8 ms·

The Chinese Businessman Paradox (2018)

58 points by riverlong 6y ago

yc-kraln 6y ago
I mean, the mundane explanation would be that there are simply a huge number of Chinese businessmen, and that by proxy there are a large number of successful ones (and an even larger number of unsuccessful ones).
- mabbo 6y ago
  Exactly. Nobody talks about the million start ups that failed before their first big funding round.
- Blikkentrekker 6y ago
  It probably also explains the maxim of “No matter how good one be at any given task, there is always a ten year old Chinese child that is better at it.”. There are quite a few ten year old Chinese children. Though, it does beg the quæstion why we hearn't as much from the 10 year old Indian children
  - gumby 6y ago
    I have never heard this so-called “maxim”
    - Blikkentrekker 6y ago
      You could have searched for it to see that it exists in your favorite search engine, however. I just searched for “no matter how good always Chinese child better” and got a great deal of references to this in various phrasings. Your posts, frankness be, more so suggests your dislike for it's existence, than anything.
    - PoignardAzur 6y ago
      It's funny, I first heard of it a few weeks ago when discussing emerging startups, and how for every innovative ideas you might have in your day-to-day life, odds are someone else already made it into a business+website.
- klunger 6y ago
  I don't think the author is suggesting that business Chinese businessmen are uniquely successful. He is really just trying to pinpoint what makes the successful ones successful. You could remove the word "Chinese" from the whole thing, and it would still make sense.
  - nubela 6y ago
    Am an ethnically Chinese Singaporean. That is not really true. Chinese businessmen have a way of doing business that is pretty unique and not startup-like. Some examples: 1. Real estate purchases (with bank loans) are a superior alternative to renting because paying mortgage beats making a landlord richer. Also, east-asian culture believes that very few things beat the appreciating value of land. 2. We love profit. I for one, started a company since I graduated moving from one product to another. And I do not tolerate making losses unless there is significant expectation of profit in the short-term. (I think this applies to older generation "chinese businessmen" because we never had such a thing as venture capital.
    - rtx 6y ago
      That's how small to mid size business used to be run. Successful ones always worried about margins before growth. We get this trope in other regions too, like Jews in the west and Marwaris in India. What made them succesful was generational knowledge. As there were no business schools.
      - Answerawake 6y ago
        I have long suspected there was this generational knowledge that some tend to rely on and others don't. I wonder if there are any attempts to document this generational knowledge somewhere like in a blog or a book.
        rtx 6y ago
        > blog or a book. Never heard of any in popular culture, you question prompted me to search. I found a good article about of the communities I mentioned above. https://nextbigwhat.com/marwari-business-principles/ https://nextbigwhat.com/marwari-business-principles/
- goodcanadian 6y ago
  To be fair, I think the author recognises this. He calls it a trope throughout and makes frequent reference to the less successful and unsuccessful ones. The main thrust of the article seems to be about what we can learn (if anything) from the trope. I found it all a mildly interesting read. EDIT: The "paradox," I believe, has nothing to do with being Chinese or not. Rather, it is that he finds the most successful ones to be rational, but superstitious; and intelligent, but uneducated.
- Clewza313 6y ago
  The author is not describing China, but South-East Asia, where Chinese are a small but conspicuously successful minority. The blog series is an exploration of possible reasons why this is so.
- ArtWomb 6y ago
  I am reminded of comedian Ronny Chieng's bit about Caishen, the Taoist "God of Money". And how the New Year's greeting is literally "Hope You Get Rich" ;) This is a great read. But the underlying fundamentals don't seem to vary much, East or West. Learn by doing. Trust your gut. Bias toward action. Cash is king. >>> what separates the Robert Kuoks, the Mochtar Riadys, the Ng Teng Fongs and the Yeoh Tiong Lays from the rest of the traditional Chinese businessmen who have graced both sides of the Malaccan Straits? The obvious answer — the one that springs to our lips — is Luck. The concept of Wufu may be so ingrained that it transcends mere philosophy. I've heard it described in terms of family history even. That ancestors are reaching through the veil of space and time to help the new generation succeed!
4cao 6y ago
There is a lot of insight in the description of all the individual, small- and medium-scale Chinese businesses in the region, and the article is well worth reading for this reason. However, extrapolating these observations alone is not enough to explain the emergence of a relatively closely-knit elite of powerful business moguls who have a finger in every pie and can apparently do no wrong in their respective geographic areas of operation, while seemingly being unable to capitalize on the same business acumen to successfully expand beyond the region, a question the article also brings up: > Consider a question that I’ve been interested in for the past 10 years: what separates the Robert Kuoks, the Mochtar Riadys, the Ng Teng Fongs and the Yeoh Tiong Lays from the rest of the traditional Chinese businessmen who have graced both sides of the Malaccan Straits? To anyone interested in some good answers to the above question, along with an extensive background discussion, I heartily recommend the book "Asian Godfathers: Money and Power in Hong Kong and Southeast Asia" by Joe Studwell, a well-researched study of the topic that is also captivating to read: https://www.amazon.com/dp/0802143911 https://www.amazon.com/dp/0802143911
