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On The Difficulties/Injustice Of China Business. Have At It.

By Dan Harris on Posted in China Business

Around five months ago, I did a somewhat long, very off the cuff, post, entitled, “Win-Win Negotiating In China. It Is More Than A Panda,“ on some of the things that make doing business in and with China so difficult. it drew some comments and, like most of our posts, was quickly forgotten (by just about everyone, I am assuming). Until now, when we just got a long, very off the cuff, but thoughtful reader comment. The comment starts out hoping that “it is still possible to get replies from some of the original [other] commentators” on the post. 

Because I too hope it gets comments, and because I realize that leaving that comment as just another comment to a five month old post is not likely to draw much response, I decided to run it in its entirety here and ask for comments so as to get a dialogue going on this. Here’s the comment:  

I really appreciate the comments to this post and I hope that it is still possible to get replies from some of the original commentators. Aretha Franklin, your talking my language. I think that you need to be someone who has lived in China for long enough and have faced some real make or break situations to see the real challenges of doing business in China. Casual business trips and “student” experiences don’t revel the underbelly of China. Aaron, your argument that businesses outside of China are also cut-throat shows that you probably are speaking more from considered logic then real personal experience. Let me contrast your examples to real world situations in China. “seven eleven (reduction of Big Gulp), Taco Bell’s Beef”. These are high level business decisions that at best run the risk of harming the company’s credibility with customers. I will give you a personal example of what you can face in China. As Dan commented, in China, the contract is just a starting point. Lets say you have a contract that stipulates a required delivery date and a cost. And you are unwise enough to let slip that the order is sole sourced and the shipment is needed urgently. When the factory in China has completed your product, and you have arranged a container for loading that product, they know you are at your weakest negotiating point and I have personally experienced the factory warehouse doors being locked and the factory demanding to receive a price increase. And it’s not because their costs have gone up, its because you confided your weakness and expected that your supplier, seeking a long term relationship, would take that into consideration and try to work to your schedule. However, what you really did was put yourself in a vulnerable position. At that point, many (I will go so far as to say my personal experience is most) will take full advantage of the situation, with-out showing any mercy. What’s worse, is that because as was stated by Aretha Franklin, in China, the further you are from being a local person, the more you are considered to be an outsider and looked down upon. Therefore, the factory who just aggressively manipulated more money out of you is considered to be a winner by the locals. They outsmarted the outsiders and even though it was dirty pool, it makes no matter. In China its not the means, its the ends that matters. As Dan points out, pride in personal excellence is not a goal in China. In China they are much more pragmatic, just get the job done, it does not have to be well done, just done. The goal is the payment, not the pride in creating something. Do I sound harsh? Well, for those who have really spent time doing business in China, I think you will largely agree. Are there similar circumstances elsewhere? Yes, but rarely are they celebrated as role models. I often struggle to understand how China got to this point and what it means. I think that there are a few obvious possibilities (though, they are just my observations). I think it is important to remember as Dan pointed out, most business men in China were subsistence farmers just a few short years ago. They are used to living from day to day. They don’t think about a long term business plan. They focus on maximizing each and ever deal today. I find that many lack confidence in the future and fear that any day, what they have today might not be there tomorrow. So the plan is get what you can today. China’s huge population makes competition extremely fierce… only the strong survive. Although China is often thought of by westerners as a police state, in fact the opposite is true. China’s government, like all governments, worries about losing power and takes steps to avoid that, but China’s commercial legal enforcement mechanism is almost non-existent. Police for the most part do not carry weapons in China. Police are rarely seen on the streets, and if they are they are probably ticketing a truck driver. Do people get executed in China, yes, but I have never spoken to someone who showed fear that they would be the next because of cut-throat business deals or even outright corruption. Next consider the cultural history. In China, people have been under the rule of an Emperor for thousands of years. Society was highly developed when the west was still beating Animals with a stone for a meal. But when the west burst with innovation in the 1800′s, China was stuck in a highly developed society were linguistic and political skills were considered far more important then tinkering with steam engines. The result is that China has not developed a culture of innovation and what is left for them in their post revolution, savage, Ayn Rand style capitalistic world, is survival by cut-throat tactics. Finally, the cultural revolution seems to have created a cultural void in China that unfortunately is being filled with pure unadulterated materialistic greed. Wow, that felt good… but seriously, don’t get me wrong. I’ve been in Asia for most of my adult life and China the majority of that time. I am hooked. I could never live in the west again. As difficult and challenging running a business in China is, I can’t image doing it anywhere else in the world. The opportunities and historical significance of being in China today are unlike anything the world has seen for several hundred years. The negatives listed above can all easily be offset with positives that I will leave for another time. Hope to receive some comments on my thoughts as I really would like to continue to improve my ability to survive and flourish in the most dynamic economic country in the world. And just so you know my post is not just sour grapes, despite all the challenges I manage to run a very successful (although exhausting) business here in China.

