Chinese Wall

photo © 1997 Brian Kelley Creative Commons License

Yesterday I was in a four + hour meeting with members of the PRC government and business community.  This is only the second time in my life that I have met people from the PRC and I think the first time was over 15 years ago.  The meeting was long due to the frequent stops for translation but interesting to see how entrepreneurial the Chinese business people are.  Communism may still be the official song but the real tune is capitalism.

And capitalism was in its full bloom so long as it benefited the Chinese. Even the government people wanted something for nothing.  One of the government officials seemed to be asking (in remarks that he admitted were prepared for him) that we stop worrying about enforcing our rights in China because the "Market Player" was more important.  Maybe the translation was a bit off but I took that  to mean that the local companies distributing our product were more deserving of revenues  than the companies, like mine, who invest  in the development and production of the content.  This same government official said that we should not worry about piracy in China because it was an advertisement for our product.  His countrymen (and they were mostly men) laughed but none of the Americans in the room did.  I have seen that same argument on the Western internet pages of those who also want us to give away our product (movies and TV shows) for free on the internet.  Like certain Western internet companies that will go unnamed (e.g. search engines and ISPs) the Chinese want to build their internet businesses on the backs of others who have invested in producing the content that causes people to use those internet services.  The newspaper and magazine industries are well aware of this phenomenon.

Internet penetration in China is quite high for a country with a massive population, much of it poor.  We were told that penetration is about 32% representing over 400 million using the internet.   About 10% of that are video only users.  China is a huge market but the cultural differences, which the Chinese also commented about, make it difficult to for my (and most Western) industry.  I have read that Chinese have a more relativistic or situational view of morality deriving from their spiritual beliefs, unlike Westerners who, as believers in a monolithic deity, see morality in terms of black and white, right and wrong.  For most Westerners, theft is wrong (unless of course it is on the internet and then it is justified).  We continue to hear that Chinese factories are notorious for taking designs provided by Western companies, and producing a counterfeit good at the same time they are producing the legitimate good for export.  Do the Chinese see anything wrong in this? Not if it benefits their economic growth.

The Chinese yesterday claimed to respect our intellectual property and to have laws that enforce our rights but the reality is quite different.  Piracy is most rampant there and the legal claims so far are not making even the smallest dent. To me the tell tale sign was that one of the delegates, an older woman dressed somewhat frumpishly, particularly compared to her colleagues in expensive suits, was carrying a large "Burberry" purse. Ironic?  You decide. (Although to be fair, I have seen Americans who work to protect intellectual property also sporting counterfeit purses or watches.  A bargain is a bargain.)

My thoughts on this matter are still in flux.  I think there is great opportunity in China but will we be able to bridge the cultural gulf?  For my part, I spent a fair amount of time worrying about whether I would flub some protocol.  For example, it took me half the meeting to get right the art of exchanging business cards.  I knew enough to exchange them with two hands but for the first half of the meeting I was handing them over facing the wrong direction-- with the text toward me rather than toward the recipient. I finally figured out to turn the cards around and felt more confident by the end that I was not insulting someone inadvertently.

On my way to the meeting by happenstance I was listening to a audiobook novel about modern China and corruption in business there.  The novel, the Man from Beijing was written by Henning Mankell, a Swede.  I have no idea how accurate its descriptions of the Chinese are but I suspect it affected my viewpoint when I entered the meeting.  Where I am now in the book, it is talking about a split in the communist party in China from traditional Maoism toward a more capitalistic tenor, particularly in the approach to doing business in and supporting Chinese immigration to Africa as a means to forestall class war in China. The conclusion is that China, while protesting colonialism, is engaging in a form of neo-colonialism based on economic control rather than control of governments, a viewpoint shared by another writer , Professor Peter Navarro, (this time of nonfiction) who some view as demonizing the Chinese.   See reviews at Amazon link for Navarro book.   One criticism said:  "In The Writing on the Wall: China and the West in the 21st Century (which I recommend to anybody who cares about global peace and prosperity), author Will Hutton says, '[China] requires our understanding and engagement - not our enmity and suspicion, which could culminate in self-defeatingly creating the very crisis we fear.'"

It is difficult to know what to make of China.  To me, the best I can determine is that China is reaching out to others from behind its wall but unfortunately the differences in culture and history make the wall still quite difficult to penetrate.