Adaptation vs Innovation? Maybe it’s the wrong question.

One of the critiques of China is that it doesn’t have a creative, innovative domestic business environment. But two recent articles made me question whether that is really necessary, or even advisable, for China or other countries trying to play catch up to the US. (I don’t have room to discuss the advantages of a dictatorial state directing the economy in this piece.)

First is an article about WeChat, a mobile chat app in China that now boasts 980 million global users. What makes it unique is that it was first an adaptation of chat apps on iPhone but has since evolved into it’s own platform that allows users to download and run apps within the WeChat app itself. It’s amazingly popular and successful with a ton of advantages, not the least of which is that it has basically created it’s own ecosystem that users don’t have to leave to lead a digital life.The platform allows for smaller apps to run simultaneously, so, for example, it allows for payment to retail and/or individual users by letting individuals to split a restaurant tab 4 ways via instant transfers and then pay the retailer. You can hail a ride, read the news, posts to social media, edit photos, pay bills, and so much more all in the same app.

The WeChat platform is THE business platform for China-related business today. You cannot deal with Mainland China in any meaningful way without WeChat. Outside of China, other than with PRC expats, it is slowing expanding, incorporating Hong Kong and Taiwan into social circles that China’s other government-sponsored soft power resources haven’t otherwise been able to do.

Basically, you have to have WeChat to interact with (PRC) Chinese people. The CCP has taken notice of that and structured laws to incorporate anyone that uses the app and censors any conversation that it deems problematic via both corporate liability requirements as well as government censors. Expect both control of and use to expand as digital ID cards on WeChat are coming soon.

Second, is a WSJ article about CRISPR gene splicing. It was invented and pioneered in the US. But due to regulations in the West, actual testing has been taken over by China. 85 patients so far in China since 2016 vs 0 in the US and 0 in the EU. For me the highlights of the article are that China is both equal to the US in ability to perform this type of cutting edge work AND that it has no qualms about moving forward with trials. There are 1.5 billion Chinese (“enough and to spare” to paraphrase Chinese friends of mine) and they all want a better life–but a different better than the US. The US is worried about equality, information (patients rights), legal and health consequences, processes to make sure that it’s as safe as possible in the long term. For example, regulatory hurdles have still not been overcome after years of dedicated work to meet FDA demands, while Chinese doctors apparently received approval after a single Power Point presentation. The Chinese government is specifically oriented to passing the US in high-tech within the next 20 years. And they have little to no experience with the legal issues surrounding many advanced processes or human rights. In fact, they don’t really care about legal or HR issues–and at this point that inattention is giving them a huge advantage moving forward.

For decades now my fear has been that China will eventually take over the world just by shear numbers and by dint of the way those billions are accustom to doing business. With the financial and political backing of the State and the lack of regulations or Human Rights concerns, the opportunities for China to dominate are quite literally endless.

On a related note, Chinese money is affecting the Indian Tech industry as well. It’s happing in Cambodia too–Chinese money is overwhelming both local competitors as well as the local government institutions. It’s not just that the Chinese are outbidding other rivals, but that with the backing of the Chinese state they are investing such massive amounts directly, or indirectly via related projects, that they are taking over entire industries—mostly strategic infrastructure projects that benefit both the host country and China. Some of these projects are leaving host governments with limited resources to pay back Chinese investment loans (Sri Lanka) or a Chinese dominated sector that then becomes a security issue (Nepal, Pakistan).

National Security and Chinese Businesses

National security fears.

With two large Chinese projects being halted or terminate in the US this last month (ANT and Huawei), the specter of Chinese state sponsored corporate espionage was center stage. US and Chinese analysts are all pointing to a “trust gap” in the US with Chinese investors. Specifically, the fear is that “decisions are not being made by Chinese businessmen in China, but rather government interests in Beijing.”

China shouldn’t be surprised about politics influencing business and trade when just about everything in China, from rap music to computer hacking, can be officially considered political activities. The investment and business environments in China are equally controlled by the State and participation is often highly political for both domestic and international corporations.

Additionally, he US has legitimate fears about CCP influence in large Chinese Tech companies: e.g. the 5 year and long-term plans to dominate global tech markets, a recent history of extensive corp espionage, “made in China 2025,” laws that force Chinese companies abroad to have CCP reps as board members, opaque corporate ownership laws, government involvement in erstwhile private Chinese companies, government sponsored hackers, tech companies linked to military (Huawei), etc.

