairman adopt?

2. Why did the Canadian party meet the Chinese last request?