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Charles Hampden-Turner

Learning from China’s spectacular growth



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China has reached extraordinary levels of economic growth, largely by ignoring America’s advice, writes global expert in people and culture, Dr Charles Hampden-Turner. How can the West use China’s learning to its advantage?

After the death of Mao in 1979, how did the People’s Republic of China switch from being one of the poorest performing economies in the world to being probably the best of all in the whole history of economic development?

Two simultaneous changes happened after 1979. China allowed into its economy world market forces. And it encouraged its vast diaspora across the world to come home and/or transact business with the mother country.

By 1980 the Chinese Diaspora, if added together, was the third largest economy in the world, behind only the USA and Japan and larger than West Germany. Chinese culture knew how wealth was created and its overseas communities had honed these skills.

But something else had returned home, traditional Confucian family ethics of close relationships and more importantly the value dualities of Yin and Yang. All of a sudden it became possible for one nation to have two systems as Deng Xiaoping put it, capitalism and communism.

What is most obvious, even infuriating, about Chinese culture is that it flatly contradicts our own in the West. Their cultural values are the mirror images of ours. Whereas we in the West prefer universal rules, the Chinese are more taken by personal exceptions.

The hundreds of thousands of their students studying in the West are no coincidence. They learn from us at speed while we fail to learn from them.

While we are individualist to the core, they learned long ago that only an extended family group can sow and harvest rice. While we hanker after achieving and achievement, they ascribe value to projects yet to succeed.

The hundreds of thousands of their students studying in the West are no coincidence. They learn from us at speed while we fail to learn from them.

China’s boom has lasted 35 years and, although growth has slowed, it is still 7–8% while nearly everyone else was experiencing a recession and losing ground. It has also emancipated more than 600 million citizens from poverty in just three decades. It’s economy has doubled in size every 7.5 years.

Guanxi, the premier value of Chinese business

China’s real economic feat lies in learning from the ‘hybrid economies’ of Hong Kong, Singapore and Taiwan all of which have successfully combined cultural influences from the West and East. They have become masters of guanxi or relationship, not just personal relationships but relationships between ideas and processes in business.

Guanxi is difficult to define because of what it includes; that is, not just people, but ideas, knowledge, values and processes that form larger meanings. While the West thinks in terms of transactions, things to be counted; China thinks in terms of guanxi, or relationships to be further improved in quality.

Gift-giving is frequently the beginnings of guanxi and, while it can constitute a bribe, it is usually too small and too personal for such purposes. You will be expected to reciprocate, but over time not straight away.

Gift-giving is frequently the beginnings of guanxi and, while it can constitute a bribe, it is usually too small and too personal for such purposes.

However, those who reciprocate generosity, obligation, kindness, truthfulness, innocence and vulnerability are much better off than those who do not and make their money by depriving others. Provided they are mutual, kindness and respect may know no bounds.

The Chinese learn from us more quickly than we learn from them

I recall a visit with a Chinese friend to a Shanghai bookshop. The business section contained piles of books, mostly in English. All the way down the stairs, were avid readers absorbing what they could not afford to buy.

My friend pointed at their shoes. They were from the countryside, he told me. Yet I found their total absorption and hunger for knowledge strangely moving.

It makes sense for the Chinese to come to the West because we are still the more adept codifiers. Just as the Romans employed the Greeks to teach them, so may we offer the best explanation of how or why we lost, even as we feel helpless in the face of it.

If all that divides us from the Chinese is mirror image values then it is hard to see why we cannot work together and why arguments about where a circle starts should detain us. Yet the truth is that the reversal of our priorities makes us uneasy.

Just as the Romans employed the Greeks to teach them, so may we offer the best explanation of how or why we lost, even as we feel helpless in the face of it.

When people reverse what we perceive as the ‘proper’ order, our values feel subverted. Cold war ideology has given us the habit of polarising values, universal markets good, exceptions bad, individualism good, communal spirit bad, bits and pieces good, whole conceptions and higher goals bad.

We must free ourselves of these habits. What really matters is whether these diverse values can harmonise with each other.

Chinese and Anglo-American priorities 

American and British companies are trying to drive the best bargain for themselves and their lawyers are smart in pushing their advantage and justifying their own inclusion. In part, we resort to the law because it is very highly developed in the USA and the UK and, if you have a good system, why not use it to the full?

Another reason we prefer written contracts and the rule of law is that they are specific and clearly spelled out so no one can renege or claim ignorance. There is no wriggle room and expectations are precise.

On the other hand, the Chinese are used to the family model of business between persons of the same ethnicity, demonstrating high trust in a tight network.

Those unhappy with a contract should be released from its obligations. This is what friends would do for each other.

When dealing with foreigners, they must try extra hard to create an atmosphere and relationships in which everyone wants to benefit everyone else and reneging would be unethical and counter-productive. The idea is to want to help each other.

Not only are contracts secondary but they are little more than memoranda of friendly understandings. Those unhappy with a contract should be released from its obligations. This is what friends would do for each other.

Integrating rival views

In contrast to the West, the Chinese have always been comfortable with paradox.

The word for ‘dilemma’ is comprised from the Chinese characters ‘Spear’ and ‘Shield’ juxtaposed with each other. It is a dilemma from one moment to the next whether to defend with your shield or attack with your spear, yet it is blindingly obvious that you must rely on both and few warriors could survive without the two implements.

Hence both sides of the dilemma are vital to survival and what we in the West think of as either/or choices the Chinese see as a choice combination, a spear advancing defended by a shield and both deployed strategically.

In contrast to the West, the Chinese have always been comfortable with paradox.

As Ming-Jer Chen, Professor at the Darden School of Business at the University of Virginia, has pointed out, the West thinks in terms of either–or while China thinks in terms of both–and. The West wants victory while the Chinese prefer accommodation.

The West thinks in lines or arcs; the Chinese think in circles or helixes. The West thinks in objective quantities of things; the Chinese think in terms of subjective qualities, contexts finely fitted together in one whole.

The West’s sense of time is linear: seconds, minutes, hours, days, amid rapidly passing events. The Chinese sense of time is circular: everything comes round again if you wait patiently. If you cannot stop time and stare at the lotus flower, what is life worth?

Implications for human resources teams

The sudden surge of double-digit economic growth that has propelled China from near last place in the economic league tables to the world’s largest economy in the near future is too important to be ignored. We urgently need to learn from these developments.

For HR leaders, this means a rescue of Human Relations as a study from its confinement within HR departments of large corporations.

Humanity is not a specialty or a nice-to-have option. It is the entire purpose of business enterprise.

Humanity is not a specialty or a nice-to-have option. It is the entire purpose of business enterprise and belongs in the visions of leaders, not as a social lubricant and a “support activity” for managing employees with fewer tensions.

Within guanxi, lie the secrets of wealth creation. It is the only hope for a viable and shareable business ethic.

Dr Charles Hampden-Turner is the author of nine books including the widely acclaimed Vicious & Virtuous Circles, and the co-founder of Tropenaars Hampden-Turner which assists Fortune 500 companies in areas of globalisation, mergers and acquisitions, sustainability, training & leadership development and leveraging diversity.

Hampden-Turner is a one of the headline speakers at Talent Management Asia 2015Asia’s biggest conference on talent management and human capital strategy. 

To review the event’s topics & agenda, check out the stellar speaker list and reserve your seat visit www.talentmanagement.asia before it’s sold out.

For more information please contact Carlo Reston on +65 6423 0329 or carlor@humanresourcesonline.net.

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