They are correct, but not for the reasons they give, which are rooted in Western culture and which show little understanding of the Chinese approach to seeking harmony in outcomes. And it is not just business that suffers from this poor understanding. Discussion at higher political levels between Chinese and Western leaders suffers from the same distortions of understanding.
The Chinese parkland paths are a perfect metaphor for how conclusions are reached and negotiations are conducted in a Chinese context.
This becomes particularly important when explaining or resolving a problem. Resolution is often complicated by language. What we understand a word to mean is not always what our Chinese partner does. It is important to locate these “common” word misunderstandings very quickly because they can lead to significantly different interpretations of the same event or agreement. Unless caught quickly, going down this road leads to contractual disaster.
Be alert to words used in place of our common expressions. A request for someone to investigate a problem is acceptable. A request to solve the problem, or fix the problem, or find a solution to the problem, is not likely to give the result you want. The difference? My Chinese partner can investigate a problem and not find a solution, and still have face.
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Surmounting the language misunderstandings does not always solve the problem. Straight-line thinking is often not readily accepted and, in some cases, it is seen as offensive and impolite.
Problems are approached from many different angles. The central issues are returned to again and again. This aspect of “touching base” and “revisiting” matters that, from the Western perspective, have been discussed and resolved, is frustrating and irritating. But it is part of the process. It is the meandering Chinese path rather than the Western straight line bulldozed through all obstacles.
It is a lengthy process designed to consider all relevant material and to test and retest each step before moving on to the next. It is not a frivolous exercise because, once the decision is made and the problem resolved, it is cast in stone to a greater degree than those reached by straight-line bulldozing.
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A Western landscape designer who uses curved paths soon finds his design is defeated by Western thinking habits. The park users blaze new paths directly across the gardens, always in a straight line from point A to point B.
The next time you choose to leave the path and take a direct shortcut across a Chinese park, remember how this is a product of Western thinking and how this style of thinking impacts business discussions.
Technical outlook of the Shanghai market
The classic Guppy Multiple Moving Average (GMMA) breakout in the Shanghai Index has continued with the 4,100 resistance level under attack. Previously, the index spent several weeks hovering around this level, so this is most likely to become a significant barrier to further rises.
The outlook suggests sideways consolidation around 4,100, with a potential retreat that could test the uptrend line.
This is a rally and not a trend. A rally is an index rise from a single point, shown as C.
A trend is created after a pattern of rallies and retreats that provides three anchor points. The trend line is plotted through anchor points A and B. The trend is confirmed by a pullback and test of the projected trend line. This creates a third anchor point and the trend is then confirmed.
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This has not happened and it leaves the rally vulnerable to a significant retreat back to around 4,020 or the lower edge of the long-term GMMA. A fall to near this level followed by a rebound would create a third anchor point for the trend line.
The short-term group of averages is well separated, suggesting strong rally support from traders. The index is clustering along the upper edges of the short-term GMMA.
This has become a classic GMMA breakout. The short-term group of averages has moved completely above the long-term GMMA. This shows exceptional optimism from traders. The long-term GMMA has quickly turned up and compressed. Proof of long-term support from investors comes when the long-term GMMA expands as investors become strong buyers.
An index retreat to the lower edge of the short-term GMMA or to the upper edge of the long-term GMMA remains consistent with a continuation of this uptrend.
Daryl Guppy is an international financial technical analysis expert. He has provided weekly Shanghai Index analysis for Mainland Chinese media for two decades. Guppy appears regularly on CNBC Asia and is known as “The Chart Man”. He is a former national board member of the Australia China Business Council.
