The Road Less Traveled.

Effective Sino-Western Contractual Negotiation: A Cross-
                  Disciplinary Analysis
This paper was originally a thesis written for a Master of Laws at the
University of Sydney, Australia. After being offere...
“It is not easy for westerners to realize that the ideas recently
developed in the west of the individual, his[/her] selfh...
The Road Less Traveled: Effective Sino-Western Contractual Negotiation.

Table of Contents


Focus ..........................
2




                                      Focus
"The historical development of insulated disciplines housed in
segregate...
3

    1. Introduction

The Chinese 5 approach to contractual negotiation and the West's inability to
understand and work ...
4

climate,   this   cultural    obstacle   remains. 10   Resources   are   being    used
ineffectively, avoidable dispute...
5


       [2]. Man [/woman] exists in and through relationships with others. The
       goal of socialization is to train...
6


In addition, the need for effective negotiation is further compounded by two extra
factors. First, whilst the legislat...
7

1.2 The underlying thesis
Whilst there     has been    a significant    amount of consideration         on        the
c...
8


Informal         awareness   whereas         the    Chinese     predominantly      have     formal
awareness. These co...
9

2.1 The importance of perception and culture to the structure of
negotiation
Many of us either take for granted, or are...
10


content. 3 1 For culture "is not just thoughts, it is a way of thinking," 3 2 and
reveals "the collective programming...
The cyclical mode) of negotiation: P, Party; O, Opponent.



Culturally   specific    differences             in     Chin ...
12


      These ways of being contribute to the content of my-self perceptions.
      In this sense I become my ethnic al...
13


harmony in all things.


Unlike many other societies, the phenomenon of Chinese civilization, has
created a vastly pe...
14


As Geertz has noted, "culture pat terns - religious, philosophical, aesthetic,
scientific, ideological - are 'program...
15


Keesing notes, culture is an individual's "theory of what his [or her] fellows
know, believe, and mean, his [or her] ...
16


       legends, drama, folk stories, and folk songs for the peasantry. Thus all
       Chinese people were enmeshed i...
17


Chinese consciousness to the extent that it became rooted in, wha t Hall has
described as, bio-basic activities 65. I...
18

4. Cultural Perception
As mentioned above in the section on negotiation,       perception i s critical
to the negotiat...
19


are present in any given situation irrespective of cultural background, the
pattern which will dominate will vary.


...
20


when, the roles of each team member, and even, what order the team members
walk into the room. Most importantly howev...
21


Confucian values, and similar Communist values were enforced. Secondly,
because the Chinese way of negotiation works,...
22


them""; and that "the first rule in negotiating with the Chinese is the need for
abiding patience." 94 Because, the w...
23


largely diffuse Chinese attempts to use the Westerner's ageric monochronic
tendencies to their advantage. 99



4.3  ...
24


Whilst, it would be unwise and, in Halls vocabulary, "incongruous", to attempt
to imitate the content of the culture ...
25


according to accepted customs and rules of conduct, not how to enable                 him
[or her] to rise above them...
26


emphasis of harmonious relationships. 114


Therefore, a Western negotiation team is perceived as           an    out...
27

6. Sino-Western Communication
Having "pattern awareness", referred to by Hall, and an alertness to the
distinctive qua...
28


all tightly knitted into one another through China's Confucian heritage. Also, as
explained in the discussion on Sino...
29

6.1 High-context and low-context communication
As referred to above, the collectivistic -individualistic orientation o...
30

      point, in effect putting all the pieces in place except the crucial one.
                                       ...
31


contrasting expectations about the consequences of direct versus indirect
approaches to potentially volatile situatio...
32

The benefit of such a comparative analysis in China's case is particularly
useful due to it's unique "static " 1 5 4 l...
33

                                                  156
       fair social order be achieved.

Furthermore,           th...
34

          162
peace."         Litigation did not support the Chinese moral absolute. Nor does
it currently do so.


In...
35


settling points which may cause suspicion or doubt; of distinguishing where
there should be agreement, and where diff...
36


Therefore, relationship not law became the linchpin of society. Similar to the
Gemeinschaft strain, traditional Chine...
The road less traveled   effective sino-western contractual negotiation (revised)
The road less traveled   effective sino-western contractual negotiation (revised)
The road less traveled   effective sino-western contractual negotiation (revised)
The road less traveled   effective sino-western contractual negotiation (revised)
The road less traveled   effective sino-western contractual negotiation (revised)
The road less traveled   effective sino-western contractual negotiation (revised)
The road less traveled   effective sino-western contractual negotiation (revised)
The road less traveled   effective sino-western contractual negotiation (revised)
The road less traveled   effective sino-western contractual negotiation (revised)
The road less traveled   effective sino-western contractual negotiation (revised)
The road less traveled   effective sino-western contractual negotiation (revised)
The road less traveled   effective sino-western contractual negotiation (revised)
The road less traveled   effective sino-western contractual negotiation (revised)
The road less traveled   effective sino-western contractual negotiation (revised)
The road less traveled   effective sino-western contractual negotiation (revised)
The road less traveled   effective sino-western contractual negotiation (revised)
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The road less traveled effective sino-western contractual negotiation (revised)

