At Long Last: Telling the Public and Celebrating the Deal

Although most of the hard work is behind you now, you still need to get a few very important details right. You’ll be working very closely with your new Chinese partner in figuring out how to deal with the news of your new venture, preparing for the formal signing ceremony, and last but not least, celebrating the new relationship. In this section, we show you how to wrap things up the Chinese way.

Announcing the news

If the Chinese agree to an announcement, you need to negotiate the wording in both Chinese and English. The last remaining detail is to agree on when and where to simultaneously release the announcement. Usually, the press releases are announced simultaneously in China and your home country. To be polite, consider letting the Chinese side announce it just before you do.

Make sure you’ve obtained all government approvals for your company to operate in China. The last thing you want is to announce the deal before the government has finally approved it.

Chinese and foreign companies often sign a letter of intent before full negotiations have finished. The letter of intent can be announced before the negotiations and approval process are finished, but you still need to get your Chinese partner’s approval before you make anything public.

Never release any announcement without getting permission from your Chinese partners first. Sometimes, the Chinese don’t want too much fanfare or publicity around business deals. For example, a local government official may not want the sale of a state-owned enterprise (SOE) to be announced because he or she fears the price was too low and doesn’t want to risk getting criticized. To respect the government officials’ wishes, no press release or public statement would be made.

Showing off for the cameras at the signing ceremony

For deals that the Chinese want to publicize, they really do like to make a big splash. Formal signing ceremonies are very common in China. You and your Chinese counterparts need to work together carefully to organize this event.

Usually, these events take place in ballrooms of flashy five-star hotels in China. Signs announcing the deal are in the background in English and Chinese and sometimes other languages. Everyone wears his or her best attire. Senior management from each company wears boutonnieres or corsages. Sometimes, flags representing each country are on display on the table. Beautiful flower arrangements adorn the podiums and tables.

Each company brings in several senior officers to the ceremony, and each side generally makes a speech congratulating the other on the venture. You do lots of clapping, and both sides are all smiles. It’s the perfect photo op and a testament that you and your Chinese partner have entered into a new phase of your relationship.

Celebrating the venture

The Chinese like to celebrate their newly formed partnerships with foreigners through one large, elaborate, and expensive banquet. (See Chapter 16 for more on banqueting in China.) The guests include the important relationships from both sides, including selected government officials. The guest list for the Chinese side is usually larger than yours, if only because they have a greater number of relationships in China.

The banquet is usually hosted jointly by both companies. You need to come to an agreement on who pays for it. Generally, the hosts share the costs equally.

For very large companies that are celebrating a major deal, having several hundred guests to celebrate the venture is not uncommon. For smaller companies, a celebratory banquet is likely to include two dozen people. After your long negotiations with the Chinese, you’re ready to celebrate your new commercial relationship in style.