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Joy Huang is the president of ConnectEast, and her insightful newsletters offer a wealth of information and perspective on the increasingly critical connection between Western and Chinese cultures.

Whether or not you think you’ll ever do business with China, think again. Because — directly or indirectly — you will. And that’s why it would behoove you to go to her site and subscribe.

To wet your whistle (which is a decidedly Western cultural phrase) here’s her latest installment on the dynamics of trust in our vastly different cultures.

Enjoy. No pun intended:

Understanding Chinese Trust and Mistrust

by Joy Huang

In a recent research study I was conducting, the topic of trust came up frequently as a source of confusion among U.S. companies who do business with the Chinese. Many felt that reaching a deep level of trust with Chinese businesses was very hard. There is a feeling that their good intentions could be misinterpreted and efforts to build relationships were not always successful or reciprocated. On top of this, foreign employees who work inside Chinese companies also reported that they could be excluded from key decision-making and were limited in their career path due to the fact that they were not Chinese. The general feeling is that in the U.S., you are “innocent until proven guilty,” while in China, you are “guilty until proven innocent.”

Do Chinese have an innate feeling of mistrust towards U.S. businesses and individuals? The answer is probably yes. The reasons can be traced in its history and cultural backgrounds.

[To read the historical background (which you should) click here for Joy's entire article.]

Francis Fukuyama argued in his book Trust that two types of trust separate societies into high and low trust societies. Low trust cultures such as China value personal trust and can almost only trust another person if there is a personal connection. High trust cultures are more easily accepting of others on the basis of things such as profession, moral values, etc. This is very true considering the importance of personal connections in China. Trust can be more easily gained if there is a connection via the family or the existing network of “in-groups.” It is much more difficult when these “connections” do not exist, and it can take a long time to build trust.

This style of trust can be a double-edged sword for Chinese businesses. On the one hand, with strong personal trust, business can make fast decisions and execute with highly competitive speed and quality. On the other hand, this can become an impediment especially for Chinese companies going global in countries that tend to have higher levels of “formal trust.” In dealing with U.S. partners and employees, it can get in the way of decision making, relationship building and utilizing the best talents available. More progressive Chinese companies are realizing this and are taking pragmatic steps to best their localization efforts. This means to focus on what’s important for their customers and partners in the U.S., and to truly empower and utilize the local talents for their business.

We live in a time of change. As the rest of the world makes efforts to adapt to the Chinese styles in order to capture a piece of its economic boom, China needs to do the same when doing business in other places.

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