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For Chinese business, the means is more valuable than the end

By Jeremy Ballenger - posted Tuesday, 1 February 2005

Numerous perceptions exist on why the Chinese diaspora is successful in businesses abroad and apparently more so than in their domestic market. A review of Chinese cultural roots only provides part of the solution. Greater insight can be garnered by combining ethnicity with contemporary business theory. The mere fact of being “different” is the key.

A free trade agreement (FTA) with China looms on the horizon. The popular press is whipping up concern with headlines like “Be warned - The China danger”. Fears the dumping of low cost imports on the Australian market will crush domestic suppliers has prompted surveys, with the Australian Industry Group duly reporting that 848 Australian manufacturers “suspect” they have seen some form of low cost, predatory pricing by Chinese competitors.

Certainly credible reportage, but a little caution is necessary. Results like these are easily refuted on questions about sample size, leading questions to interview subjects and similar issues that can influence how much sway they hold. Arbitrary surveys aside, China poses a very real threat to Australian business should it achieve unfettered entry to the global marketplace.


Parallel expansion efforts are occurring globally. China’s entry will make the international market considerably larger, meaning Australian business (and businesses from other nations) must pay attention to developments. The threat is the possible influence the sheer size of China’s presence will have on the free market.

There is a maxim in strategic management that every threat posed holds within itself an equal, if not greater, opportunity. The situation arising from the China FTA and the alleged threat to Australian business is no different. The present opportunity here is to learn from the Chinese diaspora before China gains “market economy” status, and better prepare ourselves to interact with the billions of Chinese businesses and consumers.

Yet circumspection is required, especially when investigating a particular ethnic group. We must be careful about drawing the conclusion that all Chinese are united by their ethnicity, cultural legacy or other such traits. This approach tends to focus solely on the observable commonalities and ignores the differences. It is rarely noticed that there are many poor Chinese overseas, mainly in rural areas, as well as rich and successful ones. Differences between various groups of Chinese in these respects turn out to be just as striking as any similarities between them, or more so.

It follows then that ethnicity (or “race”) must be accepted as just one element of many sentiments, ideals, prejudices and stereotypes that we might hold. We would do better to acknowledge racial differences, confront them openly, and learn how to best cope, instead of pretending, as some do, that race is a dirty word to be avoided altogether.

In openly confronting this issue, we can look to the roots of Chinese culture for insight into contemporary interactions. Two thirds of the population still live in rural areas, working the land as part of a communal society, not as individuals (as we do in the West). Loyalty and obedience to familial structure binds labouring groups where agriculture is regarded as the root of society. With agriculture the root, commerce becomes the branch, and historical Chinese social and economic theories have favoured the former and slighted the latter.

Signally entwined with this lifestyle is a Confucian morality based on the construct that a society organised under a benevolent moral code is prosperous and politically stable, therefore safe from attack. Scholarship and kinship are revered.


Discussions about the benevolence, prosperity and political stability of domestic China belong to a different forum, as we are concerned, prima facie, with the Chinese who pull up stumps and head abroad to find prosperity. This adventurer takes with him the ideals with which he was raised, employing them to best effect in the new environment.

Prominent among these ideals are approaches to negotiation that stem from Confucian sentiments. The concepts of guanxi (personal connection), renji hexie (interpersonal harmony) and chiku nailao (endurance, relentlessness) are arguably most informative in describing some of the differences in the “Chinese” way of doing business.

Western business is transactional. The initial transaction between parties commences the relationship, and should this be successful, the practice generally continues. Based on continuing behavioural patterns, we might begin to trust our counterparts. By contrast, the Chinese believe that there must be trust first, and only then can business be done. There is also an inherent wariness of foreigners borne of hard won experience. Further, they trust in two things above all - their family (Confucius) and their bank accounts (jiejian or thrift).

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About the Author

Jeremy Ballenger is a Melbourne-based researcher and writer. His website is here.

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