Understanding Chinese Trust and Mistrust

Author: Joy Huang

In a recent research study I was conducting, the topic of trust came up frequently as a source of confusion among U.S. companies who do business with the Chinese. Many felt that reaching a deep level of trust with Chinese businesses was very hard. There is a feeling that their good intentions could be misinterpreted and efforts to build relationships were not always successful or reciprocated. On top of this, foreign employees who work inside Chinese companies also reported that they could be excluded from key decision-makings and were limited in their career path due to the fact that they were not Chinese. The general feeling is that in the U.S., you are "innocent until proven guilty", while in China, you are "guilty until proven innocent".

Do Chinese have an innate feeling of mistrust towards U.S. businesses and individuals? The answer is probably yes. The reasons can be traced in its history and cultural backgrounds.

1. History:

China was the most prosperous country in the world in 18 of the last 20 centuries. It was one of the oldest civilizations in the world, was advanced in many scientific fields, and it was financially prosperous. History took a downturn for China in the 18th century, when foreign forces (mostly western) began invading China to take advantage of the then weak and corrupt government. Following the two lost opium wars, the country was forced to allow opium trade, opened ports for unlimited foreign trade and conceded Hong Kong to Britain via "unequal treaties". Chinese were discriminated and treated as inferiors in their own land during this time. This is what is referred to as the "Century of Humiliation" in China's history. It is also what contributes to the resentment and distrust Chinese feel towards the west until this day.

Sino-U.S. relationships, in particular, have gone through turbulent times. China would find itself in the center of the battleground of the U.S. crusade against communism throughout the 20th century. Even in more recent times when the two countries have forged strong economic bonds, there is constant tension on the political front. The active role that U.S. plays in international affairs can often stir up memories of past imperialism, and even common people in China are quick to point to the U.S. fault whenever sensitive topics surface such as Taiwan, Tibet or even economic policies.

This historical backdrop consciously or unconsciously affects the thinking at many levels in China, from government policies, to business planning to even dealing with individual persons.

2. Culture:

Francis Fukuyama argued in his book "Trust" that two types of trust separate societies into high and low trust societies. Low trust cultures such as China value personal trust and can almost only trust another person if there is a personal connection. High trust cultures are more easily accepting others on the basis of things such as profession, moral values, etc. This is very true considering the importance of personal connections in China. Trust can be more easily gained if there is a connection via the family or the existing network of “in-groups”. It is much more difficult when these "connections" do not exist, and it can take a long time to build trust.

This style of trust can be a double-edged sword for Chinese businesses. On the one hand, with strong personal trust, business can make fast decisions and execute with highly competitive speed and quality. On the other hand, this can become an impediment especially for Chinese companies going global in countries that tend to have higher levels of "formal trust". In dealing with U.S. partners and employees, it can get in the way of decision-making, relationship building and utilizing the best talents available. More progressive Chinese companies are realizing this and are taking pragmatic steps to best their localization efforts. This means to focus on what's important for their customers and partners in the U.S., and to truly empower and utilize the local talents for their business.

We live in a time of change. As the rest of the world make efforts to adapt to the Chinese styles in order to capture a piece of its economic boom, China need to also do the same when doing business in other places.

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