Troy Parfitt offers some home truths about doing business in China, among which is the warning that “win-win” is a western concept, not a Chinese one. Preconceptions can be shockingly wrong.
I’ve heard it several times. You probably have, too. Because of the economy, or simply to forge a new opportunity, so-and-so is heading off to China to gain that competitive edge or capitalize on their expertise. As I recently overheard a middle-aged man in a coffee shop say, during a time-out from his Mandarin lesson, and after declaring the Chinese could benefit from his know-how: “I’m going to China to make a difference.”
Westerners have been going to China to make a difference for centuries, but they often discover the difference made is in them.
Nowhere is this better illustrated than in Jonathan Spence’s To Change China:Western Advisors in China. A series of vignettes which read like a sequence of tragicomedies, the Yale historian’s book chronicles one ambitious and morally-superior Westerner after another (always a man) who gallops off to the Middle Kingdom convinced he will be the one to succeed – in educating the Chinese, in converting the Chinese, in advising the Chinese, in trading with the Chinese – where so many others before him failed. In the end, the usually intellectually gifted and well-meaning individual finds himself being used for his know-how before being icily discarded, and usually despised. Many of Spence’s cautionary tales come from the nineteenth and twentieth centuries. Things have improved considerably since then, but there are modern-day accounts that eerily echo the professor’s work.
Tim Clissold’s Mr. China is one such narrative. In the 1990s, the British Clissold raised $400 million to buy shares in some 20 Chinese companies while providing the technical knowledge to make production more efficient and the bottom-line more profitable. On the surface, it seemed a grand idea: a win-win situation. But win-win is a Western concept; in China, it can prove elusive.
Instead of a spirit of cooperation, what Clissold discovered was widespread graft and a systematic lack of business ethics. A factory land-deed was transferred without his knowledge; a local manager siphoned off funds to establish an identical plant across town; another manager drained the joint bank account and headed for the hills. The bank manager who allowed for the total-sum withdrawal headed for the hills with him. The Englishman discovered that attempting to remove corrupt factory managers resulted in strikes and riots. Investigations on behalf of China’s anticorruption bureau were possible, but necessitated bribes.
What the aspiring Mr. China realized, well down the road to financial ruin and failing health, was that the China of his imagination and the China of reality were poles apart. It’s something every China expat learns, either with a sense of wonder or horror; their preconceptions had been shockingly wrong.
China has always represented different things to different people. It is a vast and vague entity onto which one is free to project one’s own fears and desires. To the pious, it has represented a sea of prospective converts since the proselytizing Portuguese turned up in Macau in the sixteenth century. In the seventeenth and eighteenth centuries, Europe’s obsession with Chinoiserie aided in creating a romanticized version of the Oriental nation. In the twentieth century, the Nationalist Party was China’s saviour and the West’s ally, until the West realized it was brutal, dysfunctional, and corrupt. With its rapid involvement in the Korean War, the Communist Party became the West’s enemy, but since its capitalistic shift, Western perceptions and projections have flourished once more. It’s a boundless new market, a bottomless labour pool, the last economic frontier; it’s whatever people want it to be. It becomes, therefore, clouded with myth.
You’ve doubtless heard about the Chinese character for ‘crisis’ being comprised of the components ‘danger’ plus ‘opportunity.’ You’re aware of the Chinese curse, ‘May you live in interesting times.’ Most are familiar with the deplorable sign at the former Shanghai public garden saying ‘No dogs or Chinese.’ And it’s common knowledge that to read a Chinese newspaper, you only need to know about 2,000 characters. Chinese characters are pictographs and Mandarin a monosyllabic tongue. Of course, Chinese lacks a phonetic alphabet, and although there many dialects, all are underpinned by a common script.
These ‘facts’ are commonly known, but not a single one is accurate. When it comes to China, it’s imperative not to project your constructs and notions onto it, or to regurgitate stereotypes and myths. Rather, one must analyze China and see it for what it really is.
A friend of mine, who travels to China two or three times a year to recruit students for a Canadian university, always says to me after he returns, “Nothing makes any sense.” Pedantically, I like to remind him that in China everything makes perfect sense; it just takes time and effort to understand why.
But this, to reiterate, is the key problem: Westerners are too busy making assumptions and engaging in projection to take the time to reflect and understand why. This is the mistake to be avoided if one hopes to survive and thrive in China. In short, stop projecting and start observing.
But advice for dealing with China cannot be distilled to a single phrase. Knowing that, I’ve devised eight guidelines to make doing business in and with China easier. Why eight? Why not? Besides, eight is an auspicious number; it sounds like the word for ‘prosper,’ though it might interest you to know that two, three, five, six, seven, and nine are propitious numbers, as well.