  1. 1. The Road Less Traveled. Effective Sino-Western Contractual Negotiation: A Cross- Disciplinary Analysis
  2. 2. This paper was originally a thesis written for a Master of Laws at the University of Sydney, Australia. After being offered the opportunity to turn the thesis into a Phd, the author instead incorporated and expanded the insights to unify systems of human potential from around the world and define a new way to realize our potential as individuals, relationships, families, companies, and members of the human community. This unified system is called metacentering. Because the author has a deep connection with India, the system was launched there to media acclaim in 2004. We are currently preparing for global release in January 2011 together with pioneering technology to help you live more harmoniously within yourself and within the world. You can find out more at freedomsway.net Prior to the new world order that arrived with September 11 – cross- cultural understanding was advisable for effective business dealings in the international arena. It was also advisable for humanity but we rejected that need. The need was almost articulated as prophecy in 1968 by mythologist Joseph Campbell: “The difficulties posed are great. Chiefly they derive from the fact that the values of both of the opposed hemispheres, the individual and the social, are …mutually repellant. That is to say, the partisans of each banner view the values of the other side merely as negative to their own and therefore, in every attempt either to attack or to achieve concord, succeed only in dealing with their own negative projections, giving battle to their own shadows on the walls of their own closed minds – which presents a fine circus of clowns for the laughter of the gods, but for mankind with, increasing danger, a turba philosophorum that is being reflected not in a sealed retort but in the carnage of exploded cities.” 1 Developing an aptitude for cross-cultural understanding could determine our very survival. This paper will not just give you insight into the way people from other cultures see the world – it will also show you how your own culture has shaped your perception and it will show you ways to engage others with superb and profound result. 1 Campbell J, Creative Mythology, First printed 1968,1991 (reprint edition), Arkana, pp314-315.
  3. 3. “It is not easy for westerners to realize that the ideas recently developed in the west of the individual, his[/her] selfhood, his[/her] rights, and his [/her] freedom, have no meaning whatsoever in the Orient … They are in fact repugnant to the ideals, the aims and orders of life, of most of the peoples of this earth.”2 “Human beings are drawn close to one another by their common nature, but habits and customs keep them apart.”3 2 Campbell J, Myths to Live By, 1993, (reprint edition) Arkana, p61. 3 Confucius
  4. 4. The Road Less Traveled: Effective Sino-Western Contractual Negotiation. Table of Contents Focus ...................................................................................................... 2 1. Introduction ........................................................................................ 3 1.1 The background ................................................................................ 4 1.2 The underlying thesis ........................................................................ 7 2. The Negotiation Process Per Se ........................................................... 7 2.1 The importance of perception and culture to the structure of negotiation .. 9 3. Chinese Perception and Comprehension ............................................ 12 3.1 The Role of Cultural analysis in Sino-Western negotiation ..................... 14 4. Cultural Perception ........................................................................... 18 4.1Formal, informal and technical patterns of awareness. .......................... 18 4.2 Time ............................................................................................. 21 4.3 The relevance of perceptual differences t o negotiation ........................ 23 5. Individualism and Collectivism .......................................................... 24 6. Sino-Western Communication ........................................................... 27 6.1 High-context and low-context communication ..................................... 29 7. The place of law and the basis of contractual obligation ................... 31 7.1 The Structure ................................................................................. 32 7.2 Relationship-The basis of contractual rights ........................................ 35 7.3 Contemporary contract dynamic ....................................................... 38 7.4 The future role of traditional attitudes towards Sino - Western contracts 42 8. Conclusion ......................................................................................... 44 Bibliography .......................................................................................... 48
  5. 5. 2 Focus "The historical development of insulated disciplines housed in segregated departments has produced a legitimating ideology that in effect suppresses critical thought.”3 As a result, it has also stultified the evolution of multi faceted disciplines, such as the science of bi-cultural negotiation. Similarly, it has blinded the insulated discipline of Law and, especially, the study of its role in other cultures. This ignorance cannot continue. It is the product of an attitude which is antiquated and obsolete. As the global village shrinks, and consequently, crossing cultural boundaries becomes a habitual affair, we will have to wake up. The People's Republic of China (hereinafter referred to as "China") is centrally relevant to this perspective for two reasons. First, since the adoption of it's "open door" and socialist market policies, its relevan ce to international political and commercial affairs has had an almost exponential growth rate.4 Secondly, and more specifically, the orientation of Chinese law, culture and psychology is, in effect, polar to the West. Therefore, the Western lawyer/negotiator has before him or her a vitally important challenge for which he or she is unlikely to be prepared. 3 Giroux H, Shumway D, Smith P & Sosnoski J, The Need for Cultural Studies: Resisting Intellectuals and Oppositional Public Spheres, (internet) http:eng.hss.cmu.edu/theory/need.html. 4 In six years, from 1991 to 1996, foreign direct investment in the PRC has grown from 4.4 billion to 42 billion dollars (US), (World Bank: World Investment Report, 1996, at 56) making China the second most popular country for direct foreign investment in the world.
  6. 6. 3 1. Introduction The Chinese 5 approach to contractual negotiation and the West's inability to understand and work with it, has proven to be a significant stumbling block. A s one leading commentator states, cultural differences i s "[u]nquestionably the largest and possibly the most intractable category of problems in Sino - 6 [Western] business negotiations. " Ignorance of the cultural implications to 7 the Sino-Western negotiation process can be fatal. A s has been said of the Japanese-Western experience An attorney's failure to appreciate or become familiar with the importance of the cultural influences ... often reveals itself at a critical 8 stage of the transaction, and the results can be disastrous. Whilst, China i s modernising rapidly, as i s its previously anorexic commercial legal structure, 9 and a sense o f predictability and reliability has s l o w l y begun to permeate the legal political 5 In referring to the Chinese approach I do not inte nd to expound a stereotype but, "to recognise that people do their business, act out their roles, take up their attitudes in concrete, though complex, contexts that shape them and are not only shaped by them." - Tay AE-S & Leung CSC, The Relation Between Culture, Commerce and Ethics, in Tay AE-S & Leung CSC (eds), Greater China: Law, Society and Trade, 1997, LBC, p4. 6 Pye L, Chinese Negotiating Style: Commercial Approaches and Cultural Principles, Quorum, 1992, p23. 7 Cf East Asia Analytical Unit - Department of Foreign Affairs and Trade, China Embraces the Market, 1997, p188. 8Walters RE "Now that 1 Ate the Sushi, Do We Have a Deal" - The Lawyer as Negotiator in Japanese - US Business Transactions, (1991) 12 North Western Journal of International Law and Bus iness 335 at 335. 9 E.g. Company Law of the PRC, adopted 1993; Economic Contract Law of the PRC, amended 1993; Foreign Trade Law of the PRC, adopted 1994; The Law of the PRC on Foreign Equity Joint Ventures (1979), the clauses of which were vague and gener al (characteristic of Chinese drafting), and hence very unpredictable, was revised, and adopted on April 4 1990; Law of the PRC on Chinese-Foreign Co-operative Joint ventures, adopted and promulgated in 1988 - The implementing Regulations were not approved and promulgated until 1995; Rules for the Implementation of the Law of the PRC on Foreign Capital Enterprises approved and promulgated in 1990; Income Tax Law of the PRC Concerning Foreign Investment Enterprises and Foreign Enterprises approved and promul gated 1991; Provisional Regulations of the PRC Concerning Value-Added Tax, adopted and promulgated in 1993; Provisional Regulations of the PRC Concerning Business Tax, adopted and promulgated in 1993.
  7. 7. 4 climate, this cultural obstacle remains. 10 Resources are being used ineffectively, avoidable disputes are occurring at both the pre and post contractual stage, and most importantly a substantial amount of capital is being used inefficiently and the capacity to make more is being inhibited . Moreover, the situation could intensify, for as Rubin and Sander observe, in the wake of global inter-dependence, "the transactions are increasingly complex and multicultured. Hence attempts to resolve disagreements through negotiation increasingly require sensitivity to the possible contributing role of 12 cultural differences." For these reasons, this paper will define these cultural implications, and demonstrate how they impact on the Sino -Western negotiation dynamic. In addition, it will refer to the inextricable connection between law and the cultural system within which it operates, which on any substantive level is ignored by most commentators. 1.1 The background At the outset, it is helpful to be acquainted with the basic psychological themes underlying these cultural implications, which Bond states "can be used to make sense of a variety observations about Chinese behaviour." 12 They are, inter alia: [1]. Laws negotiated by men [/women] are rigid, artificial, and insensitive to the changing circumstances of life. The judgement of wise and compassionate men [/women] is a better way to regulate personal, political and social relationships. 10 For example as Scogin states: "The continuing effect of traditional values and assumptions on current practices is apparent to those engaged in the process of negotiating and effectuating contracts in China today." Scogin Jr HT, Between Heaven and Man: Contract and the State in Han Dynasty China, (1990) 63 Southern California Law Review, 1326 at 1327. 11 Rubin JZ & Sander EX Culture, Negotiation and the Eye of the Beholder, (July 1991) Negotiation Journal 249 at 249. 12 Bond MH, Beyond the Chinese Face - Insights from Psychology, 1991, Oxford University Press, p118.