Now have at it. Or as I usually say, what do you think? 

  • http://www.americanlawyerinriyadh.com Donzelion

    (1) Don’t see much in this description of China that isn’t common to most of the emerging markets in particular, and ultimately, not all that different in the developed ones either. How many trillions of dollars in real estate traded hands in one of the “best” regulated countries in the world – based on wishful thinking and the confidence that someone else would pay for any mistakes?
    (2) While some were tinkering with steam engines in Europe, others were tinkering with opium trafficking and slave trading. “Gone with the wind” has romanticized America’s relentless cut-throat tradition, at least for those never subject to the lash, but let’s not kid ourselves that the West prided itself on quality and long-term business thinking (or that business was ever so far removed from politics). The railroads themselves were far more about wanton land grabs than manifest destiny or any great vision – and China, these days, has put down infrastructure that compares or exceeds the icons of American long-term aspirations.
    (3) The contract is always just a starting point in every business transaction – it’s just that sometimes, we believe we are closer to the finish point based on the length and heft of its terms than in fact we really are. Locals cheer for Robin Hood – until they realize he’s just a slum lord pretender. Then they gut him in half a heart beat.

  • LH

    This description of business in China and the place of foreigners in it fits my experience too (I’ve been coming to China regularly for 8 years and have lived here for the past 4).
    I find myself wondering what effect the imperative for China to export its own products, services, and companies (as publicly traded entities on overseas exchanges) will have? Do Chinese businesses imagine that they will be able to play by the same rules when they are doing business in Germany or the U.S.? The recent string of fiascos involving IPOs of Chinese companies, reverse mergers, etc., is just the tip of the iceberg and the most visible indication of the disconnect between the standards here and those abroad. I think it is fair to conclude at this point that relatively few Western businesses are going to establish a long-term foothold in China. Those that do will probably be those like Intel and Apple that have an overwhelming technical advantage that they carefully protect from the IP wild west that is China. But it seems to me that it will be largely the reverse situation overseas — Chinese companies will increasingly meet with a foregone skepticism, unless they adopt an entirely different set of practices overseas than at home. And is that a realistic possibility? I can’t think of any company anywhere, any time, that has operated by *higher* standards overseas than it has in its home country. Given the importance of exports to China and the shifting tides of currency exchange rates, wages in China, etc., it seems to me that this weird disconnect between the internal and the external in China will come more and more to the surface.

  • Andeli

    Some of this may hold true for the production industry in China focused on selling to overseas suppliers but not very likely within the Chinese B2C service industry.
    If you don’t provide fair god long term service in China then you are likely to get a) into a direct and open verbal/physical fight with consumers and then b) go bankrupt because someone else can provide that service.
    NO Chinese consumer would put up with any of the things mentioned above, so very few service industry companies dare to cheat them. Especially the high income Chinese consumers don’t take no BS, so companies that offer service have to honor their own statements.
    That why consumer laws/regulatives in Beijing, Shanghai eetc. are enforced differently from smaller places that are more backwards. In bigger cities there is some consensus about holding someone to their promise (or as lawers call it: a contract ) and in the case of the service industry the perpetrators will a) meet powerful city dwellers that are just as well connected as themselves (Guanxi no good) b) a legal system that is better educated and better paid (no for corruption in small consumer matters) c) a social norm that understands enforcement f the law as important.
    Another important thing is that the Chinese consumer will go to your store and “nao” until they are given satisfaction. The most dangerous “consumer” in China is a 50+ women who has a) all the time in the world b) family members that work in the local area c) know other 50+ women that think standing in our shop and making trouble is way then sitting alone at home d) does not take well/listen to reason. These older women can take down any local based cheater any day, so I think the service industry in China works differently from what is stated above.

