Chapter 8

Living in China: A Survival Kit

“If you have a Monday-to-Friday, 9-to-5 kind of thinking, forget about doing business in China. We get phone calls on Saturday and Sunday, or six o’clock on Monday morning. It’s really 24 hours. We work hard and play hard.”

Mark Pummell (UK), Founder and CEO, ChinArt, Sinapse and Music Pavillion

“China is more of a civilization, than a country. You can’t be neutral about it; you either love it or hate it.”

Josep Giro (Spain), Co-founder and Managing Director, SBC & Associates

Introduction

Even in China, and even for entrepreneurs, life cannot be all work and no play. Ultimately, success as an investor or manager in China requires creating a positive and sustainable life for yourself—and your family—outside of work.

In this chapter, we look at how foreign entrepreneurs have adjusted their lives, and the lives of their spouses and families, in order not just to work successfully, but also to live happily, in China. The chapter covers five main topics:

Since the 40 entrepreneurs profiled in this book hail from 25 different home countries or provinces outside mainland China, it is not surprising that their answers varied widely when asked, “What do you find difficult about living in China?” That is, except for one area: nearly all of them shared a common challenge in grappling to overcome the language barrier. Thus, we start this chapter with the challenge most commonly faced by non-Chinese businesspeople living and working in China.

Clearing the Language Hurdle

Of the 40 entrepreneurs interviewed for this book, only six were native speakers of Mandarin Chinese (being ethnically Chinese), the national language of China. While each of the non-native Chinese speakers faced a language barrier, they differed in the importance they placed on overcoming it.

Just how critical is the mastery of Mandarin to operating a business in China? In answering this question, our interviewees fell into two camps, arguing either that learning Mandarin is not critical or that it is “essential.”

The key differential for foreign managers is whether they themselves must communicate directly with their Chinese clients, partners, and employees, or whether they can delegate Mandarin-language communication to a key staffer.

The “Mandarin is Not Essential” Camp

Among those with the viewpoint that “Mandarin is nice to know but not essential” is Swiss consultant Nicolas Musy. According to research conducted by his firm on 111 Swiss companies operating in China, the results of which were published in 2006, Chinese-language skills were not rated as a top priority. “Interestingly, language ability ranked very low among the success factors in our research; ranking in the 38th position among 47 success factors.” American consultant-entrepreneur Steven Ganster agrees: “Do [foreign] entrepreneurs have to speak Chinese? I don’t think so. I’m not fluent in Chinese, but I have people whom I trust do that.”

Italian consultant Ruggero Jenna tells his foreign clients that Chinese-language skills do help in China, but he says the importance varies depending on the business and the role of the foreign manager in a company’s operations. “The importance of Chinese skills depends on what you want to do. When you speak Chinese, it does make a difference in doing business.” If the foreign executive must work directly with Chinese-speaking suppliers or customers, then language skills are a significant advantage: “If you are talking about starting up a manufacturing venture, for example, then speaking Chinese means a lot. Especially when you deal with production and need to really negotiate with Chinese companies.” But if your clients are mainly English-speaking multinational companies, he says, then Mandarin skills are less critical.

In his consulting business, Chinese-language skills are not a make-or-break necessity, Jenna says. “In my own case, speaking Mandarin is not that important because what I have to do is to build a team. Our key people must speak both Chinese and English because we have to deal with our clients, who are typically multinationals.”

Lack of Chinese-language skills also hasn’t stopped consultant Kobus van der Wath from building a successful business in China. As he explains: “I study Chinese every day, but my Chinese isn’t very good. Does it prevent me from operating here? No, but I need to cover my weaknesses. I do that by having very good staff.” He warns fellow expatriates that being sensitive to Chinese cultural differences is more important than learning the language.

“I study Chinese every day, but my Chinese isn’t very good. Does it prevent me from operating here? No, but I need to cover my weaknesses. I do that by having very good staff.”

Kobus van der Wath (South Africa), Founder and Group Managing Director, The Beijing Axis

Even those international businesspeople that had mastered Mandarin recommended leaning on the local staff for help with some aspects of professional—and even personal—life in China. For example, U.S. executive Mark Secchia says he regrets not having asked his staff for help when he purchased real estate. Says Secchia: “Buying an apartment in China was one of the worst experiences in my life. We had a property agent and we gave the down payment and three months later, we got nothing for it. The bank took advantage of us and the property agent took advantage of us. I didn’t ask any of my staff for help. If I had asked my staff to help me, I wouldn’t have had so many problems.”

The “Mandarin is Essential” Camp

Among those executives who would argue that achieving a working level of Mandarin is critical for business success in China is Israeli business developer Aviel Zilber: “I speak Chinese, but it’s not good enough. My life is here now. I don’t think it’s right to live in a country without being able to speak the language.”

Among those of our interviewees who were struggling to master Chinese, most had a similar modus operandi to that of American Mark Secchia: make an effort, show your sincerity, but accept your limitations. “Our managers speak English, so we communicate in English. But still, you must be able to speak Chinese in order to form successful relationships. For instance, how can I prove to my staff that I’m committed to them if I don’t speak Chinese? The message I send [by not learning Chinese] is that I’m going to leave China next month.” While Secchia has mastered a conversational speaking level in Mandarin, he relies on key staff for assistance with reading and writing in Chinese.

“If you can speak Chinese, it definitely helps you to understand the culture better. If you have a good command of Chinese, it definitely helps you to negotiate with the Chinese. Since you’re a foreigner, some Chinese may take advantage of you using the language. Thus, I usually conduct negotiations in Chinese.”

Aziz Mrabet (Morocco), Managing Director, Impact Promotional Concepts

Having committed several years to studying the Chinese language, Moroccan businessman Aziz Mrabet explains the clear benefits for his work in China: “If you can speak Chinese, it definitely helps you to understand the culture better, to understand the subtleties that are crucial in doing business in China. You can still do business without speaking Chinese because so many people speak English here. But if you have a good command of Chinese, it definitely helps you to negotiate with the Chinese. Since you’re a foreigner, some Chinese may take advantage of you using the language. Thus, I usually conduct negotiations in Chinese.”

