Header graphic for print
China Law Blog China Law for Business

It’s Not China. It’s Just Banking. And Basketball. And People.

By Dan Harris on Posted in China Business

Sometimes all of us can get too close to a subject. Sometimes anything that happens in China gets writ large to become “a China thing.”  Sometimes a cigar is just a cigar.

Let me explain.

The other day, The New York Times ran a story, “Four Mao Too Many” (h/t Shanghaiist),  which essentially consisted of a very literary rant about the Kafkaesque bureaucracy of Chinese banks. I am certain most readers finished the article convinced that Chinese banks (and maybe China in general) are somehow a breed apart. I completed the article and immediately thought of the following two personal banking bureaucracy stories, neither of which have boo to do with China:

1. When I was an undergrad studying in Tours, France, I lived occasional wire to wire from my parents. Literally. It had been days since my money had run out and tired of borrowing from friends, I was eagerly looking forward to going to my French bank to take out freshly wired funds. I arrived at my bank at 11:30, knowing it closed for lunch at noon. There was no surfeit of tellers when I got there (that’s a literary way of saying there was only one) and I got at the end of long line. Maybe a minute or so after I got there, the haughty bank manager (haughty is a literary way of describing just about everyone in France) proclaimed that he would be shutting the door because nobody would be working past noon. I continued to wait as the line slowly wound down and then at 12:01, it was finally my turn. But as soon as I got to the teller, the teller put up the “fermé.”  No f—ing way, I thought, and probably said. I was hungry and broke and my money was in this bank and I needed it for lunch. I wasn’t going to leave and I made that quite clear. The teller and I fought, loudly and then the manager came out. He told me that the bank closes at noon, he had announced that the bank closed at noon and I would need to return at 1:30 for my money. I told him that I needed the money for food and that I would not leave.  I told him a heap of other things as well, but as part of my policy of not writing anything I would not want my kids to see, I won’t go into that. To make a long story short, after at least 15 minutes, the manager brought back the teller (of course he would never have deigned to have done it himself) and I got all of my money and moved my funds to a new bank.

2.  A friend had multiple accounts at his bank and no longer needed one of them. He told the bank he wanted to close it, but they told him to leave it open for a few more months just in case an errant check came in on it. My friend said there were no errant checks and he did not want to pay the $10 a month fee for it being below the minimum balance. The bank assured him that they would waive the fee. Then they didn’t and they pulled the money from another one of his other accounts to pay the monthly below minimum balance fee. While all this was going on, my friend sought to borrow about $100,000 from this same bank to buy two luxury cars from Germany for re-sale in the United States. The bank approved the loan in writing, but when my friend got mad about the bank not waiving the monthly service fee and pulled ALL of his accounts from the bank, the bank claimed his loan had been denied and refused to fund it. My friend ended up having to sue the bank and the bank settled.

The New York Times then came out with an article on an alleged fight between Stephan Marbury and a Chinese basketball fan. That article, entitled, “Differing Accounts of Another Basketball Brouhaha in China,” also seems to imply that this sort of brawl is a Chinese thing. Trust me, it isn’t.  My old law firm did the legal work for around a dozen NBA players and they were constantly getting challenged to fight or even sued for fights in which they did not participate. I saw this with my own eyes. One night I was out with a couple of them at a really nice restaurant bar in Seattle and someone came up to one of them and totally out of the blue, said something like “you think you are so tough….let’s fight.”  The NBA player calming refused.  Another time I was at a birthday party for one of them on a local cruise ship and someone who was not allowed on the boat shot at it. This kind of thing is commonplace for pro basketball players, apparently in China as well.

When something particularly violent or horrible happens in China I sometimes get an email or a comment from a reader (which I do not post) ranting about how this is further proof of “what the Chinese are like.”  To me, the only thing that is proven is that out of 1.5 billion people you are bound to have violent sociopaths.  In any country.  In any culture.

