China Law Blog

I blogged the other day in a post called "That's China and It Ain't Always Pretty" about the Chinese government takeover of Mark Kitto's foreign owned That's Shanghai/That's Beijing/That's Guangzhou media empire.  Today, Asia Business Law Blog, in a post called, "That's China and The Necessary Cultural Acumen" blogged on my post and added an excellent in-depth analysis of how Mark Kitto's handling of his business is a "great example of why it is important to be familiar with Chinese custom."  Just yesterday, in "Ruminations in Korea and on Getting Along in China" I talked about the benefits of having at least a basic understanding of the culture of the country with whom you are doing business.

Asia Business Law goes further by explaining exactly how Mr. Kitto's knowledge of Chinese culture allowed him to succeed so well and for so long in China, in such a difficult industry.  The post starts out by concurring with my view that when in China, one must do everything possible to abide by Chinese laws and then gives specific examples of how Mr. Kitto's knowledge of China's business culture allowed him to do so well in China for so long:

Also, Kitto's article is a great example of why it is important to be familiar with Chinese custom. The key to Kitto's success is his familiarity with Chinese culture, and his article explicates some of the situations where behaving as a zhongguoren and not a foreigner was beneficial.

'Guei mei' is one of the underlying customs that won Kitto valuable allies. It means 'subordinate' and is the fifty-fourth hexagram in the I Ching (i.e. the Book of Changes). According to NTC's Dictionary of China's Cultural Code Words, 'guei mei' describes how you should act when faced with a situation that is beyond your control. The prudent guei mei is to be subordinate, passive, patient and very polite. Kitto was never confrontational. When faced with several Chinese bureaucrats attempting to shut down his operations, Kitto apologized and continually asked for guidance.

Kitto also exhibited another trait necessary for succeeding in China known as 'xu' or 'calculated waiting.' NTC's Dictionary describes 'xu' as a mental balance that is maintained during periods of chaos. Survival is possible if you maintain a positive, friendly attitude and seek the advice and assistance of other like-minded individuals. The NTC Dictionary says, 'The key to influencing the behavior of Chinese is always to create a scenario in which they immediately see a personal advantage to themselves'or a disadvantage if you don't want them to react positively.' Kitto's adherence to Chinese custom and 'xu' gained him numerous allies that assisted him in building his media empire. In particular he mentions a Mr. Wang. Instead of shutting down Kitto's operations, Wang taught Kitto how to obtain a publishing license, which made his media empire possible.

The post ends with what I see as another excellent explanation for why foreigners in China must be so much more careful than Chinese natives in making sure they hew to China's laws:

Implicit in Kitto's article is that we should never underestimate the prevalent xenophobia in China. As a foreigner ('waiguoren'), the rules and customs of Chinese culture will never be as acquiescent to our manipulations as they will be to a native born zhongguoren. Never forget that 'zhongguo' means 'middle country' and that the 'zhongguoren' are the chosen people.

Bottom Line:  Following the law in China will not guarantee freedom from governmental problems, but it increases your odds.