Carlie: Hey there, it’s Carlie with the Expat Focus podcast. Are you on our monthly mailing list? You can sign up to our newsletter – and get free access to our email course with useful information for new expats – over at expatfocus.com.
Gabor Holch’s relationship with China began two decades ago, on what he thought was simply a two-year sabbatical. As an Intercultural Leadership Coach and Consultant, Gabor has worked with China-based managers at countless multinationals over the years. And he was there for what was dubbed the ‘Golden Age’ for foreign businesses in China, when loads of expats were moving there on lucrative work packages, for a guaranteed boost in their careers.
Gabor joins me for a chat about how the business landscape has changed, and the key attractions and benefits of China for today’s international talent. We touch on China’s infamous internet restrictions, and some of the many anecdotes that Gabor gathered on work and life from expat professionals for his latest book, called Dragon Suit.
Gábor, there are a few juxtapositions in the description of your new book, Dragon Suit. It’s based on interviews with China-based corporate executives that you’ve done over five years, and you say that it brings to life “the country’s swarming cities, recent economic tsunami, unstoppable middle class endemic pollution, intermittent internet (which gave me a giggle), confusing culture, but also endless opportunities”. Is that really China to you in a nutshell?
Gábor: It is. It literally is, and thank you very much for having me on the show. So, all of these tried to strike a balance that between the good and the bad part of what I experienced in China between 2001 and 2022 when I lived in China full time, and now I’m commuting in and out.
So I tried not to keep silent about things like the pollution and the intermittent internet, but also I think overall the balance is positive and I do believe that half sentence about the endless opportunities, I do think they are endless. I spent some of my graduate years, graduate study years researching the colonial connections, history of European people in China, and then at that time, let’s say in the 1800s, there was already a little bit of FOMO in Europe. Have we missed the big opportunities in China? But nobody has, it keeps going on.
Carlie: I feel like, honestly, I feel a little bit ashamed being an Australian, being geographically so close to China growing up and yet knowing very little about it. Is that the case for a lot of countries when it comes to China, or is it my ignorance?
Gábor: Well, first of all, Australia is not so close to China as you might think. Right now you are in Europe and it looks that way. But actually the interesting thing when I flew from Shanghai to Sydney or Melbourne a couple of times to deliver workshops there is that you keep flying for a quite considerable amount of time, about the same as flying in Europe, but you’re still in the same time zone so you don’t get jet lagged, but they are far away from each other.
Carlie: It’s just classic Australia really. We’re just far from everybody!
Gábor: Right, right. And then just to give a general idea to the listeners, to flight to Singapore, which is about halfway and a popular, how do you say, flight switching station, is already almost six hours away. So it is quite a journey. But yes, this is generally speaking the case that people don’t really know too much about China. What they know is partially historical and partially current event clichés. I think we could make a shortlist of the top 10, but also I would like to add, for the sake of the same balance that I mentioned earlier, that this is not a coincidence and it’s not a coincidence and not entirely the fault of those people who don’t know about China that much.
China actually worked long and hard to remain a mystery and very, very actively. Even today, the internet restrictions that we mentioned are just part of it. But also China is a culture where everybody from Xi Jinping down to people in the street, they very consciously create a persona, something like an image that they very carefully maintain. And this makes it a little bit hard to know the country, to know certain cities and even to know individuals.
Carlie: I want to know how you came to know China. You moved there, I believe a good 20 years ago. What led you to China?
Gábor: It’s a long and fairly personal story. In my teens, I suddenly started being extremely interested in what, at that time in my part of Europe called “oriental” (although today it’s a little bit of a tainted term), “oriental philosophy”. So I started reading ancient Chinese texts in all kinds of translations about Confucianism, Taoism (I fell in love with Taoism), Buddhism and then partially because of that I started learning martial arts. And then at one point in the mid 80s, my father was sent to China as an expat.
And this was in the 80s, so the digital culture was much more primitive than today, but I think he was one of the first expats from Hungary who bought a video camera and sent these very blurry, very short videos and lots of photos. When he came back, he bought some snacks from China and so on, and that was it for me. Afterwards I knew that I would like to end up somewhere over there. I wasn’t sure China or Japan. I applied for a scholarship in Japan. I didn’t get it. Then I made a detour, because I couldn’t fund my East Asian ambitions. But after I studied diplomacy, I was an intern in the United Nations. I ended up in a European security organization. I worked there for a couple of years and when I saved enough money, I just quit and went to China in 2002.
