China vs. Japan: Two Cultures, Two Responses to Crisis
In both Japan and China, there is much talk of "harmony." In China, it's is a means to an end. "Advancement," either individual or national, is the ultimate objective. In Japan, harmony -- fitting in -- is an end in itself. Primary satisfaction is taken in consensus. Yes, the young Japanese generation is, relatively speaking, more "individualistic" but not in a rebellious (i.e., Western) sense.
The Chinese: Pragmatic to the Core
Given this fundamental difference, the contrast between ordinary Japanese and Chinese peoples' reaction to the financial crisis is not surprising. Japanese are in a trance, befuddled, even helpless, stunned by something they don't understand. The Chinese have been supremely pragmatic and this has blunted the pain of the global tailspin in the People's Republic. There has been a meticulous assessment of risk and opportunity. Every state-owned company has methodically recalibrated its five-year plan. Export companies, particularly in Guangdong and Fujian, have unceremoniously closed shop. While micro-protests are rampant, 20 million laid off migrant workers have returned to the countryside sans despair for the future. "We have been through much worse" is a refrain one often hears. "I'm sure something will come up in six months time and, until then, my family has saved some money," said one lanky, bright-eyed Anhui young man to me. Shanghai taxi drivers have had incomes lowered by around 25%, primarily due to fewer trips to and from Pudong airport. But they are clear-eyed, hardworking as ever, often betting whether passenger loads will pick up in the fourth quarter of 2009 or the first quarter of 2010. Even the penny pinched middle class has begun to reopen wallets. Mobile phone purchases, even premium models, have perked up. After the government announced a consumer-friendly tax policy, auto sales have shifted into third gear.
At JWT, we have had to "derisk" our budgets, not only on the mainland but in Hong Kong and Taiwan as well. The Chinese have accepted (in these times, relatively minor) staff cuts with no fuss, no muss. Of course there is concern, and sadness. But as long as the selection of "nonproductive" employees is performance-based, we avoid major morale hits. (I asked a few employees whether we should fire a few people or lower salary to save jobs. The answer was unanimous: trim headcount, please.)
The Japanese: Numbed Anxiety
Japan has risen from the ashes before. They have reshaped their society and reinvented themselves as a cultural and high-tech, value-added global force. The grace of the people and their focus on innovative detail remain significant, albeit latent, competitive advantages. But, in 2009, the Japanese are loath to accept a new reality. This crisis, unlike the "lost decade" that followed the pop in Japanese real estate bubble back in the late '80s, is a foreign creature. It was not "made in Japan" and has landed upon the population like an unfamiliar alien invader.
The magnitude of Japan's predicament, one that represents a fundamental challenge to the country's economic model and way of life, has not sunk in. In the U.S., people talk of little else. Here, people don't. True, there is anxiety. "Voluntary retirement schemes" (VRS) occur with unaccustomed frequency. Men in their '50s are petrified of being laid off. (Most social security is connected to employment.) And consumers have pulled back even more than their American counterparts. But, on the street, there does not appear to be panic, only resignation to the drumbeat of steady bad news in the morning papers.
No Fundamental Challenge of the System. The patriarchical, leader-protects-underling-in-exchange-for-consensus underpinning of Japanese society is still considered "the right way." If change is happening, it is happening very slowly, perhaps imperceptibly to Westerners. In the midst of a tsunami, disgust seems to greet the trivial. When some of the trading companies rescinded job offers extended to third-year university students, citizens and editorial pages protested. Japanese labor laws are as rigid as ever. Once-in-a-generation layoffs at Toyota and Sony seemed to come as a bolt from the blue; people were shocked that the pillars of Japan's industrial complex had been so compromised. The "opening" of society to foreign laborers is discussed only sotte voce, with real liberalization light years from reality. During JWT's recent VRS, we "selectively targeted" non-performers and asked them to leave the agency with a generous compensation package. In one-on-one conversations, there was some anger but, more often, stunned grief. Questions regarding "my performance" were rarely raised while a chorus of "This is not the Japanese way!" rose from the ranks, orchestrated by union leaders. To avoid spouses discovering jobless status, severance to former employees will be paid in twelve monthly installments. (The Japanese movie, Tokyo Sonata, beautifully captures the dismay of a laid off father when his "family protector" position is threatened.)
On the advertising front, Japanese clients, with clenched teeth, still accept the flagrantly dishonest media rebates giants Dentsu and Hakuhodo receive from media vendors. These emperors wear no clothes -- they are TV and print space traders -- but they are revered for "scale" and "safety." Only clients "lost in Dentsuland" have begun using multinational agencies.
Explaining the Difference
What explains the dramatic difference in how Japanese and Chinese people absorb the financial crisis?
Economics. First, and most simply, China's economy is in an earlier stage of development so growth, while slowing dramatically, is still relatively strong. Japan, on the other hand, is still too dependent on exports for a mature economy.
