Clicked on a Washington Post article entitled, “A color-coded map of the world’s most and least emotional countries,” because it was showing as the most read WaPo article today.  The article contains the following map of “emotions”:

Emotions Map
The World’s Emotions Mapped — China Too

The map reflects the results of Gallup surveys taken since 2009:

Since 2009, the Gallup polling firm has surveyed people in 150 countries and territories on, among other things, their daily emotional experience. Their survey asks five questions, meant to gauge whether the respondent felt significant positive or negative emotions the day prior to the survey. The more times that people answer “yes” to questions such as “Did you smile or laugh a lot yesterday?”, the more emotional they’re deemed to be.

Gallup has tallied up the average “yes” responses from respondents in almost every country on Earth. The results, which I’ve mapped out above, are as fascinating as they are indecipherable. The color-coded key in the map indicates the average percentage of people who answered “yes.” Dark purple countries are the most emotional, yellow the least.

China scores right in the middle, which probably seems about right to me, assuming the survey accurately measures emotions and assuming that the emotions it measures are the same ones I am thinking about.  People in China do sometimes smile — certainly more than in Russia but less than in the United States.  People in China sometimes scream and yell and fight — certainly more than in Singapore, but less than in Korea.  But of course people smile and scream and yell and fight everywhere, so I don’t know….

Is this map accurate?  Do these surveys accurately portray China?

What do you think?

I admit to a bit of fascination with the viral Korean pop video, Gangnam Style.  My fascination stems from the following:

  • It has nearly 400 million views on YouTube.  Some kind of record.
  • I have been going to Gangnam 4-8 times a year for at least 15 years. It’s the wealthiest and trendiest part of Seoul and of Korea, but there really isn’t a lot of there there and that is what I see as the theme of the song/video.
  • I am a huge fan of Korea and whenever people talk of the China miracle, I start talking about the Korea miracle.  Korea was the second poorest country in the world in the 1950s and it is now a wealthy developed country.  In addition to its economic miracle, it also has become a full-fledged democracy.  I can remember ten years ago walking through parts of Busan or Seoul that had open sewers.  No more. I was in Busan a few months ago and what struck me was how everyone seemed to be at least middle class. Korea deserves credit for having “made it.”
  • I think a video like Gangnam Style almost has to come from a country that has made it and has confidence in itself.  I can remember ten years ago having only one Korean friend who I felt was truly honest about Korea — both its good and its bad.  My other Korean friends were overly protective of their country, refusing to admit it had any real faults. That sort of protection is disappearing and I see that as a good thing.

But what about China? I just read a really good piece by Evan Osnos, a top-notch China journalist for New Yorker, on how China is just not capable of producing a video like Gangnam Style.  Not because China doesn’t have tens of thousands of very creative people, but because it is just not there yet in terms of being able to poke fun at itself.  The article is called “Why China Lacks Gangnam Style” and I recommend that you check it out.  Whether you agree or not, it certainly makes for an interesting read.

But do you agree?  Is Osnos right that China could not produce such a video, or is he selling China short?

Not quite sure why, but I have been writing a lot lately about the risks of operating a business in China. A few months ago, I did a post entitled China Is The Risk. I See Clouds and a few weeks ago I did a post entitled Secure And Insecure Countries. In Light Of Egypt. An Open Thread. Both of these posts talked of the risks of being in China and sought to compare that risk to other countries.