  8. 8. 5 [2]. Man [/woman] exists in and through relationships with others. The goal of socialization is to train children for lifelong interdependence with others by developing skills and values which promote harmony. The family is a fundamental cradle of sure sup port across time and requires especial commitment from its members. 13 In this behavioural vein, there are two universally recognised cultural variants in Sino-Western negotiation, central to this study. The first, is the Chinese distaste for legal considerations, and their pref erence for moralist and ethical principles. 14 This is prevalent in, the relationship between the parties as a source of obligation, the point in the contracting process at which agreements become binding, the personalised nature of negotiations, the insist ence on flexibility in responding to changed circumstances, and the effort of dispute resolution a t facilitating compromise and maintaining relationships. 15 The second, is the protagonist role played by politics, economics and social relations in the Chinese negotiation process, which the West, by comparison, ignores. As argued below, whilst a balance, which allows for commercial predictability, needs to be struck between the culturally bi -polar attitudes towards law, it is the West which needs to alter its approach to the latter. This is demanded by a legal, commercial, all-pervasive political 16 and social climate different to its own. 13 Bond MH, Beyond the Chinese Face - Insights from Psychology, 1991, Oxford University Press, p118. 14 For example, as one respected observer of Chinese commercial practices states: "The Chinese are not used to and do not like to sign long complicated contracts that attempt to tie absolutely everything down. They will frequently refuse even to read a lengthy contract, insisting that it be simplified and shortened." And in addition: "To the Chinese, a contract is a commercial agreement, not a legal document, and should not be the last word on anything. You might say that they sign contracts only as formal confirmation that they intend to do business with you, not how they are going to conduct the business." - De Mente Boye, Chinese Etiquette and Ethics in Business, 1993, NTC, 121. 15 Scogin Jr HT, Between Heaven and Man: Contract and the State in Han Dynasty China, (1990) 63 Southern California Law Review, 1326 at 1327. 16 Pye L, Chinese Negotiating Style: Commercial Approaches and Cultural
  9. 9. 6 In addition, the need for effective negotiation is further compounded by two extra factors. First, whilst the legislative structure has improved, and there has been an attempt to install adequate enforcement mechanisms,17 the commercial legal structure is not "well understood, respected [or] integrated", and in practice "getting legal redress for failure to comply with a contract is just about impossible."18 Secondly, in a "world dominated by social relationships",19 where the style of negotiation is relational rather than transactional,20 litigation is a commercially inadequate remedy." Principles, Quorum, 1992, p23. As Blackman states Chinese officials tend "to use rulings and approvals to induce foreigners to accept certain views and to sign agreements, and then change them if they "no longer suit the interests of the ruling or approving authority or the Chinese Partner." Blackman C, Negotiating China: Case Studies and Strategies, 1997, Allen and Unwin, p40 referring to a complaint made, by a business consultant and former ambassador to China, to Chinese officials attending the 1986 Australia-China Senior Executive Forum. 17 Due to the political and economic vulnerability of the local courts to the local authorities and interested parties, the Supreme People's Court requires the next-highest-level court to review any proposal to deny enforcement by a local court. - Notice of the Supreme People's Court Concerning the Handling by the People's Courts of Issues Relating to Foreign Related and Foreign Arbitral Matters, August 28 1995. 18 Blackman C, Negotiating China: Case Studies and Strategies, 1997, Allen and Unwin, p4. A former President of the Supreme People's Court described the failure to enforce court decisions as "the most outstanding problem in the administration of justice in the economic sphere." - Zheng Tianxiang, Zuigao Renmin Fayuan Gongzuo Baogao [Supreme People's Court Work Report], 1988 NPCSC Gazette No 4, at 29. Complaints about problems in enforcing judgments are a regular feature of the annual Supreme People's Court work reports. See also for example a report by the Australian Department of Foreign Affairs which says that "numerous studies highlight the difficulties of enforcing contracts in China." East Asia Analytical Unit - Department of Foreign Affairs and Trade, China Embraces the Market, 1997, p204 referring to the Economist Intelligence Unit, 1996a, Investing, Licensing and Trading: China, Hong Kong. For a more detailed analysis see Clarke DC, Dispute Resolution in China, (1991) 5 Journal of Chinese Law 245 at 263 - 268. 19 Smith C, People and Places in the Land of One Billion, Westview Press, 1991, p41. 20 Goh Bee Chen, Negotiating with the Chinese, 1996, Dartmouth Publishing Company, p3. 21 For example, due to its commitment to succeed in the Chinese market IBM "has had to bend its imperial rules...On a number of occasions, its Chinese customers have signed contracts only to come back after the merchandise has already been shipped, say they don't have the money to pay for the order, and ask that part of the shipment be given to them free, or that the price be reduced down to the amount of money they have - a common ploy. Rather than lose the business, IBM has both given additional discounts and withdrawn some of the less vital items from such orders." - De Mente Boye, Chinese Etiquette and Ethics in Business, 1993, NTC, 110.
  10. 10. 7 1.2 The underlying thesis Whilst there has been a significant amount of consideration on the content of the Chinese culture and its relevance to Sino-Western negotiation, little attention has been paid to its framework. It is through this framework, however, that we can expound certain psychological and strategic processes, such as perception, comprehension and communication, critical to understanding the Sino-Western dynamic. Thus, this paper will attempt to articulate the bi-cultural dynamic, including the precipitate place of law and relationship, in Sino-Western negotiation by reference to this cultural keystone. In doing so, it will also demonstrate how the Western negotiator may redefine his or her awareness in responding adequately to the cultural schism. It will also be tentatively suggested that certain Chinese commercial strategies, such as the notion of market flexibility, should be embraced by the West and incorporated into Sino-Western contractual planning. 2. The Negotiation Process Per Se Most lawyers are unaware of the structural dynamics involved in the negotiation process. 22 Whilst it could be said that lawyers can and do manage to negotiate in mono-cultural situations, largely unaware of the forces at play and minusthe skills that would be useful in midwifing the process, this grace does not apply to the bi-cultural arena. Awareness of the extra variables is vital. This problem is made acute in that the Chinese are collectivistic and high context communicators, contrasted with Westerners who are indivi dualistic and low context communicators. In addition, Westerners predo minantly tend to have what Hall 23 has called 22 For example see Fisher R, What About Negotiation as a Specialty, (Sept 1983) 69 American Bar Association Journal 1221 -1224. 23 Hall Edward T, The Silent Language, Doubleday, 1959, p95-96.
  11. 11. 8 Informal awareness whereas the Chinese predominantly have formal awareness. These concepts will be examined later. Clearly, there is a considerably higher probability for a serious breakdown in communication or misunderstanding between Chinese and Western parties. 24 However, despite these two major differences, and, inter alia, differences in values and rules, the structure of the negotiation processes of the two cultures are "essentially similar". 25 As demonstrated in the diagram below, "there are common patterns and regularities of interaction between the parties in negotiation irrespective of the particular context or the issues in the 26 dispute.” This is of some benefit, as it means that whilst the negotiation style may change the inherent developmental stages to which both parties are accustomed remains. There are several benefits to this, and also advantages in being aware of them, as they tell negotiators what to expect at each stage, give them guidance in planning their own strategy and a basis for interpreting the strategies of their opponents, facilitates coordination of the negotiation process with the litigation process, and prevent the embarrassment and harmful 27 effects of mistakes in timing. Furthermore, it assists in giving the two parties some unconscious sense of commonality. However, largely, the relevant similarities stop here. 24 As Pye observes: "When the cultural gap between parties is too great, the "logic" of tacit negotiations cannot prevail. Whereas the differences between ... [Westerners] and Chinese may not always seem so great, in many situations the gap is enough to cause misunderstandings. "- Pye L, Chinese Negotiating Style: Commercial Approaches and Cultural Principles, Quorum, 1992, p93. 25 Gulliver P. H., Disputes and Negotiations, Academic Press, 1979, pxv. 26 Gulliver P. H., Disputes and Negotiations, Academic Press, 1979, p64-5. 27 Williams GR, Negotiation as a Healing Process, [1996] No 1 Journal of Dispute Resolution 1 at 34.
  12. 12. 9 2.1 The importance of perception and culture to the structure of negotiation Many of us either take for granted, or are unaware of what cultural and psychological mechanisms are brought into play during the negotiation process. 28 However, it is vital to acknowledge the main mediums of the negotiation process per se, if we are to correctly place the Sino -Western considerations in their deserved critical context. Gulliver states, [t]hese matters include the interests, goals, expectations, strategies, and psychological concomitants (attitudes, perceptions, emotional dispositions, etc.) of both parties; the ambient reality of the situations and changes in it that indicate the result of non -agreement; an appreciation of the costs of the possible outcomes to each party; the limits of the effective range of consideration for the issues between them; whether and where respective expectations overlap; relevant and potentially useful norms and rules and overarching prin ciples; areas of relative strength, weakness, and tenacity; the nature and strength of outside interests and influences; and much more depending on the 29 particular parties, their inter-connections, and the issues in dispute. (my italics) For this study, the psychological concomitants, that Gulliver refers to is the most crucial aspect of the negotiation process. This is because it is the psychological concomitants that regulate our perception and comprehension of reality and consequently, as shown in the diagram 30 below, determine the success or failure the negotiation. Serious bi-cultural analysis requires examination of the framework of the participating cultures, and not just their 28 As Professor Roger Fisher, one of the world's leading authoritie s on negotiation, states, "[m]any people consider negotiating like putting on their clothes: no need for theory, just do it. But in negotiation, theory does help." - What About Negotiation as a Specialty, (Sept 1983) American Bar Association Journal, vol 69, 1221 at 1222. 29 Gulliver P. H., Disputes and Negotiations, Academic Press, 1979, p70 30 Gulliver P. H., Disputes and Negotiations, Academic Press, 1979, p84.
  13. 13. 10 content. 3 1 For culture "is not just thoughts, it is a way of thinking," 3 2 and reveals "the collective programming of the min d " 3 3 . As Hall states, people from different cultures not only speak different languages but, what is possibly more important, inhabit different sensory worlds. Selective screening of sensory data admits some things w hile filtering out others, so that experience as it is perceived through one set of culturally patterned sensory screens is quite different from experience perceived through another. 3 4 (My italics). In the same vein, culture provides the individual with his [or her] theory of what his [or her] fellows know, believe, and mean, his [or her] theory of the code being followed, the game being played, in the society into which he [or she] was born. 3 5 In other words depending on the set of concomitants belonging to A and to B, A could see a particular set of circumstances critically differently from B. Furthermore, depending on the same set of concomitants, the response provided by A could also be critically different from B. This point is accentuated in the Sino -Western situation. This is because our respective culture is a system of knowledge which shapes and constrains the way our brain acquires, organizes, and processes information and creates our 36 “internal modes of reality.” 31 Thus throughout this study, the c o n t e n t of the culture, such as findings from Sino-Western case studies, w i l l by referred to in demonstrating the effect o f the framework and how it functions in commercial reality. 32 Keightley DN, L a t e S h a n g D i v i n a t i o n : T h e M a g i c o - R e l i g i o u s L e g a c y , in E x p l o r a t i o n s i n E a r l y C h i n e s e C o s m o l o g y , Rosemont Jr H (ed), 1 9 8 4 , Scholars Press, p11. 33 Hofstede G , C u l t u re ' s C o n s e q u e n c e s : I n t e r n a t i o n a l D i f f e r e nc e s i n W o rk - r e l a t e d V a l u e s , 1 9 8 0 , Sage. 34 Hall E T , T h e H i d d e n D i m e n s io n , 1 9 6 6 , Doubleday, 2. 3 5Keesing R, T h e o r i e s o f C u l t u re , ( 1 9 7 4 ) 3 Annual Review of Anthropology 7 3 - 9 7 at 8 9 . 36 Keesing, R, T h e o r i e s o f C u l t u re , ( 1 9 7 4 ) 3 Annual Review of Anthropology 7 3 - 9 7 at 8 9 .
