Lost in Translation: Why the “Foreign” Language Almost Always Makes Sense

Wow, this is incredible.

“Part of the problem seems to be that there is no Chinese-language text of the agreement that the Chinese delegation supposedly was agreeing to. My own concern is that I don’t think China will give up its sovereignty, the right to retaliate if we put tariffs on them again.” He said that not having a Chinese translation was another source of “possible misunderstandings”, with translation of the 120-page draft agreement into Chinese needed for top leaders in Beijing to agree to it.

And this relates to your frequent note to blog readers that it’s the Chinese-language version of the contract that matters in China.

My response: “yup.”

He [Pillsbury] added that “I did not agree with” comments White House economic adviser Larry Kudlow made on February 28 in a Fox News interview about the last round of talks in Washington a few days earlier. Kudlow said in an interview after those talks that Lighthizer had harshly reprimanded the Chinese side to get back to the negotiation table after a tough first day of talks followed by a breakdown in the discussion on the second.

“Lighthizer read them the Riot Act. And Vice-Premier Liu He responded. And all of a sudden everything picked up,” Kudlow had said, sending an upbeat message of what he described as “heading towards a remarkable historic deal”, though “we have to hear from President Xi Jinping” to sign it off. Pillsbury said Kudlow’s remarks implied to Chinese hawks that the US delegation had “bullied” Chinese trade negotiators and brought indignity to Liu.

“Their concerns, which may be paramount concerns, are that China has been bullied and made inappropriate concessions. And we can see this argument is now in the Chinese press,” Pillsbury said. “I believe China will be tough and not accept some of the American demands” because of fears of having their “nose rubbed in it” after Kudlow’s comments, he said. “Unnecessary misunderstandings seem to have occurred.”

Pillsbury is right and I’m guessing hardly anyone who knows China (or human nature) didn’t wince when they first saw Kudlow’s comments. I (and the other China lawyers at my law firm) always talk about how no country likes being told what to do by another country, and that is especially true of China because of its history. See this Washington Post story, U.S. Was Winning the War Against China’s IP Theft, which quotes me as saying the following:

“No country likes to be told what to do,” said Dan Harris, a lawyer who writes the China Law Blog and specializes in Chinese legal issues. “And they especially don’t like to be told what to do in public. That goes double for China. If you push them loudly, they will feel they have no choice but to push back loudly.

Kudlow has put China in a difficult position and this has made it harder for China to settle. And what Kudlow did with China, foreign companies constantly do with China companies, to the detriment of resolution.

The SCMP article also discusses how Pillsbury blames trade negotiation problems on language misunderstandings:

It is  important to have your contracts with Chinese companies be in Chinese for a whole host of reasons.

The first reason is to achieve clarity. Having a well-written contract in Chinese assures you that the Chinese company with which you are doing business truly understands what you want of it. It puts the two of you on the same page. For example, if you ask your Chinese supplier if it can get you your product in thirty days, it will answer with a “yes” pretty much every time. But if your Chinese supplier signs a contract mandating that its failure to ship your product within thirty days will require it pay you 1% of the value of the order for each day late, you will know the Chinese company is serious about the thirty day shipment terms.

The US-China trade talk snafus highlight the need for clarity in the negotiating phase as well. The issue regarding the need for “China’s top leaders” to first understand the writings is prevalent when foreign companies negotiate with Chinese companies as well. We have countless times seen deals where a company thinks it has a deal or is on the verge of a deal with its Chinese counter-party, only to have the Chinese owner step in and change everything because he or she did not really understand the terms previously discussed solely in English. Is that what happened in the US-China trade talks?

All the time, an American or European company will come to our law firm wrongly believing it has a “deal” with a Chinese company and believing our job as lawyers is merely “to document it.” We look at the deal and immediately note the following:

• There is no way the Chinese company would agree to one or more provisions and either it did not (and the foreign company is mistaken) or it did, but does not understand to what it has agreed.
• There are one or more things about the deal that are bad for both sides and both sides would benefit by changing those.
• There are one or more things that are completely illegal in one or both countries.
• There are one or more things that are completely unworkable or nonsensical in one or both countries.

Sometimes these companies will have been negotiating for months (even years) and made many trips back and forth to China and everything they have done is unworkable or illegal under any terms. Other times, they essentially need to start all over at square one.

What should these companies have done? What should the US and China trade negotiators have done? They should have spent the extra time and money to use truly bilingual negotiators from day one and every single step of the way and — to the extent possible — the true decision-makers should have been intimately involved in negotiations from day one and every single step of the way as well. This usually costs more in time and money in the short term, but it nearly always ends up saving way more time and money in the long term.