  • Luntai

    Everyone is an expert. China is vast. No way to paint an entire culture with a single brush stroke of one color.
    My experiences in doing business with China (for more than 30 years) have been excellent. hundreds of millions of dollars of trade.
    Perhaps if the laowei tried harder to understand China instead of expect ing them to always understand the outside they would have a better chance of accomplishing their goals .. which are ???

  • Mathew

    Thanks Dan for uploading this comment. Based on 5 years experience in China I can 100% agree with what Aretha and the comment above state.
    Andeli, though I will not doubt your experience with the 50+ ladies but there are also hundreds of examples against that. Think only of food, clothes and other consumer products.
    I think that in the common western analysis on the state of China I truly think that the impact that the cultural revolution has still today is totally understated. I admire China for its unbelievable Wirtschaftswunder but you cannot develop the moral grounds of a society at the same pace. I am sure it will happen but it might take a while before China is back where its business ethics ones were.

  • deldallas

    I don’t think ayn rand would find mainland china to be ‘ayn rand style’… hong kong perhaps.

  • DaMn

    The comment states “They outsmarted the outsiders and even though it was dirty pool, it makes no matter.” Right now it is impossible to lose honor dealing with foreigners. Accept it. Most foreigner’s personal perception is that, if you are interested in doing business in China it must hold some reward, or somehow business must be conducted within arms reach of what you deem proper. Not. Maybe, just one possibility, you are in China because you are meant to learn something about your self or the world and do something with that knowledge other than enrich your self.
    The comment mirrors my understanding of China. What strikes me about the above comments is they are not really commenting on the subject comment but reacting to it and “thinking out loud” through their own preducises and predilections.
    According to Business Insider “China’s GDP per capita is the 91st-lowest in the world, below Bosnia and Herzegovina.”
    China is difficult because of personal perception of proximity. Most people in China would certainly not be interested in living in Bosnia and Herzegovina yet they compare and judge China based on hype rather than the fact, that, as a whole, China is very much a developing country.
    The announcement that Huawei will take on Cisco in enterprise routers will evoke lots of press and emotion in people that is out of line with the facts that Huawei currently holds 2.5% of the market to Cisco’s 80%. The hype is “triple revenue,” “Cisco stock has declined 30%,” “closing it Flip video unit and cutting 550 jobs,” etc. etc.
    It’s the last part of the article that states the facts “Huawei has had less success cracking the market for enterprise routers, where Cisco held 81.8 percent of the market in the fourth quarter of last year, compared with fourth-placed Huawei’s 2.5 percent share, according to California-based market research firm, Dell’Oro Group.”
    So many foreigners come with vivid emotion and “dreams” yet are lost. Luntai points this out well saying “Perhaps if the laowei tried harder to understand China instead of expecting them to always understand the outside they would have a better chance of accomplishing their goals .. which are ???”
    I think the subject comment is not so much about difficulties and injustice as it is about taking China for what it is. Luntai is right, foreigners need to think about what their goals are rather than so much about what and how they relate. Foreigners are very biased and so Chinese quite rationally treat them as biased, which only supports foreigners views of Chinese, yet if the foreigner spoke the language and sat in on “normal” conversations they would find a much deeper, interesting and varied situation.
    It’s way too early to say “You don’t need China” yet that’s seems to be the poular line these days with respect to companies and individuals considering business or having difficulties in China (Google, Facebook, etc.).
    You just need to make an assessment if now is the right time for you or your company based on reality and facts, not hype. Things will seem, and be, much different 5 and 10 years from now. That’s not the end of the world and it may mean smaller or even larger opportunities for you or your company.

