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A monthly column from the Asia Pacific Management Forum

Review focus: Lifestyle, China, business relationships, business associates, Chinese, face, social credit, business in China, networks, cultural differences, American, European, Westerners

Boye Lafayette de Mente's Asian Business Code WordsBoye Lafayette de Mente is one of our regular monthly columnists at the Asian Business Strategy & Street Intelligence Ezine. A noted author with over 30 years of experience in China, Japan, Korea and other Asian countries, Boye's tips on doing business in the region are both pragmatic and enlightening. Some material is taken from Boye's many books exploring Asian cultural and business Code Words, business etiquette, customs, and language.


Asian Business Code Words Index
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Bao (Bah-oh)April 1997

Bartering Social Credits

Life in China is based on a set of rules that are very different from the typical American and European experience. These cultural differences go to the very heart of the Chinese way of thinking and doing things, and are an on-going challenge to Westerners dealing with the Chinese.

Westerners are generally conditioned to base their personal and business relationships on impersonal rules that apply to everyone - friends and acquaintances as well as strangers. These rules, in turn, are founded on the principles of frankness, fairness, and a set of equality that pervades our most fundamental concept of the world at large. In principle, we can approach anyone, anytime, and expect to be treated fairly and courteously.

Chinese, on the other hand, are accultured to deal with people on the basis of social debts built up through a variety of personal relationships in the past - with family members, relatives, teachers, friends, business associates, and employers. In accepting help, of whatever king, from various people, the Chinese build up a reservoir of debt that they owe to these people. By the same token, they also build up a bank of "receivables" from people they help along the way.

Paying and collecting these social debts serves as the primary means of interpersonal relationships in China, from purely social to business and political affairs, and is controlled by the concept of bao (bah-oh), which might be translated as social reciprocity.

Fulfilling the obligations of bao is one of the most important ways the Chinese maintain and nurture their face. Failure to properly discharge social debts that are owed is regarded as one of the most dishonorable things a Chinese can do. People who ignore bao are regarded as uncivilized.

While more and more Chinese who are involved with outsiders socially, economically and politically, make some attempt to break away from the rigid bonds of bao in order to accommodate new relationships that are not based on social obligations, virtually all Chinese automatically make a strenuous effort to very quickly establish the kind of obligatory social debts they are used to because that is the only way they know how to react.

Newcomers to the world of China will find that their way is much smoother if they give building social credit accounts the highest possible priority. In fact, speaking broadly, it is often impossible to operate effectively in China, in virtually any capacity, without such "social credit", so there is no other acceptable choice.

Anyone proposing to go to China on business or for any professional purpose should begin to lay the ground work for establishing social credit prior to arriving there by getting as many introductions as possible, and taking along a grab bag of gifts and favours.

And, of course, these introductions should include as many foreign residents of China as possible because they represent a trove of insights and contacts that help newcomers begin the process of establishing their own networks.

Those who have no mainland China contacts to begin with would be well advised to make their approach to China through Hong Kong, spending whatever time is necessary there to obtain the all-important introductions.



This month's column is excerpted from NTC's Dictionary of China's Cultural Code Words, by Boye Lafayette De Mente available from NTC/Contemporary Publishing Company

© Boye Lafayette De Mente and the Asia Pacific Management Forum 1997

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