Ten years ago, when one of our China lawyers would write to a Chinese company to demand it do or pay something, we usually received one of two responses:
- No response at all. This was the Chinese company’s way of “saying” no to our demand.
- A long rambling response from the Chinese company denying that it had done what we accused it of having done, but also somewhat admitting that it had actually done it or saying that its own subcontractor had done it. These responses usually included a discount going forward or some really small amount as compared to the actual damage.
Starting maybe three or four years ago, we started receiving a response to the effect that “we didn’t do anything wrong and we are never going to do what you are requesting, but let’s negotiate.”
Starting maybe a year or so ago, we started receive a response to the effect that “we didn’t do anything wrong and we are never going to do what you are requesting, and if you don’t stop accusing us of having done something wrong we will sue your client in a Chinese court and we are also are going to sue you [the lawyer] for what you did. And then they still offer to negotiate or they propose a low settlement amount.
At my law firm, we call these latest sorts of responses “bluster”. They are intended by the Chinese company to scare you away, and the fact that it has become so common makes me think that it sometimes works.
But how should you respond if you do not wish to just turn tail and run?
There are two ways to respond, one way better than the other:
1. Fight fire with fire and punch back with a slew of your own threats. This method is not terribly effective in the West and it is even less so the case in China. These Chinese “bluster” letters are designed to make you run away, but secondarily, they are designed to throw you off your game. Don’t let them.
2. Play it cool and respond without any acrimony by very briefly making clear your position and what it will take for you to be willing to resolve the problem.
China negotiation 101.