The influence of China’s culture on the way that its organizations are managed

China’s long history has until very recently been marked by two over-riding social imperatives. The first imperative concerned the preservation of its integrity in terms of protecting its immensely long borders and maintaining internal unity. This justified and reinforced the hierarchical status and centralized powers of the Emperor and imperial officials.

While they normally treated imperial authority with great deference, the peasantry occasionally revolted against the abuse of this authority, especially when driven to desperation by famine. The second imperative in fact concerned the need for ommunal self-help in the face of recurrent natural disasters, particularly famine and flood. The precariousness imposed by a combination of threats from natural causes and arbitrary imperial rule led to a reliance on mutual support within extended family units and the local community.

This historical legacy helps to account for the paradox characterizing China today, that high trust is accorded to group members or those with whom there are special relationships, while others are actively mistrusted. Chinese culture and tradition is therefore deep rooted and before the nineteenth entury was largely undisturbed by foreign influence. The majority Han people had managed to absorb foreign invaders, such as the Mongols and the Manchu, into that culture.

Their culture is a strong attribute of Chinese society and its members remain very self-conscious of it. As Fairbank noted (1987: 367), ‘the influence of China’s long past is ever-present in the environment, the language, the folklore, and the practices of government, business and interpersonal relations’. Many writers have stressed the influence of China’s culture on the way that its organizations are managed .

The PRC has been one of the fastest growing economies in the world in recent times. China’s achievement has been a dazzling success and quite unanticipated in many respects, particularly after the debacle of the Great Leap Forward and the woes of the Cultural Revolution under Mao Zedong. Since Deng Xiaoping initiated the ‘Open Door’ reforms in 1978 however, it has expanded by leaps and bounds. By the start of the new Millennium, China was hailed as a coming economic superpower. Living standards have risen greatly but the distribution of benefits has been uneven.

By 2000, nominal GDP growth was around over eight per cent per annum. Industrial production grew even faster than this. Per capita GDP was just over US$800, a modest level by international standards but purchasing power parity was much higher, around US$4,500 for that year, according to World Bank estimates. The last few years have seen more deflation than price rises. Those living in towns have done better than those inland over the decade; urban workers have benefited more than peasants but living standards of both have risen bsolutely even if there have been differences in their relative degrees of prosperity.

A new middle class has also emerged, and a consumer revolution has been unfolding, if unevenly. Labour resources, a main feature of China’s comparative advantage, have been increasingly been more effectively channelled into productive uses than under the command-economy system. As of April 2001, the latest available official Census statistics indicate that over 705. 75 million people were ’employed’ in the Chinese conomy at the end of 1999, out of the ‘economically active’ population aged 16 and over of around 720 million.

The employed represented 56. 1 per cent of the total number of Chinese people working. Women comprised 46. 5 per cent of total employment, which is on the high side by international standards, though one should bear in mind that the Chinese Population Census of 2000 suggested that there were 117 females for every 100 males in the PRC.

GDP growth is still buoyant, but bad debts continue to an albatross around the neck of the financial system. Asian devaluations risk undercutting its strong exports. In addition, the downturn in the US economy in 2002 augurs poorly for future export expansion. Recent US tariffs against imported low cost steel from the PRC and elsewhere may signal stormy times ahead (The Economist 2002a). No doubt, there are further threats (as well as opportunities) just around the corner.