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April 27, 2005
Japan, George Costanza and Valentine's Day
Having worked in Japan a number of years, I noted the inherent mirror-like dichotomy between Japanese and American ideas. Which thought brings me to the character of George Costanza in the American television show, Seinfeld. A perennial loser who without fail makes the wrong choices in life, George decides he couldn't possibly go wrong by adopting whatever action contrary to his natural instinct.
Immediately thereafter, the strike-out king of dating, at first self-condemning of any attempt at success, he picks up a stunning blond in a diner -- despite informing her that he is unemployed and living with his mother.
While desiring not to associate myself too closely to this character of comic fiction, I found there to be, in fact, a certain truth in it -- in a Japanese context. The show caused me think of my decision, while in Japan, to adopt an attitude, as they say proverbially, “diametrically opposed” to any American convention to which I was habituated.
Quite naturally, one might assume that I was of this opinion simply because of a profound lack of understanding of Japanese ways of life. And in many ways, I was at sea for a while. But after lenghty observation and experience, I had come to the conclusion that Japanese and Americans are separated by an ocean of culture; whereas Chinese and Americans walk upon the same footbridge that crosses it.
While I found my sea legs in Japan, I made use -- years before the Seinfeld show ever aired -- of the George Costanza method of success: I thought and did the opposite of just about whatever I’d considered, by habit, to be “right and proper.”
An example. Valentine’s Day is that special day for American ladies, on which they receive all sorts of expressions of love – candy, flowers, diamond rings -- from their male lovelies. But in Japan – here we begin to cross over to the mirror Earth on the opposite side of the sun -- Valentine’s Day has always been a burden on the lady, for it is she who is must give her favored male the giri-choco (義理チョコ : ぎりちょこ) – the “obligation chocolate.”
In my first year, my unthinkingly chivalrous American behavior turned me into a laughing stock when I brought in chocolate for all of the ladies in the office. The ladies loved it, but the men – have you ever heard Japanese men laugh heartily en masse?
And as I was just about the only foreigner working for my Japanese employers, I received quite a bit of giri choco from the gals – but by my second year realized that I had no responsibility to return the favor. None of the men do.
Not even with the establishment of “White Day,” (ホワイトデー ) March 14, ostensibly created by a candy manufacturer [see this interview with a few of the luminaries of the sweets world] so that men would have the ceremonial opportunity to repay the giver of giri-choco with a present of white chocolate. (Well, why not? White chocolate is the opposite of…not-white chocolate.) Needless to say, Japanese men, having eaten their dark chocolate with glee, have no incentive to return the favor – and they don’t!
Posted by Richard at 3:32 AM | Comments (0) | TrackBackApril 21, 2005
Courtesy at the Crosswalks
This week, I write from Washington, D.C., where work on a client project takes me but steps away from the White House. Lucky for me, indeed – not that I have or would wish to have access to that office – but simply because this week sees the blossoming of the cherry trees, gifts from the Empire of Japan in 1912. So much of the DC environs has become as decrepit as any city that has slithered out of Philip Dick’s imagination, that this glorious gift from the Emperor redoubles its inestimable value nearly a century later.
Round about that year, the Qing dynasty of the Manchus had collapsed utterly, the Chinese Republican government was about to, and pitcher Smoky Joe Wood of the Boston Red Sox in the United States would say "I threw so hard I thought my arm would fly right off my body." Most Americans at the time were very likely oblivious to anything regarding the world at large, other than the World Series, which was particularly American. But in his comic novel, Picadilly Jim, P.G. Wodehouse speaks through his cricket-loving butler, Bayliss, to inform a heartbroken American that baseball originated as “rounders,” a children’s game played effeminately with a racket and a soft ball.
Whatever they claim to be, Americans generally will not run over a pedestrian. Here in D.C., whether walking or driving, I have found Washingtonians to be extraordinarily courteous and patient with the street-crossing walker. Fast-forward to Shanghai, the “Pearl of the Orient,” at least to mainland Chinese. What Shanghaiese driver will pause for a pedestrian? What one will stop for an elderly woman with bowed shoulders carrying her groceries in her arms and a young child on her back? Perhaps only a foreigner from DC…
Herein lies a lesson to be learned, one to be extrapolated from experience. In China, “big” wins – always, and with mind-numbing repetition. “Little” must defer. The walker, after all, is a mere bi-ped with limited speed and range of movement. No match for the 1 ton auto or the 10 ton bus. When, on crowded urban streets, competing bus companies rush from one stop to the next in search of customers – and make the driver’s compensation dependant upon surpassing a quota of tickets sold – “big” becomes a public danger.
True, the city of Shanghai, alone among Chinese cities, has attempted to force drivers to defer to pedestrians by placing financial responsibility on the driver in case of injury due to accident – even when not at fault. [For some background on Chinese auto transportation, see this.]
But, aside from this most modern of mainland Chinese cities, still 40 years behind its counterparts of Hong Kong, Singapore or Taipei, most Chinese drivers consider themselves “big.” The emphasis on the brutal exercise of power by those who apparently have it finds itself expressed throughout Chinese society, even where that expression is illogical or detrimental to the individual or society-at-large. This is, however, not a concept that has traditionally been in the ascendant. The recent 50 years have brought it to life and allowed it to flourish, but changes are in the wind.
More on the application of this idea in the Chinese management setting in an upcoming post.
