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Mark Giorgini, GMS"To know the road ahead, ask those coming back" – As this Chinese proverb illustrates, there is no substitute for experience. China blog author Mark Giorgini's first-hand experience living and working in China enrich his posts with timely, practical information for anyone with an interest in this dynamic marketplace. Add your comments and questions as we journey together!

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Potpourri III

REMINDER:  Worldwide ERC’s Asia-Pacific Global Workforce Summit is on this week at the JW Marriott in Hong Kong.  Look forward to seeing you there! 

BUBBLE, BUBBLE, TOIL & TROUBLE:  Real estate isn’t my area of expertise but many of our members have an interest. Without purporting to give you a comprehensive review of the current real estate situation in China, suffice it to say this much:  There’s either a real estate bubble or there isn’t.   The national government has tightened credit, affecting some developers, and is vowing to do more to control the situation.  The issue has gotten big play in government circles and there’s even a popular TV drama highlighting the problems of young people struggling with high housing costs.  But money is flowing into real estate… lots of fancy digs, and even a floating palace!  But if you want to know where prices have surged by 30+% since the start of the year….

WHAT DO THEY THINK – WHAT DO WE THINK:  One of the perpetually interesting things to do here is figure out what’s really going on.   We search for snippets, for insights, for glimmerings.   The China Daily ran an interesting opinion piece a couple of months ago which has resulted in some interesting discussions in the expat community. And the Washington Post  ran an equally interesting opinion piece a week or so ago trying to separate fact from perception regarding China’s rise.  Both are worthy of your cogitation. 

Thoughts anyone?

Back to work

Many companies reopened last week after the holiday officially ended. But with Lantern Festival now formally ending the holiday season, the fireworks have finished and families have for the most part said farewell to departing members at the crowded rail stations and airports. Even the very enjoyable Winter Olympics, a coincidental addition to the holiday this year, has ended. Spring Festival is over – bring on the hong bao.

Hong bao, which means “red bag” and in its modern form is an envelope with money, is the traditional New Year’s gift adults give to children or young unmarried adults. (Local practices differ. I’ve heard lots of different combinations and permutations.) But it’s also a pretty common practice here in Guangdong Province to give hong bao to workers returning from holiday as an enticement to get them back. Given the labor shortages here these days, companies not already on the stick had better get their acts together.

Giving hong bao is a lot of fun and saves the agony of shopping for individual gifts. One of my clients makes it a big production for returning employees. The president, CEO, Board chair, and a few other senior executives all wear Tang Dynasty clothing, roll out the red carpet in front of the head office, and stand outside, often in the cold, for an hour or so personally greeting every employee returning to the office. It’s a lovely touch. The money given is symbolic, but employees look forward to the chance to exchanging new year greetings with the “big potatoes.”

About mid-morning the same day, it’s also that company’s tradition for the unmarried adults to race around collecting hong bao from anyone in management. Think “Halloween-on-steroids.” Lots of fun if you’re not in management. If you’re in management, well, let’s just say that you want to be prepared for the onslaught.

The holiday season is over, folks. Back to work.

Now THAT'S Mobility!

That holiday spirit is taking really taking hold now that we’re down to only a week before the official Chinese New Year, or Spring Festival, begins. Cubicles are emptying, office lunchrooms have more “home town” favorite foods available for snacking and vendors, like the one below, are on the street selling all manner of decorations to adorn homes and apartments. The biggest annual holiday is nearly here.

But as a practical matter, the holiday started January 30 – the day the official 40-day travel season begins. This is the one time of year when most Chinese feel a very strong compulsion to return to the home roots, connect with families, eat their favorite hometown foods, and generally kick back and enjoy time with family and friends. 

For migrant laborers, peasants from rural areas who’ve gone to the big cities to work in factories or as laborers, this may be the one and only holiday each year when they can reunite with their families. And I don’t mean reunite with the extended family. Many migrants who live and work in urban centers leave their spouses and children behind in the home village – too expensive to move the entire family to the city – so getting home to spend a week or two with family is the annual highlight.

The numbers are awesome and deserve contemplation:

  • The government predicts 2.54 billion journeys by rail, intercity bus, sea, ship, and air between January 30 and March 10.
  • 210 million passengers will go by rail. That’s like moving nearly the entire populations of the Netherlands, Belgium, Germany, the UK, and Italy somewhere else. And then moving them back home a few weeks later. The trains will move an equivalent of nearly the entire nation of Denmark each day.
  • 29 million people will travel by air. Imagine airlifting every person in Texas to Minnesota and everyone in Minnesota to Texas. 

And then getting everyone home again. And there’s always the possibility of bad weather. To say nothing of airport luggage conveyor belts so overloaded that they start smoking. So it’s not uncommon for foreigners to go into hiding at this time of year. We’re just not equipped to handle the throngs, but until you’ve been in the swimming in the sea yourself, it may still be difficult to fathom. Here is a very nice compendium of photos from different sources giving you a sense of real mobility in action during the first few days of this year’s travel season.

