Seeking Common Ground

love-vs-moneyRecent studies suggest that a phenomenon known as “social entrepreneurship” has emerged and been increasing in China over the past decade (Gu 2012; Zhao 2012; Zhao 2014; Zhou et al. 2013). In countries around the world, researchers have observed private citizens dubbed “social entrepreneurs” starting for-profit businesses to address localized problems related to poverty, access to education, and public health (Bornstein 2004; Dees 1998; Leadbeater 1997; Martin and Osberg 2007). Such issues are often linked to larger societal problems resulting from inequalities created by capitalism (e.g., LeRoy 2010; Piketty 2014; Stiglitz 2003).

Departing from the anti-capitalist rhetoric of the Mao years (1949-1976), the transition to a market economy in Reform Era China (1978-present) has replicated many of the inequalities being addressed by social entrepreneurs in other industrializing nations. Moreover, post-Mao government policies in China have heralded “the return of the god of wealth” (Ikels 1996), whereby individualism and materialism have become a means of governance (Hertz 2010:82; see also Farquhar 1996; Hoffman 2008; Kipnis 2007; Pun 2003; Yan 2010; Zhang and Ong, eds. 2008). Self-interest and the profit-motive have flourished since the early Reform Era, when teachers even began selling candy in classrooms (Chan et al. 1992[1984]:274). Thus, it is particularly interesting to find evidence of Chinese citizens who seem to be starting companies not only to make a profit but also to address local problems related to their country’s rapid industrialization.

At a time when China and the United States frequently clash over trade agreements, military agendas, and even international aid projects, Americans tend to be presented with a narrative of the Chinese as a calculating competitor, even a growing threat (e.g., Navarro 2015). These concerns are likely justified. Yet, the most populous country in the world is not simply defined by its government’s policies, both domestic and international. It is comprised, like ours, of individuals striving to create meaningful lives for themselves. They are not simply passive actors in a domineering political economy (e.g., Hsu 2007). In addition to potentially common enemies, the experience of seeking a moral life by working to improve their own country should resonate with Americans, and humanize a proud people whose aspirations are not so foreign from our own.

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Market Value and Dirty Underwear

$3 solution to a $50 problem

$3 solution to a $50 problem

After the first week of my preliminary doctoral research in Shenzhen, I took two bags of dirty clothes to the laundromat across the street. It was about five days worth of clothing for my wife, daughter (3) and I. The woman (probably the owner) was very meticulous about counting each piece and ensuring that the lights were separated out. She wrote me two separate bills. The darks were 245RMB and the lights came to 80RMB. She showed me the total of 325RMB on her calculator. It seemed high at first glance, but I’d never had laundry done in China (I usually just wash it in a plastic tub), so I assumed it was fair. On my walk back to meet my ladies, I did a rough conversion in my head. At $16 to every 100RMB, I’d just paid over 50 bucks to do a couple loads of laundry.

The “hey wait a second” thought had crept into my head even before rendezvousing with the ladies. I didn’t even have to tell my wife what had happened to know her reaction. She laughed at me as expected, but was also very understanding. She actually told me to forget about it – to chalk it up to a learning experience. But we were on a tight budget, and so I decided to go back, eat a piece of humble pie, and ask for my money back. On my way, I looked up the word for “refund money”(退钱)– which I had learned before but now won’t ever forget. I told the owner that I was a poor college student, and that 325RMB was just too expensive for me. She said no problem, and was all set to return my money. But then, just at the last second, she asked me how much I wanted to pay. At first I thought she was trying to charge me some sort of return fee, but then she said, “How about 285?” And then it hit me. As a foreigner I didn’t know the value of anything in China, not even getting my dirty underwear cleaned. 325RMB is ridiculous for a couple loads of laundry. “150,” I said. She laughed, and countered, “Okay, 200.” I shook my head in agreement, “Okay, and it’ll still be ready tomorrow after 5:00?”

So, I wound up knocking about $20 off the original price. I learned a lesson about the value of getting your laundry done and the value of just walking away in a negotiation (and about just doing laundry in a plastic tub). An accidental technique has now become purposeful. I also learned an important lesson about learning the value of things. In China, value is determined in a very interpersonal way. It’s not something you can look up in a book, or even on a price tag. Understanding value is particularly experiential in the Chinese context.

