The bargaining tips here work, but require a little perseverance. It will take you some energy, and some people are not comfortable negotiating with vendors, and would rather spend their energy taking in the sights — if you are the person please move to another article.

The following are some Chinese bargaining and negotiating techniques that will most likely save at least 50% on all your purchases in China.

Four types of shoppers in the eyes of a store owner:

• A local, who speaks the local dialect (gets the best deal).
• A Chinese person from a different city and speaks a different dialect. For example, someone from Beijing visiting Tibet.
• A foreigner who lives in China can speak fluent Chinese.
• A tourist with little or no Chinese skill (gets the worst deal).
• As in most countries, tourists pay a premium on goods. The difference in China is that price fluctuates from person to person based on their appearance, handle of the Chinese language, their accent, sex, skin color, willingness to not be in a hurry, etc.

Most tourists feel uncomfortable when bargaining for these reasons:

When they are lowering the price that is already cheap
There is a communication barrier.
They easily get embarrassed, or care about what others think about the fact that they are bargaining over something.
They don’t know the actual value, or don’t know what they should offer.

When you Can Bargain, When you Cannot Bargain

Rule of thumb:
Street vendors, family-owned stores or small businesses = you can bargain.
Large malls, corporate chains = no bargaining.
Bargain on material items only (gift items, clothing, jade, etc).
Sometimes at a small business stores you’ll see signs that say “All prices final” or “No bargain!” — disregard these signs, they mean nothing and are only meant to trick the unknowing.
Never bargain on food at a restaurant or on the street.
You cannot negotiate prices on automobiles in China. You’ll be hard pressed to have them throw in free floor mats.

You must learn to take the personal connection out of a purchase. There is no emotion involved. You need not help them out by buying something, they are not poor, and you should try to not feel embarrassed about anything. Here are some tips to help you before you buy something.

• Compare prices at different stores. Keep a mental note of the price quotes. This will help you in two ways, 1) you will know the average price quote they give for tourists; 2) you can use this as leverage when you are negotiating (example, “The guy up the street is selling it for half that price!”)
• Express no emotion. If you show excitement or smile when the shop owner sees, you lost your negotiating power. Things like calling your husband over to come to have a look at something, or saying, “Oh honey, it’s so beautiful, she’s going to just love it!” are key indications to the shop owners that you will pay the maximum price. They will take a much harder stance when negotiating prices.
• Express apathy. Again, use your poker face. Show disinterest even being at this person’s store. If they show you something, shrug it off like they are wasting your time.
• Point out flaws. Look closely and there will be some. Point out the flaws right away — a frayed edge, a knick in the wood, bad color in the jade, an uneven design, a crack. Be sure to point it out with your finger and say, “Ni kan! Ni kan!” (你看,你看) which means “Look! Look!”, "Too expensive!” If the store owner mentions any price, learn this phrase: “Tai gui le!” (太贵了) which means, “It’s too expensive!” Say it with gusto, in the same way you would respond if someone cut you off in traffic and keep a serious face.

Never fear. The store owner may start to tell you how cheap you are being or may give you disgruntled looks, or may even joke with other people about how “xiao qi” (cheap) you are being. This is part of the process. Don’t falter. They still want your business.

You get one shot. If you leave the store and come back, you have no negotiating power the second time around. The store owner knows you want something and knows you have already compared prices.

How to Negotiating Prices in China

So you found something you want to get. Here is a step-by-step way to bargain:

Cut the price by 75% — if they say 200 RMB, you say 50 or 60 RMB.
1) They will say, “Okay”. If they say okay, you bid way too high and you should just accept the transaction and pay up. 
2) They will yell “Bu mai!” (I’m not going to sell it that cheap) and wave you off with the back of their hand. If this happens, walk away.

As you are walking, wait for their second or third offer, take note of how fast they reduce the price. If they make no offer as you are walking away, you bid way too low. (If luck isn’t on your side and different vendors are not making counter-offers, change the initial price to 60-50% off instead of 75%.)

If they do making counter offers, it should be much closer to the 75% percent off price.
Walk back and buy it. Pay with exact change, or give them a bill that is close to what you are paying. In other words, do not hand a hundred for something that costs 5 RMB. The oldest trick in the book is for them to swap out the 100 with a 50 and they will insist that you only gave them 50. If this happens there is nothing you can do and you will not get your money back.