The premise:

"We'll go to China to negotiate for a short while about prices and other conditions, and then we want to strike a deal in no time, as soon as we have signed a contract, the heaviest part is over and we are secure!?"

 

Commentary:

To the Chinese partner a deal that has been concluded through a contract is just a statement in which you declare your intention to achieve something by joint efforts. The execution in accordance with the stipulated terms of a signed contract is even so not yet a matter of course. On the Chinese side certain more ponderable considerations could thoroughly hamper an execution to the letter.

Chinese society is familiar with legislation as any other, at high speed even most of the still existing gaps in economic legislation have been filled about ten years ago. On the other hand, the impact of existing laws on the way ordinary citizens act in daily life is rather limited.

The character of relations between people is usually decisive for the course of events. This has implications for the extent which a Chinese partner considers himself committed to an agreement. To enforce the execution of a contract by taking the matter to court is by no means easy.

The success of the deal is nevertheless dependent on a broader relationship in which the interests of both parties do match well and even have been checked beforehand. In addition, the Chinese partner assumes that the deal is not a one-time affair and that changed circumstances may influence each item of the contract in question.

On the Chinese side one is not open to doctrinal quibbling or judicial hair-splitting. In a situation like this it is better to reason and act according to the spirit of the letter.


Yujie Services comes each month with a premise that focuses upon a certain aspect of the Chinese business culture where things may go wrong.

You want to comment on this subject?

Send your messages to Yujie Services: info@yujie.nl.

Back

 

© 2019 Yujie Far East Intermediary Services ®