International Law

Chinese Investment in the US - Job Creation Chimera

This article claims 10,000 Americans hired by Chinese-invested US enterprises, a pittance for a population of over 307 million. The test will be whether PRC Chinese cultivate an ability to manage Americans, which they have traditionally done very badly. In the minds of American employees, Chinese managers are autocratic, overly demanding, unrewarding and incapable of building cooperative teams. In the minds of Chinese managers, American workers are lazy, unresourceful, overpaid and slow. There is a good deal of relative truth in both perceptions.

But when in Rome... If one can't get the best out of his employees -- usually done through a practical understanding of makes people tick -- he is doomed to get only mediocrity or worse. PRC Chinese in their native environment enjoy a freedom of action they simply will not obtain here: they will find themselves handcuffed in a highly regulated workplace without that necessary understanding. They are not (yet) able to adapt management style to the new environment. That is why PRC Chinese in the US prefer to hire Chinese immigrants. But I don't think most PRC Chinese are capable of such adaptation. It is not simply about language. Despite their generally admirable resourcefulness, PRC Chinese, unlike Japanese, do not, in my experience, possess the behavioral flexibility necessary for outward cultural adaptation. (I have worked in Chinese and Japanese companies in the US, Japan and China.) The adult PRC Chinese mindset, especially for those who have only arrived in the past few years, is set in stone almost.

Chinese investment in the US is not at all likely to create jobs for Americans. Now if the federal government would only create the real, substantial incentives to encourage domestic manufacturing rather than the expansion of unproductive government bureaucracy, we might see some American jobs created.

"I'll quote George Buckley, the CEO of 3M," said MacMillan. "He [made] a great comment to me about a year ago, and he's British, for the record. He said: 'I've never lived in a country where you feel like the government is on the other team's side.' " The regulatory agencies "are enforcing a level of regulation on U.S. companies that they are not enforcing on European companies or on other companies. We have companies in our industry that actively count the fact that they don't belong to the U.S. trade association because it means they can play by a different set of rules in this country. That is very troubling, to feel that the U.S.-based companies are at a competitive disadvantage in our own country."

Despite glib promises about regulatory review committees -- the harbinger of bureaucratic delay -- comments such as this from Obama's people make distressing reading. Why are these smart Ivy grads so dumb?

Full post as published by Asia Business Intelligence on January 19, 2011 (boomark / email).