Given centuries of turmoil in China, today’s leaders will do everything in their power to preserve stability. Whenever I have doubts about a potential Chinese policy shift, I examine the options through the stability lens. It has worked like a charm.

Stephen S. Roach tells us this in an article published on Project Syndicate. The economic history of China tells us the same story. Each dynasty was concerned with maintaining the status quo of the Middle Kingdom, preventing popular uprising and ensuring everyone had food to eat. Today, this same model has been analyzed by the intercultural field as a root value that informs behavior. George Renwick’s stability model illustrates the origins of this deeply embedded Chinese norm.

To avoid scarcity of resources and starvation, stability becomes the most important value.

With survival of the family unit as the most important value, maintaining stability takes shape in a number of ways, and everyone has a supporting role. The cultivation of rice, China’s staple, has historically been an especially labor-intensive form of agriculture that required an entire family’s participation.

The most successful path to providing one’s family with stability evolved around a good education, obtaining a good position of employment alongside perpetual reinforcement of face or honor for one’s family. This leads to a greater network of influential connections, otherwise known as guanxi. Many people who have done business in China know the word guanxi and how important it is to have relationships with people who can help you or your family in times of challenge and need.

In light of China’s economic and developmental trajectory, the central party continues to focus on stability and the momentum of its “harmonious” rise.

…Those at the top no longer want to concede anything when it comes to stability. By addressing economic instability through pro-consumption rebalancing, and political instability by removing Bo [Xilai], stability has gone from a risk factor to an ironclad commitment.

Will this relentless approach towards stability continue to define the motivation behind China political and economic behavior in the 21st century? Will this sociocultural and political value change considering the growing appetite for consumerism and material wealth, which is connected to the all important Chinese notion of status? This also makes me wonder how to conflate the Chinese penchant for gambling with stability. I wonder how many people use credit cards in China in the way they are often used (excessively) in the US.

Please share your thoughts on this matter. How do you envision China’s path to stable economic growth vis-a-vis its modern cultural drivers?

Sean
RW3 CultureWizard

恭喜发财! Happy Chinese New Year, or literally, Congratulations and be prosperous!

Check out the Baidu.com homepage (China’s biggest search engine) for an interactive dragon animation.

QUIZ: which famous Chinese animal is not part of the zodiac? And, why do you think so? Leave your answer in the comments area below!

RW3 CultureWizard

Whether you’re an expatriate or business traveler, part of a global team with members in China or working with Chinese customers, the following culture tips will prove essential to your success:

+ Relationships: Close and trusted relationships are fundamental elements of Chinese society, and in fact, China has its own brand of relationships, called guanxi. Guanxi can also be expressed as a complex network of relationshps that is core to Chinese life (see this blog post on the topic for more background on guanxi).

+ Communication: The Chinese can be quite direct (even blunt) if there is an already established relationship and if the status of the speaker is higher. On the other hand, Chinese can also be quite indirect in their communication. They often imbed a surface exchange with alternate meaning to help maintain harmony between parties and avoid direct conflict or the potential loss of face.

+ Negotiation: Chinese negotiators may respond to a question with another question. This allows them time to think carefully about their response and spares them the possibility of saying something that might offend the other side. In general, vague responses are given frequently, since they help retain group harmony.

+ Risk Tolerance: The best way to get changes accepted and implemented is to provide information concerning previous successes and the benefits that can be achieved for the organization. In more traditional companies, the fear of exposure, and the potential of embarrassment that accompany failure, continues to bring about aversion to risk and the need to thoroughly examine potential negative implications.

With younger generations and those who have been educated outside of China, you will interact with people who are not fatalistic, but rather believe that China’s future (as well as their own) is boundless and full of potential.

However, you may often hear the phrase “Mei banfa“. Molded by years of communism, many Chinese who work in government offices and other highly bureaucratic entities may believe their destiny is not within their control. This attitude is best expressed by, “you try your best, but if things don’t work out the way you wish, what can you do?” – or “mei banfa“.