  • LH

    DaMn writes: “Right now it is impossible to lose honor dealing with foreigners. Accept it.”
    I like this. Nice and straightforward. See, when it’s put like that, with such refreshing candor, there’s none of this “you don’t understand China” bullshit. Everyone can understand the above. We have a phrase in the U.S. (not one of my favorites, but we have the phrase all the same): “you ain’t from around here, are you?” It’s kind of a veiled threat, really. At best it’s an admonition to watch yourself. And everyone can understand it.

  • MB

    The Chinese behave in the same way with Chinese. Getting screwed over is not an experience reserved for foreigners.
    Theorising about the causes of such attitudes is so much entertainment, but does it help you grasp the Chinese way of thinking?
    A straightforward, one-off, Prisoners’ Dilemma will nearly always end up as lose-lose (and no more clearly so than in China) . To get to win-win, you need some coercion.
    In the West, we have contract law and strong courts – negotiated coercion enforceable in public. The Chinese use guanxi – semi-negotiated coercion enforceable in private.
    Is this a cause or result of the cultural and historical differences? Do we need a meta-narrative to explain China?
    Dan’s blogs are excellent, precisely because (most of the time) he shies away from venting frustration at the problems of living/doing business in China (for which I have every sympathy!) and goes into detail of how things work, how business practices connect together and how to get results.

  • LH

    MB writes: “In the West, we have contract law and strong courts – negotiated coercion enforceable in public. The Chinese use guanxi – semi-negotiated coercion enforceable in private.”
    Yes, but is there really any doubt that the availability and utility of guanxi to native Chinese and to foreigners is entirely different? For most foreigners, the delusion that they are cultivating real, dependable guanxi is far more dangerous than doing business without it but with sufficient mechanical measures (like front-loaded payments, cash-and-carry, etc.) to protect themselves.
    “does it help you grasp the Chinese way of thinking?”
    “Perhaps if the laowei tried harder to understand China…”
    Every time I’ve been treated to a face-to-face version of the above — someone protesting loud and usually long that I don’t understand China — it’s because they’re trying to explain to me why they’re breaking an agreement they had made with me. I don’t have much trouble at this point accepting the breaking of agreements — it’s so commonplace that I’ve factored it into my expectations and I blame myself for leaving an opening that the other party can exploit. I think of it like we think of shoplifting in the U.S.: it’s a cost, you factor it in. On the other hand, I just can’t stand to receive these interminable lectures about “understanding China”. As if it were so fantastically difficult to comprehend taking advantage of a situation! haha.
    “Getting screwed over is not an experience reserved for foreigners.” No, but being treated to a lecture on Chinese “culture” as an explanation and justification for it IS an experience reserved for foreigners. I was recently visited by someone who casually walked away from an agreement he had with me. He spoke for hours and hours about Chinese culture and what
    it means and how I don’t understand it blah blah blah blah blah. I pointed out to him that he was also walking away from exactly the same agreement with a Chinese person in what seemed to be exactly the same circumstances. I had to ask him of course: do you think that the Chinese person you’re f*cking doesn’t understand China? Does he need a lecture on guanxi also? Why are you wasting my time telling me all this crap?
    If you’re going to screw someone over, just screw them over already. Spare them the lecture. What’s the point of insulting them further by telling them that if they were a Chinese anthropologist or the son of a high-ranking official in the Chinese government that none of this would be happening? haha. So silly.
    My take is that all the lectures about understanding China are in fact for the benefit of the Chinese themselves, because while it is somewhat true that “Right now it is impossible to lose honor dealing with foreigners”, it still leaves the businessmen who do these things a little uncomfortable in their skin, with a need to explain their behavior to put a little spit and polish on the matter so it doesn’t look quite so flagrantly bu kaopu. But it’s a huge waste of time and rather ridiculous.

  • Recipe Monger

    I wondered why you would give so much space to such a rambling comment but after thinking about it I decided that it encapsulates what China is really like. I agree with it 100%.