Most of our entrepreneurs said they wished they had more time to study Chinese. Internet businessman Marc van der Chijs’s viewpoint is typical: “I planned to study Chinese for a year. I believe that one year is the minimum for language learning, but I finally quit my study to run the business. I regret that my Chinese isn’t perfect now. I’m able to communicate with most Chinese people, but I’m still far below fluent.”

Adding an element of frustration to the already tough task of mastering Mandarin, several of our interviewees stressed that learning to speak Chinese won’t overcome communication problems. Many misunderstandings between local and foreign businesspeople are caused not by lack of language skill, but by misreading the Chinese communication style. Business communications in China tend to be conducted in an indirect and roundabout way, leaving both sides to solve a puzzle. This communication style can be exhausting and frustrating for foreigners, especially those used to direct business talk.

Macedonian trader Oto Petroski explains: “The Chinese are masters of confusing communications.” He says that when he began working with China from the Macedonian capital of Skopje, his first Chinese client began asking questions about the terms of the business deal. Petroski noticed that the client seemed to ask many questions about the same topics. “Back then, I didn’t know Chinese well, so I didn’t know why [my client] had to ask the same question many times. But now I know.” Petroski explains that when Chinese do business with each other, they often share only part of the information, leaving the other side to work out the full details. “[My client] had experienced many tricky business situations, so he felt he had to constantly ask and confirm whether I was saying one thing but meaning another thing,” recalls Petroski.

Speaking Chinese shows your commitment to China; it will help you to better understand the culture; and it will be very useful when negotiating with domestic partners.

This cat-and-mouse style of communication can be extremely frustrating for newcomers. “In my culture in Macedonia, we speak very concisely, very clearly,” says Petroski. “If anyone asks the same question several times, we consider them to be stupid. But in China, I have to ask 10 times for the same information. When I ask about registration of the company, I ask once and get an answer. Then I come from another side and ask again the same question. Then slowly, I get the answer, piece by piece.”

Hardships of Life in China

Despite their diverse backgrounds and cultures, and disregarding individual yearnings for such things as their favorite food from home (Philadelphia cheese steaks, for example) or hometown traditions (Catholic services), when interviewed for this chapter, our 40 foreign businesspeople identified several aspects of life in China that they all considered to be hardships. The most frequently cited of these were:

• Distance from nature
• Driving woes
• Lack of community
• High cost of expat living

We consider each of these in turn.

China Hardship #1: Distance from Nature

Many of our interviewees from the West said that the main challenge in enjoying life outside of work had to do with handling China’s crowds, pollution, and the distance from nature. (Most of our interviewees live and work in the megacities of Shanghai, Beijing, and Guangzhou.)

“I miss my sports. I miss being able to get in my car and just drive someplace. I miss blue skies and sunshine, and I don’t like the pollution [in China].”

Phillip Branham (USA), Founder and President, B & L Group

Swiss consultant Nicolas Musy voiced a common sentiment when asked what he finds most difficult about living in Shanghai: “It’s the lack of countryside that is frustrating; that and the noise.” American software entrepreneur Eric Rongley said: “I miss driving my BMW around on good roads without many people on them.” British entrepreneur Mark Pummell concurs: “I really miss fishing; I like to go fishing in the countryside where there is fresh air.”

U.S. citizen and construction entrepreneur Phillip Branham, who owns a home in Hawaii, says: “I miss my sports. I miss being able to get in my car and just drive someplace. I miss blue skies and sunshine, and I don’t like the pollution.” After 11 years in China, he says: “I’m still not used to crowds.” He also misses having access to U.S. sports programs on television, as well as live sporting events. “In the U.S., you take it for granted that you can turn on the TV and watch sports in English, or that you can watch sports in person.” For the sports-minded, he says “quality of life is obviously better in the U.S.” than in China.

Food and beverage delivery business founder Mark Secchia also hankers to escape the city life, and admits to feeling homesick for America: “Shanghai isn’t the world’s most beautiful city. When I was in Michigan, I liked to fish, to be outdoors, and breathe fresh air. You don’t get that here.” Still, like many of our interviewees, Secchia believes the business benefits outweigh the disadvantages: “The business environment here is so awesome, that makes me so much happier.”

Our entrepreneurs did mention missing specific creature comforts, although those based in China’s megacities said that many of these comforts of home could now be found in China—albeit at a price. Phillip Branham measures progress in this area by the current ease of finding his favorite fast food: “You can get good pizza [in Shanghai] now, and you couldn’t when I first came.”

“Bad pollution” was the second most frequently named hardship among our interviewees. Even after 15 years spent living in the Middle Kingdom, Spanish consultant/entrepreneur Josep Giro is still sometimes bothered by China’s pollution and by the lack of certain comforts from home. “Last time I was in Spain, the sky was blue, the weather was nice, and the food was good. Sometimes, I say, ‘What am I doing here [in China]?’ Shanghai is cold in the winter, hot in the summer, and very polluted,” he says. “That is why many Spanish companies have trouble sending and keeping people [expatriates] in China.”

“Last time I was in Spain, the sky was blue, the weather was nice, and the food was good. Sometimes, I say, ‘What am I doing here [in China]?’”

Josep Giro (Spain), Co-founder and Managing Director, SBC & Associates

Although our Asian entrepreneurs in China tended to suffer less from homesickness than the Westerners, many of them also wished to escape from China’s crowds, pollution, and fast pace of life. Taiwan-born serviced office provider Maggie Yu explains: “I miss Taiwan very much. I really miss the countryside in Taiwan—there, we have small hotels with hot springs, and the people are very friendly.”

