Working in China

Working as an expat chemist in China
Dr. Kai Pflug, Management Consulting – Chemicals, Shanghai, and Dr. Stephen Pask, SteDaPa Consulting, Düsseldorf
It should be noted that the impressions of the individual chemists interviewed for this paper showed a large variation from person to person. Important factors influencing the China experience include the knowledge of the local language, the location (while some expat communities, e.g., in Beijing and Shanghai allow leading a fairly Western lifestyle, this is impossible in some smaller, more provincial cities particularly in Western China) and the type of position held (technical consulting positions may be less critical than line management positions). Preparing this paper, the authors were thus occasionally reminded of the Chinese proverb concerning the “blind man touching an elephant”.
Doing business in China rather than in Europe or North America is a little like working in the rubber industry rather than the plastics industry. Put simply, if you want to sell plastic then you first have to have the right price…and if that is accepted, then you have a sale, if it doesn’t work you have to send in a technician to solve the problem (Europe, N.A.). If you want to sell a rubber, you first have to work with the customer to convince him that the product can perform (building trust). Only then can the price be discussed (China)
Chinese Culture is different! The Chinese culture is older and has experienced a more continuous development than the European – and many Chinese are more aware of this than perhaps are many Europeans or Americans! A modicum of national pride is part of the central government’s policy and it is thus positively supported. At least some understanding of the culture is essential for a westerner trying to cope with life in China. As an example: According to Confucius copying something is seen as adulation. This might be annoying for the owner of a patent or brand but these issues are increasingly coming under control in China. The influence of this aspect remains in daily life; it requires not only understanding but tolerance. It is generally contrary to the western view of achieving success via one‘s own ideas and efforts. Thus, if ideas or concepts are proposed by someone else, without reference to the origin, this might be very frustrating but is actually an excellent complement and if the concept is then accepted it is better just to be satisfied with the success!
What was the motivation for the move? Chinese companies are particularly interested in gaining western technology and management expertise; this is actively supported by their central government. Additionally, there is a degree of prestige and image improvement which they expect from employing non-Chinese managers. Indeed, in small Chinese companies, it is not unheard of to hire some Western faces for a visit by investors just in order to simulate a higher level of competence and expertise. For the western chemist a major motivation is often the life and work experience and although the remuneration is generally considered as adequate it is not described as very good. Often, the contracts are arranged via personal contacts but also via personnel consultants.
The idea that a Chinese contract is the basis for further discussion should not deter from the general truism that any contract should be properly understood before it is signed! In China a contract will also be enforced when it fits, in detail.
Several points are particularly worth noting:
1) Period of notice. In contrast to the time it sometimes appears to take to make a decision, once a decision has been made, putting it into practice can be very fast and to the detriment of anything not directly involved with the decision itself. It is generally assumed that western managers are responsible for, and have organized, their return to their previous environment. Thus, deciding it is time to go is not a problem…tomorrow! It is worth having a plan B and making sure that this in place but it is also worth making sure the contract provides at least a period of payments following any decision.

2) Bonus payments should be especially well defined (For what and when!). In China more value is placed on team achievement than is really compatible with individual bonus payments and the ability of western managers to really influence progress is limited (Vida infra). It is also not unusual in China that for accidents or misconduct fines are imposed. The team spirit and the traditional management structures define who is responsible and fines proportional to salary are imposed. This can be very expensive for the western manager considering the relative salaries! It is suggested that such aspects are also considered in any contract.


3) Ancillary costs (e.g. Pension, health insurance, disability insurance and unemployment benefit) are often regulated statutorily in many western countries or at least taken for granted. This should not be assumed in China. Taking a job in China may mean the end of participation in national systems such as unemployment benefit and private insurance schemes need to be checked. A detailed examination will allow an assessment of the consequences and the cost and this should be used during discussions about remuneration.