Travel safely. And be careful of those fire crackers!

Know when to hold 'em, know when to fold 'em

It’s been a busy few weeks here in the Middle Kingdom.

We’ve got the controversy about Google being hacked, a U.S. government statement about internet issues, and vigorous Chinese responses on the internet issue as well as an announcement of sanctions against U.S. companies involved in arms sales to Taiwan. Throw in a British report about Chinese intelligence and British businesses to make sure no one is napping and, just in case that’s not enough, accuse Apple of copying a Chinese product with its new iPad.

This is not the standard run-up to a Chinese New Year celebration.

Now all of that may be at a higher level than most business people have to deal with here, but there are some things here worth pointing out. As noted in a previous blog entry here, the barrier between work and home life in China is substantially lower than in more westernized economies. So is the barrier between business and government. For example, in western economies, companies are responsible for making and funding their own purchases, i.e., when an airline needs planes, it goes to a plane manufacturer. In China, that’s a little different. When Chinese airlines need planes, it’s the government that cuts the deal with the manufacturers and then allocates the purchased planes between the different airline companies. Similar arrangements exist in other "key" industries.

Although situations such as the ones in the news the last couple weeks are not common, it’s not uncommon for businesses to get caught between a rock and a hard place. Local officials may suggest subtly or not so subtly that certain actions would make it easier for them to award a contract, often with consequences to a company that thinks compliance is the easiest route. But businesses not complying with China’s expectations also face consequences. And while China may be able to act as a unified entity when negotiating some business deals – like with airline manufacturers, among others – western businesses rarely act in concert; indeed, silence or taking an it's-not-us stance are the two most common responses. Only rarely does a company get called out for such a response.

The bottom line of all this for Human Resources and mobility professionals in all this is ... drum roll ... selection, selection, selection! Earlier posts have highlighted the need for foreign managers here to have many leadership, not technical, characteristics, a global mindset, etc. Add to that list the capability of being a competent diplomat. The reality is that even the smallest business here can find itself in situations unheard of back at the home office.

'Tis the Season -- Still!

This is the season lots of expats in China love.  We start off with Canadian Thanksgiving in October, follow up with American Thanksgiving in November, move on to Christmas and Hanukkah in December, and then New Year’s.  But no post-holiday letdown for western expats in China because Chinese New Year, also called Spring Festival, is next up. 

The Year of the Tiger begins February 14 and Chinese staff are already beginning to finalize their travel plans and generally get into a pre-holiday mindset. Frankly, though, it’s something of a challenge to get into a mellow pre-holiday mood when contemplating the rigors of getting home during the holiday travel period along with tens of millions of fellow citizens.  The numbers and logistics are quite numbing.

For foreigners, though, this is a great time to just hibernate, and avoid travel for the next month or so while enjoying the lights, the food, and the sense of holiday that pervades the street scenes.  By the time the New Year celebration culminates 14 days later in Lantern Festival, most folks are pretty well partied out and in a mood to bear down for another few weeks until spring actually does arrive.

So the lights are still up from the January 1 New Year celebrations, the local plaza has started hosting the occasional evening musical concert, and we’re soon going to be in the throes of all those last minute preparations endemic to most major holidays.

New foreign assignees often go through a period of angst as familiar holidays aren’t celebrated while unfamiliar holidays are. But once one gets into the hang of it, having an extended holiday season by celebrating the holidays of both home and host country can be pretty great.

Bring on those red packets!

Home for the holidays

One of the fascinating aspects of living abroad for most folks is realizing how they’ve changed as a result of the experience. Some changes are large and obvious: learning to speak a new language, coping with different currencies, finding one’s way around a different geography, locating that special hometown food the kids just can’t live without. Some changes are large but far more subtle: learning how to motivate or work with staff who have completely different mindsets, life experiences, and values; handling the demands and expectations of home office folks who may have little or no understanding of the local situation; and maintaining the intellectual alertness to deal with the thousand-and-one little differences between one’s own cultural programming and what is needed to function effectively in the foreign location.

But the biggest change is often in how the assignee ends up perceiving the home company or home country. As the saying goes, to really understand something, a person needs to step back and view it dispassionately from the outside.

And that can make even short holiday trips home an interesting experience.   After a few get-togethers with longtime friends over the holidays, it can be tough to keep that “geez-is-this-really-what’s-going-on-now?” feeling under control.   After all, the answer to that question is pretty obvious to the people who live there and having inconsistencies, lapses, or other shortcomings pointed out is rarely welcomed, no matter now accurate the observations may be.

