The first thing you need to do is prepare for the shock. Walking into a Chinese market can be a dizzying assault on the senses. There are too many people, the sales people are too aggressive and don’t respect your personal space, and all in all there is a palpable atmosphere of mayhem.
As soon as you get past one person who grabs you shouting, “Rolex Rolex DVD DVD looky looky”, another one tries his luck. “Bag bag bag looky looky Nike Nike Yellow DVD.” Yellow DVDs are pornos. But mostly Japanese ones with the good bits pixelated out.
If someone grabs you, you can shout 'bu xing!' (Which pompously translates as 'That won't do!')
You're in a situation where normal standards of politeness aren't going to work. You have to ignore everyone. You have to! It's hard to accept at first, especially if you've been taught to, like, respect other people and stuff. But you have to ignore everyone and focus on what you want.
If ignoring people offends your sensibilities, you can politely decline what they have to offer. 'bu yao!' (Don't want.)
It's important not to go straight to the first stall. Let's assume you want a fake Louis Vuitton handbag as a gift for your mistress. If you walk past a few bag stalls you can try to play them off against each other. Liang bai kuai? Ta shuo le san shi kuai! (200 bucks? She said thirty!)
Haggling is acting. You need props. An umbrella is the perfect wingman. You can point with it, drop it in astonishment, tap it impatiently, or hit yourself on the head with it.
Or, importantly, lean on it:
The first step of the process is pointing to something with your umbrella and asking the price. Duoshao qian? (How much?)
It is VERY IMPORTANT that you laugh at whatever he says. If you don't understand Chinese numbers, don't laugh at this stage. Shrug, and the stallkeeper will type the price into a calculator and show you the screen. Laugh now. This is his first price for really stupid foreign devils and you are sharing his joke. What a character!
But now you want the real price. As a rule of thumb, you can probably expect him to accept 10-20% of the first price. If he says 300, he means 30.
When serving food, a Chinese person will say 'man man chi' (eat slowly) to his guest. Haggle slowly and you'll get more discount. The more theatrical your performance, the greater the discount. The more friends you have acting along with you ('bad cop' is the best supporting role if you only have one friend) the greater the discount. If you have more friends, get them to play more roles. I once went with three friends and we did the cast of Seinfeld.
You want to buy some trainers. The woman asks for 400 RMB. You laugh, she laughs. Now what?
If she has a little stool, sit down, and get settled. Offer 50. 'Wu shi'. Sit forward on your umbrella, preferably leaning your chin on the handle.
Begin pleading, shaking your head, looking to the heavens, sighing, leaving long silences, pretending to be angry, shrugging your shoulders, and mumbling instructions to your team mates (“Point to your own shoes and talk quickly in English… Put your hands on your hips… Try to get me to leave…”)
If things aren't going well, try these useful phrases:
(Why do you hate me?)
wo bu shi you qian ren (I'm not a rich guy)
tai gui le! you liangge er nai (That's too expensive. I have two mistresses to keep)
ni shi huai dan! (You're a bad egg)
wo gei ni san bai kuai, wo diao lian (If I give you three hundred bucks I'll lose face)
Walk away. If you agree on a price before walking away, you are paying too much. If you can't get the stallkeeper to go lower than 50, walk away. She will call you back and say 'okay 40'. If she doesn't call you back, it means 50 is her lowest price. Go back and pay it!