By David Dayton in "Silk Road International"
I originally thought to title this: "How to use understand Chinese Culture to your advantage." It was written during some serious frustration and was neither helpful, PC or even remotely polite. I've tried to tone it down some and make it more helpful than angry.
Sometimes everything goes bad at once. At least 5 different suppliers still don't have enough employees (this was originally written in March). Two different projects had defects due to miss-communications between factory reps and engineers/line workers and two other suppliers are stonewalling because they've done something wrong and don't want to have to pay to do it over. I suppose the "bright side" of all this is that in the midst of an historically bad economy we actually have projects to work on. Or the fact that if factories were problem-free I wouldn't have a job at all! But, if you hadn't noticed in previous posts, I'm probably more Scrooge than Pollyanna.
So, in the spirit of creating a harmonious society, lets look at "culture" and how you can use to get what you want what you may need to know if you get screwed when working in China.
Two quick points about preparing yourself for China (or anywhere else, probably) before I get to the culture specific issues:
First and foremost, learning Chinese is probably the single most advantageous thing you can do for yourself in China. (This is followed very closely to being an expert in the field/industry that you're working in. Having one of these two can make you valuable. Having both can make you absolutely indispensable.) Being able to listen to and understand most of what's going on first hand is a HUGE advantage. If you don't speak Chinese then you should get a trusted interpreter (not a translator).
Second, go in knowing that "dishonest is part of their business model," as one Chinese businesswoman told me. Note: this is NOT ME saying, "all Chinese are dishonest." It's actually Chinese people talking about doing business with other Chinese people. (Although I'll admit that I can't think of a very effective counter argument if you blamed me for saying this either.) This is not Kansas. You will always be an outsider here no matter how long you stay and how much of a China Hand you become. The rules from "back home" do NOT apply to you and the local rules are not the same for you and for the locals—but there are rules and you do need to know them. (By rules, I do not mean official laws, which theoretically, apply to everyone equally.)
1. You will always lose the politeness game (and yes, it's a game). Chinese are nothing if not polite, and of course you can catch more flies with honey than vinegar. But do not ever feel guilty about "doing your job" because your hosts are so polite to you. Don't get sucked into letting little things go because you don't want to offend. Don't let a ride from the hotel or $5 welcome gift and a $50 dinner keep you from bringing up the hard conversations that have to be had to get things done right.
I've had more than a few customers tell me that their hosts are so polite and do so much for them on their trip to China that they are almost embarrassed to say anything negative. So they let little things go (and then get back home and regret it as soon as they deal with customer complaints). If you don't think this overwhelming kindness is done on purpose, you're just not thinking.
If you're letting the factory pick you up, shuttle you back and forth and plan your time in the factory—you're not going to be getting a chance to point out problems and have difficult discussions. You need to step up and arrange the agenda yourself, to be more of what you need. Commenting over dinner that you'd like to "see a bit more attention paid to QC" may be a very polite way in the West to get a subtle hint across but in China it's one of a thousand comments that will be forgotten unless it's repeated with product in hand while pointing to specific defects in a conversation with the QC people and a manager. And then followed up on later.
Use the fact that you just flew half way around the world for this visit to get what you want. Make sure they know that you are frustratingly aware that if there weren't any problems you wouldn't have had to pay for an international flight, hotels etc. You're here because they couldn't do it on their own—you mention that once and you'll get embarrassed but knowing smiles. And results. Once everyone is on the same page you can eliminate some of the BS that usually accompanies factory visits.
Don't misunderstand, I’m not advocating being rude or insincere. Quite the opposite. Be overwhelmingly polite to them as you make very pointed comments about quality and ask for specific verifications, signatures, confirmations, contracted conditions to be completed, etc. Do this publicly and follow up your sweet talk with pointed and polite private conversations afterward. Get people on your side and make it just as difficult for them to refuse you as they are (consciously) trying to make it for you. Then follow though with EVERY ONE of the issues that you raise in public—make sure that they know that the consequences for failing will be made as public as the praise for success.
2. Dinners—pay for them and demand pay back. If you want to put someone in your pocket, pay for a dinner that they know they should be paying for. And specifically tell them (politely, of course) exactly what you're doing. This works very well if a boss or higher up is in attendance and may lose a bit of face by the exchange. They will publicly complain and "fight" you for the bill…you know the drill. So after you've paid and they are still complaining you hit them with, "Ok, I'll tell you what. Since I paid for the dinner you can make it up to be by..." And then of course you follow up on this too.
