Beyond relationships—three grounding values of Chinese ethics

In the West, we might start a list of ground-level ethical values like this: promoting justice and freedom; maximizing happiness and other goods; treating others not just as means to our own ends but as ends in themselves; acting in ways we would want others to act; leading a virtuous life at work and at home; etc. Lynn Sharp Paine offers a more specific list of such values, which also displays Western Rule-First thinking: “do right, be honest, be fair, keep promises, obey the spirit of the law” (Paine, 2002). However, if we are to do that for Chinese approaches to ethics, the list starts differently: promoting harmony; strategic competition; and collectivism over individualism. Because of Interconnectedness, these values are not exclusively ethical, and at first may not sound to Western ears like values at all, yet they guide everyday ethics, etiquette, society, and culture. These values, therefore, are less directly connected to the ecosystem of relationships, but help define the broader ethical-cultural landscape (of which relationships are a central part).

5.3.7 Harmony

The first, and arguably the most important, foundational value in traditional Chinese ethics is harmony, often translated as héxiè At the most elemental level, harmony is what ethical thought and behavior aim to achieve. The ethically cultivated person lives in harmony, not only with themselves, but also with those surrounding them, and even the environment (Zhuangzi, 2009, pp. 7-8, Xunzi, 1999, pp. 208-261). Within Chinese philosophy, traditions that otherwise disagree on very many things—for example, Confucianism and Daoism—nonetheless agree on the importance of achieving harmony in various forms. The cultivated person does not strive to stand out, does not openly gather prestige for themselves, and does not openly strive to overcome or defeat competitors. Such behavior is considered rather gross and barbaric. For example, disruption, that core value of many Western technology firms, is not an overt value in China, meaning that while disruption certainly occurs in China, overt disruptiveness is viewed as uncouth and uncivilized behavior. A well-known proverb sums up this mindset succinctly: “the nail that sticks out gets hammered down.” According to this mindset, success is not associated with overt success, excellence, or standing out (as in Aristotelian ethics, for example), but rather with fitting in and participating seamlessly within one’s relationships, guânxi networks, co-workers, family, institutions, and society more broadly.

One way to appreciate the centrality of harmony in traditional Chinese culture is to consider its relationship to paradox, a common cultural-philosophical stumbling block for many Westerners living and doing business in China. Chinese perspectives, in general, tend to be more tolerant of paradoxes than common Western ones. Starting in Ancient Greece, but especially since the Enlightenment—which came with the advent of modern science and the brazen hope that rational humanistic thought could solve or resolve nearly every human problem—a widespread Western perspective on paradox is that it is to be studied, analyzed, and ultimately resolved or if not, at least explained away. By contrast, to many Chinese perspectives, a paradox is viewed less as a problem that must be solved, or resolved, than as a discovery or even just a fact of life. Acceptance of paradox is a way of preserving overall harmony where circumstances and events might seem discordant to many Westerners.

There are myriad examples of apparent paradoxes encountered by Western business executives doing business in China. One concerns Chinese views of time. One the one hand, Chinese counterparts can seem to be endlessly patient. As Chinese proverb has it: “time is the only thing that’s free.” Of course, this is in direct opposition to the common Western (perhaps especially American) aphorism: “time is money.” Businesspeople in situations like that of The Hurried Executive in Chapter 2 often report frustration that Chinese counterparts seem to be waiting out negotiations rather than trying to get a deal done. This is, in part, to test out and to get to know potential business partners better. However, it can also be a negotiating tactic used to force the hand of Westerners who feel the pressure of time more acutely and will eventually accept a deal that is less favorable to them and their firms—a smart move from Chinese perspectives (we go into more detail in the next section). At the same time, however, other things happen very quickly in China, including research and development of tech, as well as construction in cities. We propose looking at it this way: some things happen slowly because it takes time to get to know people and one wants the most advantageous deal one can get for one’s firm. Another reason is that lower-level folks often have neither the authority nor the inclination to make decisions for which they may be held accountable—typically, any proposal or decision has to “slinky” its way up, and then back down, the chain of command before action may be taken. As Hank Paulson noted, his counterparts were often slow to decide, but then quick to act. Additionally, one needs to be able to trust one’s business partners since one cannot trust the government and legal system to avoid or resolve problems. Other things happen quickly because they are a matter of national pride and prestige (like Al research), or because they are a matter of desperate need, as millions of people continue to move from rural China to cities that have better work opportunities (like coastal construction). Awareness of what motivates Chinese government officials, businesspeople, and citizens helps us understand this paradox.

