Chinese Glasses: Chinese Ideas Of Contracts

Western business revolves around contracts. Once signed the contract determines the future reality: what should get done, when, by whom, quality and quantity. A contract sets the penalties for non-conformance. A contract is a commitment.

Does Chinese business revolve around contracts? Do Chinese think contracts are a commitment? No, and no. Chinese see contracts as a picture of what they hope happens, a place to start. Chinese gladly sign contracts for many reasons, two are that we insist and a contract signing is a great reason for a big meal at company expense.

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[gabissky]

Me too Levlobotomy, but we have to keep sight of the fact that the Chinese way worked for Chinese.

The big question now is will it still work under the pressures of  markets and the always-on global financial system, not to mention the host of "precision required" aspects of the industrial/digital revolution. Barter doesn't work for lean, just -in-time manufacturing for example; for that you need the certainty of contracts. A big issue, and challenge.

[Cellobeginner]

Very well said!

I've seen all your videos and I'm really surprised that you have such deep understanding about Chinese culture.

You're absolutely right about the way Chinese doing business.

So far I haven't seen any Chinese explain western culture the same way you did.

Good job and certainly hope to see more.

Thanks

[gabissky]

Thanks for your kind words. A lovely way to wake up on a Saturday (or any day). I'm off to do some all-day workshops next week and hope to get some new videos from them.

Cheers, Greg

[paulbaolong]

Actually, this guy's by and large off the mark. The marriage analogy works, but his bit about some sort of Chinese incapacity to prepare for future contingencies is a laugher. I live in Beijing. I speak Chinese. I practice law. Leading Chinese attorneys have all studied in the US or England. They know how international business is conducted and they're slowly but surely spreading the word throughout China.

[gabissky]

Are Chinese now a "fa li ching" (law more important than relationships) culture? Is knowing the law equal to following it?

I didn't say Chinese "can not" prepare for future but that Chinese tend not to look into the future, and that Chinese tend to view a contract differently than Westerners do. I agree that in high rent Beijing boardrooms, lawyer-to-lawyer relations look similar to Western, but that is such a small slice of the Chinese reality. Talk to traders about it.

Happy CNY

[Garethchina]

So what do you do after spending months on a contract and they try to re-negotiate at the signing?

MUTUAL? I see nothing mutual about the way they act. It appears to be ME ME ME. And foreigners are fair game. It's a national sport to screw the foreigner.

[gabissky]

Never said it was fair. Everything said about the Chinese -- your stuff and my stuff -- is true. My point is, if you want to have a chance, here is the way things have to work. Is it much of a chance? Often not, that's true, but I don't force people to "do" China, just try to help those that are so inclined.

[YellowMagi]

The US is pretty screwed at the moment, yes:)

Nothing lasts forever, the Roman Empire fell, the Mongols and America. There is no doubt that Asia will become the new world leading economy, but they will eventually crash aswell :p

There is no way to do things that is perfect, everything will crumble apart eventually ^^

[pantslizard]

considering 52-54% of all marriages fail in the U.S. I think we have quit a disadvantage.

LOL!

[TheSportsbot]

i will assume you are telling the truth. thanks if-so.

[clownbaton]

Lando must have been wondering if Darth Vader was Chinese.

[macdaddylorenzo]

2:55 "your benefits to the Chinese must be short-term, because they don't look long term."

This may be true in certain respects, but in many respects the total opposite is true. Just a few extremely important examples:

- Chinese have a legendary savings rate. When they make a dollar, they spend maybe 20 cents . . .if that

- Chinese students are renoun for their studiousness

- Chinese economic planning is very long term, whereas Western econ planning is . . almost non-existent

[rufullofshitusa]

this vid is so right...

[lodproductions90]

Bullseye! Sadly, most Westerners will not listen to it. They only think Western, and they don't like to wear glasses. :-(

[americanoxford]

@YellowMagi

Here's hoping that the Europeans take the plate from the East.

[codyhodyman420]

@wigglesmalibu Im guessing dynasties ago you had stock markets, shipping indexes and the internet. Right. They do think in dynasties. Things 1000 years ago progressed as fast as today. Im so stupid.

[Caramonn]

You can not get future benefit = no or little long term strategy. That is why so many go bankrupt... It is changing. Chinese culture is vanishing (you can see the gap between ways in Shanghai and inner China). Gabissky is right.