TNAG-1657-FCO40-2305-Daya-Bay-nuclear-power-station-project-safety-concerns-in-Ho-1987 — Page 51

to consider some concession on their side if

the_supplier reduces the price by this margin

(x). "Surround the enemy" stage.

(c) The seller is given no sign of the value

of any subsequent Chinese concession even

if you break out of the "one avenue of escape",

you are still surrounded.

(d) So the company will make only a partial

concession in the direction of this margin (X).

Say, 30%. The Chinese response will be that

because a full concession was not made, they

will allow half - 15%. The difference is now

$$% of X. The Chinese will move again half

of the concession made by the seller.

Asymptotic to 66% concession in the Chinese

favour. Hence a constant "come on" to try to

settle near 50%, with no guarantee that the

Chinese will make a similar concession.

(e) Chinese contribution: with a new "basic

price", and still a "gap", the Chinese may agree to give up some of their "options".

at the value of the original basic price ie

three options of 10% of X each, gives the

Chinese a further advantage of 10% in terms

of the new base price.

But

36 -