Carlie: And what kept you in China?
Gábor: What kept me in China is that I am a restless person and before that I moved from one country to another, but China changes enough every couple of years so that you feel like you’re in a different country. Not to mention that I moved from city to city. So the last 15 years or so of my 20 years, I actually was based in China, but I traveled about half the time, literally, not only in China but all over the world. But otherwise, I arrived in 2002. I thought it was a two year sabbatical, which it wasn’t. I learned martial arts, I learned the language.
I started my firm in 2005 with a Chinese business partner. I took it over entirely because he left the country in 2008, and then I met my now wife. We started a life there. So there was always something to keep me. And plus the China gearing up to the Olympic games, say, was completely different from the China of, let’s say, 2015. Completely different business environment, completely different experience to live there as a foreigner.
Carlie: I want to know what led foreigners, expats typically to China, back when you went there in 2002, what were the common opportunities? What were the reasons why expats were drawn to China? For you it was a fascination with culture and history initially. Were there a lot of businesses booming that led to companies bringing in expats?
Gábor: Well, first of all, I will stop talking about myself for a little while and I will start talking about the people that I worked with as a coach and who inspired the book because I think their personal stories (I mean, the listeners can decide if they are more interesting than mine), but obviously statistically more relevant than mine, let’s say.
So, first of all, we can look at official sources that consulting companies, HR agencies, banks and so on, publish who research very carefully why expats go to China. And then as mundane as it sounds, usually expats go for two reasons: number one; money, number two; to boost their career. So the first one is that for foreigners in China, this what they call disposable income, which means the money that you make but don’t spend, is quite decent. It actually has always been, let’s say the top five of major expat destinations in the world.
And the second one is because China has always been a kind of career booster simply for its size, its scale and its speed. So basically if you are a manager, a C-level person, like a CEO, a CFO, a COO, when you move over to China, you suddenly bring the responsibilities…you take up like 10 times. So, if 100 people reported to you now, it’s almost definitely 1000 people and growing. If you invested in greenfield projects that were size of a couple of a baseball stadium, then now you’re investing in projects size of a small city. And so on.
So, on paper, these are the top two reasons, and based on my interviews, it’s fairly accurate. People are hoping to make it big and people are hoping to reap the rewards, so to speak, both in terms of money and also sending their kids to a great international school, living a kind of lifestyle that you can read about in the book.
Myself, I think it was more or less true as well, because when I was contemplating Japan versus China, eventually I ended up with China because I felt that’s where big things were happening, as opposed to Japan, which was more like a consolidated place. Now we know a little bit on a down curve, but at that time it wasn’t so obvious. So wherever you went, China had just joined the WTO, the World Trade Organization, it started hosting major international conferences, around the time when I arrived, the Olympic Games, Summer Olympics of 2008 was announced. So the air was literally electrified with opportunity.
Carlie: I remember some things about the lead up to the Olympics in China and how they were going to manually control the weather or something like that. And I always found that incredibly sophisticated, like they were going to seed the clouds or stop the clouds from raining when they didn’t want the rain or something like that!
Gábor: Absolutely. Those trained in chemistry may slap their forays when I say, but I think it’s called silver sulfate or something similar that they spray onto clouds. Actually, technology came from abroad. But yes, China did use that technology and still uses that technology because it’s a subtropical climate, it’s very difficult to predict when it’s going to rain and when it doesn’t. And then basically you can create a couple of hours, definitely free of rain if you do that!
But in general, I mean there are lots of things about it. First of all is that China is basically, the political ideology is based on what we call Marxism, Leninism and Mao Zedong Thought or Maoism. And that philosophy believes in controlling nature as opposed to aligning with nature, let’s say, the ancient Chinese philosophy of Taoism. So, this kind of constant fight against the elements is, if you read news about China, is one of the big themes of development.
Carlie: Wow, that’s fascinating. Although with the levels of pollution, I kind of wonder whether the fight against the elements is really winning!
Gábor: If you live in a very polluted city, then the fight against the elements becomes your daily reality. Especially there is one executive that I interviewed in the book from the food giant Danone, who’s interestingly, he’s a very high level human resources executive in Danone, but he is Hungarian as well. He lived all over the world.
