Never the twain shall meet

PUBLISHED : Monday, 13 February, 2012, 12:00am
UPDATED : Monday, 13 February, 2012, 12:00am


To many in the West, though fewer in Hong Kong and Asia, China's rise is moving roughly according to plan. The forces unleashed by Deng Xiaoping's reforms have created an increasingly free-market economy, albeit with some unwanted legacies, such as the tendency of Chinese companies to receive state support or steal intellectual property.

For most observers in Europe and America, though, the path is broadly established, even if those who understand China a little better think that nothing could be further from the truth.

One of the rather odd, even amusing, assumptions which follows is that China is also progressing, albeit gradually, towards a Western-style democratic system of governance, even although the government in Beijing has never declared that intention, and there seems little domestic interest in such a transition.

Most of the enthusiasm for this sort of reform seems to come from Chinese dissidents, or Western commentators.

These false assumptions have allowed another consequence of China's rise to be overlooked. Western beliefs that China will gradually adopt concepts of democracy and laissez-faire economics also assume that the country will embrace Western ways of thinking. They assume that China will accept Western social values, and Western ideas of morality, too.

Unfortunately for those sitting in Washington or Brussels, nothing could be further from the truth.

The United Nations Declaration of Human Rights states that individuals are born free and equal. It reflects Western and European Enlightenment notions of freedom and democracy. It says everyone has the right to work, to enjoy leisure time, the right to clothing and shelter, education and health care.

But this is not how things work in China, which has not signed the declaration, nor in most Asian countries, many of which view such ideas as soft-headed nonsense - the products of warped post-imperialist minds.

Chinese societies do not think about rights and society the way the West does. As a rule, they mistrust individual freedoms and political liberalism, preferring to emphasise order and discipline instead. Citizens are expected to sacrifice Western notions of freedom, including freedom of expression and freedom to congregate, for the good of society. There is little interest in Western democracy because it does not fit with Confucian ideas of stability, harmony and control.

Many of China's most cherished philosophies are based on other ideas - on those of filial piety, respect for authority, a strong work ethic, a desire for education and thrift.

It is these differences in philosophy that have made it hard for many foreign companies to do business in China over the past 20 years.

Chinese work practices reflect a fundamentally different way of thinking. Mainland Chinese businesses view the protection of data, workers and property in another light. Their approach to the environment and to working hours is often totally at odds with those of European and US companies. Promoting staff on merit, for example, runs counter to a system that prefers to protect the interests of a family or an established social group. What the Westerner sees as corrupt, many Chinese see as fair business practice, even necessary.

Respect for the law is often scant, especially if regulation is weak. Chinese job applicants often think nothing of presenting fake qualifications to get a job, just as local managers are happy to falsify company accounts or transfer corporate assets to their families.

Responding to such practices, which were unfamiliar to Western businesses when they arrived, has become just another part of the formula needed to do business in China. Foreign managers have also discovered that many of these work practices have existed in China since the time of Confucius.

Even so, Western commentators still seem to believe that Chinese values will change as the country takes a bigger role on the world stage, that businesses will adopt something akin to Western ideas of morality when they move abroad. However, evidence from China's foreign adventures suggests otherwise.

Most overseas investments by Chinese companies have been in less-developed countries so far, notably in Africa. These suggest that Chinese firms have taken their domestic ideas and management practices with them.

In a report on Chinese investments in Africa, researchers found the relationship with Africa was simply a 'classical colonial exchange', with mainland firms on the continent exporting raw materials from Africa and importing consumer goods from China to sell there. The study said that cheap finished products from China undercut those produced by African companies, pushing them out of business, bringing few benefits to local economies.

Employees of overseas Chinese companies say they rarely receive contracts. The benefits they are legally entitled to are often not paid. Labour laws are routinely flouted. Women are typically dismissed if they become pregnant. Workers are not paid if they become ill or are injured. Many of those working in mines are given the option to buy their own safety equipment or go without. Local African newspapers claim that 18th-century plantation slaves worked shorter hours than those working for modern Chinese firms.

The arrival of many Chinese workers in Africa has led to an increase in elephant poaching, while thousands of local workers have been displaced by Chinese immigrants in Kenya, Angola and Malawi, creating unemployment.

China has also been accused of environmental damage in much of Africa, especially Mozambique, South Sudan and Equatorial Guinea. Much of the local textile industry has been destroyed by low-cost Chinese imports.

So, Chinese companies have hardly adapted their behaviour when they have moved abroad, nor paid much heed to local laws. They have been driven by the pursuit of reward and have retained their traditional business practices.

For developed-world societies, the push by Chinese companies into their home territories is likely to bring trouble. For Western companies, to have experienced such unfamiliar work practices in China is one thing; to have to face them at home will be quite another.

When the same companies reach the shores of America and Europe in large numbers, one side will have to change its ideas.

At a time when developed-world governments face a prolonged period of low growth and high unemployment, they desperately need the inward investment that Chinese companies could offer.

The question is: how much will they be willing to compromise on their values to get it?

Graeme Maxton's latest book is The End of Progress, published by Wiley