Chinese Negotiation Traditions: Guest Post

A recent post noted that Wang Cheng Jie, Secretary General of the Mediation Centers of the China Center for Promotion of International Trade, delivered an insightful and provocative presentation at the World Mediation Forum in Athens on March 12.  Mr. Wang has kindly given permission for his remarks to appear on this blog.

Wang Cheng Jie’s point is alluringly straightforward:  Insofar as mediation is flexible and adaptable, it hinges upon the parties’ own preferences, styles and predispositions.  This being the case, then mediation that involves two parties with strongly distinctive culture expectations — as between Chinese and western parties — might be an invitation to misunderstanding and confusion.  In his essay, Mr. Wang explains why commercial mediation between eastern and western parties may easily go seriously awry.

We are honored that Wang Chen Jie has granted this blog permission to reprint his remarks for this wider audience, and eager to share his useful and perceptive remarks, which appear below as they were delivered in Athens.  I hope that readers will share my deep respect and high regard for Wang Cheng Jie’s invaluable insights.

Influence of Culture Difference on International

Commercial Mediation

Chengjie Wang, Secretary-General

CCPIT/CCOIC Mediation Centre

Ladies and Gentlemen,

Good morning:

It is my great honor to be invited by UIA to attend the World Forum of Mediation Centers, and to have this opportunity to discuss the development of international commercial mediation with friends of law from different countries. For this reason, I would like to thank UIA for giving me this opportunity. The topic of my speech today is “Influence of Culture difference on International Commercial Mediation”.

In order to discuss this topic, we first have to explore the inner nature of mediation. Mediation has many intrinsic characteristics, such as flexible, convenient, cost-saving, but in the context of the impact of cultural difference, its nature is highly related to the dominate role of the parties. Mediation is strongly featured by the parties’ dominate role. This feature distinguishes mediation from litigation and arbitration, and is a most attracting feature to the parties. And I believe it is also the most inner nature of mediation. During the process of mediation, besides the facilitation of the mediator, everything is dominated by the parties, from whether to proceed the mediation process (which signifies the procedural option of the parties), to whether to reach a settlement agreement and the content of the settlement agreement (which signifies the recognition and respect of the substantial right of parties), all of which is decided by the parties. The mediation process is really a process for the parties to negotiate how to resolve the dispute under the coordination of the mediator and to finally reach a settlement agreement. Although the mediator plays an important role in communication, coordination, mediation, and facilitation, in essence, mediation is for the parties to communicate and to negotiate a way to resolve dispute. Therefore, whether mediation can proceed smoothly and result in success is affected by its parties’ dominance nature.

Needless to say, there are cultural differences. Affected by factors such as history, religion, geography, economy and politics, every ethnic group has formed its distinctive culture character in its development. The so called cultural difference is actually the differences in language, knowledge, conception of life, value, morality, way of thinking and custom. The cultural difference between the parties has profound influence on international commercial mediation.

During the process of international commercial mediation, we can undoubtedly feel the cultural differences. Take the differences between the east and the west for example; the differences are in the following aspects.