Leadership. Second, the Chinese "believe in" their government. China, a Confucian society, reveres strong central leaders who are capable of efficiently, sometimes ruthlessly, mobilizing resources for the greater good. Most feel the Communist Party central leadership is doing a fine job managing a difficult situation. Eminently pragmatic, mainlanders feel protected by the power structure. Japanese, on the other hand, are dismissive of their politicians. Prime Minister Aso, the third ruler in as many years, is a joke. They don't have faith in Ichiro Ozawa, the leader of the opposition Democratic Party. The "bureaucrats," lifers who control institutional levers of power, are regarded as old-guard, out of touch.
Culture: Confucianism vs. Buddhism. Third, there's "culture." Chinese and Japanese societies balance Confucian and Buddhist thought. But, in Japan, Buddhism dominates. In China, Confucianism reigns supreme. It is telling that Japan and China, both anti-individualistic, express the importance of collectivism in subtle but significantly different ways. Chinese say, "The leading goose gets shot down." The Japanese say "the nail that sticks up get hits down." The former is ambitious, recognizing the impulse of forward advancement, albeit within a regimented structure. The latter is collective, harmony-driven.
Japanese society, as a result, is characterized by: exquisite traffic etiquette; sparkling, sleek streets with neat neon signs flush against buildings; cleanliness as a primary urge (people wear masks when they have hay fever); young men who "shape" eyebrows for "clean" look; a surreally slow pace of change reinforced by unanimity instinct; a superior service culture with genuine satisfaction derived from pleasing others; door-to-door auto salesmen; inconspicuous demonstration of wealth (titles on business cards are more important than salary; big diamonds are worn infrequently because of the attention they draw); a highly creative design community that glorifies detail; an assertive eco-consciousness.
In China, however, harmony means "order" and "stability," not "peace" and mutual-respect. It's pragmatic, often messy. Hierarchies are everywhere but everyone wants to climb the ladder of success. Crossing the street is a death trek. Title inflation is endemic, with high staff turnover a constant challenge. Service is staccatoed, mechanically scripted. Elevator talk is deafeningly loud. Advertising blares from all corners, at all hours of the day. Fights break out on the sidewalk. Auto accidents settlements are resolved in the middle of the highway. Product quality is slapdash. Men with booming voices are admired for stature. Businessmen who "forge new models" are revered; Alibaba's Jack Ma, a visionary who redefined business-to-business internet marketing, is a hero. There is joy, frustration, despair, pride and glory on public display. China's spontaneous humanity, both admirable and self-serving, is accessible to foreigners.
Towards the Future
What does all this mean for the fortunes of the two countries in a post-crisis world? Will China adapt? I believe so. It will, with relentless pragmatism and faith in the wisdom of leaders, adjust to the realities of a new economic order. And Japan? Twice in the past, the country has redefined itself, without abandoning cultural moorings: once at the beginning of the Meiji era and again after World War II. But, after seventy years of post-war introspection, the daunting challenges should not be underestimated. A new, more liberal generation must assume the reigns of power but, by then, will it be too late?
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"On the advertising front, Japanese clients, with clenched teeth, still accept the flagrantly dishonest media rebates giants Dentsu and Hakuhodo receive from media vendors. These emperors wear no clothes -- they are TV and print space traders -- but they are revered for "scale" and "safety." Only clients "lost in Dentsuland" have begun using multinational agencies."
That's right! Japanese culture is to blame for your company's inability to compete!
In the meantime... the Americans are asking themselves how God could have let this happen to his chosen people....
Gee, total mystery as to which country the author likes -- a lot. Chinese wonderful. Japanese terrible. Got it. Nice that you so admire a government that oppresses its own people (and people who have become their people by invasion & brutal occupation).
Perhaps the Japanese are "...befuddled, helpless", which incidentally describes the American population at this point too, because (like American's) they've become accustomed to economic success, high standard of living, etc, as opposed to China that has what, a single generations worth of that.
Meanwhile the Japanese met modernity running. They resisted colonization and created a stable nation state and a national identity. During the latter part of the 19th century they transformed into a modern nation state with extensive infrastructure and modern financial, political and military systems. By 1905 they were the victors of the Russo Japanese war. By 1930 were a major modern power and began to conquer and colonize their neighbors. They were all too able to adopt modern weaponry and unleash the horrors of war upon their neighbors and eventually the Westen powers.
Following their failed war they were near ruin, the county a bombed out shell. Albeit with US aid, the Japanese quickly rebuilt and quickly adopted a new way forward based on both Western and Japanese ideas. In less than a quarter century they were again a leading nation with a massive economy built on industry and production with a mix of government and private control. They were so successful that they became a model not only for Asia but for other nations.
Unwilling to take the hard steps to adapt to the curent economic environment, Japan is clearly not perfect. But a couple of decades is not enough to count out a nation. If it were China would never have been able to come back from centuries of failure and weakness. Perhaps we should balance our view of the current and the recent with a glance a bit further back.
