One Billion Customers - James McGregor [17]
An examination of the interactions between China and various foreign nations that have wanted to do business there over the past two hundred years demonstrates why the Chinese today still harbor suspicions about foreigners. It also illustrates how the Chinese have adapted that suspicion to their advantage in negotiating tactics and strategies, both in government and industry. The Chinese genius for playing foreigners against each other is certainly present in modern business dealings, as is the Chinese art of brinksmanship and creative practicality of the sort that almost parked King George’s portrait behind the emperor’s curtain. As the story unfolds, China’s commercial transformation increasingly depends upon what amounts to a rocky marriage of necessity between China and America. The political relationship is volatile due to ideological differences, domestic political proclivities, and the natural friction of a superpower bumping against a could-be superpower. But China has also placed an amazing reliance on the United States in the past three decades as an influential adviser and a model commercial system.
China today is a strange hybrid. In many ways it resembles the United States. It has a continental-size domestic market that sets businesspeople worldwide salivating, a population of ambitious, risk-taking entrepreneurs who can use the country’s massive domestic market to build world-class products and businesses, and, by virtue of its size and stature, can force others to deal with it on terms it dictates. But, unlike the United States and almost all other nations that have become successful global commercial powers, China has an authoritarian and often paranoid political system that crushes dissent, controls information, and injects itself into every facet of business. There is constant experimenting with new political slogans, but the country really has no leading ideology other than enriching itself. The relentless drive of international trade and commerce that has shaken China out of its imperial stupor has now become an end unto itself. As a result, commercial negotiations in China often carry the weight of national aspirations, focused government planning, and, often just below the surface, the belief that you as a barbarian owe China something for past transgressions.
Commerce in China is all about making money, just as anywhere in the world, but business is also intertwined with China’s struggle to change and adopt the ways of the West while retaining its Chinese “essence,” as reformers in the final dynasty termed it. Foreigners have always sought not just commerce with China, but to change China, as well. Richard Nixon explained that desire in a 1967 Foreign Affairs article in which he said, “the world cannot be safe until China changes. Thus, our aim, to the extent we can influence events, should be to induce change.”
Those who do business in China need to remember that this struggle sets a backdrop for the business environment.
The Barbarian Handler
A nation that eschews relationships with other nations doesn’t need a foreign minister and China had none when Lord Macartney so rudely imposed himself on China. Macartney left China empty-handed, but his trade mission to China set the stage for many more. As the West industrialized, it sought new markets and raw materials. The Portuguese, Germans, French, Japanese, Dutch, and Americans were as eager as the British to open China for trade. The increasing presence of foreigners demanded that someone try to control them. For years the task of “barbarian handler” fell to Li Hongzhang, a commercially minded Confucian Renaissance man. To foreigners, Li cut an odd figure. A small man with a wispy beard, he was always clad in traditional gowns. Li hobnobbed with the foreign merchants and diplomats, attending their Christmas parties and other celebrations,