Touch of Grey

Here is the second of my three China Law Blog guest posts.

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A favorite critique by Westerners of China is that “the Chinese are unethical.” It is claimed that Chinese deceive, don’t stick to contracts, deliberately cheat. While few would deny that China can be a frustrating place for Westerners to do business, and while unethical behavior certainly occurs in China, claims of unethical behavior are often exaggerated, and result from Westerners’ own failure to understand the different background assumptions held by the Chinese. As such, claims of unethical behavior often amount to little more than excuses for poor business planning and practices on the part of the Westerners.

When it comes to doing business in China, the road to ethical harmony can be less than entirely clear. But that’s OK. In China as in business anywhere, understanding the terrain is critical to knowing where to place your next step. And with China, that first step is an understanding that we do view things differently. The “ethical roadmap” below — while brief and by no means a complete guide to potential conflicts — begins the process of helping you navigate terrain that may look unfriendly, but is in fact just different.

Humans throughout the world fall into a simple, yet immensely hard-to-avoid, trap: attributing ill intentions where there may be none. Each of us is the only one with access to our intentions. In the moment we might not always know exactly why we’re doing something, but when pressed to introspect we’ve still got an infinitely clearer picture than anyone else does. When we do something that upsets someone else, we can easily take refuge in our intentions: we didn’t mean to hurt anyone’s feelings. If the people involved in this kind of upset are willing, dialog can happen, misunderstood intentions can be clarified, and relationships can deepen.

The rub is that we have no access to anyone else’s intentions. All we have to go on is behavior. We observe a behavior, and attribute an intention, whether it’s accurate or not. The result: we make a lot of mistakes, often assuming evil intent where intent was either good or, at worst, indifferent. Whether we like it or not, we are wired to judge those around us based only on their behaviors, while at the same time judging ourselves based mostly on our intentions. That’s a cold, hard reality — but a good one to know about.

This finding is not my own, nor is it new. And it’s a profoundly useful finding for intercultural understanding. Think of the staggering amount of miscommunication that happens every day among members of (roughly) the same cultural group speaking the same language. Now imagine a “typical” Westerner and a “typical” Chinese person. Both behave in ways deeply conditioned by their very different cultures; neither is familiar with the other person’s cultural habits; neither speaks the other’s language. How could they not judge each other? And what hope have they got of working things out, given the cultural and linguistic barriers?

My own answer is that they’ve got plenty of hope. What it takes, though, is hard work, commitment, and the involvement of experts with the tools to build the necessary bridges. It just won’t happen reliably on its own. It may happen here or there, but for most organizations that’s hardly what you’d want to stake your future on.

The truth is, there are ethical problems in Chinese business. As there are unethical practices in any business, in every culture. Who would claim that there aren’t ethical problems in Western business? Just look at the world economic meltdown. Plenty of experts have claimed — and many Chinese believe — that it’s due in part to ethically shady practices, mostly in the West. So while it’s quite possible you will encounter problems that are indeed unethical, don’t be too quick to conclude that it’s because of anything “Chinese.”

At the end of the day both you and your Chinese counterparts care most about the bottom line. It’s easy to cry foul on ethical grounds when it looks like your business is taking an unexpected hit. But there’s much more to be gained for your business by understanding that the Chinese are operating, just as much as Westerners, inside of an ethical system. Complaining about the system will only set you back. Understanding the system will ensure that you’re ready for anything.

Just don’t expect business in China to be absolute. Remember, your degree of willingness to deal with nuances and shades of gray will help make your China venture boom or bust.