China, the Complex

After serving as a professor at Peking University and on the board of a Chinese merchant bank, American executives often ask me, “What are the three most important things I need to know to do business in China?”  I usually tell them this advice 1) Go spend a lot of time out there.  2) repeat #1, and 3) repeat #2.    In this age of shortcuts and “get rich quick” schemes, the question doesn’t surprise me, but my answer to them often surprises them.   I tell them this because it’s the truth.  For a country as large as China, as varied, and as complex, there are no quick answers, no summaries that will capture the nature of China and do it justice.   Ask ten Chinese people the definition of communism, and you will likely get ten different answers.  

 

Most if not all of the bestsellers currently on the marketplace about China are exaggerated because exaggerations sell.   A book that tells you that China is too complex to distill into a theme will not sell.   Even if a handbook about China was possible to write, by the time it hits the stands, it will be outdated because the rules of engagement there are constantly changing and rapidly so.  

 

Moreover, most of the people who write books on China, purportedly claim they are experts because they fly in and out of there on business trips and mistakenly believe that their surface observations are accurate.  For instance, Thomas Friedman wrote that China’s restaurants had the best customer service.  Well, the running joke amongst ex-pats living there was “Really?  Where are these restaurants?   We’d like to get in on this secret!”  I, also, would love to know because at many of the restaurants I’ve been to there, the waitresses don’t even know to bring individual bowls to a table of guests who ordered soup.   Since in the Chinese culture it is common to share food as sign of closeness, they expected all the guests at the table to eat out of the same soup bowl.   Without understanding this mentality, a Westerner can be easily frustrated by their seeming lack of attentiveness and common sense. 

 

Companies looking to do business in China must understand that China is not one giant market.   Many of the cities are vastly different from one another in wealth, demographics, and taste.   Luxury products that sell in Shanghai and Beijing will probably go bust in Hainan or Yunnan and vice versa.   Any company that doesn’t understand each market individually with different marketing strategies will easily go bankrupt.   

 

So how long should one stay in China to gain a decent understanding?   I would say that the minimum is three years, and longer if one doesn’t speak the language.  Many words in Chinese simply do not have direct English translations, so without understanding the nuances implied in the language, much insight about the culture can be lost.  

 

Most Americans do not have the time or the willingness to immerse themselves in China like that.  Obviously that does not mean doing business there is impossible.  Many companies have succeeded, but it is usually by hiring native Chinese or who have been living in China for very long stretches.   You need someone with connective tissue to the Chinese, and that only comes with time.   What do I mean by that?   Well for example, a  common phenomenon is that Chinese men over 40 tend to have many wives and mistresses, even the poor ones.   Why is this common?  To an outsider, one may simply interpret such behavior as morally corrupt or especially licentious or both.   However, someone who has lived there can understand that these men have become schizophrenic out of necessity.  During the Cultural Revolution, most men didn’t know who to trust.  One was forced to have different moral values than what was passed down through the generations in order to survive.  As a result, many developed multiple personalities in order to cope with all the internal value conflicts.   In public, for example, a government official may have to proclaim he is not religious because the State outlawed it, but in private, he may feel a burning desire to believe that God exists.  A lifetime of such conflicts thus manifested in the need to love multiple women since each man had essentially become multiple men inside. 

 

Bottom line, China is too complex to explain succinctly just as there is really no such thing as an average American.

4 Responses to "China, the Complex"

  1. Anonymous   May 12, 2008 at 3:39 pm

    hopefully this will be a forum for shedding light on some of the complexities – and local stories of this fast changing country. What you say sounds like good practice for any market – know your customer and understand how to market the product.

  2. Guest   May 14, 2008 at 3:06 am

    I agree with your view that one needs to know more about the market before you do business there. But I disagree with some points you illustrated, especially the examples you gave. Yes, the customer service in many restaurants can not be described as excellent. But you do receive excellent service in high-end restaurants and people do not eat soup from the same bowl now. Chinese men at whatever age are only allowed to marry one wife legally. Sometimes, rich and/or powerful men do have mistresses as it happened everywhere in the world and that is deemed morally wrong by most Chinese people. Many Chinese do not have faith in God not because they claim so to protect themselves but because they were told there exists no God since they were young kids and this concept was entrenched in their minds. The cultural revolution may undermined the trust between people, but it does not necessarilly lead to the love of multiple women. These examples do reflect the shallow observation pointed out in the article.

  3. Anonymous   May 14, 2008 at 11:41 pm

    The author is such a shame as a professor.

  4. guest   May 16, 2008 at 11:39 pm

    You wrote well and seem to put ur finger on some of the issues that atefacing China today. But I wish u, with all ur expertise, have had offered some more useful tips in response to American execs’ questions. Ur descriptions on Chinese males are not exactly accurate and, I’m afraid, may entice foreign "devils" to prey on Chinese women sextually.