Of course, that’s almost exactly the same reaction most new assignees have in a new location: “geez-is-that-really-how-it’s-done-here?”  Coupled with a few choice pointers on how things could be improved, an assignee can easily manage to antagonize folks in both the home and host locations.

Getting home for the holidays is always great to connect with friends, family, folks who’ve drifted away over the years but now seek to reconnect, and to go through the familiar holiday rituals. It’s always tough to come back and get back in the groove again. 

But despite all the advantages of a foreign assignment, the personal development, the broadened horizons, and the insights into the human condition that you can pick up by virtue of being away, sometimes being judicious in sharing your cross-cultural insights is the safer path. When the “geez” feeling starts welling up, it’s best to claim a bad case of jet lag and go take a nap.

New Year's Wishes II

I’m still in that stuffing-induced dream state from last week, so here are my final five mobility wishes for that ideal world. Again, in no particular order…

5. The realization dawns: Money doesn’t solve all problems. Expatriate assignments can be expensive, which is why they are often cutback targets when budgets get tight. Unfortunately, sometimes companies have brought this on themselves. For example, in response to spouse complaints, some companies often toss in a payment of some sort, usually relatively nominal, to the spouse as part of the overall expat package. Of course, the spousal complaint is rarely actually about money… it usually is a manifestation of loneliness, living in expatriate housing with few community outlets, or not being able to utilize their skills in fulfilling employment. The payments to spouses add to cost but don’t address the underlying problem and the corporate attempt to minimize spouse unhappiness fails.

4. The importance of organizational leadership reinstates itself. Chinese organizations crave leadership and Chinese employees appreciate good leaders. But a good leader isn’t necessarily the one who shouts the loudest, has the biggest ego, has taken a Chinese spouse, tries to out-Chinese the Chinese by being an authoritarian leader, or tries to cultivate relationships by only being nicey-nice. It’s often more about when to adjust one’s leadership style to fit the situation. The world economic crisis has created a "hunkering down" atmosphere and hopefully as things improve, leaders will be able to focus less on survival and task completion and more on cultivating organizations and future leaders.
 
3. Knowledge transfer trumps localization. Localization in the Chinese context means turning over a position filled by an expatriate assignee to a national employee. It does not typically refer to the payroll on which a foreign employee is placed. One of the issues companies often face in China is a sense of urgency in turning over expatriate positions to nationals, often as a result of Chinese partner pressures.
However, making such changes often results in poorly trained employees being placed in those positions which, in turn, often has negative organizational consequences. Companies would often be better served by giving talented Chinese national employees some overseas experiences which would not only increase their capability for repatriation (and then localization of the expat position) but would enhance organizational knowledge transfer.
 
2. Bungee boss assignments lose their allure. The Dilbert® "bungee boss" series is one of my favorites. A bungee boss is one who is dropped into a new work area and then is quickly pulled out again, whether as part of a reorganization, a “high potential” program, or whatever.
The bungee boss never has an opportunity to live with the consequences of the changes implemented and so, if things go badly, someone else is left to clean up the debris while the bungee boss goes on to ever greater success on another bungee assignment. In the Chinese context, bungee bosses really, really don’t work well.
 
For technical or project work of defined duration, fine. For leadership positions… ugh. I keep harping on this relationship stuff as important for China, but I’ve never seen a short-termer be successful in building bridges to Chinese partners or staff here.
 
And the number one wish?
 
1. Everyone renews their Worldwide ERC® membership, introduces a colleague, and volunteers to help out a bit.

Yeah, yeah. I know, I know. Self-serving, brown-nosing the Worldwide ERC® staff, and so on.
 
What can I say? But there is a lot of organizational capability among our membership and the best way to benefit from that collective knowledge is by belonging and participating. Building a sustainable long-term business around the world in different cultures is not easy or for the faint-hearted. Best to pick up what you can where you can!
New Year's Wishes I
So 2010 is upon us and we’ll all undoubtedly be spending some time sorting out challenges, opportunities, and priorities for the coming 12 months. I’m not a big fan of New Year’s resolutions or the like but after the jet lag, fruitcakes, bowl games, lutefisk and lefse, turkey dinners, get-togethers and reunions with friends and relatives, and snow and cold, recovering on the couch while indulging in stuffing-induced dreams of what could be seems attractive. So in no particular order, here are my Top 10 mobility wishes for this next year:

10.  Companies maintain or increase their investments in mobility.  2008 and 2009 were tough years with companies cutting back on relocations, training, shortening assignments, and just generally retrenching in light of the economic tsunami.  Completely understandable from a western perspective. But in China, which maintains strong growth and values long-term relationships, the consequence of those (hopefully) short-term cutbacks is the loss of organizational knowledge and loss of image for foreign companies as preferred employers in the eyes of many talented Chinese staff. Many companies don’t have the bench strength in China as it is to afford such losses; continued cutbacks will only exacerbate the problem.
 