But…so he describes in very great graphic detail about how he sealed his house and filled it with filtering equipment for the sake of his kids. But also we have to remember that managers that I interviewed for the book, they’re not just responsible for their own safety and for the safety of their family, but also the safety of thousands of people who work for them.
So, when it comes to pollution, for example, you don’t just seal your house and buy a couple of good air purifiers, but you also look at the offices, the warehouses, the factories you are responsible for. If your business transports meat or transports works of art, then pollution becomes an extremely important factor that you have to (how do you say?) find ways to control one way or another.
Carlie: You mentioned in the book two of the biggest gripes, I suppose, amongst foreigners that you spoke to being the air quality pollution levels and also the internet restrictions. I’m so curious about the internet restrictions.
Gábor: Everybody’s curious about the internet restrictions, because that’s one of the big reasons why we know so little about China!
Carlie: And yet, it seems to be this very open secret that everybody just uses a VPN, and I’m like, well, for a country that controls what sort of information it wants locals to be consuming, how does it not control the use of VPNs or how does it say “that’s okay guys”? Or is it really a case of one rule for foreigners and one rule for locals, in that sense?
Gábor: I think it’s more the latter. So, just to take it one by one, there are these two big veins. Actually I included these two. There could be lots of others. There could be the weather, for example, I described more than one person who simply hated China at the beginning for the simple reason that there is a questionable, although understandable habit of multinational companies of usually sending expats to China in the summer. The reason is that the school year is just coming up, so it’s much easier to manage the family of affairs, but it also means that most foreigners arrive in China during the most unbearable weather you can imagine. So it’s this kind of subtropical humid heat that as you…
Carlie: Baptism of sweat!
Gábor: Yes, something like that. But also because when you are a new expat, and let’s say you arrive at the end of August, it’s going to stay hot for another two or three months. And then of course if you’re an expat, you want to explore the place where you have just arrived, and you would like to go out and meet people and then spend some time outdoors and so on. But I didn’t include it as a separate chapter because what I heard from headhunters, HR agencies, relocation companies, is that these are the two statistically highest reasons why people refuse postings to China. So basically these are the two biggest grievances why somebody as a talented manager, they say, “could you please take over the financial operations or the legal operations of our branch in China?” And they say, “no, I’m not going”. And these are the two reasons why people refuse.
Now, there is a notable difference that I also explain in greater detail between these two, is that the pollution situation is getting better and better (meaning better for people, not better for pollution), and the air is cleaning up. China is switching over to less carbon intensive ways of transportation, ways of production.
So, it is significantly better now than it was 10 years ago for foreigners living in China, whereas arguably the internet situation is getting worse. So first of all, before 2007 you could use Twitter or Facebook or LinkedIn or Google, YouTube, all of these services in China. It was around the Olympics that the government started to block it. And even for example, LinkedIn was only blocked in China recently. And indeed you will hear some tearful stories from foreigners, although you will also hear stories about how they switched over to local technology tools and apps and what they learned from it.
That everybody uses a VPN: it’s absolutely true about foreigners, but it’s not true about locals. So, what you can see is that in the age group of my stepdaughter, who is Chinese, who is early twenties, about half of the internet users use a VPN. But that also means because there are very few young people thanks to the Chinese population policies, is that ultimately it’s a single digit share of the population that use a VPN. So the Chinese population as such is still mostly cut off from the bigger half of the worldwide web.
Carlie: I did read in your book someone saying how it was kind of refreshing in a bit of a digital detox. Have you had periods in China of deliberately not seeking out extra access to the internet?
Gábor: No, I didn’t, but people told me about it. So, I remember…this is also quoted in the book, I remember an executive for a pharmaceutical company who’s also a single mum, and then she told me that at the beginning she tried not to use blocked sites because…the way it looks in China is that originally, let’s say you cannot use international services, then you install a VPN and then you can use international services, but you will find speeds of 5 to 10% of what you’re used to at home.
And also the more you visit sites, which are considered (how do you say?) sensitive, because actually there is no law for which international sites are blocked, the more your connection slows down. And then she said for a while she tried not to use international services, but then she joined this expat mum community where everybody was talking about YouTube videos trending. So, she said to herself, “okay, I have to catch up on these trends”. So she started watching YouTube and then she got completely fed up with it. We know how the tox works as opposed to the detox.