Escaping the crowds and pollution by moving out of the cities and into suburban or rural areas is generally not a viable option for foreign businesspeople in China. First, most entrepreneurs will likely need to live in one of China’s larger urban areas in order to find the infrastructure, and the access to customers and clients, necessary for their business. Second, those who do end up in a less-developed area—for example, in order to establish manufacturing operations—are not likely to find an idyllic rural setting. Much of the Chinese “countryside” available for investing is also crowded, polluted, and poorly planned. In addition, foreign startups will find primitive infrastructure, a less-educated workforce, and limited access to international media, imported products, and Western-style restaurants. In other words, locating your operations in the Chinese countryside is generally not the answer to homesickness for the great outdoors.

Generally, our interviewees who hailed from elsewhere in Asia or from other congested urban areas had less trouble in adjusting to China’s big-city hassles. Their twinges of homesickness came instead from missing specific elements of life back home. For most entrepreneurs, traveling outside of China satisfies such cravings.

Another hardship—one that cannot be overcome by spending a long weekend at a resort in Thailand, and which impacts on many foreigners on a daily basis—is the challenges associated with driving (or even being driven) in China.

For many expatriates, China’s dynamic business environment compensates for its crowds, pollution, and the lack of access to nature.

China Hardship #2: Driving Woes

Most businesspeople in China—and all the entrepreneurs we interviewed—must drive regularly in the course of doing business. For those working in the less developed areas of China, that means struggling along poorly constructed, and very often overcrowded, roadways. Roads in the larger cities may be better, but the problem of overcrowding remains. Either way, China’s notoriously worsening traffic (the nation is adding more than a million cars per year to its domestic streets) is a key source of stress and frustration.

“Recently, I was almost involved in an accident with a car that entered a ring road and drove in the wrong direction. And that driver shouted at me, asking me where I got my license! It’s unbelievable.”

Onder Oztunali (Turkey), Founder of Globe Stone Corp.

Taiwanese food service entrepreneur Michael Yang offers a graphic description of the demands and dangers of driving in China. “In Hong Kong, Taiwan, and Singapore, traffic is very good now. Years ago, it was probably just like China is now; but over the years, people got more educated and they now know how to follow the rules. But in China, there is still a long way to go—drivers don’t follow the rules. They don’t care about red lights. Sometimes, I have to sound the horn and yell at them, because they are endangering my life.”

Driving is “the biggest frustration in China” for Turkish building materials supplier Onder Oztunali. In fact, the dangers of driving have impacted on life in one of his favorite cities in China: “Xiamen is one of the most beautiful places in China. Very clean, very nice—but unfortunately, that’s not the whole picture. The way people drive in a country tells me a bit about how they do business. In Xiamen, if there are only two cars on the road, the other car will try to get in front of you even if there is no car in front of him. Driving in Xiamen is crazy; traffic rules don’t exist. Cars never stop when entering a main highway or a faster-speed ring road—or any crossings, for that matter. They drive across at the same speed regardless of whose right of way it might be. Recently, I was almost involved in an accident with a car that entered a ring road and drove in the wrong direction. That driver shouted at me, asking me where I got my license! It’s unbelievable.”

Many of our interviewees told of losing their temper while driving in China. Macedonian import/export company founder Oto Petroski shared a typical anecdote: “I had a case when a taxi driver drove around me like crazy—passing from left, then the right. He cut me off three times. Then suddenly, I became Chinese. I drove in front and cut him off. I pulled him out of the car and asked him, ‘What do you want? Do you want to kill me, or to kill yourself?”’

Others among our long-time China hands were more philosophical and accepting of the challenges of the roadways. Israeli entrepreneur Aviel Zilber downplayed the difficulties of driving on China’s roads. “I drive in Israel. Driving in Israel is also crazy. The rules here make sense to me. I understand very much what they do on the road. It’s not as bad in Israel, but I understand it here.”

Some veteran China drivers, including American entrepreneur Mark Secchia, claim to recognize, and even appreciate, an underlying logic behind the appearance of chaos. “When foreigners look at the traffic, they say, ‘How can they drive like this?”’ he says. “But it’s a controlled form of chaos.” Secchia says there are rules, though they are unspoken and unwritten. For example, when driving down a rural street in China, he tends to stay close to the middle of the road, while allowing enough space for oncoming traffic to pass by. “The guy driving toward me will do the same thing; he also goes to the middle of the road. So, we are communicating. As long as we both leave enough room to pass each other, it’s okay.” While he acknowledges that drivers do “the exact opposite in the States”—meaning that they crowd over to each side to give a wide berth—Secchia says the system in China usually works. “When foreigners come here, they say, ‘Oh, my God, he’s going to hit us!’ Actually, he isn’t. He’s communicating with you. He is saying: ‘This is how much space I need,’ and you do the same thing with him.” Secchia says that business negotiations in China are conducted in much the same way as these Rambo-like driving methods.

Danish furniture business owner Simon Lichtenberg agrees: “When driving, the Chinese have a pragmatic point of view: ‘Go forward as fast as possible without endangering anybody. Know the rules, but if you can get around them, fine.’ There are actually not that many accidents when you consider how people drive.”

“When driving, the Chinese have a pragmatic point of view: ‘Go forward as fast as possible without endangering anybody. Know the rules, but if you can get around them, fine.’ There are actually not that many accidents when you consider how people drive.”

Simon Lichtenberg (Denmark), Founder and CEO, Trayton Group

At a far end of the spectrum is 25-year China veteran consultant Jan Borgonjon who claims not only to drive like a domestic Chinese, but also to find driving in China an enjoyable leisure activity. Says Borgonjon: “I’ve been driving in China since 1988. For me, driving in China is relaxing. When I go to Europe, I get quite nervous. I’m used to driving in China.” Asked if he is frustrated by traffic rules that either are unclear or are disregarded, he responds: “There are rules. They are not written down, but I know them instinctively. One is: the bigger you are, the more power you have—until you have a traffic accident. Then, it’s exactly the other way around; the one who is the weakest wins, and gets more compensation. What else? You go with the flow, expect the unexpected, and always have your hand on the horn.”