The standard Chinese response is that the US either misunderstands the situation in China or that the innocent Chinese businesses are being used as political pawns to keep China down and the US on top. Specifically, the Chinese claim that that most investment money coming to the US is from entrepreneurs and corporations looking for legitimate business opportunities and that the US is simply a hegemon in decline or racist or both.

This fact that there is legitimate monies coming from China to the US is both true and misleading at the same time. Yes, most Chinese investors in any international businesses venture are entrepreneurs and likely have honest and even deeply capitalistic intentions. No doubt many of them want as little interference from either the US or Chinese government as possible as well. But that is defiantly not always the case for a significant percentage of Chinese entrepreneurs. Three specific caveats need to be made when discussing Chinese businessmen and business and their relations to various levels of government in China.

First, what is a private company in China?

You might think that private means just that, private: no public shares and no governmental investment or official ownership connections. And in the US you’re correct. But you’d be wrong to conclude that private in China means the same as it does in the US. There are a number of reasons why this is so. To begin with China has only had aspects of a market economy for less than 40 years. This means that until the early 00s almost all corporations either came from former SOE’s, TVE’s, the military, or governments. Most private companies are still tightly connected to government or military at some level. And while many private companies do not have overt connections to the state, most are connected personally, professionally (as suppliers, partner-companies, buyers, borrowers from or lenders to) to the various levels of government and as such have responsibilities to the state that would not be expected in the US. Indeed, in China more than 50% of a “private” company can be owned by government investors (individuals or agencies or their representatives) and still be considered private (Huang, 2008). Government connections and ownership are  especially common for any company from sensitive or priority industries (banking, finance, electronics, automotive, aerospace, communications, et al). Additionally, in China, these and many other industries are fiercely protected from foreign competition.

Second, Red Hats.

An astonishing percentage of Chinese entrepreneurs are also voluntary members of the CCP—as many as 70%! In China these party-member entrepreneurs are called Red Hats (红帽). Joining the CCP isn’t like joining a political party or registering to vote in the US. Joining the CCP means that you swear (even if it’s insincere and purely practical) allegiance to the CCP, denounce any religion, and pledge to support the Chinese state, among other promises. These Red Hats can be, and increasingly are, called on to fulfill their covenants outside of China–just last week HNA sponsored a meeting for the swearing in of Party member-employees across their offices in China. More on that below. Xi has recently called on all CCP members, specifically businessmen overseas, to represent the party and the state and stay loyal and true to their commitments to the party. What does that mean exactly?

Many of the Chinese that I’ve interviewed, as well as accounts I’ve read in academic publications (Huang, Pei, others), all point overwhelmingly to the fact that membership in the CCP provides access to government projects, loans, inside information, and to necessary and important individuals. Membership is a practical necessity in China—if you want to do business in China, you need to have access to the connections, officials, money, and whatnot that is part of doing business with the bureaucracy in a socialist state. Indeed, many conclude that corruption (political connections) are one of the major reasons for the growth and stability of the Chinese 40-year economic miracle. Without the social connections that party membership provides, non-Red Hat businessmen are eliminated from the limited opportunities that are provided via local governments and national 5-year plans.

This is capitalism as Chinese have known it for the past 40 years. And this understanding becomes important when going abroad because Chinese don’t automatically flip a switch and assume that everything in country X is going to fundamentally different than what they are used to—and when going to lesser developed countries many of their prior experiences in China are repeated. Like anyone, prior successful behaviors are repeated until they prove unsuccessful.

Third, “Follow the Money.”

While doing research on Chinese companies overseas, I had the ex-military, Red Hat founder of a Chinese tech company in Guangdong Province give me this piece of advice. If you want to know who is now and who will be soon making money, “look for the piles of money.” Meaning, look to government investments priorities, contracts, incentives, projects, plans, and sponsored industries for China’s economic leaders. The people that know where the government is spending money are now or soon will be rich/successful, he said. With some insider-information and the right connections “the money flows like water.” Though he complained that this hurt truly independent startups, he was also actively chasing government money (and was himself fantastically wealthy).

This doesn’t mean that all private contractors that work on Chinese government projects are “insiders” or CCP plants or even Red Hats. But most of them are at least well connected to the government AND are Party members.

Fourth, The United Front.