In response to the Egypt post, a loyal reader sent me a link to a super-cool interactive country by country risk map compiled by Aon Corporation, a leading “provider of risk management services.” The map ranks countries from Low Risk to Very High Risk, with Medium-Low Risk, Medium Risk, Medium-High Risk, and High Risk in between those two extremes. The rankings are based on the following:

  • Exchange Transfer
  • War/Civil War
  • Strike, Riot, Civil Commotion, Terrorism
  • Sovereign Non-Payment
  • Political Interference
  • Supply Chain Disruption
  • Legal & Regulatory

Here are how various countries fared:

  • China —  Medium Risk
  • India —  Medium-Low Risk
  • Vietnam —  Medium Risk
  • Bangladesh —  Medium-High Risk
  • Thailand —  Medium-High Risk
  • Singapore —  Low Risk
  • Cambodia —  Medium-High Risk
  • Laos —  Medium-High Risk
  • Hong Kong —  Low Risk
  • Taiwan —  Medium-Low Risk
  • Japan —  Low Risk
  • Russia —  Medium Risk
  • Malaysia —  Medium-Low Risk
  • Indonesia —  Medium Risk
  • Egypt (before the street demonstrations) —  Medium Risk
  • Brazil Medium —  Low Risk
  • Mexico —  Medium-Low Risk
  • South Korea —  Medium-Low Risk
  • North Korea —  Very High Risk

Interesting. What do you think?

I just learned a new term today that I know I will be using frequently in the future. The term is “middle income trap” and it crystallizes some of my previously discombobulated thoughts I have had regarding economic development. Let me explain.

This new term (for me) comes from a post by Michael Schuman on Time Magazine’s Curious Capitalist blog, entitled, “Escaping the middle-income trap.”  The post focuses on how Malaysia’s economic growth has been so consistently strong since World War II, yet has been slowing over the last few years and of how Malaysia just cannot seem to break into the league of developed nations. Schuman defines this “trap,” as follows:

I returned a few days ago from Kuala Lumpur, the capital of Malaysia, where the talk of the town – well, at least among economists — is the “middle-income trap.” What’s that, you ask? A developing nation gets “trapped” when it reaches a certain, relatively comfortable level of income but can’t seem to take that next big jump into the true big leagues of the world economy, with per capita wealth to match. Every go-go economy in Asia has confronted this “trap,” or is dealing with it now. Breaking out of it, however, is extremely difficult. The reason is that escaping the “trap” requires an entire overhaul of the economic growth model most often used by emerging economies.

The concept behind the “middle-income trap” is quite simple: It’s easier to rise from a low-income to a middle-income economy than it is to jump from a middle-income to a high-income economy. That’s because when you’re really poor, you can use your poverty to your advantage. Cheap wages makes a low-income economy competitive in labor-intensive manufacturing (apparel, shoes and toys, for example). Factories sprout up, creating jobs and increasing incomes. Every rapid-growth economy in Asia jumpstarted its famed gains in human welfare in this way, including Malaysia.

However, that growth model eventually runs out of steam. As incomes increase, so do costs, undermining the competitiveness of the old, low-tech manufacturing industries. Countries (like Malaysia) then move “up the value chain,” into exports of more technologically advanced products, like electronics. But even that’s not enough to avoid the “trap.” To get to that next level – that high-income level – an economy needs to do more than just make stuff by throwing people and money into factories. The economy has to innovate and use labor and capital more productively. That requires an entirely different way of doing business. Instead of just assembling products designed by others, with imported technology, companies must invest more heavily in R&D on their own and employ highly educated and skilled workers to turn those investments into new products and profits. It is a very, very hard shift to achieve. Thus the “trap.”

Schuman sees South Korea as “probably the best current example of a developing economy making the leap into the realm of the most advanced.” Schuman sees Malaysia as a long way from making that same leap:    

Malaysia, though, is quite far from where it wants to be. That’s a bit surprising based on its remarkable recent history. Malaysia has been among the best performing economies in the world since World War II, one of only 13 to record an average growth rate of 7% over at least a 25-year period. The country has an amazing record of improving human welfare. In 1970, some 50% of Malaysians lived in absolute poverty; now less than 4% do. Yet Malaysians also feel that they’ve become somewhat stuck where they are. GDP growth has slowed up, from an annual average of 9.1% between 1990 and 1997 to 5.5% from 2000 and 2008. Meanwhile, other Asian economies have zipped by Malaysia. According to the World Bank, the per capita gross national income (GNI) of South Korea in 1970 was below that of Malaysia ($260 versus $380), but by 2009, South Korea’s was almost three times larger than Malaysia’s ($21,530 versus $6,760). Malaysia is getting “trapped” as a relatively prosperous but still middle-income nation.