Most anecdotal business stories are not very useful to foreigners running their own small businesses in China. They make great bar-talk, but mostly involve large companies, with enough money and large enough margins not to worry a whole lot about the difference between a few hundred, thousand or even ten thousand dollars. One such case involves a large American outdoor company which, as luck would have it, was told to me at a bar in Shenzhen by the American businessman it happened to. During a large order, the factory insisted on a large fee to release the merchandise. They asked for half-a-million dollars. This was negotiated down to a quarter-million. When the order was about to be released, the factory all of sudden demanded a million bucks. After a whole lot of negotiating and empty threats, the order was released for some amount slightly higher than a quarter-million dollars.

The lesson recounted by the American businessman was that the Chinese can’t be counted on to honor contracts, and may even rescind deals they themselves have initiated. That may be true. (What they don’t realize is that even at a million dollars, the mark-up at which the American company is selling the products makes such a sum inconsequential.) However, to individual businessmen, these sums of money are very consequential, and thus such a story, while entertaining, does very little to instruct one on how to start and run a business in the Chinese context. My assumption here is that the amount of money involved drastically changes the circumstances of business negotiations. And walking away may hold very different consequences for a small business owner whose entire business rests on a single negotiation. Thus, the strategy for handling any number of business related situations must be considered in relation to the scale of the business within the cultural context. In order to contribute to our understanding of Chinese economic practices beyond anecdotal evidence, I focus on expatriate entrepreneurs (“expatrapreneurs”) who own and operate small businesses in China. For them, financial profitably relies on practical cultural knowledge, and comes without the “free pass” extended to most foreigners for casual faux pas, or the financial leverage imbued to Americans representing multi-national corporations in China.

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Debt to a Master, Fei Xiaotong

250px-Fei_XiaotongA student of Bronislaw Malinowski, Fei Xiaotong presented an empathetic and prescient account of the problems facing changing village economies in his native land of China. His career was greatly disrupted by two decades of persecution under the Cultural Revolution (Fei 1981). So much suffering and mismanagement could have been avoided if only Mao had listened to the brightest social scientist in the land. Fei nearly mirrored the communist ideology (though not its action-plan), foreseeing that the decline in domestic industry and high land rents would lead to a peasant revolt. He argued for a “reasonable and effective land reform” (Fei 1939:286), knowing that “if the agrarian situation is defined in technological terms only, the actions followed will be limited to technological improvements” (Fei and Chang 1945:306). This foreshadowed, if not directly informed, a main argument of the post-development critique, namely that traditional societies are incorrectly assumed to have inefficient means of production which must be replaced in order for development to occur (see Frank 1966; Dos Santos 1970; Escobar 1995).

Fei sought to include the land and business owners, whom he viewed as victims of the government’s funneling of capital to the foreign treaty ports instead of into the rural districts (Fei 1939:284). Though this inclusive approach doomed him during the Mao years, it ensured his legacy and influence among anthropologists, both in East Asia and worldwide. In fact, in 1980 he was given the Malinowski Memorial Award at the 40th annual meeting of the Society for Applied Anthropology in Denver, CO. During his acceptance speech, a tearful reunion with colleagues from whom he had been separated for years, he framed the central role of a “People’s Anthropology” in the creation of a peaceful and prosperous society (Fei 1981:19). He knew that rural areas must not be left out of the development process (Fei 1989:106), and that peasants are not stupid simply because they are illiterate, “just as an urbanite is not stupid for being unable to catch grasshoppers” (Fei 1992:46). Such empathy serves as the benchmark for inquiries into the societal changes resulting from the transition to industrialization and capitalism as experienced by the billion+ people in twenty-first century China.

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Getting Guānxi

“Those who exchange presents with one another
Remain friends the longest.” ~From the Hávamál(Mauss 1990[1950]:1)

The exchange of gifts or money for favors is commonplace in China. Both the national government (the CCP) and foreign observers tend to gloss this as bribery. However, more broadly in Chinese society, such exchanges are central to the production and maintenance of guānxi (关系) networks, a horizontal form of social organization rooted in reciprocity. Guānxi is based on fluid, person-centered networks, rather than fixed social institutions (Smart 1999:130), and emerges from a system of reciprocity in which social capital takes on a material value. Though China has a long-established gift economy, guānxi has proven critical to conducting business under the current system of market socialism with its ambiguous and often-changing bureaucratic rules.