Another highly salient paradox is that of innovation versus traditionalism. When we were talking about IP in Chapter 2, we discussed how many Chinese businesspeople view IP losses as theft and as a serious problem, yet culturally speaking, it is not viewed to be as serious a problem as many Western businesspeople view it. We cited one book on the subject, which has a telling title: To Steal a Book is an Elegant Offence. In China there is, and has been for millennia, a widespread perception that older is better, that new ideas are not to be trusted, and that transmitting ideas is better than (overt) innovation and disruption. Confucius is quoted as having said “Following the proper way, I do not forge new paths; with confidence I cherish the ancients—in these respects I am comparable to our venerable Old Peng,” a legendary storyteller and hence transmitter of ancient wisdom (Ames & Rosemont, 1999, p. 111). More recently, Zhou Enlai is often quoted as having said “it’s too soon to tell” when asked in 1972 about the impact of the French Revolution. Though apparently arising from a misunderstanding in translation—he almost certainly interpreted the question as referring to the 1968 uprisings in Paris—the translation was allowed to stand, in part because such a remark is nonetheless consistent with Chinese perspectives on how long it can take for ideas to become established (Cowen, 2011). In China, old and established are a matter of millennia, not years or even centuries—culturally and politically speaking, neither three years nor 173 years is a long time in China. Yet, there is tremendous innovation happening in China, especially in Al and other areas of technology including social media platforms. How do these perspectives square with one another? Perhaps they do not—our message here is to highlight the almost-instinctive Western need for everything to make rational sense. Examining the situation closely reveals quite different motivations around technology development (national honor and prestige on the world stage, plus perhaps also the government’s ability to maintain control of information), which are largely separate from a generalized tendency to prefer, take pride in, and trust the older over the newer. Yet again, both can be true.

5.3.2 Strategic competition

A second foundational value of Chinese ethics and culture is what we call “strategic competition.” To Western ears this might not sound like a value. However, in part because of the emphasis on harmony, a basic moral instinct in Chinese ethics and culture is to avoid, or at least minimize, open conflict. At the same time, business, and life generally, involve competition—for access to resources, market share, lucrative contracts and partnerships, etc. The value is not that one ought to avoid competing per se, but rather this: given that one must compete anyway, the ethical way is to do so strategically so as to reduce disruptions to harmony. What defines strategy has been influenced by a variety of classic Chinese sources, but two of the most influential are the Daodejing and The Art of War. The latter is often misread by Westerners as a treatise on how to conduct war and win at all costs, but is in actuality a book about how to avoid warfare—specifically to avoid the destruction of people and resources, as well as the disruption of social harmony, that war creates. As the great General Cao Cao noted in his commentary on the Art of War, “the wise win before the fight, while the ignorant fight to win.” The apparent tension between competition and harmony is yet another example of increased tolerance for paradoxes—this tension becomes less acute, however, when one realizes that part of the strategy is to minimize disruptions to social harmony while increasing one’s own resources, maintaining face and gudnxi, and so on. Such a strategic outlook emphasizes the “long game” and ultimate victory rather than immediate reward and prestige.