In the last year alone, governments in AUZ, NZ, the EU, andthe US (as well as a few African nations) have proposed laws against foreign influence in politics, focusing specifically on Overseas Chinese who have been accused of illegal influence in domestic political spheres. These cases have lead to high profile political resignations in AUZ and NZ. Chinese journalists may soon be required to register as foreign agents in the US too. Reading the details, these cases highlight how private citizens are supported by the CCP and encouraged to promote Chinese interests abroad (i.e. subvert domestic interests in favor of PRC positions).

These government-supported subversive activities are not just limited to political activities either. Student groups, “privately held” Chinese newspapers, businesses, academic journals, among many others are all areas where CCP influence is being promoted, encouraged, and where individuals that do not support the “correct positions are being threatened. One unique example is the fleets of private fishing vessels in the South Chinese sea that are paid to act as a de facto floating militia—purely private in ownership, but available for political/military activities and financially supported by the state. Competing businesses, with Taiwanese ownership or sympathies, are often blackballed (other Pro-Chinese businesses and individuals are encouraged to freeze them out of markets). Another example is the Confucian institutions that are slowing spreading to universities around the world.  On campuses students and professors are “encouraged” to support and research pro-PRC issues, and those that do not are ostracized, limited in access to funds or research opportunities in China, or are directly or indirectly (via their families back in China) threatened with other consequences for not being loyal to China. When the largest financial supporter of China-centered research on campus is the Confucian Institute, pressures to support specific positions carry significant weight.

Called The United Front, propaganda and influence activities (covert and otherwise) are all part of an overt official international campaign to unite overseas Chinese with the PRC. At the recent Global China Town Hall, I asked about the influence of Chinese politics limiting scholarship and/or individuals at universities in the US. The topic was immediately dismissed out of hand and my question was not discussed further. In private follow-up conversations with professors and students at multiple universities it is acknowledged as both real and a growing influence. Some universities have closed existing Confucian Institutes and others are denying the formation of new ones—but the money that backs these institutions is extremely hard to ignore.

Add to the culture of Red Hats entrepreneurs and the active United Front campaign the increasingly international electronic surveillance of the new social credit systems and you have a global 24/7 Orwellian network tracking calls, chats, friends, business and social and political activities, monies, and the locations of Chinese businessmen and their families and employees. How is Chinese business not political?

Certainly not all Chinese are part of a global CCP conspiracy and not all Chinese companies are actively participating in corporate espionage either. But many are active in supporting PRC positions out of a sense of both patriotism and personal opportunity (and maybe even a sense of self preservation as well). Many Chinese under 40 are increasingly nationalistic as well. The US and other countries are right to be wary of the fact that loyalty to the CCP is likely a practical if not personal priority of many Chinese that want to be successful and/or want return to China and continue in business or politics at some point.

Questions about how do deal with a Global China (in Hong Kong)

I love to listen to the witty and very knowledgable banter of Kaiser Kuo and Jeremy Goldkorn over at the Sinica Podcast on SupChina. I’ve been listening to these guys for years now—long before they started SupChina when it was still hosted at Pop-up Chinese (and also long enough to know that they are much more knowledgeable about China than their poor puns and re-reading of the week’s Caixin News on the Caixin-Sinica Business Podcast would suggest—yuck). These guys have an engaging rapport with one another, they are funny, extremely well educated, very experienced in China, and have GREAT guests and the best recommendations. They typically ask timely and provocative questions of their guests too. If you’re not subscribed to the Sinica Podcast from SupChina, then you are truly missing out. These guys and their podcasts really are a great China resource and my only complaint is that we don’t get enough of them. More, please! (No, I get nothing for shamelessly promoting them.)

But a couple of weeks ago I was stuck by the simple answers from a guest that seemed to be allowed without much follow up (except, of course, for Jeremy badgering the guest about how they were going to make money—we still don’t know). I couldn’t stop thinking about the conflict of interest presented and so I put my thoughts down in this short blog.

Listening to Gary Liu, the new Editor in Chief (EiC) of the South China Morning Post (SCMP), talk with the SupChina guys,  it’s clear that he’s pioneering a new path through the mire that is Hong Kong-China relations. But it’s also clear that there are some real unanswered questions in his presentation of journalistic objectivity, independence, and integrity at the SCMP.

Now I am not questioning the integrity of the paper, Mr. Liu, or any of the staff. But I am not sure I can comprehend his explanations about how the paper plans to navigate its complex relationships with China.