1. Study the language. Yes, it is difficult, and might well seem impenetrable at first. The learning curve is much steeper than with a European language, and elements such as tones or writing can be exceedingly frustrating. But try. Learn something. Get a textbook and a good tutor (preferably one with experience or a government certificate) and allot at least three hours a week for lessons. Understanding the language will help you understand the mindset, and even basic conversational Chinese will garner respect and open doors. You’ll no longer be just a foreigner. You’ll be a Chinese-speaking foreigner.
2. Read. Books are the best way to supplement what you learn from experience and direct observation. The bad news? There are so many China books it’s hard to know where to start. The good news? Almost all of them are interesting. I’ve read about 80 books on China, many of them weighty tomes, and not one was dull. The aforementioned, business-related Mr. China is a must, but you ought to stray outside the commerce zone. Peter Hessler’s books are accessible and respected, and for something more academic try Jonathan Fenby or Jonathan Spence. Ian McGregor’s The Party comes recommended, and should give you insight into how the Chinese government conducts its affairs and partners with industry and business.
3. Talk to old China hands. It’s all about figuring out the puzzle, and those with a long-term China interest know where most of the pieces in that puzzle fit. But don’t limit your contacts to other Westerners. Businesspeople from Taiwan and Hong Kong are often especially knowledgeable, not to mention well educated and English speaking. They understand doing business in China better than anyone, and they will feel closer to you, culturally, than they will to so-called mainland Chinese. They will also feel safer talking to you, because what they say has little chance of being relayed to “mainland” Chinese, and can’t come back to haunt them. Buy these veterans dinner; buy them a drink. Ask them questions and listen to what they have to say.
4. Don’t allow yourself to be buttered up. In China, what is said is not always what is meant. Chinese people are fond of dishing out praise and flattery – to curry favour. Your saying ‘good morning’ in Mandarin, for example, could result in a lengthy compliment about how solid and pitch-perfect your Mandarin is. Don’t allow the compliments, banquets, and others picking up the tab to affect your business decisions. Business is business, after all; separate it from pleasure. And when endeavouring in pleasure, never engage in behaviour that can be leveraged against you.
5. Butter others up. Although you shouldn’t be susceptible to flattery and praise, you should dispense it as much as possible. By doing this, you’ll give people face. Use people’s work titles when possible, too. That’s another way to give people face. Don’t introduce Thomas Chen, or Mr. Chen, but Vice-President Chen.
6. Strive to find honest Chinese contacts. China, remember, represents a low-trust culture. Formal contracts and promises don’t mean what they do in the West, and the legal system is something you want to avoid. It’s always been like this, and always will be, but find people you can trust – and reward them for their honesty and loyalty – and you will minimize risk and headache. Moreover, don’t judge Chinese contacts on their English ability. Westerners tend to strike up relationships with employees who have the best English skills, even though these individuals may not be as competent or knowledgeable as others unable to express themselves fluently. The upshot is that Westerners often wind up with bad advice and/or an only marginally capable staff.
7. Don’t be mesmerized (or intimidated) by the size of the Chinese market. It’s not a single, behemoth entity, but one divided into regions, provinces, municipalities, and so on. If you’re going to establish a joint-venture in Province A, that doesn’t mean you’ll have access to the market in Province B. Many Westerners drool at the thought of a market of 1.3 billion. No drooling, please.
8. Learn to think like they do. This is key. Those unaccustomed to the Chinese world will find themselves in situations they could never have imagined. The idea is to come to understand the national culture and psyche so well that those situations are foreseeable. You should go from ‘Nothing makes any sense,’ to ‘Ah, I see the pattern now,’ to ‘We must do X to prevent Y.’ In many instances, dealing with Chinese problems requires employing Chinese solutions. Your objective should be to learn how to do that, to get to where you see the Western solution and the Chinese one, and know which one to apply.
There is a rather crude, but rather fitting, anecdote about expatriates in China. So the story goes, they each have two buckets, and when one is full, they leave. One bucket is for the crap they put up with; the other for the profit they make. If you stop projecting, and start observing, while utilizing the aforesaid advice, you should be able to fill the correct bucket.
Never mind what you’ve read or heard; there is nothing mysterious or inscrutable about the Chinese or their society. Participate, observe, and study, and you can figure it out. It just takes a bit of time. True, you can never change China, but unlike the tragic figures in Jonathan Spence’s To Change China and Tim Clissold’s Mr. China, you are now aware of that. You can still benefit from China, however. It’s likely to represent an opportunity – to the vigilant and the informed – for many years.
Troy Parfitt is the author of Why China Will Never Rule the World