(One of the best ways to pay for dinner is to get up and go to the bathroom and pay the bill before it ever gets to the pretend fight over the check stage.)
If you don't know already, dinner is just part of the game (and your check is included in the fees suppliers charge you for product). I can't count the number of times I've had factory reps stare at me with their mouths open when I reject product. Time after time they say to me something like this: "But I thought that we had good cooperation on this." Which really means "Hey, we bought you dinner, gave your rides back and forth to the factory and played bball together. How can you bring up QC issues with us now?! I thought we were friends."
This is a little window into what's really going on—there is 5000 years of culture going on behind everything that's said, every dinner that's hosted, every ride, every cola, every "extra" that you're given, and you, the foreigner, are usually the only one that doesn't get it. All those "polite" little things that make China so enjoyable to visit are really hooks into your wallet—each is expected to be paid back at some point in the future.
Bottom line, your Chinese supplier either thinks you don't get the culture and so will use it to their advantage or they don't know you don't get it and so can't figure out why you just don't seem to get it. (A third almost never seen option would be that they know you don't get it and they help you out. This despite the obvious disadvantage to them it would be to have you know what's going. This will only happen if they, like you, have never read The Art of War. Don't get your hopes up as most suppliers memorized it in school and are living it. Daily.)
3. Shame is the guilt of the East. Guilt is a monotheistic concept based on an absolute truth and the concept of a conscious. In the karma based, polytheistic Asia (and especially in the officially atheist and socially unstable China) there is little if any guilt because there are very few things that are absolutely wrong all the time. Everything is relative. Things are not done for our western "right reasons" but rather for convenience, opportunity, necessity, duty, honor, pride, face, etc. (Not a criticism, just an observation.) Most lives in Asia are lived much closer to the scarcity side of the economic equation than the abundance side and so moral dilemmas, in my opinion, are just not dealt with all that often (e.g. who cares about morals if you're starving/poor/needy/see your self as being historically oppressed by the West/etc.). The point is that you're not going to get someone to do you a favor if it costs them money just because it's what "ought" to be done. (And no, I'm not saying the "West" is better, I'm just saying it's different here. Save your "yea, America sucks too" comments, I won't post them.)
Again, in telling you how you can use these things I'm not advocating humiliating other people. But I am talking about publicly using cultural expectations and the loss of face to coerce people into performing the way you'd like. You have to be very careful in "shaming" people in Asia (or anywhere) into doing things, even what they previously contracted to do. Asians will generally NOT be able to compartmentalize their personal face separate from this one single business transaction either. This is a one and done option. If you are not careful you'll get worse product, less friends and no options. You've been warned.
A group of foreigners get together to play bball every week in Shenzhen. There are often a few Chinese that join in too; usually they get offended and don't come back after a week or two (they probable get hurt too, especially if I'm guarding them). But a few that have either been over-seas or are from HK stick it out. The one local Chinese guy that has been playing for 5 years now has told me a number of times that foreigners (mostly North Americans in our group) play ball very differently than Chinese. Chinese are very polite and much less physical so that there are no fights, he says. A Chinese bball group knows each other from other parts of life and connections made on the court lead to other interactions. Foreigners, he tells me, are very aggressive and fight and curse at each other on the court but then go out and drink and eat together afterward. At first he was totally stunned at how personal the verbal "attacks" were. But after a while he realized that once the game was over the egos were usually over too. He realized that foreigners compartmentalize (sports, business, family, social groups, etc.) but says that Chinese do NOT and so they must be very polite in basketball games so that they don't have lingering problems in business later on.
But you can very effectively put people in uncomfortable social positions that will get you what you want. For example, instead of pushing a solution onto a manager, engage him and get his buy-in, even let him take credit for the solution (even though it may have really originate with you). If his name/rep is on the line with this solution, you can bet that it's going to work (or at least be completed). Most managers are not willing to lose face if they can get done what they've demanded with a bit more of someone else's overtime and some yelling.
