Mei (00:00 – 00:35)
And Gabor, good morning. Welcome to my podcast. It's so wonderful to have you join my podcast. How are you doing today?
Gabor
Good morning, Mei. Thank you very much. Thank you for having me on the show for arranging this. It took us some time to arrange this conversation. I'm quite okay. It's a busy morning. I am in Europe, but I work a lot in the Asian time zone. So usually most of my work happens in the mornings.
Mei
You are in Budapest, right?
Gabor
I am in Budapest, Hungary indeed, yes, in my home office.
Mei
Yeah, great. And Gabor, could you please give our listeners a brief introduction about yourself?
Gabor (00:35 – 02:04)
So my name is Gabor Holsch. I am Hungarian, but I have spent about half of my life outside of Hungary, partly as a child, as an expat child, which is one of the sources of my interest in expat careers and intercultural leadership. Lately, I spent about 20 years in China. I established my consulting career in China, partially in Mandarin, I think, which is an interesting aspect of what I do. Perhaps we will talk about this.
I was trained in all kinds of fairly theoretical things first, languages and philosophy. And then I went over, studied international relations, and I have a graduate degree in diplomacy. I actually worked in international organizations for a few years. But then I decided that it's time to realize my old dream of settling in somewhere in the Far East, as we say in Europe. And then I was facilitating for a couple of years between Japan and China. And suddenly I set my mind on China.
In 2002, I went over to China. I thought it was for a short while, a couple of years, but finally it ended up being 20 years. And I established a company there. I established a family there. I learned an awful lot. And recently I started splitting my time between Europe, where my base is Budapest, Hungary, my birth city. And China where my base is Shanghai.
Mei (02:04 – 02:43 )
Yeah, what a fantastic journey, Gabor. And as a child already living in so many countries and travel around, I'm just curious, Gabor, growing up as a child and we call it a child expert, expert you will, you traveled with your father, your father is engineer and traveled around the world in different, live in different countries. Could you please share some memorable experiences or challenges, maybe your family faced while moving around and living in different countries? Maybe I think this plant some seeds for you to become an intercultural trainer.
Gabor (02:43 – 04:49)
It's interesting because I think some of the people who are listening to us right now, perhaps they were expat kids or maybe they have expat kids. maybe they are part of an expat family where you have little children. And then one of the things that I would like to share with everybody is a child experiences the world when you travel in a completely different way from an, from an adult, from a grownup, because children don't really know the significance of geographic distance. You don't really know what the globe looks like. And whether you move 500 kilometers away or 5,000 kilometers away or more, basically you just experience being taken away.
Two of the differences that made a very huge impression on me, which is I think useful for everybody who moves families across the world, was the climate and the food. So wherever we went, I really don't understand. Sometimes I need my parents' help to remember or to recall where we were exactly. But I always remember what it felt like, if it was dry or rainy or if it was hot or cold, if we were in the desert or a forest, this is one thing. And the other thing is I remember what we ate, and what we drank and you know the smells when you go to the marketplace. And some of this childhood experience was in the Middle East, which, which is very heavy on the senses, so to speak.
And this is, I think, uh, one thing that it does to you. It turns you into a relativist because you, you always appreciate the differences, how differently people cook the same ingredients. Like there are potatoes and onions and meat everywhere in the world, but they create completely different dishes. from it. And then the other thing is when you move to another place, then you start missing what you had in the previous place. I think everybody who's moving in the world has some kind of nostalgia to something from a country where they lived before.
Mei (04:49 – 05:24 )
Yeah, fantastic. And Gabor, I can imagine it must be for a child, you also develop a great adaptability and flexibility. And when you try to adapt to different food, different smells and different culture all the time. And did this experience also impact you to really become a cross-cultural trainer and to bring people from different cultures together to work together?
Gabor (05:24 – 07:41)
Yes, I think in some respect, it makes you more flexible. In another respect, it makes you more impatient with certain things. So you're more flexible because simply you're exposed to more experiences. So for example, whenever I'm in the Middle East again, after my childhood, when it hits me with a sort of deja vu from my childhood.
