WHY "THE ART OF THE DEAL" WILL FAIL IN CHINA

by Colin Liddell

To any macro-empirical realist, China has already won the struggle for global power, and we are now living in an increasingly China-dominated world. It may seem multipolar for a while, but China effectively has it in the bag. 

To stop this would require radical new factors that do not yet exist, like a political collapse in China or the ability of Europeans and Americans to work collectively with much greater efficiency, neither of which are on the cards right now.

As for its presently shitty fertility rate, China has deep enough demographic pockets to ride this out, until they can create actual baby factories. 

Trump's late-in-the-day attempts to counter Chinese power are doomed economically and diplomatically; economically, when you understand how a smartphone is put together, and diplomatically, when you understand how the Chinese mind works. 

I recently chanced upon a good source on this, when I finally got round to reading one of the many old books I occasionally pick up and store away. This is "Myself a Mandarin" (1968) by Austin Coates. As a point of interest, the author was the homosexual son of Eric Coates, a well-known composer who wrote the theme music for Desert Island Discs, among other well-known pieces.

The book describes Coates's experience as a special magistrate in the New Territories of Hong Kong from 1949 to 1962, which he characterises as an area largely run on traditional Chinese law inherited from the Ching Dynasty. In the cases he dealt with, the Chinese parties had a choice of British Common Law or Chinese traditional  law and almost always chose the latter, something which suited Coates's own tastes.

Working day-in-day-out with an entirely Chinese staff, Coates gained a particular insight into how the Chinese mind works. As someone who has had plenty of dealings with Orientals myself, I would definitely recommend this book as deeply insightful. 

But, of most interest here is what Coates says about the Chinese way of negotiation; something that is very much in the news with Trump's latest attempts to bluster and bully the Chinese into submission with his economically illiterate sanctions.

To cut to the chase, here is Coates reflecting on his own experience negotiating with the Chinese from a chapter entitled "The Distirct and the World": 

"A Chinese negotiation differs from negotiation elsewhere in two respects: in its indirectness, and in what may be termed a margin of indefiniteness. 

The degree of indirectness required in a Chinese negotiation is something which is apt to reduce any but the most patient Westerner to exasperation. Everything, from start to finish and at all levels, must be done indirectly, to avoid all possibility of any kind of confrontation or showdown. No contrary word should be uttered except to a third party, who will transmit it in his own way -- often, be it added in a wrong sense, which has subsequently to be rectified by similar indirect methods. 

It is all but useless for a negotiator, whether diplomatic or commercial, to go to China and expect to discuss matters with his opposite number. Negotiation is the work of underlings who, on the Chinese side, will be provided. If the Western negotiator arrives without underlings of his own, he has instantly lost his status. 

The very last thing that a negotiator is expected to do in China is to negotiate. The duty of the principal person in a negotiation is to meet his opposite number, engage him in delightful dinner parties and pleasant country excursions, give well-chosen presents to his hosts and hostesses, and be amiable. The perfectly conducted negotiation is one in which neither of the principal persons concerned ever has to refer to the matter in hand. 

This may sound like something out of an antique fairy tale, but it is not. It is China as it was, as it is, and as it will be. The Chinese dislike of direct confrontations is exceedingly deep, pervading Chinese life from beginning to end. A Westerner who reckons without it will get nowhere."

Now, triangulate this with the abrasive, arrogant, boorish personality of Donald Trump, and we see how hopeless this whole thing becomes. Any Chinese faced with Trump's toxic boomer schtick are immediately incentivised to dig their heels in and obfuscate, rather than lose face.

Coates in later life

Coates emphasises the importance of 'character' to the Chinese. He is not referring here to the kind of erratic cartoon character that Donald Trump has become, and which resonates with his low IQ followers. What he means is a cultured and respectable individual of relatively predictable tendencies.

"When an agreement is scrupulously adhered to, it is because of the character of those who have agreed to it, and the degree of understanding that exists between them. It is not because of the written contract, which, when it comes to it, is merely a reminder of the points that have been previously agreed to. It is this element of character, which throughout the Orient is the most important of all criteria of judgment, which might, in a sense -- and here I succumb to my own Western dislike of blank spaces -- be said to lie in those subtle interstices of indefiniteness.

Because of this element in Chinese thinking -- the element that has no time for absolutes -- a Westerner has to be careful not to press too hard or too far in negotiation. The Western technique of making extreme demands, then moderating them until an agreed balance is reached, is of course fatal in China. Moderate a demand and you lose face. "

You will have noted that Coates has just described Donald Trump's one and only negotiating trick of going in high and then flopping over, and how ineffective it is.

Coates instead advocates an opposite, softer approach.

"In a negotiation, the moment reached when you have created the position in which you can make demands, have in mind clearly what you want and demand 70% of it. In most instances, the next 25% beyond this will be understood by the other side, and thus can, by gentle steps, be gained. The last 5% is sacrosanct."

What he means here is that nearly 100% can be gained by approaching things properly, maintaining the correct character and the the mutual relationship, and, of course, being patient. All of these are alien to Trump's brand. 

Coates also comments on how China has became a graveyard of previous hard bargains.

"...Westerners who strike hard bargains do not last long in the Orient. In the nineteenth century, the nations of Europe struck hard bargains with China, made exact demands, and got everything they wanted. By the 'unequal treaties,' China was humiliated. The humiliation, however, did not lie in the fact that the West was strong. That, with a hard swallow, could have been tolerated. The humiliation was that China was dictated to by people who behaved like boors. 

Moreover, what was the outcome? Where are all those treaty ports and special concessions today? Losses such as Europe has suffered in China exemplify what will always happen if Chinese are pressed too hard."

The likelihood of anyone in the Trump administration reading books like this is absolute zero.

My copy, purchased in an opium-scented bazaar somewhere in the East

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Colin Liddell is the Chief Editor of Neokrat and the author of Interviews & Obituaries, a collection of encounters with the dead and the famous. Support his work by buying his book here (USA), here (UK), and here (Australia), or by taking out a paid subscription on his Substack.

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