CHINA ESQUIRE

I have been thinking a lot about the Chinese mindset vs. the American mindset. Being a Chinese American, I find myself smack in the middle a lot: appreciating western principles, culture and ideology, and yet, raised by those who were culturally very Chinese, and all that it entails about trust for others, ideology, and principles. The two mindsets are vastly different.

This has become even more clear as I dialogue with Chinese friends about Tibet. [note: I am not posting anything on this blog about that topic for two reasons: (1) I like being able to get through the great firewall and (2) it is hard work to maintain any sense of neutrality about the subject, and I prefer taking a neutral stance wherever possible.] Inevitably, I find myself having to defend the western viewpoint to some degree because the two are just so different. So many of the grievances on both ends could be addressed just by understanding the other perspective.

So what triggered this post? An interesting article about international arbitration in a supplement to The Recorder entitled “Going Global” by Alexandre de Gramont at Crowell & Moring. In the article, he discusses how in the past, American companies approached international arbitration like American arbitration/litigation: hire a slick attorney who is a litigation super star, and let him dazzle the panel. Well, this article talks about how this utterly failed for American companies. And large firms were forced to develop international arbitration practices that dealt with many of the cultural and international aspects of arbitration. I only want to highlight a few portions because I need to actually type them:

A foreign company brings a high-stakes international arbitration against a U.S. company. The U.S. Company turns to a star outside litigator, an American attorney, to handle the matter. Although he has never handled an international arbitration before, the litigator has an unparalleled track record of winning bet-the-company cases in state and federal courts around the country. His performance in domestic arbitration is equally superb. . . . Why go elsewhere . . . .

The litigator no doubt feels the same way, that is, until the arbitration gets under way. With an experienced international arbitration specialist on the other side, the parties begin by selecting a tribunal of three arbitrators. The specialist seems to be on personal terms with nearly all of the available international arbitrators. Indeed, she has even served as an arbitrator with some of them.

In the meantime, many of the witnesses just don’t seem to warm to the U.S. litigator and his team, who don’t understand the witness’ language or culture and who have to communicate with witnesses through interpreters (whereby much is lost in translation). Even the translating service selected by the U.S. team has missed some of the critically important legal subtleties in the key exhibits.

As might be expected, this particular adventure does not end happily for the star U.S. litigator–and his client.

Moral of the story: what works in America and what works for you now won’t necessarily work on a global, international scale. Or in China for that matter. “When in Rome…” seems to make good sense because you need to learn to what works in China rather than making the assumption that you already know. You (or your client trying to go into China) may be dead wrong if you don’t.

I found the article interesting because it shows that American biglaw firms are gaining enough sensitivity and sophistication to know that things don’t work the same internationally as they do in America. (and trust me, large law firms are hardly the model of cultural sensitivity) And though American large corporations have discovered this going into China, it is imperative that smaller enterprises (SMEs) understand Chinese culture and ways of doing business first. It is very different. So before you go on Alibaba, plunk down a lot of money, and wait for disaster to happen, you should educate yourself. China blogs such as China Law Blog, This is China!, All Roads Lead to China, and others (hopefully including my own) will give you a start. My blogroll has a number of these.

You can and should read, read, and read some more. It doesn’t mean you will fully understand the Chinese culture and mindset. But at least you’ll have a much better idea and grasp of it. Really, resources and capital are only half the battle to doing international business. Common sense, respect, savvyness, and the ability to understand another culture are equally important.

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