But I also remember when we were in our early 20s, I was backpacking with some of my friends who grew up in Hungary. And then we turned the corner in the Middle Eastern city and let's say a train of camels came across us. And of course, friends who grew up in Europe, they started pointing like, look, camels, camels. And to me, it was nothing out of the ordinary. I said, of course there are camels. We are in that part of the world. So I wasn't shocked as you would be and for instance, right now in Europe, immigration is a huge issue, and then a lot of Europeans have a very strong emotional reaction to people who are in European cities and wear a traditional outfit from another part of the world. Let's say from the Middle East, from Africa, from India, they are dressed in a completely different way. Obviously, it hits me less than a lot of people who are not used to these kind of visual experiences.
But on the other hand, I can tell you that it also makes me impatient or inflexible in certain regard and specifically when it comes to people from very different cultural backgrounds being in the same space, I am perhaps more upset when I see people differentiating between these different people. So I really become very critical and annoyed when I see people engaged in conflict just based on who comes from where. So when people become very sensitive, when people just find themselves on two sides of a very sensitive division line, I really don't relate very well to it.
Mei (07:41 – 09:07)
Yeah, certainly, sure. And Gabor, I just read your book, Dragon Suit. It's really, yeah, fantastic. Yeah, so let's show both of the books together. Yeah, I got such a lot of insights about many aspects of doing business in China. Really, I got such a lot of light bulb moments. So I think I can really recommend this book to everybody. If you want to learn about China, about the future of China, or engage with Chinese people, I can really highly recommend you to grab this book. Gabor, people can buy it on Amazon, right?
Gabor
Yes, that's right. Amazon, Barnes and Noble, or if you have regional online bookstores, you will usually find it.
Mei
Yeah, so Gabor, and what I really love your book is I'm a quite a visual thinker. I like to think the visual and imagine things. So you used quite a lot of vivid visual sentences to describe doing business with China. So I just want to get into a few of them in a minute. But before I get into that, I want to just ask you, what really, what inspired you, Gabor, to write this book?
Gabor (09:07 – 13:26)
Well, Mei, first of all, thank you very much for your endorsement because due to your heritage, due to your education, due to your profession, you know way more about this topic than the average reader will. There are lots and lots of things which need no explanation to you. So if you took away so much from the book, it is a huge compliment to my work.
One of the things that I like hearing is that people who have been in the country, in China, for decades sometimes. The other day somebody emailed me who said he'd been in China for 30 years and then he sent me a couple of bullet points of what he liked in the book. So this is amazing because it means not just somebody who, let's say looks at China from the distance, can carry away something from it.
The story of the book itself is, I am the kind of writer for whom a book is not a business plan. You know, I'm not one of those smart people say this topic is trending now. And if I write a book on it, then it's going to take me there. It's more like, uh, one of my mentors in creative writing called it. Voices in your head, basically things that when I listened to news podcasts over breakfast, which is my habit. And I don't know if you know this feeling when the, when the newscaster tells you a story like.
right now, for example, why Gallup, the global research institution wants to close its China offices. And then you start in your head to basically create a dialogue with what's going on the podcast. And this is something that I regularly do. And this was the origin of the book.
China is not an easy place to work with because if you imagine the border of the country as almost like, let's say, a system of information where there are channels of information in and out, the intensity of information in and out is very low. So it means people in China don't know enough about the rest of the world, and people in the rest of the world certainly don't know enough about China.
And I found myself in this position of hopping in and out, both virtually and physically, and hearing things in China, which people outside would really need to hear. And then hearing things in the rest of the world about China, which I think people who work in China, including locals and expats, would really want to know. But the tendency is that foreigners who work in China, they get settled in China very often. It means their empathy towards the rest of the world starts fading.
And that's why I was in this kind of situation when I was making a speech at a conference in Europe where I was meeting clients at the headquarters in Europe, because most of my clients are large European multinational companies, I just said, I wish I could hear my conversation a week ago with this Chinese executive for a large Chinese firm or somebody who worked for the same multinational company and the other way around.