  14. 14. The cyclical mode) of negotiation: P, Party; O, Opponent. Culturally specific differences in Chin a and the West, such as the individualist/collectivist and high context/low context communication split, are derivatives of our cultural systems. They lead to substantially different parameters of decision making. 37 Furthermore, the bi-cultural situation in itself accentuates the cultural tendencies of the individual, for when same culture people are in a group, such as a negotiation team, the group tendencies. the cultural tendencies will tend to dominate. 38 In expounding this response, Roosens observes that one’s culture is Particularly attractive when one is continually confronted by others who live differently... If I see and experience myself as a member of an ethnic category or group, and others – fellow members and outsiders - recognize me as such, "ways of being” become possible for me that set me apart from the outsiders. 37 Pye L, Chinese Negotiating Style: Commercial Approaches and Cultural Principles, Quorum, 1992, p93. 38 Keesing, R, Theories of Culture, (1974) 3 Annual Review of Anthropology 73 at 89.
  15. 15. 12 These ways of being contribute to the content of my-self perceptions. In this sense I become my ethnic allegiance; I experience any attack on the symbols, emblems, or values (cultural elements) that def ine my ethnicity as an attack on myself. 3 9 Such a response fuels our ethnocentrism - "where we interpret and evaluate other's behavior using our own standards ... caus[ing] us to evaluate different patterns of behavior negatively, rath er than try to understand them." 40 As explained below, this fact is compounded with the Chinese due to their collectivistic orientation. Thus, the need to consider the Chinese system of perception and the wa y it is expressed in Sino-Western negotiation becomes immediate. 3. Chinese Perception and Comprehension The perception of the Chinese, 41 their sense of reality and their perceived place in the universal Scheme 42 is in accord with ideals which have not basically changed for over 4000 years. 43 Furthermore. these values have been significantly endorsed for over 2000 years by the Confucian system, which has been supported by the Chinese tripartite approach to reality through Heaven, Earth, and the Tao, and the ruling emphasis of maintaining 39 Roosens E, Creatin g Ethnicity , 1989, Sage, pp17- 18 40 Gudykunst W'B. Bridging Diff erences, 1991, Sage, pp66-67. 41 The Chinese have, what Bond has described as, "holistic perception" Bond MH, Beyo nd th e Chin ese Face - Insights fro m Psycho logy , 1991, Oxford University Press, p23. This is exemplified, for example, by Franci s Hsu's Rorschach ink-blot research where the mainland Chinese gave relatively more whole -card, as opposed to specific-detail responses, than did Chinese Americans, who in turn gave more than Caucasian Americans. - Referred to in Bond p 23. 42 ie Humans model themselves "on the earth; the earth models itself on the Heaven; the Heaven models itself on the Tao; the Tao models itself on the Nature." - Lao Tzu, Chapter 25, translation in Chan W-T, A Source Book in Chinese Philo sophy, 1963, Princeton University Press, p153. 43 Cf In fact, the eminent mythologist Joseph Campbell says the Taoist concept of a socially manifest cosmic order (a rather matured precipitate of the notion of harmony), arose in the early Bronze Age – Campbell J, Myths to Live By , 1993 (reprint edition), Arkana, p65.
  16. 16. 13 harmony in all things. Unlike many other societies, the phenomenon of Chinese civilization, has created a vastly penetrating interconnectedness consisting of a social spiritual philosophical fabric which enmeshes every aspect of life. Nothing is excluded from this system of being. Law, 44 the family structure, relationships, government, communication, birth, death and even what one eats and the order they eat in 45 are all under the umbrella of this tripartite approach. Thus, "the traditional Chinese fusion of custom, law and morality ... shimmer before [one's] eyes, interweaving in intricate patterns until it is no longer easy to distinguish one component from another." 46 In this light, whilst "to a considerable extent contemporary Chinese attitudes are the product of the Confucian tradition" and a "thorough knowledge of law in communist China requires an understanding of China's imperial tradition and legal order",47 an analysis which stopped at the level of legal theory and legal culture would be inadequate for the purposes of this study as there are significant "psycho" and "socio"-cultural forces at work during the cross-cultural negotiation process. 44 This applies to the place of law in the system of governance and the practice of it in daily life. For example the ritual aspect of formalising contracts in the Han Dynasty was "invested with cosmological significance". Scogin Jr HT, Between Heaven and Man: Contract and the State in Hon Dynasty China. (1990) 63 Southern California Law Review 1326 at 1326. The Han view was that "Rites are the meeting-corner of the yin and the yang. [the link] connecting all the affairs of [men[/women]], that wherewith Heaven and Earth are revered, the spirits are treated, the order among the high and the lowly is maintained, and the Way of man[/woman] is kept straight." - PAN KU, 2 PO HU T'UNG (Tjan Tjoe Som trans 1949) referred to in Scogin Jr HT, Between Heaven and Man: Contract and the State in Han Dynasty China. (1990) 63 Southern California Law Review, 1326 at 1352-1353. 45De Mente Boye, Chinese Etiquette and Ethics in Business, 1993, NTC, 16. 46 Tay AE-S, Law in Communist China - Part 1, (1969) 6, no2 Sydney Law Review 153 at 154. 47 Lung-Sheng T, Law in Communist China, read to the Chinese Studies Colloquium at Brown University, October 30 1969, p30 of the manuscript referred to in Tay AE -S, Law in Communist China - Part 2, (1969) 6, no2 Sydney Law Review 335 at 337, fn 1.
  17. 17. 14 As Geertz has noted, "culture pat terns - religious, philosophical, aesthetic, scientific, ideological - are 'programs'; they provide a template or blueprint for the organisation of social and psychological processes. " 4 8 And, as Rubin and Sander believe, culture is a profoundly powerful organising prism, through which we tend to view and integrate all kinds of disparate interpersonal information. 4 9 The cultural fabric of the Chinese, therefore, requires emphasis, as it reveals how the mind has been progr ammed. 5 0 And, as Bee Chen Goh states one needs "to be familiar with the Chinese mental software" if negotiating with the Chinese is to be successfu1. 5 1 Furthermore, it is necessary to have some understanding of how these culturally determined elements affect the communication style of the Chinese negotiator, otherwise much of this information stagnates as theory, absent of practical application. For these reasons, the significant "psycho" and "socio" - cultural building blocks will be examined prior to and as an aid to understanding the legal cultural forces which affect the Sino -Western negotiation process. 3.1 The Role of Cultural analysis in Sino-Western negotiation Through identifying the isolates 5 2 - of the Chinese culture we are provided with a looking glass through which we can seek to understand the Chinese way of being and perceiving." For as 48 Geertz C, Ideology (is a Cultural System, in Ideology and Discontent, Apter DE (ed), 1964, New York, p62. 49 Rubin JZ & Sander EA, Culture, Negotiation and the Eye of the Beholder, (July 1991) Negotiation Journal 249 at 249. 50 Hofstede G, Culture's Consequences: International Differences in Work-related Values, 1980, Sage. 51 Goh Bee Chen, Negotiating with the Chinese, 1996, Dartmouth Publishing Company, pvi. 52 See Hall Edward T, The Silent Language, Doubleday, 1959, p50. 53 As Edward Hall states: culture "is man [and woman] in a greatly expanded
  18. 18. 15 Keesing notes, culture is an individual's "theory of what his [or her] fellows know, believe, and mean, his [or her] theory of the code being fo llowed, the 54 game being played, in the society to which he [or she] was born." This whilst, seeming excessively philosophical or scientific to the pragmatic observer, provides the Western negotiator with profitable dividends. By the same token, however, one cannot expect to understand the motivations and mechanics of a culture or a foreign negotiator in "three easy steps". As Hall believes, "the job of achieving understanding and insight into mental processes of others is much more difficult and the situation much more serious than most 55 of us care to admit." Hence, it is advantageous before proceeding that we have some concept of the fabric of culture - the framework. The Chinese, it could be said, have one of the most distinct 56 cultures on earth. This is for two reasons. First, the culture has had time to develop and intensify because of its ancient age. 5 7 Secondly, the Chinese people for two thousand years 58 have been intensely subjected to the Confucian form of social existence and way of being, strictly enforced by both society and the administration. The Confucian teachings were used by the various dynasties as a powerful mechanism for social conformance control. As Bond and Hwang state the ruling educated elite exercised power according to Confucian prescriptions. As cultural transmitters, they advocated Confucian philosophy as a way of rationalizing the political and social order by writing sense. Culture is the link between human beings and the means they have of interacting with others." - Hall Edward T. The Silent Language, Doubleday, 1959. p213. 57 Keesing, R, Theories of Culture. (1974) 3 Annual Review of Anthropology p 73. Hall Edward T, The Silent Language. Doubleday, 1959, p52. 56 For a social system to be qualified as a cultural system, Hall says that it must be "[c]apable of analysis in its own terms without reference to other systems and so organized that it contained isolated components that could be built up into more complex units" - The Silent Language, Doubleday, 1959, p61. 57 Many historians argue that the Chinese civilization is the oldest. 58From the Han Dynasty onwards Confucianism became recognized as the official philosophy of the State - Fairbank JK & Reischauer EO, China: Tradition and Transformation, Houghton Mifflin.