  • http://www.pbl.com DLW

    Just a few comments:
    Many Chinese business leaders looked (and continue to look) to the West for inspiration on how to conduct a successful business. Granted a lot may have been “lost in the translation” but for Westerners, one should take a (perhaps painful) look at the truth behind the facade (see Donzelion’s similar statements) of their so-called business successes. Whether it was the East India Company and others in the UK (at times it was difficult to distinguish the company from the Crown), or US banks investing in loans to “both sides” in World War I (or now, it’s fast food multinationals lobbying to protect their “fattening” of the World, or oil companies’ pollution of South America), or the use of concentration camp prisoners to assemble Mercedes-Benz vehicles in the 1930s and 1940s, or the French and British concessions made to Japan, to handover German colonies in Shandong Province if Germany were defeated in WWI (and this agreement was entered into before the US had entered the war, by the way, and there’s no evidence that it was ever disclosed to the US before the handover was completed in Versailles), to promotion of Swiss companies’ instant baby formula in places where there was no clean water, leading to massive and murderous dysentery outbreaks, there’s a long history of Western thievery and greed. The petty greed in China and other developing nations may well pale in comparison.
    Second point is that Western thievery of course continues today. Some of the more obvious hypocrisy in the West may be somewhat apparent to others in China. Some may not–ironically, my experience is that sometimes, Chinese businesses can be much too trusting of their foreign counterparts, and then have to learn (the hard way) about the high costs of pursuing legal remedies in the West, if and when they are NOT paid upfront.
    But the practical problem for discussion is for the neophyte Western business that thinks that by sourcing product in China (can we say “already way behind the curve…?”), all of its business problems will be solved, and so then it tries to do things in China on the cheap, and looks for sources on, say, Alibaba (and therefore unwittingly ends up working with traders, who then contract and subcontract it out, usually to really really bad results these days), and instead of doing it right, neophyte is behind the 8-ball (if it’s lucky) or more often, is off the table altogether. The need to proceed carefully and with the right plan and resources in place should apply to dealings with someone in a business’ “own backyard,” as well as to those on the other side of the Globe. It’s just that it’s that much harder (and more expensive and time consuming) to do it right, and to conduct proper due diligence, in a foreign land, with a foreign language, etc (and I suppose it’s easier to blame China, the Chinese and their culture or ethics, when things go wrong–easier than self-analysis and criticism, perhaps?). But the cheapest route (and again, this is in reference to Western businesses! So who says that the Chinese have any monopoly on cheapness?) in my experience, is almost always the wrong path to take. Ounce of prevention vs. pounds of cure.

  • DaMn

    LH writes “My take is that all the lectures about understanding China are in fact for the benefit of the Chinese themselves, because while it is somewhat true that “Right now it is impossible to lose honor dealing with foreigners”, it still leaves the businessmen who do these things a little uncomfortable in their skin, with a need to explain their behavior to put a little spit and polish on the matter so it doesn’t look quite so flagrantly bu kaopu. But it’s a huge waste of time and rather ridiculous.”
    You are absolutely correct that it is for the benefit of the Chinese themselves! I still hold what I said about honor to be absolutely true, adding one detail or clarification that your post demonstrates particularly well.
    Right now it is impossible to lose honor (in the eyes of other Chinese!) dealing with foreigners. The culture and system are at the ready to have your back and it does not support in any way the concept of losing honor to foreigners.
    Of course the Chinese lose honor in the eyes of the foreigner.
    So why do they get “a little uncomfortable in their skin, with a need to explain their behavior” as LH points out?
    The answer is that, while the culture supports and acts as a safety net for people to retain honor despite how they have handled a relationship or business with a foreigner, the fact is we are all human and it is still possible to lose self honor.
    People use “themselves” to get what they want and it is a natural and necessary function to “unwind” themselves from the transaction when it is obvious trust has been broken. They must use culture as an “excuse” for shafting you, de-personalizes it, because otherwise it might change them, become part of their inner conversation, who they are, at their core, the meaning they hold of themselves, and thus their actions.
    It is very human to live with low self esteem yet holler and parade as though you are legion among the crowd. It is endemic. Self disgrace may not be talked about or dealt with but it is there none the less. Denial is thick. Don’t get me wrong, I don’t think Chinese are walking around wounded inside. But yes, a simple explanation to the foreigner of the culture and how it works is enough to rid them of the ghost. It is more of a talk to their “selves” than it is to you and that is all the more reason to get angry or frustrated at the exercise. You are enduring a lesson from a person who shafted you which is really for their own benefit. Talk about feeling used!