One way to bridge this is a book, because then basically the message stays out there. It reaches much more people than me telling people something at a meeting. And also a book has the certain kind of authority that somebody telling you something doesn't. And that's why those people, and certainly you who have already read the book can see that I think it's a relatively entertaining book about China, but you can also see a lot of footnotes. It's not just because of the inherent fear of authors these days of being criticized if they don't quote reliable sources, but it's also because I wanted to show people this information is out there. You don't have to be in China and talk to CEOs in order to know the country a little bit better. I think we can go back to what we said about prejudices and being a little bit impatient with these prejudices. I just wanted to bridge this kind of information gap between China and the rest of the world.
Mei (13:26 – 14:10)
Yeah, you did a great job, Gabor. You provided such rich resources about all kinds of information. And thank you for that as well. And Gabor, just like I just mentioned. I really enjoyed your metaphors. So I would like you to elaborate on a few things I picked out and maybe our listeners can through this metaphors and again can get a visual understanding of doing business in China, and Maybe they can remember those metaphors and apply those knowledge while doing business with China.
And you have written, “Do as the Chinese do, namely crossing the river by feeding the stones.” And could you please give some examples to elaborate this aspect?
Gabor (14:10 – 20:49 )
Well, yes, first of all, the metaphor that you, or in Chinese, we call them the cheng yu, this proverb of crossing the river by feeling the stones. It's actually, usually when they quote, they quoted from Deng Xiaoping, who was the leader of China quite a few decades ago at the time of the beginning of the reform and opening up. Obviously, people like Deng Xiaoping were educated people who took this metaphor from somewhere. I'm not aware of the exact origin, but Communist Party leaders, they usually borrowed from ancient Chinese culture. I think this metaphor is very typical for not only for the attitude of Chinese people to business, but also a successful business attitude to China from anybody who is trying to get on well.
Please remember, the beginning of the discussion that I am somebody who comes from theory. A lot of management consultants and executive coaches like myself, they actually come from the practical side of business. They were multinational managers, executives for many years, or they were a banking expert, they were a lawyer, they were an engineer. I didn't come from any of these fields. Actually, I was a philosopher first. I was a linguist, then I was an international relations practitioner. Then when I went into diplomacy, it was a little bit more practical.
So perhaps I sense more than many people who are in the corporate or consulting industries that there is a huge mismatch between what people try to understand about China and then how they solve problems when they do business with China. And specifically, too many foreigners, they try to prepare for business in China based on these historical and very general, almost stereotypical sound bites, like Confucian society, like harmony, like the kind of hierarchy that they think Chinese people follow, the concept of Guangxi, the concept of face or “mianzi”.
And then they go into China and then they find that in how do you say, in a better situation, they find that these big picture concepts are not very useful because simply Chinese people refuse to behave according to these patterns of behavior. Or in a worst case scenario, they basically keep trying to do business with China based on these patterns.
And so there is a serious mismatch. And I'd never tire of telling people that I coach or train that the kind of traditional Chinese culture you have in mind is in China, but usually is not in the 25th floor meeting room where you are talking to people who are very competitive, they had to prove themselves, they work in a fairly ruthless and very dynamic economy. So they are not going to be the obedient confusions that you expect.
But then there is a question that, if these big picture templates don't guide you in doing business with Chinese people, then what? And that's where a lot of international business people completely lose their bearings because they say, well, if I don't have this kind of guidance, then I must accept that cultures are confusing, chaotic, and there is basically no comparison between, let's say, my Chinese counterparts and Western counterparts.
And that's when I like to give them a couple of very practical templates for doing business in the Chinese people, the relatively short attention span that people have in large Chinese cities because everything has to be done yesterday, basically. The flexibility because Chinese economy is changing so quickly that successful Chinese people had to be flexible for decades. This is how they imagine successful business, so to speak.
The changing landscape, and this is one of the problems in large multinational companies that the executives who accumulated a decent level of experience with China five or 10 years ago, they will find that experience outdated. And then they come back to a completely different kind of China. The level of technology in China is completely different. What China can offer for an international company, completely different. What local governments, what local companies expect from international business people. Completely different today than five years ago.