Sometimes we need to just step back and say that it’s just a bank or just a basketball game or just a violent sociopath. Not everything is an indictment of an entire nation.

Do you agree?

 

  • hanmeng

    I’m really impressed you got the French bank to help you.

  • Rodrigo Nunes

    Dan, I totally agree with you. Sometimes people ask me, as soon as they know I have business in China and Chinese partners on my consulting firm, how is it to deal with them thinking I will have the regular answer: they don’t pay, they are really hard to deal with and so on. In my case, I have a great experience with my foreign partners and I am even reallocating people to work there not only for the obvious cost reason, but also because in China the culture (or whatever it is) of working real hard is something that really helps for today’s M&A culture and speed. In Brazil it is not so easy to get a high performance oficce without having to invest more than reasonable in paychecks. We are expensive and less productive. Maybe that’s just where I live. Or maybe this is a hint about how the western society should be convinced that low skilled jobs will naturally go after low skilled workers, that meaning countries with low skilled populations will absorb these jobs in an organic way. High income and educated countries will have to either export culture (design, services, consumer trends) or to live with high unemployment and it’s social effects.

  • Chip

    I agree with the concept.  And it’s not fair to paint all Chinese banks as inefficient, bureaucratic, and notoriously ill-prepared to deal with customers.  Only Bank of China, Industrial and Commercial Bank of China, China Construction Bank, and the Agricultural Bank of China match this description.

  • Roberto

    On the Marbury issue, it’s impossible to believe there is not video of the incident that either implicates or exonerates Marbury. It’s also very difficult to believe Marbury picked a fan at random from the crowd and attacked him. 

    Facility operators have a responsibility to ensure player (and referee) safety, and though some may disagree, I believe they have a responsibility to ensure a certain level of civility (e.g. preventing the throwing of bananas at African players, as has happened many times at football games in Europe). 

    Many facility operators do not provide adequate security, and though a player who allows himself/herself to be provoked enough to climb into the stands after an abusive fan has fallen right into the fan’s trap, there is certainly a limit to the abuse even highly paid professional athletes are willing to take.

    As for banking, irritating bureaucracy is universal, but every Chinese friend to whom I forwarded that Times blog post had had similar experiences with Chinese banks.

  • Nathan Fischbacher

    I thought Abrahamsen’s piece was really entertaining while superbly
    lacking in agenda or animosity. This despite even his self-confessed ‘years
    of general resentment at bureaucrats everywhere’, which any red blooded
    person in a Bank of China’s seventh circle of hell could be forgiven.

    I’m not surprised that it’s seized upon as evidence to condemn an entire nation. That’s unfortunate, yet typical of any foreign writings on the topic of China. Had the piece been openly flattering toward China (rather than subtly so, and as such gone over the heads of the very people who would use it as evidence of China’s poor quality), it would have been accused of Uncle Tommery. As will no doubt this post by Chinalawblog. C’est la vie.
    To me the punchline was the charming informality and dedication of the teller who went to somewhat great lengths to resolve the issue (or non-issue if you prefer). If I was going to draw any sweeping conclusions about Chinese, it would be drawn from that, as I suspect was the author’s intention, if indeed he had any.

    订Chinalawblog for putting a voice of reason out there.

  • MHB

    Great article, no word conjures up an image of France better than ‘haughty’.

    As much as I agree with the sentiment, I wouldn’t expect much difference between a modern Chinese bank and a provincial French bank in the 80s(?)!

  • SteveLaudig

    the lack of privately possessed guns and the prevalence of people [a/k/a witnesses] almost everywhere almost all the time have left me feeling far safer in china than the u.s. For example, when there is a car crash everybody goes for their cellphone camera and shoots some photos and  doesn’t worry that the other guy is going to shoot something else. it could be the language barrier I suppose but the arguments I’ve seen between drivers seem to lack the violent aggressive energy of U.S. arguments. there’s an almost whiny quality to the arguments I’ve seen rather than true anger. My experience with Indian banks several years ago places Chinese banks in the middle to upper range though they do seem wildly overstaffed and oblivious to wasting the customer’s time. countering that though is the fact they seem to be open everyday of the week unlike US banks.

