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Negotiating With Chinese Investors

In 2015, the Chinese economy passed a significant milestone. After years of proactively soliciting overseas investment to build large-scale manufacturing and generate jobs, China saw its outbound investments surpass inbound investments for the first time. As the Chinese economy becomes more advanced, the focus of Chinese overseas investment has entered a new phase, with a change in the target companies of interest. Recognizing this change is important for Western executives seeking to negotiate effectively with direct investors from China.

To negotiate effectively with Chinese investors, corporate managers need to understand three things: (1) the environment in which Chinese companies operate, (2) their interests and priorities, and (3) the strategies Chinese investors use at the negotiating table. In developing our perspective, we studied 15 years of accounts of Chinese outbound investments, as reported by the Financial Times, The Wall Street Journal, The New York Times, Reuters, The Economist, Bloomberg, and the BBC, as well as by leading Chinese media outlets such as Sina, China Daily, Xinhua News Agency, and Caijing. Across hundreds of investments, we focused on 55 highly visible transactions, most with a reported value of at least $100 million. They varied across major industries and countries and involved both state-owned enterprises and private companies. Read full article here