The importance and ubiquity of strategic competition in Chinese society and business is, as is often the case, largely a result of history. Resources have been scarce in China for a very long time—1,300 years ago during the golden age of the Tang Dynasty, the population exceeded 50 million, and its capital was the largest city in the world by population (Banister, 1992). For contrast, that time included the reign of Charlemagne in Europe, when the population of that entire continent is estimated to have been half that of China’s yet Europe is twice the size by area of the Tang dynasty’s greatest extent (Russell, 1972, pp. 25-71). During the 16"’ century under the Ming Dynasty, China’s population surpassed 100 million, when all of Europe’s surpassed 70 million (Champion & Aubin, 2020). Scarcity of resources is thus a long-standing cultural assumption in China. For these, among other socio-political and economic reasons, a foundational assumption has guided Chinese life and society for centuries: if someone is an outsider and not within your family, clan, or gudnxi networks, then you are in strategic competition with them for resources. These resources have typically included water, food, land, and places to live—especially in cities—as well as access to government favor and recourse for wrongs done. In business, resources include opportunities such as increasing responsibility, promotions, and partnerships. To repeat: anyone who is not an insider is a presumed competitor.

As we discussed in previous chapters, this often leads to fundamental China-West misunderstandings in business. A typical Western mindset might come to the negotiating table looking for a partner with whom to make a deal that is mutually beneficial to both sides. Indeed, as we saw in Chapters 2-4, this is the appropriate rhetoric for those situations. But, to typical Chinese mindsets, that only makes sense among people already within their guânxi networks. Typical Chinese perspectives on the same activity of sitting down at the table are: you are looking to strike a deal advantageous to your firm, they are doing the same for their firm, and this process will not happen in a single sitting anyway. (Chapter 4 explained how to get past this situation, through understanding, time, and effort.)

Given this competitor-perspective on sitting down at the negotiating table, Western businesspeople are well-advised to learn and apply Chinese wisdom regarding strategic competition. Drawing from The Art of War, for example, such wisdom includes: (i) know yourself, in terms of strengths and weaknesses (including impatience, when compared with many Chinese perspectives on negotiation); (ii) know your enemy (who is at the table, what relationships are operating in the situation, which individuals ultimately make the decision, how will they perceive the prestige and title of the chief negotiator on your side, show them respect that they will recognize as increasing face, anticipate redirections and even misdirections, etc.); (iii) know the terrain (what are the background conditions of the negotiation, such as the political climate, relevant histories between the two firms, competing firms with whom the Chinese firm may be talking, how much time your leadership has given to make a deal, etc.); and (iv) mislead your competitor so that they cannot know you as well as you know them (appear more disorganized than you really are, do not fully reveal your negotiating strategy or approach right away, perhaps do not immediately reveal everything your firm is hoping to get out of the partnership, perhaps introduce your own redirections and misdirections, etc.) (Sunzi, 2011).

5.3.3 Collectivism over individualism

A third foundational value of traditional Chinese ethics, often discussed by sociologists, is “collectivism over individualism.” Generally speaking, the emphasis in Chinese culture contexts is on the well-being and face of the group—family, clan, work-group, department, business, industry, country— over that of the individual. It is often expected that an individual will accept harm such as a demotion, pay cut, fine, or other loss of face in order to preserve the face or otherwise reduce harm to a group of which the individual is a member. (It is also thought that this is importantly related to the Chinese religious-philosophical-cultural emphasis on harmony, discussed previously.)

When sociologists like Geert Hofstede and others measure the collectivism-individualism spectrum globally, they find that China leans significantly more towards collectivism than the United States, or Northern and Western Europe (Hofstede, Hofstede, & Minkov, 2010, pp. 90-92). The latter are the most individualist societies, whereas China and Asia generally are among the most collectivist (Hofstede et al., 2010, pp. 92-102). Another interesting finding, which Hofstede and others confirm in their research, is that globally, more people live in societies that tend towards collectivism. This is grist for our mill that Western, but in this case especially American as well as Western and Northern European businesspeople in particular, have very good reason in the global business environment to expand the range of their cultural-ethical-philosophical understanding and fluency. While Europe and North America are economically extremely important parts of the world, to simply assume Western standards are global standards, as many do, is not only naive but demonstrably inaccurate. These cultural differences help explain the apparent intractability of the challenges that motivated us to write this book. Difficulties communicating and working across this spectrum from more collectivist to more individualist are real because the cultures are profoundly different along this spectrum. That said, any businessperson serious about going to China, staying there, and keeping their hands as clean as can be needs to understand, appreciate, and learn to navigate these differences. On the bright side, since collectivism is more of the global norm than individualism even into the 21st century, this is an investment worth making. Even if, going forward, there comes a global shift towards individualism, there is little to be lost by Western businesses and businesspeople who gain the Agility to work within more collectivist contexts in the meantime.

