Trends in Chinese Business Practice: Changes in the Beijing Wind

For a report on the views of China-based American executives on preparing for China, see Frankenstein John , “Training Expats to Manage in China,” Asian Wall Street Journal Weekly, August 26, 1985. The trade statistics are from U.S. Department of Commerce, China's Economy & Foreign Trade, 1981–1985, Washington, D.C., 1984, and the author's projections based on a two-way trade of $5.04 billion for the first eight months of 1985; see “US-China Trade Rose 26% Through August,” Asian Wall Street Journal Weekly, November 25, 1985, p. 15

For research on the salience of cultural preparation for China business, see Frankenstein , op. cit., and Tung Rosalie , “US-China Trade Negotiations: Practices, Procedures and Outcomes,” Journal of International Business Studies (Fall 1982). For a concise review of the literature on the cross-cultural skills needed for international business effectiveness, see Tung Rosalie , “Selection and Training of Personnel for Overseas Assignments,” Columbia Journal of World Business (Spring 1981). For findings stressing the importance of behavorial training, see Kobrin Stephen , International Expertise in American Business (New York, NY: Institute for International Education, 1984).

Lucian Pye's Chinese Commercial Negotiating Style (Cambridge, MA: Oelgeschlager, Gunn and Hain, 1983), originally written under the auspices of the RAND Corporation, is a classic and remains the best single book on Chinese business behavioral issues. Also, see Davies Derek , “How Britain Fell for the Peking Game-Plan,” Far Eastern Economic Review, June 21, 1984, for a summary of other RAND research on Chinese negotiating style. There is, of course, a large literature on the subject: For example see Tung Rosalie , op. cit., (1982) as well as her US-China Trade Negotiations (Elmsford, NY: Pergamon, 1982); for a practitioner's view, see Kelley Dennis , “Technology Transfer Contracts: The Negotiating Process,” East Asia Executive Reports (October 1984). See China Business Review for remarkably astute continuing coverage of all aspects of the China business scene. For the classic statements on high- and low-context cultures, see Hall E. T. , The Silent Language (New York, NY: Doubleday, 1959), and Beyond Culture (New York, NY: Anchor, 1977). For another angle on negotiating issues raised by centrally planned economies, see Beliaev Edward Mullen Thomas Punnett Betty Jane , “Understanding the Cultural Environment: U.S.-U.S.S.R. Trade Negotiations,” California Management Review (Winter 1985); it may well be that many of the problems encountered in the East-West business arena arise more from the dynamics—or, rather, sloth—of bureaucratic communism than they do from the unique constellation of attitudes, behaviorial characteristics, and history—that is, the “cultures”—that belong to the Russian and Chinese peoples.

For comprehensive views of the reforms, see Zagoria Donald S. , “China'a Quiet Revolution,” Foreign Affairs (Spring 1984); and Harding Harry , “The Transformation of China,” The Brookings Review (Spring 1984). For more business-specific comment, see “China: Reforms,” Business America, November 26, 1984; Clarke Christopher M. , “Decentralization,” China Business Review (March/April 1984); De Wulf Luc , “Economic Reform in China,” Finance and Development (March 1985).

For example, see “Textile Bill Would Imperil U.S. Ties, Chinese Warn,” (AP), Arizona Republic, December 5, 1985.

The outcome of the project proposal was interesting. In keeping with the devolution of decision-making power to the provinces, the provincial authorities, who had been working with another U.S. firm, carried the day. However, shortly after the decision had been made, SINOPEC informed this executive that his company had been chosen to participate in another project that, apparently, was under the sole jurisdiction of the ministry. In other words, SINOPEC was treating this U.S. company as an “old friend”—someone who had stayed the course. Later, however, this same U.S. businessman complained about the difficulty of communication with Chinese bureaucrats: “No one covers the phones when they're out of town!”

See, for instance, Bennett Amanda , “Western Companies Find They Must Change Their Strategies as China Eases the Government Out of Business Transactions,” Wall Street Journal, April 3, 1985; and Taylor Donald Ganster Steven H. , “Strategic Shifts in Marketing to the People's Republic of China,” Foreign Trade (March/April 1985).

There is continuing coverage in the Chinese and foreign press of these unintended consequences. For a sampling, see Wong Jesse , “China Fails to Find Shortcuts on Road to Modernization,” Asian Wall Street Journal Weekly, July 15, 1985; Bennett Amanda , “Despite Deng's Quest for a Credible China, Truth Remains Elusive,” Wall Street Journal, July 30, 1985; Burns John F. , “China's ‘Open Door’ to West Begins to Close,” New York Times, August 4, 1985; Fung Vigor , “China's Leaders Struggle to Apply Brakes But Runaway Economic Growth Persists,” Wall Street Journal, August 25, 1985.