JoeAltmaier 6y ago
It may be more about the survivorship, than any of the supposed traits that make a good businessman. Why are the winners often superstitious? Because superstition works? No, more likely I imagine, is that they take unpredictable moves from time to time. Often that is a mistake, and those businessmen we ignore. But if they make a random move and succeed, we laud them as a real Chinese Businessman, a True Scotsman.
jmartrican 6y ago
I've been lead to believe that grit is the most common trait among successful business people. Maybe that is a western belief. I also think that culture is too. But that we make our own culture though the friends, family, associates, and communities we participate in. If you roll with a culture that puts a lot of importance on business success, then maybe it will help keep you motivated through the tough times. It will help your grit.
wenc 6y ago
I read this series some time ago, and I thought there were many gems in it that tracked my experiences that I could not articulate. For instance, there's a bit in here about rationalism, and how the rationalist community might be good at being "correct", the kind of rationalism espoused, which prizes removing biases, doesn't always result in achieving the desired ends or winning. https://commoncog.com/blog/chinese-businessmen-superstition-doesnt-count/ https://commoncog.com/blog/chinese-businessmen-superstition-... To me, a pure rationalism relies on your mental models of the world being correct in essential ways (to use a PCA analogy, in the principal components). However, the business world is one where higher-order effects dominate, so even if you have a rational first-order mental model of the world, that mental model is often insufficient. This is where the empirical approach shines. The terms are used loosely in the article, but it differentiates between "epistemic rationality" (how do you know that your beliefs are true?) and "instrumental rationality" (how do you make better decisions to achieve your goals?), and the observation is that businessmen with high acumen -- in any culture, I would argue, but especially among the early Chinese settlers in Southeast Asia who generally lacked much formal education -- tended to employ "instrumental rationality" a lot. It was a kind of experimental culture within a conservative culture, which I find fascinating. This seems to track with how startups work today -- create an MVP, ship, get feedback and iterate -- as opposed to the old product development approach of doing market surveys/focus groups, waterfalling the product engineering and then shipping a shiny product (that potentially no one wants). I personally think that for most things, first-order mental models (i.e. simple cause and effect) will get you 80% of the way there, but in order to get over the lump of the last 20% of diminishing returns (where higher-order effects dominate), empiricism/instrumental rationality is necessary. In the flip side, one of the downsides of being hyperrational is to overthink things. All mental models of the world are incomplete, so one can end up optimizing a narrow model of reality. We've all come across stuff that "shouldn't technically work" but do in real life. In many cases, it's more useful to just interact with reality directly. Uber and AirBnb shouldn't work -- some might argue they don't -- after all, who would trust strangers enough to book a car or a room on the Internet? Yet, empirically they do work for the most part, or at least the trust part does.
- Pamar 6y ago
  First reading for me and I have to agree: there are some very interesting ideas in the whole series, I am planning to share it with some friends and get their feedback.
MaybeMalaysian 6y ago
I have skimmed through the post series and some comments over here, like from the Singapore Chinese about non-startup business and Ronnie Cheng chinese love money comment https://www.youtube.com/watch?v=O_KpLrHCAx0 https://www.youtube.com/watch?v=O_KpLrHCAx0 There are only two reasons why a business can succeed from Chinese point of view, I am writing this as a Malaysian, ethnicity is Chinese. 1. Work Hard (grit) 2. 会做人 (know how to take care of other people's feelings and needs first) To elaborate on the second point, you have to know how to lobby and please 1. the government 2. the police 3. the other rich businessmen/women 4. the clients/customers and of course those of famous people around the town you operate your business in, like 5. bad guys who are notorious 6. pretty/powerful people if you are doing all of these, it is just bad luck that if your business fail, from Chinese point of view. There are infinite reasons why a business will fail, and as a Chinese businessman, what you would do is to quit that industry and start in another one (grit).
- innagadadavida 6y ago
  These are all reasonable points. However if you look at the billions of people in south east Asia, many of them have all these traits and yet they are not as successful as the Chinese businessmen - on an aggregate. The reason I feel Chinese businessmen succeed is lack of environment protections, cheap labor (lack of worker protections) and relatively cheap energy. These are essential ingredients for success and countries like India are not as successful despite possessing the skills you mention. Most western countries all developed before the socio-enviro-economic issue I mentioned became prevalent.

