The Cost of Doing Business in China

By Gisela Sommer, Epoch Times
February 8, 2013 11:37 am Last Updated: December 9, 2013 6:07 pm

 An American professor and management consultant, who recently returned from eight years of working with international corporations and teaching at a number of universities in China, says he has a lot of issues with China and has no desire to return there. 

“One of the biggest struggles I had in China was maintaining my ethics, maintaining those core values that, as Americans, we’re brought up with,” Dr. Lynn Knight told The Epoch Times in an interview. “When you go to China, all of that gets turned upside down,” he said. 

Dr. Knight holds a Masters degree in Organizational Psychology from Harvard University, a Masters of Management from Cambridge College, and a Ph.D. in management and workforce performance from San Diego University I.S. With over 30 years’ experience in workforce development, he has worked with a number of multinational companies and learning institutions, including BMW, ADL Corporation, Beijing United Family Hospital, Bank of China, Lenovo Computers, Sino-British Institute, and China Agricultural University and has coached a range of leaders, from CEO’s, senior vice managers, middle managers, and line managers.

Dr. Knight stated that, like many people back in the early 2000s, he thought China was the place to be in terms of economic growth and business opportunities and the international organizations there could use his services.

Before setting out for China in 2004, his plan was to start a workforce management consulting business in China by partnering with a Chinese individual, “Mr. Wu,” whom he had met through a mutual friend in the United States. He was forewarned by people with prior experience of working and living in China that he needed to have a plan B in the event that things didn’t work out. They told him the best thing would be to get a teaching job at one of the universities, saying with his degrees and qualifications, he would definitely be hired. So, with a teaching contract at a university in China as well as this potential business partner, Dr. Knight felt that he was on his way. 

However, the business relationship didn’t work out, he said, and the initial teaching job also didn’t go well.

When Dr. Knight arrived at Yang En University in Fujian Province with nine other foreign teachers who had all been hired to teach various academic subjects, they found “dire” conditions.

“You look at this Yang En University’s website, as I did in America; it seemed like a very modern university. The surroundings seemed very modern, they looked no different than any other university in America. But looks can be deceiving,” Dr. Knight said. 

The university was next to a very small village called Majia, about two and a half hours drive from Xiaman, the next largest city with an international airport.

Dr. Knight said that within seconds of arriving many of the things agreed upon changed, including contract, living arrangements, pay, and the number of students per class.

Their living quarters were not ready at the time of their arrival, and they had to live in a dirty, rundown hotel for several days. However, their apartments turned out not any better; they were very dirty, with no running water or electricity. 

“We were told, ‘don’t worry, we’ll take care of this, this is only temporary,’ but it went on for six months,” Dr. Knight said. 

“The phrase ‘don’t worry’ became a common term during my stay in China,” he added. “It meant, ‘you’ll get used to it.’”

Cheating

One major issue that he quickly had to get used to was the magnitude of cheating among Chinese students and Chinese teachers’ seeming acceptance of this behavior, Dr. Knight said. He learned that lesson in his first two months of class at Yang En during his first examination he had to give the students. 

After he wrote up the exam, he was told to take it to the copying room, and they would make copies for all the students. On the day of the examination he distributed the booklets, and the students sat down to take the exam, which he had estimated would take them about an hour and a half to complete. But this particular class finished it in 20 minutes. 

“I was dumbfounded, and thinking to myself, wow, Chinese kids are really smart!” Dr. Knight said. “Then I asked myself, how can 110 Chinese students with very limited English comprehension do this well?”

Only later did he learn from his foreign colleagues that the students had been cheating, because he not only dropped off the exam at the copying room, but also the answer key–as was required by the school. The copy room people then sold the students copies of the answers.

And that’s why they were able to finish their exams so quickly. They didn’t even have to read the questions. As it was multiple choice, and true or false, all they had to do was memorize the order of the A, B, and C and the true and false. “And they are very good at memorization,” Dr. Knight said. 

“My heart just sunk, because, again, it’s going against the grain of how we are taught and how students are in America,” he said. 

Business Partner

While teaching at Yang En University, Dr. Knight also met with his business partner, Mr. Wu, who flew out from Beijing. They had a meeting and wrote up contracts. 

“We had an agreement,” Dr. Knight said. “I had explained to Mr. Wu what I wanted to do in terms of business consulting, and Mr. Wu said, ‘That’s what I want to do as well, but I need someone with your expertise because we don’t have this type of business in China.’ And then he said, ‘I want to introduce you to Chinese organizations as well as international organizations. You’ll give me credibility, I’ll do the marketing, I’ll get the clients, and you’ll set up the programs.’ And so I thought it was a good idea. We exchanged our cards and information and I began putting one of the management programs together.”

Then Mr. Wu asked for a sample presentation, saying there would be another person involved who knew certain businesses and would be helping them developing the marketing end. 