Several of our interviewees drew a comparison between China’s chaotic roadways and the nation’s confusing, but somehow functional, business practices. Oto Petroski explains the (slightly tongue-in-cheek) insights into the Chinese mindset that he gained through driving: “If you want to understand the Chinese, their mindset, you have to drive. When you drive, you discover the nature of Chinese behavior. Why? When the Chinese drive, they cannot wear a mask; they can’t pretend. In the acting of driving, they show their life philosophy clearly, which is: ‘Try to abuse any position you have in your favor, no matter what the price—even if you are in danger of killing yourself in the process.”’

Driving in China can be compared to doing business in China: the rules are followed when necessary, but ignored whenever possible.

Mark Secchia agrees that Chinese driving behavior serves as an apt metaphor for Chinese business behavior, but he describes the situation in a more sympathetic light. “The rules of driving in China are like the rules of doing business,” he says. “You can’t say that the Chinese government is corrupt. They just work differently within their system. I don’t look at it as corruption; it’s just a different system.”

China Hardship #3: Lack of Community

Among the negative aspects of expatriate life in China, our interviewees mentioned the stress of living as an outsider. For example, when asked how his non-working life is different in China than in his native Netherlands, businessman Olaf Litjens says he lacks a sense of community and belonging. “I’m Catholic. In Holland, that means that you go to a Catholic school, Catholic church, and the Catholic social club. I’m from a small village where everyone knows each other. Here [in China], you are on your own; people come and go every three years. Because of that, as an expatriate, you are not integrated with the place you live.”

Because of the high demands of working life in China, most international businesspeople tend to form friendships with fellow expatriates, based either on work or, if married and with children, on family connections. Before they had a child, social life in China for entrepreneur Susan Heffernan and her husband, a Dutch businessman, revolved mainly around their work. “My friends in China were basically in the same business I am—architectural designers, furniture suppliers, maybe even competitors. That’s the way it is. Even if they are your competitors, they are the same kind of person, so it is natural to become friends.” Except for a few close Chinese friends, Heffernan says that most of her friends in China are foreigners—a natural phenomenon, since friendship is easiest among people with similar “cultures and values.”

Bridging the culture–values gap in order to form strong friendships with Chinese people requires a significant “stretch,” agrees Spanish businessman Josep Giro: “If you have an open mind, it’s very easy to make [casual] friendships with the Chinese. I say hello to people when I take the lift in my apartment, and my neighbors become my friends. But to form real friendships is different, and more difficult.” Giro says that one of the most off-putting differences, from a Western viewpoint, is the tendency among the Chinese to hide their emotions and feelings. “Western people are more extroverted and outgoing. It doesn’t mean that Chinese people don’t feel emotions, but they don’t show them that much. It’s a cultural habit.”

Even those foreign businesspeople with broad and diverse social networks described experiencing difficulty in forming real friendships with local Chinese. After 13 years in China, Iranian-born American entrepreneur Shah Firoozi says his social circles span many demographics. Among Chinese communities, he says it is easiest for foreigners in China to befriend either “returnees” (Chinese who had studied and/or worked in developed nations) or those from Taiwan, Singapore, or Hong Kong. “The most difficult group to make friends with is local Chinese,” says Firoozi, explaining that the cultural divide—in terms of language, customs, and mindset—remains large.

“Western people are more extroverted and outgoing. It doesn’t mean that Chinese people don’t feel emotions, but they don’t show them that much. It’s a cultural habit.”

Josep Giro (Spain), Co-founder and Managing Director, SBC & Associates

Others among our expatriate interviewees said that their lives were so busy and harried, it was easier to socialize with those from a similar background and culture and with compatible leisure habits. Italian consultant Ruggero Jenna is typical in his thinking on the relative challenges of forming a strong friendship with Chinese nationals versus fellow expats: “It’s not easy to make really close Chinese friends. It’s much easier to become friends with other expatriates—they invite you out, you invite them out.”

Artificial Society

While socializing with fellow expats is often easier logistically, there are also drawbacks to restricting one’s non-work life to the foreign community. Several of our interviewees stressed that expatriate social circles can be quite superficial and artificial. China veteran Olaf Litjens says that some mid-level managers get carried away by the relative wealth they suddenly—and often temporarily—enjoy as expats in China. In many cases, he says, American or European managers whose packages back home didn’t include expatriate-type perks experience a radical change in lifestyle when they arrive in China. Suddenly, they are provided with a large house, paid vacations, several domestic helpers, and a driver. For some managers, the expat lifestyle encourages snobbery. Says Litjens: “I get very upset when I hear people complaining about their domestic help in China when they didn’t have this kind of perk in Europe.”

Foreign business-people, must work to form true friendships with Chinese nationals. There are language, social, and cultural divides that many expatriates find difficult to bridge.

Another hardship for international businesspeople who are committed to a long stay in China is that most fellow expats are on short-term assignments. This makes forming strong friendships challenging. Eleven-year China veteran Phillip Branham says this is one aspect of his host country that makes him miss life back in the United States. “You can make friends here, but people are more transient. You wind up knowing a lot of people, but you don’t make really, really good friends. They are here today, gone tomorrow, which doesn’t happen quite that much in the U.S.”

“You can make friends here, but people are more transient. You wind up knowing a lot of people, but you don’t make really, really good friends. They are here today, gone tomorrow, which doesn’t happen quite that much in the U.S.”

Phillip Branham (USA), Founder and President, B & L Group

Crossing the Cultural Divide

Among our interviewees who had successfully scaled the cultural barriers and penetrated into Chinese social circles, their most common entry point was through a Chinese spouse. Israeli Aviel Zilber, whose wife is Chinese, is one example. In describing his social life, he said: “My wife is very much my friend. I don’t really have other close Chinese friends. It takes time to build friendships [in China] because of the difference in culture and languages. But my wife’s friends are becoming my friends little by little. We go out together and travel together.”

