Abstract
China’s rapid rise to economic prominence has been documented in a flood of new writing. There is now a vast array of books and articles on the Chinese economic ‘miracle’, from rather dry and formal run-downs of policy changes and reform measures, to in-depth sociological studies of workplace restructuring and the rise of a new class of Chinese consumers, to managerialist ‘insider’ stories that promise to reveal the trade secrets of ‘doing business in China’. Such is the proliferation of material—and so wide the scope—that it can be difficult to know where to turn in order to read something truly valuable on China. With this context in mind I can certainly recommend Steven Feldman’s Trouble in the Middle.
This long and detailed book explores the institutional roots of the Chinese economy (cultural, philosophical, sociological, political) and seriously considers the enormous practical and ethical issues that are deeply interwoven into Chinese economic life. Broadly taking an institutional approach in which all economic action is understood to be embedded in complex and enduring socio-cultural norms, Feldman’s depiction of China reveals a business environment with extremely strong institutional constraints and enablements on economic action. Business actors are enmeshed in complicated and often problematic relationships involving elements of reciprocity, ‘face’, gift-giving, guanxi and bribery. With an overbearing and corrupt government ‘involved in everything’ (p. 182), Chinese and international businesspeople have no option but to involve themselves in the often murky world of bureaucratic officialdom, including bribery, ‘connections’ and an economy of favours. Focussing specifically on American-Chinese business relationships within this difficult context, Feldman explores the unavoidable ethical and cultural compromises that structure international business action, introducing his concept of ‘the cultural middle’. This is defined as ‘the ideational space between two established cultures where they can potentially work to understand each other’ (p. 21). Feldman has a very pragmatic and ‘realist’ notion of power and cultural compromise; sometimes a cultural middle is characterized by ‘adoption and fusion’, but perhaps more often by ‘conflict, miscommunication and misunderstanding’.
This notion of ‘the cultural middle’ takes up a central role in the book. Even amid the rapid ‘Reform and Opening Up’ of China, international business in this region is complex, messy and difficult, and a workable cultural middle rarely emerges. Given that trusted relationships are so hard to form and sustain, American and Chinese businesspeople use middlemen to broker deals, to provide access and to maintain ‘plausible deniability’ about Americans’ involvement in corrupt practices. The use of middlemen, however, restricts the possibilities for a ‘cultural middle’ to develop. Trouble in the Middle is, therefore, a powerful discussion of the importance and persistence of institutional and cultural norms, and a very detailed and convincing account of how complex and ethically difficult ‘doing business in China’ really is. This is not a fertile environment for cultural or moral absolutes.
One of the strongest aspects of the book is its historical depth. In Chapters 1 and 2, Feldman provides a wide discussion of the complexity and longevity of the institutional structure of contemporary China, showing that a powerful state bureaucracy and strong norms of authority and collectivity have always structured Chinese economic action. He argues that an overbearing state and dominant family structures resulted in a weak civil society, meaning that the ‘official’ forces of stability and control have their corollary in a low-trust society consisting of secrecy, malpractice and ambivalence. This makes for a complex and potentially toxic business environment. Feldman’s coverage of these issues is multifaceted, subtle and highly convincing.
With the concepts, purpose and historical background of the book established in Chapters 1 and 2, Feldman goes on to provide extensive contextual material on China, around which he orients the remainder of his contribution. The style is to provide a wide canvas of historical and policy-related material, juxtaposed with chapters based on data derived from in-depth interviews with 37 American and 47 Chinese businesspersons. The result is a book that is highly informative in its coverage of the broad context of Chinese socio-economic practices, institutions and traditions, while also reporting important qualitative empirics on the more focused issue of Chinese-American business relations.
Chapters 3 and 4 delve into the historical roots of China’s economic culture, exploring issues of the persistence of centralized bureaucratic political control that has been a dominant feature of Chinese society for generations. Dishonesty and mistrust have long been rampant, often at its worst among those who claim to be the arbiters of ethics (p. 54). Some fascinating passages address the ways in which China has typically been misunderstood by North American observers, who falsely project their own concepts of liberal democracy, ‘individualism’ and ‘progress’ on to China, another historical issue that Feldman argues remains prevalent today. ‘Indeed’ he argues, ‘it is part of an American myth that Americans see the world “objectively”, without any historical or social biases’ (pp. 93–94).
Chapter 5 updates the picture by providing a very detailed discussion of the post-Mao ‘reforms’ in China, emphasizing the continuation of state control and the persistence of endemic corruption and mistrust. In Chapter 6, Feldman starts to draw on his empirical material, and the chapter is illuminated by frequent interview quotations from Chinese and American businesspersons, often in the form of ‘war stories’ about the challenges of business in China. Some of these excerpts were fascinating in terms of the practical details (of bribes, gifts, connections) and of the moral games being played. Many of the American interviewees rationalized the corruption and distanced themselves from it, by reference to corruption as being ‘unavoidable’ or that Americans have ‘nothing to do with’ bribes as they are paid ‘remotely’ through middlemen. In reality the use of middlemen leaves US executives ‘a handshake away from criminal activities’ (p. 211).
Discussions of whether the authoritarian and corrupt Chinese political system will ever change feature prominently, with Feldman believing significant change to be most unlikely. Chapters 7 and 8 further explore ‘culture and conflict’ in US-Chinese business relationships, with Chapters 9 and 10 focussing somewhat more narrowly on the specific and deeply troublesome issue of intellectual property rights, again illuminated by extensive interview quotations. Conclusions, epilogue and appendices follow.
This is an ambitious and substantial book. It explores a number of important issues using a combination of historical narrative and contemporary empirical data. The scope is wide, and the interrelated themes require the author to range over a number of literatures. At times this meant that the use of literature (and especially theoretical concepts and traditions) seems rather haphazard; Feldman draws on a disparate array of literature and concepts, resulting in an eclecticism that some might find superficial. For example on p. 18 he states that his work follows in the tradition of Max Weber, Clifford Geertz and Melville Dalton, although there is scant reference to any of these authors elsewhere in the text. There is no staking out of a theoretical or conceptual position, at least not in a traditional sense. The text is not especially challenging on a theoretical or conceptual level. On the other hand, the author’s focus is very broad, and he contributes in no small way to all of the elements of the story. The book deals very effectively with both the ‘big picture’ of Chinese socio-economic culture and the more contained focus on ‘the cultural middle’ between US and Chinese business actors. It is a fresh, clear account that is strongly argued and authoritative.
The book is extremely well presented. It was good to have a paperback edition with an attractive cover design rather than the expensive, hardback only ‘blocks’ that are all-to-often the default option for monographs. Feldman’s book is an original, readable and very insightful contribution to the Chinese economy literature. It takes an approach that is both very wide in scope, has rich historical depth and yet at the same time maintains a clear and focused argument. In short, the book is very impressive. It deserves to be widely read by scholars and students of Chinese economy and society.