Schuman does not see Malaysia making the leap.  Its companies are not innovating. Its private investment is declining and it spends almost nothing on R&D. “If Malaysia is going to break the “trap,” it has to reverse all of these trends.”

So what has made Korea so different from Malaysia?  

Why has Korea jumped so far ahead? I think the reason is embedded in the different methods the two countries used to spur rapid growth.

Both countries relied exports to create rapid gains in income, but they did so differently. South Korea, from its earliest days of export-led development in the mid-1960s, had been determined to create homegrown, internationally competitive industries. Though Korean firms supplied big multinationals with components or even entire products, that was never enough – Korea wanted to manufacture its own products under its own brands. The effort was often a painful one – remember Hyundai’s first disastrous foray into the U.S. car market in the late 1980s and early 1990s – but Korea is where it is today because its private companies have been working on getting there for a very long time, backed in full by the financial sector and the government.

Malaysia, on the other hand, relied much, much more on foreign investment to drive industrialization. That’s not a bad thing – multinational companies provide an instant shot of capital, jobs, expertise and technology into a poor country. MNCs, however, aren’t going to develop Malaysian products; that has to take place in the labs and offices of Malaysia’s private businesses. But those businessmen have been content to squeeze profits from serving MNCs and maintaining their original, assembly-based business models.

I have for years viewed Korea as THE success story of Asia. In fact, whenever people tout China and act as though democracy is wholly incompatible with growth, I respond with Korea. You can see me making this point in this Commonwealth Club of San Francisco video of a “Doing Business in China” panel. Korea was at one time the second poorest country in the world, second only to Niger. Now, Seoul is more dynamic than Tokyo and Korea just continues to grow both economically and in terms of its political freedoms. Why is that? And why are countries like Malaysia and Thailand stuck in the middle ground?  And what about China and Vietnam, will they be able to make “the leap? 

Japan and Korea are important because they have spending power. Vietnam and Cambodia are important because they have very low wages. China is the most interesting because just three or four years ago, companies were going to China because of its low wages, but now, companies are going there to make money (mostly on the Coast) and going there to make things (more and more inland).  

Where do Malaysia or Thailand fit into all this?  

Malaysia and Thailand remind me a bit of the mid-size law firm. I can understand hiring the big firm for the big deal or the big case requiring a massive number of associates or legions of highly specialized partners. And I can understand hiring a highly efficient and focused small firm. But I rarely understand hiring the mid-sized firm, which usually tries to price itself along the same lines as the big firms, but without the corresponding depth or expertise. Why bother? And nothing against either Malaysia or Thailand, but I think many businesses have asked themselves this very question.

What do you think?

When the media and the blogosphere started going crazy writing about China’s plans to ban the eating of dog meat, I made very clear to myself that I was going to stay out of it. There was just no way I was going to join that bandwagon. First off, I just did not see it as a big deal. More on that below. Secondly, I have always hated the whole dog meat issue because when Westerners discuss it, they so often do so in an irritatingly self-righteous and ethnocentric (please note this is the first time I have used this word on this blog) way. More on that below also.

So why then am I writing about it now? Because I long ago vowed that whenever I get at least three emails from readers requesting I write about a topic, I will do so, and my third one just came in:

Dan,

I know you don’t eat meat so I am surprised you have not written anything about China’s new law on the eating of dog meat. Do you see this as China’s becoming more humane? Will the law be enforced or is this just being done for PR?

No, no, and no.

