Elaborating here on the theme from the last book post: the scarcity of money in the Chinese mindset. I ended that last book post by contrasting the default Chinese view with a different, American view of scarcity: the opportunity to use one's talents in the most fulfilling way possible. In this post we delve more deeply into the Chinese approach.

From a Chinese perspective, things look radically different. The obvious domain of scarcity from this perspective is the physical, material resources of this earth: in particular food, water, clothing, shelter, and their proxy, money.

Money is, of course, valued the world over, and I have yet to meet a person who would walk away from it in any quantity under anything but the oddest of circumstances. The difference, though, is in the singularity of focus on the need to acquire and conserve money.

China’s history is epic, and doesn’t lend itself to easy summarizing — except for one persistent theme over the past 3,000-plus years: it’s one disaster after another. If it’s not a devastating flood, then it’s an earthquake. If it’s not an earthquake, then it’s a drought, followed by a famine. Human beings, of course, can wreak plenty of havoc: internal rebellions and external wars have caused untold devastation over the centuries. Various parts of China have been invaded and occupied dozens of times. Natural disasters, human misrule, and hostile conquerors have conspired to make China a notoriously unstable society, persistently, century after century.

It is also easy to forget that just 50 years ago, 20–30 million people starved to death in China. Tens if not hundreds of millions of Chinese still remember this, and surely their children and their children’s children have been duly reminded.

On top of all this — and partly a cause of China’s woe over the centuries — when compared to the United States or Canada, China is relatively lacking in resources, most notably arable land. Vast swaths of China are taken up by mountains and deserts which make farming impossible.

Over time this has yielded a pervasive mindset, so pervasive that it could be called a cultural instinct: do what you must to get money, and, once you have money, keep as much of it as you can.

This focus shows up all over Chinese society, but perhaps nowhere more clearly than in the persistently high savings rate in Chinese households, which as of late 2010 has for years been holding steady at around 50%. It also shows up in the willingness of workers to switch jobs for even a modest increase in pay. And many, many other places, including negotiating.

In her classic, Negotiating China: Case Studies and Strategies[1], Carolyn Blackman begins by introducing readers who are unfamiliar with China to what she calls the “haggling society.” She tells personal stories of how far people would go, just in the local markets, to ensure that they didn’t spend any more money than they needed to:

When I lived as a Chinese person in a Chinese household, I watched the bargaining that went on around me every day. My landlady, Mrs. Zhou, bought her fruit from the fruit seller who pedaled his bike and tray past our place about 10 a.m. every day. They started by exchanging a few words of banter, then she began to pick up the fruit and have a good look at it. To my way of thinking, Mrs. Zhou was unbelievably thorough. She would examine just about every piece of fruit on the tray.

She would accuse the fruit seller of charging too much. She would say the bananas were too thin or the apples were not red enough.[2]

And so on, until, after much time and energy, a bargain would be struck. Sometimes things can get extreme:

Down the road at the free market I used to see the same kind of thing go on. A plump grandmother shopping for her extended family went to the pork stall and chose a piece of pork.…When the pork butcher told her the price, she disputed it hotly. She offered him much less, grabbed the pork and went to put it into her basket. The butcher…grabbed the other end of the pork. A tug-of-war began, the lady pulling on one end of the piece of meat, the butcher on the other, neither willing to let go, and each shouting prices and evidence to defend his own point of view. The battle only ended when they noticed that the other shoppers were helping themselves to the pieces of pork lying under the counter — and to some of the items in the woman’s shopping basket.[3]

While this example is a bit more slapstick than most, scenes like this, in which emotions between buyer and seller get heated, are common in Chinese marketplaces. Often it is self-conscious theater, but the point remains the same: don’t mess with someone’s money.

[1] Carolyn Blackman, Negotiating China: Case Studies and Strategies, St. Leonards, Australia: Allen & Unwin, 1997.

[2] Blackman, p. 5.

[3] Blackman, p. 6.