Re: Why mutually beneficial?
in response to
by
posted on
Jun 08, 2020 11:49PM
Tpower, Yes!!! You are so right. There is a cultural difference in the way Chinese view a contract vs the Western view of a legal contract.
Tpower:
"To the Chinese they will generally see a contract as simply a statement of intent.. they will do their best to honour the commitment if they really feel bound by it… But if there is a is a conflict as to ‘which road to follow’ it will be State, family… And then the parties to the contract that will prevail.
Often the Chinese will find grounds and justify their action if they feel cheated, legally trapped or the market conditions suddenly changed and therefore the terms the contract require negotiations to meet the current ecosystem."
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"The Chinese have a reputation for “not abiding by the contract" or for changing contractual terms after they have been agreed. "
The above quote is taken from the HG.org Legal Resources home page. See the link:
https://www.hg.org/legal-articles/contracts-the-chinese-perspective-china-7494
A concept that may apply in relationship to the present ongoing DenseLight sale by POET is:
All situations involving two or more entities in China require some form of negotiation, ranging from informal, friendly discussions with a long-term partner to formal bilateral talks. Chinese-style negotiation is the process of building and tending relationships to produce benefits for both sides. It is a process that does not end unless the relationship is severed. This approach to negotiation is rooted in Chinese cultural, historical, and practical considerations and exists throughout modern China. It also differs greatly from the view that the negotiation ends when the contract is signed. From the Chinese perspective, the contract signing indicates the formal beginning of the partnership and with it, the commitment to the ongoing negotiation. In this context, successful foreign companies commit adequate time and resources to understanding and tending local China relationships for the long run.
The paragraph immediately above comes from the following link:
http://www.chinabusinessreview.com/negotiations-chinese-style/
Another interesting perspective on the Chinese view of contracts follows:
"In Europe, the signing of a contract often indicates the ‘conclusion’ of a business deal. In contrast, when doing business in China, the signing of a contract indicates the beginning of the business relationship; it anticipates rather than defines the resulting relationship. Contractual terms are expected to be superseded, or at least modified, by relational and surrounding circumstances. Parties are therefore expected to make mutual adjustments and accommodations in response to the events that occur."
That quote comes from the article linked as follows: https://www.bluebiz.com/en/BizClubs/Club-China-News/Doing-business-in-China-Contracts
Thanks, Tpower and thanks to Dave (lumenge).
You both have a more circumspect knowledge of the nuiance of actually doing business with the Chinese. This is not to say that business deals with the Chinese should never be done. On the contrary, it only means that Sun Tzu may have had something when he advised: “Victory comes from finding opportunities in problems.”
– Sun Tzu