And this is why I use these metaphors because this kind of visual language, which I also love, and we are very similar to each other actually, this visual language helps people, right? So they look at the Chinese counterpart and then they say, okay, wait a minute, what they need from me is not harmony and face. What they need from me is speed and flexibility, completely different.
And what does it say, cross the river by feeling the stones? It means when you're on the left bank of the river and start crossing, you don't know what's in the middle. You cannot go in with a perfect plan. And even if you go in with a perfect plan, you are going to meet a Chinese business person in the middle of the river and you have to replan because they have a different idea of what this partnership is all about.
So keep your eyes open because you can slip and fall and that's the end of it. But also stay vigilant, be mindful that, let me put a sentence into the sentence. I work with European companies. Most of the European countries, they have a much smaller economy than China. So the balance is completely off. The size of the market is completely off. It's a European company that sells a million bottles of wine a year, it's already very successful. In China, that's a Tuesday in one city. So you have to keep learning while you're crossing that river. I hope this is helpful.
Mei (20:49 – 21:27 )
Yeah, sure, certainly. It's a very programmatic way of approaching the business. And just take one step forward and adjust yourself and feel where I should put the second step, just like you explained. And also at the other part of the book, you also mentioned about the leading cross-culture. And you have a very, again, another nice metaphor. Leading cross-culture, is a bit like playing badminton in the windy weather. And could you please give some examples or elaborate on this vivid metaphor?
Gabor (21:27 – 26:31)
Yes, in order to be successful across such dramatic cultural differences, as let's say China versus Europe, China versus United States, China versus Australia, but even I work with Japanese officials and executives who work with China, is to understand a little bit about the psychology of high-level cross-cultural interaction. I say high-level because if you learn cross-cultural communication skills for tourism or for being a student, your primary goal is to reduce conflict, not to upset the other side.
But in business, there is a higher purpose, so to speak, because there is your business goal. You have to deliver. If you don't deliver, just reducing conflict and understanding each other, it's not going to help because it's not sustainable as a business. Now, one thing that we have to know about high-level intercultural interaction, is by the time those two counterparts meet each other, both of them have become successful in their own culture. So they were reinforced in certain kind of behaviors and they decided they understand this, or if they don't, then they know who to ask. And they got fairly consolidated in these kinds of behaviors, right?
And then on a fairly high level of business interaction, these two people, interact with each other and they just have different templates for success. And if both of them adamantly insist that the other side uses their idea of business success, which comes from their culture, then at least we have no results, but we have constant conflict as well.
So one of the things that is very important to understand is what I call in the book, the boss baby phenomenon. It is the phenomenon that somebody who's advanced in years, let's say, could be in their 40s, could be in their 50s or higher, and somebody who already knows themselves as a successful person has to accept that they have to learn. And I don't mean high-level strategic skills because this is when I work with CFOs, CEOs, VPs, members of the board. They think, okay, okay. So I understand I have to just learn some very sophisticated intercultural strategy skills. No, no my friend, you will have to learn what to wear in the morning. You will have to learn how to enter a meeting room. You will have to learn how to eat, which is one of the ways to lose face, to make a fool of yourself in Asian countries for European and Western people. You will have to learn if you enter that meeting room and you sit down, how to sit. In many Asian societies, it’s not polite to cross your legs, to lean back on the chair. You have to be careful with eye contact, for example. You have to learn who sits where. In many Asian societies, the hierarchy at the meeting room is expressed in a completely different way from Western ones.
But also you have to learn, for example, how you relate to people who work for you. Because in every culture, a team is a community. But in some cultures, they imagine a team like a family. And in other cultures, they imagine a team like a football team. Completely different proposition. In families, relationships are unconditional. Even if you make a mistake, the rest of the team will either help you correct that mistake or, and this is a problem for Westerners in Asian societies, including China, that people cover up for each other, out of sheer need to help. I mean, we are one team. If a member makes a mistake, the team made a mistake and we want to avoid that, or at least we don't want to make it too obvious. Whereas in the Western idea is more like a sports team where you are a member of the team based on your own merit and there is a lot of internal competition as well. Because even though we are team members, we all want to be the superstar team players.