  19. 19. 16 legends, drama, folk stories, and folk songs for the peasantry. Thus all Chinese people were enmeshed in the Confucian tradition. 5 9 (My italics). In effect it shares some powerful simi larities with Chinese Communism 6 0 and perhaps explains why the Confucian style strongly remains in Chinese behaviour. 6 1 Both these facts largely explain why, both in basic assumption and in institutions and practices judicial administration in contemporary China displays some striking resemblances to its predecessor under the Chinese empire. 6 2 Furthermore. the Communist continuity factor is especially important to the cultural argument. For as Hall points out, it is "essential that there be no breaks with the past" 6 3 , if cultural causation is said to be responsible for particul ar current human behavior. The application of Confucianism and the Taoist concept of a socially manifest cosmic order 6 4 to life in traditional (and ancient) China permeated through 59 Bond Michael Harris & Hwang Kwang -Kuo, The Social Psychology of the Chinese People, in The Psychology of the Chinese People, Oxford University Press. 1986, p 215. 60 Traditional China's "agricultural economy tied the vast majority of the population to the land and its constraints, supporting the peasants at only a subsiste nce level. Their livelihood became even more precarious in years of famine when a great portion of China's huge population faced starvation. This kind of ecological backdrop predisposed the Chinese peasantry to accept Confucian philosophy, which encourages restraint over one's desires and unequal distribution of the limited resources among members of a group (the family in most cases. The educated elite became members of the ruling class by passing examinations based on the Confucian classics."(My italics) - Bond Michael Harris & Hwang Kwang Kuo, The Social Psychology of the Chinese People, in The Psychology of the Chinese People. Oxford University Press, 1986, p215. 61 As Tay states. "there are areas of Chinese Communist ideology and strains within it where it is not at all easy to distinguish the heritage of Marx from that of Confucius" - Tay AE-S, Law in Communist China - Part 2, (1969) 6, no2 Sydney Law Review 335 at 335. 62 Cohen JA, introduction to Essays on China's Legal Tradition, Cohen JA, Edwards RR & Chen F-MC (eds.), 1980, Princeton University Press, p4. 63 Hall Edward T, The Silent Language, Doubleday, 1959, p52. 64 Campbell J, Myths to Live By, 1993 (reprint edition), Arkana, p65.
  20. 20. 17 Chinese consciousness to the extent that it became rooted in, wha t Hall has described as, bio-basic activities 65. It has moulded a framework through which the Chinese interact with their environment, associate through a hierarchical social structure, subsist, learn 66, play 67, define their territoriality, 68 69 temporality and modes of defense and methods of exploitation 70. Therefore, Confucianism takes "centre stage in almost all approaches to Chinese social behavior. "71 65 Hall Edward T, The Silent Language, Doubleday, 1959, p60. - this is a fundamental requirement for any cultural system. 66 "Education and educational systems are about as laden with emotion and as characteristic of a given culture as its language" - Hall Edward T, The Silent Language, Doubleday, 1959, p71. 67 As Hall states "play and learning are intimately intertwined, and it is not too difficult to demonstrate a relationship between intelligence and play ... games like Chinese checkers are almost entirely a function of a specific type of intellectual development." Hall Edward T, The Silent Language, Doubleday, 1959, p75. 68 "The balance of life in the use of space is one of the most delicate in nature" - Hall Edward T, The Silent Language, Doubleday, 1959, p68. The flexible lateral Chinese sense of and relation to space and is very different from the rigid or linear Westerner's. This is evidenced in Sino-Western negotiation, which often results in exasperation and frustration on the part of the Western party. Furthermore. the lateral "harmonious" temporal nature of the Chinese contrasts heavily with the West. 69 The defensive techniques are evident, as Hall states, in not only warfare, but medicine, law and religion - Hall Edward T, The Silent Language, Doubleday, 1959, p76. Just as the analogy Sun Tzu in The Art of War makes to medicine, that minimal action in achieving ones aim is the true art, similarly the Chinese have applied this rule to litigation and the Confucian emphasis on harmony. Furthermore. this "style" is evident in the negotiation process, and the constant attempt to maintain good relations, whilst still achieving the parties' objectives. 70 The Chinese methods of exploiting their environment be it social, commercial or otherwise is famous and has been embodied in various military texts and philosophies. Suffice to say maintaining harmony is still the foundation principle, and this requires the negotiator to be acutely aware of and responsive to one's legal, financial, strategic and the demands and style of the other side. 71 Bond Michael Harris & Hwang Kwang-Kuo, The Social Psychology of the Chinese People, in The Psychology of the Chinese People, Oxford University Press, 1986, p 214. - "The essential aspects of Confucianism in constructing a Chinese social psychology are the following: (a) man [and woman] exists through, and is defined by, hi s relationships to others; (b) the relationships are structured hierarchically; (c) social order is ensured through each party's honouring the requirements in the role relationship." - p216. See also De Mente Boye, Chinese Etiquette and Ethics in Business, 1993, NTC, p21.
  21. 21. 18 4. Cultural Perception As mentioned above in the section on negotiation, perception i s critical to the negotiation process. Suffice to say, understanding that the other negotiating team may perceive things differently from us is a fac tor critical to bi-cultural analysis. There is a relationship between people and the way they perceive things. "Groups", states Hall, can be defined by the relation of their members to a certain pattern[ 72 ]. The individuals of a group share patterns that enable them to see the same thing and this holds t h e m together. 73 This means that if a bi-cultural negotiation is to be held together then a sufficient commonality of pattern needs to be established. 4.1 Formal, informal and technical patterns of awareness. As mentioned above, Westerners and Chinese have different patterns of awareness. Hall says there are three patterns of awareness shaped by culture. They are formal awareness 74 , informal awareness 75 and technical awareness 7 6. Whilst all three 72 Hall defines a pattern as a "meaningful arrangement of sets shared by a group." Hall Edward T, The Silent Language, Doubleday, 1959, p149. 73 Hall Edward T, The Silent Language, Doubleday, 1959, p148 -9. 74 Cultures that "invest tradition with an enormous weight... Formal awareness is an approach to life that asks with surprise: 'Is there any other way?' Formally aware people are more likely to be influenced by the past than they are by the present or future." - Hall Edward T, The Silent Language, Doubleday, 1959, p97-8. 75 "Situations in which much of what goes on exists almost entirely out-of -awareness". This allows for a high degree of patterning. The informal is made up of activities or mannerisms which once learned becomes so much a part of ordinary life th at they are done unconsciously. In fact as Hall states, they often become blocked when awareness takes place. Hall Edward T, The Silent Language, Doubleday, 1959, p96. 76 This type of awareness contains both informal formal awareness, however in this case i t is fully conscious behaviour. "Its very explicitness and the fact that it can be written down and recorded and even taught at a distance differentiates it from the other two types of integration". - Hall Edward T, The Silent Language, Doubleday, 1959, p97
  22. 22. 19 are present in any given situation irrespective of cultural background, the pattern which will dominate will vary. The Chinese hierarchical system is formal however a substantial number of the rules are technical. 77 The Westerner, on the other hand, tends to operate from an informal level of awareness. Furthermore, Westerners tend to communicate more inattentively 78 than Chinese - like on semi-"automatic pilot". 79 Thus, "untold difficulty" is prone to arise in Sino -Western 80 communication. An additional impediment is whilst Westerners, such as Americans and Australians, have few technical or formal restrictions, they have many informal ones. As a result Westerners "are apt to be quite inhibited, because they cannot state explicitly what the rules are. They can only point to them when they are violated." 81 This trait further reduces the effectiveness of the unaware Western negotiator in a bi -cultural situation. Additionally, Hall found that the formal, informal and technical patterns were bound by three laws – order 82 , selection 83 and congruence 84 . In the hierarchical structured formal and technical Chinese cultural system, order plays a significant role, it determines largely in negotiations what is said and 77 Hall makes this statement of the Japane se, who share a similar cultural system to the Chinese. Hall Edward T, The Silent Language, Doubleday, 1959, p 149. 781 say this as, people generally communicate largely on "automatic pilot" as "much of behaviour is habitual or based on scripts we have lea rned" - Gudykunst W. Bridging Differences, 1991, Sage, p26. However, due to the non - technical and informal nature of Western society this fact applies even more so to the West. 79 Gudykunst W, Bridging Differences, 1991, Sage, p26. 80 Hall Edward T, The Silent Language, Doubleday, 1959, p96. 81 Hall Edward T, The Silent Language, Doubleday, 1959, p151. 82 "The laws of order are those regularities governing changes in meaning when order is altered" - Hall Edward T, The Silent Language, Doubleday, 1959, p155. 83 "selection controls the combination of sets that can be used together" - Hall Edward T, The Silent Language, Doubleday, 1959, p157. 84 This is a more complex concept than order and selection, "its subtle dictates", states Hall, “... may [also] be more binding". "Unlike order and selection, which have to do with the patterning of sets, the law of congruence can be expressed as a pattern of patterns." - Hall Edward T, The Silent Language, Doubleday, 1959, p159. It could be said to exist when one makes use o f all the potentials of the pattern.
  23. 23. 20 when, the roles of each team member, and even, what order the team members walk into the room. Most importantly however, the Confucian order dictates that relationship comes before business. 85 Furthermore, as one commentator puts it, the Chinese negotiate in three dimensions - the social aspect, the pre- contractual aspect and then "really getting down to the give and take after the contract is signed." 8 6 This contrasts strongly with the Western technique, where negotiation consists of "two dimensions - presentation and closing (followed by the smooth implementation of the contract." 87 Similarly, the Confucian style dictates the manner of selection, which is very different from the style of the West. Most importantly however, Hall's notion of congruence is embodied in the principles of Confucius, therefore there is a congruent template of proper action that the Chinese attempt to adhere and aspire to bot h consciously and unconsciously 88 . Whilst China's new "socialist market economy", and Western influence, is presenting Chinese negotiators with another way of doing and seeing things, it would seem that any substantial departure from the Confucian cultural system is unlikely. First, because this system is firmly embedded in the Chinese psyche and Chinese society due to the passage of time and the rigour with which 85 "At the interpersonal level ... it appears to be 'Friendship first, competition second", as the Chinese proverb so neatly puts the issue." - Bond Michael Harris & Hwang Kwang- Kuo, The Social Psychology of the Chinese People, in The Psychology of the Chinese People, Oxford University Press, 1986, p 263. 86 De Mente Boye, Chinese Etiquette and Ethics in Business, 1993, NTC, 122123. Pye refers to the Chinese style of negotiation as a two tiered process: "(1) the manifest level of bargaining about concrete agreements and (2) the latent level at which they are trying to strike "emotional bargains."" - Pye L, Chinese Negotiating Style: Commercial Approaches and Cultural Principles, Quorum, 1992, p99. It is this "latent level" which is culturally alien and unfamiliar to the Western experience of negotiation. Furthermore, for reasons which will be discussed, unfamiliarity with this level can greatly retard the Sino -Western negotiation process. 87 De Mente Boye, Chinese Etiquette and Ethics in Business, 1993, NTC, 122. 88 "As Keesing states "the actor's theory of his [or her] culture, like his [or her] theory of his [or her] language may be in large measure unconscious. Actors follow rules of which they are not consciously aware, and assume a world to be "out there" that they have in fact created with culturally shaped and shaded patterns of mind." - Keesing, R, Theories of Culture, (1974) 3 Annual Review of Anthropology 73-97 at 89.
