Went to dinner with a Shanghai friend the other night. This is someone who has been living in China nearly twenty years and speaks fluent Mandarin and Shanghainese. This is a “China guy” who really knows China.
A couple of his stories resonated. One was about how his best client fired him. Here’s that story. My friend was tasked with making sure that his client’s product was made right and delivered on time. To a large extent, this meant that his role was antagonistic to that of the Chinese manufacturer. My friend constantly had to make sure that the Chinese manufacturer did things a certain way, and especially that no bad product pass through. To put it more bluntly and relevantly, my friend was costing the Chinese manufacturer money.
The Chinese manufacturer didn’t like that and so it mounted a campaign to get him fired.
For months, the Chinese manufacturer would tell my friend’s client of how my friend didn’t know China, didn’t know the product, and wasn’t doing a good job. These comments were the softening blows.
Then one day, the Chinese manufacturer intentionally did whatever it could to anger my friend. It worked and he got angry. The Chinese manufacturer secretly taped my friend yelling and swearing at them and they sent that video to my friend’s client, explaining how this was what they constantly were having to face from my friend. The client fired my friend.
My friend also talked of how when he visits Chinese factories, it is fairly common for someone to run ahead of him, screaming that he speaks Shanghainese so as to be sure that nobody reveals anything to him that he should not know. He talked of how the Chinese manufacturers are always trying to undercut him because he knows what he is doing and knows how to keep them on the strait and narrow.
Before Shanghai, I had breakfast in Beijing with another very experienced China guy — a European who has spent the last 13 years in Beijing assisting European companies who also. This person also speaks fluent Mandarin. He had two great “China stories” for me, both very similar. In both, he had, simply by being “a white guy who speaks Mandarin” been able to hear about large scale bribery taking place. And in both cases, when he reported what he had heard to the European companies, they both got angry at him and ceased to have anything more to do with him.
I know it may be stretching things a bit, but I see a commonality running through all three incidents, and I also see something with which we as China lawyers often must deal. Oftentimes, when we are trying to help our clients better their negotiating position vis a vis their Chinese counter-party, the Chinese company tells our client that we are not licensed Chinese lawyers and therefore we don’t know Chinese law. We typically deal with this by pre-empting it; we tell our clients early in the process to expect the Chinese counter-party to say things like this and we describe how dividing and conquering is one of the oldest and most used tricks in the book. Then when it happens, our clients usually just take it in stride.
I don’t want to get all nationalistic here, but the reality is that the person you hire to assist you in China is a lot more likely to be looking out for your interests than the Chinese company with whom you are doing business or seeking to do business.
That just makes sense, doesn’t it?
What do you think?