Team Obama was just in town for S&ED 2010, and they did a great job underscoring all the new dangers and pitfalls that managers in post-crash China now face. Most initial management teams don’t survive their first 18 months here, and it looks like Tim Geithner’s China career is shot through with more than a few holes. But Team O’s difficulties in China go further than personnel or execution issues. There’s been a problem with goals and with basic strategy.
Obama is not shaping up to be the Manager-in-Chief for the China set. True, he’s been dealt a lousy hand, but the US administration has made mistake after mistake here. Here are the top five:
1. Looked for the easy win-win.
• Team O made a number of Bad Compromises – where they were arguing about how to best enact a bad decision. (Example: Deciding to delay a declaration on forex manipulation until the G20, and then compromising again BEFORE the G20 to make forex China’s own call.) This tactic has done in a lot of new China managers.
• Rule: Never count on unspoken tit-for-tat concessions
• Rule: Don’t give power without extracting commitments.
3. Told them when we were going home
• Rule: Never threaten if you won’t pull the trigger.
4. Couldn’t describe a "yes" in details
• The US only seemed to want to preserve the pre-crash world order – without ever being able to argue why that was a good thing.
• Rule: Know your own goals and then analyze the other side’s.
5. Gave up exclusivity too early
• The US assumes that it is still writing the script and that we are all in this together. China isn’t in this with the US. Why are the US negotiators the only ones who haven’t figured this out?
• Rule: Always have a Plan B that you can go to early.
Hopefully, S&ED 2010 signals a shift to a new relationship between the US and China based on a stronger, more competent team – and a clearer, more realistic agenda for the US side.
Andrew Hupert is an adjunct professor at New York University in Shanghai and publisher of ChinaSolved and ChineseNegotiation.com.