    • http://jacobyount.com/ Jacob Yount

      You expressed that spot-on, Steve. The whiny arguments that drone on and on and on….

  • bystander

    I think of this all the time living in Beijing and Shanghai.  people think for example that the Chinese are remarkable because they don’t want to help people due to fear of litigation or blame being directed against them.  This shows up in the U.S. as well (ask a doctor about his malpractice premiums and the effect on the medical advice he is willing to give).  The context is different but the sentiments are the same.  Intellectual property theft looks very different in China and in the U.S. at one level, but when you see how casually people (generally) are willing to download pirated software, music, movies, etc., when those things are available to them and the downloading can be done without fear of being caught, it makes you wonder how deep the difference is, really.  One could go on and on adding to the list.  What is true is that a lot of situations and circumstances arise in China that wouldn’t easily or often come up in the West, and so you see some kinds of behavior that aren’t so common in the West I think.  I think 90% of it amounts to what you can get away with in the place that you live.

    Your bank story reminds me of one a friend told me about banking in India.  He too waited in line for hours, and when he got to the head of the queue the teller began shuttering the window.  He complained loudly, to which the teller replied “the British invented bureaucracy but the Indians have perfected it.”

  • Shirinpolo5

    Definitely agree. In fact, you’d think with such a large population we’d hear about more crazy things happening…

  • markkolier

    Great post Dan,

    I think you touched on something that has its underpinnings in cultural stereotypes.  When I am in China I find the westerners who live in China are not only happier to be living in China than they apparently were in the west (U.S. or Europe mostly), but they are basing their opinions on what they think of the west on what they read in the press.   The same is true when westerners read news about China in that they form an opinion that is not based in anything other than someone else’s personal experience.   

    Thanks for the thoughtful piece.    

  • Servan

    I’ve done a lot of western union transfers to and from china. I had to spend hours once, trying to get my money from a western union branch (or CA bank, really) in Beijing cause my I wrote the senders middle name with the surname rather than the first name. This was the only mistake. In Norway they just tell you what’s wrong, if you have the transfer code and the name on your ID almost right that’s probably not your identical twin with a similar name who’s trying to scam them. I think this is more of a China at this time rather than an essentially Chinese thing, however. They (just like the french at the time, I would have to guess) have an oligopolistic by regulation banking system. 

  • Ben Shobert

    Here’s hoping everyone who was so up in arms about your Chinese students in America post also reads this one, especially the last two paragraphs.  

  • Guest

    Yes, all very well and dandy but there are other points of view out there no doubt. Particuarly the  French Bank Manager who presumably thought you were an arrogant desperate American Student with no money and not worth delaying his lunch for. Under those circumstances, knowing the quality of French lunches, and the tiny amount of commission (if any) he stood to make from serving you – a broke American after all, from a country often quite rude about the French - I’d probably have acted the same way. You were impatient and desperate and he asked you to to return in 90 minutes. As a result you were rude. A typical American aboard in fact. As for your friend being charged for “having less than the minimum amount” well what do you expect? I am sure the bank, and especially the manager, were very pleased to see the back of you to be honest, you behaved insufferably. ”Merde! Get out of my bank!”

    You’re also wrong about the cigar. It is not just a cigar. It is, in fact, in the immortal words of Rudyard Kipling; “a smoke”.
    http://americandigest.org/mt-archives/inverse/and_a_woman_is.php
     

  • http://beijingcream.com/ Tao

    It’s funny though, the one negative stereotype about America that the Chinese seem to embrace whole-heartedly is that it’s a place where everyone at all times is in peril of death by gunfire. Perhaps this says something about the effect of violence on the human psyche and our need to convince ourselves that the current place we reside is in fact, relatively at least, “safe.”

