Return the favor and save the environment

This picture of the Shanghai customs house in 1860 is an impression from the work of one of the French officers who was engaged in the second opium war. China’s forced opening up was quit different from China wanting to open up in the last 30 years. This voluntary opening has led to many ideas about business culture. In the center of theories about China the concept of Guanxi (reciprocity) keeps surfacing as a key to understanding Chinese business. It implies that a favor done from one person to another will somehow be returned at a later time. It also implies networks of favors interchanged between numbers of people. Guanxi between friends is different from guanxi between business partners, guanxi can encompass family relations, party members, pretty much every layers of society. As I wrote in 2012 Guanxi takes many shapes and really depends on the persons involved. And to be clear and anthropological there are as many possibilities as there are people in China.

Many complaints about working with Chinese in business have equally arisen. One can hear Westerners utter: ‘A family member is placed in a leading position without any real capacity or knowledge!’, ‘You never know what to expect!’, ‘the negotiation process never ends’. With the complaints come the everlasting advises on how to deal with the Chinese: ‘never lower your price’,’ if a leading CEO changes, all your agreements disappear’, ‘they will take your technology and copy it,’ and the latest (which made most China hands giggle to say the least), ‘don’t bring any data on your computer or telephone on this delegation visit! If you have a phone, through it away when you leave China, you will be bugged!’ And the reproaches are equally up to date: ‘Oh China, even though the US has spoiled most of the world with consumerism in the past 50 years, your new found wealth is the cause of all environmental misery and ...’

All these definitions, warnings and well willing directions on how to…… there is a tendency to forget one other thing. How about the West?

What? No networks here? No incompetent person in business positions here? What, no favoritism? No hunt for money? No dominant lobbies? No state support for corporations?

The reality is that in the West small businesses hardly survive. Scale enlargement is not just a matter of capital, it is a matter of favoritism and simply money, and it has little or nothing to do with quality. The European Union hands out subsidies to large farm industries, never to small farmers (at leas not to biological farmers). Also, money makes money, nowadays you can literally buy your way into a business community and more bizarre, into a consumer market, also in China, or at least some companies seem to think.

Yet in China, blinded by the numbers, most companies make that mistake. When Nike claims it holds a part of the Chinese consumer market, this may sound impressive, but it is easily lost. On a population of 1.386 billion below 7% is not a real market share, it is just an awful lot of shoes! In Shanghai, for instance, a whole line of self-designed shoes, took prevalence over the standardized status of a Nike. And Nike can very easily be replaced by nationalist notions of designed in China. In China advertisements has matured in more ways than one can imagine’

What would happen if the Chinese really returned a favor equal to what some Western business export? Some 2 years ago I asked a business developer of a large Dutch dairy producer, which favor Social Corporate Responsibility, if they were not afraid the Chinese would accuse them of monopolizing the market with their exorbitant prices of export of baby milk powder. He answered with some self-indulgence that as long as they could make a huge profit, they would continue. The company proudly claimed to have a strong foothold in China and create a publicity campaign around it, until their Chinese CEO disappeared with the money. Well actually, he did not completely disappear, just the money. He pledged to return the money in real goods, which obviously for the company were similar to the gold they had lost, namely: baby milk powder

Another example I came across last year, an unfortunate case of environmental campaigning as well. A company claiming to have developed an ethical and environmental method of fertilizing tomatoes by using colonies of bumblebees. Great! No more fertilizers, except that they sold the bumblebees in China for 10 dollar a bumblebee! No average farmer would ever be able to afford such a colony.

Eco labels are also big business. I came across 20 different labels in only one Western auditing company exporting the labels to China and working with local auditors against tough prizes. While generally even the state provided eco labels are not even trusted by Chinese consumers, these ‘import’ labels really make the situation worse.

In China peers who check your activities are very far away! Aha yes, Shanghai! I have never met so many would be professors claiming to have finished from Harvard, indeed!

The crux of the matter of course is that we need to change our approach, not towards China, but towards the Western business models which did not bring much honesty into this world, neither did our consumer models, not those from the West, neither those from the East. We need a radical different innovative approach towards economic development. Such is the only way to create space for real environmental innovation. The challenge is to cooperate without all the boasting and moneymaking, of course from all sides involved. It is time for a change in environment. I hope the seminar in Amsterdam on June 7 will create the start a new approach.

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