Posted by Richard at 3:00 AM | Comments (0) | TrackBackApril 7, 2005
New Regulations Curtail Individual Outbound Investment
The traditional misidentification of China as the “Middle Kingdom,” a literal translation of 中国 (zhong-guo), leads many modern observers to claim, as did their 19 century counterparts, that China has been an historically insular nation which sees itself as the “center of the world.”
Originally, more than two millennia ago, the term was understood to have several meanings, none of which encompassed that of the English translation. It has never meant what we have ascribed to it.
Furthermore, several dynasties of yore were cosmopolitan in a very modern sense. The Tang (唐) dynasty is the cosmo poster boy most often trotted out by Sinologists. Our recent burgeoning of Sino-Western contact is hardly a new phenomenon.
So let us dump on the ash heap of historiography the fantasy of a timeless “Middle Kingdom” which, because it sees itself as the center of the universe, is predisposed to disregard the rest of the world. Chinese do not see themselves to be anymore at the center of the international world than do Americans.
And yet, Chinese often blithely wander their own way with scant regard for the international sphere, and, it would appear, to their detriment. We have a timely example, in fact, that takes us to Korea on our way to the mainland.
Korea, having seen Japan’s threat to change its currency mix fail to move the Bush administration to strengthen the dollar, issued notice of a surprising policy change. Korea will now encourage outbound investment in an attempt to move offshore much its massive foreign currency reserves of $205.4 billion. As the Korea Times article notes,
"The policy shift is considered a big step to slow the pace of the won’s appreciation against the U.S. dollar and reduce the widening deficit in the service account as well as stabilize the domestic real estate market."
The Chinese government, on the other hand, steadfastly maintains its RMB to USD peg, is unable to contain rampant property speculation and continues to accumulate foreign currency reserves (foreboding grave consequences, including inflation). A recent World Bank report warns of the potential for large capital losses to those countries with excessive foreign currency reserves.
In October, 2004, Chinese regulation was promulgated to make it somewhat easier for businesses, as opposed to individuals, to invest overseas, given the requirement of specific approvals. See page 3 of this document.
Contradictorily, and despite the economic risks, China has this past month decided to place severe constraints upon individual, as opposed to business, outbound investment. As Barbara Mok of Jones Day writes, “Outbound investment by domestic residents becomes more difficult, if not impossible.”
The impetus for the State Administration of Foreign Exchange (SAFE) regulation on individual investment may have been rooted in an attempt to curtail the pilfering of state assets. But is it any less difficult for a business to manipulate the approvals system?
The contradiction embodied by these regulations -- allowing business while curtailing individual investment -- may perhaps have originated in a disagreement among the various ministries involved. But, I am unsure of the validity of this assessment.
Chinese individuals have virtually no investment options. The Chinese stock markets continue their 6 year slide. Other than the very scary real property markets or the boringly unremunerative savings account in a state bank, gold bullion and postage stamps are what is laughably left.
If individuals were allowed to invest overseas, money would explosively drain out of China to places where it would find its higher return. The plug must stick in the drain, it seems, for fear that a freer flow of capital will wash it away.
UPDATE (June 1, 2005)
In a commentary on the subject of restrictions surrounding inbound (as opposed to outbound) investment, Doug Markel, an attorney with Freshfields in Beijing writes:
"Sceptics believe the government’s real intent is to put an end to offshore investments in Chinese businesses. What troubles the Chinese authorities most is the “valuation gap” in these deals. Typically, owners move their interests offshore at net asset value, before selling them at a significantly higher price.
The proceeds of such deals – including capital gains and significant foreign exchange earnings – are beyond the reach of Chinese tax and monetary authorities. The Chinese government has lost track of just how much value is leaving the country through these transactions." [Pay site.]
Posted by Richard at 4:51 PM | Comments (2) | TrackBackApril 5, 2005
India Trade, Investment and Outsourcing Conference
DOING BUSINESS IN INDIA: OPPORTUNITIES IN TRADE, INVESTMENT AND OUTSOURCING
Location:
Four Seasons Hotel, at 120 East Delaware Place, Chicago, IL
Date:
Monday, April 25, 2005
Cost:
$495 before April 18, 2005. Additional discounts for multiple registrations are available.
To register:
Call (773) 334-4477; fax (312) 873-4454; or email Indiaconference@aol.com
For Online registration visit http://members.aol.com/indiaconference
Speakers:
Senior corporate & business leaders from Motorola, S.C. Johnson & Son, ICICI Bank, Ernst & Young, Madaan.com, Hester Pharmaceutical, US-India Business Council, US Department of Commerce, Illinois Trade & Investment Department, the Consul General of India in Chicago, Engineering Export Promotion Council of India, Harvard University and the University of Illinois.
Topics:
• Economic and business climate in India
• Current state of the Indian industry
• Key market trends and developments in India
• What attracts foreign investment and business dealing with India?
• Emerging Telecommunication Opportunities in India
• Research & Development Expertise in India
• Legal Aspects of Investing, Trade & Outsourcing in India
• Financing Operations in India
• Tax Aspects of Doing Business in India
• Export and Import Procedures and Intricacies
• Opportunities in Infrastructure Projects in India
• Business Process Outsourcing to India
• Engineering and Manufacturing Opportunities in India
• Opportunities in Software Sector in India
• Opportunity Analysis & Business Feasibility for Business Opportunity
• Corporate Experiences in Doing Business in India: Practical Lessons Learned
