DiligenceChina

Chinese nationalism is back, and international managers have to be very careful. As the banners and demonstrations at the gate’s of Danone’s Wahaha subsidiary underscore, Chinese leaders are more than happy to whip up public opinion to serve a wide range of goals. The problem is that once the genie of nationalism is out of the bottle, it’s impossible to contain.

Recent Chinese economic gains have raised expectations in two ways that are both significant to ex-pat managers and investors. 1) Chinese people believe that any frustrations, shortcomings or failures are YOUR fault, not theirs. They have been conditioned to see themselves as the natural heir to economic and industrial ascendancy. Any blockages or pitfalls must have been placed in their way by outside forces. 2) Westerners and foreign institutions are plotting against the rise of China. The average mindset in China is that western institutions are “tired” and outdated – and their only defense against the rise of China is trickery and manipulation. You will hear more and more of this line of reasoning when intellectual property or product safety laws are invoked – particularly on the international level.

An ounce of prevention is worth ten tons of cure as far as Chinese nationalism is concerned. Here are a few areas where international managers and investors need to be careful:

Know which subjects to avoid, or at least where to tread carefully. Tibet & Taiwan are obvious. Hopefully you are aware that to the average Chinese person, Tiananmen is an architectural structure whose main historical significance is as the site of Mao’s address to the Red Guard. There was never any massacre there as far as most of your Chinese staff and managers are concerned. Chinese colleagues think that government censorship of the internet is a virtuous system that protects children, that media controls are necessary and party membership is akin to joining the Rotary Club or Chamber of Commerce. They probably don’t understand why Darfur matters (at least to them) – but believe the Beijing Olympics is one of the most important events in modern history. Don’t be lulled into misconceptions by sophisticated-sounding Chinese colleagues who take a worldlier, cynical line. Once the banners start waving, every critical word you’ve ever uttered – or agreed to – will be used against you.

Be sensitive to the symbols. Mainland Chinese yuppies like to sound sophisticated and modern. Don’t buy into it. Chinese people revere Mao. They revere their flag. They respect the Party, at least as far as you’re concerned. They think the Chinese legal code is the best in the world. As far as the symbols go, you want to be very careful whenever the Chinese flag is used – but also watch out how images of Mao, dragons, the map of China, images of “common” Chinese workers and historical or traditional Chinese personalities are handled. Don’t fall into the trap of believing what the NY Times or hip business mags have to say about the “Chinese street”. The people around you tend to be MORE patriotic and loyal towards their government than US people are.

Don’t become a PC weenie. It is definitely possible to be TOO sensitive, and you can’t allow yourself to be led around by the nose. You are in business to make money – and your team needs to be on board with this. Once people see that you can be browbeaten or conned into making too many concessions, you’ll spend ALL of your time making “self confessions” and scampering from political crisis to political crisis. Take individual complaints and incidents seriously, but do your best to get a single individual to take responsibility and identify specific, workplace-related grievances. If they want to have long meetings or dialogues, you should offer them a space — but have them meet ON THEIR OWN TIME before or after work. Make sure you send a management representative (the higher ranking, the better) who can speak the local language.

Support healthy nationalism & patriotism, and make the trend your friend. Your job is not to fight the communist party or Chinese institutions, and you would be a fool to try. If they tell you they want to form a union or party organization within your company, the correct response is, “Can I join too?” Now, wipe that silly grin off your face and let’s try that again. “Can I join too?” Of course they won’t let you. They probably won’t even take you seriously. But asking if you can join is going to be VERY important later, when the demonstrating and flag-waving start. Your job is not to fight, but to co-opt wherever possible.

Multiple data flows.
Forewarned is fore-armed. You need channels of information into every department and branch. It’s good to know what people are thinking – but better to know WHO is talking. Every branch will have a shadow-leader or informal group leader who pulls the real strings. Low-level people in the organization will be the most clued in as far as what is happening – so ask them. Develop ways of opening up informal avenues of communication with young staffers who don’t have strong loyalties yet. They will tell you who is trying to influence them – if you start early and ask the right way. Information tends to get bottlenecked very quickly in Chinese organizations. Make sure you are not the last to find out what everyone else in the company already knows.