A recent article in the New York Times entitled, “Trump Warns China He Is Willing to Pressure North Korea on His Own,” (July 3, 2017) made reference to the miscalculations both Xi Jinping and President Trump made regarding their discussion of the threat of North Korea when they met at Mar-A-Lago earlier this year:
“Mr. Xi, they said, miscalculated what China needed to do to satisfy Mr. Trump, thinking he could buy him off with a few highly visible measures, like banning coal purchases from the North. Mr. Trump overvalued the personal touch by betting that a few hearty handshakes with Mr. Xi would overcome China’s deep-rooted resistance to pressuring North Korea.”
When I read this, my reaction was, I have heard this story before. In the conduct of business between China and the US, this is a familiar story. As far back as 1966, James Clavell wrote in Tai-Pan, his masterful novel about the founding of Hong Kong, about the arrogance of the Europeans who became the lords of the island, and the disdain of the Chinese about everything from the visitors’ rude manner to their smell.
This clash of cultures continues today, akin to how Clavell wrote it (except maybe not the smell part). Many American businessmen, like President Trump, think that the fact that they are Americans, Presidents or Vice Presidents (of companies), should afford them some reverence which will result in lower prices, one-sided deals, and obedience to processes (particularly compliance), all of which may be of no benefit to their Chinese counterparts. This arrogance may vary between subtle and very overt; in either case, it is clearly perceived and builds a wall between the parties, preventing the true partnership that is needed for a successful, win-win business relationship.
The Chinese, on the other hand, in addition to being put off or even offended by this arrogance, are put on their guard- another brick in the wall. The foreigner will be classified and stereotyped as lao wai, or guailo, and their reaction to the manner and attitude of their foreign customers may simply be disdain. China is one of the oldest cultures in the world, and deserves respect for that, but, even more, in today’s China, for the unprecedented accomplishments of economic growth, infrastructure building, and just plain success that has taken place over the last 20 plus years. Definitely a source of national pride, as it should be. So their cultural and emotional reaction is still-disdain, especially when presented with the above arrogant attitude.
That being said, Chinese are very practical. Regarding openness, they are the cultural opposite of Americans. If we look at openness as an iceberg, for Chinese it is mostly below the water. So, like Xi Jinping, the typical business owner or manager will do just what they need to do, and say what they need to say, to be sure they do not miss a business opportunity. What they won’t do, in almost every case, is something stupid that would cause them to lose money. But they will almost never say, “Look-I don’t trust you and your self-important attitude shows me you are not thinking about my business or my success, only your own.” Even Xi Jinping did not say that to President Trump, but dollars to donuts that is what he was thinking.
Can this wall be broken down? Absolutely. And it is up to we Americans who, as visitors, want to do business in China for our own benefit, to learn what to do and what not to do to build a long-term sustainable relationship or, in some cases, prevent disappointment and disaster in the short term. Embarking on a business relationship without a baseline of mutual trust will, and in many, many cases has, left room for unforeseen events and problems.
There is a lot to learn. And a lot more than can be said in this article to actually accomplish the goal of trust and partnership. A few hints:
1. Get over yourself. So you are President/Vice President of a big/small American company. That and $1.95 or thereabouts gets you egg roll. Your position gets you an invitation to China, and a courteous reception including some elaborate dinners, but that is it. When it comes to business success, who you are means nothing- it is what you are and what you do.
2. Hire an expert and allow them to do their magic. Don’t let your ego convince yourself that you are an expert if you are not. There are those of us who have put years and decades into working with China and learning the business and culture who can get through the wall. How? Simply by capitalizing on our understanding of the conduct of business and business relationships, and, most important,
3. Building Trust. I don’t care who you are and where you try to do business, without that, you have no foundation. Both sides need to believe that the most important thing is not today’s price, or the lowest price, but a mutual understanding of each partner’s requirements and metrics for success. Once you build trust for yourself as a businessperson, then you can take the next step, of
4. Humanizing one another. If you are successful in the relationship, you and your counterpart, while not necessarily BFFs, will see each other beyond the title and the benefits you can get from each other. You will see each other as people. A good start on that road is,
5. Shut Up and Eat the Food. If you visit someone’s home anywhere in the world, they will be very sensitive to whether you accept their food. This goes a long way toward accepting their culture, and them. I have seen too many times senior executives who make it painfully obvious that the food is either strange or disgusting to them. China is a highly food-oriented culture, and mealtimes are more than just eating food-they are a mutual bonding experience. The best way is to change your attitude and get a little food curiosity, but if you are a redneck and just can’t, then just shut up and eat.
6. Don’t Make Promises You Can’t Keep. I have seen too many grandiose, blue-sky speeches by senior executives which fade away like the fog; in each case, this breaks down trust. Tell them your hopes and dreams, but don’t promise. That being said, understand that
7. A Business Relationship is Quid Pro Quo- You can’t take and not give. This puts another dagger in the heart of the relationship sooner or later.
8. Read Beijing Jeep: The Short, Unhappy Romance of American Business in China (Jim Mann, 1989). This is a journalist’s true account of a failed joint venture (you can guess who from the title) by a big company in the early years of China’s opening which still rings true today and should be required reading for anyone who hopes to do business in China, even almost 30 years later.
A constant theme in my articles refers to category experts. It applies here as well; the nature of the word “expert” is that there are not too many who can deserve that title. Whether you are President Trump or Mr. Executive, you may be many great things, but expert on China is probably not one of them. What an expert can deliver is what should be the goal of all international business interactions-trust, perfect understanding and an unambiguous result.