John Zerafa
In today’s globalised world, moving goods, money and contracts across borders has become increasingly easy. Supply chains are more efficient, payments are faster and legal frameworks are more standardised than ever. Yet one element still does not travel as smoothly: understanding. My years of working with China have taught me that while transactions may be global, trust remains deeply contextual, shaped by culture, expectations and human judgement.
China is often discussed because of its central position in the global supply chain. Decades of long-term vision and sustained investment have created an ecosystem that spans raw materials, manufacturing, logistics and finished products, positioning the country as a global powerhouse. Had a similar level of scale and integration emerged elsewhere such as in India, Southeast Asia or any other market, the underlying challenge would be the same. Systems can be replicated; cultural navigation cannot.
In international business, profitability is rightly non-negotiable. Companies exist to create value, and without commercial discipline, no partnership can survive. But experience has shown me that profitability alone determines whether a transaction can occur, not whether it can endure. Endurance, particularly in cross-cultural environments, depends on something rarely captured in contracts or spreadsheets: emotional intelligence.
This became clear to me during an assignment I undertook while living in China. An international German company asked me to establish a manufacturing line for a specific product, operated by a Chinese subcontractor. My role was to identify and negotiate with a suitable Chinese manufacturer who could manage production on the German company’s behalf. On paper, the task appeared straightforward. In practice, it exposed the limits of purely transactional thinking.
Germany is widely regarded as a low-context culture, where clarity, structure and explicit agreements are paramount. China, by contrast, operates largely as a high-context environment, where relationships, trust and implicit understanding carry significant weight. These differences surfaced quickly during negotiations.
The German company made its position clear: it would not pay any advance deposit. Its expectation reflected its internal governance and risk framework ‒ an order would be placed, goods produced and shipped, and payment would follow delivery.
The Chinese manufacturer, however, requested a 30 per cent deposit upfront to purchase raw materials and secure production capacity. From their perspective, this was not a negotiating tactic, but a standard mechanism for managing operational risk.
“Emotional intelligence is a strategic asset that allows smaller players to function effectively within complex global systems”
We reached an impasse. For the German side, paying in advance was unacceptable. For the Chinese side, proceeding without a deposit exposed them to disproportionate risk. Contractual logic alone could not resolve the issue.
This was not a question of who was right, but of how two different commercial logics could be aligned.
At this point, the value I could add was not technical expertise, but contextual judgement. I first had to establish credibility with the Chinese manufacturer, demonstrating that the German company’s commitments were reliable. In China, credibility is not asserted; it is observed. At the same time, any solution had to remain compatible with the German company’s principles.
I proposed starting with small production runs rather than large initial orders or deposits. These would be shipped to Germany, and the German company would commit to settling invoices within four days of delivery. Risk was not eliminated but redistributed in a way both sides could accept.
The agreement was accepted. Production began. Shipments were delivered. Crucially, the German company honoured its commitment, paying consistently within four to five days. As confidence grew, volumes increased and the project progressed smoothly.
What made this experience significant was not simply that a deal was reached, but how it was reached. The outcome was achieved not through contractual pressure or price concessions, but through cultural interpretation, emotional awareness and the ability to design a process that respected both perspectives. This is emotional intelligence in practice, not sentiment, but strategy.
Beneath this outcome was a deliberate alignment of economic reasoning and emotional judgement. The German company approached the decision through comparative analysis: the Chinese manufacturer was competitive on price, met quality standards and outperformed alternative subcontractors.
From the Chinese perspective, however, the absence of a 30 per cent deposit created an imbalance that undermined the principle of a win-win outcome, despite the long-term value the relationship could generate. The solution worked because it addressed both logics simultaneously, preserving comparative advantage for the German side while restoring balance for the Chinese partner through rapid payment cycles and volume continuity. Emotional intelligence did not replace financial logic; it connected it.
‘What cannot be scaled is often misunderstood. Profits scale easily. Emotional intelligence does not’
From that point onward, the collaboration moved from a trial arrangement to a stable operation. What began as a cautious compromise evolved into a functioning partnership built on demonstrated reliability rather than contractual enforcement alone.
More recently, I have encountered the same dynamics beyond boardrooms and factories. Through short videos in Mandarin shared on Chinese social media platforms, I speak about Malta, daily life and cultural differences from the perspective of someone who comes from a very small island yet has lived and worked in China.
The response is immediate and visible. While metrics such as views or engagement are imperfect indicators, the comments themselves often reveal something more valuable: recognition.
When viewers remark on the naturalness of the language, the accuracy of cultural references, or their surprise at discovering Malta through a familiar lens, it reinforces a lesson learned years earlier in negotiation rooms. Cultural understanding cannot simply be claimed; it must be demonstrated. Trust forms when people feel recognised rather than persuaded.
For a small country like Malta, this insight has wider relevance. We cannot compete on scale alone. Our strength lies in adaptability, contextual awareness and the ability to operate credibly across cultural environments. Emotional intelligence, in this sense, is not a luxury or a soft skill. It is a strategic asset that allows smaller players to function effectively within complex global systems.
In a global economy where systems continue to accelerate and automate, the human dimension remains stubbornly unscalable. My experience working within China’s supply chain ecosystem has shown me that emotional intelligence is not an alternative to commercial rigour, but a multiplier of it. Those who invest in it are not weakening their commercial position ‒ they are reinforcing it where systems alone cannot.
John Zerafa is a Maltese entrepreneur working in international shipping. He spent several years living and working in China and continues to collaborate with both European and Chinese companies on cross-border business and communication.