9. Assignee selection processes improve. Global mindset anybody? Too many organizations continue to make expatriate staffing decisions on the basis of “the best technical person” gets the job, even though management, staff motivation, influencing partners, and working cross-culturally may have little to do with technical or operational skills. Also, giving out “plum” foreign assignments as rewards to successful domestic managers doesn’t always work. What makes someone successful in one assignment may not work at all in a foreign assignment. And what made someone successful in a previous foreign assignment may not make them successful in a foreign assignment in China.
 
8. Organizations improve (create?) meaningful repat processes. Fifty percent of repatriated assignees leave their employer within a couple of years of repatriation. This is successfully leveraging the often large investment already made in relocating the employee (and family)? This year in southern China, a number of firms laid off expats who had volunteered for foreign assignment without first repatriating them. Aw, c’mon. The message to (any remaining) employees in the home office will be “Don’t take a foreign assignment because the company will strand you there.” Finding competent employees to take on challenging foreign assignments is already difficult enough. Don’t make it worse.

7. Expatriate assignments are used to build organizational capability. See comments above on selection and repatriation. Organizations which plan to succeed in China – and probably elsewhere – not only need to develop and maintain their capabilities within China,
but need to institutionally incorporate those learnings in the home office. That’s hard to do unless there are sustained and meaningful job exchanges.
 
6. The Year of the Tiger results in more than a few roaring successes. Okay, okay. Not a heavy new year’s wish. But after a tough couple of years for western businesses, seeing some of those little green shoots of hope turn into something stronger will be exceedingly welcome for all. More next week!
 
We are the village

This week’s guest columnist is C.J. TAN, who works for a major Chinese state-owned enterprise screening potential target companies for merger/acquisition potential.  He has significant international and personal relocation experience, having lived and worked in Tokyo for six months, San Francisco for three years, and most recently in sub-Saharan Africa for two years while leading his company’s initiatives there.  In addition, he has worked for Danish and British companies in the international trading, shipping, and energy industries.  Mr. Tan has also co-translated several books into their official Chinese editions, including “1999: Victory Without War” by Richard Nixon, “History of Western Civilization” by William McNeill, and “Global Conflict: The Domestic Sources of International Crisis” by John W. Burton.  Mr. Tan now travels less, reads more, constantly searches for the real fun in life, and rejoices in being home now with his family in Beijing.

Never mind whether you are Chinese, American, Chinese-American or American-Chinese.

When it comes to China, only three decades of changes can make one’s feeling of identity an antique luxury in this rapidly changing world.

In the early 1990s, a Chinese colleague of mine who was assigned to San Francisco with me was caught by the highway patrol police for speeding; he was asked to pull over to the shoulder of Highway 101, the first time he was ordered to do so in a foreign land.  Confused but still hoping to argue with the policeman, he got out of his car, and approached the policeman who stood about 10 meters away to make his argument. The policeman held up his pistol, pointed it at my colleague and shouted “Don’t move, hands off!” As my colleague recently recalled, he was surprised the policeman treated him like an enemy launching an assault.

That happened in an era when owning a private vehicle in China was a luxury.  The popular symbol of luxury at that time was the triad of a washing-machine, a refrigerator and an air conditioner.  Even then, a breeze of change was gaining momentum – the Chinese car industry was beginning to open to French and German car makers.  And that was at a time when everything new seemed just about to replace the old – things like the traditional imports from the Eastern Block, for instance. I happened to see Chen Pei-Si, the Chinese comedian and film star, drive an aging Russian import, a Volga, in the streets of Beijing. And I can recall figuring out that this guy would become much wealthier and this Volga would soon prove an antique show-off.

“Pulling over” is about rules: Once rules are universal, all traffic would flow like a liquid.  Today in China, cars are many, and many bikers chose cars over bikes. To cope with the kind of speeding my colleague encountered on Highway 101, the Chinese traffic rules are enforced to the similar effect – no bargain, no spot argument and leave it to the court. I rather believe this is an American lesson learned for the good.

So, I would feel that a Chinese driving on Highway 101 or an American driving on G101 makes no difference today – similar experiences result in similar rules.  And that statement is a rule, too!

An old but true story about John Fairbank would sound jokingly alarming today. In the 1930s, as John recalled in his autobiography, he once accidentally rode his bike into the rut of the old Peking trolley and ran down a Peking local.  Anxious and uncertain about how the gathering local crowd and the police would treat him, John lay on the ground for some time longer than his actual pain would justify, only to show that he was suffering a misery equal to the one of the run-down man. As a result, the police fined him one dollar and an apology to the “victim” to settle the case.

With the world becoming a village – as many claim – and more experiences and rules being shared, the less anxiety and uncertainty one needs to have.  “Fun” is what a village would mean to Johns and Zhangs alike.

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