Granted, I’m neither a journalist nor do I have to manage cross-border (cross-customs?) relations. But I’ve interviewed scores of people that do and I’ve also worked in China with an office in Hong Kong (and Bangkok) for most of the last 25 years. My “China-sense” is up when I hear somewhat vague explanations of how to manage professional/governmental relations.

First, in terms of content that offends China, according to Mr. Liu there is an identified but undefined line that he explicitly said the paper wants to go up to but will not cross. He says they will not back down covering controversial content, but that there is certainly a line they are aware of. He states that this act of act of self-censorship (my term, not his) shows that the paper has both editorial independence and moral integrity. Come again? If the paper is willing to do, just to be polite, what it claims it will not do under duress, how is that being independent?

Further, how can anyone go right up to a line, if it’s not clearly defined? And, if there indeed is a content-specific line that someone else (the CCP) has defined for the paper, then the paper is explicitly not independent, right? The integrity in the editorial process that comes from this awkward position is, at best, limited to accepting fuzzy standards set outside of their own boardroom (and country?). In the Mainland, Hong Kong is widely considered to be the spoiled step-child that will eventually be taught a lesson. That they still publish on topics that Beijing doesn’t allow Mainland papers to cover doesn’t mean they are independent, just not yet reprimanded.

Second, the SCMP does not make a profit and doesn’t expect to any time soon (nor do they know exactly how they eventually will, if ever). All of their funding comes from their new owner, Alibaba, as does all of the physical hosting of their archives and content—which, by the way, has now been transferred 100% to the Alibaba cloud servers (in China).

For the moment, lets ignore related news from just this last year that will likely directly affect this relationship: Online editing of historical and academic archives by the CCP. Tracking of journalists and citizens inside and outside of China by the CCP. Kidnapping of journalists/booksellers by the CCP. The CCP’s United Front’s desire to “tell a new story” for China. Demands by Xi et al that Hong Kongese and other overseas Chinese are loyal to China. And, of course, the new Orwellian Sesame Credit program of the Chinese government, pioneered by Chinese companies, including Alibaba.

Back to the SMCPs cloud and money, or lack thereof. The purchase of and hosting of the SCMP by Alibaba means a couple of significant things. Despite what the EiC says, monetary control is editorial control. The SCMP is specifically controlled by Alibaba who is unapologetically influenced by and works tightly with the Communist Party and government in China to develop, ironically, systems to monitor the conversations and movements of Chinese citizens (which Hong Kong citizens are specifically considered to be). Chinese newspapers in Australia have been affected by China’s content control though they are not owned by Chinese companies (and are significantly further away than is Hong Kong). To think that this won’t be, at some point, a significant issue, is (imo) naive. While the EiC stated that as of yet, they have never been told what to write or not to write, there is a line that they will not cross and the paper is willing to commit it’s financial future to those that define that line, i.e. Ant Financial (Alibaba) and the CCP.

Within the context of the government’s desire to control media and rewrite history, that the SCMP archives is hosted in China, where it is also banned, should be a huge red-flag in the face of independence (pun intended).

Third, the new EiC said that he and the BOD have want want to “tell a different Chinese story.” This is almost a direct quote from Xi Jinping’s United Front plans; and un-ironically, Xi’s words were directly targeted at the CCP’s guiding of the media’s presentation of China and China-related issues outside of China. The perception of China outside of China is the specifically identified audience of the SCMP. What does it mean that the paper wants to tell a better Chinese story? According to Xi, they want to present the PRC specifically in a light that is not (as) negative and that is not (as) critical. In other words, a presentation that is not (as) deeply investigative, but is more positive of the CCP’s version of Chinese history, politics, and other social issues. Saying that the SCMP wants to tell a different Chinese story than what they were previously telling highlights the CCP’s desire to challenge any independent coverage of China outside of China. Further, the fact that new ownership, directly or indirectly, has made a break from the prior China story that was told in the SCMP strongly suggests that we will explicitly not be getting the same quality/style paper—there’s a New China Story in town, and it’s being authored by Xi and the CCP.

Let’s be honest, any agenda that is set by one’s own object of investigation is a conflict of interest. That the CCP is that subject and has its own explicit agenda for Chinese media outside of China means that the EiC is either not willing to publicly recognize the obvious conflict or worse—he believes it really doesn’t exist. It is folly to think that the SCMP can have Alibaba paying for the production of content, hosting all archives, presenting the same position as the CCP, agree to undefined content limitations, and still claim to be independent.