Dr. Knight said he didn’t think anything of it and gave him an hour and a half written presentation, basically laying out his intellectual property, the whole business plan, and telling him: “This is what organizations are looking for. This is how it should be laid out.” 

“The guy was ecstatic and said, ‘Yes, the business is going to go very well,’” Dr. Knight said.

“To make a long story short, at one point he said, ‘Lynn can you forward us samples of a presentation that you would give an organization, this would help in opening more doors.’ 

“So I sent him information, it seemed like–this is hindsight 20/20–every other three weeks he would be asking for bits and pieces of more information to the point that he had everything that I had presented. And once he had everything, the conversations stopped,” Dr. Knight said.

“I emailed and called. To call, I had to go to another city because the university only had one telephone. He had disappeared, totally disappeared. It was like the guy did not exist,” Dr. Knight said.

This actually happened twice while in China. Dr. Knight said that after two such experiences, he realized that he had to be more cautious, that he couldn’t go in “like a foreigner, so gullible, trusting everyone.”

Maintaining Sanity

There were other annoying and alarming things at Yang En University. Dr. Knight said the university locked them in at night, saying it was necessary to keep thieves out, and he had to bribe the guards to let him out in the morning to go jogging. He also learned that the owner of the university was a drug lord who sold drugs from Burma. 

After about six months, Dr. Knight thought that it was better to get out of there while he still had his health. He said he didn’t want to go back to America after his first negative encounters because he was sure that other areas in China were not like this, and that this was just one of those unique situations.

At the Spring Festival break, he and three of his foreign colleagues decided it would be best to pack all their belongings at night and head out to Xiamen. Since they didn’t understand how things worked in China, they would just say they were going on vacation. 

Dr. Knight had already contacted Jimei University in Xiamen through a friend who was also going there to assure that they had a position open. In addition, this university was a sister university of Keuka College, New York, making him feel a little more confident since at least there was a Western connection.

“I started teaching leadership development and organizational behavior. It was a nice difference from how I started. I felt a little more relaxed,” Dr. Knight said. 

But then other things began to happen, Dr. Knight said. While in Xiamen, ongoing issues began regarding contracts, things that were verbally promised but then later changed. 

Problems also surfaced with teaching ethics in the classroom, about what he could and could not say. There is a Communist Party spy sitting in every class that is taught by a foreign teacher, Dr. Knight said. It could be a student selected by the university or a Party worker. That person’s job is to report anything that might be interpreted as being negative toward the communist government. Speaking anything about religion could get you immediately deported, he said.

“When you go to China, maintaining your ethics, maintaining those core values that we’re brought up with, having a keen understanding of what’s right and what’s wrong, what’s truth and what’s a lie, all of that’s turned upside down. You start questioning: wait a minute, that person just told me a lie; she knows she lied to me, I know she lied to me, but she is sitting there with a straight face as if to say, ‘I didn’t lie to you.’ So you go through this questioning of your own values.”

Cheating in the classroom was also prevalent at Jimei University, Dr. Knight said. A colleague told him that he could expect that 75 percent of students in China will cheat. 

“I was thinking, why? As a behaviorist, you always look at patterns of behavior, and you always look at those influences that impact the environment. So I said to myself, I need to look at this, to maintain my sanity. And also, why a culture like this breeds this type of behavior when doing the right thing is very easy to do and very simple to do.” 

Dr. Knight said: “No matter where you go, there are certain behaviors that are common among all of us. They are those basic, core human morals and values, which are honesty and the ability to give of oneself when another human being is in need. These are core values that a lot of countries hold as true, except for China. And this is one of the issues that a lot of foreign entities that go into China have.” 

During the eight years in China, Dr. Knight said he worked in many educational and business organizations. As a consultant he had the opportunity to work in international companies, including BMW and Lenovo, and heard their concerns about working with Chinese companies and Chinese employees; the lack of integrity and morality are of great concern to foreign businesses, he said. 

“Of course the government has a lot to do with it,” he added. “Therefore, what the government does reflects on the behavior of the people. The people have very little voice. And they have very little self-guidance, so the government gives that to them. And what the people see in the government, the people then translate into: this is how things should be. If the government is corrupt, guess what, the people will be corrupt. They will say, ‘The government does this, so I should be able to do this also.’” 

This view by the larger Chinese population was inspired by Deng Xiaoping who encouraged the Chinese people to get ahead no matter the cost or circumstances, Dr. Knight explained. The term Deng Xiaoping used was, “black cat, white cat,” meaning it doesn’t matter which you use as long as you are making as much money as you can; cheat, lie, steal, and pollute, just make the money! 

“When the vast majority, 75 to 80 percent of a country or group, believes that this behavior is normal or accepted, then you have a country and government that is out of sync with the rest of the world,” Dr. Knight said.