  24. 24. 21 Confucian values, and similar Communist values were enforced. Secondly, because the Chinese way of negotiation works, to the extent that even Western negotiators are studying the eastern tactical philosophies, such as the Art of War. Lastly, the flexible, action based on response style, cohabits infinitely better, than the rigid Western alternative, in the haphazard unpredictable Chinese market, and the Chinese communist "feel-as-we go" style of commercial policy and law making. In fact a s will be discussed below, the Western negotiator and foreign investor would benefit if they observed the Chinese manner of handling the unfamiliar Chinese commercial, social and legal climate rather than struggle with a linear formula which is not suit ed to the Chinese situation. 4.2 Time Another bi-cultural distinction which often frustrates Sino-Western negotiations is the individual's culturally derived perception of time. Westerner's are, what Hall 89 describes as, "monochronic" - meaning "they compartmentalise time, scheduling one thing at a time and become disoriented if they have to deal with too many things at once" 90 ; whilst, the Chinese are "polychronic" - which is characteristic of collectivistic cultures, tending to undertake multiple tasks a t the same time. In addition to this, Chinese and Westerners perceive, what we in the West would call, "inaction", fundamentally differently. In the West, people continually make a distinction of whether or not a person is engaged in an activity - distinguishing between the "active" and the "dormant" phases of everything around them. 91 Hall labels this characteristic as "ageric". 92 In China, like many other collectivistic cultures, this distinction is not made. It is for these reasons that the Chinese negotiators "seem impervious to the possibility that time may work against them rather than form 89 Hall Edward T, The Hidden Dimension, 1967, Doubleday, p162. 90 Hall Edward T, The Hidden Dimension, 1967, Doubleday, p162. 91 Hall Edward T, The Silent Language, Doubleday, 1959, p178. 92 Hall Edward T, The Silent Language, Doubleday, 1959, p178.
  25. 25. 22 them""; and that "the first rule in negotiating with the Chinese is the need for abiding patience." 94 Because, the way they perceive and relate to time is very different from that of the Westerner. As Williams states: We are impatient with delay, or it makes us feel we are wasting time. We seem to be guided by a metaphor that time is money, and we do not permit ourselves to waste it. This attitude reduces our effectiveness in doing business in many countries of the world, where meaningful interpersonal relationships are necessary preconditions for doing business together. 95 Furthermore, it is especially important that we be aware of these differences as the Chinese are very aware of the ageric monochronic nature of the Westerners, and use it very effectively to their strategic advantage. 96 An additional reason that this occurs is due to the observant formal/technical nature of the Chinese as opposed to the informal nature of the Westerner. However, whilst we cannot alter the way we perceive, as Hall states, much of the potential difficulty between the interaction between polychronic and monochronic people can be avoided through "proper structuring". 97 In terms of negotiation, this means communication and the ability to be flexible and make allowances in terms of time and scheduling. In other words, as has been the experience of many Western negotiators, 98 making a tight schedule without accounting for the unexpected is fancifully unrealistic. Such preparation will also 93 Pye L, Chinese Negotiating Style: Commercial Approaches and Cultural Principles, Quorum, 1992, p83. 94 Pye L, Chinese Negotiating Style: Commercial Approaches and Cultural Principles, Quorum, 1992, p58. 95 Williams GR, Negotiation as a Healing Process, [1996] No 1 Journal of Dispute Resolution 1 at 29. 96 Pye L, Chinese Negotiating Style: Commercial Approaches and Cultural Principles, Quorum, 1992, p83-85. As Tay and Leung state the Chinese are "not accustomed to giving anything away quickly - including revealing their own position. Bu quing chu ("not clear") is the most common response to awkward questions; it is courteous, laconic and gives nothing away including just who, or what, lacks clarity." - Tay A E-S & Leung CSC, The Relation Between Culture, Commerce and Ethics, in Tay AE-S & Leung CSC (eds), Greater China: Law, Society and Trade, 1997, LBC, p6. 97 Hall ET, The Hidden Dimension, 1987, Doubleday, p 162. 98 See for example case studies 4 (p139) and 6 (p171) in Blackman C, Negotiating China: Case Studies and Strategies, 1997, Allen and Unwin.
  26. 26. 23 largely diffuse Chinese attempts to use the Westerner's ageric monochronic tendencies to their advantage. 99 4.3 The relevance of perceptual differences t o negotiation Therefore, contrary to the majority's unconscious assumption that regardless of culture one's experience of a particular event will be uniform, Chinese culture and Western culture, rather, can be said to be relative to each other on the pattern level. It is now being realised that people have no direct contact with experience per se but that there is an intervening set of patterns which channel ... [their] senses and ... [their] thoughts, causing ... [them] to react one way when someone els e with different underlying patterns will react as ... [their] experience dictates. 100 As Hall states, 101 a lack of awareness about ones cultural patterns can lead to serious financial mishaps. It is, furthermore, for this reason, that one of the most promising developments in the intercultural field has to do with research directed towards bringing in formal patterns to awareness. 102 Much would be gained if the Western negotiator, who has a tendency towards informal awareness, negotiated from the elevat ion of technical awareness, coupled with a knowledge of the cultural make -up of his or her Chinese counterpart. 99 "It is better to sense out the situation and the people involved, to make haste slowly, to ensure or pretend that all parties are satisfie d." - Tay A E-S & Leung CSC, The Relation Between Culture, Commerce and Ethics, in Tay AE-S & Leung CSC (eds), Greater China: Law, Society and Trade, 1997, LBC, p6. 100 Hall Edward T, The Silent Language, Doubleday, 1959, p145-6. 101 Hall Edward T, The Silent Language, Doubleday, 1959, p153. 102 Hall Edward T, The Silent Language, Doubleday, 1959, p153.
  27. 27. 24 Whilst, it would be unwise and, in Halls vocabulary, "incongruous", to attempt to imitate the content of the culture and out do the Chinese, 103 much is to be gained from understanding and applying knowledge of its dynamic. As Pye states Effective negotiation requires a constant alertness to the distinctive qualities of the Chinese to appreciate the meaning behind their actions, so as not to be misled or to mislead them. 104 Therefore rather than dangerously performing to a cultural script, the Western negotiator can predict and understand the culturally motivated behaviour, and apply it to negotiation strategy. 5. Individualism and Collectivism Individualism and collectivism, concepts similar to egocentrism and homocentrism, is "the major dimension of cultu ral variability used to explain ...[Sino-Western] differences in behaviour.” 105 In Chinese, collectivistic, behaviour the individual sees their self as a p art of the social whole. Their sense of identity and the way they see the world is perceived through their relationships and the groups they belong to . 106 Group goals take precedence over individual goals. It is for this reason that the problem for the Chinese “has always been how to make the individual live 103 For "one can only act superficially in accordance with the rules of the Chinese culture." - Pye L, Chinese Negotiating Style: Commercial Approaches and Cultural Principles, Quorum, 1992, p110. To become a real part of a culture, we really need to be born into it with the appropriate genes (Muhlmann H, The Nature of Cultures - A Blueprint for a theory of Culture Genetics, 1997), and be constantly subjected to the intertwining fabric it threads through and around us. 104 Pye L, Chinese Negotiating Style: Commercial Approaches and Cultural Principles, Quorum, 1992, p110. 105 Gudykunst W, Bridging Differences, 1991, Sage, p45. See Hofstede G, Cultures Consequences, 1980, Sage; Kluckkohn F & Strodtbeck F, Variations in Value Orientations, 1961, Row Peterson; and Triandis HC, Collectivism v Individualism, in Cross –Cultural Studies of Personality, Attitudes, and Cognition, 1988, Macmillan. 106 Triandis HC, Cross-Cultural Studies of Individualism and Collectivism, in Berman J (ed), Cross-Cultural Perspectives, Nebraska Symposium on Motivation 1989, University of Nebraska Press, 1990, p81.
  28. 28. 25 according to accepted customs and rules of conduct, not how to enable him [or her] to rise above them. "107 This psychological orientation is inextricably connected with Confucian (and Communist) ideology. In the West, on the other hand, the reverse applies. The individualist identifies their self from an isolated view point focused toward realising their own unique set of talents and potentials. 108 Whilst collectivistic people give priority to group goals, they do distinguish between out groups and in groups 109 . Thus whilst the Western individualist tends to be universalistic and apply the same standards to all, the Chinese collectivist tends to be particularistic and, therefore, applies different value standards to members of his or he r "ingroups" and "outgroups". 110 An ingroup 'is a group whose norms, goals and values shape the behaviour of its members". 111 An outgroup, on the other hand, "is a group with attributes dissimilar to those of the ingroup, whose goals are unrelated or inconsistent with those of the ingroup, or a group that opposes the realisation of ingroup goals (competing)". 112 Furthermore, strength of identity with a group, "introduces the risk of apathy about or even hostility tow ards other groups." 113 Therefore there are limits to growth if this dynamic is encouraged. Also, potential outward displays of conflict are largely absent due to the Confucian 107 Hsu FLK, Americans and Chinese: Passage to Differences, (3rd ed), 1981, The University Press of Hawaii, p135. 108 Waterman A, The Psychology of Individualism, 1984 Prager, p4-5. 109 Also known as collectivities: Hofstede G & Bond M, Hofstede's Culture Dimensions, (1984) 15 Journal of Cross-Cultural Psychology, 417. 119 Gudykunst W, Bridging Differences, 1991, Sage, p46. 111 Triandis HC, Cross-Cultural Studies of Individualism and Collectivism, Berman J (ed), Cross-Cultural Perspectives, Nebraska Symposium on Motivation 1989, University of Nebraska Press, 1990, p53. 112 Triandis HC, Cross-Cultural Studies of Individualism and Collectivism, Berman J (ed), Cross-Cultural Perspectives, Nebraska Symposium on Motivation 1989, University of Nebraska Press, 1990, p53. 113 Redding G & Wong GYY, The Psychology of Chinese Organizational Behaviour, in The Psychology of the Chinese People, Oxford University Press, 1986, p 262.
  29. 29. 26 emphasis of harmonious relationships. 114 Therefore, a Western negotiation team is perceived as an outgroup at the beginning of the negotiation process. However, "such grouping is perceptual and changes in accordance with one's association. "115 Thus, the success of the negotiations will largely depend on the Western team's ability to become an ingroup" 116 - a fact which most Western teams are oblivious to. This also basically explains why the first dimension 117 of Chinese negotiation is regarded as a social one. As will be discussed, the collectivist orientation of the Chinese also helps to explain why "the main characteristics of Chinese law are to found in the concept of family and in the ideology of the stratification order." 118 Furthermore, individualism and collectivism provides a powerful explanatory framework for understanding cultural variances in Sino-Western communication, fundamental to the negotiation process.” 119 114 See below. To see an analysis on the dynamic process of coping with interpersonal conflicts in Chinese culture see - Bond Michael Harris & Hwang Kwang-Kuo, The Social Psychology of the Chinese People, in The Psychology of the Chinese People, Oxford University Press, 1986, p 263. 115 Goh BC, Cross-Cultural Perspectives on Sino-Western Negotiation, (November 1994) Australian Dispute Resolution Journal 268 at 272, where the author refers to Triandis HC, Cross-Cultural Studies of Individualism and Collectivism, in Berman J (ed), Cross-Cultural Perspectives, Nebraska Symposium on Motivation 1989, University of Nebraska Press, 1990, p81. 116 It is for this reason that Blackman observes that "[b]ecause the Chinese use different rules for out groups, it is important for Westerners, the ultimate outsiders, to move the ground inside the Chinese camp." Blackman C, Negotiating China: Case Studies and Strategies, 1997, Allen and Unwin, p16. It is also due to this that it is acceptable for the collectivistic Chinese to cheat a person in business transactions whilst they remain a stranger: See Triandis HC, Cross-Cultural Studies of Individualism and Collectivism, in Berman (ed), Cross-Cultural Perspectives, Nebraska Symposium on Motivation 1989, 1990, University of Nebraska Press, p73. 117 See above. 118 Ch'u T-T, Law and Society in Traditional China, 1965, Mouton & Co, p10. 119 Gudykunst W, Bridging Differences, 1991, Sage, p50.