Finally, the EiC says that he’s committed to serving the paper’s Hong Kong base and the interests of Hong Kong. But what happens when that base and those interests are in direct conflict with the idea of telling a “better” China story (i.e. the PRC is not infringing on Hong Kong’s independence or violating in anyway the 1997 agreement)? Yes, they have indeed covered protests in the past, but next time there are demonstrations, and the PRC weighs in (either with words or bodies) how critical or inquisitive or exposing can the SCMP be? That the EiC doesn’t know what will happen if this occurs highlights both the conflict of interest as well as the questionable independence of the paper in the face of a conflict with China.

And this is the biggest concern I have: the EiC says that the BOD of the SCMP has not even prepared for a future “existential conflict” (when somebody from Alibaba, or higher up, calls and says that “xyz is over the line”). How can the SCMP be independent and truly have integrity but not have prepared for that specific call? If there is a chance that that call could come—don’t they have to already have an answer ready? When the SCMP is supposed to be defending, or at least being loyal to its Hong Kong base, a base that is regularly in direct conflict with the Chinese mainland, the absence of even a discussion of what position the paper will take shows a lack of commitment to both integrity and to Hong Kong.

Readings and other Conversations

Over the last month in Shenzhen not only have I been blessed to have a very cooperative and generous host company allow me to observe their daily work, but I’ve had the wonderful opportunity to interview another 15-20 individuals, foreign and Chinese, about their own personal experiences with Chinese Business Culture (中华企业文化). People have literally given me hours of their time and shared personal and professional insights that I never would have considered on my own.

I’ll share a couple of their insights from others, mingled with my own analysis.

On Govt. Chinese Engineer/Businessman, leading a publicly listed tech company.
You have to follow the money in China—and it’s all coming from the govt and being directed into specific places. The good part of this is that specific industry and sectors and regions that need help are targeted and develop faster then they otherwise would. The bad is that there are govt gatekeepers guarding the money (and making profit off of access) and that the there are limited funds in the economy for other developments. Uneven development, and over-interest in targeted sectors is the result. Corruption too.

On Chineseness. Taiwanese Businessman, working in a Chinese company (5+ years).
There is a certain cachet in being foreign in China—Taiwanese included. He can use his foreignness to get out of some difficult situations, but nothing like Westerners (occidentals) can. While he can get out some legal situations because it’s too much trouble for public employees to deal with a “foreigner,” at other times, especially in social situations (after hours work drinking activities) or informal business transactions (“gifts” to gain access) he is expected to be Chinese. Like a taxi drive told me yesterday, “You’re a foreigner, You just don’t get it.” I have a built in excuse for not participating in some activities. As a Taiwanese citizen of Chinese descent, he does not have the same degree of leeway.

On Tech. Ex-Chinese Military Engineer, leading a successful tech company.
Despite the fact that he’s spent his life in this company, he’s putting his money in foreign baskets—literally. He’s moved his family to the US and made sure that his investments and retirement are there too. He’s here to make money, but doesn’t expect this (the rapid growth of China) to last and is concerned about the instability and other issues here (pollution, corruption, censorship & control). He tells me that I don’t have any idea how deep the connections between the private sector and the military extend. Much of the tech industry in the country is originally “borrowed” from the West, improved and then re-copy righted (not new). But why it’s allowed, he says, is because it (“borrowing from the West) is supported by the govt so the tech can be sold back to the military via a vast network of related and intermediary companies.

On organizational culture and relationships. Chinese Educated Foreigner, working in a Chinese company (10+ years).
Rather than there being large differences in organizational structure here, this guy talked about how interpersonal relations color professional interactions here in significantly different ways. Ideas and methods for both dealing with relationships and problems are different—understanding what’s actually happening (vs what is being said) is the key to understanding Chinese corporate culture, he thinks. “Managers” are hired because they have connections and/or seniority, rather than professional skills. This works fine when they are in Chinese companies as the expectations are for them to “manage” relationships rather than “do” work. But foreign companies either don’t get the relationship management aspect of Chinese business or the need for “managers” to be hobnobbing with big-wigs more than creating spreadsheets. Conflict often ensues when expectations and reality do not align.