And the quote that you mentioned, it actually comes from another expert memoir. It comes from a book, and I heard it from some young people that it’s nice to be off the highly addictive social networking sites. Also the CFO of an Italian fashion brand, when I asked him about social media and does he try to use, let’s say, Facebook or LinkedIn in China, did he learn to use WeChat? Just looked at me and said, “listen, I grew up without social media. I’m okay without social media”.
Carlie: It’s really generational, isn’t it?
Gábor: Well, actually this gentleman is younger than I am. I am 52 now. But maybe it’s generational. Maybe the fact that he comes from Italy and people are less addicted to social media there is significant. It’s very personal too. So, those people who suffer the most during COVID, outgoing people who really live their lives in a buzzing social circle, perhaps they will suffer less from the lack of certain social media that connects people who are physically far away.
Carlie: Speaking of COVID, we can’t speak about China without speaking about the effects of COVID. If I am correct, China had the longest period of being cut off from the world because of COVID-19. What really stands out to you in terms of China before times, and China today after COVID?
Gábor: If I assume that the question is about foreigners being in China, then I see three big changes. The first is purely statistical, but it has an enormous impact on the daily lives of foreigners in China. And that is that the bigger half of foreigners left during this period. So, there were three big waves.
One of them was…the big so-called exodus waves, when people leave, it always came right after big lockdowns, for understandable reasons. Where during the lockdowns you couldn’t even go to the airport. But then once they lift the lockdowns, and then some families who sat around during the lockdown said, “well, this is the straw that broke the camel’s back”. Yeah, exactly. “Now we are going”. So the first one is that all over the world, expats move to certain countries, among others for its expat community.
And this is something that China has lost. So basically, and I’m going over to my second point about people who stayed and formed a very strong bond and commitment with China. But if you look at it from the perspective of the, let’s say, the typical expat family, they have fairly loose connection with China itself.
They go there for the opportunities, they go there for the money, they go there for the cultural experience of the family traveling all over the world. I was an expat kid and I experienced the same thing. So, if you look at it and you see, let’s say that 40% of China’s previous expat community is still in the country, then those are the people who are fairly settled and fairly rooted in China, and they are not necessarily the best, the most entertaining peers for short-term expats in the country, because they live a fair amount of their lives in Mandarin, they hang out with Chinese people, they eat Chinese food and also expats complain all over the world. If they don’t complain about politics, then the weather, if not weather than the service in the restaurant and so on and so forth.
And then foreigners who are more rooted in China, they don’t like hearing the typical expat grumbling, which means those people who grumble cannot vent, don’t feel understood. And then finally the way it changed is the dynamics of building an expat career in China are completely different, absolutely different. It’s a completely different proposition. The double digit economic growth that created that money, that was the top reason why foreigners went there is not there anymore. So you are going to earn a decent salary, and I’m quoting a live example, they’re not going to ship over your grand piano and wine collection if you are a highly needed manager.
Carlie: Because they may have done that a couple decades ago.
Gábor: They did that. It’s a big German conglomerate, industrial conglomerate whose manager I coached and then interviewed, because what you had during coaching, you cannot say or cannot write in a book. So, I went back to the same people afterwards and I interviewed them. But this is a live example.
So when he settled over to China in 2005, then his grand piano and wine collection came with him at company expense. So, you’re definitely not going to get those kind of packages. But also there is a lot of haggling, for example, about international school education for kids. Companies are not willing to foot that bill anymore. There is not so much travel involved in being an expat in China anymore. You’re going to spend much more of your time in China and working much more with Chinese teams.
So, it is a different kind of lifestyle. It is much more, I think it’s much closer to the experience of working in Japan, let’s say, or France or Brazil. You’re primarily there to look after the affairs of your company within that country or within that city, rather than being…feeling you are in the center of Asia or even the center of the world as it was for a while.
Carlie: So, is it really the end now of that golden age for foreign business in China? I mean, I see in the news all the time talk about multinationals looking to reduce operations in China or move the building of new factories to places like Cambodia and India instead of doing their next phases in China like they may have done a decade ago. It sounds like it’s just not as lucrative anymore. Where’s China going? Because you mentioned that it’s on this down curve.