  • DaMn

    DLW writes “The petty greed in China and other developing nations may well pale in comparison.” One thing I’ve noticed after being in China for a while is that this statement is true, that the greed in China is often petty while the greed in the West is certainly more audacious. That doesn’t mean it cannot derail you or your business. It certainly can.
    DLW states the focus of the difficulties lies on neophyte businesses. “But the practical problem for discussion is for the neophyte Western business.” I disagree, although neophytes certainly have their disadvantages and challenges especially when they turn to “low cost” manufacturing to have “all of its business problems will be solved” and do no DD, cutting corners and treating China as a poor country happy to serve and take commands from the western client because it offers some money and is hungry to know “how things get done.”
    Yahoo is no neophyte, Danone was no neophyte, Google no neophyteself, and this completely leaves out what is and needs to be the engine of growth which are innovative, robust, and growing medium sized businesses.
    Lastly, self analysis and criticism is lost on all sized businesses as it is human error and does not discriminate based on “intellectual” or “business” success.

  • Tim

    Just a few points:
    I rarely hear folks in Mainland China speak about honor and when I’ve used the concept to argue the merits of a choice, I usually get incredulous stares from locals. So it may be impossible to lose honor in front of a foreigner, but I would argue that this is because this is a country that expunged its traditional value systems for ideology, which was then replaced by pragmatic materialism and are now searching for greater meaning. It is, after all, a developing country and its not just its economy that is developing.
    Now if you’re talking about face, or respect, I have certainly seen Mainlanders lose this because of a foreigner’s behavior and their have been recent examples on the interwebs of this.
    Both Google and Danone were neophytes when they first entered the market. Danone’s mistakes were as a result of negligence. Google, on the other hand, I am not convinced really made a mistake, but both, I would assume, have learned from their experiences.
    I have witnessed the entire gamut of greed in China from the petty to unadulterated avarice, but you’ll have this wherever there be humans.

  • DaMn

    Tim – Interesting points. Thanks.
    I don’t and didn’t consider Google and Danone neophytes just because they are new to China. They are large corporation with plenty of resources. They are not new to business and certainly have a well articulated plan, process and system for business from which to judge their operating parameters. If we are to define neophyte as anyone new to China despite their business maturity, size, resources or wherewithal then they have no business implementing parallel strategies of their business in China.
    Chinese do not have to be conscious of, or value, situations in terms of honor in order for the term honor to have implications. In fact, you make a good point that if the term has no value at all to one side, then it certainly will not have influence in motivating, restricting or guiding actions and cannot be lost.
    For argument’s sake I am using honor and face/respect as the same (Otherwise it gets complicated and difficult to make a point that is useful).
    You noted there are plenty of examples of this. Could you please offer or refer some to us where a Chinese loses face/respect to the foreigner so we may judge it as a “win” or different from honor? How lasting is it? Does it depend on the ongoing future prospects of the parties (remember we are dealing with pragmatic materialism here)?
    The true test is…will the loss of face or respect last beyond or without regard to dealings with a foreigner? I believe any loss of respect may only hold in the context of dealings with a foreigner, not in general. I believe the Chinese will not say to themselves, “Wow, he really treated that foreigner badly, he will treat me and other people the same.” Honor is more lasting across contexts whereas I believe the face and respect you refer to is highly subjective and context based.
    I like your insight that China “expunged its traditional value systems for ideology, which was then replaced by pragmatic materialism and are now searching for greater meaning” and agree “It is, after all, a developing country and it’s not just its economy that is developing.”

