Beware of green hats: what you don’t know about traditional Chinese culture can sink your prospects

Given the multiplicity of cultural forces at work in China today and the contestation and reinvention of the meaning of traditional values over the course of millennia, a book that seeks to gain insight from its most ancient philosophical writings in the contemporary business environment might seem hopelessly quixotic and out of touch. Moreover, especially among young people born and raised since the 1980s, social scientists have observed the development of bi-cultural and multicultural adaptations of traditional values in response to the forces of economic transformation (Hu et al., 2018). However, the very real discontinuities, contestability, and multiplicity of Chinese culture should not mask its extraordinary degree of continuity, coherence, and enduring relevance. Despite the many forces drawing contemporary China in divergent directions, its culture and traditions remain remarkably resilient and distinctive, and they persist to this day in the country’s political, social, business, and family life. For all the things that have changed in the momentous past century, remaining remarkably consistent are the thought-traditions that underpin Chinese culture: the ones that make Chinese thinking and practice surrounding ethics and business Chinese. These are a combination of philosophical, religious, and what might be termed “superstitious” traditions, which are all crucially relevant for understanding everyday Chinese life, including in business.

When we invoke the concept of culture in relation to the enduring resonance of traditional Chinese values in contemporary business, we take our cue from the Dutch social psychologist Geert Hofstede, who observed:

understanding people means understanding their background, from which present and future behavior can be predicted. Their background has provided them with a certain culture. The word “culture” is used here in the sense of “the collective programming of the mind which distinguishes the members of one category of people from another.”

(Hofstede, 1994)

In short, Hofstede observes that culture distinguishes who people are and how they will be likely to behave. Traditional religio-philosophical elements of Chinese culture, we argue, are important components of that collective programming at work in contemporary China.

One primary reason for the ongoing relevance of ancient thought traditions is well-rehearsed: China has over 3,000 years of history, but unlike other old cultures, China’s is not merely old. China has grown old in situ—in pretty much the same place, with many of the same common cultural references. It has also had continuity (if evolutionarily so) in its language and writing system. As a result, there has been a great deal of continuity over the millennia, specifically of the things that often make a culture what it is, including language, philosophy, religion, and art. To make the contrast vivid, consider that China was first unified in 221 BCE. In the West, it would be as if most of Europe, the Middle East, and North Africa still viewed themselves as Roman subjects, spoke and wrote something that was recognizably Latin, and could directly trace myriad everyday elements of their culture, thought, and behavior back to Rome. Therefore, in order to understand how Chinese people in the 21st century think and act in general, and especially with regard to ethics, one has to understand not just the ideas and practices that are more recently influential—such as of gudnxi (IwW;) and “face” (which translates two Chinese concepts midnzi, ¡fiPF and lidn M?)—but also other subtly influential ancient and enduring ones. In the case of China in particular, this means going back to foundational values that have shaped Chinese culture, especially Chinese thought and behavior, to this day. We therefore focus more on the philosophical, religious, and ultimately cultural undergirding that drives Chinese ways of thinking about ethics.^[1]

Understanding the title of this chapter, “Tea with the dragon,” like many things to do with China, requires understanding multiple aspects of Chinese culture. Tea has been a popular daily beverage in China since the ninth century, and is a symbol of Chinese identity and culture (Sigley, 2015). Sitting down to tea with someone is an act of hospitality, serving a ritualistic purpose and creating a social bond (Benn, 2015). The dragon symbolizes China itself, as it is a legendary creature so strongly associated with Chinese mythology, folklore, and popular culture. It is a symbol of strength, power, and good fortune. Thus, sitting down to tea with the dragon metaphorically captures one aim we have for this book, something that is so desperately needed: for Chinese and Western business executives, government officials, and others to approach China-West relations as involving opportunities to be polite, sit down, and have real conversations, especially when they have deep and serious areas of disagreement. This is in contrast to the animosity, excessive saber rattling, and widespread misperceptions, even ignorance, of Chinese culture that permeates much of the current international political climate.

Throughout this book, we demonstrate through a number of carefully chosen case studies how understanding and being able to apply the core ideas of classical Chinese philosophy and literature can help executives to achieve their business objectives and maintain their core ethical values when doing business in China. To take this path with us, it is not necessary to understand Chinese language, although we will be introducing a few Chinese words into the vocabulary of most readers. We hope to “translate” difficult and often subtle cultural ideas and traditions for the modern business executive, policy maker, academic, or student. We focus on these cultural elements because they continue to resonate in the modern world, even if Westerners don’t realize that these traditional ideas might be forming an unstated backdrop to their business interactions.

Brewer Stone, a private equity investor who has been traveling to China for over three decades, offers a vivid portrait of how things can go very wrong when foreign business executives are oblivious to cultural signals:

The most common problem scenario I have seen would tend to go as follows: 1) high level meeting between the US and Chinese leaders of their respective business. A lot of mutual compliments, perhaps a bit of framing of high-level opportunities for collaboration, and maybe even a general understanding of a path forward (amidst friendly toasts). The US side leaves happy and discusses a compelling opportunity internally. Then 2) the Chinese side sends a mid-tier person to speak with someone who seems culturally connected—a Chinese national or speaker on the US company’s staff for example—and describes some key terms that matter or something not so great (e.g. a favor or more) that needs to happen to get someone on the Chinese side on board. 3) The US side takes this move from the polite high level to the tougher indirect channel as demonstrating a lack of good faith, double talk, or some other bad act. The discussions end up with a lot of noise and the opportunity has to be truly compelling to fight all the way through to a close.

(Stone, Interview, 2020)

As further evidence of the relevance of traditional culture in contemporary business, consider the infamous “Green Hat” story relayed by John Kamm, the founder and chairman of the Dui Hua Foundation, a human rights organization and nonprofit humanitarian organization that promotes universal human rights in “well-informed, mutually respectful dialogue with China.” Kamm, a MacArthur “genius" award recipient, has served as past president of the American Chamber of Commerce in Hong Kong and managed business operations in China for Occidental Chemical Company in the 1980s. “An American agricultural company wanted to secure an agreement to conduct field tests for their pesticide on a Chinese state farm,” Kamm recalls.

It brought boxes of hats emblazoned with the company’s name, trademark, and trademark color which was green. It was unable to hand out the hats however because in Chinese “to wear a green hat” means your wife or girlfriend is cheating on you.

(Kamm, Interview, 2020)

• [1] In what follows, we will emphasize ideas from Confucian and Daoist (also spelled "Taoist”) texts, as well as ideas that resist any particular classification and are sometimes called "popular religion” (Adler, 2002, pp. 17-18). While some scholars write of the “Three Teachings” (san jiao, _2$() of Chinese culture: Confucianism, Daoism, and Buddhism, we do not emphasize Buddhism because in China, Buddhism has been influenced by indigenous thought-systems, especially Daoism (Adler, 2002, pp. 74—89). Moreover, our focus is on contemporary business practices in China, and, although ideas from Buddhism have some salience in business, core Buddhist ideas such as karma, rebirth, and impermanence have considerably more influence in other spheres of life, such as private life and education (Adler, 2002, pp. 121-123).