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Dr Merridan Varrall is lost on China · 25 October 2014

When I am in Shanghai, I attend a monthly “China HR Professional Group” social event, which is an invitation only gathering hosted by Alsen Hsien, president of Take5 People (which has offices in Shanghai, Hong Kong and Shenzhen). Attendance is usually around 20 people, of whom usually about 80% are ethnic Chinese. Most of the attendees are working in mainland China (although there are often a few overseas visitors) and most have studied or worked outside China.

The discussions are very free and diverse, but I went to the last meeting with a plan to get specific and detailed feed-back on a claim by Dr Merriden Varrall, Director, East Asia Program at the Lowy Institute (made on 23 September) that “relationships among people are totally different in Western and Chinese societies”. She wrote that “in China, social relations are fundamentally based on a system of obligation and reciprocation that is quite different from societies like Australia. In Chinese society, helping others carries an inherent obligation to repay the favour, both to avoid losing face as well as for self-interest.”

To back-up her claims, Varrell quotes Chinese sociologist, Fei Xioatong who, according to a site linked by Varrall, examined “guanxi” in fieldwork in the “1980s and 1990s” and demonstrated how the “gift economy operates in the larger context of the socialist redistributive economy”.

I took copies of the Varrall article to the Take5 People event, and over the course of the evening managed to have detailed discussions with 5 of the people present (including Alsen). Three of the others were involved in HR in China, while the other was the Asian regional chief of a well-known international executive search firm. All were ethnic Chinese.

Did they agree with what Varrell had written? “Yes and no”, as one said. None of these people thought that Varrell had got the balance right.

I was not surprised for a number of reasons.

Firstly, Varrall’s “totally different” strong claims ran contrary to much of my everyday experience in Shanghai. However, I would accept that the situation in Shanghai is a little different than in Beijing, and probably many other parts of China. Some months ago a young Shanghai-based women was telling me about the frustrations she felt about working with her Beijing-based boss in a “corporate training company”. He was a “relationship” man she said, but there were very many new-comers in Shanghai and “relationships” were considerably less important. (Having said this, in many respects, such relationships in capital cities such as Canberra can be more important than relationships in cities such as Sydney, and some people are naturally more “relationship” orientated than others.)

Secondly, even if we accept the accuracy of the work of Fei Xioatong, it is several decades old and the economy now does not have the same structure (even in the provinces).

Thirdly, much of what Varrall wrote about her own experiences in China (mainly Beijing) could also apply in Russia. For example, as in China, many Russian young people do get jobs with the help of “connections” (particularly family). But this does not mean that – in spite of some occasional claims – that “relationships among people are totally different in Western and Russian societies”. In my view, it is just that “market mechanisms” (including for job-hunting) get subverted when societies are relatively bureaucratic, corrupt and non-transparent.

Fourthly, it seemed to me that much of the concept of “guanxi” – at least as described by Fei Xioatong and Varrall – ran against what we know of basic human psychology. This point was made a couple of times at the Take5 People function. Indeed, one of my Chinese interlocutors went so far as to suggest that relationships in China are essentially no different to any other country, with people in all societies forming and dissolving relationships (of all kinds) depending on the mutual advantages.

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