Asian financial habits

Their hiring practices may also sometimes be strange to the West. For example, in Singapore, future government officials are spotted at an early age. When they discover child prodigies, they are groomed, trained and expected to serve their role when they grow up later. And unlike in the West or other parts of the world, where people can assume different kinds of jobs, changing careers for instance from teacher to sales manager, the Yellows tend to frown on functional changes. If you start as a teacher, they expect you to be one all your life because that is your elemental function in an organized and orderly society. It may be organizationally obsessive, but it works.

The Yellows are also known for their work ethic. Confucius’ favorite disciple Yan Hui is a model of Confucian virtue. Confucius says, “What a fine man Hui was! One container of rice, one dipperful of drink, living in a back alley-others couldn’t have endured the gloom of it, but he never let it affect his happiness. What a fine man Hui was!” Consequently, many Yellows work long hours under poor conditions for very little wages. Entrepreneurial Yellows also pad very little profit to their products or services, depending on bulk orders to make ends meet. This has given them a competitive advantage over the West in terms of cheaper labor, facilities, infrastructure, equipment and benefits.

Asian philosophy also affects Asian financial habits. “If a person has too much wealth” states the Tao Te Ching, “it will arouse the envy of others. And through an overly luxurious life, that wealth will eventually be lost.” This teaches them not to show off and to save for the future. Many Chinese firms are not as dependant on debt as their Western counterparts. Even if their stock market crashes, many Chinese corporations will again not be as affected as their Western counterparts because they don’t rely as much on stock market capital compared to the West. China has the highest savings rate in the world-nearly 50% of GDP. Unlike the West, they also don’t allow their currency to float freely because speculative investors (Fire) will often play the money market game or manipulate currency rates to their advantage and to the detriment of society.

This happened during the Asian Financial Crisis in 1997 after the Thai Baht was allowed to float and many foreign speculators pulled out their money all at the same time and devalued many South East Asian currencies. Consequently, the stock market and asset prices dropped while private debt rose. Learning from this lesson, China will unlikely yield to foreign pressure to float the Yuan. China also does not like the idea of speculative foreign investors playing around the Chinese stock market or day-trading for a quick buck. They would prefer real long-term investors; so many good quality Chinese stocks are not available to foreigners.

The stocks for sale to foreigners are usually junk stocks, and it may be difficult to purchase directly. Having to avail it from Hong Kong, the “play” area of China along with Macau, may deter foreign players from manipulating the Chinese market for quick and easy money. Asians usually think long-term. They are willing to sacrifice profit for market share and stability. And this comes from the desire to impose Confucian social order and harmony.

In terms of quality control and management, Asian philosophy has also played a major role. Rene Domingo in Quality Means Survival speaks of Japanese culture, specially the integration of Chan or Zen Buddhism, into quality management. Toyota is best known for Total Quality Management (TQM). The ability of any worker to point out errors without fear of reprisal comes from Buddhist principles where the interconnected and interdependent Self and Other needs to be constantly trained to improve. Miyamoto Musashi’s ancient Book of Five Rings along with the samurai way (Bushido) also dictates their quality culture.

The samurai sword, for example, has been hailed by Westerners as the finest sword ever manufactured since the dawn of time. And the secret is in continuous improvement. Their practice of kyudo, a form of archery where you do not have to hit the target but simply continuously let go, allows one to let go of his or her errors while continuously moving toward perfection. Bushido is also used when negotiating with Westerners. The one who starts has the disadvantage, so the Japanese will usually wait for the Westerner to start, unless the Westerner already knows the Samurai way and waits also (Nihon Services Corporation).

Conclusion

Some may argue that it is actually economic growth that is responsible for culture. However, this is clearly not the case in China. They are unyielding in preserving their values in spite of fast economic growth. In fact that’s why they banned Avatar in favor of Confucius. They are also not flexible when it comes to internet censorship. CNet points out that “sex,” and “porn” are part of the top four keywords that Western children search for on the internet. While it may be a Western value, China thinks it’s “gay” Fire, and prefers to set up a firewall against it. This angered Google lately which accused China of hacking its systems.

A few weeks later though, CNN reports that an Atlanta-based security company confirmed that the alleged China-government hacking was done by amateurs and that the Chinese government is not responsible for it. Time also points out that “Israel and of course the United States Government itself with the largest group of hackers in the world employed by the National Security Agency” are responsible for most hackings in the world. As China says through the BBC, “We need to preserve our nation’s interest, our people’s interest; we cannot be relaxed with any information that will cause harm to the stability of our society, to our system, and to the health of our under-age young people…So, of course, what needs to be shut down will be shut down, what needs to be blocked will be blocked.”

Without a doubt, economic growth doesn’t necessarily transform culture. Quite the opposite is true. Asian culture is the primary driver to the economic success of the Asia-Pacific. The Asians are now also reorganizing the world order. As they promote stronger ties with South East Asia through the ASEAN+3, we may begin to see the workings of a new world order built on Confucian harmony.

References

Bruya, B. (translator). (1996) Confucius Speaks.

Domingo, R. (1998). Quality Means Survival: Caveat Vendidor – Let the Seller

Foroohar, R. ; Liu, M. (2010 Mar 22). It’s China’s World. We’re Just Living in It: The middle kingdom is rewriting the rules on trade, technology, currency, climate-you name it.

Kammerer, P. (2006 Apr 21). The Art of Negotiation. South China Morning Post.

Karabell, Z. (2010 Jan 15). Google and China: Silicon Valley Is No Longer King.