Gábor: Well, first of all…
Carlie: Three questions…!
Gábor: No, but they are closely connected, so they’re fairly easy to answer one after another. So, first of all, the golden age is definitely over, and this is not my opinion. I actually at the very beginning of the book, I quote a specific paper, research paper where they not only say that a lot of international companies in China said the golden age was over about five years ago, but that was when their research tilted over and the bigger half of multinational companies in China said the golden age was over.
Carlie: This is even before COVID, companies…
Gábor: Well before COVID. Yes. So, around 2016 or 17, chambers of commerce and research institutions like McKinsey and Roland Berger, they started noticing that the expat population decreases in China, and significantly over 5% a year. And then this announcement about the golden age, which I think is one of the early entertaining passages in the book. And also then I spent some time on looking at why that is the case.
So, first of all, China market entry was administratively it was difficult 20 years ago, but then it was quite easy because the market wasn’t served. There were not enough cars, there were not enough…for example, if you look at telecom companies, all of them are state monopolies in China. But then the state monopolies hired firms like Ericsson and Nokia to run their technical operations. So, there were tremendous opportunities.
There was double digit economic growth. And basically as long as people turned up at work, including salespeople and operation people, there was tremendous money to be made in China, and large multinational companies, anything from a quarter to half of their profit, and very often two thirds of their growth came from China, and that’s what we call the golden age. And you can see as I list this why this is over for so many reasons.
China itself doesn’t grow that fast. Also, it has nurtured a new generation of local Chinese companies that can serve the market and then therefore they don’t need the multinationals so much anymore. So, this is what has been over for a while, actually. But I always try to remind people that what is good for foreign business in China is not necessarily the same as what is good for China. So that Chinese electric vehicle manufacturers are world-class now, it’s definitely bad for international business in China, but is not bad for China itself. That they replaced trucks with high-speed trains: it’s bad for MAN and General Motors, but it’s not bad for China.
Carlie: It sounds like China’s just prioritizing itself a bit over the world stage.
Gábor: Can you blame them? I mean, can you name a successful economy that doesn’t do that? So, welcome China to the family of normal countries after all the cultural revolution and the opening up and all the confluence there. But what is very important is that what is happening in China right now and what the direction it’s pointing to is that basically the companies that wanted this kind of environment where they are badly needed and they can set the terms, they’re moving on, as you said, they’re moving on to Indonesia, they’re moving on to some extent to India.
They’re moving on to countries which have been these kind of golden age markets once and now they give it another go, like Mexico. And two kinds of companies remain in China: one of them are the ones whose business is very close to state goals. So they became providers almost like a large Chinese company. I am talking about, for example, companies like the German firm BASF, a chemical firm that is heavily investing in China right now. Pharmaceutical companies, because the pandemic taught China that they simply haven’t managed to solve a lot of the biotechnological and biochemical needs of the country. Also, service firms, law firms, strategic firms, they are really having a comeback in China.
But the scissor, the gap between winners and losers in the Chinese market out of foreign firms is widening very, very rapidly. So it seems like companies that are already established there, they have a history there, they have a good market share there, they will stay and they make good money. But it is extremely difficult to become a new entry in China right now. And chambers of commerce tell me that investment from companies that have never invested in China before has practically dried up.
Carlie: What does this mean for the expat or the foreigner who may have been looking at how much taking an opportunity in China would further their career?
Gábor: Well, it means that first of all, you have to look at your skill sets, as everybody does. For example, do you speak Chinese to some extent? You go online and with a 10 minute search, you are going to find out which way the Chinese economy is going and what are the most cherished areas of development where foreign expertise is really needed.
Artificial intelligence, renewable energy, robotics, certain social sciences as well, because corporate social responsibility and for example, the welfare of workers, they are relatively new areas in China and they are…expats are badly needed. So, this is the first thing that I think is a no-brainer about still a lot of people forget about it. And then the second one is you look at your psychological preparedness. Are you ready? Because once you arrive in China these days, you will travel much less, and it’s very unlikely that your company will throw two annual tickets into the contract. So are you prepared?
Carlie: I have a friend who worked in Turkey and a part of her contract was a return flight every 12 months back to Australia.