  30. 30. 27 6. Sino-Western Communication Having "pattern awareness", referred to by Hall, and an alertness to the distinctive qualities of the Chinese, that Pye refers to, contributes to the importance of having a heightened awareness of how we communicate, what Howell 120 calls "conscious competence" - where we think about our communication behaviour and consciously modify it to impro ve our effectiveness. Gudykunst labels this state of attention in communication as "mindfulness" 121 . 122 Having this awareness will prevent "polarised communication'' 123 , which inevitably leads to or endangers a breakdown in negotiations. 124 Similarly, having this awareness also entails an awareness of the distinction between the "content" 125 and "relationship" 126 dimensions of a message. 127 When humans communicate we "combine a set of symbols into messages that we encode to send to others". 128 Similarly, we engage in a process of decoding every time we receive a message and seek to understand its meaning. This encoding and decoding is embodied in our cultural, sociological and psychological background." 129 As, mentioned above, these three contributors are 120 Howell WS, The Empathic Communicator, Wadsworth, 1982. 121 Ellen Langer, another advocate for this principle identifies three qualities of mindfulness: "(1) creation of new categories; (2) openness to new information: and (3) awareness of more than one perspective". - Langer E. Mindfulness, 1989, Addison-Wesley, p62. 122 Gudykunst W'B, Bridging Differences, 1991, Sage, p4. 123 "[T]he inability to believe or seriously consider one's view as wrong the other's opinion as truth" - Arnett RC, Communication and Community, 1986, Southern California University Press, p15-16. 124 As Gudykunst states - "polarised communication exists when groups or individuals look out for their own interests and have little concern for other's interests''. - Bridging Differences, 1991, Sage, p5. Clearly this factual matrix is present in the pre and post contractual negotiation process. 125 The information in the message - eg what is said. 126 How the message is transmitted and how the participants relate to each other. 127 Watzlawick P, Beavin J & Jackson D, The Pragmatics of Human Communication. 1967, Norton. 128 Gudykunst W, Bridging Differences, 1991, Sage, p8. 129 Miller G & Steinberg M, Between People, 1975, Science Research Associates.
  31. 31. 28 all tightly knitted into one another through China's Confucian heritage. Also, as explained in the discussion on Sino-Western perception and culture in 2.1, the thoughts, feelings, emotions, attitudes, values and experiences of the Chinese are quite different from those in the West. Therefore, an important acknowledgment especially for the bi cultural negotiator, is that "communication is effective to the extent that the othe r person attaches a meaning to the message similar to what we intended." 130 Furthermore, during any negotiation the parties make cultural, social and psychological predictions 131 about how each other will respond. However, in the bi-cultural arena we cannot base our predictions of ones behaviour on our own culturally motivated rules and norms. "This", as Gudykunst s tates, "will 132 inevitably lead to misunderstanding." For this reason alone, if a Western negotiator wishes to communicate effectively with the Chinese he or she "must 133. use [his or her] knowledge ... [of the Chinese culture ] to make predictions" If the Western negotiator has little or no knowledge of the Chinese culture then 134 they have "no knowledge... for making predictions." This scenario is Potentially fatal in the Sino-Western negotiation process. Obviously this theorem, applies equally to the Chinese. However it is compounded by their collectivist nature, as there "is a n increased chance of misunderstandings occurring because ... [they] are likely to interpret others' behaviour based on ... [their] group me memberships. '' 135 130 Gudykunst W, Bridging Differences, 1991, Sage, p9. 131 "When people communicate they make predictions about the effects, or outcomes. of their communication behaviours; that is they chose among various communicative strategies on the basis of predictions about how the person receiving the message will respond." - Miller G & Steinberg M, Between People. 1975, Science Research Associates. 132 Gudykunst W Bridging Differences, 1991, Sage, p18. 133 W Gudykunst W, Bridging Differences, 1991, Sage, p18. W 134 W Gudykunst st Gudykunst W, Bridging Differences, 1991, Sage, p18. 135 t W Gudykunst W, Bridging Differences, 1991, Sage, p21. W t Gudykunst W
  32. 32. 29 6.1 High-context and low-context communication As referred to above, the collectivistic -individualistic orientation of a person affects how a message is communicated. The Chinese collectivist culture engages in high context communication - where "most of the information is either in the physical context or internalised in the person, while very little is 136 in the coded, explicit. transmitted part of the message." The Western individualist cultures, on the other hand, communicate with "the mass of 137 information ... vested in the explicit code." Furthermore, as illustrated below, this high and low context distinction helps to explain how "individuals are dominated in their behaviour by", what Hall has described as, "complex hierarchies of interlocking rhythms." 138 As Bond points out, this observation "is rich and consistent with a host of observations about the Chinese, especially those concerning their negotiation 139 behaviour.” Specifically, in high context cultures much more attention is paid to the interaction process itself, and as a result "getting into synch" has 141 become necessary for an exchange to succeed. As stated by Gudykunst, "the level of context influences all other aspects of communication" 141 : High-context cultures make greater distinction between insiders and outsiders than low-context cultures do. People raised in high-context systems expect more of others than do the participants in low -context systems. When talking about something that they have on their minds, a high-context individual will expect his [or her] interlocutor to know what's bothering him [or her], so that he [or sh e] doesn't have to be specific. The result is that he [or she] will talk around and around the 136 Hall ET. Be yond Culture, 1976, Doubleday, p79. 137 Hall ET. Be yond Culture, 1976, Doubleday, p70. 138 Quoted in Bond MH, Beyond the Chinese Face - Insights from Psychology, 1991. Oxford University Press, p51. Source not specified. 139 Bond MH. Beyond the Chinese Face - Insights from Psychology, 1991, Oxford University Press, p51. 140 Bond MH, Beyond the Chinese Face - Insights from Psychology, 1991, Oxford University Press, p51. 141 Gudykunst W, Bridging Differences, 1991, Sage, p50.
  33. 33. 30 point, in effect putting all the pieces in place except the crucial one. 142 Placing it properly - this keystone - is the role of his [or her] interlocutor. (My italics). 1 4 3 This observation is highly relevant to Sino -Western arena, as the placing of the keystone rests on the unfamiliar low -context Western negotiator. Therefore, the competency of the Western negotiator to undertake this responsibility, may be crucial. Another relevant factor, is the Chinese fundamental concern with maintaining interpersonal harmony which explains the typical structure of Chinese discourse. As has been c ommonly observed, Chinese discussants first present the common problems and contextual restraints which are binding on all the participants, before stating their own position. This strategy results in their appearing diffident and vague to most Westerners, but effectively prevents a polarisation of positions and resulting conflict among the 144 participants. In this way. the Chinese believe that hostility is avoided, as thereby is loss of face, yet control over the outcome of the dispute is maintained. 1 4 5 However, as case studies indicate, the typical structure of Chinese discourse is not obviously effective in the bi cultural situation, as it is not a structure common to both parties. "The cultural differences here", states Bond, "revolve around . 142 Hall ET. Beyond Culture, 1976, Doubleday , p98. 143 Another for this behaviour, is that it is a way for the Chinese to maintain face". One study has sho wn that the involvement of face is common in Chinese nego tia tio n and fina ncia l decision making - Redding SG & Ng M. The Role of Face in the Organizational Perceptions of Chinese Managers. (1982) Organiz ation Studies, 3, pp201-19. As De Men te sta tes, "in all rela tionships, persona l a nd business, it is critical to the Ch inese that th ey maintain "face" and avoid of fending the "face" of others. ... Failure to preserve the [face] of others is tantamo unt to ro bbing them of their so cial status and brin ging great humiliation to them ." De Mente B, Chinese Etiquette and Ethics in Business, 1993, NTC, p61. 144 Bond Michael H arris & Hwan g Kwang - Kuo, The Social Psychology of the Chinese People, in The Psychology of the Chinese People, Oxford University Press, 1986, p 262. See also Young LWL, Inscrutability Revisited, in Gumperz (ed) , Language and Social Identity, 1982, Cam bridge University Press, pp72-84.
  34. 34. 31 contrasting expectations about the consequences of direct versus indirect approaches to potentially volatile situations." 1 4 6 Consequently, negotiations often break down for this reason. Furthermore, the high-context style of the Chinese people helps to explain 1 4 7 their preference for generalised, simple and short contracts, 1 4 8 and their tendency towards drafting vague generalised legislation. 1 4 9 However, as discussed, this style of drafting also allows the contract or legis lation to be compatible with the unpredictable political and legal climate. 7. The place of law and the basis of contractual obligation The Chinese perception of and attitudes toward contractual negotiation and dispute resolution can only be seen when view ed against the traditional backdrop of Confucianism, its tripartite basis. and the consequential subordinate place of law. For as Scogin states "[t]he continuing effect of traditional values and assumptions on current practices is apparent to those engaged in the process of negotiating and effectuating contracts in China today." 150 145 Bond MH, Beyond the Chinese Face - Insights from Psychology, 1991, Oxfo rd University Press, p66; and Bla ckman C, Negotiating China: Case Studies and Strategies, 1997, A llen and Unwin, p4. 146 Bond MH, Beyond the Chinese Face - Insights from Psychology, 1991, Oxford University Press, p66. 147 For contract and legislation are in essence a set of promises and reliance , embodied in a form of formalised communication. In effect it is an encoded message subject to the same high and low context forces that accompany any message. 148 eg De Mente Boye, Chinese Etiquette and Ethics in Business, 1993, NTC, 121: and Chu C-N, The Asian Mind Game, 1995, Stealth, p288. 149 Nb Parker RB, Law, Language and the Individual in Japan and the States. (1988) 7 No 1 Wisconsin International Law Journal 179 at 200: - "If it is true that Japan is a society of 'contextuals' [or collectivists] rather than 'individuals' and that the use of language in Japa n is highly contextual [ie high context], then we should expect that law in Japan to also be 'contextual'. It is." 150 Scogin Jr HT, Between Heaven and Man: Contract and the State in Han Dynasty China, (1990) 63 Southern California Law Review, 1326 at 1327. See also, Tay AE-S, Law in China - Imperial, Republican, Communist, Centre for Asian Studies, The University of Sydney, Annual Lecture on Asian Studies, No3, 1986.