As is usual in comparing and contrasting differing perspectives on ethics, there is nuance to the individualist-collectivist distinction. Even within Chinese culture and philosophy, collectivism—the generic view that any individual’s rights, privileges, interests, and ethical choices are subordinate to the group’s—takes a number of forms, as does its inverse, individualism, the more primary value in much of the global Northwest (Wong, 2020). It is precisely this kind of nuance that motivates this book, with its emphasis on the philosophical foundations of culture, in addition to psychological and sociological differences East-to-West. We leave detailed discussions of such nuances to philosophy, psychology, and sociology seminars. What is important for present purposes is that the collective’s interests do not simply and totally override individual interests. One can disobey a superior, and even act in a way contrary to what the larger group, company, or even society demands, if one does it in ways consistent with principles such as hierarchy (xido), propriety (II), and uprightness (yi) discussed in the previous sections. One must be sure that when one acts in any such way, one respects the face of the group and any superiors involved as much as possible. Another complexity is that the further up the hierarchy one goes, both in business and government, the less collectivist the thinking. Xi Jinping, Jack Ma, and Terry Gou, for example, care a very great deal about the prestige and well-being of the collectives they lead, but their behavior is not overtly collectivist, in contrast with middle-managers and even many top executives. This is another matter one must understand about Chinese culture contexts.

A classic illustration of how properly to disobey a superior according to Chinese ethics and culture comes from the Mengzi, in which a cultivated man wishes to marry a woman of whom his parents do not approve (Mengzi, 2008, p. 118). He knows she and he are a perfect match, but the parents do not see it that way and withhold their consent. In this case, there is an apparent conflict between uprightness on the one hand—standing up for what you know to be right, despite inconvenience to yourself as a result of a superior’s or society’s disapproval—and hierarchy and propriety on the other hand—which require that one respects the wishes and commands of a superior, in this case a parent. The cultivated person in this case marries without their parents’ consent so that the parents’ face is respected at the same time as the couple is able to wed. The same reasoning would apply in the workplace if a subordinate had to disobey an unethical or problematic order from a superior. The right thing to do is to disobey, but in a way that does not directly or openly challenge the superior, thereby avoiding open conflict. The subordinate should anticipate criticism from the superior (as part of them maintaining their face), and perhaps also some erosion of their relationship with the superior. This only works well, of course, if both parties understand these ethical-cultural norms well enough to accurately anticipate both the actions of the superior and the subordinate. An application of this is a common and much bemoaned problem in China-West business relations—when unaware Westerners find out that Chinese partners or their subordinates have said they would do one thing but instead have done another. Chinese partners or subordinates may think they are disobeying in such a way as to respect the face of their superiors and/or partners, but without understanding on both sides, the situation devolves into blaming and finger-pointing such as we saw in our discussion of the drug supplychain challenges in Chapter 3.

We should not leave the subject of collectivism without making note of the fact that, together with the emphasis on harmony, the current regime, the Chinese Communist Party, often invokes these values to justify all-encompassing state control of information, including personal information that can be used to identify and repress political dissent. Efforts towards political repression and social control have increased under Xi Jinping, and so it should not be surprising, as we noted in Chapter 1, that Xi has embraced traditional Chinese ethics to justify a very modern, high-tech form of authoritarianism. His embrace of traditional ethics should be viewed as a sign of the enduring power of these traditional values rather than any sort of independent verification of whether the current regime is actually in accordance with them. This question, interesting and important as it is, lay regrettably beyond the scope of this book to adequately analyze and answer, although, for the record, despite their protestations to the contrary, we don’t believe Xi or the CCP generally are paragons of traditional Chinese values.