One can think of many instances of guānxi-like exchanges in our own culture, or other cultures under study for that matter. This is in line with a current trend to incorporate the concept of guānxi into the analysis of Western practices, particularly in the business world. In fact, a search for “guanxi” on Amazon.com revealed 224 paperback books, most of which are geared toward either using guānxi to do business in China or to succeed in business in general. It should be noted that Kipnis (1997) is the first academic work to appear and is listed fifth on the list. However, the majority of the works have titles such as Guanxi for the Busy American or Guanxi and Business Strategy.

This is not to suggest that the academic works somehow give us a better understanding of guānxi and its real-world applications (though their methodologies may indeed be more rigorous). Certainly the business books often present the concept in much more digestible and easily-applicable terms. The point here is that guānxi has entered popular English jargon, and been accepted as a framework for conceptualizing interpersonal relationships that rings true beyond the Chinese context.

Of interest is that the business books recognize guānxi as a term originating in the social sciences, and frequently cite academic works in their definitions (e.g., Langenberg 2007:1). This is noteworthy, of course, because the term is originally an emic one. That is, it was used by normal Chinese people long before academics began employing it as a “gate-keeping concept” (Appadurai 1986:357) for the study of social organization in China. In this respect the business books are returning it to its original usage in the lives of everyday people.

The business books usually dedicate a relatively short section of the introduction to the definition of the term. Langenberg (2007) uses just over eight pages, and this is particularly long compared to similar works. In fact, the first book on the Amazon “guanxi” list defines the term in just one paragraph with not a single citation (Buderi and Huang 2006:6-7). Including that definition, “guanxi” only appears five times throughout the whole book, never adding more explanation and merely referencing Bill Gates (the central figure of the work) as having either good or bad guānxi (Buderi and Huang 2006:6,90,218,232,242).

In the end, the purpose of such books is not to explicate the term in all its manifestations, but merely to give the reader a working knowledge of what is certainly a vital part of doing business in China. This is encapsulated in the question: “How can guanxi be integrated into business strategy?” (Langenberg 2007:9). The answer to such a question, both in terms of general business practices and in the specific case of Microsoft’s move into China, serves as a utilitarian introduction to the use of guānxi in the Chinese context.

We can imagine a businessman, before embarking on his venture to China, picking up such a book. Even a skim through the introduction and some of the key chapters would at least make him aware of the use of guānxi in the Chinese context. He would of course make many missteps during his initial attempts at creating guānxi connections. Yet, the Chinese would probably chalk most of these up to his being a foreigner, and largely let him get away with them. As he went along, presumably learning from his mistakes, he would slowly begin to master the art of guānxi in a variety of contexts. We can also assume that eventually he would be far better at it than someone who had merely done a thorough review of the academic literature on the subject.

Thus, we see that even a rudimentary introduction to the concept of guānxi can have the effect of revealing the concealed mechanism behind interpersonal relations in China. The point is that one must experience guānxi in order to understand it, and more importantly, actually use it in real situations. In this way, the blending of guānxi into Western thought is a partial remedy to the long-standing problem with Orientalism of failing to see the Asian experience as a human one (Said 1994[1978]:328).

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Pissing on the Street

Shenzhen, the city of 10+ million in southeastern Guangdong Province where I do most of my field research, has a wide variety of neighborhoods. In fact, until it was declared a special economic zone (SEZ) about thirty years ago, this now thriving metropolis was little more than a fishing village (Bach 2010). The crescent-shaped urban sprawl begins in the southeast with the bustling, often-chaotic Dongmen Market. The Chinese expression 人山人海 (lit: people mountain, people sea) seems apt for an area that, according to a survey I conducted this past winter, receives approximately half-a-million visitors on any given weekend. The narrow alleys, wet markets and vibrant street vendors season this border area with the spice of raw, human commerce.

Moving west along the main arc of the city, we come to Futian and Coco Park, Windows of the World, and swooping south, finally arrive at Shekou. These areas, in varying degrees, are sharp departures from the street-level petty capitalism of Dongmen. The shimmering windows of high-rise office buildings tower above broad, clean boulevards. There are numerous high-end malls, and both the shopping and eating are priced for the business elite, Chinese and expat alike. Yet, one thing unites the decidedly distinct eastern and western parts of the city: Parents letting their children piss on the street.