Daily life in China, even in the metropolitan areas of Beijing and Shanghai is different from that in typical European or North American towns and cities. Of course, this also influences the work experience. Whether it is the noise, the crowds or the „olfactory experience„ in a provincial Chinese block of flats; whether it is the Chinese food or - at least in provincial Chinese towns- the attention that foreigners („long noses“) experience while they simply go window shopping; all these aspects and some others too, require a degree of laissez faire not necessarily in-born for European or North American managers and their families: Some flexibility is required. Additionally, the Chinese have a different appreciation of what is private. Thus, family status and age are among the first questions to be asked by a new acquaintance. Specifically, if westerners have to rely on local translators, this can become an uncomfortable experience: imagine having to communicate with your doctor, or in a difficult discussion with an employee via an employee. A non-Chinese speaking ex-pat is very dependent on the quality on the available infrastructure and his immediate group (translator, driver and assistant) but also from the level of support he becomes from the top Chinese management. If possible, an assistant or translator should be appointed after an interview rather than simply assigned.
Dealing with Chinese employees is not always straightforward. Despite many Chinese having some knowledge of English, in reality these are often quite limited, particularly among technically oriented male Chinese. A particular problem is that often the assigned assistant speaks the best English within his group (and he is proud of this!). Often the Chinese themselves are not very aware of these limitations as their limited knowledge may be the best within the company. (It should be noted that this comment is also valid for Europeans and Inter-European relations. A great deal might be achieved in intercultural relations with more understanding for simple differences in language.) As a consequence, even simple communication is not always straightforward and can be a big obstacle in developing mutual trust. An additional factor is the different understanding of each other’s roles. Chinese employees tend to accept the statements and actions of their superiors without question – thus there is a lack of critical feedback. For example, if an expat manager puts an excessive workload on one of his employees, the employee is more likely to work until after midnight than to address the problem. On the other hand, a typical Chinese employee shows only limited initiative. It is unlikely the employee will communicate that he has spare capacity or is aware of possible improvements.
The professional knowledge of Chinese employees is frequently on a different level to that of his Western counterparts in a comparable position. In China, the key selection step in the educational system is before entering the university and thus before the specialization on a specific subject such as chemistry. The university studies following high school are often more a relaxation period after the extreme efforts of securing a place at a good university. In addition, learning by rote rather than the creative handling of complex issues remains central even at the university level. On a business level, a real understanding of basic economic principals, as well as those of safety and quality, remains rudimentary and often more a question of lip-service than real commitment.
For Western employees the limited separation between work and private life is another issue. One has to be available for even trivial telephone calls 24/7. And for Chinese employees it is not unusual to invite their superior to a game of billiards, or whatever, on a Sunday morning. The separation between family and job are not as clear as they usually are in western cultures.
The hierarchy for Western expats in Chinese companies tends to be separate from and parallel to the Chinese hierarchy. As a result, the expats have limited influence even on their direct employees as the Chinese are more likely to listen to their highest Chinese boss. On the other hand, Western expats often have access to Chinese top management outside the formal hierarchical structures and this can lead to mistrust among the Chinese they work with.
Generally, Western expats still have consulting roles in Chinese chemical companies and thus, generally, are not part of the dominating line organization (matrix organizations seem to be rare in Chinese chemical companies). Support from the levels above and below is often half-hearted. This limits the expat´s influence and can lead to frustration – “the real work is done by the locals anyway”.
The work style in Western companies involves substantial delegation of power and responsibility to lower- and mid-level managers. They have targets to be met but are relatively free as to how to achieve these. The experience of Western expats in Chinese chemical companies is very different. In each commercial unit there usually is only one decision maker. In addition, in this top down structure, micro-management is prevalent. In the words of one Western chemical manager: On his own, he “could not even order a pencil”. Closely related is that the system does not encourage lower-level employees to assume responsibility and functions on a system of punishment rather than reward.
Planning periods in Chinese companies are very short, and are changed very frequently. This is valid both for small issues such as the timing of the next meeting as well as for more important issues such as the complete business strategy of the company (if one exists!). Furthermore, at state-owned chemical companies the targets pursued in reality are not the same as the officially stated ones, and are often not based on simple commercial issues. Instead of optimizing profitability, the focus is on securing jobs and increasing the production capacity (and thus the importance of the company).
[It is certainly worth considering this alternative approach: is it better to pay unemployment benefit or the losses of the company which employs too many people? This certainly has more widespread effect than bailing out ailing banks!]
This is reflected in the people at the top of SOE – most of them are politicians rather than business managers. In such an environment, the room for improvement targeted by Western chemical managers is restricted, even though some of the Chinese chemical companies are in very difficult economic conditions and thus in dire need of improvement.
One reason for the generally negative experience which we have registered is that the motivation was not clearly defined by either party. From the point of view of the Chinese company; is the central concept a transfer of technical or management Know-How? Or is the concept simply one of image improvement?
The bottom line is that it may be possible to transfer technical Know-How but the transfer of western management methods requires more than a few years and is very difficult between unschooled personnel without mentors (At least top management support). This results, not least because, generally, western managers do not have any direct influence on what their coworkers do – either because they really do not have that prerogative or because they do not feel they have it. The general impression is one of limited influence of Western expats, primarily due to communication issues, intransparent or non-existent structures and unspoken barriers towards stringent management measures.
There are examples where contracts were not even signed before the ex-pat gave up and went home, there are also examples where the ex-pat would have liked to stay longer. Nevertheless, despite the difficulties in simple communication, the lack of transparency of the structures within the Chinese company (at least for the westerner) and the lack of measurable success most of the interviews spoke positively of their experience. A westerner should not necessarily believe he can succeed in a Chinese company as he would in a western one.
Many of the questions raised above apply, albeit in a modified context, to western companies sending ex-pats to China. In the first instance, the object of the exercise needs to be well defined in detail. Additionally, it was interesting to note comments which suggest that where western companies have slowly changed to meeting their management requirements with Chinese nationals that within a relatively short space of time, structures and work practices more akin to a Chinese company tend to prevail. Thus, western companies that emphasize the value of delegation and individual responsibility as part of their company culture should certainly examine very carefully whether these values can be achieved with local personnel. Furthermore, the increasing importance of international compliance needs to be considered.
In some cases companies attempt to achieve the best of both worlds by having a Chinese „Potential“ as delegate in the home country for 6-12 months before appointing them as a manager in China. This only works with careful training and ensuring that the delegate appreciates the value of his training and the trust being given to him. Only then can the renationalized delegate be expected to be able to transfer both technological Know-How and management culture.
For additional information please contact either Kai Pflug, This email address is being protected from spambots. You need JavaScript enabled to view it. or Stephen Pask, This email address is being protected from spambots. You need JavaScript enabled to view it.

Working in China