- from RW3′s CultureWizard™ Country Profiles

RW3 CultureWizard

Human Resource management in China is an ever-present challenge to multinational organizations and an article on the Knowledge@Australian School of Business website addresses a range of pressing challenges in a thorough and thoughtful way. These challenges, aside from being ostentatious in the business media, are emphasized by research showing that Chinese employees at Chinese companies were happier than those at foreign companies. Here’s why:

First, expectations of workers in multinationals are often much higher than in Chinese companies, so satisfying them becomes problematic even with strong human-resources practices…Second, Chinese-owned companies are typically more attuned to the culture of their workers and have fewer rules than foreign businesses. Third, foreign managers face language barriers and are typically less accessible outside work hours than Chinese bosses.

Despite all this, Roger Wolfe, chairman of the China-Australia Chamber of Commerce in Beijing, says,

Many skilled Chinese workers want to join…foreign companies to gain exposure to new skills and, in some cases, pursue postings overseas. Multinationals must get a number of factors right if they hope to prosper in China: a robust screening and selection process, clear job descriptions and definition of roles, ongoing training programs, a commitment to staff development, annual performance appraisals and feedback and succession plans to ensure all jobs are eventually ‘localised’.

So many of these factors are closely related to Chinese culture and the implications of major values that prove to be quite different from the usual HR tactics in Australia, US, UK and other Western countries.

For example, how does a foreign company recruit and hire in China? An understanding of guanxi and the importance of personal contacts in China is a good place to start. Advertising via word of mouth is one tactic the article encourages. A personal recommendation or reference is considered a valuable channel to quality candidates versus collecting a resume or CV from a pool of unknowns. The standard Western HR approach (using measurable, technical criteria along with a meritocratic philosophy) may not be the most effective way to find new employees. For even more insight into the particulars of recruiting in China, read the MRI Group’s 2011 Greater China Talent Environment Index.

How can foreign companies appeal to potential Chinese employees? Those who fail to acknowledge the paternal view Chinese companies have of their employers will not attract top candidates. Most Chinese expect the company to play a role in all areas of work and life. “In a hierarchical workplace, Western managers are often treated deferentially,” says Alan Morrell of Austrade Beijing. “But what goes with that are a set of expectations and mindsets about how a manager is supposed to behave and the leadership that you are supposed to provide.”

Managers accustomed to giving their teams autonomy will have to change their approach in China. Employees assume leaders will provide business goals, thorough training and precise instruction before they execute tasks. This is how Chinese staff set themselves up for success, and it requires a lot of background and peripheral information that an American would likely skip or gloss over.

The contemporary Chinese world view is also an important factor when considering the cultural approach to doing business in China.

Chinese employees are strongly nationalistic and justifiably proud of their country and its new-found strength in international markets. Therefore, Westerners must tread carefully when introducing new strategic and people-management approaches. Wolfe says ‘To directly challenge the Chinese way of doing business is a recipe for failure.’ Many Western managers entering China as part of a joint-venture deal make the mistake of trying to force their culture, values and business practices on employees, he says. ‘The key to success is listening and learning how business is typically operated in China, defining opportunities for improvement with the Chinese workforce, then practising effective change-management with employees.’

How does a company keep the momentum or popularity of a particularly foreign brand alive without bringing along its corporate culture? The plan for China must be carefully calculated, taking into account the needs of a Chinese workforce along with perceptions of working for a non-Chinese company.

The prescriptive article provides a sound plan for acquiring and keeping talent for foreign companies in China. The intercultural challenges of operating in China as well as in many parts of Asia can be costly without a deep understanding and appreciation of Chinese business, which companies can build through proper training and preparation.

If you have experience, what are the most important lessons you’ve learned about HR in China? What do you find most effective in preparing your workforce and leadership for business in China?

Sean

RW3 CultureWizard

A blogger in China uncovered a phony Apple Store in Kunming, China, the capital of Yunnan province in Southwestern China. It is neither an official re-seller nor a true Apple property, although the owners have gone to great lengths to mimic the style and feeling of typical Apple Stores.

Forbes.com picked up on this story and published some commentary.

