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The political sensitivities that should be observed when doing business with China

By Barry Li - posted Monday, 3 July 2017


There was news recently that a lecturer from Monash University had unintentionally offended Chinese students with a question regarding Chinese stereotypes in a course quiz. Following university inquiries, the lecturer was suspended and Monash has since removed the popular textbook (Human Resources Management by Raymond J. Stone) while apologising to the incensed Chinese community. The business school textbook quoted outdated information about Chinese government officials and skilled labours, resulting in Chinese international students feeling humiliated. While I personally believe that some may have overacted to the inappropriate question, the textbook – despite being republished in its 9th edition this year – clearly needs its contents revised and updated; universities and lecturers from this experience should enhance their awareness of political sensitivities while doing business with China, and this very much includes when teaching Chinese international students.

Firstly, be sensible when you use the word "country" or "nation" to describe particular regions in Asia. I was listening to SBS Radio's Mandarin channel recently: Taiwan became the first Asian country to recognise same-sex marriage, and in response to a listener's social media comment the host apologised for referring to Taiwan as a "country". The Chinese (People's Republic of China) government claims Taiwan as a province of China, not an independent country, and officially both the United Nations and Australian Government do not recognise the Taiwanese national government. Hearing the host's apology, I knew my friends from Taiwan wouldn't be happy with a public rejection of their identity, hence this is a topic I avoid when I talk to them. Despite this, Australia and Taiwan still share strong economic links with extensive unofficial ties, so if you are meeting with a wealthy businessperson from Taiwan, it would be wise to be aware of and observe similar political sensitivities.

Another suggestion is to not assume that the Chinese people you meet know the same version of Asian history as you. In my book, I give an example of how a well-meaning Australian woman confused me with some perplexing questions about Tibet. The version of Tibetan history I had was different from what she had. Some topics we, as Chinese people, never talk about at home. These issues are too sensitive and our parents preferred never to understand nor speak about them in public. Consequently, most new Chinese you meet in Australia, especially those recently from China, won't know politically what you are talking about. Pushing your view onto them invariably results in an instinctive defensive position; the conversation goes nowhere from there. It's my advice not to talk to Chinese about political issues unless ultimately required.

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Finally, it's important to know about President Xi Jinping's anti-corruption campaign, which since 2013 has brought around huge change to normal business practice in China, especially for those working in the government and state-owned corporations. Before 2013, corruption was common in China. Relationship building with key stakeholders in the public sector typically involved expensive business dinners and sometimes direct bribery of cash and other valuables. It was both common knowledge and common sense that there were standard "transaction costs" while operating businesses in China; even foreign companies operating in China couldn't be completely immune to it. Nevertheless, with the campaign, China took a sharp turn from the open and accepted corruption practices to vigorous enforcement of anti-corruption laws and policies. Many government officials, including highly ranked officials, were arrested and over 100,000 public servants received different levels of punishments and warnings for corruptive conduct. Think twice before bringing an expensive gift to a Chinese business person today. There's a fine and tricky line between an acceptable gift to build guan xi ("relationships") and something deemed bribery, where you run the risk of being turned down right away.

The question and "correct" answer at the centre of the Monash University controversy – "There is a common saying in China that government officials only speak the truth when….? They are drunk and careless" – maybe was a common saying ten years ago when the people of China were deeply disappointed with the bureaucratic practice in China. But President Xi Jinping has not only turned the bad culture around in his term but also significantly enhanced many Chinese people's confidence in the central government. The growing patriotic minds of the Chinese should be noticed by the Western world, including the Australian higher education sector, and kept in mind when doing business with our northern partner.

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About the Author

Barry Li was born in China a few years after the end of the Cultural Revolution, living there for 22 years before deciding to complete his higher education studies in Australia. Barry has a BA in Economics from the University of International Business and Economics (UIBE), Beijing, and a Master of Commerce degree from Macquarie University in Australia. He is the author of The New Chinese: How they are changing Australia.

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