So this is why people need a certain amount of humility, which is really not easy in the case of the people I work with, because they are already very successful. I also work with Chinese people who rise to the international hierarchy of foreign firms. And China is a market where you can get very high because the local market is very big, and suddenly you are promoted into an international position. And again, they have to be very humble. Because running an international business is not the same as running a domestic business, even if the domestic business is worth 3 million euros, 3 billion sometimes.
Mei (26:31 – 26:58 )
Yeah, yeah, so interesting insights about this and really very practical from your personal experience. And you also mentioned in your book that actually for a lot of foreign experts or foreign managers, they can also learn really a lot from this Chinese manager at multinational firms. Could you please share some advices with us for foreign managers and about learning from the Chinese managers?
Gabor (26:58 – 31:55)
So when it comes to learning from China, I would split it into two parts, the hard skills and the soft skills. The hard skills are technologies where China, I'm not saying it's necessarily ahead of other countries, but can show something that is worth learning.
For example, in hot topics these days, like new energy vehicles and self-driving vehicles. Since China had to replace its vehicle park very quickly, in the 1990s, 2000s, China originally adopted a relatively outdated technology. We mentioned just now the Volkswagen Santana taxis around the Olympic games in Beijing in 2008. China adopted those technologies. Those cars, they looked a little bit like our childhood cars to German people, to Westerners.
And that was because it was an effective way for China to get a lot of cars quickly from the Volkswagen company. But then as technology advanced in China as well, they basically replaced almost the entire car park. And now if somebody goes to Beijing, they are going to take a BYD taxi or they are going to take a NIO taxi. And there's really futuristic vehicles. Now, what a lot of international managers want to learn is how to do this kind of, how to manage this kind of revolution because now it's Europe's turn to replace an entire generation of vehicles here. And really there is no experience in Europe how to do that because so far it was a steady, slow evolution in terms of vehicles. Or how end users experience these kinds of radical changes. So this is one part.
Or if we look at artificial intelligence and advanced data tools. In Europe, in the United States, in Japan, people have no experience with the level of invasion of artificial intelligence technology in their daily lives as Chinese people do. Because China has used these tools for a very long time in anything from guiding traffic to, let's say, internet connected, household appliances. Every single Chinese friend of mine has a smart speaker somewhere in the home and so on.
And also the kind of approaches to business like lean and agile where China has been ahead of the West or of Japan or South Korea, exactly because there are so many changes. They are so dramatic. This is a planned economy. So political leaders change raw material prices, legislation, entire industries, like the five year plan, you know, it changes the funding. They say, okay, now solar technology is out and artificial intelligence and robotics is in. So Chinese business people learn to be very flexible and this is something that now Westerners would like to learn as well, because these upheavals are coming to places like Europe, Japan, the United States and so on.
But also international business people want to learn the human side of how to manage this kind of flexibility. this kind of radical disruptive change from within the company. And they want to learn from companies like DJI whose secret is flexibility and they basically dominated the commercial drones market in just a couple of years. They want to learn from the big tech companies in China, the gaming companies like Tencent, these kind of huge tech empires like Alibaba because their internal cultures, Learning, it doesn't necessarily mean that they need to copy the Chinese way.
It can be a good example or a bad example, but international business people would certainly like to, for example, to learn from Chinese tech companies how to use advanced technology, basically social technology supported with AI, to delegate tasks, to measure performance, and to create differentiation between different levels of performance, basically great workers and not so great workers. In many Chinese companies, this is automated to a level that Europeans, Americans, Japanese would be very uncomfortable with, but it's coming, whether they want to or not. So China can be a great testing ground.
For medical technology, for example, medical testing, China is the biggest testing ground in the world because there is so much data. Regulation is friendlier to the medical industry engaging in testing than in many other markets. So that's why still a lot of managers want to come to China to gain insight into something that is not available in their home markets.