Further along on the integration trail was Dutch internet entrepreneur Marc van der Chijs, who says: “I’ve been in China for many years and my wife, who is Chinese, has a lot of friends. So, my friends in China are now mainly Chinese. My Chinese business partner is really my best friend.”

Japanese consultant Hiroshi Shoda also finds it possible to make Chinese friends, with some effort. “Most of the time, the Japanese in China socialize with other Japanese. But really, it’s not difficult to make Chinese friends. I have Chinese friends here.”

After six years in China, Brazilian business owner Winston Ling, who is ethnically Chinese but culturally Latin American, says he mingles within several diverse social circles: “I hang out with all different types of people. I don’t only deal with the Brazilians or Americans. I have local Chinese friends, and also friends from Taiwan and Hong Kong.”

For most expat managers, social life revolves around work and the community in which they live. Foreigners who speak Chinese and/or have a Chinese spouse tend to enter the Chinese social circles.

Sports and sports clubs can be a logical channel for breaking down cultural divides, comments American real estate entrepreneur Bruce Robertson: “I play tennis a lot. I have a group of Chinese to play tennis with. We gained a lot of social life that way and also by going to concerts or the theater together. It’s not too difficult for me to make Chinese friends, except for the language problem. Most of my Chinese friends are bilingual.” One factor impacting on East–west friendships is that relatively few Chinese aged over 40 speak English. Says Robertson: “Because of that, I have a lot of younger friends.”

One factor that impacts on the social lives of foreign managers and business owners even more than cultural and language issues, however, is time. Belgian entrepreneur–consultant Jan Borgonjon sums up the experience of many international business managers in China with this comment: “I think it’s quite easy to make Chinese friends. I speak Chinese, so that helps. But basically, I only have business friends. The problem with most people doing business in China is that you don’t have much time for social life outside of work.”

“As an expat [new to China], I wasted a lot of money. My first apartment cost US$6,000 a month. Why would you pay that for an apartment? Now I live across the street and have two gardens. I pay less than US$2,000 a month. I think a lot of expats just waste money.”

Eric Rongley (USA), Founder and CEO, Bleum

China Hardship #4: High Cost of Expat Living

Another hardship identified by our 40 entrepreneurial expatriates is the high cost of expat living in China. While it is safe to say that all foreigners in China suffer from the high cost of imported items—paying several times the costs paid back home for their favorite shampoo, chocolate, or wine—the degree to which high costs bothered our interviewees fluctuated widely.

At one end of the spectrum are businessmen such as U.S. software company founder Eric Rongley, who lives comfortably in China without spending at an expat rate. “[High costs are] not much of an issue for me,” he says, explaining that he is “not a very vain person”, and thus, doesn’t choose to spend money on status symbols. Rongley originally came to China on an expat package paid by a U.S. company. When he quit that company to start his own business, he drastically cut his living expenses. “As an expat, I wasted a lot of money. My first apartment cost US$6,000 a month. Why would you pay that for an apartment? Now, I live across the street and have two gardens. I pay less than US$2,000 a month. I think a lot of expats just waste money.”

The primary factor in determining the cost-of-living expenses of foreign businesspeople is the size of their family. As a single man, Rongley’s expenses are a fraction of those of a married man with children. Rongley himself says he “thinks carefully” when hiring a foreigner with children, because expenses then rise exponentially.

The largest single reason for the high cost of expat families is international school fees. The going rate at most international schools in Shanghai and Beijing is US$20,000 per child, per year, from kindergarten up to the start of high school (see the box below). For companies bringing in an expat manager with a partner and, say, three children, expenses can be expected to soar. On top of the minimum of US$60,000 the company must pay annually for school tuition (additional fees are incurred for buses, uniforms, books, and other services), the apartment or house may cost US$10,000 per month. When other family-oriented perks—home leave airfares, babysitters, and car and driver—are factored in, the package alone can match the expat’s salary. Companies can easily pay US$200,000 per annum for an expat manager and family’s expenses, in addition to the salary.

By contrast, a young, single foreign manager footing his or her own bills in Shanghai, for example, could keep living expenses as low as US$8,000 per annum (US$700 per month) by renting an older, Chinese-style apartment, eating at street-side restaurants selling Chinese cuisine, and traveling by subway or motorcycle.

China’s urban centers, such as Shanghai, offer a full spectrum of housing and schooling. Foreigners can lead a very expensive expatriate lifestyle, or can “go local” for around one-tenth the cost.

The Struggle for Work–Life Balance

Necessity for Long Hours

When questioned about their after-work life, most of our interviewees responded along the lines of: “What after-work life?” While entrepreneurs around the world work notoriously long hours and face the continual stress of never being truly “off work,” the pace in China, our interviewees agreed, is generally more intense than in their home countries.

Real estate entrepreneur Bruce Robertson explained how life differs in Shanghai from what he had been used to back home in the U.S.: “Here, in China, it’s 24/7. Tonight is Saturday night. I worked all day today, and I’ll be working tomorrow again, meeting with clients. This wouldn’t happen in the U.S.” Robertson explained that, in China, business meetings are often set up for Saturday and Sunday. “In the U.S., no one would propose to customers or clients that we work all weekend; it would be considered impolite, insulting, boorish. Here, if an opportunity to do something productive arises, everybody jumps at it.”

Another entrepreneur who works all hours is internet business pioneer Ken Carroll, partly because he can so easily check on his business online. “In the morning, the first thing I do after I wake up is work on the computer in bed. The last thing I do at night, after my wife and daughter go to bed, is to check [online] to see who was ‘in the store.’ My wife thinks I’m crazy.”

“Here, in China, it’s 24/7. Tonight is Saturday night. I worked all day today, and I’ll be working tomorrow again, meeting with clients. This wouldn’t happen in the U.S.”