On Gender Roles. Foreign Professional Women, working in a Chinese company.
Chinese women’s’ social and professional roles in China are different from both Chinese men’s and Western women’s, even though Chinese women are now equally well educated and many have not taken time off for children (no career breaks). Even among women, the expectations for other women is different than what is expected of/for men. For example, she noted that Chinese women can be “cute” for much later in life than can a man—and that she doesn’t fit this ideal-type is noticeably off-putting to superiors. Dress and hobbies can be relatively less (relative to the West) mature for women without impacting their social status in a professional office. This extends to different standards for dress as well. While the white/blue dress shirt, slacks and leather belt/shoes/bag combo for men is almost mandatory, almost anything goes for women—from shorts, to mini-skirts, to prom dresses, to club-wear, to casual dresses—all are common office attire.

Two of my own thoughts

The fluidity of the Chinese individual amidst so much seeming chaos. People, traffic, calls, family, work, more people, constant WeChat conversations, and still more people makes business here seem to me to be more overwhelming and fast-paced than it was just a few years ago when I was here full time. The concentric focus of priorities (recognizing both where power/influence comes from and what can actually be controlled/accomplished) is emerging as a key to managing time, relationships/hierarchy, and responsibilities. Without the ability to actively ignore much of the chaos that surrounds individuals in China, I think that distraction and inefficiency would result.

Second, What are “Chinese values” today. This phrase is in the news almost daily. President XI mentions it all the time. Many think it’s the “cause” for Chinese business success (ironic since it was seen as the cause of China’s lack of economic success prior to the 80’s). It’s much easier, I think to list of what are not current Chinese values today than what are. If pressed, I can list off the traditional Confucian values of propriety, filial piety, thrift, patriarchy, and likely add in guanxi to manage external relations, as well as wuwie (or inaction) for dealing with conflict. But do those values resonate today? I’m seeing A LOT of change in current professional environments. How does conspicuous consumption fit into “Traditional Chinese Values?” How does the ubiquitous WeChat (distant and somewhat impersonal communications) mesh with the need for close interpersonal relationships? How has the population policies and increasingly western entertainment/professional environments affected the traditional family and persona roles?

If you want to comment, I’d love to hear from you—what do you think of Chinese Corporate Culture (中华企业文化)?

Reading Recommendations:
Since I’m here doing research I’ve had and increasing number of people ask me for book recommendations. I’m not always sure that what I’m reading is of much interest to others but in case it is, here is a list that I’ve started to put together after multiple requests over the last month. These are mostly books that I have remembered I really like or have used in my own research (as examples and/or sources).

Books about the Chinese Business Environment:
Capitalism with Chinese characteristics, Huang
Wealth into Power, Dickson
China’s Cooperative Capitalists, Dickson
Marketing Death, Chan
Capitalism without Democracy, Tsai
Factory Girls, Chang
Chinese Capitalisms, Chu

China history:
The Search for Modern China, Spence
Chinese Lessons, Pomfret
China: Fragile Superpower, Shirk
The Tian**men Papers, Liang, Nathan & Link
All 4 books by Peter Hessler (especially River Town)
China goes West, Backaler
China’s Second Continent, French
Age of Ambition, Osnos

Chinese Anthropology:
Chinese Modernity and the Individual Psyche, Kipnis
Social Connections in China, Gold
Anxious Wealth, Osburg (“real,” on the ground stories/experiences)
Chen Village, Chan (why I decided to study Chinese Anthro)
Gifts, Favors, and Banquettes, Yang (my favorite book on China)
Elite China, Lu
From the Soil, Fei
China’s Emerging Middle Class, Li

Other Social Sciency Stuff:
Golden Arches East, Watson
The Geography of Thought, Nisbett
Sacred High City, Sacred Low City, Heine (my FIU MA advisor)
You gotta have Wa, Whiting (baseball in Japan, a fun read)
Globalisation and Japanese Organizational culture, Mitchell
The Structure of Scientific Revolutions, Kuhn (social science theory)
The Constitution of Society, Giddens (social science theory)
Lovelorn Ghost and the Magical Monk (Thailand), McDaniel
Impact of China’s Rise on the Mekong Region, Santasombat

You might also want to be listening to the Sincia Podcast (Supchina). Also, if these guys at Sinica and Caixin would put their business podcast on iTunes, I’d recommend that one too.

