Differentiating Chinese Culture

I was reading the China Law Blog, and one of Dan Harris' articles caught my attention; "Chinese Cultural Awareness Simplified: Don't Be An Asshole". Mr. Harris makes a very good point in his post and brings up something I should certainly clarify on my own blog. After reading his blog, I completely agree with Mr. Harris while at the same time disagree with him at least in part.

The importance of culture in China really depends on whether the western firm is buying or selling in China. For businesses that intend to sell in China, culture is everything. From a marketing and business development perspective, understanding Chinese culture is imperative to gaining market share. I've thrown out examples of how Starbucks, Dell, etc. have gone into China without cultural understanding and have lost money in the process. China has a complex culture, and brands that embrace that culture will be embraced by consumers there. Firms that don't understand Chinese culture will certainly struggle.

For businesses that intend to source from China, the culture as described above is fairly meaningless. Chinese manufacturers are capitalists as well as realists. Perhaps making up for American cultural insensitivity, I found the Chinese to be very gracious to foreigners. They are more than willing to overlook poor manners or general ignorance of local customs and practices, especially if you are spending money there. However, there is a side to Chinese culture - "business culture" - that is extremely important to western firms wishing to source from China. This is purely a matter of semantics as Mr. Harris would consider this a matter of "Chinese business pitfalls" instead. Dr. Bill Conerly interviewed Dan Harris for his blog, businomics.com and Mr. Harris touched on some of these business issues.

In my humble opinion the pitfalls Mr. Harris describes during his interview (as well as other pitfalls I've seen) have a root cause in "business culture" (as opposed to general Chinese culture). I would argue that cases of corruption in China are also a matter of culture as 60 years of communist rule have made corruption a necessity for doing business. In fact, I think that lack of intellectual property protection in China and Taiwan are rooted in culture. Further, the Chinese legal system's tendency to favor Chinese in litigation is certainly based on culture and cultural prejudices. In fact, that's a regional phenomena as Japanese courts have the same tendencies.

I would argue that there are two "cultures" in China that must be studied. For businesses penetrating the Chinese market, what typically comes to mind when one thinks of "culture" is of utmost importance. This is an issue of marketing. For businesses sourcing in China, the "pitfalls" of doing business in China (the negative side of Chinese culture) are of far greater relevance, and these are issues best suited for an attorney specializing in international law and China.