Bruce Robertson (USA), President, Asia Pacific Real Estate

With the click of a mouse, Carroll can check how many users are logged on to his language-learning websites, and he can read the real-time online comments uploaded by users. Operating a Web 2.0-type business, where customers are online and viewable, makes maintaining “off hours” difficult, since the website is being used continuously around the globe.

One way to create some balance between work and leisure is to build your social life around your work. Says entertainment and counseling entrepreneur Mark Pummell, “We enjoy our work—the work is fun. A lot of times, we do business with our friends. The model in Shanghai is business-to-business friendship. You socialize a lot with people who you do business with, but not in a formal way. We do business with our friends and they join us for drinks. We enjoy our work a lot.”

How does he balance this full-on work pace with fatherhood? Says Pummell: “I go home to play with my son until he falls asleep, then I go back to work or go out. If you want to do business in China, you’ve got to live within your businesses. This is our model. We don’t literally live here [in the business offices], but almost. We try to make it a very nice workplace, with a nice bar. We can eat there. I think this model is very good.”

Try to make your China offices as comfortable as possible. You will probably spend more time there than at home.

The Personal Toll

Others among our entrepreneur interviewees said they were struggling with an overwhelming workload, which was causing frustration, stress, and exhaustion. Consultant Ruggero Jenna, who has a strong desire to live and work in China, describes his situation: “I enjoy China as a country. I’m interested in understanding the Chinese culture and the Chinese people. The weak part about life here is the fact that I’m working too much. I want to spend some more time with my family and my kids, which is a sacrifice for me. I would also like to have some time for myself, because I’m really working too long hours now. I need to sort it out.”

Mother of three children (with a fourth on the way at the time of the interviews for China Entrepreneur), French fashion whole-saler/retailer Valerie Touya describes her work–life imbalance. “I am working 24 hours a day now because I have three stores and six employees. My costs are high, so I am myself working every day.” In addition, during the time when she met with the authors, her retail shop in Suzhou was “not working out” — a situation that was demanding much of her personal time. “It is hard for me. It is new, but right now, I’m not balancing work and life very well.”

“There is always this pressure—the pressure to make the right decision. . . . I studied an EMBA at China Europe International Business School [in China] to avoid making mistakes, but in China, there is no recipe. You have to make decisions alone.”

Valerie Touya (France), Founder, Curiosity Fashion Store

Most difficult to handle, she says, is the constant stress of being the main decision-maker in a young and unstable business venture. “There is always this pressure—the pressure to make the right decision. You are always wondering, ‘Is this a good decision? Is a fashion show the right way to attract customers?’ I studied for my EMBA at China Europe International Business School [in China] to avoid making mistakes, but in China, there is no recipe. You have to make decisions alone.” The solution, she says, is to rely on other China experts in making decisions. “I rely more and more on other people’s specialties.”

Our interviewees conceded that the working pace of an entrepreneur in China could cause problems at home. Entrepreneur Susan Heffernan considers herself lucky that her husband “understands the pressure” of her business. “My husband is general manager of a big company. He also has to work very hard. If you have a partner who isn’t at the same stage as you, it will be horrible.” She says the couple share the same lifestyle of coming home at around 7 p.m., then working at the computer until midnight to get ready for the next day. “If you have a partner who doesn’t understand, he would leave straight away.”

Heffernan says that being able to relax in China is more difficult than in her native Australia. “It’s not the same as it is back home. You can’t just take your dog out for a walk after work and meet other people in the park and pull out some chardonnay and organize a barbeque. Lately, I really miss that.” She says that while she knows that sports clubs such as softball or basketball clubs exist in Shanghai, she hasn’t yet made the effort to find them. “I’ve been running my own business for more than four years, and I don’t have that much of an after-work life. It’s pretty sad.” Instead, she makes it to yoga class, goes to the gym, or meets friends for lunch or dinner whenever she can. But most weekends involve at least some time for work: “When you have your own business, you don’t get peeved that you have to work on the weekend. It’s normal.”

The few entrepreneurs we interviewed who didn’t complain of a work–life imbalance said they try to leave their weekends free. Mexican trading company founder Juan Martinez, whose wife is Chinese, is one example. “On the weekend, my wife and I try to disconnect ourselves from work. We turn off our mobile phones or don’t answer them. We don’t turn on the computer. If we work all the time, we think it’s not healthy.” Much of his off-work time is spent with his wife’s relatives. “On weekends, we visit my wife’s family a lot. Her sister and husband and their two kids come over and we take the kids to the zoo, museums, and the aquarium. We are getting some training for our future kids. We are Catholics and we go to mass at St. Ignatius Xujiahui’s Cathedral [in Shanghai]. We also sometimes meet friends and classmates for dinner.”

Health Issues

The one interviewee who clearly claimed to have achieved a healthy and satisfying work–life balance had suffered a stress-related ailment and subsequently changed her lifestyle. Serviced office facilities owner Maggie Yu explains how she got caught up in a workaholic lifestyle during her first years in China. “Shanghai is a very dynamic, exciting city. On the flip side, however, it can be difficult to keep up with the pace, and that may produce a certain amount of anxiety. The fast-paced life-style is one of the things that people have to adapt to here. Expatriates may find that business entertainment plays a much bigger part in their working life than they are used to in their own country, and that can be tough. Late nights spent socializing with business associates can take a toll on your health, but this is an expected part of doing business in China. After the first few years of adapting to the lifestyle and culture here, I have now achieved a better balance in my life.”

“Late nights spent socializing with business associates can take a toll on your health, but this is an expected part of doing business in China.”

Maggie Yu (Taiwan), Founder and Managing Director, Asian BizCenter & Consulting

Yu’s primary method of calming and balancing her life, she says, has been through studying Buddhism, taking yoga classes, eating well, getting more sleep, and traveling every other month for relaxation. “When I made this change, I stopped taking medicine, and my gastric problem was cured completely within a month. It’s amazing.”