    But seriously, Shanxi basketball fans are pretty shitty.

  • Twofish

    There’s a reason that banks are incredibly rule based and bureaucratic and that has to do with “flexibility” and large sums of money invariably causes problems. 

    It doesn’t help that large banks hate small accounts, and if you get fed up and close your account, that’s probably what the bank wants to happen. It’s often the case that a bank performs some business only because they are legally required to, and when someone is doing something that really don’t want to, it shows.

    American banks tend to provide decent service for small checking accounts, only because they are loss leaders for credit cards and mortgages.  Most Chinese banks have special offices for people with large-ish accounts, and the service there is pretty good to excellent.

    Also, I have this feeling that the French teller is now telling all of their friends about pushy, obnoxious Americans that can’t follow rules and wants special treatment.

  • Gilman Grundy

    Sorry Dan, but three whole days of standing in line and arguing with BoC staff to get something done, and then finally settling the whole thing in about 20 minutes after calling my company’s payroll department up to put some pressure on them, has taught me that if there are worse banks in the world, then I haven’t seen them despite having banked in four different countries.

    Is it right of me too think of those three days in which bank staff refused to allow me to transfer more money back to the UK than I had paid in tax during my stay (despite that not being the case, despite me having all the necessary documents, and despite me having transferred money before at the same branch - it took 3 hours) only to cave in after I got one of their major customers to ask that they cut out the BS as somehow symbolic of Chinese bureaucracy in general? Well, it never seemed so – it seemed perfectly demonstative of the pure obstructionism-for-obstructionism’s sake which can only be overcome through REAL connections that one finds in certain corners of Chinese life.

  • Twofish

    One thing to remember is that the person you are talking to at the bank is willing to provide bad service or even get yelled at if the alternative is ending up in jail.

    Sending any sort of money overseas can be extremely painful because the banks are in charge of enforcing currency control regulations, and whenever there is a chance that the regulators would frown on a transaction, the banks will err on the side of caution and block the transaction.

    Having done the transaction before makes things worse.  A lot of the limits are cumulative, which means that if you do N transactions, then N+1 will get blocked.  Often the regulators will overlook something if it’s a one time special situation that will never happen again, but if you repeatedly to something, then you can’t argue special situation.

    There are a lot of Kafkasque bits in banking regulation.  They also happen in the US, but usually customers don’t notice, because there isn’t something like foreign exchange rules in which directly impact end users. 

    First of all, the bank will usually not tell you, and the regulators will often not tell the banks exactly what the rules are.  The reason for this is that if you know exactly that a transaction that is more than $5000 will get blocked, then you will send across $4999.  So many of the limits are “soft limits”  $1 is OK, $1 million is not, at some point in the middle it will get blocked, and people will intentionally not tell you what the limits are, because if there are precise limits, people will game the system to get around the limits.

    The second thing that happens is that if a transaction gets blocked because of regulatory action, the person looking at the customer is often legally prohibited from even hinting to the customer what might be the problem.  So the teller runs a transaction, and either a regulator or someone in compliance will block it.  Often the regulators will *intentionally* not tell the bank why, and if they tell someone in the bank, that person will *intentionally* not tell anyone that is customer-facing.  Again, this means that the bank is likely to enforce the block because no one knows whether the regulators are blocking the transaction because some form wasn’t filed, or because the customer is about to get arrested for trafficking heroin.  Now if you make it clear to the bank that you aren’t trafficking heroin, then they may decide to let the transaction through.

    Whenever I’ve read of an expat complain about horrible service in banks, it’s usually something involving foreign currency, and this is less a result of the bank’s attitude, than the PRC’s system of currency controls, and the PRC is preceding very, very carefully about liberalizing currency controls after seeing what happened to Indonesia and Thailand in the late 1990′s.