Chop Sticks or Fork?

There is a steeper learning curve
regarding how to do business
in China compared with
in the United States

ILLUSTRATION BY BRYANT FUKUTOMI

Chop sticks or fork? Although these two eating utensils serve the same function, the process of feeding oneself respectively with these two utensils can be as different as night and day.

Although, the chop stick will bring food to your mouth, there is a required level of proficiency to be obtained before being able to feed oneself efficiently. In contrast, the fork will bring food to your mouth without as much effort and without much of a learning curve.

As it takes time to learn to use the chop stick as opposed to a fork, there is also a steeper learning curve to doing business in China as opposed to doing business in the United States. Accordingly, a successful business in the United States does not automatically translate into success in China. Besides the obvious language barrier, the trust and legal issues, the cultural differences, there is also the relationship factor or guanxhi factor.

» What is guanxhi"?

"Guanxhi," as I define it to my Hawaii friends, is like being local but keeping a score card as to what you do for someone and what that same person does for you in return.

In Hawaii, we will often open our home to friends or willingly offer assistance to a stranger without expectation of receiving anything in return. And this may go on indefinitely with this friend or stranger until you feel this person either does not appreciate what you are doing for them or you feel like, "eh, dey takin' advantage of me" -- or both.

We in Hawaii will take measures to show one's appreciation or pre-empting this feeling of being "humbug" by bringing gifts to someone's home or office when visiting. In return, the host will make the guest take home food as a gesture of his or her appreciation of their coming to their home, or in the case of a business relationship, the recipient of the gift will provide greater assistance. This is something unique to Hawaii and an accepted form of social and business interaction.

I refer to this social interaction in Hawaii as being local style.

"Guanxhi" to the Chinese is taking this sense of local style to another level. Instead of reciprocating a favor with a box of malasadas, the price of reciprocating a favor can mean providing a product or service worth 10 times or even 1,000 times the value of the original favor.

For example, a businessman or government official in China will provide product or services or a meal for free. In return, said businessman will ask you to help his son or daughter secure a U.S. visa or provide funding for a project. Although, it might seem illogical and an impossible request to fulfill, to the Chinese businessman or government official, it is a fair request. The failure to return the "guanxhi" will result in the loss of "face" by the party failing to return the favor. I refer to this social interaction in China as being local style to da max.

The failure to return said favor, although unfair and disproportionate in value, will be seen as losing "face" or integrity on the part of the person failing to providing the favor in return. This failure or loss of face will in turn terminate the relationship. Do enough of these "lose face" propositions and you will find yourself unable to do any business in China.

» Can "guanxhi" extend to other people?

Yes, "guanxhi" can even extend to a third-party person or fourth-party person or fifth-party person, etc., not even involved in the transaction between the original two businessmen. For example, Chinese businessman B owes Chinese businessman A a favor. Chinese businessman B will ask his American business partner to do a favor for Chinese businessman A. It has nothing to do with the American businessman and Chinese businessman A, but it is the way of doing business in China.

After a while, this "guanxhi" system becomes a web of twists and turns with "guanxhi" being paid to or received from parties far removed from the original source. It can become so tangled that eventually it will become impossible for businessmen to conduct business in China without bringing a third-party American without "guanxhi" baggage.

» Does "guanxhi" have any boundaries?

No. There is a saying in China that even the lowest person in a company may have "guanxhi" of value to the company. There is a story of an extremely low-level employee being able to resolve a problem between two companies, the executives could not resolve, because of the "guanxhi" the low-level employee had with the other companies' President.

In Hawaii, it would like having the stockperson (no offense to stock employees) resolve a dispute between two companies through a friendship or relationship with the President of the other company. It may seem absurd in Hawaii, but, in China it is a reality.

» Can you resolve problems through "guanxhi"?

Yes, one key to doing business in China is being to resolve a problem through your own network of relationships in China to call upon. It is a common mistake by American businessmen to try to resolve business problems the American way, by having its executives or lawyers or high ranking government officials step in and resolve it. It may work. However, success is much easier to achieve if the person being asked to resolve the dispute has "guanxhi" with the parties involved.

» Why is "guanxhi" required in this situation?

Because the person resolving the problem may have done a favor for one or both of the involved parties in the past and is owed a favor in return by one or both parties. Now the issue involves not only losing face to the original party but also losing face to the third party that has been asked to resolve the problem.

Using a chop stick to feed oneself is not required nor is understanding the concept of "guanxhi" necessary to doing business in China. However, taking the time to learn both will provide you a different perspective and an added skill which is necessary in our world today.

We in Hawaii, because of our time zone and ethnic and cultural backgrounds have a tremendous opportunity to conduct business in China and to play a major pipeline between China and the rest of the United States. However, to do so, we must first demonstrate to the rest of the United States that we understand how to do business in China, how critical it will be to make China a business partner in the 21st century and why it is important to learn the way of the chop stick.

Unlicensed contractors
aren’t always cheaper

We recently completed the building of our new home in Aiea. Fortunately for us, my husband is a licensed structural and civil engineer by trade and has vast experience in architectural design, so he was able to design the home of our dreams. Because our father is a licensed general contractor, the utmost attention and quality of work was achieved on our home.

Currently, in this favorable housing and construction economy, it seems that many friends are also building their new home or second-story addition. But I was so shocked to learn that many of my friends hired the services of an unlicensed drafter for their design. Furthermore, they paid an unlicensed contractor or just a group of construction workers to build their home. I cannot believe that they would put themselves in such risk when it comes to the biggest investment in their lives. Would you go to an unlicensed doctor for surgery? Of course not!

So I spoke to all of my friends about why they did not come to us to help them design their home. Most of them said that they assumed they could not afford a licensed architect or engineer. But after learning how much they paid the drafter that prepared their design, I was doubly shocked to learn that they paid the drafter nearly double or even three times more than what a licensed architect or engineer from a small firm would have charged.

Some people spent $15,000 for just a second-story addition design, and that did not include the cost for the building permit, the structural engineer stamp, etc.!

And what these homeowners are receiving is an amateur design with very little thought or calculations, resulting in oversized beams, footings, and other inefficiencies that will drive the construction costs much higher than they need. Don't think that just because building plans were approved by the City Building Department that the drawings were designed well. Truthfully, the Department of Planning and Permitting only looks at certain aspects of the design plans without particular attention to all the calculations. That is why the city relies on professional architects or structural engineers to stamp the drawings.

For an unlicensed drafter to save money, he or she will often obtain a stamp from what I would call "an unethical architect or engineer" who will stamp the drawings, but not do many calculations, and charge a nominal fee, such as $300 for the stamp. So what's the safest thing to do?

Make sure the architect or engineer is legitimate, is insured, and will oversee construction of the projects. All of them would be happy to let you walk-through a sample project they've worked on (as long as the homeowner is available). The quality of the design is not only aesthetically superior, but it will comply with local codes.

Seek the services of a licensed professional designer. If need be, pay a little more for their services because where you will save the most money is during construction.

And by all means, do not hire an unlicensed general contractor.