Should You Work for a Chinese Company?
As lawyers, we spend a lot of time fielding good, bad, weird, interesting, deep, superficial, and all types of other questions from people. We’re generally expected to be oracle-level wizards, a lot like people are treating AI now. In this series, we’ll share some of these questions that people ask us, along with our answers.
Prepare for Culture Shock
Quick Question. I live in the U.S., and I have been working in my industry for over 30 years. Recently, I was approached by a Chinese manufacturer that wants me to help them grow their business in the U.S. by working directly for them and investing capital in that expansion. I have both the expertise they need and a lifetime of industry contacts. I have never worked directly for a Chinese company before, and I am not really keen on investing. What advice do you have?
Quick Answer. This trend reflects a broader realization among Chinese manufacturers that survival often necessitates operating beyond China, particularly in traditional industries that are stable but not at the forefront of innovation. When considering this opportunity, you should first evaluate the complexities of working for a Chinese company, including cultural and operational differences, and the geopolitical climate that could affect the business. Additionally, assess your personal commitment and readiness to invest your own resources. It’s crucial to safeguard your professional interests and personal investment with a comprehensive employment and investment agreement, specifically designed to align with your needs and those typical of Chinese companies.
Centralization of Power in the Chinese Work Culture
Chinese business management practices differ significantly from Western styles in several key aspects. They emphasize hierarchy and centralized decision-making, contrasting sharply with the decentralized models prevalent in Western companies. In the West, initiative and input from various organizational levels are not only encouraged but also valued and frequently rewarded. This fundamental difference underscores a distinct approach to authority and collaboration within the workplace.
Preeminence of Relationships in the Chinese Work Culture
Another major difference is in the approach to relationships and networking, known as “guanxi” (关系) in China. Establishing and maintaining strong personal connections is vital in the Chinese business landscape and can significantly influence business outcomes. While Western companies also value relationships, they often put more emphasis on formal processes and merit-based evaluations.
This cultural emphasis on guanxi means that thriving in a Chinese company often requires not just professional expertise but also skill in managing and utilizing personal networks. This may be very difficult for you to do if the managers are all in China and you do not have the opportunity for meaningful personal interaction either in China or in the U.S.
Long-Term Viewpoint in the Chinese Work Culture
Chinese companies often focus on long-term relationships and loyalty over immediate results. The cultural preference for patience and steady progress, which can differ sharply from the Western focus on quick achievements and rapid performance reviews, may grind on you more than anything else. As a result, career growth in a Chinese company may be slower and based more on long-term commitment and loyalty than on quick wins. You will probably find this environment limiting and even stifling, especially if your compensation will be based on short-term market-driven metrics.
Grinding Hours in the Chinese Work Culture
Work-life balance expectations also differ significantly. The “996” culture—working from 9 a.m. to 9 p.m., six days a week—is prevalent in China, especially in sectors like technology. This demanding work schedule reflects a broader cultural emphasis on hard work and perseverance. On the other hand, Western companies often promote a more balanced approach to work and life, offering more flexibility in working hours and vacation time.
Because you will be in the U.S. and the management team will largely or wholly be in China, you will probably have more leeway in managing your daily schedule. You will still need to deal with the large time difference between the countries, but you should be able to manage that and maintain normal working hours.
Maintaining Your Boundary Lines When Working for a Chinese Company
Even though the Chinese company proposed that you work directly for them, you may want to maintain more autonomy by proposing a different arrangement. Rather than work as an employee, you could work as a contractor or through your own consulting company. Both of these options would maintain a firewall between you and the Chinese company because your relationship would be governed by a more detailed contract rather than a looser but more comprehensive employment agreement.
If the Chinese company hesitates because they want to hire you as an employee, then you can mention that U.S. employment law places significant burdens on employers. Their familiarity with Chinese employment law may provide you enough of a window to keep the relationship more arm’s length.
Good Advice From a Former Journalist in China on Working for a Chinese Company
Recently, a friend and fellow China hand, Isaac Stone Fish, wrote:
I wanted to share my thoughts on the struggle Chinese companies in the United States face trying to hire American talent. In the 2000s and the 2010s, I would recommend Americans take jobs with Chinese companies. They can be a great way to learn Mandarin, experience a different work culture, and learn firsthand the byzantine niceties of engaging with the Chinese Communist Party. The situation is different today. I do think Americans considering joining a Chinese company need to weigh the risks of that company being sanctioned, of the company following Chinese laws or norms in a way that brings it into conflict to U.S. laws, and of the negative reputation many Chinese companies now have in the U.S. labor market.
Conclusion
When deciding whether to work for a Chinese company, you should carefully consider multiple factors, especially given the unique cultural, legal, and geopolitical landscape. You should weigh the differences in work culture, from the centralized decision-making and the importance of “guanxi,” to the long hours and emphasis on loyalty. These elements can create a significant culture shock for those accustomed to Western business practices.
Especially in this election year, the evolving geopolitical environment adds another layer of complexity. Working for a Chinese company may involve navigating between Chinese and U.S. regulations and the potential reputational risks associated with such a move.
Ultimately, your decision (including whether to invest in the venture) should align with your professional values and long-term career goals. If you decide to proceed, consider establishing clear boundaries and terms to protect your interests, such as proposing a contractor or consultant role instead of a full-time employee position. By doing so, you can leverage your expertise while maintaining some level of autonomy and mitigating potential risks.
Latly, before starting work with a Chinese company, setting up the right legal and financial protections is key. Make sure to negotiate a clear employment contract that spells out your role, responsibilities, compensation, and the grounds for termination. Include specific provisions for non-disclosure and intellectual property.
For more information, see:
Chinese Manufacturers Go Abroad: New Business Relationships for a New Era
Isaac Stone Fish on the Legal Lunch Byte podcast
How to Ensure You Get Paid When Doing Business With Chinese Companies
What Do US Investment Bankers and Private Equity Groups Think About China and the Global Economy?