Gábor: That’s a typical expat benefit that is being phased out. But even if you can come home for a week or two, twice a year, are you in the position to be separated from your loved ones, from your friends, from your professional networks? So, one of the Chinese executives who is…there is this replacement of expats with local Chinese managers. What he told me is that one of the advantages of Chinese managers is that while they take a job with a large multinational, they are not afraid of being separated from their home professional network. So, these are extremely important. In the third chapter of the book, I also write a lot about who is more and less suitable, temperamentally, to be an expat in the first place and to be an expert in China.
Carlie: Gábor, what qualities do I need to survive as an expat in China? Tell me if I’m going to make the cut.
Gábor: Okay, so first of all, I would tell you to forget about Confucian harmony and the Taoist “go with the flow” mentality because you’re not going to meet that in China. So these are some of the stereotypes that are usually occupying people’s thoughts when they look at China culturally. And I would say first of all, you have a 90something% chance to land and to live in one of the top cities of China.
And therefore be prepared to live in a large city, be prepared to be surrounded by crowds, be prepared to live a high-paced life where private and professional has very, very vague demarcations, to work long hours. If you settle there with a family, prepare your family that they will see you less. Then be prepared to make fast and risky decisions based on limited information.
This is a key success factor in being an expat in China, especially if you’re on the management level, but also if you’re on the technical expert level and the people I interviewed in the book, they’re going to give you ample examples of how that works on a daily basis, from hiring people, to invest or not, to move to another city on a short notice. And finally be ready to work in professional hierarchies or even social hierarchies in a different way from what you are used to. So, seniority is extremely important in China, as in everywhere in the world, but in Asian societies it works a little bit differently from, let’s say, what we are used to in (I use air quotes) “The West”, Australia included.
And since most people work in a multinational company, there is a clash between how Chinese people and international colleagues at the same company imagine hierarchies. Seniority within the team, with bosses. Let’s say, if you’re a pharmaceutical salesperson and you talk to a medical doctor, in what kind of horizontal or vertical relationship are you with that medical doctor?
In Australia (correct me if I’m wrong), but in Australia, somebody who represents Pfizer and goes to visit a medical doctor, it’s an adult to adult conversation. If…in certain parts of China, if you are in the same position, you’re a pharmaceutical sales rep and you talk to a doctor, you have to stand at attention. Whereas in certain other situations, the pharmaceutical sales rep probably has the kind of government connections and corporate connections that the doctor only wishes for. So, you have to be quite flexible with these, and you have to learn quite fast because most jobs don’t give you the time to take a step back, hit the pause button and learn.
Carlie: I’ve spoken to expats in China before who have been a little bit, not cautious, but just respectful in how they, I suppose, critique China. Is that also a temperament, an attitude, a mentality that you should adopt if you’re going to live and work in the country to keep your opinions to yourself a little bit, or to be a little bit more careful about who you express your opinions to?
Gábor: So, let me ask you a question in return, and you are a Australian, living in France, if I remember correctly.
Carlie: Yes.
Gábor: You can answer from the perspective of Australia, France, or both: local people that you know there and foreigners that you know there, do they criticize the country in any way?
Carlie: Yes.
Gábor: I think it’s, well…I’m Hungarian. I lived away from Hungary for 25 years. Now, for a couple of years I moved back to Hungary. I say things about Hungary all the time. I criticize the government, I criticize the health system, the traffic, and I think it’s perfectly normal. It’s the only country in my life that I visited where nobody ever criticizes their own country is North Korea. So, if you are a foreigner in China, my advice would be that at the beginning, be very cautious with your criticism. Simply for the reason that you don’t have the information that you need to deliver educated criticism.
So, what you are criticizing is…might just be a personal offense, because you don’t like personally the way things are in China, but they might not be like that in China at all. But also as human beings, we have the right to criticize anything. Now out of consideration to Chinese counterparts, because to expats you can say almost anything maximum, they’re going to be a little bit offended. But it’s very important to know that there is no foreigner in China, for example, who is a member of the communist party.
There is no foreigner in China who has a Chinese ancestry, because as opposed to lots of countries in the world in China, there are no second, third, fourth generation foreigners living there. So, you can say anything to a foreigner. But there are certain taboos. And in the book I mentioned one that a journalist formulated as the three Ts: Taiwan, Tibet, and Tiananmen.
