- Why do affluent Chinese agree over dinner
or in a meeting and then completely back out
or drastically change the terms?
How many of you have experienced this?
Yeah. They agree. Yes.
Wanna do business with you. Sounds good.
Let's do it. Handshake. Let's go for it.
Let's sign it. I'll sign it as soon as I get home.
Next day, man I'm not doing the deal.
Or next day, no I wanna change 20 things on it.
I thought we have an understanding.
What's going on? I thought you trust me.
We like each other. (speaks in foreign language)
We're friends. (laughter)
No, no, no, no. What the hell is going on?
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It could mean either you are
assuming an agreement where none exists.
Chinese people will nod and appear to agree
because it is rude to make someone lose face.
What's the word?
- [Students] Lose face. Lose face. Write it down.
That's a big part of it. Face.
Particularly in a social situation.
So do not assume your deal with a Chinese company
is done until the money has arrived in your accounts.
In full. Yes, I'm sending you the money.
It's right there. It's coming through.
Don't assume until it hits the bank
and you're spending the money.
Then the deal is done. Right, Patrick?
Right? Patrick deals with a lot of affluent Chinese,
very professional investor.
By the way, owns a company, investment company
20 million managing (muffled yell)
25 million under management? Yeah.
Yep. So he knows the pain. (laughs)
Contracts and agreements are often
not perceived to be binding by affluent Chinese.
Instead they are seen as guidelines.
They are seen as what?
- [Students] Guidelines. - Guidelines. Guidelines.
Just knowing, that's how they think.
Yeah, contract, just guidelines.
They don't think, oh yeah are you going to sue me?
They don't think that way.
Affluent Chinese do not value a written contract
as Western people do.
So relationship, verbal.
But there's an advantage to this
I'll explain in just a minute.
They do not value written contracts as Western people do.
Now why am I spending a lot of time talking to people
but never close any deals?
How many of you have experienced that?
Talking deals. Talking to people.
Just make sure when you are,
when anyone you're dealing with
most of the time, I'm just telling,
most of the time that person may or may not
be the decision-maker.
They might sound big. They might talk tough.
So, let me give you an example.
This is very common. (rustling paper)
So you have the boss, right?
They have a lot of friends.
They have people who work for them.
And then they know some people.
So the ones you're talking to may be this guy.
He cannot make a decision.
So he agrees, yeah let's do it, and he
will make it sound like he's the boss.
Just so you know.
He will walk, talk, act like he's the boss.
He ain't the fucking boss. Okay?
Because they wanna save face.
What's the word? - [Students] Save face.
They don't want you to know they're not. They act at it.
Let's say the boss is in China, worth
let's say worth 100 million dollars.
He's not coming here look at a house.
He'll say, "You know what, you find somebody."
And this guy finds this dude. You go look.
And then this guy walks into, let's say you're a realtor.
He walks in the house.
You will feel like he's the guy that's buying the house.
You will not know the difference.
You will not. He'll say, "Yeah, I'm looking for this house."
Cause he's not gonna tell, "Yeah, no, I work for this
"and that guy and he owns"
No, no, no. It's all private.
So you may be dealing with this guy
and that's why, you agree on something,
it sounds good, next day he talks to this guy
and he says, "No that's shit. Don't do it."
and he texts you no I can't do it.
That's why. That's how the relationship works.
That's why they changed it because you're not,
so make sure, the first thing you wanna do
is you wanna deal with the decision-maker.
Who do you wanna deal with?
- [Students] The decision-maker.
- And how do you find out?
So how do you find out?
How do you find out?
- [Female Student] Can you ask them?
- [Female Student] Who's your boss?
(laughter)
- I don't have a boss. I am the boss.
- [Male Student] Ask him for some money?
- How do you know?
That's why you do it over a series of meetings
and dinners and drinks.
Get them fucking drunk.
(laughter)
I'm not joking. Chinese get you drunk so they watch you.
It's very easy. You're one way in a board room,
let's get you drunk to see how you are.
Are you trustworthy?
Are you gonna spill all kinds of secrets about me?
Just get you a couple drink.
Well some people, they think oh I closed a deal,
let's get drunk. Let's relax.
The deal just start. The negotiation just start.
Right? They're playing games, right?
So, you may not be dealing with the decision-maker.
That's one problem. And the wealthier they are,
usually they don't do their own thing.
They send people to do their shit.
So you have to find out, are you dealing with the boss
who can make decisions? Right?
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