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Tom Doctoroff

Tom Doctoroff

 

China vs. Japan: Two Cultures, Two Responses to Crisis

Posted: 03/23/09 07:21 PM ET

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?