Earlier this year, I spent 2.5 months working in the tech startup industry in Shanghai and Beijing.
Here are some of my reflections from my time there.
Stability is paramount to China. Throughout history, Chinese leaders have been obsessed about keeping "social order" and rightly so; a politically unstable China is not good for anyone.
In the West, it's about individual freedom and the realisation of individual potential, but in China, it's about maximising the potential of a family/community/society, and to do this, a country must be stable.
For example, is it "fair" for the individual that "odd" and "even" numbered car plates can only drive on certain days of the week in Beijing? Absolutely not. Is it necessary as one of the many ways in an attempt to reduce traffic congestion? Probably. Would such a solution ever be implemented in a Western nation? Maybe, but I doubt that it would last longer than one election term. ;)
China is a developing nation. It was only a generation ago when families often went months without meat (and not because they were vegetarian). Although the issue of sustenance has largely been resolved (the poverty line has moved more than 10 times in the last two decades in China), Chinese citizens are overwhelmingly driven by the need to SURVIVE.
Although there is some social security, social safety nets are full of holes (no pun intended). Families furiously save in the fear of illness and in preparation for their children's education. A large number of young women are attracted to single men with the 3 Cs - car, condominium and cash (and lots of it), because the prospect of living in financial hardship is still very real.
The Chinese love to own assets, especially new assets. That's why the secondhand goods market is virtually non-existent for a country of China's size. And the ultimate asset to own is real estate.
Even though there is no concept of "freehold" in China (all real estate is on a 70-year renewable land lease), it is almost a rite of passage for Chinese families to buy an apartment before being able to start a family, despite the fact that it might take three generations worth of savings to just pay the deposit on the house. In fact, it'll take 40 years for an average young family to pay off the family home.
A lot of what makes China what it is are the values of Confucianism. At the centre of Confucianism are the values of a family. Although Confucianism has been heavily suppressed during the Cultural Revolution, it is so deeply ingrained in the Chinese culture that it still pervades society today.
The Chinese view the family as the single most important thing in their lives. Creating a better future for your children, looking after your parents and looking out for other extended family members often comes before wider societal interests.
Here's an acid test on cultural differences: if your mother committed a crime that is punishable by death, would you turn her into the police? If you do, you'll be a good German (yes, I'm over-generalising, but I'm using Germany as an example of a rule-based society), but a bad Chinese. The vice versa is true if you don't.
Shanzhai literally means from "village in the countryside" – it has now come to represent the "copycat" culture that is often one of the first things that comes to mind for the West when thinking about Chinese products and services.
The Chinese have historically been really good at inventing new stuff and innovating (gunpowder, movable type, compass, the straddle…the list goes on). Unfortunately, the upheaval of the last 100 years meant that education has come to a virtual standstill and when it was revived less than 30 years ago, the focus on hard science and engineering (since China has lagged behind the industrialised West) left little room for the creative arts.
In addition, in order to rapidly develop China's economy, money was poured into manufacturing and supply chain processes (which China got really good at). While this made China the world's factory, it has meant that Chinese companies got really good at copying, instead of innovating. With time, this might change, but for now, China is a great at replicating technologies, faster iterative "micro-innovations" and having the most complete manufacturing supply chain in the world.
To the outside world, China seems like a culturally and ethnically homogenous country. In reality, China is incredibly diverse and it's better viewed as a continent.
There are 56 ethnicities officially recognized in Chinese law (as in officially recognizing each culture and language). The "Han" ethnicities dominate over 90 percent of the population, with the remaining 140 million people spread across 55 ethnicities. In addition to this, there are huge differences between the North and the South, the East and the West.
The Northern Chinese (an area of China where I was born) are physically bigger. Their personalities are very open, honest and are known to have a temper. The Southern Chinese in contrast are known as being very shrewd and are physically more petite. Most Chinese provinces have thousands of years of history that have uniquely influenced it to form its own character. In many ways, China is like Europe, except with a united written language (thank you Emperor Qin), family values (thank you Confucianism) and central government.
China has 1.3 billion people. Any number multiplied by 1.3 billion looks really impressive. China has the biggest number of internet users in the world, the biggest number of cities with over a million people, the most university graduates, the biggest luxury market. China has overtaken Japan as the second largest economy in the world. This is the side of China that the world often sees and sometimes fears.
It's important to remember that the 1.3 billion population works both ways. To a Chinese person, the effect of this is not multiplication but division. Everything divided by 1.3 billion becomes dysmally small. Eighty percent of Chinese internet users are extremely unsophisticated;, most of the luxury goods consumers earn less than US$2000 a year. Employment is a huge issue for Chinese graduates today.
We in the West tend to view China in black or white, right or wrong, left or right. In reality, China is an incredibly complex country with its own rich culture and history, with a different set of values. The best we can do is to learn more about this nation to work towards a better future for humanity.
Bowen Pan is a Chiwi (Chinese Kiwi) technology entrepreneur. He will be embarking on the MBA programme at Stanford University in September 2012. Follow his blog here
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