• 1. Different attitudes towards dispute. Western people usually see disputes as a normal occurrence. A quote from an American classic work on negotiation describes disputes as an unavoidable condition when people of different interests doing business. The quote shows the calm and frank state of mind of Americans when they face disputes. There are even scholars who think conflict by itself is the power that makes the change in society and individuals. The above expressions show the direct and positive attitudes towards disputes for people of western cultural backgrounds.
  On the contrary, People in the east usually see conflict or dispute as abnormal status in life. They would think conflict as a bad thing. Because conflict shows the incapability of maintaining a harmonious relationship with other people. For this reason, when getting upset with others, eastern people usually choose to stay quiet instead of confronting others in order to avoid conflicts. So, under the eastern cultural background, avoidance is the most common and normal way to keep away disputes.
  In conclusion, under the different cultural backgrounds, people’s attitudes towards disputes will directly affect their attitudes in resolving the disputes. Those who hold positive attitudes towards disputes will be upfront with it and take initiation in finding a solution. And those who hold negative attitudes towards disputes are more likely to respond passively to the upcoming disputes. Since eastern and western people hold different attitudes towards disputes, they choose mediation as the way to solve the disputes for different reasons, which will lead to their different concepts during the mediation process and possibly running into communication difficulties.
• 2. Different value orientations towards dispute resolution. Traditionally, people in the west are not used to choose mediation to resolve disputes. However, since mediation, compared to the costly and slow litigation, is more economic and convenient, it is becoming a more popular way to resolve disputes. Meanwhile, people in the west usually have a clear and direct aim, which is to defend and protect their own right and interest. This could be called the “interest-dominated” dispute resolution.
  Compared to the western people, people in the east do not focus their own interest, at least not their direct interest, but more of a long-term relationship between the parties, or the long-term interest. It means to use dispute resolution to maintain the existing relationship and look forward to the long-term development. This is a reflection of an old Chinese saying “harmony brings wealth.”  The “relationship-dominated” value orientation is the reason why people in the east will use large amount of time to build a good relationship at the beginning of the mediation, and take it as a basis for further mediation development.
  These two contrary value orientations will lead to misunderstandings of the parties during mediation. Western people will see the behavior of the eastern people as a waste of time, and eastern people will see western people of too hasty to seek interest and lack of sincerity of cooperation. This crisis of trust will very likely make the effort made by the mediator and the parties in vain.
• 3. Difference in mediation modes. In the western society, people are used to the face to face communication, which also affects their habits in mediation–to exchange opinions in person. This mediation mode is called as the “face to face mediation”.  The advantages of the “face to face mediation” are obvious. It is convenient for the parties to express and understand their views and easier for the mediator to find out the truth and know the interests of the parties.
  Under the eastern cultural background, people tend to avoid conflicts, and to some extent, they are not so used to the face to face mediation. People in the east are more used to express their views in the “back to back mediation” process and to pass on their views to the other parties by mediators. Only when the principle matters of the settlement are basically agreed will they face each other to negotiate the details.
  Under these two mediation modes, to make either side adjusting the other would leave the compromised party with a negative impression, and will undoubtedly obstruct the process of the mediation. Of course, in recent years, in the western practice, considering the skills of mediation and the protection of personal privacy and commercial information, the “back to back” mediation mode are commonly adopted. This coincidence provides the possibility for mediators to seek the agreement of the parties on the mediation method.
• 4. Different choices and expectations of mediators. Generally speaking, people in the west pay more attention to the expertise of the mediators, for example, whether the mediator had received professional training in the past. They would emphasize the neutrality of the mediator, so that no special relationship should exist between the mediator and the parties. Besides expertise and neutrality of the mediator, people in the east tend to choose someone they know of from the mediator list, and those who know the history and facts of the case are most favored. The difference in the standard of choice will lead to certain problems. On one hand, western people might challenge the neutrality of the mediator chosen by the eastern people; on the other hand, eastern people might concern that there are obstacles to communicate with the unfamiliar mediator.
  As for the expectations hold to the mediator, in the western practice, the role of the mediator are positioned to facilitate the communication and negotiation, and to assist the parties to reach an agreement. In the eastern practice, more duties are assigned to the mediator, one of which is for the mediator to make evaluations of the rights and responsibilities of the parties and to suggest settlement solution, and such suggestion would better serve to maintain the good relationship between the parties. The different expectations will lead to misunderstanding on the role of the mediator both by the parties and the mediator. For this reason, it is necessary for the mediator to acknowledge his/her understanding of the role, so that the parties and the mediator could reach an agreement on this matter.
• 5. Besides the above points, affected by diverse cultures, people in the east and the west are different in their thinking patterns and the decision-making patterns. Western people who are used to chronological thinking and linear thinking usually divide a large task into a series of small tasks, and the final settlement agreement is the combination of the compromises and agreements of the small tasks. On the other hand, eastern people who are used to comprehensive decision making and fuzzy thinking are more likely to discuss and consider the overall issue, without sorting out obvious priorities. And when the time comes, usually at the last stage of the mediation, will the eastern people make compromise and commitment, and reach the final agreement.
  Such difference might cause trust crisis between the east and the west. The eastern people bringing the discussed issue back on the table might seem untruthful and dishonest to the western people. On the other hand, the eastern people might also be confused by the reaction of the west. To them, the previous discussions are only considered as presumptions, relative issues are still on their mind, and they would think they have not given their final word to such issues. Because to the eastern people, there are only one binding agreement in the mediation process. That is the final settlement agreement.

In conclusion, the diverse cultural backgrounds will turn into real-life conflicts and obstruct the smooth continuance of the international commercial mediation process. The international commercial mediation process itself is a process for different cultures to collide and merge, and it also is a process for mediators to interpret and coordinate different cultures. Therefore, during the international commercial mediation process, the mediation centre and the mediators should try their best to facilitate the parties to understand, respect and accept each other’s culture, and to minimize the obstacles caused by different cultural background to the largest extent.

Established in 1987, the Mediation Centre of China Chamber of International Commerce (CCOIC Mediation Centre) serves to resolve international commercial disputes through mediation. By now, we have handled more than 8000 cases with a success rate of higher than 70%, and the parties of the cases involved more than 50 countries and regions. To provide better service to the parties of the case, we have established 42 sub-centers in China, forming a mediation network nationwide. To promote cooperation internationally, we have enlisted almost 50 foreign experts as mediators, and have concluded cooperation agreements with counterparts of more than ten countries promoting the adoption of mediation to resolve international commercial disputes, surmounting the obstacles caused by different cultures. I believe, through the better knowledge of mediation by the parties, the further support and confirmation of the mediation by the government and legislative body, and our collaboration of effort, the prosperity of mediation will not be far away.

Thank you.