Fiction and US History (really the only things I make time for other than research and family are Triathlon training, the NBA, US history, Crime fiction, Chocolate, and documentaries):
The Girl with the Dragon Tattoo series, Larsson
Anything by John Le Carre
The Monuments Men, Edsel
Lost in Shangri-la, Zuckoff
Unbroken, Hillenbrand
Team of Rivals, Goodwin
The Book of Basketball, Simmons
EVERYTHING! by David McCullough
Anything by Malcom Gladwell
Anything by Michael Lewis
Anything by Joseph J. Ellis
Alexander Hamilton, Chernow

ALL Documentaries by Ken Burns (new Vietnam doc coming out this summer)

Awfully Chocolate (dessert shop from Singapore, used to be in SZ, now 3 stores in HK and also GZ).

Current Summer Reading List (heavy on SEA):
Chinese Society in Thailand, Skinner (classic)
Chinese Encounters in Southeast Asia, Nyiri & Tan
The Overseas Chinese of Southeast Asia, Rae and Witzel
New Asian Emperors, Haley, Haley & Tan
Unlocking Leadership in Thailand, Roongrernsuke & Liefooghe
The Way Thais Lead, Persons
China’s Disruptors, Tse
Global Body shopping, Xiang

What’s the Difference Between a Duck? (AKA: Nonessentialized Chinenessness)

What’s the Difference Between a Duck?

When I was a kid my dad used to always joke around and ask me this question. We’d be in the car or at dinner and he’d get serious and look me in the eyes and then say, without any hint of a smile, “What’s the difference between a duck?” For years I never said anything other than, “A duck and what else?” and he’d just repeat the question with a big smile on his face until I just gave up frustrated. When I was a teenager I realized that there was no wrong answer—and there was no right answer either—and any answer would stop the annoying questioning.

I was reminded of this question as I had the opportunity to listen to a sales professional from Taiwan speak to a group of businessmen and educators about working in China last week. He’s a well educated professional and has done business in Shenzhen for a number of years. In his presentation he made a point that I’d never heard from a Chinese before, and it got me thinking. He said, “Foreigners have a racial/cultural excuse when they want to get out of something or want to say no to something here in China. We (Taiwanese) don’t have that option. We’re expected to be Chinese, just like they are.”

This reminded me of the experiences of an ABC (American Born Chinese) woman that I knew that worked in here in Shenzhen about twenty years ago. She was born and raised in a Chinese immigrant family in the US and went to a PAC 10 school on an athletic scholarship. though ethnically Chinese, she was, in her own words, “more American than Chinese.” She came to China with an MBA and was fluent in Mandarin. She had a good job (title) and was excited to be here, the land of her ancestors. She originally hoped that this would be a real educational experience for her—she would learn about her family and China and she expected to learn to love her Chinese ancestry.

Unfortunately for her, the opposite happened. She was frustrated that she was expected to play a very specific (and for her, limiting) role—one that she did not fully understand. Being seen as a (local) Chinese woman, meant that she was expected to be, “less than the men.” She told me that she had more education and more work experience than most people in her company but she was seen as not only a junior employee but a woman as well—meaning she was even less than the junior men. She was explicitly told that she was supposed to dress “pretty” (according to local standards) and that she should keep her head down and fit in, rather than stay to stand out and try to get ahead. As an athletic, rather tall, culturally American, educated woman, playing this role was too tall a request and eventually proved to be impossible for her.

She told me that she “understood the words” that were being spoken to her, but she “didn’t get the hints” behind them. She looked and sounded “Chinese” and so was expected to play the role that she physically resembled. But she didn’t fully understand her part, and the more she learned the less she agreed with the expectations being placed upon her. She eventually left China and got a job working for a US company (in the states) and an interlocutor between Chinese and American businesses.

The Taiwanese professional that I heard speak this last week had a similar point to make. He “looks” the part and so is supposed to play the role. Those that don’t look the part, foreigners, are given great leeway (read: allowed to bumble though negotiation protocols that Chinese are expected to know). It’s just assumed that foreigners don’t know what’s going on and so get a pass.

For me at this time, this highlights a scale of Chinese and foreignness—it’s isn’t as simple as you are or you’re not Chinese. Ditto being or not being foreign—although this is a bit harder “not to be.” I have a buddy from the States that went to college here and has lived most of his adult life since age 18 in China. It’s been decades for him in China and he consciously recognizes that returning to the West is a “foreign” experience for him. While he’s occidental and will never be considered “Chinese” by the locals here, he himself feels more comfortable here in China.

