The Chinese Businessman Paradox

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    Also in this series: Let Reality Be The Teacher, Superstition Doesn't Count, Maybe Strategy Matters, Cash Flow Is King.

    I met my friend Samuel in the first year of secondary school, way back when we were beginner teenagers. Samuel’s dad was a traditional Chinese businessman. He ran a pharmaceutical import business, supplying a handful of pharmacists around Kuching, population 300,000, the small city on Borneo that we both grew up in.

    Over the years, Samuel’s father expanded the business into other interests: small real estate holdings, food & beverage outlets, retail shops selling mobile phone kits, clothes, phone data plans and packages. If a business unit wasn’t doing too well, he was quick to shut things down. I observed most of this through my friend’s eyes; Samuel was being groomed to take over the company. Every year when I returned to Kuching, I discovered that Samuel’s father’s business empire had grown, inch by hard-won inch.

    In Malaysia, where I was born, and in Singapore, where I did university, there is this trope of Chinese business acumen that we grew up with. Group identities are built around tropes, because tropes are the stories that we tell ourselves. This particular trope is a cultural one, born from the history of overseas Chinese.

    The idea of a savvy business leader emerging from a humble background, thriving despite adversity, is one of the strongest touchstones in the stories that make up who we are. It is in the family histories of all those Chinese who migrated out of China; it is the story of our grandfathers, uncles, and (occasionally) aunties, making a living on distant shores; if we have no direct relationship to a relative in business, it is the stories that we are familiar with through our friends and their families.

    This idea of a ‘Chinese businessman identity’ is what makes up a race-based superiority complex, as Amy Chua argues in The Triple Package — it is the reason certain racial identities help with certain types of achievement. When a Chinese person feels down-and-out in the education system, he has a path that allows him immediate respect in his society: that of doing business. The ones who succeed are lauded by their families and friends. The ones who don’t do so well are still seen as engaging in a respectable pursuit.

    Over time, my friends and I referred to those Chinese peers who did well in business as having ‘Chinese businessman wisdom’. We used this phrase in the following way: “He’s not really into startups. He’s into business. He has Chinese businessman wisdom.” and “If even half of the people doing startups today have Chinese businessman wisdom, we would have a lot more successes on our hands.”

    In other societies, and in other cultures, this might be phrased in a different way: “he’s business savvy”, or “he’s built for business”. But this phrase resonates with us because we are surrounded by positive examples of successful (and not so successful) Chinese businessmen, many of them seem to be built of the same mould. Nearly all the major tycoons in South East Asia are Chinese: Robert Kuok of Malaysia, Ng Teng Fong from Singapore, Mochtar Riady of Indonesia; the list goes on. They are described as thrifty, low-key, savvy, cunning, pragmatic, and respected — even begrudgingly! — by the communities they run businesses in.

    Which then begs the question: “what exactly is Chinese businessman wisdom?” And how do you gain more of it?

    ‘Business Sense’

    Traditional Chinese Shophouse frontage.

    One aspect of the Chinese businessman wisdom trope is the idea that some people are born with business sense, and others are not.

    Samuel’s dad is fond of saying that his brothers tried their hand at business before he did, and nearly all of them failed. He was the only one from his family who succeeded.

    My maternal grandfather, who ran a car workshop on the island of Labuan for most of his adult life, was dinged for not being business savvy enough. The stories I heard of him are mostly about how he was kinder than he needed to be, and charged less than he could have charged. He did eventually sell off the business to retire in Kuching, and I’m now experiencing the terror of doing a business on my own, so I respect him tremendously; I think he’s done alright for himself. But the perception of ‘business savvy’ or ‘not business savvy’ as an inborn trait, unchangeable by circumstance, is hardcoded into our culture; an inalienable part of the ‘traditional Chinese businessman’.

    I reject this notion almost as strongly as I reject the notion of pre-ordained destiny.

    (This shouldn’t be a surprise to you — this entire blog is built around the idea of a keeping only the ideas that are useful to your future career. Believing in ‘business sense’ as an unchangeable, in-born trait is not actionable in a way that another belief might be; therefore reject it in favour for the actionable belief.)

    A more acceptable version of this ‘business sense as an inborn trait’ meme is the one articulated by Robert Kuok in his memoirs:

    To me, talent and instincts in business are inborn and cannot be learned in the classroom. The best comparison I can give you is the game of soccer. The best soccer players are born with great innate talent. Even if a person is not born with the ability to be a top soccer player, he can learn to be a good soccer player through good coaching. But he will never be one of the great stars of the game, such as a Pele or a Messi, who are gifted people with inborn skills augmented by good coaching.