Founding emperors of Chinese empire have always known to be a revolutionary ie they have to raise a people's army to destroy the old power structure (nepotism, corruption, poor handling of the economy, exploitation of the masses, etc) and create a new "improved" society with themselves firmly in the driver seat. All emperors claimed to be the "son of heaven" and have the mandate from heaven to lead the people. (This is true of the Japanese emperor as well).
The above is true of Mao when he led the Communist to power, it is just as true for the founding emperors of the Qin, Han, Tang or Ming Dynasties going back 4,000 years. Mao can be considered to be the founding emperor of a new dynasty - communism is just a tool - don't get distracted by it. Deep down the new leaders of China are pragmatist ie "it doesn't matter if the cat is black or white, a cat that can catch mice is a good cat".
Remember China is highly diverse and multi-cultural the main religion is a mixed pot of Buddhism, Confucianism, & Taoist and to a lesser extent Islam, Christianity and Paganism depending which region of China you are in. Similarly coastal cities have traditionally been richer than the inland cities due to geography and trade. There is no one China - what you see is a slice of an ever evolving mosaic. The best is yet to be..
While Japan has suffered through what seems like two decades of recession, China has seen a sustained boom for the same period. That those to have moved in opposite directions is hardly a surprise as manufacturing moved to China from Japan and it's satellites the 'Little Dragons" of Taiwan and Korea.
Doctoroff's point seems biased toward recent history. It is easy to look at the last two decades and decide that the Chinese are flexible and early adopters and that the Japanese are incapable of getting out of a rut, but if you look at the last five centuries or even millenium the picture is less clear.
With the collapse of the Ming dynasty in the 17th century, China fell into a period of weakness and stagnation that lasted until the mid 20th century if you believe Mao was an improvement or the end of the 20th century if you don't. Throughout that period China regressed unable to get itself from the ditch.
This is a really interesting article, thank you! I lived in Japan for 5 years and you really articulated the Japanese sentiment perfectly, plus you taught me something new about Chinese culture.
"To avoid spouses discovering jobless status, severance to former employees will be paid in twelve monthly installments."
Um... what? Do these employees realize they are trading a year's worth of interest in exchange for an easier time lying to their familes?
For the U.S., a common point is that we must end the trade deficits with both Japan and China - and you can add Korea into that list.
This is a pathetic fantasy. How are we going to end the trade gaps with Asia when it's so much more expensive to produce products in America, and Americans are totally addicted to Wal-Mart? Ask Joe the Plumber if he would be willing to pay triple for everything so he could "buy American," and you'd quickly see that looking out for number one, and to hell with the consequences for America, is not confined to AIG. It is utterly impossible for us to reduce the trade gaps with China and Korea in any meaningful way. America is a sinking ship, like Britain after it bankrupted itself in WWI. America is history. Toast. It's ironic that we've got the best and smartest president since Lincoln presiding over the management of America's decline. It's sort of like GM's finally producing a great car, the Malibu, when it's way too late for it to matter. By the end of this century, America will be third in world power and wealth, behind both China and India. Henry Luce was right, the 20thC was "the American Century," just as the 19th was Britain's. Like them, we had our flash in the pan, now "good-bye to all that."
It is a common tendency in defeatists to see only their weaknesses and only their opponent's strengths. If our doom and China's rise is so certain, move there. Get some experience with a real police state.
I am from India ... believe me its not happening - atleast not in the 21st century, things will improve massively for India, no doubt. Tom Friedman did spin a lot of fantasies. I don't know about China though ... we don't know the inside story because there is no freedom of press there. According to me there is a lot of empty posturing from China - they are not all that.
Next up: Swedes and Greeks -- They're both white, so why do they react to things so differently?
That was too funny.
All societies appreciate strong leadership - the Chinese is no different. China is a melting pot of culture - there are officially 56 minorities and 100+ of dialects in China. In a country of 1.3 bil people this diversity if not managed well can lead to miscommunication, mistrust, chaos, civil wars & revolutions.
Imposing one common language (Putonghua), writing, culture & history (the ruling class like Confucius - as it talks about benevolent leaders and respect of the subjects for their leaders). These are necessary and hopefully sufficient conditions in ruling China and making it orderly, manageable and prosperous. China is still a developing economy with lots of room to grow.
Japan on the other hand is a mature and rich country. It is more homogeneous, very team based and subservient society. Everything has its place and all major human interactions are ritualized by society. It has their own "improved" version of Confucianism and the role of the monarchy which help the ruling class to strengthen its control over the populace. After WWII despite being an island nation the economy flourishes with the help of US technology and money leading to rapid modernization, industrialization and export - but it has been in a slow decline ever since.
Most foreigners are confounded when they have to deal with the diversity and contradiction that is found in China. Remember it is an ever evolving mosaic - still Work in Progress.
"In both Japan and China, there is much talk of "harmony." In China, it's is a means to an end. "Advancement," either individual or national, is the ultimate objective. In Japan, harmony - fitting in -- is an end in itself. "
Strange. Seventy years ago, it was the other way around, and I don't mean that in an economic sense.
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