  • http://www.pbl.com DLW

    I think there’s enough useful information that’s already been set forth that absent a couple of comments, I have little else to add. I agree with much that was written above (especially with DaMn’s statements about the great Global hype machine that continually feeds the China frenzy, despite the disconnects with reality), but must note some aspects of some of the comments that read like a generalized “singling out” of all/vurtually all of the Mainland Chinese for wanting to “get one over” on the laowei (and to wear that as some sort of medal of honor), which reads like some sort of paranoid, overarching stereotype, bordering on racism–some Chinese people may (and do!) joke that one should never trust the financials of a Chinese business and so forth, but clearly not all are bad (and when compared to what one may find in so-called modern Western countries, the percentages are not outrageously worse…)!
    As for targeting of the da bidze business people, I hardly see the business climate for foreign businesses in the PRC today as a lingering of the Boxer Rebellion or the like. At most, what foreign businesses may now be seeing is either (i) the (continuation of) the gross influx of newcomers to the marketplace, anxious to gain any sort of foothold to rise above their (hopefully former) undeveloped or meager socio-economic placements in a society where (at least in the cities) newfound wealth is paraded before them virtually constantly (ethics be damned), or (ii) a sort of “David and Goliath” situation, where any sort of triumph over sophisticated, established Western big business is deemed a triumph for “the little guy.” Neither implies a generalized or enshrined ethical shortcoming. It’s in fact a replication of what has happened in countless other countries and cultures before, on every continent.
    Finally, DaMn, while I agree that there are lessons to be learned for all foreign businesses, big and small, old and young, WRT doing business in China, it is precisely the neophytes (new to China)who need them the most, and are most likely not to have them in hand. And as a former university lecturer in strategic business planning, and as a business lawyer, I must also add that ANY business leaders who fail to actively evaluate and assess (and in the China context, it should include all involved in a China project, especially including the Chinese team leaders–talk about developing a teamwork mentality!), both during and upon completion of a phase of any strategic business activity, what went right and wrong, and why, and what could/should have been done differently, are not engaging in anything like good business practices in the 21st century (and the same may even be true under the standards for the latter quarter of the 20th century, too). Period.

  • MB

    LH – I agree that the ‘you don’t understand China’ responses are annoying. My problem is with the endless theorising and posturing in response to these rebukes. You rightly felt I was criticising your attitude more than the ‘you don’t understand China’ critics – I estimated there would be far more of the former in the audience.
    Attempting to find a narrative to ‘explain’ China is very tempting but superficial at best, and often misleading. Applying Western logic and narrative to a culture whose cultural products have for centuries resisted the narrative form (Taoists of many forms, Confucius in part, certain forms of Buddhism – the koan – the Story of the Stone, and more recently Eileen Zhang are the few I can point to) is absurd. It can provoke anger in those who don’t want to fit into your narrative.
    The situation you give is a good example of when things go wrong in China and how people react. Of course the ‘you don’t understand China’ sermons are reserved for foreigners. But don’t doubt for a minute they have some other diatribe saved up for Chinese who annoy them too!
    Why would he rant like this? Well, he is angry and frustrated – he is dissatisfied in some way. Maybe he doesn’t want to reveal his reasons to you, but he wants to get out anyway.
    Quite possibly, he feels he is being forced into giving out some information he doesn’t want to give out. The point at which he began ranting may have revealed something about his priorities – the development of the conversation would have told you what upsets him, and it probably was not Chinese culture, but how you were frustrating him in some way.
    This is the interesting story to be told of your encounter, but it will not involve any of the grand narratives which you are offering. Who thinks of honour in the heat of the moment? Again, this is why I really like Dan’s blogs – he tells of his experiences when faced with such confusing reactions (which superbly hide real intentions) and explains the facts and law which affect them. With no mention of honour. Just occasionally French toast.
    The lectures on Chinese culture are an easy story to tell – they are vague and non-specific. Maybe even meaningless. For both sides of the cultural divide.

  • quoll

    I think part of it is misunderstanding what a “win-win” deal looks like in China.
    I agree that many business people in China think in very short time horizons so, if all you, as an outsider, are offering is payment, then there is an incentive on the Chinese side to make that payment as high as possible. If you are offering something else as well the incentives might be different. The hard part is finding that “something else”.

  • Jacob the Caterer

    All of this is true, but so what. China is still the most amazing place to be because no day is like the previous day. I have been here for three years now and I have yet to be bored.