Walking Backwards

Imagine that you are walking backwards along an unfamiliar road unable to look over your shoulder.  You have to go onwards only guessing what is to come.  You draw your conclusions about where to place your feet based on what you can see.  This is, indeed, life. 

We cannot see a nanosecond into the future even when we are looking squarely down the road ahead.  Practically speaking we are getting a useful picture of the present, of the lay of the land ahead, but strictly speaking, even when we look down the road at what is ahead, we are looking at the past because by the time the light reaches our eye the situation has moved on.  In daily life we are happily unaware of the speed-of-light problem and consider, sensibly, that we are seeing the present.  Indeed, we walk happily down the road believing that we are seeing the future and place our feet with total confidence.   This works fine most of the time and this ability to compute and predict the future well beyond the road ahead has made us what we are as humans.

Unfortunately, we are not always right.  Black-swan events teach us this.  We are unable to predict the future even a nanosecond ahead.  As we walk down the road confidently seeing what lies ahead there is nothing other than past experience and probability to back our confidence.  A sinkhole could open beneath our feet or a meteorite might obliterate us before we can take that next step.  (In practice think of 9/11 and the GFC).  Fortunately such events are rare and our ability to predict is an effective guide in daily life and decision-making, but it is important to keep in mind that we are not actually seeing the future.

This idea is particularly relevant when one finds oneself in a totally unfamiliar environment.  The entrepreneur or executive arriving in China probably has several decades of experience in life and business and has a high degree of confidence in his or her abilities.   However, past experience is of only limited use in a place as different as China.  The ATM incident comes to mind in this context.  I am surely not the first foreigner to experience this.  We all know the drill: you put in your card, enter the password, enter the withdrawal amount, take back the card, get the cash and probably get a receipt or the option of one.  Three hours after my first ATM withdrawal and two hundred kilometres down the tollway, I realized that I did not have my card.  The cause of this disaster was that I failed to notice that in China it is money first, then receipt then press finish and wait for the return of your card.  After almost seven years I still have to remind myself before every ATM transaction to make sure I do not forget to take back the card.  Another simple example is the expiry of cheques.  The first time we were paid by cheque we did not bank it immediately for some reason.  A little over a week later when we did take it to the bank we were told that it had expired!  That was news.  In my country that does not happen for one year, a period that in practical terms is of no consequence.

un·pre·dict·a·ble

ˌənpriˈdiktəbəl/

adjective

1. 1.

   not able to be predicted.

   "the unpredictable weather of the Scottish islands"

   synonyms:

   unforeseeable, uncertain, unsure, doubtful, dubious, iffy, dicey, in the balance, up in the air More

The lessons in China come thick and fast for the foreign entrepreneur, especially the pioneer without the backing of a large organization or head office.  I felt such “oh-fuck” moments were a daily occurrence in the first year or so.  They were then weekly and now, after more than six years, perhaps less than monthly.  There is no way to know!  All one can do is to try to avoid making assumptions, but that is not a simple matter.  Can I assume that my food is not poisoned?  Probably.  Can I assume that I can drive through a green light safely without slowing to crawling pace?  It depends on which city or, part of the city, you are driving in.   Can I look at the laws and assume that what they appear to say is what they mean?  Probably not.  Can I rely on people to do what they say they are going to do without scrutinizing the transaction at every stage?  It depends, but mostly not.

So walking backwards through China is hard, because your past experience is only a very rough guide to what lies ahead.  So the lesson fellow Sinophytes is to be very, very careful and to assume as little as possible.  Ask lots of questions of lots of people before you make any decisions.  Tread carefully.

The Worship of Money and Luck

Chinese today are said to worship only money.  That appears largely to be true, although obviously a broad generalization.  There are plenty of places of worship here these days, including a lot of Christian churches, and the government is tepidly and cautiously promoting “traditional” religion with a view to restoring some sort of ethical base in Chinese society.  The government sees Confucian philosophy in a positive light for the obvious reason that it promotes filial piety, which places the state (substitute Party in this case) at the apex of society and as the ultimate object of filial duty. 

However, in terms of what one sees here in everyday life, money and luck are the ultimate objects of Chinese devotion.   This is appears not to be a modern phenomenon, in spite of the oft-heard lament here that people have in this generation lost their ethical compass.  Perhaps this claim is partly true, with the trauma of the Cultural Revolution and the attendant deliberate destruction of tradition taking its toll on subsequent generations.  My own take is that even in traditional religion people sought protection rather than moral guidance.  In other societies and religions there is also this element to some extent, but it seems to be more pronounced in China.

If true, why would this be the case?  In my view it comes down to the lack of the rule of law or social compact.  China claims to be subject to the rule of law, but that is not the case in the usual sense of the term.  Law is applied selectively here and power is exercised in an arbitrary fashion.  There is very little ability to reliably predict the future, or guarantee that one’s assets are not seized under some legal pretext.  Even a traffic accident that is entirely the fault of the other party can result in significant financial pain.  In business entire industries can be wiped out overnight, with no recourse, due to an arbitrary change in policy.  There is no discussion and no forewarning.  In business disputes, powerful enemies can coopt the corrupt court system to attack business rivals.   Cash-starved government agencies impose arbitrary fines on businesses to help boost dwindling coffers.  Again, no recourse is available.

