GUANXI, CHUPPIES, AND TRADE

The 2nd Annual Alaska China Business conference was today’s agenda. The program was hosted by the Alaska World Trade Center. I attended the first conference last year, prior to participating in the trade mission to Shanghai last year.

Lt. Governor Loren Leman opened the conference. He was followed by several China experts, including a special presentation by Yongpu Wang, the Commercial and Economic Counselor of the Consulate General for China based in San Francisco. From this diplomat I learned an unexpected thing - the Chinese term for the Korean War” is “War of protection of the Chinese Mainland.” How about that?

Much of the conference centered on information on the business culture of China. We were told there are large differences between the different regions in style, personality, and customs. For example, signing a contract is not the end of negotiation, it’s the beginning, and everything is possible with enough time. Building positive relationships is critical, and is termed “guanxi.” It is said that interpersonal relationships are more important to the Chinese businessperson than products and prices, and that the “loyalty factor” is extremely important. We were also informed that there is too often a dichotomy between guanxi and law.

According to the speaker Dr. Andreas Hoefert, a global economist, “China on an exceptional growth track, "Never in the History of the world has there been such a large economic growth at such a fast rate for such along time.”

I learned a new term, “Chuppies.” These are upwardly mobile Chinese for whom “Buy American” – especially high-quality goods – is a status symbol.

There's both great opportunity and some problems with Chinese – American trade. Expanding two way trade can be beneficial because profitable trading partners are less likely to upset the applecart with war. But a note of caution. Behind emerging capitalism, the bright lights and ultra-modern glitz in big cities like Shanghai, China is still a communist dictatorship that violates human rights daily. Trade is good but prudence reminds us that when we trade with China we are “Dancing with a Schizophrenic Dragon” - please review my September 27, 2005 Blog of the same title, written after my trip to China last year.