The most interesting facet of this story is that both sources claim the employees of the store believe they work for Apple and Steve Jobs. I’m wondering if the employees are aware that they work for a store that has no connection to Apple other than the products they’re selling (authentic or not). For the employees to openly admit that they don’t work for Apple when the store is trying so hard to appear genuine would promote disharmony and would cause a loss of face, two things Chinese culture generally prohibits.

This also makes me think of the employment market in China and what attracts young Chinese to foreign companies. From both a cultural and generational perspective, I’d suspect innovative Western companies top the list. Do they? Read my related post on the employment market in China for more insight.

The demand for products with Western brands has had a robust consumer market for so long in China that fakes abound in places where the real thing doesn’t reach. What better place than a second or third-tier Chinese city? I wonder how this store’s management recruited it’s retail representatives. In any case, intellectual property as a concept does not fly so high in China.

Thoughts?

Sean

RW3 CultureWizard

Kai Falkenberg, Editorial Counsel and blogger at Forbes, writes about how she completed RW3′s WorkingWith China course on CultureWizard to prepare for her first trip to China where she’ll be attending the 2011 Stellar International Women’s Leadership conference.

Falkenberg points out how helpful the WorkingWith China course was and how cultural understanding will play an important role in the success of the conference itself.

Read her article on the strategies for success she learned from the e-Learning course.

Falkenberg writes:

I learned that I should expect more inference, indirectness and subtleties in conversations. The flow of information may not be linear so active listening is more critical. And to preserve “face”, its important to avoid openly criticizing or correcting others. When confrontation is necessary, I learned, using an trusted intermediary is preferred.

WorkingWith China provides practical advice for professionals in any field on being effective with colleagues, customers and virtually anyone you may interact with in China.

For more information on the WorkingWith series of country-specific e-Learning courses, and the other countries available in addition to China, please write us at info@rw-3.com.

RW3 CultureWizard

“Hao Ge (pronounced How Guh) is perhaps China’s most unlikely pop star: he is Nigerian, and he sings in Mandarin,” goes the singer’s article in the New York Times.

Emmanuel Uweche is his real name, and he gained popularity through China’s version of the TV show “American Idol”. He sings many classic Chinese songs, but infuses them with R&B, soul and other genres, which may be the key to his success. Listen to him sing in the video below.

The article goes on to draw a connection to China’s growing ties to and investment in Africa:

Some music industry experts in China credit part of his fame to the close economic and cultural ties — including friendship and exchange programs and other joint ventures — that have long existed between China and some African countries.

‘This is not just about Hao Ge,’ said Long Hu, 38, a music producer and talent scout…’It’s about China and Africa.’

This is an intercultural success story through and through. Do you know of any other unlikely star’s who have successfully managed to adapt to a new culture while finding celebrity?

Sean

RW3 CultureWizard

At first glance, I must admit, I was appalled by what I was about to read: the idea that McDonald’s, throughout Hong Kong, had gotten into the near $1.4 billion a year wedding game according to the New York Times (there are also McWeddings in mainland China). The slow foodie in me, the environmentalist, the lover of tradition…all cringed. Good Heavens, just what the world needs, unhealthy, fast-food weddings, complete with saturated fat, sodium and Styrofoam!

But then, after digging deeper, all my eco-ethnic-epicurean snobbery went out the window. The typical Chinese wedding – especially for the working class and the impoverished, is a pressure-laden and often financially crippling ordeal. According to the article, the average Hong Kong couple spends $29,200 on their wedding, a taxing sum given that the average monthly income in HK is only about $2,250. And then there are the traditions, viewed as so burdensome by many young Chinese that their wedding becomes a joyless, perfunctory, familial and societal obligation that leaves them with a hefty debt and little in the way of fond memories.

Enter McDonald’s! Who would have thought fast food would be the great social equalizer – for weddings!? (Actually, that’s exactly what the fast food companies are thinking.) For just under $1,300, a McWedding (a term coined by McDonald’s) includes food, drink and cake for 50 people, and, more interestingly, provides a service that falls so outside the cultural norm that it sidesteps many of the familial and societal pressures and obligations that swaddle a young couple with debt and resentment.