Carlie: Makes sense.
Gábor: And although this is obviously not a complete list, but there are certain topics, conversational topics, that Chinese people take great trouble to avoid. And this is simply for political risk. So, it’s not that they don’t want to talk about these things. When you’re private with a Chinese friend, and you finish a couple of drinks, they are going to vent just like anybody else. But since foreigners don’t know too much about these topics, and it can be as, let’s say, as sensitive as discussing religion in a very religious country.
So, it’s better to avoid them initially or if you really, really want to discuss it. So, let’s say you’re a foreigner, you’re visiting China, you’re living in China, and you’re really interested in Chinese politics, just read up on Chinese politics from sources on both sides, and then when I coach executives, I have a very, very simple advice: when you want to go there, when you want to address one of these sensitive topics, grammatically use questions.
Don’t say things, ask. There is a methodology called action learning when you are in a conversation and you’re only allowed to ask questions. And those questions cannot be pseudo questions like, “the internet is censored in China, isn’t it?” But they have to be genuine open questions. And that can be extremely interesting to be in a conversation when you take the role of the listener, and you just bring up the topics that you’re interested in and you let your Chinese or international friends answer those questions.
Carlie: Is it also about respecting, I suppose, that the level of risk (for want of a better word) of having these conversations is different for a foreigner in China than for a local in China?
Gábor: It’s true everywhere. Now, let me take two quick examples, not from China, because I think that help us understand China as well. One of them was in the state of Georgia in the United States, when people at the dinner party asked me quite outright if I am a believer, if I am a churchgoer, and I just very casually told them I wasn’t. And then the ear splitting silence that engulfed the table is…
Carlie: “How dare you!”
Gábor: Well, I don’t know if it’s “how dare you”, I think it’s just they didn’t expect a simple “no”. And then I reached out for the salad or something. But as somebody who comes from Europe, from a former communist country, I didn’t even think that would be such a big deal. The other one is when I first visited Pakistan and they took me to a tourist site, and an employee of the company where I was doing a leadership workshop who afterwards became my dear friend, he took me to a certain sight and I noticed these beautiful traditional outfits that women were wearing there.
But I also noticed that there is a difference between what they’re wearing. So, some women were wearing white, some of them were kind of purple, head to toe, some of them black and some of them these very ornamentally decorated ones with gold and silver and so on. And then I asked them, “listen, what does it depend on which woman wears which kind of outfit?” Because is it different nationalities, or is it that they just like it? And then this friend just looked at me and said, “they don’t have to wear it. They can choose what they wear”. So, obviously I think that local friend was prepared for a little bit more confrontational question about this topic. It so happens that part of my family comes from fashion. I was just interested in what’s the difference.
Carlie: It wasn’t so deep. Yeah.
Gábor: It wasn’t so deep at all. Not to mention that I spent part of my childhood in the Middle East, so I’m used to this kind of environment. But people jump, people jerk when somebody even asks them a question about certain sensitive topics and it’s the same in China. And that’s why a question is the best way to start this kind of conversation.
Carlie: You say there’s going to be an increasingly China facing future in business. We’ve talked a little bit about how China is, kind of, looking after its own interests these days as opposed to caring so much about the multinationals. What do you see in this China facing future?
Gábor: Well, what I mean is for better or worse, the infrastructure, the global infrastructure that China built up over the past 25 years through international cooperation, mind you. So this was not a singular Chinese accomplishment. I think China joining the WTO and working together with all kinds of United Nations organizations and the World Bank and the Asian Development Bank.
So, basically the infrastructure with China in the focus that has been created through this cooperation is going to be one of the linchpins, or one of the hinges of a global supply of everything: funding, talent, good services, technology, whether we like it or not. And I also think…I mean this is a very pessimistic time to talk about this because now if you enter the office of a senator or a member of parliament or a minister or a C-suite executive who is working on the China and the rest of the world being connected, I think 60% of them are actually working on severing these ties right now, which is a sad thing.
But there are going to be certain connections that politicians and doubters cannot stop. So, for example, certain key technologies that we are going to use, such as technologies that go into self-driving cars, technologies that go into payment apps, they come from China, whether we like it or not. Or satellite technology, for example.