58 points by riverlong 6y ago

I mean, the mundane explanation would be that there are simply a huge number of Chinese businessmen, and that by proxy there are a large number of successful ones (and an even larger number of unsuccessful ones).

mabbo 6y ago
Exactly. Nobody talks about the million start ups that failed before their first big funding round.
Blikkentrekker 6y ago
It probably also explains the maxim of “No matter how good one be at any given task, there is always a ten year old Chinese child that is better at it.”. There are quite a few ten year old Chinese children. Though, it does beg the quæstion why we hearn't as much from the 10 year old Indian children
- gumby 6y ago
  I have never heard this so-called “maxim”
  - Blikkentrekker 6y ago
    You could have searched for it to see that it exists in your favorite search engine, however. I just searched for “no matter how good always Chinese child better” and got a great deal of references to this in various phrasings. Your posts, frankness be, more so suggests your dislike for it's existence, than anything.
  - PoignardAzur 6y ago
    It's funny, I first heard of it a few weeks ago when discussing emerging startups, and how for every innovative ideas you might have in your day-to-day life, odds are someone else already made it into a business+website.
klunger 6y ago
I don't think the author is suggesting that business Chinese businessmen are uniquely successful. He is really just trying to pinpoint what makes the successful ones successful. You could remove the word "Chinese" from the whole thing, and it would still make sense.
- nubela 6y ago
  Am an ethnically Chinese Singaporean. That is not really true. Chinese businessmen have a way of doing business that is pretty unique and not startup-like. Some examples: 1. Real estate purchases (with bank loans) are a superior alternative to renting because paying mortgage beats making a landlord richer. Also, east-asian culture believes that very few things beat the appreciating value of land. 2. We love profit. I for one, started a company since I graduated moving from one product to another. And I do not tolerate making losses unless there is significant expectation of profit in the short-term. (I think this applies to older generation "chinese businessmen" because we never had such a thing as venture capital.
  - rtx 6y ago
    That's how small to mid size business used to be run. Successful ones always worried about margins before growth. We get this trope in other regions too, like Jews in the west and Marwaris in India. What made them succesful was generational knowledge. As there were no business schools.
    - Answerawake 6y ago
      I have long suspected there was this generational knowledge that some tend to rely on and others don't. I wonder if there are any attempts to document this generational knowledge somewhere like in a blog or a book.
      - rtx 6y ago
        > blog or a book. Never heard of any in popular culture, you question prompted me to search. I found a good article about of the communities I mentioned above. https://nextbigwhat.com/marwari-business-principles/ https://nextbigwhat.com/marwari-business-principles/
goodcanadian 6y ago
To be fair, I think the author recognises this. He calls it a trope throughout and makes frequent reference to the less successful and unsuccessful ones. The main thrust of the article seems to be about what we can learn (if anything) from the trope. I found it all a mildly interesting read. EDIT: The "paradox," I believe, has nothing to do with being Chinese or not. Rather, it is that he finds the most successful ones to be rational, but superstitious; and intelligent, but uneducated.
Clewza313 6y ago
The author is not describing China, but South-East Asia, where Chinese are a small but conspicuously successful minority. The blog series is an exploration of possible reasons why this is so.
ArtWomb 6y ago
I am reminded of comedian Ronny Chieng's bit about Caishen, the Taoist "God of Money". And how the New Year's greeting is literally "Hope You Get Rich" ;) This is a great read. But the underlying fundamentals don't seem to vary much, East or West. Learn by doing. Trust your gut. Bias toward action. Cash is king. >>> what separates the Robert Kuoks, the Mochtar Riadys, the Ng Teng Fongs and the Yeoh Tiong Lays from the rest of the traditional Chinese businessmen who have graced both sides of the Malaccan Straits? The obvious answer — the one that springs to our lips — is Luck. The concept of Wufu may be so ingrained that it transcends mere philosophy. I've heard it described in terms of family history even. That ancestors are reaching through the veil of space and time to help the new generation succeed!