Mei (31:55 – 32:12)
Yeah, so interesting. Thank you, Gobor. If we think about what you just mentioned, how people can learn from each other, what would be the most essential skills and qualities that experts or business people should have to navigate the future of China in the coming years?
Gabor (32:12 - )
Well, let me put together a kind of bad news, good news sequence. The bad news is going to be how the world is changing. And the good news is going to be what business people can do about it to successfully engage China in one way or another.
The bad news is that obviously global mobility has dropped significantly. It's, it has two elements. One of them was the pandemic and the other one was political situation. Very often people like to call it geopolitics, which gives me a kind of deja vu from my diplomatic years. So what's happening right now is that foreigners who would like to go and do business in China, either as business visitors for just two weeks, or as expats who could move to the country for several years, they are going to arrive in a completely different environment now than let's say until five years ago.
Because although in terms of the percentage of population, the number of foreigners in China is absolutely insignificant. So even at the height of foreign population in China, there were about a million foreigners in China. So just in comparison, there are three times as many foreigners in Tokyo itself, not to mention the entire, so in one point something four billion people. A million foreigners is really absolutely insignificant. There are more people working for State Grid, you know, the electricity company in China than the number of foreigners in the country.
But still, in these top five cities, including places like Beijing, Shanghai, Guangzhou, including increasingly places like Chongqing, foreigners, they had a community of other foreigners they could rely on. Because even though it benefits you to speak the local language in any country, but let's face it, the typical foreign business person is not going to learn Mandarin just to do business with China. This is why the Chinese government started special development zones, because they wanted to create cosmopolitan hubs within China.
Now, this kind of foreigner economy has taken an enormous hit, first for political reasons, then because of the pandemic, and then for political reasons again. So foreigners who arrive in China right now, they are going to find much less, much fewer international companies to provide service to them. It's harder to find a good interpreter. It's harder to find a visa agent. It's harder to find, let's say, a company that provides you with meeting venues when you are going to different cities. And it's just because so many international people and companies left the country. So this is definitely bad news, so to speak.
Also, the approach, the attitude towards foreign business in China has changed dramatically. With programs originally like Made in China 2025, which was initiated around 2015, you know, when we were 10 years away from it, there is a very strong preference for self-reliance in China. So that means it changes the attitude not only to foreign investment, but the individual foreigners as well, when many foreigners who have lived in China for a long time sense this difference.
Now come the good news. Is that although you have to be very careful and you have to select foreigners who go to China in a different way, but there are still an awful lot of opportunities. And if you select people carefully, then you can, companies can take advantage of those opportunities. So basically if five years ago, 10 years ago, if you wanted to send an international business people to China, you had to send a technical problem solver. Today, you have to send a networker. (36:00) The international manager who negotiates in China or runs the local Chinese branch doesn't necessarily have to provide the technical solutions because there are people in China who provide the technical solutions already.
They could be local Chinese workforce. They could be foreigners who have been in the country for 20 years, but you know, this kind of know-how about how to solve problems is not so badly needed in China anymore. But because of the sharper, more challenging social and political environment, not to mention the language, not to mention the knowledge of local things, like how to open a bank account, how to register a company, you need somebody who builds a good network, who is flexible, who is politically sensitive as well so that they don't create unnecessary conflict. That means that very often the person you want to send to China is not necessarily the mid-career professional who already has a lot of experience in China. Very often a young professional who speaks fluent mentoring is a better choice.
Now, another good news is that simply due to the fact that the doing business in China or doing business with China is definitely not the same thing. So basically what is happening now is it's easier to work with China remotely. A whole infrastructure of doing business with China from neighboring countries has been built up because a lot of high level managers who run businesses in China, they don't necessarily want to be in China. So during the pandemic, they started running Chinese businesses from Singapore, from Thailand, from Hong Kong, which in terms of key indicators is not necessarily the same environment as mainland Chinese cities. So now you can actually, if you want to engage China, you want to start a brand in China, or you want to provide services in China, let's say legal services, consulting services, you can go much further by virtual means than five years ago or 10 years ago.