I feel I must set out my bona fides at the outset. I love dogs. They are my favorite animal by far. I am a dog person. On top of that, I have not had a bite of meat for 17 years. Not one. I do NOT consider those who eat meat any less moral than I am. Two reasons for this. One, eating or not eating meat is just one small aspect of a person’s morality and I absolutely can understand those who think it is no aspect at all. Who is more moral, a vegetarian serial killer or someone who eats meat but devotes their whole life to helping the homeless mentally ill? Who is a better “environmental steward, a vegetarian who owns a massively polluting factory that engages in illegal dumping, or someone who works for Greenpeace and walks everywhere? Two, I know very few people well enough to be able to judge their moral standing and that kind of judging just ain’t my bag.

The new laws will also deal with animal cruelty issues, which I view very differently than the provisions on dog meat.

Many years ago, I was at lunch with a group of law students after having given a talk at their school. When my meat-free entree arrived, one of the students launched into a mini-speech about how great it was that I was “such a steward of the earth.” As soon as she finished, I jokingly said that I did this to make up for owning two large Hummers and not recycling a thing (neither true but said for effect). This poor student looked horrified, but everyone else laughed. I felt only a little bit bad.

So I just cannot ascribe much at all to whether a country eats dog or not. I also cannot see any real difference between eating dog meat or any other meat. Where does horse meat fit on the moral scale? Are countries that eat horse meat (France for example) less culturally developed than those that do not? Does anyone disagree with me on this? Or should the cuteness or friendliness of the cut count towards the morality of the eating? The US is not necessarily more sophisticated, not necessarily more moral, not necessarily more advanced than countries in which dog (or horse or whatever) meat is eaten. In France they love mussels, yet clams are generally considered dirty. It’s a cultural thang.

I once had a dog meat discussion with some Koreans who complained of how Americans act as though all Koreans are “horrible people” because some eat dog. They told me that their retort is to point out how badly the US takes care of its homeless humans. Touché.

I have been to Korea so many times that the Westin Chosun in Seoul had a mini-celebration for me on my 100th stay there about five years ago. And though this happens less often than it did, I still occasionally encounter someone who wants to let me know that they would never go to Korea “because they eat dog there.” My favorites was when a butcher told me this. I kid you not.

So here is how I see China’s plans to ban dog meat.

I do not think China is doing this to placate the West. I think China is doing this because dogs are becoming increasingly popular pets in China among its wealthier citizens and this planned ban is a great way to placate them. I do not see it as a sign of anything else.

There is a saying on how the Chinese will eat anything “with four legs that isn’t a table, anything that flies that isn’t an airplane, and anything that moves that isn’t a bike.” Apparently dog is an exception.

What do you think?

UPDATE: Someone pointed out to me that I failed to distinguish between eating endangered animals and animals that are not threatened or endangered and that this distinction proves my thesis wrong regarding the cut of the meat being irrelevant in terms of determining morality. I agree that I should have excluded endangered and threatened species when I talked about not being able to see any difference between eating one animal as opposed to another.

ANOTHER UPDATE: Nice post on the topic of animal rights in China at the China Geeks blog [link no longer exists]. Makes the important point (though one that should be unnecessary) that, hey, not all 1.3 billion people in China think alike on these issues.

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I usually find these things way corny and stereotypical, but I actually kinda like this one. Shanghai Networking News has an article out, based on its having asked questions on Linkedin, on “What The Chinese Want You to Know About Networking” [link no longer exists]. Here are their findings, which I will follow up with my own analysis:

They’re not that different. People often get so caught up in the differences that they fail to see the similarities between Chinese and western cultures. Just be yourself and don’t worry about skipping across the cultural minefield. Just as most of us would go easy on any local who made a social faux pas without knowing, local Chinese aren’t going to bite your head off if you accidentally put your foot in it.

They are that different — from one another. Following on from the above, don’t fall into the trap of thinking that all Chinese are much the same. They have their own thoughts, hopes and dreams. Some are more introvert, some more extrovert and some are just plain weird, just like foreigners. They’re not all Little Red Book waving fanatics, or traditional Confucian sages or “insert stereotype here.”