For those with powerful allies (guanxi) there is some protection from some kinds of the arbitrary exercise of power some of the time, but no-one is immune all the time.  So luck and money are seen as essential to survival.  Money can help buy protection or an escape route.  With good luck accidents and illness might be avoided.  Being ethical and in ethical society is not only worthy, but will probably serve you well, but here a person who trusts the system is seen as a fool.  The system is not going to protect you, and it is certainly not your friend.  And this is the way it has always been.  You are more likely to get help by burning some fake banknotes for the Money God during the Spring Festival and burning some candles to Guanying, the Goddess of Mercy and other deities that might bring good fortune.

Making Sense of Corruption

It should be no surprise that North Korea regularly tops the list of corrupt countries in Transparency International’s annual surveys.  It is a one-party state run by a third generation despot.  But China is also a one-party state that lacks an independent legal system and it comes out at halfway down the list, i.e. at number 80.  I find that interesting because I believe that China is extremely corrupt and I wonder if there is some bias in the survey methodology – and it is pretty hard to imagine an effective way to measure a practice that officially doesn’t exist.  It is, however, fair to say that there are worse places than China because here, in day-to-day living and in mundane transactions like buying phone credit or paying bills, there are no extras to pay.  This sort of stuff goes quite smoothly and there are no obvious irregularities.   On the surface at least, China looks clean.

For anyone doing business here or simply following the news, it quickly becomes clear that corruption is pervasive.  Frequent arrests and the trial of officials at all levels, most recently that of Bo Xi Lai, clearly reveal this.  At the same time, to an outsider, the same arrests and trials appear to show how the Party assiduously works to root cooruption out, even at the highest levels.  The Chinese press dutifully echoes the Party line, explaining that no matter how powerful these corrupt officials may be, the Party will show no fear or favour in bringing them to justice.

If only it were true.  You only have to ask yourself how it is that so many Chinese leaders and officials all the way down to my local customs chief can afford to send their kids to foreign universities, to realize that something is not quite what it seems.  Could it be that the very officials leading the anti-corruption campaign are themselves corrupt?  Short answer: emphatically “yes”.

It all comes back to the one-party state.  In a land where there are no checks and balances; no independent parliament, media, courts, education system and no meaningful plurality of opinion tolerated, there is no way to systematically attack corruption.  Every intelligent person recognizes this and laments it, but what can he or she do?  Nobody really believes in the ideology any more. It is all hollow theatre, a church of non-believers going through the motions to avoid dangerous accusations of heresy by cynical rivals.  Add to this that, while the country’s economic boom continues to pump out new millionaires every day, the salaries of ordinary officials are barely sufficient to feed a family.  Even at the pinnacle of the Party, the monthly salary is just a few thousand dollars a month.   Finally, there is tradition.  Before the one-party state, was, except for a brief interlude, the no-party state.  The imperial system was much the same as the current system in that the imperial court dictated everything of importance.  There was no system of independent checks and balances.  It is true to say that the Party is, in fact, the heir to the imperial system and that, as has been pointed out before, Mao was the Red Emperor.  So this tradition of corruption has its roots very deep in Chinese culture. 

Now put yourself in the position of a mid-level official in any section of the bureaucracy.  You know the rules; don’t get too greedy and keep your nose out of Party business.  Are you going to be the only person in the office who does not except the gift vouchers, the fancy dinners, the offer of cheap rent or the use of your friend’s villa on the occasional weekend?  If you decide to stay poor and scrupulously honest, remember that you are going to be seen as a threat to your colleagues, and you must accept also that you will never be promoted.   Unless everyone has his snout in the trough, no one can feel safe.  And, after all, a few perks do not make you rotten to the core.  You can tell yourself that it is the system that is rotten to the core, not the individual.  Why should your family suffer when there is plenty to go around anyway?  How can you tell your wife that she can never have the things that departmental colleagues wives have.  How can we not have a car, when everyone else has one?  Why can our little emperor not go to Canada like his friends do?

One of my friends in a government office told me that he was resigned to staying at his current level because he could not afford the next promotion.  What?  Yes, it would cost about $40,000 to get up to the next level and he did not have the money.  I do not know how widespread this is, but I know that it is not uncommon.  Sinecures are dispensed for cash by the upper echelons of the agencies based on the value of the positions, which means the amount that can be “earned” in the respective jobs.

How is it that this apparent house of cards does not come tumbling down when the Party is constantly running fierce anti-corruption campaigns?   I always save the best part till last.  Well fellow Sinophytes, if everyone is guilty all of the time, then the Party reigns supreme.  When everyone has been given plenty of rope, the Party can decide at will who is to be hanged.  With the wisdom of hindsight you can go back and re-read the entire Bo Xi Lai drama and figure out what that was about.  The apparent paradox of former Premier Wen Jiao Bao’s ill-gotten billions should also now be somewhat less of a paradox.