I’ve seen it at 9:00 on a Friday night on the busiest pedestrian road in Dongmen, and I’ve seen it at noon on a Monday in one of the ritziest malls in southern China at Coco Park. A toddler with crotchless sweatpants squats by the curb, while his father checks text messages. A mother holds her daughter over a trashcan, with a public restroom no more than 20-feet across the hall. So, news of the recent kerfuffle in Hong Kong is neither surprising nor without precedent. Nor is it surprising that the subsequent Sina poll revealed that only 11% of Chinese people think it’s not okay for parents to let their children piss in public. I’m not surprised for the very simple reason that, as I began to discuss in my last piece, China is in transition.

anti-spitting_posterPublic expulsion of bodily fluids, hopefully limited to urine and saliva, are both common and relatively harmless in villages of 200, 300, or even a thousand households. Let’s not forget that no more than thirty years ago, the majority of China lived in such places, and that these people are today’s parents, grandparents, teachers and leaders. But, in cities of ten, twenty, even thirty million people, with some of the highest population densities on earth, these rural norms quickly become public health hazards. The Chinese authorities embarked on an aggressive campaign to end public spitting during the SARS epidemic. I hope it won’t take another major outbreak for them to take action on public urination.

We of course don’t need a poll to assess the views of those outside mainland China on this issue. But, criticism without understanding and constructive suggestions is both self-serving and counter-productive. So, the question becomes: What approach can the Chinese authorities take to reduce public urination that will be in line with the way the Chinese people view the issue? In other words, how can we rebrand the practice within emic categories of right and wrong?

I invite anyone genuinely interested in solving this dilemma to post suggestions.

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What’s bigger than China?

A snapshot of present-day China depicts an unwieldy economy, fraught with cronyism, a lack of transparency, and a variety of social and environmental powder-kegs primed to explode after three-and-half decades of rapid industrialization. Through even the most rose-colored lens – taking into account significant increases not just to GDP, but also to per capita income and even the Human Development Index (Willis 2011:7) – it is tempting to agree with Prem Shankar Jha’s assessment of the Chinese Miracle as little more than “managed chaos” (2009).

Yet, China is in transition. A momentary glimpse does little to reveal the trajectory of what have undoubtedly been significant and lasting changes to Chinese economic life. Deng Xiaoping’s 1978 Reform-and-Opening Policy (改革开放) gave the green-light for profit-making endeavors, something openly chastised during the Mao era. In fact, Deng was twice purged during his predecessor’s reign for advocating pragmatism over class struggle and revolutionary ideology (Barnett and Clough 1986:1). But, Deng’s conviction outlived the Chairman, and his notion that socialism is not about shared poverty continues to drive Chinese economic practices in the twenty-first century.

For Deng and his successors, some people have to get rich first for everyone to eventually benefit. On the surface, this seems to echo Adam Smith’s view of the butcher, the brewer and the baker acting in their own self-interest to put food on the rest of our dinner tables (1776:1.2.2). However, from an ideological standpoint, the post-reform Chinese Communist Party (CCP) views capitalist development as a means to socialism. They appreciate what Mao failed to account for during the epic failures of The Great Leap Forward: Profit-making drives innovation.

In China, unlike the USSR, the ideological shift did not accompany institutional collapse; the CCP led the transition (Hsu 2007:1). It is thus misguided to assume that China’s growth is a cheap reproduction of our own, driven solely by free-market ideals. It is still unclear how genuinely the CCP will adhere to its socialist endgame, given the high profitability of ongoing cronyism. Regardless, China clearly has big plans for itself. By allowing “the return of the god of wealth” (Ikels 1996), the CCP has tapped into the unrivaled productivity of a capitalist system. China may or may not overtake the US as the world’s #1 economy. But, since 2010 it’s been a solid second. That’s big, because we prize economic dominance. But, what if China’s growth leads it beyond the ideology by which we measure success? That’s much, much bigger, because even the most focussed image cannot reveal what it fails to capture.

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MH 370: Beyond Tragedy

As the search for debris enters its fourth week, the surreal circumstances of Malaysian Air Flight 370’s disappearance persist. However, as the possibility of finding survivors has evaporated, the tragedy has become indelibly real. The loss of MH 370 (March 8) and the Kunming Massacre (March 1) together violently took 182 Chinese lives in a single week. We, Americans, can certainly relate to China’s frustrations in its search for answers. Yet, it is the types of questions they are asking that may lead to greater cooperation and in fact fraternity between our two nations. As Malcolm Moore (March 4) asked, “Has the global Jihad reached China?” Furthermore, if the disappearance of MH 370 was a terrorist plot, are there links to Kunming? These questions alone seem to align China’s interests with the US War on Terror. The answers will determine the strength of our common interests, but the questions themselves begin to define US-China relations for the coming decades.

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