Losing Face = Bad. Making fun of Chinese, even if you’re just playing around, can be considered disrespectful and a big loss of face, especially in front of other people. Wait until you’ve got to know someone a little better, or wait for them to make a joke first. Don’t be staid and serious, or afraid of offending them, but do bear in mind that others may take the joke more seriously than you do.

Giving Face = Good. Acting impressed by someone’s job title can give a lot of face to the individual in question, and can quickly turn into what westerners might think of as a “mutual appreciation fest,” with each party saying something nice about the other’s position and modestly denying their own prestige.

They’re not that different. They are not. I am amazed more by the similarities between China and the United States than the differences. I have been to Korea so many times that at least 25 stays ago, I had my picture taken at the Westin Chosun in Seoul because it was my 100th stay. And yet, when I talk about my knowledge of Korea, I always say that I used to think I had a 25% understanding of Korea but when I started reading Michael Breen’s book, The Koreans, Who They Are, What They Want, and Where Their Future Lies I still tell anyone new to Korea that nothing there is as it first appears. China is far easier. China is like the United States in that both countries see themselves as unique and, dare I say it, special. China is like the United States in that it is geographically large and culturally and ethnically diverse. China is also like the US in its work ethic and in its overall informality. Now I know some are going to say China is formal, but I see China as considerably less formal than Korea, Japan, or even Germany.

They are that different — from one another Duh! There are 1.3 billion of them. Anyone who thinks they are all alike is just off. There is even huge diversity among lawyers. At one of the Chinese law firms with whom we have worked on many matters, there are fervent (almost religious) communists and there are others there who make little effort to hide their contempt for it.

Losing Face = Bad. As an inveterate jokester, I find myself having to be mindful of this prescription and I am because it is true. An attorney friend of mine once told me that it took him a while to get used to what he calls my “towel snapping humor” because he never played sports. Unless you have been friends with someone in China for a long time and they are making “towel snapping” jokes about you, you should avoid making “towel snapping” jokes about them.

Giving Face = Good. Good idea both on being complimentary and being humble. Frankly, I think this is good advice in the West too as very few people I know like arrogance.

Is this a good list? What do you think? Anything missing?

If the above is just too much for you to remember or too difficult for you to follow, then I urge you go read my previous post, “Chinese Cultural Awareness Simplified: Don’t Be An Asshole.

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Last year, I wrote an article for the Complete Lawyer, entitled, “Working with Korean and Chinese Lawyers.” I was originally asked to write on working with Asian lawyers in general, but persuaded the magazine to allow me to focus on just China and Korea. I asked for this limitation because I did not believe myself experienced enough in working with lawyers from other Asian countries to write about working with them and, more importantly, because I did not see enough similarities to talk of Asia as a whole.

An article like this has to generalize a bit and there are certainly exceptions to everything I say. But having worked with dozens of law firms in Korea and China, I have noticed the following four problems in dealing with lawyers from those two countries, respectively:

KOREA

  • Non-responsiveness is the norm. American lawyers generally see their role as helping clients achieve their goals and keeping their clients informed. Korean lawyers operate far more independently. They consider themselves the legal experts and they often get offended when questioned. According to their perspective, a client should trust them, not ask questions, and not expect updates. This obviously does not work well for American clients. Two excellent Korean law firms have admitted to me they “always get fired” when they work directly with American companies or with American lawyers inexperienced with Korea. If a Korean lawyer has a hearing scheduled in a case, I email him (it is virtually always a he) the day before to urge him to provide me with a full report by the next day, at the latest. I usually send another email reminder after the hearing concludes and if I do not have a timely report, I call.
  • Your matter is not important. Most Korean lawyers have plenty of work and any one matter from an overseas client is not likely to be of great importance to them. This may mean your Korean lawyer will not fight hard on a particular motion where the chances of winning are low; he or she would rather stay in the good graces of a judge or fellow lawyer than challenge the status quo. I try to get around this by hiring “outsider” lawyers if my case is going to be particularly difficult or contentious, or by attending the hearing if it is particularly important. I also always make clear, upfront, that a good result for this client will lead to more work from my law firm’s other clients.
  • The Korean lawyer’s role is different. Korean lawyers tend to view themselves as “above it all.” I learned this when, trying to settle a case, we offered $900,000 and the Korean company on the other side offered to pay us $700,000. I asked the Korean lawyer to go back at $850,000 and I could feel his reluctance. I say “feel” because while he was telling me he would go back at $850,000, he was also asking me questions to let me know he did not think he should go back at $850,000. Weeks then passed with no updates and vague responses to my emails. Then, out of the blue, a US-educated paralegal from the firm called me to say the $850,000 offer had never been passed on because the Korean lawyer considered it beneath him to negotiate “as though at a flea market.” I do not know if that paralegal was put up to the call by the attorney or if he called me on his own, but I have since learned to control negotiations myself. It is not just in negotiations that the Korean lawyer sees himself as above the fray. If you do not put pressure on your Korean lawyer, you can pretty much assume that numerous time extensions will delay your case for years.
  • Confidentiality? What’s that? Korean lawyers simply do not respect the attorney-client privilege the same way American lawyers do. I try to handle confidentiality problems by using the same few lawyers in Korea for all of my firm’s clients. Because I provide so much work to these attorneys, I have a personal relationship with them, which makes it less likely that they will hurt me by hurting my client. It also decreases the incentive for the Korean lawyer to hurt my client because doing so will cut off the regular stream of work my firm provides.

CHINA

There are many lawyers in China scrambling for work, but most of them have neither the experience nor the language skills to handle international clients. The problem is that most either do not know this or will not admit it. The four most common problems I see in retaining Chinese lawyers are:

  • Chinese law firms often are not “firms” as we understand the term. There are very few really good Chinese international law firms in China and many of them are not really firms at all; they are a collection of solo practitioners. Many American companies think they are using the best lawyer in a firm for a particular matter when in fact that lawyer has the case not because of his skill set, but because he or she is the one who brought in the case.
  • Chinese lawyers are rarely power brokers. The importance of connections is not as strong as it once was, though it is still a factor in certain industries and certain parts of the country. Chinese lawyers are usually not well connected (even if they are reluctant to admit it) so hiring a lawyer as a power play is rarely recommended. China’s good lawyers are very smart and very well educated, but if they were truly well connected, they would most likely have a top position in the government or with a big company, and they would never have attended law school in the first place.
  • The Chinese lawyer’s role is different. Chinese lawyers far too often see their role as doing what the client tells them to do, rather than telling the client what should be done. If a client calls me and says she wants to do A, my knee-jerk response is to ask why. The typical Chinese lawyer’s response is to say “yes.”
  • Chinese lawyers do things the Chinese way. Chinese companies can get away with all sorts of things in China that American-owned companies cannot. Chinese lawyers tend not to account for this. Chinese lawyers also almost never know the various US law strictures under which American companies must operate. The Foreign Corrupt Practices Act is a classic example. There are also many things American companies can do legally in China that would be a public relations disaster back home. This is particularly true regarding labor relations and environmental stewardship

As always, I would love to hear what you think. I particularly welcome comments from those who have worked with (or for) Korean or Chinese lawyers and from Korean and Chinese lawyers. Have at it people…

One of the things that has always fascinated me about microeconomics is how imperfectly it can track the macro picture. For example, on the macro level, we might hear of a country experiencing negative growth, but on the micro level, this means some companies might still be growing at 20 percent a year.