  35. 35. 32 The benefit of such a comparative analysis in China's case is particularly useful due to it's unique "static " 1 5 4 legal history, i n which for over two thousand years "the fundamental conditions which determined the structure of Chinese society remained unchanged. ” Because of this, "the influence of the ancient structure of Chinese society an d of ancient Chinese law, as well a s of the Chinese views on the function of law, remains to this day - in the fields both of public and of private law." 1 5 3 7.1 The Structure Traditional Chinese law 1 5 4 was not formulated on Western notions, rather it was a mechanism which was used to maintain order, and not as in the West, to provide a system by which to live by and under. W here the rule of law rules, the separation of powers doctrine applies and all are perceived equal. 1 5 5 In fact the bedrock of Confuci an ideal is irreconcilably different from the Western notion of law as it denied that uniformity and equality were inherent in any society. [It] emphasised that differences were in the very nature of things and that only through the harmonious operation of these differences could a 151 In usin g the ex pression "static" , I am not asserting that the lega l history wa s sta gnant, as Sco gin may assert. Rather, whilst, as Scogin argues, the response to contract h as been "anythin g bu t static" , the fundam ental c onditio ns which determ ined these respon ses, essentia lly , have not. See Sco gin Jr HT, Between Heaven and Man: Contract and the State in Han Dynasty China, (1990) 63 Southern California Law Review, 1326 at 1328 - 1329 and Fn 10. 152 Hulsewe AFP in his forewo r d to Ch'u T-T, Law and Societv in Traditional China, 1965, Mouton & Co, p2. 153 Hulsewe AFP in his forewo rd to Ch'u T-T, Law and Society in Traditional forewo1965. Mo uton & Co, p2. China. rd f C italics. My 154 I use this expression loosely o a mode to Western understa nding, a as r s , and and subscribe to the conceptual limita tio ns enunciated by such c ritics as Stephens - see FN 199 an d accompanyin g e text. In addition, a s Needam a nd Granet observe, w p "the idea of predetermin ed, rig id, universal im pera tives governing conduct and o 2 impo sing o rder from without is not there" : Stephens TB. Order and Discipline in r . China, 1992, University of Washington Press, p8. 155 This structu ral dif feren ce ha s d occurred due to fundamentally different metaphysical orien ta tion s. M t y o i i
  36. 36. 33 156 fair social order be achieved. Furthermore, the attitudes associated with this approach, have not 157 swayed. Bond states, that a unifying theme running through Chinese behaviour today is The Chinese belief in the naturalness, necessity, an d inevitability of hierarchy. It is self -evident to the Chinese that all men [/women] are born unequal. An efficient society requires a broadly accepted ordering of people. The alternative to hierarchy is chaos (luan) and anarchy which are together worse than a harsh authority. 1 5 8 Essentially law was and still is perceived by the Chinese as only a device with which to rectify discord. 1 5 9 And, that its effect on society is 160 temporary. "The elimination of disputes and disorder ", states Ch'u, was "the minimum requirement for maintaining the social order". 1 6 1 This stance is well illustrated with the medical analogy given by Sun Tsu in The Art of War, where the most effective practitioner is the one whose patients never get sick. Litigation was perceived as evidence of the sickness of a society because the Chinese "moral absolute is all on the side of 156 Ch'u T-T. Law and Society in Traditional China, 1965, Mouton & Co, p227. is for this reason that Cohen stresses the need for a "particularistic analysis" of the continuity/change arguments in relation to the PRC and its traditional past - Cohen JA, introduction to Essays on China's Legal Tradition. Cohen JA, Edwards RR & Chen F-MC (eds.), 1980, Princeton Universitv Press, p4. 157 See also text accompanying fn 13 158 Bond MH. Be yond the Chinese Face - Insights from Psychology, 1991, Oxford University Press, p118. 159 A s Ch'u states "law ...was subordinated to li and ethics", it was an instrument for implementing li. "Law was seen a s more or less identical to punishment. which was invoked whenever li or moral principles were violated. Consequently, law played only a secondary role in society. It failed to develop a body of rules independent of li and ethics." - Ch'u T-T, Law and Society in Traditional China, 1965, Mouton & Co, p283-4. In its modern day socialist market application, as Deng Xiaoping argued, "law must be used to establish stability and order for economic development." Chen J. China: Constitutional Changes and Legal Deve lopments, in Tay AE-S & Leung CS (eds), Greater China: Law, Society and Trade, 1995, LBC, 141. Referring to Deng Xiaoping, Implement the Policy of Readjustment, Ensure Stability and Unity, in Selected Works of Deng Xiaoping, 1984, Foreign Languages Press, p335- 355. 160 Ch' u T-T, Law and Society in Traditional China, 1965, Mouton & Co. p250. 161 Ch'u T-T, Law and Society in Traditional China, 1965, Mouton & Co, p239.
  37. 37. 34 162 peace." Litigation did not support the Chinese moral absolute. Nor does it currently do so. Instead, true order, rather than being outwardly maintained, was self regulated and maintained throug h "a body of approved behaviour 163 patterns" . The reason being that: If the people be led by laws, and uniformity sought to be given them by punishments, they will try to avoid the punishment, but have no sense of shame ... If they be led by virtue, a n d uniformity sought to be given them by the rules of propriety, they will have the sense of shame and moreover will become good. 1 6 4 Therefore, theore tically this approach avoided the need for law. The focus, thus, turned towards self -cultivation. The rationale for this is deduced in the Great Learning: The ancients who wished to illustrate illustrious virtue through the kingdom, first ordered well thei r own states. Wishing t o order well their states, they first regulated their families. Wishing to regulate their 165 families, they first cultivated their persons. This was sought through the li, which Ch'u def ines as "the rules of behaviour varying in acc ordance with one's status defined in the various 166 forms of social relationships. " Another enlightening definition is: the rules of propriety, that furnish the means of determining the (observances towards) relatives, as near and remote; of 162 Fairba nk JK, Varieties of the Chinese Military Experience, intro duction in Chinese Ways in Warfare, Kierman Jr FA & Fairbank JK (eds.), 1974, Harvard University Press, p7. 163 Ch'u T-T, Law and Society in Traditional China, 1965, Mouton & Co, p230. 164 Lun Yu Chu-Su, 2, 1a-b; Legge, Chinese Cla ssics, I, 9: Ch'u T-T, Law and Society in Traditional China, 1965, Mouton & Co, p251. 165 Li chi chu-su, 60, la ; Legge, Texts of Confucianism, IV, 411-412; Couveur, Li Ki, II, 156 referred to in Ch'u T-T, Law and Society in Traditional China, 1965, Mouto n & Co, p255, fn 160. 166 Ch'u T-T, Law and Society in Traditional China, 1965, Mouton & Co, p230-231.
  38. 38. 35 settling points which may cause suspicion or doubt; of distinguishing where there should be agreement, and where differ ence; and of making clear what is right and what is wrong. 167 Philosophically, it was an attempt to align human activity with the tripartite structure, seeking to achieve perfect harmony in all relations. However, of more immediate concern to the administr ation, the li was a mechanism which was "able to divide the people, to cause them to have the classes of poor and rich of noble and inferior, so that everyone would be under someone's control. "168 It is for these reasons why, Ch'u observes that, the "main characteristics of Chinese law are to be found in the concept of family and in the ideology of stratification order." 169 7.2 Relationship-The basis of contractual rights The backbone of the concepts of family and the ideology of stratification order, was the single minded emphasis on the maintenance of and harmony in all relationships. In order to realise this abstract ethical and moral principle, "li were formulated to regulate the expected, reciprocal attitudes and behaviour between persons occupying different social statuses." 170 It was due to these differentiations, manifestly crystallised in wu-lun - the five human relationships, that the Confucianists believed their ideal society would be 171 realised on the basis of "human relationship". 167 Li Chi C0u-Su, 1, 6a; Legge, Texts of Confucianism, III, 63; Couvreur, Li Ki, I, 3: in Ch'u T-T, Law and Society in Traditional China, 1965, Mouton & Co, p232. 168 Hsun Tzu, 5, 4a; Dubs, I, Works of Hsuntze, 65: in Ch'u T-T, Law and Society in Traditional China, 1965, Mouton & Co, p233. 169 Ch'u T-T, Law and Society in Traditional China, 1965, Mouton & Co, p10. 170Ch'u T-T, Law and Society in Traditional China, 1965, Mouton & Co, p234. 1 7 1 Ch'u T-T, Law and Society in Traditional China, 1965, Mouton & Co, p236.
  39. 39. 36 Therefore, relationship not law became the linchpin of society. Similar to the Gemeinschaft strain, traditional Chinese justice was "based on the primacy of traditional social relationships and not on the primacy of the right-and-duty- 172 bearing individual, on social ties rather than contractual obligation. " It was virtue not law which was the chief mechanism for ensuring the execution of contractual duties. 173 Rather, legal sanction was used to enforce "the principles 174 and spirit of the li together with its concrete rules of behaviour." Therefore, to seek adjudication of a dispute under this umbrella was seen as not only an indignity but as a personal failure and a s a failure of the officials 175 , as a failure of the Imperial Government and as a failure of Heaven 176 . It meant that harmony, for which everything stood, had not been maintained. This is why Confucius considered "the state of no litigation as the ultimate end." 177 Furthermore, under this virtuous umbrella the rights of the individual were and remain today subject to the nature of the circumstance they are said to arise in, "as their rights are relative and arise from changing human and social relationships and corresponding duties." 178 Instead, the emphasis was and is on obligations and duties which maintains harmonious relationships and therefore order. Thus, whilst it could be said that 172 Tay AE-S. Law in Communist China - Part 1, (1969) 6, Sydney Law Review 151 at 156. 173 See Ch 'u T-T. Law and Society in Traditional China, 1965, Mouton & Co, p244-5. 174 Ch'u T-T, Law and Society in Traditional China, 1965, Mouton & Co, p274. 175 For example. before the Chancellor of the Kingdom of Chiao-tung "went out to hear a case, he always closed his door and placed the blame on himself. Sometime s he went to the village to effect a compromise. Thereafter litigation was greatly reduced. Some officials even acknowledged their faults and resigned." - Hou-Han shu, 64, 3a referred to in Ch'u T-T, Law and Society in Traditional China, 1965, Mouton & Co, p253. 176 Conversely, a document on court procedure from around 1300 AD for example instructed that if guilt was not found "all [should] stand in awe of Heaven's majesty." - The Book of Documents, Karlgren B (trs) in Bulletin the Museum of Far Eastern Antiquities 22, Stockholm 1950, referred to in Van Gulik RH, T'ang-Yin-Pi-Shih, Leiden, 1956, p49. 177 Lun Yu Chu-Su, 12, 4b; Legge, Chinese Classics, I, 121: in Ch'u T-T, Law and Society in Traditional China, 1965, Mouton & Co, p249. 178 Kim HI, Fundamental Legal Concepts of China and the West, 1981, Kennikat Press, p121.

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