The China I know

The China I know

Golf course developer and GCI guest columnist Sam Sakocius shares his experiences with doing business and growing the game of golf in China.

November 14, 2011

The China I know is a fascinating test of patience, perseverance, adaptability, indignity, creativeness, integrity, humor, humility, and friendship.

Before writing how business here sometimes feels like a never ending game of “Three Card Monte” where only the people holding the deck know the rules (and the rules change each hand, and always without notice), a fair article about current business life in China demands space for the other times when there is a profoundly exhilarating sense of making history, living on the front line of this modern day frontier expats fondly refer to as the “Wild Wild East.” 

Life can be disorienting
No one seems to know the population of our little town. Estimates range from 4.5 million to 7.5 million, notable only in that either way, it is considered a smallish city by Chinese standards.  Traffic signals appear to be just suggestions and looking both ways on a one-way street, mandatory.  There are daily safety hazards to be navigated that in America would give an OSHA inspector a nervous breakdown and a bodily injury lawyer, dreams of mansions and speed boats.  Passengers standing and pulling down baggage before the plane has slowed even to taxi speed, toddlers pooping on the street through diaperless slits it their pants, misbehaving kids on leashes, well behaved dogs that aren’t, a family of four packed onto an electric scooter, the morning ritual of fresh carcasses being butchered in front of restaurants, hundred thousand dollar luxury cars sharing the road with every other conveyance ever invented from hand carts to single cylinder homemade hybrids redolent of half tractor and half rickshaw transformers, all begin to seem normal after a year or so. 

Life can be charming
Ancient looking neighbors seem astonished when a friendly Westerner greets them with a hello or good morning in Mandarin.  Children, largely raised by their grandparents, spend hours outdoors under their watchful eyes, fearlessly pursuing feats of daring play long ago banned by Western moms.  Women form close bonds often walking arm in arm and are always receptive to western women as one of their sisterhood.  It seems all Chinese enjoy and pursue western friendships.  Fresh food is brought into the cities daily and a walk through a market is resplendent with vibrant colors, pungent smells, disturbing looking offerings, haggling customers, and smiling faces.

Life is frustrating
The language is tonal.  Four different tones and a neutral for each word result in every word having at least four meanings and there are huge differences.   A mistake in a tone can mean the difference between asking, “May I pet your dog?” or “May I date your dog?”   In this little burg there is very little English spoken and few eating establishments have menus that are in English or have photos.  Walking out of a restaurant in frustration is common for months until you get the hang of the sounds that we in the West simply do not make.

Life is exciting
How can it not be living in what is probably the most capitalistic country in the world?  Commerce is growing at break neck speeds and the enormity of the economy leaves the regulators in perpetual catch up mode.  Every city has dozens of tower cranes and civil projects ongoing.  Signs of wealth and improving standards of living are everywhere. There is a palpable sense of energy in the streets with industrious and thriving people everywhere.

The golf business is bewildering
China is a land of interminable patience. The entire population seems able to endure disorganization and delay with epic stoicism.  Official red tape and rules are monumental, ambiguous and often nonsensical.  Enforcement is lax or nonexistent if you have money and Guanxi (a way of developing relationships and accumulating favor among powerful people). 

However, farmers have great influence with the central government, theoretically largely due to a history of intermittent famine spanning hundreds of years. Almost all crop production is still done by hand on terraces much as it has been since the early dynasties.  A general strike by farmers could literally starve the cities.  The government is ever vigilant to the pacification of farmers and extremely sensitive to anything that might appear bourgeois.  Considering that few pursuits are more universally seen as bourgeois than golf, it is not surprising that China officially banned golf in 2004.  The ban has largely been ignored. However, on April 11, 2011, the Chinese government issued the "Notice on Starting the Comprehensive Nationwide  Compliance and Corrective Measures for Golf Courses" to reinforce the policies outlined in the 2004 ban.  As there had been numerous attempts over the years to enforce the ban, this notice was taken in stride by developers until the 12th committee in charge of banking came into the picture.  Regulators now have the power to freeze accounts and deny future loans to the offending developers.  This has changed the game.  While minimal work is continuing, many projects have shut down all together and are awaiting word from the government as to how or even if they will be allowed to proceed.  Many rumors are floating around but the most prevalent is that this latest action is a precursor to lifting the ban but under close regulations.  If true the China Golf Development industry will finally be stabilized, albeit under great scrutiny.  The general unscientific consensus is that this will be a good thing in the long run.