So culture maven, what think you? How does this further change the youth culture in China? Is this a solution to a problem, or, given the unhealthy nature and environmental impact of fast food, just creating a new problem altogether? Does it eschew the issue that for many cultures, the expensive, pressure-inducing modern wedding needs to be entirely re-examined?

Adam

RW3 CultureWizard

Illustration by Alex Gross

Fast Company’s spread on China’s plentitude of social networking sites designed in the image of Facebook is a foray into the culture of China’s online denizens born in the 1980′s and 1990′s.

Because Facebook is prohibited by the Great Firewall of China, dozens of sites have taken a share of the social media market over the past few years. The article contains some truly cultural insights, which I’ve posted below.

Liu Neng, a sociologist at Peking University, says that [the young] generation has come to see social networks as ‘a place of escape. Online, they find a sense of security and a sense of social worthiness. It’s a place where they can derive their own youth culture. These are things they cannot get from their real lives, where they feel pressure.’

…In a society where the collective has long been emphasized over the individual, first thanks to Confucian values and then because of communism, these sites have created fundamentally new platforms for self-expression. They allow for nonconformity and for opportunities to speak freely that would be unusual, if not impossible, offline. In fact, these platforms might even be the basis for a new culture. ‘A good culture is about equality, acceptance, and affection,’ says Han Taiyang, 19, a psychology major at Tsinghua University who uses Renren constantly. ‘Traditional thinking restrains one’s fundamental personality. One must escape.’

This tells us individuality is a new value youth culture is embracing more than ever before. This also alludes to important implications for the commercial applications of social media sites:

…According to Netpop Research in San Francisco, Chinese Internet users are twice as conversational as American users; in other words, they’re twice as likely to post to online forums, chat in chat rooms, or publish blogs. And to the joy of advertisers and marketers, social media is twice as likely to influence Chinese buying decisions as American ones, which explains why brands such as BMW, Estée Lauder, and Lay’s have flocked to China’s social networks.

Because so many social sites are nearly identical copies of their predecessors, the concept of intellectual property in China is an important theme of the article. Wang Xing, founder of one of China’s most successful social media sites – Renren, echoes the view that in a very group-oriented society, copying and re-producing ideas is not seen as stealing, but rather supporting the community through improvement:

When asked how [Wang Xing] could be so comfortable with copying, he says he has nothing to say about intellectual-property rights. In fact, many Chinese have remarkably lax views on IP. Copying usually isn’t seen as wrong as long as you’re making something better or cheaper.

This is a powerful case that illustrates a culturally-based view on IP. It reminds me of the stories I’ve heard in chatting with other intercultural consultants. During tests and examination, Chinese students will often whisper their thoughts on the correct answers (otherwise known as cheating in the West). When the Western instructor intervenes, the candid response of the students depicts their strong desire to help their teammates – not to compete with them.

Furthermore, ideas on the rule of law are commonly expressed by Chinese youth where they compare it to law in the West: “In the West, law is like an .exe file. In China, law is like a .txt file.”

Did you get that? “In other words, in the West, the law works. In China, it exists, but doesn’t operate…” according to the article. The loose enforcement of laws in China speaks to the more case-by-case approach most Chinese take to rules.

What else do these websites tell you about the culture of China’s future middle class? How can this cultural knowledge impact your decision to do business in China or with Chinese colleagues?

Sean

RW3 CultureWizard

In China, many US companies have complained about the favoritism, cronyism or otherwise preferential system they encounter doing business in China. A recent BBC article highlights the complaint: “Inconsistent interpretation of regulations, bureaucracy, and a lack of transparency all make it hard to do business here.”

According to the American Chamber of Commerce in Shanghai, the main grievances are:

1) Intellectual Property theft
2) Regulators prefer local companies
3) Regulations not transparent
4) Government contracts awarded to Chinese rivals

However, to the Chinese, is this interpreted as favoritism?