4cao 6y ago

There is a lot of insight in the description of all the individual, small- and medium-scale Chinese businesses in the region, and the article is well worth reading for this reason. However, extrapolating these observations alone is not enough to explain the emergence of a relatively closely-knit elite of powerful business moguls who have a finger in every pie and can apparently do no wrong in their respective geographic areas of operation, while seemingly being unable to capitalize on the same business acumen to successfully expand beyond the region, a question the article also brings up: > Consider a question that I’ve been interested in for the past 10 years: what separates the Robert Kuoks, the Mochtar Riadys, the Ng Teng Fongs and the Yeoh Tiong Lays from the rest of the traditional Chinese businessmen who have graced both sides of the Malaccan Straits? To anyone interested in some good answers to the above question, along with an extensive background discussion, I heartily recommend the book "Asian Godfathers: Money and Power in Hong Kong and Southeast Asia" by Joe Studwell, a well-researched study of the topic that is also captivating to read: https://www.amazon.com/dp/0802143911 https://www.amazon.com/dp/0802143911

JoeAltmaier 6y ago

It may be more about the survivorship, than any of the supposed traits that make a good businessman. Why are the winners often superstitious? Because superstition works? No, more likely I imagine, is that they take unpredictable moves from time to time. Often that is a mistake, and those businessmen we ignore. But if they make a random move and succeed, we laud them as a real Chinese Businessman, a True Scotsman.

jmartrican 6y ago

I've been lead to believe that grit is the most common trait among successful business people. Maybe that is a western belief. I also think that culture is too. But that we make our own culture though the friends, family, associates, and communities we participate in. If you roll with a culture that puts a lot of importance on business success, then maybe it will help keep you motivated through the tough times. It will help your grit.

wenc 6y ago

I read this series some time ago, and I thought there were many gems in it that tracked my experiences that I could not articulate. For instance, there's a bit in here about rationalism, and how the rationalist community might be good at being "correct", the kind of rationalism espoused, which prizes removing biases, doesn't always result in achieving the desired ends or winning. https://commoncog.com/blog/chinese-businessmen-superstition-doesnt-count/ https://commoncog.com/blog/chinese-businessmen-superstition-... To me, a pure rationalism relies on your mental models of the world being correct in essential ways (to use a PCA analogy, in the principal components). However, the business world is one where higher-order effects dominate, so even if you have a rational first-order mental model of the world, that mental model is often insufficient. This is where the empirical approach shines. The terms are used loosely in the article, but it differentiates between "epistemic rationality" (how do you know that your beliefs are true?) and "instrumental rationality" (how do you make better decisions to achieve your goals?), and the observation is that businessmen with high acumen -- in any culture, I would argue, but especially among the early Chinese settlers in Southeast Asia who generally lacked much formal education -- tended to employ "instrumental rationality" a lot. It was a kind of experimental culture within a conservative culture, which I find fascinating. This seems to track with how startups work today -- create an MVP, ship, get feedback and iterate -- as opposed to the old product development approach of doing market surveys/focus groups, waterfalling the product engineering and then shipping a shiny product (that potentially no one wants). I personally think that for most things, first-order mental models (i.e. simple cause and effect) will get you 80% of the way there, but in order to get over the lump of the last 20% of diminishing returns (where higher-order effects dominate), empiricism/instrumental rationality is necessary. In the flip side, one of the downsides of being hyperrational is to overthink things. All mental models of the world are incomplete, so one can end up optimizing a narrow model of reality. We've all come across stuff that "shouldn't technically work" but do in real life. In many cases, it's more useful to just interact with reality directly. Uber and AirBnb shouldn't work -- some might argue they don't -- after all, who would trust strangers enough to book a car or a room on the Internet? Yet, empirically they do work for the most part, or at least the trust part does.

Pamar 6y ago
First reading for me and I have to agree: there are some very interesting ideas in the whole series, I am planning to share it with some friends and get their feedback.

MaybeMalaysian 6y ago

I have skimmed through the post series and some comments over here, like from the Singapore Chinese about non-startup business and Ronnie Cheng chinese love money comment https://www.youtube.com/watch?v=O_KpLrHCAx0 https://www.youtube.com/watch?v=O_KpLrHCAx0 There are only two reasons why a business can succeed from Chinese point of view, I am writing this as a Malaysian, ethnicity is Chinese. 1. Work Hard (grit) 2. 会做人 (know how to take care of other people's feelings and needs first) To elaborate on the second point, you have to know how to lobby and please 1. the government 2. the police 3. the other rich businessmen/women 4. the clients/customers and of course those of famous people around the town you operate your business in, like 5. bad guys who are notorious 6. pretty/powerful people if you are doing all of these, it is just bad luck that if your business fail, from Chinese point of view. There are infinite reasons why a business will fail, and as a Chinese businessman, what you would do is to quit that industry and start in another one (grit).

innagadadavida 6y ago
These are all reasonable points. However if you look at the billions of people in south east Asia, many of them have all these traits and yet they are not as successful as the Chinese businessmen - on an aggregate. The reason I feel Chinese businessmen succeed is lack of environment protections, cheap labor (lack of worker protections) and relatively cheap energy. These are essential ingredients for success and countries like India are not as successful despite possessing the skills you mention. Most western countries all developed before the socio-enviro-economic issue I mentioned became prevalent.