During the Asian crisis of 1997, my firm represented a company that sold what I would call “luxury fruit” into Korea. Korea imports a large percentage of its fruit and the old axiom is that food does okay during recessions because people still need to eat. I’m guessing (but do not know) that fruit consumption probably declined a bit in Korea in 1997, but probably not all that much. I recall (but please don’t anyone hold me to this statistic), that fruit imports that year declined around 20%. But Korean sales for my client fell from $2 million a year and rising to $20,000. In other words, his products were pretty much wiped off the Korean map.

And yet there will also be companies that can thrive in difficult times. Our fishing company clients are actually doing quite well right now. Fish sales have generally not declined, but the cost of catching fish has. It has become easier and cheaper to find crew and, most importantly, the cost of fuel has been cut in half.

I mention all of this today because I just read an article in Plastics News (I know it sounds boring, but trust, me it isn’t), entitled, “Worldwide Recycled Plastics Trade Plummets.” And it is not just plastics. My international law firm represents a number of companies in the recycled paper, plastics, and metals industry (a/k/a the scrap business), all of whom sell mostly into China. Until around three months ago, we typically would have at least one recycling deal pending at any given time, many times two. In the last three months, we have received a couple calls from our clients telling us they might have a deal, but not a single one has gone through. The only calls we get from our recycling clients these days are those where they want to discuss how they might seek to collect from their buyers who have stopped paying.

About a month ago, the largest recycler in one of Asia’s largest cities told me it “was losing big money on every paper and plastics sale” and the price of metals had fallen so much it would soon be losing money on every metals deal as well. The Chinese companies to whom it sells its product are renegotiating deals after the product has shipped or they are just flat out not paying at all. Like many in the recycling business, this company has a comparatively long term contract with its city and it must continue to pick up recyclable materials. It has had to secure additional warehouse space to store it. This situation is repeating itself across the world. Recycling companies are getting squeezed.

What China related industries are thriving right now and which are really hurting?

Beijing Newspeak has an excellent post on the recent death of South Korean diplomat, Whang Joung-il, who died at the Vista Clinic in Beijing after eating a tuna sandwich. The post is entitled, Mystery over death of Korean diplomat in Beijing continues [link no longer exists], and it notes how speculation on the cause of death ranges from the tuna sandwich to the clinic to overwork (gosh, does that really cause vomiting?)

More than a month after the diplomat’s death, nothing is official yet and there are rumors that Korea has begun soft-pedaling the death to allow China to save face. In return for this Korean gesture, China is said by some to have given South Korea something on the six-party talks regarding North Korea’s nuclear program or some economic deals.

I do not think this death is going to have any lasting affect on much of anything (other than on this diplomat’s family and friends), but reading about it is at least as interesting as watching Law and Order reruns.

Big scandal going on in Korea right now where many leading public figures are being forced to come clean for having lied about their degrees. Korea Law Blog just did a post, entitled, “More on the Fake Degree Scandal,” [link no longer exists] explaining why this is happening and what employers should be doing about it. Just substitute Chinese for Korean and China for Korea and it applies to China.

KLB starts out by describing the problem:

Fakes are endemic in Korean corporations, says the New York Times yesterday. And we’re not talking about fake handbags — society is grappling with the problem of fake people who claim degrees they don’t have. How do all these fakes get themselves hired? And why do Korean employers emphasize the degree to such an extent? According to the IHT, it’s because employment background checks are useless:

Although some companies conduct their own aptitude tests to detect the best job candidates, the dependence on academic degrees persists.

The post goes on to quote from the IHT article on how personal recommendations are seldom useful because when Koreans talk about other people, they tend to focus only on their good points.

KLB states that his experience tells him “that the idea of the ‘worthless’ background check is overstated.

The truth is, while the critics are correct in that former employers are reluctant to offer frank comments on a past employee, in our practice we often find that the background check is not done at all. And that failure allows the real fakers — those who never went to the university they claim, who overstate their degree, or who claim work experience they don’t actually have — to get in.

KLB’s advice is to “slow down, and double-check everything. Speed kills.”

Good advice for doing business in China too.