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Chinese Culture First Homework

Student: Manuel Ignacio Rojas Gonzlez Teacher: Megan Knight

Part 1- 2 Economy: Since the last trade policy review in 2010, in the face of the complex and volatile external environment and new circumstances and developments in economic situations at home, the Chinese Government, centered on the goal of maintaining strong, sustainable and balanced growth, has accelerated the transformation of economic development pattern, stepped up efforts to expand domestic demand, promoted structural adjustment, and continued deepening the reform and expanding opening up. The national economy continued to develop at a rapid yet steady pace, making important contributions to the world economic recovery and development. The development of China's foreign trade and cross-border investment saw a new trend. China's opening up began to shift from being a predominantly export-oriented economy and relying heavily on inward foreign direct investment to putting equal emphasis on exports and imports as well as on both attracting foreign capital and making outward investment. The Chinese Government has proactively promoted the change of the trade development pattern, intensified efforts to optimize the use of foreign capital, continued to implement the strategy of "going global", and paid more attention to balance and sustainability in the development of both trade and investment. The Chinese Government continues to develop foreign economic and trade relations in an all-round way. China is willing to conduct cooperation pragmatically with all countries and regions, large or small, rich or poor, in multilateral, regional and bilateral frameworks to draw on each other's merits for complementation, to bring into play each other's respective advantages and to achieve mutual benefits and win-win results. The multilateral trading system is the cornerstone of China's foreign economic and trade relations. The Chinese Government spares no efforts to push forward the Doha Development Agenda and safeguards the multilateral trading system with concrete actions. At the same time, the Chinese Government steadily promotes bilateral and regional relations and continuously enhances the South-South cooperation. Monetary policy 1. In terms of monetary policy, in the past two years, the People's Bank of China strived to achieve an equilibrium among the policy objectives of the currency value stability, economic growth, full employment and balance of payments in the light of the primary challenges in economic development in different periods, and handled satisfactorily the relationships among sustaining economic development, containing inflation and preventing financial risks. 2. In 2010, the People's Bank of China continued to implement a moderately easy monetary policy. At the same time, as the momentum of economic recovery was steadily gaining ground, it put emphasis on making the policy more targeted, flexible and forwardlooking, and guided the monetary conditions to return step by step from anti-crisis state to

normal. In 2011, a prudent monetary policy was pursued. In the first three quarters, under the ever-increasing inflation pressure, the People's Bank of China guided the steady slowdown of money and credit growth by using a variety of policy tools. In the fourth quarter, with the short-term capital flows having experienced some shift as a result of international situations including the worsening of the European debt crisis, the slowdown of economic growth on the domestic front and the fallback of price rise, monetary policy was timely fine-tuned accordingly and market liquidity was appropriately increased to maintain the overall moderate level of money and credit supply.

Chart 3 Ratio of Balance of Trade in Goods to GDP and to Total Imports and Exports in 2010 for the 9 Nations
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20 15 10 5 0 -5 -10 -15 ratio of balance of trade in goods to total imports and exports ratio of balance of trade in goods to GDP

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Source: Import and export from the World Trade Organization, and GDP data from the World Bank.

CONSTRUCTING ECONOMIC AND TRADE PARTNERSHIPS BASED BENEFICIAL AND WIN-WIN PRINCIPLE

ON

MUTUALLY

China has been committed to developing all-round foreign economic and trade relations. China is willing to carry out practical cooperation with all countries and regions, large or small, rich or poor, to draw on each other's merits for complementation, to bring into play each other's respective advantages in a bid to achieve mutual benefits and win-win results. China believes that economic and trading partners should keep on enhancing mutual understanding, especially understanding on each other's national conditions, development needs and development objectives. With respect to frictions and disputes, China has always preferred dialogue to confrontation and cooperation to pressure, and chooses to have them settled through consultations and negotiations by giving full consideration to the interests of all parties and in the spirit of seeking common ground while shelving differences. When consultations fail to settle a dispute, China, as a WTO Member, will

seek to handle the issue appropriately with its trading partners through the WTO dispute settlement mechanism.

CHINA INFLATION RATE The inflation rate in china was recorded at 2.2 percent in june of 2012. Historically, from 1994 until 2012, china inflation rate averaged 4.2900 percent reaching an all time high of 27.7000 percent in october of 1994 and a record low of -2.2000 percent in march of 1999. Inflation rate refers to a general rise in prices measured against a standard level of purchasing power. The most well known measures of inflation are the cpi which measures consumer prices, and the gdp deflator, which measures inflation in the whole of the domestic economy. This page includes a chart with historical data for china inflation rate.