That’s why multinational companies, some multinational companies, are so adamant in remaining in China, because they know they can learn something that is not there outside of China yet, or not so readily available and not so well tested. So, there is a previous question I didn’t answer: what would be the advice that I would give to foreigners who would like to build an expat career in China right now? I would tell them to target these companies. So, the BASFs, the Volkswagens, the Teslas. I could also tell a couple of global consultancies that are doing quite well. So, this is what I mean.
Carlie: What about Apple? Because I heard Apple’s moving to making products in other countries. Is it still lucrative to work for a giant like Apple in China?
Gábor: Yes. I even know people who work for Apple in China, but okay…so create these two avatars about expats in China. So one of them is the…I’m just telling you something: one of them is a manager in a manufacturing operation in a relatively small, let’s say third tier city in China that has 5 billion people (it’s not so big in China), who works together with Chinese managers, hangs out with factory workers, they invite him to their homes at Chinese New Year, eats Chinese food, lives a considerable part of his or her life in Mandarin, and so on and so forth.
And then entertainment is also Chinese style entertainment. And then there is another executive, let’s say, who works for a European luxury design company or fashion company, who works in a corner office where you overlook Shanghai, orders international food, western food to his or her office, then goes out to a western style lunch or dinner with other foreigners at the weekend. They have a champagne brunch in the Four Seasons hotel. And if you look at Apple, that’s the kind of company that Apple is!
It has always lived in a kind of bubble. Apple never made an effort. If you look at some of the cores of Apple’s business model like, for example, the way they handle user information, the kind of secrecy that they maintain is just the opposite of the Chinese business model. If you look at their manufacturing operation that basically, yes, they manufacture in China, but they brought in their international manufacturing operations and partners in order to manufacture in China. So, Apple is a little bit like this.
If somebody is in favor of that kind of environment, I think it’s a possibility, but it’s also not a good time to target Apple because Apple is not growing in China. So, maybe if you really want to work for Apple in Asia, why not give it a try in India? Whereas Volkswagen for example, Mercedes Benz, BASF and pharmaceutical companies, just read the news and they have just signed major deals with local Chinese companies in order to upgrade their operations in China.
Carlie: Just finally, Gábor, I’d like to know the title of your book, Dragon Suit: what or who is a Dragon Suit?
Gábor: I have…how do you say? Okay, I published a couple of books in my native language, Hungarian, also in English, and they always start with a kind of mental dialogue. One of my writing, creative writing mentors, Shelly Winer, she said that having voices in your head is part of being a writer.
And when I went online to check for search engine optimization purposes, whether…let me put it in another way, I wanted to check how many books have been written with the title Dragon Suit and if they are good enough to knock my book out, and that I couldn’t believe my eyes that nobody had ever written a book called Dragon Suit, because in my head I always labeled (how do you say?) well-paid, well-mannered international executives in China, the Dragon Suits. So, when you walk in the streets of Beijing or Shanghai or Shenzhen, you are going to see these people who are…get out of a chauffeured Buick van and then without even looking around, they march into one of these office buildings. Those are the Dragon Suits.
They are suits because they are suits like the TV show Suits, and they are dragon because the dragon is the symbol of everything in China, basically. So, as you imbibe Chinese culture and Chinese business environments, then you become a Dragon Suit. And you are always a Dragon Suit. I coach these people through transitions of relocating to their home countries or moving on to a next expat assignment, and what they learned and what they experienced in China, it will always remain with them and it’s always an asset, both for their own careers and life wisdom and also for the companies who hire them.
Carlie: Well, Gábor, it has been a fascinating conversation and I feel like we could cover so much more about living and working and the professional culture in China and what the future holds for expats that have China in their sights. Your book Dragon Suit is out now, I’m assuming from all good retailers, Amazon being one?
Gábor: Amazon definitely being one. Yes.
Carlie: Thank you again for coming on the Expat Focus Podcast. It has been a great conversation.
Gábor: Thank you very much for having me on the show, and I hope that I will get a couple of emails from people who are listening to us. I’m really curious about how they like the book.
Carlie: That’s it for this episode. For more insights on China, check out our collection of expat experiences over at expatfocus.com. You can also roll back through our podcast archive to hear conversations about emerging from Covid lockdown in Shanghai, and building a food and beverage business in China. Don’t forget to like and subscribe, however you like to listen to the show, and I’ll catch you next time.