Negotiating in China
AHEAD candidate Italian Sarah Invernizzi has almost two decades' experience of China's economic policy, regulatory affairs and business environment gained working both in the private sector and in the European Commission. Now working on a project on the development of renewable energy resources in the EU and in China, here she reflects on her experiences past and present...

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The capacity to adjust to changes and to correctly evaluate
all the different issues at stake are key to success.




I worked in Beijing for the European Commission at a very interesting moment in China’s recent history, when negotiations for the country’s WTO accession were entering their final stage. I had therefore the opportunity to gain a comprehensive understanding of all the changes occurring in the Chinese business environment and regulatory framework in the widest range of sectors, from investment in the manufacturing and services industries, to international trade, intellectual property rights etc. I was also in the position to see China’s economic development happening in the broader context of bilateral relations with the EU and other major partners, and of multilateral relations in the WTO. 

After WTO entry in 2001, the pace and depth of China’s structural and regulatory reforms increased rapidly, in order to ensure compliance with WTO commitments and face the challenges posed by an increasing integration into the global economy. There was an extensive drafting ex novo or amendment of existing policies, laws and regulations, along with the reorganization of industries and business sectors. China’s law enforcement, its implementation of international commitments and the establishment of a level-playing field in business, all became frequently discussed topics both at national and international level. The interaction with various interlocutors and stakeholders, including government officials, European business groups and individual companies, made it possible for me to develop a very comprehensive understanding of these issues. This professional experience proved to be a major plus in my subsequent career moves.

Between 2003 and 2010 you were a senior advisor, head of knowledge management and business development manager for two major European corporate law firms with strong Asia practices, working across several Chinese and European offices. That must have been an interesting period and challenge…

Well, I already had the opportunity to interact extensively with the business community while working in the European Commission, therefore after that I chose to build a substantial expertise in business practice. Law firms’ counselling for corporate clients covers a wide range of business activities, leading to the development of a solid multi-sector knowledge, along with strong analytical, drafting and negotiating skills. 

In addition, as business development manager and knowledge manager, I took up multi-cultural cross-office team leadership, project management and strategy development responsibilities. Both managerial positions required a strong combination of those skills that I had developed over the years: understanding of the broader picture and of main trends in policy making and regulatory affairs, business environment insight, experience in interacting with different stakeholders.

Negotiation has long been an important part of your work. In your experience, what does it take to be very good in this field?
 
Negotiations are a great trainer of intellectual agility and behaviour flexibility, particularly in a multi-cultural context. Even within one single round of talks, there often are sudden, multiple changes of priorities, objectives, interlocutors, deadlines etc. The capacity to adjust to these changes and to correctly evaluate all the different issues at stake are key to success. Negotiating also makes you realize that fluency in your interlocutor’s language and knowledge of the cultural background are major pluses. In any situation there is a huge amount of detailed information and know-how which cannot be transmitted through any translation.

How hard was learning Chinese compared to European languages? 

Getting started was extremely challenging, as both the written characters and the tonal pronunciation require a different mindset. I guess my passion for cultures and languages helped, plus my determination to be able to use Chinese extensively at work. What made the real difference was surely the long-lasting full immersion experience. Mastering a language is much easier when you’re daily exposed to it and to the cultural background. Then at a certain point a little “click” occurs somewhere in the brain and what follows is mostly regular practice.

You’re currently involved in a project looking at the many challenges faced by Europe and China in developing a viable policy and regulatory framework for renewable energy resources. Energy is a really hot topic nowadays… 

Yes, moving to a greener and more sustainable growth model is certainly one of the major challenges ahead shared by the EU and China. Various policy and regulatory developments are occurring now in the clean energy sector not only in Europe, but also in China, as the country takes steps to promote an economic development based increasingly on quality rather than only quantity goals. Both the European and Chinese markets are rich in opportunities and challenges for private business operators and for those involved in the policy making process. Project development and bilateral cooperation opportunities involving organizations and institutions are also increasing. On energy, similarly to other sectors, I can provide my expertise in EU, China and EU-China policy making, legal affairs and business strategy, to institutions, business organizations, consultancies and private companies. 

How do you think European companies should face the challenges posed by China’s emergence on the global stage? 

European discussions often focus on the threatening aspects rather than carefully evaluating opportunities. Delocalization of production units, manufacturing job losses and import of cheaper goods have long been the main debated topics. China though is also facing new challenges posed by its attempt to adjust its development pattern and move from being an energy-intensive, high-emission-emitting global manufacturing hub to becoming an innovation-based economy with a well-developed tertiary industry. China’s labour market is experiencing major changes: the blue-collar workforce is losing its traditional competitive edge, that low-cost labour advantage which has long been seen by investors as one main attractive. An increasing number of white-collars is building an international education and professional background, looking for higher-position-and-higher-pay jobs and aiming at living conditions matching the best international standards. Investment sectors and locations that once were in bud are now mature and no longer open to an easy entry, or their further development is no longer encouraged by government policies. 

The winners will be those who also establish strong China-strategy teams back in their European HQs.

All these and other factors need to be carefully evaluated in the China-strategy making process, as strategic business planning becomes increasingly complex in the rapidly changing global economic scenario. In order to develop business plans with a truly global perspective, companies need to select professionals with an in-depth China-expertise. The winners will be those who also establish strong China-strategy teams back in their European HQs