Company management style: In Confucian philosophy, all relationships are deemed to be unequal. Ethical behaviour demands that these inequalities are respected. Thus, the older person should automatically receive respect from the younger, the senior from the subordinate. This Confucian approach should be seen as the cornerstone of all management thinking and issues such as empowerment and open access to all information are viewed by the Chinese as, at best, bizarre Western notions. (It should be borne in mind that many people in China - as well as in many other Asian countries - see the lack of observance of hierarchical values as the root cause of the 'problems of the West.' These problems include the twin Western diseases of moral

degeneration and the anarchic idea that an individual is more important than the group to which they belong.) Thus, in China, management style tends towards the directive, with the senior manager giving instructions to their direct reports who in turn pass on the instructions down the line. It is not expected that subordinates will question the decisions of superiors - that would be to show disrespect and be the direct cause of loss of face (mianzi) for all concerned. The manager should be seen as a type of father figure who expects and receives loyalty and obedience from colleagues. In return, the manager is expected to take an holistic interest in the well-being of those colleagues. It is a mutually beneficial two-way relationship. Senior managers will often have close relations to the Communist Party and many business decisions are likely to be scrutinised by the party which is often the unseen force behind many situations. It is often said that China has a lack of good-quality, experienced managers - this is typical of a rapidly growing and modernising economy - and that the good managers who are available are very expensive (even by Western standards.) This places enormous emphasis on any company's recruitment and retention policies - you have to be able to recruit the best and then keep them. The greatest difference in organizational structure between most Chinese enterprise and Western companies is that there are parallel management systems in a Chinese enterprise. 1, administrative system 2, leadership structure based around CCP(Chinese Communist Party) So this system is always referred as Two Carriages Organizational Structure Two Carriages Main responsibility of the latter system (leadership structure based around CCP) is personnel assignment. Because of the difficulties associated with operating the parallel system, differences of opinion often arise between the two management systems.

Working life: The Chinese government stipulates a five-day workweek with no more than 8 hours a day and no more than 44 hours a week in the Labor Law of People's Republic of China. The regular working time generally is from Monday to Friday, with Saturday and Sunday off. The Chinese people usually work between 08:00 and 18:00 each day, with a lunch break from 12:00 to 14:00. However, local variations may occur due to the time difference or policy in different cities. For instance, the working day in Xinjiang usually starts from 09:00 or 10:00 due to its longitude. The working hours of Chinese companies may be from 08:00 to 17:00, 08:30 to 17:30 or 09:00 to 18:00. The official organizations like the government offices usually work from 09:00 to 17:00 with a one-hour siesta, and they do not work on Saturdays and Sundays. Hospitals, post offices, banks and tourist sights are always open daily from 08:30-09:30 to 16:00-18:00, but the hospital clinics and its first-aid center are usually served for 24 hours. Hotels also offer the round-the-clock service to any lodger. Shops, department stores and supermarkets are open every day from 08:30-09:30 to 21:30, including public holidays. Restaurants and bars are always open from around 10:00 to the late night, sometimes even into the small hours or for all night. Besides the regular days off (Saturday and Sunday), Chinese people also enjoy the holidays of Spring Festival, Qing Ming Festival, May Day, Dragon Boat Day, Mid-Autumn Day, National Day, and New Year's Day. Take the Spring Festival for an example. According to the state regulations, Chinese people can take three days off, including the December 30th, January 1st and January 2nd of the Chinese lunar calendar. So, during this time, most sectors are closed. Only some service sectors, like banks, post offices, tourist companies and railway stations, are open. Chinese meetings: It is important to show respect to those to whom respect is due - this is one of the ways in which you can show yourself to be honourable and in turn worthy of respect. Respect should be shown to age, seniority, party membership, the history and traditions of China, political sensitivities, the company, the region....... the list is almost endless. Stand up when a senior person enters the room, offer the seat of honour and be attentive even if the key person's English is weak. Business cards are always exchanged on first meeting a new contact. Cards are held in both hands when exchanging and then scrutinised in detail. It is best to have your card printed in

Chinese on the reverse and always offer it Chinese-side up. Treat the card with great respect as the card is the man. Handshaking is the norm but a Chinese handshake will tend to be light and lingering. As it is considered impolite to look people straight in the eye, it is customary to look down, lowering the eyes as a mark of respect. It is common to be involved in a series of meetings rather than one big meeting at which all major issues are disclosed and assessed. Meetings are about building relationships and exchanging information - it is rare for a decision to be made within the meeting. Decisions will be made elsewhere in consensus-style discussions, which involve all the relevant people (including possibly the Party.) As a result of this approach to meetings and their serial nature, patience is very definitely a virtue. Impatience will achieve nothing other than delaying things even more. Negotiations: Management consultants and academics who look at negotiation sometimes place counterparties on a matrix of 2 dimensions concern for others goals and concern for ones own goal. 1. Competitive negotiators care only about their own needs and nothing for the counterparties. They are Win-Lose negotiators. 2. Accommodators are those that care more about their counterpartys needs than their own. Salesmen with important clients fit into this category of Lose-Win negotiators. 3. Compromisers are the ones that try to work out differences and arrive at an equitable distribution of scarce resources. They look Win-Win, but many negotiators consider them Lose-Lose. 4. Avoiders are those that prefer not to negotiate at all . Anyone who has told you that your idea violates company policy or that the boss who makes that decision is out of town for the next 6 weeks may be a great example of an Avoider. 5. Collaborators make up the last category and these are the guys who want to push envelopes and think outside of boxes to build new business. If you want to buy a couple of household items and the counterparty wants to start a manufacturing JV with an R&D center, then he is probably collaborative in his approach. They talk Win-Win but if they dont have the resources or capacity to follow through they can actually be huge drains of time, cash and patience. You will meet each of these negotiating archetypes in China but things will not be quite what they seem. Two cultural factors influence how each negotiating style will appear in China:

1) Relationships are currency to Chinese negotiators, and the banquets, dinners, KTVs and visits are not just meeting places they are deal points. Refusing to participate is insulting but letting them make the arrangements all the time reinforces the notion that you are playing on their home court (i.e.: weak, ignorant and vulnerable). 2) They all read Sun Tzus Art of War in junior high and now swear that it governs the placement of every delicate strand of their grand strategy. In fact the only thing many of them remember from the book is the part about deception being a good tactic. What impact does this have on Chinese negotiating style? Competitors will often appear to be very accommodative offering to bend over backwards to help you. They may even be very flexible on certain issues particularly schedules, timetables, sales targets and other things that cant be easily enforced later. Dont fall into the trap of negotiating solely on price with competitive counterparties access to information and audited financial data, quality standards, supply chain and personnel issues are what will make or break your deal with these sharks. Accommodators exist in China, but you have to be doubly careful here. Beware of counterparties who look helpful but are really plotting to slaughter you for your gold fillings. But wolves in sheeps clothing arent your only problem here. In China kindness can kill as passive colleagues and counterparties smile and nod as you blunder into disaster. In Shanghai and Shenzhen the situation has gotten better, but you still shouldnt assume that people will warn you about mistakes and dangers that are obvious to everyone else. Compromise is an integral part of Chinas consensus-oriented culture and your counterparty may look like hes really searching for a fair solution. Its possible but he also may have anticipated your nave willingness to sign a deal and will employ the meetin-the-middle technique more commonly seen at one of Chinas many fake markets. Here they set a price 400% above their real target, and will try to compromise you down to a mere 200% overcharge. Dont start negotiating when they call out a number. Learn the market and control the parameters of the discussion at the start. (I.e.: Just because they say 500 doesnt mean you are required to shout back a counter offer.) Avoiders are common in China, and are most likely to show up in the middle of modern international corporations and the heads of State Owned Enterprises. Chinas Imperial legacy lives on in its bureaucracy, and you may find it extremely difficult to meet the real decision-maker face-to-face. Every situation is unique and it may be worthwhile for you to pursue some long-shotsBUT if you cant get a satisfactory answer to basic questions before you sign a deal youre probably going to have a lot more trouble afterwards. Collaborative negotiators are your greatest hope and your worst fear in China. On the one hand a true value-adding partner can open doors and supply vital market information. The problem is that lots of Chinese counterparties like to talk like the boss even if they dont have the power to back it up. The result is a lot of big plans that dont ever amount to

anything. China novices have been known to build these optimistic notions into internal business plans and later face disappointed senior managers who want to know what happened to the budding China JV. Beware of partners who move too fast when negotiating in China.

Chinese Taboo: Due to the differences in the cultural context and history, China and the West have created different sets of taboo topics. For example, Westerners may be uncomfortable with the small talk about personal matters-e.g., age, weight, marital status, family, salary-while the Chinese might talk about them as nonchalantly as mundane issues like the weather. Such topics are usually for the purpose of establishing a basis for further conversation and finding things in common between two people. The Chinese tend to point out physical characteristics more directly than Western people. They have a realistic world view and might mention, for example, overweight without a negative connotation attached. The Chinese will also deflect compliments to show modesty.

(class work) Part 2. In this part of the paper, I interviewed a Chinese person and he talks me about his country.

1. What are the countries that border China? China is bordered by many countries: the north by Russia and Mongolia northwest with Kazakhstan and Kyrgyzstan the west by Tajikistan and Afghanistan (through the Wakhan corridor). southwest Pakistan, India and Nepal south with Bhutan, Burma and Laos the southeast by Vietnam and the East China Sea east by the Yellow Sea and East China Sea, and northeast by the Yellow Sea and North Korea. 1. What is the capital of China? The capital is Pekin 2. What is the currency of China? The Yuan 3. What is the population of China? Is about one thousand four hundred millions of people, is the most populated country in the world. 4. Who is the president of China? The president is Hu Jintao from 2008. 5. Which places do you recommend me to visit? Great Wall of China, the Forbidden City, the Terracotta Warriors, the Yangtze River, the Jiuzhaigou Valley, etc. 6. What is the typical food in China? Pork with pineapple, chicken with chile, fried eggs with black fungus and pork with garlic shoots. 7. Where do you live? I live in Shangai, the most populated city in China.

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8. How is the weather in shanghai? Although Shanghai is not directly in contact with the sea (the coast is 40 km), near the mouth of the Yangtze River (20 km) and Lake Taihu make the city maintained a high rate of humidity throughout the year. Shanghai has a humid subtropical climate with marked seasons 9. What is the economic livelihood of Shanghai? The city of Shanghai is the main commercial and financial center of China and one of the largest in the world.