Foreign Businesswomen in China

In any culture worldwide, businesswomen face specific challenges. To try and understand how China compares as an environment for foreign female managers, we included seven women among the 40 entrepreneurs interviewed. Hailing from Taiwan, Australia, Singapore, France, Canada, and the United States, these women represent a range of industries from furniture wholesaling and fashion retailing to consulting, silk flower manufacturing, and banking.

We asked our businesswomen interviewees for their thoughts on two topics of particular interest to expatriate businesswomen in China:

• Gender discrimination
• Balancing work and children

Gender Discrimination

One of the most welcome findings of this book is that none of the women entrepreneurs we interviewed reported experiencing gender discrimination themselves, or having women friends or colleagues who had been discriminated against on this basis. Singaporean co-founder of China Vest, Jenny Hsui, who has worked in China for 30 years, said: “Since 1978, I’ve spent 80% of my time in China. As a woman, I’ve never encountered serious discrimination here. If there was a slight bias in the beginning, it changed as I proved myself.”

“Since 1978, I’ve spent 80% of my time in China. As a woman, I’ve never encountered serious discrimination here. If there was a slight bias in the beginning, it changed as I proved myself.”

Jenny Hsui (Singapore), Co-founder and President, ChinaVest

Hsui and our other interviewees attribute this openness to China’s historical circumstances. “I came to China to do business in 1978, which was at the end of the Cultural Revolution. At that time, everybody wore gray and blue. All the women wore pants, rather than skirts. In a way, I suppose that women had more power then than they have now, because there was no obvious difference between the genders.”

Hsui says, “What really surprised me was that, in the late 1980s, I found great discrimination outside China. The phenomenon isn’t obvious—usually it’s hidden—but you can sense it.” Today, Hsui says, gender discrimination is obvious in developed countries such as Japan. “It’s not easy for Japanese society to accept women entrepreneurs,” she says. In Taiwan, she has found that women face some discrimination when starting a business; while in the U.S., women frequently are paid less than men for similar work and still find it difficult to speak out when men run their company.

By contrast, Hsui says, women in today’s China find a supportive environment. Even though women tend to be “more feminine” today than they were during the Cultural Revolution, they generally continue to be treated as equals in the workplace. “Today, I don’t feel any discrimination as a woman doing business in China. In terms of doing business, it’s not harder for women; there aren’t many barriers,” she says.

“Here, in China, women are definitely treated more equally than they are in Australia. It’s still a relatively sexist society in Australia.”

Susan Heffernan (Australia), Founder and Managing Director, Soozar

Business owner Susan Heffernan finds the environment for businesswomen more favorable in China than in her native Australia. “Here, in China, women are definitely treated more equally than they are in Australia. It’s still a relatively sexist society in Australia.” Serviced offices supplier Maggie Yu also finds the lack of gender discrimination in China refreshing: “Women in China enjoy more equality than women in other Asian countries.”

All our interviewees, and especially the six female entrepreneurs profiled, see the business environment for women—both expatriates and locals—in China as quite vibrant. Maggie Yu describes the environment in Shanghai for businesswomen as “welcoming.” “I’ve seen many successful women entrepreneurs here in Shanghai. Some of these women are only in their thirties, or even younger.”

Being female can even be a plus, according to some of our interviewees. Canadian floor tiling entrepreneur Chee-Chin Wu, who works in mainland China, Hong Kong, Canada, the U.S., and Europe, puts it this way: “As a woman entrepreneur, I don’t find there is any discrimination in the international business world. Sometimes, a woman’s soft approach can be more successful in business than a man’s approach.” She adds that, during her time as president of the Shanghai Rotary Club from 2006 to 2007, she met encouraging reactions. “Some of the European clubs are restricted to men only, so many people were a little surprised— in a positive way—that there was a woman in the Rotary Club, and that the president was a woman.”

China is a relatively egalitarian society, in terms of gender, as a consequence of its communist past.

American cultural training company founder Marjorie Woo agrees that China can offer businesswomen a gender advantage. “For me, my gender didn’t have any negative impact on business. There’s an interesting phenomenon in China: women have more leverage than men when doing business. For one thing, male clients tend to give you more time of day if you want to make a pitch; and women tend to have easier access to decision-makers in business.” Woo, who has business ties in the U.S. and throughout Asia, says that the proportion of women entrepreneurs in the general population is far higher in China than elsewhere, mainly because it is easier for women to start businesses there.

“Women are more powerful in China,” says Taiwan-born entrepreneur Wendy Tai, owner of an interior decoration manufacturing business. “I think being a woman here is an advantage. [Business leaders] show more respect to women in China than in other places like Taiwan.” Tai says that women in Taiwan still suffer under the gender-discriminatory laws that were influenced by the 50 years the island spent under Japanese control (which period ended in 1945). For example, in Taiwan, she says, a married woman who owns property cannot sell it without her husband’s permission, whereas a married man faces no such restrictions.

Another advantage for women entrepreneurs, says Susan Heffernan, is that Chinese government officials are sometimes slightly more lenient toward females. “It is especially obvious when you tackle things at the government level. If you are a woman, they seem to be more lenient toward you.”

“You have the support from your extended family, and you can have all the domestic support—such as drivers and ayis [nanny or domestic helper]—needed to make life much easier.”

Marjorie Woo (USA), Founder and chairwoman, Leadership Management International (China)

Balancing Work and Children

Another very clear benefit for businesswomen with children in China is the relatively high level of childcare support that is available, compared with other countries. China’s one-child policy means that most working women have only one baby to look after (although the policy has been relaxed slightly in recent years). Unlike in some other countries, a working woman’s right to have that child is carefully protected. Once a woman is pregnant, China’s labor laws provide extra protections against losing her job—in fact, it is extremely difficult to fire a pregnant woman or new mother. In addition, women are guaranteed four months of paid maternity leave after the baby arrives, and may take longer leave in the event of a difficult pregnancy, twins, or other complications.