And then when I prepare international managers, I prepare them completely differently. If they want to actually be resident in China or visit often, or they want to do business with China, primarily from outside of China, it's a completely different proposition because you keep in touch with different people in different ways.
Mei (38:43 – 39:46)
Yeah, so insightful this, I think your advices will help a lot of people and companies to just get a better understanding about how can we choose the right people to go to work in China, or with China. You also mentioned just now about language skills. You speak fluent Mandarin Chinese, and you also train people in Chinese. And how does language skill help you to build your business to really engage with Chinese people more than other people who don't speak Chinese?
Gabor (39:46 – 45:19)
Yes, I mean, there are a couple of things to be said about this. So first of all, yes, I, one of my big steps forward in my China career was when I'm in 2008, I actually passed the certification exam in mainland China to become a local certified management consultant. So basically it's the, is the degree in Chinese, which is called a 国家注册管理咨询师. So basically you get a national certification to work as a management consultant in Mandarin. And it has been amazing because it is a networking tool. It is something that you can, when you're selling your consulting services, it's definitely an advantage.
On the other hand, you also have to be careful because China is one of those places where international business and international people are not very closely integrated into local society and local business. This is the original idea of special economic zones. That international companies, they operate in these kind of bubbles. Like if you incorporate a company as a foreigner in mainland China, you incorporate a so-called Wai zi gong si, right? Like foreign invested company, you don't incorporate a local company.
If you're a Chinese person who speaks fluent German and go to Germany and start a company, you don't start a foreign invested company, you start a German company. So the integration from the very beginning of you as a foreigner into the local business reality is much deeper than the integration in China. So even as a Mandarin speaking management consultant, when I meet my Chinese management consultant friends, their clientele is completely different. And then I find out, let's say my Chinese consultant friend says, I do projects for the Agricultural Bank of China. I do projects for a government funded think tank to 10 cent and whatever. To me, it's like a dream, you know, for an international consultant, it's very difficult to achieve decent work. I mean, you can go there and do a workshop or do a speech, but to do decent volume of work from these companies, very, very hard. But then I start talking about how I do business for BMW or Patek Philippe or Roland-Berger, and then for them, it is, tt is equally difficult. There are basically parallel economies in China.
Another thing to say is that I read, and I really don't like, articles where somebody who has 20 years of experience, 10 years of experience in China, who is very well rooted in the Chinese reality to say, well, listen, you know, if you are an international business person, you want to do business in China, just learn Mandarin. Right? I really don't like reading this for several reasons.
First of all, some of the most talented, most gifted business people are not good at languages. Sorry. They are good at mathematics. They are good at sciences. They are good at engineering. They are good at chemistry. But they are not talented in languages the same way as I am not talented in physics. So it's a bit unfair to set this as a condition. It's the same thing if you go to the Middle East and you don't want to learn Arabic or any other language. And then if we set this as a condition, it can be very counter selective. And this is a serious issue because entire countries rewire their visa policies and then they can choose, do we or don't we make a language exam part of the point system?
And if we do, it can be very counter selective. You can select out exactly the kind of talent you need in your company or a country because they don't speak the local language and they don't want to try basically. Somebody comes over from Silicon Valley, they are very good at artificial intelligence. Are they going to bother learning Mandarin? It's a very difficult language. No, a lot of people will say, ah, okay, if this is the condition, I'm going to Singapore instead. So this is one thing.
The other thing is let's remember how much money and energy China, the Chinese government, one government after another, spent on creating these hubs, these special economic zones where foreign investment can land and work under international conditions within China. I mean, that was created because they wanted international companies to support each other, right? So there is a foreign manufacturing company, that has a foreign law firm, that has a foreign HR agency. And within this kind of microcosm, English is used as a business language. And an entire generation of globally informed Chinese managers came out of these special development zones. This is very, very interesting because China hugely benefits from the generation of experts and managers who grew up in multinational companies or local internationally invested SMEs, and now they can connect China and the rest of the world.