A particularist approach would best describe the inconsistent applicability of rules to businesspeople in China. In other words, actions and behaviors are based on particular cases, and oftentimes the depth of a relationship, based on longstanding trust and reciprocation, may trump the prospect of starting a new relationship, for example, with a US company. A conflict with the more universal approach in the West may best explain the complaints we see about favoritism. What is behind this particularism? Guanxi.

CultureWizard’s Country Profiles tells us that guanxi is one of the most powerful forces in Chinese culture. Although the direct translation of guanxi is “relationships,” the concept is much richer and more encompassing, incorporating the idea of a complex network of individuals and families with whom one is networked.

Guanxi expresses the relationship of one person to another. The term also includes the sense of commitment and obligation, built over time by the reciprocation of social exchanges and favors. People who have guanxi with another are quick to act on that person’s behalf, do favors for each other, and, depending on the depth of the relationship, support each other by doing anything necessary for the other party and reciprocating when the need arises.

Guanxi is built and deepened over time and carries with it a profound sense of responsibility. On one level, it addresses the need to reciprocate and, on a deeper level, the need to anticipate the other’s needs.

Understanding the role of guanxi in business is essential for building fruitful relationships. However, the specific questions of how, when, where, and with whom to build guanxi can vary greatly from location to location, and industry to industry. Government employees require different treatment than business people. There are also variances based on age, personality, and education, to name a few. In short, there are no formulas, and there are no guarantees. While many foreign companies are hedging their bets on future growth of the Chinese economy, wouldn’t it behoove them to build this kind of knowledge to avoid losing opportunities due to a lack of cultural competence?

In a way, the Western business community is looking for the Chinese to adopt a system foreign to Chinese culture, negating certain aspects deeply embedded in the way Chinese approach business.

Considering the role of guanxi, do you see a connection to the aforementioned grievances? While protectionism may play also part, how does an awareness of culture (and the Chinese perspective) change your thoughts?

Sean

RW3 CultureWizard

New York Times economics columnist David Leonhardt wrote a massive (10,000 word) article titled “In China, Cultivating the Urge to Splurge”. Truth be told, it was a hard read that might strike all but the most devout China expert and enthusiast as a bit bloated. Nevertheless, the overall gist of the article was interesting – an examination of the difficulties that lay ahead for China as the country inevitably transforms from an industrial economy to a consumer economy. The problem being for China, that their capacity to produce goods now exceeds the world’s ability to consume those goods and that it’s time for China to consume more of the goods they themselves create in addition to foreign products.

For the rest of the world, the Chinese consumer is one of the best hopes for future economic growth. In the years ahead, when the United States, Europe and Japan will have no choice but to slow their spending and pay off their debts, China could pick up the slack. Millions of Americans — yes, millions — could end up with jobs that exist, at least in part, to design, make or sell goods and services to China. This possibility helps explain why Democrats, Republicans, economists, business consultants, corporate executives and labor leaders all devote so much time to urging China to consume more.

But there’s a cultural issue afoot: while young Chinese tend to be very tech savvy and spend a great deal of time on the internet, middle-aged and elderly Chinese believe strongly in saving money for large scale purchases, e.g. university education for children and home purchases, than on buying the latest gadget from Apple. In fact, as exemplified in a series of images I found just wonderful, many Chinese view some of the new super-consumer centers, like IKEA’s 460,000 square foot Beijing superstore, as destinations better suited for an interesting outing than actual shopping.

Shopping, or napping? Lars Tunbjork

For Chinese, a new way of consuming. Lars Tunbjork

So, savvy business traveler with ties to China, my question is: From your personal experience, how can non-Chinese companies develop products that will appeal to cultures so distinct and diverse? How do you motivate Chinese individuals to shop? What do you think about China’s likelihood of transforming from a production economy to a consumer one?

Your China Blog, which covers intercultural issues in China, posted on Chinese women’s expectations of dating, serious relationships and marriage.

Several young men in China told us that the girls they courted would, before even agreeing to a date, inquire about their means and intentions of purchasing a flat.