Another example. Use names—don't just name drop to give face, but bring up names of managers in discussions (with the managers there) that forces them to publicly support the position or lose face. Similarly, bring up private conversations and comments with people that force those people to pick sides in public. Sure, it's not fair and it can get you in trouble. But it can also help if you do it right. Most people would rather, I think, have a bit of ground to stand on, even if it's not in the best part of town. So be fair, but use what you know to get what you want.
4. Without real leverage your just being a jerk. If you can't back up what you're saying and all the games you're playing by withholding some cash or having the ability to make the final decision on product quality then you're just abusing people.
If you have a contract you'd better follow it for many reasons. Just a few would include: One, you signed it–that's your name on the paper. Two it's the right thing to do. And three, not following your own contract is the surest way to cut your own feet out from under you. But if you're being lied to and yanked around and you can get product from someone else, I believe that turn around is fair play. String out payments, cancel orders that don't meet standards, don't send components to or refuse shipments from the supplier—always keep your word, but keep the very strictest letter of the law.
I am not talking about cheating someone that has cheated you just for revenge. I'm saying be painfully, brutally, excruciatingly honest in all minutia. It will soon get to the point when it will become very financially painful for your factory to continue to repair/replace items or hold onto product for you unless you accept the product and pay the balance. When they are physically coming to your office for payment, you know that you have the leverage you want.
The only way doing any of this is justifiable is: 1. If you've been wronged by a supplier who is refusing to rectify the problem, 2. You're just trying to get what you originally contracted for, 3. You have the authority to make the decisions that your forcing on others, 4. You don't have court as an option, and 5. You've been honest and upright in all your doings with the supplier up to this point. Do NOT do this just to get upgrades/changes or revenge or free meals.
Don't be fooled, though. There is no guilt on the other side. Your factory will use their leverage to get early/extra payment even if there are no previous problems or reasons to doubt that you'll pay. I've seen factories withhold perfectly good product for full payment even if there are clearly contracted terms. And if they have financial problems (Chinese New Year, bad economy, other defaulting foreign buyers) not related to your project you may still get blindsided through absolutely no fault of your own. Which brings us to #5.
5. The rules in China work for only one party, and that party ain't you.
First, it is not unique to China that laws favor the locals. Don't complain about the fact that the field is tilted against you—it is. Deal with it. Second, unless you're a big deal (e.g. you are spending 6 figures per order) you're not going to get any special attention, so take your ego down a couple notches before you start working here—you, the Westerner, are not that cool any more (Dollar and Euro are not worth that much, your market isn't that big any more, and you're not a "secure" payment source anymore either). Now, you may have connections and you may done everything the right way but if push comes to shove you're the outsider and you'll lose. Sure the legal system is getting better and you can certainly win court cases. But who wants to go to court over a $10,000 or $20,000 order?! No one. It's just not worth it. And, don't forget, China has regular bouts of "we hate everything foreign" where embassies get stoned and foreigners get intimidated (anti American and anti Japanese as recently as 2007). Know that all your hard work could, one random morning, turn out to be for not. Third, the culture favors those who know what they are doing in it and you, being foreign, most likely don't have a clue. Don't take that personally. It's not just you. The longer I'm here the more I realize there is so much more going on than I ever knew. The adage is still true—you don't know how much you don't know.
The answer to this? Ironically, play up your roll as the stupid foreigner. Force them to spell everything out in simple terms (e.g. get everything in writing). Compel them to include you in every discussion because it's just too much of a pain to have every discussion twice or to do everything over again because you didn't see it/approve it the first time. Play up every misunderstanding, ignore every Chinglish sentence and make them show you every process, every step, every carton of product. Be exacting, condescendingly simple, and don't accept anything until you have it both in writing and a perfect sample in hand.
If you think that you're not getting exactly what you're asking for, maximize your advantages. The quickest way to shut down an interfering sales person is shame; either correct their English translations (if you can speak Chinese) or speak more quickly and in more complicated English than normal and then have them explain back to you what they translated to the engineers or what they are going to do. This is, of course, very rude. But so is pretending that they understand what you want when samples show that they obviously do not. This forces them to show you, rather than just nod their heads, that they know what you are taking about and forces them to listen to what you really want.
None of this is new. I know all of this has been done to me (and millions of other foreigners) at one time or another in the past 8 years of negotiating deals and solving problems in China.
Part two in a couple of days.
Part II is here.