So what is the difference between a duck, or in this case, a Chinese? Culture isn’t a racial, or ethnic, or even geographic distinction—those it’s often used colloquially as such. It’s learned set of behaviors and ideals that are specific to a time and space. “He’s Chinese,” or “She’s Hong Kongnese,” or “He’s an ABC” point to location, a nationality or an ethnicity as the defining cultural markers that are often generalized across a large spectrum of people with a similar attribute. But this is not only essentializing but problematic to recognizing cultural differences and understanding how these differences in affect understandings and behavior.

To see how this might look in another context, think about claiming that Americans all have something culturally generalizable and significant in common other than a common nationality—though even that would likely be understood differently. Generalizing third generation immigrant Cubans living in Miami, Bill Simmons from Boston, my ranching-family from Wyoming, multi-generation Mormons in Arizona, Japanese immigrants living in San Francisco, or someone of African-American descent in Atlanta would certainly be too general and/or completely inaccurate to give any real understanding of culture in America.

China needs to be understood in a similar way to the diversity in the US or the EU—a collection of very different small countries and groups rather than a singular cultural and historic monolith. Chinese working in the company (where I’m conducting research) are from more than 12 difference provinces and speak 7 different “native” languages before their common-use language, Mandarin. Some are urbanites with educated parents, some are from (much) smaller hometowns, and some are first generation college grads from large east-coast cities. Within the employee pool there are stark generational differences, with some being graduates of the best colleges in the country and some who were forced to skip years of school due to politics. Of course there are economic differences as well—significantly influencing how life in Shenzhen (the highest per capita GDP city in China), as well as rapidly developing China, is understood and experienced.

Back to the Taiwan professional, he finished with a final thought about economic development and how it’s changing the cultural habits of urban professionals in China today. He said that drinking and eating out are popular here because there isn’t yet a culture of other social activities. For the most part, he said, the middle class in Shenzhen don’t yet go to NBA games with buddies. They don’t go biking or running with neighbors. They don’t golf on weekends with their professional counterparts. Classes, church groups, home improvement projects or yard work are just not part of most urban lifestyles in China. While these types of activities are increasing as disposable income rises, they’re not yet anywhere near the norm. But food and drink are relatively cheap, are available everywhere, are extremely convenient and require no special training, have been culturally acceptable for generations, and can accommodate any size group or type of group.

The point isn’t that there are problems with China, or that this Taiwanese professional’s and the ABC’s experiences are standard. Rather that there are likely as many definitions of Chineseness as there are Chinese. Many MBA types might exasperatedly exclaim, “Well what the hell’s the use in knowing that everyone different?! What can we generalize and apply across people and industries and cities? My answer? Difference. Each experience will be as unique as the people participating. Don’t overly generalize urban Chinese or the Chinese experience. Don’t assume that your experience in Beijing will be repeated in Guangzhou.

I realize that this isn’t a new concept. I actually wrote about this years ago—the generational and regional differences in China. But I think that it’s still true, despite the standardization of education, the increasing control of the media and the seeming globalization (Westernization) of Chinese cities. There is much localization of neoliberalism that makes for unique adaptations to globalism. Diversity may not “look” the same here as it does in the West, but that doesn’t make it any less of a reality in Chinese businesses.

Post Script: As I’m typing this blog up in a local Starbucks, there is a saleswoman pitching some electronics and her company to a client from a phone company in Zhejiang. The guy has just arrived in SZ and has been waiting for her here for about 1/2 an hour. They’re sitting in the seats right next to mine, him next to me and she across the table from us. They are talking about parts and standards and markets. About 15 minutes into the conversation, she pauses for effect and says, “The truth is that foreigners think differently and have different expectations than we do.” At this comment, Chinese guy on the other side of me, studying for some US graduate exam, and I both look up at her and I catch her eye, right as she continues to say, “Foreigners just don’t think the same way that we do.” And while I’m looking right at her, with a kind of surprised smile on my face, she says in Chinese to me, without skipping a beat, “Excuse me for that“ (buhaoyisi, 不好意思). In Chinese I say to her, “No need to apologize” (Buyongkeqi, 不用客气). She smiles and then just continues right on with the sales pitch to her client about how we think differently and how that makes our markets different. At this, the Chinese student laughs and smirks. The sales lady talks for another 20 minutes and then, despite me trying to start a conversation with her on her way out, she doesn’t make eye contact with me and continues with her client; and I’m left without the follow up questions that I was hoping to get.