Working mothers in China also benefit from the extremely low cost of live-in domestic help. At an average rate of RMB8–10 [US$1.40] per hour in Shanghai, and less than this outside the main cities, nearly everyone (even graduate students) can afford to hire domestic help. Families with a young child can often easily afford to employ a full-time, live-in nanny/housekeeper. The nanny will often work long hours and weekends, and will handle a range of chores—from shopping to cooking and cleaning, and even helping the child with his or her homework. Many working couples also have access to four doting grandparents for their single child. All this accessible assistance with mothering alleviates a major source of stress for working mothers.

“You have the support from your extended family, and you can have all the domestic support—such as drivers and ayis [nanny or domestic helper]—needed to make life much easier,” says Marjorie Woo.

Business founder Mark Secchia and his wife, both Americans, fully appreciate the domestic perks available in China. “Raising kids is cheaper here. I can keep my kids here until they are six years old and have an ayi to take care of them for a couple of hundred U.S. dollars a month. My friends back home pay more than a thousand dollars a month for eight hours of childcare a day. Here, the ayi can watch the kids for 16 hours a day for one-fifth of the price.”

Many Chinese working mothers enjoy low-cost, 24/7 domestic help provided by nannies or grandparents.

Susan Heffernan, who became a first-time mother in late 2007, is also taking full advantage of the domestic help available in China. “Support here is more affordable, which definitely makes life much easier.” In fact, Heffernan says her work–life balance improved after becoming a mother. “Before I had the baby, my life wasn’t in balance. I often worked overtime. Since the baby, I try to keep some balance.”

In fact, support for working mothers in China goes so far that our interviewees described a problem that may be unique to this country: working women are expected to work long hours and to leave the childcare to others. Says mother of four and entrepreneur Valerie Touya: “Chinese women don’t try to achieve work–life balance.” She says that, while many Western mothers insist on spending time on raising and educating their children themselves, many Chinese women pass these tasks nearly completely over to grandparents or nannies. “I try to balance my life, but Chinese women don’t have the same thinking. Their parents educate and raise the child, and they just devote their time to their professional life. I always try not to work on Saturdays and Sundays—aside from the period when I first launched the business—but Chinese businesswomen who are mothers will work every weekend as well.” Touya now limits her work time, in order to build in mothering time. “When I am with my kids, I don’t have my mobile phone with me. Saturdays and Sundays are dedicated to the kids.”

The Good Life, China-style

When asked if, overall, they were happy living in China, most of our interviewees gave clearly positive responses. American Eric Rongley voiced a representative viewpoint: “I find life in the United States rather boring, to tell you the truth. It’s addictive to constantly stay in a different culture. Something surprising happens all the time, and that makes life interesting.” Rongley, who lived and worked in India and traveled in Asia for several years before setting up his own business in China, describes an unsuccessful stint back in the U.S. several years ago: “Between India and Shanghai, my former company brought me back to Richmond, Virginia for six months, to learn the business and build the company network. I tell you, if it’d been longer, I would have gotten a gun and shot myself. Everyone goes home at 5.30, the wife has dinner on the table at 6.30, and everyone goes to bed at 10 o’clock. They then wake up the next day and do the same thing over again. Here, each day is different from the one before.”

“It’s addictive to constantly stay in a different culture. Something surprising happens all the time, and that makes life interesting.”

Eric Rongley (USA), Founder and CEO, Bleum

Mexican entrepreneur Juan Martinez also says he has built a happy and fulfilling life in China. “Both my wife and I enjoy our lives here a lot. Many famous people come to Shanghai for concerts, operas, sports, so we have opportunities to go to cultural events. Shanghai also has a good nightlife, good restaurants. It’s much more international than Leon Guanajuato [in Mexico], where I am from! Living in Shanghai, we feel. . . wow!”

After seven years in China, Martinez says he has finally convinced his family back home that he is living a good life. “My parents have been to China and they enjoyed it very much. They came to China for the first time 15 or 20 years ago, so my mother had very different idea about it because of that trip. She said, ‘Oh, my poor son is in China!’ When she came a few years ago, she could feel that now it is a completely new world, a new country. Now she wants to come and stay with us here. Before, she really had misconceptions about China—it was all rice fields, and so on. Similar to Americans who still think that all Mexicans wear big hats.”

Many of our long-time China hands now consider China as their home, especially those with Chinese spouses. A typical example is Israeli entrepreneur Aviel Zilber: “I have a big family in Israel and I do business in Israel, but my central life now is in China. I bought an apartment and I have a wife here and a dog. I enjoy life here very much. There are moments of frustration, but in general, it’s very good.”

Korean Chun In Kyu also has crafted a good life for himself and his family. “Living in China is very convenient. I’m very satisfied. My family is here with me: my wife, two sons and my mother—five family members. We are all happy here.”

Conclusion

The main challenges foreign entrepreneurs face in creating an enjoyable life in China outside of work are the language barrier and the cultural distance from home. There may also be frustrations arising from China’s crowded living conditions, pollution, the difficulty of accessing nature, the clogged roadways and long commuting times, the lack of a sense of belonging and community, and the high cost of expat living. Despite these hardships, in most cases, foreign entrepreneurs find their rewards in the dynamic business environment in China. For the same reason, it may be more difficult for a trailing spouse and children to adapt to China. Success for a non-working spouse depends on finding a sense of purpose and a social life in China. A good solution can be for the spouse to use her or his time in China to study, to explore China, or to find work or volunteering opportunities.

The adaptation of the spouse and kids can be a critical success factor for a foreign entrepreneur in China.

For working women, China offers a friendlier environment than is often the case in other countries. The seven women entrepreneurs interviewed for this book described China as an egalitarian business environment, in part because of the effects of the Cultural Revolution. In fact, women are strongly encouraged to work, women bosses are not uncommon, and working mothers have access to full-time domestic support through inexpensive nannies.

SUMMARY OF TIPS

LIVING IN CHINA