According to the blog, many young women agreed that this form of stability, directly connected to the purchase of an apartment or house, was a critical prerequisite to considering a relationship. Chinese culture is founded on a strong motivation to maintain harmony and stability, and housing is a key ingredient. Of course, there are a few responses that were unconventionally missing the expectation of a flat, alluding to a cultural shift as China emerges as the second largest economy in the world.

Conversely, the typical European response is that love, loyalty and a strong personal connection are the most important requirements for starting a relationship. According to the respondents, there are no financial commitments required. Of course, these values come from the resource rich environment in which European culture has evolved. Chinese culture has been informed by a more challenging environment, where housing is not taken for granted, thus leading to a discussion about the different trajectories of each region’s economic histories and their influence on culture.

Watch the video below from Your China Blog. What strikes you as uniquely cultural about the individual responses?

Grayson

RW3 CultureWizard

In China, according to the CNN video above, companies hire Caucasians to pose as employees or even business partners, which effectively bolster the “face” or reputation of the company. In the video, one man posed as an Italian jeweler for a Chinese jewelry company producing pieces inspired by Italian design, which in the eyes of the Chinese customers made their products more authentic. However, the man was in actuality an American actor. In another case, a young Caucasian male was hired to sit in an office that faced the street to visibly show passersby the company had people from the West working there.

The employment of Westerners in this way is less surprising considering the importance of face in Chinese culture. How does this strike you as an approach to the marketplace in China?

Is this way of marketing and doing business unlike advertising of the 21st century where illusion and exaggeration play a key role?

Sean

RW3 CultureWizard

Let’s take a look at a New York Times article on inheritance planning in Asia, and more specifically in China. According to the article, many of the “modern first generation of wealthy Asians” are interested in estate planning for their children.

William Lexmond, a managing director with UBS in Singapore, said that because family values were stronger in Asia, high-net-worth individuals between 30 and 40 years old — those with at least $1 million in investable assets — were more likely to do estate planning than their Western counterparts ‘because they feel they have the obligation to do so.’

Why is this obligation felt so strongly? Below is the Chinese character for family, which can also mean home. The character itself, etymologically, represents a pig under a roof, symbolizing the importance of avoiding scarcity as the most important function of family. The very center of Chinese life is family, and each person within a family has a specific role, of which the objective is to maintain their well-being. In most cases, there is a great sense of mutual dependence across members of a family. So, the idea of inheritance and estate planning is amenable to the Chinese ethos.

The Chinese Character for family or jiā.

‘Rather than to rely on someone else, i.e., the state, to take care of your family, there is more of a desire to make sure something is set aside,’ [Lexmond] said. ‘It’s more of a self-help type situation to provide some support.’

Lexmond underscores the centrality of maintaining stability for the family, even after one passes away. The article also mentions the relative sophistication of inheritance planning in Asia because of the stronger demand for the service. What is your take on the role of the family in China and the measures taken after a member passes away? It would be interesting to know if the Asian finance industry in general would benefit from an awareness of these aspects of culture, from which more attractive products could be created and marketed.

Sean

RW3 CultureWizard

Asia Business Media, a blog that focuses on B2B media and business information in Asia, posted on an interesting talk by James McGregor earlier this week at the US Chamber of Commerce in Hong Kong. As a media professional and an American expatriate in China, he offered his thoughts on changing attitudes that the Chinese have never been known for in the past.

Beijing

According to the blog, “[McGregor] believes that the arrogance that was once a less-than-appealing feature of U.S. businesses abroad has been adopted by the Chinese at an alarming rate.” These attitudes represent a smaller, yet powerful portion of the country. Oftentimes, culture is influenced by entities of power, e.g. industry and media, so the implications of a more arrogant sphere of business may gradually prove to be an influential force in popular, mass Chinese culture.

Among other observations, McGregor added that Chinese officials are increasingly implementing policies to favor Chinese businesses over foreign businesses, and that the government is encouraging “indigenous innovation.” The competition for market share will be increasingly important for indigenous organizations in China, but are these observations a foreshadow of Chinese hegemony? How can cultural awareness help us understand Chinese attitudes towards the world, and towards globalization?

Click here to read more.

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