Assuming there will be a golf industry in China, the following is devoted to an inside look at Golf Course development in the People’s Republic:

Things are different in China
Chinese development and business is a process that most likely will never be fully understood by laowai (foreigners).  For Westerners coming into China, a sharp learning curve is inevitable. Many business practices, rights and remedies go out the window upon stepping foot into Chinese Business culture.  China is a land thirsty for technology and know-how.  As in any country, there are good developers and not so good developers.  Chinese are proud of their country and people but it does not mean China is immune to exploitation by the emerging business class.   Long known for their skills at copying products, this part of the culture carries over to golf.  Unfortunately every golf course is different so copying can often lead to solutions that don’t fit the current project or that mimic a bad decision from a previous development.  Copying something from another project often outweighs almost any practical, creative solution proposed by Western experts.  It is not uncommon that little consideration is given to site conditions, location or elevation.  A prevailing attitude is they did it like this over there so it will work here too.  It does not matter if one site was in rock in the mountains and the other on a beach.  Furthermore, there are times that little consideration is given as to if it will work well or if it will last.  Chinese developers will often hire Western experts at the insistence of investors, only to have mid management isolate and neutralize them.  There are decisions made behind the scenes resulting in situations where Western advisors and managers don’t really know what is going on.  If an unexpected material is bought or a contractor is hired that was unforeseen, it is easy to suspect extenuating circumstances of a kind that is rarely revealed.  When the experts protest they often get the dreaded reply, “The decision has already been made.”  At some point they either learn this is the absolute end of the discussion or they eventually find themselves with a headache when they realize they have been unwittingly pounding it against a wall.

China has built quite a few golf courses over the past 10 years and there are experienced local people about.  However, as with any burgeoning industry, there are many false prophets.  These are people who have a little experience and the ear of the chairman.   These mid-managers can be the trickiest and most difficult of all the team to deal with.  They are usually the worst offenders of the “they did it over there syndrome” and the first to deride and undermine the Western expert while calling all opposed to his opinion, “Soft on the laowai.”  It is particularly difficult to oversee a project because the mid-managers obviously speak the local language and therefore can get a point in while your interpreter is still trying to determine what is being said and explaining it to you.  Mandarin is an imprecise language that does not interpret word for word with any hope of understanding the meaning.  Because the meaning must be taken from lengthy context, it sometimes takes minutes of conversation for the translator to understand a simple point that would take seconds in English.  By the time you have crafted a response, the conversation has moved on.  More worrisome is the fact that your point is not always understood by the translator.  It can cause some near disastrous misunderstandings.

There are the good guys
While everybody here has to work within the system there are those who truly care about their projects and respect and befriend Western consultants.  Having friends and mentors in China of this kind is a salvation from some of the perils that frustration and the surreptitious nature of business here can bring.  A knowledgeable native can calm waters and guide a business deal in a way that no Westerner can.  Just as in the western frontier of the early 1900’s, in today’s China you can find men of integrity, experience and grit who command the respect of their peers and Western colleagues.  These people are truly admirable.  They do the treacherous job of acting fairly in spite of the fact that they are often being assailed by some of their countrymen accusing them of being “too Western”.  This can lead to sticky situations for the “Good Guy” where he must occasionally publicly present a cold shoulder to his Western colleague.  But in time, much becomes clear when things magically happen behind the scenes and critical issues are resolved favorably.  It is an important lesson to learn albeit a difficult one to put into practice.  If we can only stay out of our own way, there are plenty of opportunities for strong, trusting relationships to be had. 

How do you know who the good ones are?  It seems those Chinese who have traveled or schooled in the west are a good start but the answer is, you don’t.  It is, unfortunately, trial and error so it is important to protect your interests in a respectful and professional way.  The Chinese are excellent and wily negotiators and respect a firm and fair position in their adversaries.  It is ultimately up to the foreigner to initiate a relationship that may have lasting potential.  Embracing and learning the culture and an attempt at a bit of the language is a huge advantage while always remembering that you are a guest in someone else’s country.  Just because you know a better way, you believe things are much better in your country or your experience tells you that your method will save tremendous amounts of time and money, does not mean that any of it will be embraced; or at least not immediately.  Trust here is earned so how you behave and learn to work within the system is often the most important thing you can do to help your clients help themselves.  It often takes months of impeccable advice, deftly delivered and cheerfully acquiesced if ignored, to achieve it.  We sell integrity.  Any hint of a foreigner participating in an impropriety can eventually lead to loss of face for both you and your client with an assured and serious eroding of your brand to follow.  What might be business as usual for certain locals, is reviled when practiced by foreigners.

Westerners are often stereotyped as being arrogant and unyielding.  That perception has some validity and is something that must be considered while still firmly asserting good advice.  It is not always easy or clear just how much pressure is the right amount to get the point across without offending your client.  A mistake with this type of perilous navigation may take months to repair.  Sometimes repair is not possible and you can be forever blighted by a perceived display of insolence to the wrong person.  While most Chinese will tell you that face is not what Westerners think it is, it is still subtly acknowledged as more than good manners, especially by the well-to-do and educated.

To be sure, just two years in this country is not nearly enough time to develop a true and enduring understanding.  Impressions will change, sometimes daily.  Friendships may fade, some will remain, memories will dim, and experiences will embed in the psyche melding into new perceptions and generalizations to enhance the retelling in the years to come.

The China I know is a fascinating test of patience, perseverance, adaptability, indignity, creativeness, integrity, humor, humility and friendship.  It is, for better or worse, for those of us in golf, the epicenter of the industry and it is likely to be that way for the foreseeable future.  In the meantime, from a land of beauty and ugliness, of reward and frustration, of smiles and enterprise, and of endless paradoxes, we will follow China’s progress because in golf development today, it is the center of the universe.

The author
Sam Sakocius is president of Project Control International, a golf course development company. PCI’s primary office is located in Kunming, Yunnan, China.