Benefits and challenges of China’s incredible diversity

Awareness of cultural diversity has increased with progressing globalisation. Most multinational companies offer inter-cultural training, and cultural differences are considered an important factor in cross border mediation. But what exactly is ‘Chinese culture’? While most foreign employees perceive the ubiquitous Chinese term ‘Western culture’ as too imprecise, many of them have little awareness of the immense diversity of culture in China. Volker Müller, senior business manager at the European Chamber, has worked in multiple regions in China, travelled to all provinces and witnessed the evolvement of Chinese culture over decades. In this article, he shares his insights on possible opportunities and pitfalls China’s diverse culture can bring for foreign companies.

At the bus-station at Yushu, southern Qinghai Province.

Me: “One ticket to Nangqian.”

Clerk: “Please!”

Me: “When does the bus leave?”

Clerk: “???”

Me: “The time of departure is not printed on the ticket. Can you tell me when the bus will leave?”

Clerk: “Just go to the bus and wait.”

Now I remember I am in the Qinghai-Tibetan highland. The bus does not leave at a definite time; it leaves when it is full. When the bus stops for lunch, it does not wait for a stipulated amount of time; the driver will only continue the journey when all passengers have finished their meal – a human-orientated concept of time that is worlds away from the super-punctual express-trains in other parts of China.

This may be an extreme example, but it demonstrates that China is culturally very diverse. In addition to the Han Chinese majority group, the Chinese population is also composed of 55 officially recognised ethnic minorities. The country’s land area is 2.23 times larger than that of the European Union, stretching from sub-arctic Heilongjiang Province to the tropical island province of Hainan. Until roughly 30 years ago, most Chinese rarely ever left the county where they were born, and different local cultures rarely mixed.

Stereotypes—positive and negative—abound in China: business-savvy people in Guangdong; a laid-back living style in Sichuan; a culture of dishonesty in Henan (which I personally strongly refute); patriotism and political consciousness in Beijing, and so on. To be clear: an individual’s character and professional abilities are shaped by many factors, and are not just a result of their place of birth. However, local cultural factors do exist and need to be taken seriously.

China has changed, but different parts have done so at different speeds. The early Special Economic Zones, Shenzhen and Zhuhai—but also Beijing and Shanghai—have become cultural melting pots, whereas in smaller towns, especially in Western China, you rarely find people from other provinces.

For human resources departments, it has become standard practice to care for the mental well-being of foreign employees. However, often overlooked is the fact that employees from ethnic minorities or simply other parts of the country may have the same or even greater difficulties in adjusting to their new location. Chinese (nationwide) culture emphasises a deep connection with one’s roots. Cultural concepts of homesickness (思乡病) and non-adaptation (水土不服) are deeply engrained in Chinese thinking. One simple example: many foreigners are accustomed to changing their place of residence every few years. Though Chongqing food may be very different to that of their home region, most foreigners consider it to be ‘paradise on earth’, while many domestic migrants from Eastern China will never like the spicy food.

When Chinese people move to a new place, they often form hometown or home-province groups, in which they can speak in their local dialect and cook home-style food together. This is a way of relieving cultural stress. However, this habit may become a challenge when many employees from one area are working together, which is often the case in large factories. Such groups may isolate themselves from their colleagues, forming factions and undermining team spirit.

The obvious advantage of multicultural teams is the diversity of abilities. The challenge for management is to put the right employee in the right position; stereotypes would suggest that a staff member from southern China is probably a good sales representative, a native Beijinger probably more suitable for government relations.

Because of the rapid development of China, cultural competency—just like general China know-how—needs to be maintained regularly. For example, just 20 years ago, it was very common in China to share very private information with strangers, like salary details. This habit has completely disappeared. In the past, an ‘exotic’ European face at an exhibition would give the product an international appeal and draw a lot of attention. While it may still be an advantage in western China, the presence of foreigners is nothing special anymore in the developed coastal cities.

One astonishing effect of China’s modernisation is the popularisation of standard Chinese (Putonghua or ‘Mandarin’). Nowadays, meetings with business partners or government officials are generally held in standard Chinese. However, outside of the melting pots, it is still advisable to learn the local dialect. During lunch breaks or after work, locals will switch to their dialect. A non-local manager that just speaks Putonghua will remain an outsider.

A lot of literature has been written about Chinese versus ‘western’ management styles.[1] The reality is that there is hardly any uniform Chinese management style. Some of the early private entrepreneurs came from the countryside, strongly influenced by Confucian traditions. As a result, they manage their companies like a patriarch, caring for their employees like a father and demanding strict obedience. On the other hand, since the late 1990s, a whole generation of Chinese managers went through international degrees in business, becoming heavily influenced by Western management methods.

In the past, limited economic resources and a society encouraging collectivism did not leave much room for sub-cultures. Nowadays in China, every conceivable type of living style exists in parallel. This opens new niche markets for European companies. In China, in absolute figures, even a niche market may be large. For example, not long ago, many urban Chinese looked down on peasants. Now, there is a new trend that young urban professionals move to the countryside to grow organic food, creating a completely new market for do-it-yourself tools that local companies have hardly addressed so far.

Finally, product marketing also needs to consider local cultural factors. Two examples: although China is the world’s largest consumer of pork, products containing raw materials from pigs should still at least be clearly labelled, as they will not be acceptable to the minority Muslim population. Or, as Han Chinese, like most East Asians, prefer a pale ‘white’ complexion, cosmetics are specially designed for this customer group. However, this preference is not shared by some of China’s ethnic minorities.

Case study – finding the right sales representative

In a previous job, I was assigned to establish an office in Western China. Finding good staff members was difficult, as local people seemed to be less diligent and business-orientated than the colleagues in our China headquarters. Most employees we selected for the new office graduated from universities in coastal areas, where they had acquired the ‘mindset’ that made them fit for work in an international company.

Finally, there was one position for a sales representative left. Two candidates were shortlisted: a ‘lady‘ who had already worked for foreign companies, and had stylish, sophisticated manners as well as good English. The other one was a ‘country girl‘, somewhat coarse in her appearance, the only one in her village who had worked her way up to a third-level education. Despite a lot of resistance from my team, I insisted on employing the ‘country girl‘: First, I knew people from that area are particularly honest and loyal, which are important qualities for sales representatives, whose flexible schedules mean they often follow their own agenda. Second, the wellbeing of the ‘country girl’s’ whole family would depend on her salary, which meant she would work day and night to be able to fulfil her filial duties. Third, and perhaps most important: she would match the cultural habits of our customers, who almost all grew up in that province and felt alienated when they encountered westernised behaviour.

Needless to say, the ‘country girl’ delivered excellent sales results. In this case, a right mix of employees was the key to success: managers educated in coastal areas with good organisational skills and the ability to interact with headquarters, and sales reps who could relate well to local customers.

[1] For example: Tracy Dathe & Marc Helmold, Erfolgreich im Chinageschäft: Strategien und Handlungsempfehlungen für kleinere und mittlere Unternehmen (KMU), Springer Gabler, Wiesbaden, 2018.