The more we expect foreigners to use Mandarin, the more we cut off the supply of these internationally connected Chinese managers as well. So I really do understand that people wish foreigners in China would take the trouble to learn Mandarin. And it's fantastic that more and more of them do, especially young ones. But to set this as a condition and kind of judge people who don't bother to learn Mandarin. We have to be very, very careful with that because global business hubs like Singapore became so successful exactly because they did not do this.
Mei (45:19 – 45:39 )
That's a really great insights, Gabor. And to wrap up this podcast, could you please give some tips and advices for those who are looking to engage in business in China, to work with China, some practical tips for them, they can apply?
Gabor (45:39 – 48:48 )
Well, first of all, I would tell everybody if you consider working in China, and especially those people who previously have worked in your home economies, and now that you want to, you want to pursue a dream in China, the hardest decision is just to leave your home country. After that, I would say three quarters of the challenges you experience in China are not China specific. They are, you might as well just go to Australia or Mexico, it would be the same way. You know, the hardest thing is to be cut off from your friends, cut off from your family, eat what you consider strange food, trying to make new friends, trying to get used to a different kind of climate. But these are not China specific challenges. And yet, if you read Dragon Suit, you are going to see that these were among the top challenges of people who moved to China.
And then again, you need a certain level of curiosity, you need a certain level of flexibility, you need a certain level of desire for adventure to live in a country like this, because, I mean, let's put it this way. Shanghai is a city of nearly 20 million people. Behind me through this window, you can see Budapest, which is one-tenth of that. And beyond that, my country, Hungary, which is 10 million people altogether, not even that. So you can imagine the change of scale in terms of daily life in terms of the responsibilities that somebody working in China has. I mean, you upgrade yourself 10, 20 times how many people you manage, your geographic area of responsibility, the value of money you have to deal with and so on. Let me tell you, foreigners who come back from Shanghai, including myself, now I spend my time in Budapest. Sometimes it looks like a village. Sometimes it's nice, you know, because I can walk in that direction 10 minutes and I am at the lake with like a ducks in it.
But also if you want to build a business, you have to work much harder to reach out to the same level of decision makers than I had in Shanghai because the concentration of business was much higher. So be ready for this kind of jump up.
On the other hand, once you make it and if you even work in a place like Beijing or Shanghai or Guangzhou, even for a couple of years, the level of learning, the level of experience that you experience there. So you literally, you will have to go back to your home country and then you will digest it for years. And it will give people a huge advantage in your home markets as well. Because once you manage to do it, and I have this joke in the book that Frank Sinatra would sing about Shanghai, not New York these days, because if you make it there, then you make it anywhere. Really, people learn so much and then they come back as battle-hardened business decision makers and they can teach a lot at home. And that's why I write in the book, Once a Dragon Suit, Always a Dragon Suit. These people are the best sources of China knowledge in international headquarters.
Mei (48:48 – 49:40)
Thank you so much, Gabor, for the great tips and advices. I think in the Dragon Suit, people can find a lot of golden tips to apply in the business and to be successful in China. So I can really recommend everybody go to Amazon and grab the book and enjoy it and get things out, apply it to make your own business, your own journey in China successful with the tools in this book. And Gabor, before we finish this interview, could you please also tell people how can people find you and find your book online and how they can connect with you?
Gabor (49:40 – 50:36 )
Well, the easiest way to find me is just to check my full name in the podcast notes and then go online and Google it because it's a fairly unique combination of a Hungarian first name with a Danish family name. So you will find me very soon or take your favorite browser and punch in Dragon Suit book increasingly. If you just punch in Dragon Suit, you are going to see a lot of babies in Halloween costumes that look like a dragon. But if you type in Dragon Suit book, then very soon you will get to me. My favorite social media is LinkedIn. You can also check my YouTube channel. And if you just check Gabor Holst's Dragon Suit book, you are going to find one of the websites which has a contact tab. So if you click it and you type in your message, I will just get an email from you and then we can get in touch. I really like hearing from people, let's say when they listen to this podcast.
Mei (50:36 – 50:45 )
Thank you so much, Gabor, and for your time. I really enjoyed our conversation. Thank you!
Gabor
Mei, thank you very much for inviting me.