Dr. Knight said that foreigners often feel forced to put those core values aside in order to get business done, and from what he has seen in China, it has affected some so much that they had to leave China. Many international managers were not able “to shift, be that flexible,” in order to do their job in a country that requires you to do things that might not necessarily hold to standard. 

“For me, it’s been very hard to swallow that,” Dr. Knight said. “And to be honest, I’ve gotten into a lot of scuffles with different organizations and with people because I refused to compromise myself… It really questioned me as a person, as a human being. However, substandard behavior is a very normal thing in China.”

One of the core values in China is saving face, Dr. Knight said. You are not supposed to tell anybody to their face that they are lying or a mistake has been made. When you’re in a meeting, and you know that the information they’re giving you is plagiarized, but they are trying to sell it as their own–you know that, they know that; but you don’t tell.

“You save face by denying to the bitter end that, ‘no, I am not cheating, no, I am not plagiarizing, no, I am not taking advantage of you; you are obviously seeing things the wrong way!’ … I was feeling I was in a world that was turned upside-down–the twilight zone.” 

Discrimination

Dr. Knight said China is very skin color oriented. Most Chinese people discriminate against people of color, he found, and as an American Black he experienced many situations, some funny and some sad, he said. 

But they also have a peculiar relationship with whites, Dr. Knight said. “To date a white man is seen as sort of a privilege. But on the other hand whites are looked down upon; they are people you should take from as much you can, while you can, because they have the resources,” he said.

The most terrifying incident he witnessed in regard to racial discrimination happened on Sept. 21, 2007 in Beijing while he was teaching at Agricultural University (nongye daxue) one of the three top universities in Beijing. 

On that Friday evening Dr. Knight had plans to go out and meet some friends for dinner. But a colleague called him and told him that tonight wouldn’t be a good time for him to come into town. The Beijing police were beating every dark skin male they could find, beating, kicking, spitting on, and tasering them. So he decided to stay in.

China was preparing for the Olympic Games, and the Chinese government wanted to “sort of purify” Beijing for the world to see how nice and safe Beijing was, Dr. Knight said. They decided to instigate a fake drug bust in a large Beijing neighborhood called Sanlitun that foreigners frequent.

From what Dr. Knight learned later, security forces brought in hundreds of poor young Chinese men from the country side, dressed them in black jumpsuits, put them through a “mug” program, and armed them with sticks. And then they were given orders to round up every black male they could find in the Sanlitun area, thoroughly beat them up, and bring them in. It didn’t matter who or where they were–in a restaurant with the family, walking down the street, or in a grocery store–as long as they were black and in this area, they were to be beaten and brought in. 

The young men were trained with a videotape of the Rodney King beating that had happened in 1991 in Los Angeles, Dr. Knight said.

“How I know that, is because I had a consulting job. The person who I was working for said that one of his friends happened to be a policeman who took part in the training session where they were showing this tape,” Dr. Knight said. 

“So, for over four hours these thugs went into this area and rounded up every black male, no matter who you were, threw them down and beat them severely. The son of a Caribbean diplomat got also caught up in it. His arm was broken from the beatings.” 

Most of the men were African expats who happened to be in the area, Dr. Knight said. “If you’re from Africa, that’s like the kiss of death in China.” 

The Guardian of the UK was the only international news organization who reported this in an article on Sept. 25, 2007. Other than that, “you wouldn’t know that this happened,” Dr. Knight said. 

“The next morning I joined a few of my friends to go see the aftermath of what happened the evening before, what I saw brought tears to my eyes,” Dr. Knight said. “The government tried to hurriedly clean up the mess they had made the evening before; hoping to do this before too many outsiders could see the aftermath of their brutality. In washing down the streets, the water mixed with blood, the streets looked like a river of blood from the beatings the night before.” 

Dr. Knight said that when an American asked the Beijing police, how their government could be so cruel, his response was: “We learned this from the American police. Isn’t this the way you do it in America?”

The man told him: “You are so far behind the time. No, this is not how it is done in America.”

It’s Not In the Media

Dr. Knight said he has no desire to go back to China, and he wouldn’t necessarily encourage people at this point to venture off to China to do business given China’s current social and political problems. 

When he left America to go to China, he had an image based on the American-Chinese citizens he met in America that have been here for 80 or so years, who are hardworking, trusting, dependable and intelligent. “When I got to China, it was totally the opposite,” he said.

Dr. Knight said he is writing a book about his experiences so that people can see the other face of China, which is not necessarily what’s commonly reported in the media. China’s communist history plays a major role in the behavior of mainland Chinese today, he said. 

“We’ve come to view China through the economic face: it’s a vibrant country, this is where business is, where the opportunities are. In fact, it’s not! We also need to know the culture and why Chinese people are this way,” Dr. Knight said. “Because if you don’t really understand your competition, how do you know how to work with your competition? How do you know how to make the necessary decisions?”

To contact Dr. Lynn Knight about this article, please email him at: [email protected]

[email protected]