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Chinese Vs. Western Entrepreneurship

Chinese Vs. Western Entrepreneurship


Michael Hurwitz

One of the big buzzwords in Chinese business circles of late is entrepreneurship.

Entrepreneurship may seem like it should have started a long time ago in China (I mean, literally even the first businessman ever was an entrepreneur, right?).

But in an economy long dominated by massive SOEs (State owned enterprises), large-scale entrepreneurship is a relatively new phenomenon in China.

“Start-ups are the new sexy thing,” says one Beijing-based entrepreneur, and he’s not wrong: global business schools like Stanford and NYU’s Stern School of Business are setting up shop in Shanghai and running entrepreneurship workshops and competitions nationwide.

Startup incubators are becoming a more common sight in big cities like Shanghai, Beijing and particularly Shenzhen, often considered the nation’s start-up hotbed.

But how similar are these startups and entrepreneurs to our Western conception of what entrepreneurship means?

Let’s take a look.

A Different Environment

For one, the high-flying Silicon Valley-style entrepreneurial culture we have in the West hasn’t quite come about in China yet.

VC funding isn’t particularly well-developed at this point. There are simply too many legal and logistical hurdles left over from the pre-改革开放 (gǎi gé kāi fàng)  era (the pre-Chinese economic reform era) to allow for the free-flowing systems other countries like the US, UK, Singapore and Hong Kong enjoy.

More than that, though, it’s a cultural thing. Mainstream Chinese culture, the conventional wisdom goes, doesn’t place as much emphasis on striking out on one’s own and taking the necessary risks to start a business.

I have to say though, that strikes me as a pretty significant pile of BS. Sorry, Steve Forbes (I was all about your flat tax back in 2000 though, if it makes you feel any better).

China is, in a lot of ways, one of the most uniquely entrepreneurial places on Earth, just not in the way that we tend of think of entrepreneurship.

Rather than flashy, frosted-glass-disruption-rockstar-pivoting entrepreneurship, start-up mavens here in China tend to do things in a much more low-key, improvised but still really interesting way.

Since there are so many of the legal and logistical hurdles we mentioned earlier (perhaps foremost among them the 户口 (hù kǒu)  system, entrepreneurship is often of the more mom-and-pop variety.

Wearing Many Hats

Looking at it from a ground level, a shockingly huge proportion of the people you meet in China, particularly in Shanghai, have a handful of jobs or even businesses on the side.

Your local newsstand guy, for instance more than likely copies keys, fixes bikes, sells noodles and will even watch your stuff for you for a few hours if you throw him a couple bucks.

It’s that last one that intrigues me most: the freewheeling nature of capitalism itself in China means that people are immensely flexible when it comes to making their incomes.

Lax enforcement of commerce regulations means that there generally isn’t any danger of the authorities butting in – more often than not, they’ll avoid the small fish unless it provides some sort of direct political benefit.

This unique Chinese proclivity to improvise and make something out of nothing is often called 凑合 (còu he) , literally “to gather together”.

But it's generally used to describe things done in an impromptu, informal but effective way to do something.

Here in China the default mindset is generally to take financial opportunities by saying yes and then figuring it out later, rather than saying no initially.

Profit over Formality

This spirit of flexibility and improvisation is a big part of Chinese business and entrepreneurial culture.

Just take a look at the business card of the billionaire Chen Guangbiao above.

Whereas a Western bigwig might be proud of the shiny company name and three-letter title on his or her card, Chen’s has like a dozen different jobs and titles on there. It’s some Billy Mays “but wait there’s more”-level stuff. 

Entrepreneurs in China tend to ignore the conceptual distinctions between jobs and positions that we often have in the West, and I think maybe it’s something we can learn from.

Have you had experience working in China? Do you agree or disagree with what I've said? I’d love to hear from you in the comments below.  

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MICHAEL HURWITZ spent six years in Shanghai doing the little things to help bridge the cultural and linguistic gap between China and the West. Now back in the United States studying business and Chinese, Michael enjoys reggae music, his hometown basketball team the Washington Wizards, and has a handful of tattoos he'd rather not explain.

Posted on: June 19th, 2015
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