    This rings true to me, as it gels with my experience for writing and for Judo — the two other skills I am most familiar with. In On Writing, Stephen King makes a similar case:

    There are no bad dogs, according to the title of a popular training manual, but don’t tell that to the parent of a child mauled by a pit bull or a rottweiler; he or she is apt to bust your beak for you. And no matter how much I want to encourage the man or woman trying for the first time to write seriously, I can’t lie and say there are no bad writers. Sorry, but there are lots of bad writers. Some are on-staff at your local newspaper, usually reviewing little-theater productions or pontificating about the local sports teams. Some have scribbled their way to homes in the Caribbean, leaving a trail of pulsing adverbs, wooden characters, and vile passive-voice constructions behind them. Others hold forth at open-mike poetry slams, wearing black turtlenecks and wrinkled khaki pants; they spout doggerel about “my angry lesbian breasts” and “the tilted alley where I cried my mother’s name.”

    Writers form themselves into the pyramid we see in all areas of human talent and human creativity. At the bottom are the bad ones. Above them is a group which is slightly smaller but still large and welcoming; these “are the competent writers. They may also be found on the staff of your local newspaper, on the racks at your local bookstore, and at poetry readings on Open Mike Night. These are folks who somehow understand that although a lesbian may be angry, her breasts will remain breasts.

    The next level is much smaller. These are the really good writers. Above them—above almost all of us—are the Shakespeares, the Faulkners, the Yeatses, Shaws, and Eudora Weltys. They are geniuses, divine accidents, gifted in a way which is beyond our ability to understand, let alone attain. Shit, most geniuses aren’t able to understand themselves, and many of them lead miserable lives, realizing (at least on some level) that they are nothing but fortunate freaks, the intellectual version of runway models who just happen to be born with the right cheekbones and with breasts which fit the image of an age.

    I’ve long made peace with the idea that I might never become a Steinbeck or a Hemingway, but that with a lot of effort and a bit of luck, I am satisfied with the idea that I might become good. It’s only fair that the same could be said about business.

    Rationality and Business

    I’ve long suspected that much of business ability may be explained by rationality. This stems from experience: I ran the Vietnam office of a Singaporean company for three years, and I got to see a number of ‘traditional Chinese businessmen’ up close. In some of these cases, they were our clients; in others, we were competitors with opportunistic traditional Chinese businessmen, and received our licks in a race for customers.

    (We also drove a few of them to bankruptcy, but that’s another story for another day).

    The best businessmen we dealt with were always relentlessly pragmatic. They were rational in their actions — or at least, they were rational in the sense that they did what was necessary for the survival of their businesses. I remember a client who managed to get a ton of free add-ons out of us, which he did so skilfully none of us realised what was going on for months on end. (He’s over 50 years old and very very good; my old company remains in business with him). I also remember our discovery that a major competitor in our space had been gutted by its management, and turned into a real-estate investment company in Singapore.

    But rationality alone didn’t explain everything that I saw. The question that most interested me was the following paradox: first, that the most successful Chinese businessmen were often the least educated ones. Second, that Chinese businessmen as a group were more superstitious than most, but that this didn’t seem to have much of an effect on their ability to run their businesses! And finally, that the vast majority of Chinese businesspeople did not think too far ahead. They optimised locally, and by keeping close tabs on the bottom line, shut down lines of business that weren’t performing as well.

    The paradox was driven by my misguided attempt to figure out what made the successful ones successful, and to see if I could copy them. If intelligence were a deciding factor, then the educated Chinese businessmen were more likely to do better. If rationality were truly a deciding factor, the superstitious Chinese businessmen wouldn’t have done as well as the less superstitious businessmen.  And if strategy didn’t matter, the Chinese businessmen who optimised locally would always end up ahead. None of these things were consistently true. Whatever it is that made them successful is difficult to pin down; it quickly became clear to me that I couldn’t find an answer in simple explanations like ‘intelligence’, ‘rationality’ or ‘strategic thinking’.

    But I could still try.

    I suspect the Chinese businessman paradox holds the answer to my original question. I asked, at the top of this post: “what exactly is Chinese businessman wisdom?” And how do you gain more of it?

    Over the next couple of posts, I’ll describe my current theories. Think of these as practitioner notes — only as true as I have found them in practice. It will take years before I find out if I’m right. I expect to write revisions to these posts over the long term, and I expect to write many of them. I am currently putting some of these theories to the test in my day-to-day pursuit of business; but in all honesty, I’m writing these things down because I’m interested in these questions and have been for a number of years. It’s like catnip for my mind.

    To my knowledge, I don’t think these sorts of articles have ever been written before. If I succeed in business, later in life, you may point to these posts as a record of what I got right. But if I failed, then these posts would be a record of all the wrong things I believe that ultimately did me in at the end.

    I look forward to looking backwards. But for now, these posts will serve as anchors to my present, a record to look back onto in the future past.


    Originally published , last updated .

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