Chinese History and Business

Before 1840, China’s economy, government, philosophy, arts, and innovations were the envy of the world. China has never forgotten its glorious past and the reversals, at the hands of the Western powers and Japan, that ended its dominance. Understanding and being sensitive to this pattern of history strongly influences your success in modern China.

China past and present

Many Chinese consider China’s current economic growth as a return to their correct and normal position in the world, not as a new development. For 2,000 years before 1840, the Chinese economy was either the largest or second largest in the world. The modern Chinese take great pride in this history. But there followed a century rife with painful issues for the Chinese: subjugation to Western powers following the Opium Wars (1839–42 and 1856–60); the Japanese invasion; and China’s own civil war. After independence in 1949, Mao and his close followers were—and still are—regarded as national heroes for restoring peace and independence. For the Chinese, their contribution greatly outweighs the social problems associated with the Great Leap Forward and Cultural Revolution, and are not issues that foreign business people can debate.

Foreign relationships

Based on China’s history, the Chinese often exhibit a “love–hate” relationship with foreigners that can enhance or endanger your Asian business ventures. On one hand, people in China admire Western technology, education, wealth, and power. Many advertisements and fashion displays portray models with European features, and many families dream of sending their children to Western universities. On the other hand, China’s treatment at the hands of foreign governments, suffering humiliating occupations and devastating wars, still influences current attitudes.

Ancient China’s innovations

Ancient Chinese rulers implemented civil service examinations, an efficient national postal system, and water and land expressways to transport goods and people over long distances.

One thousand years before the pyramids were built in Egypt, Chinese craftspeople were creating beautiful religious and artistic artifacts from bronze, pottery, and semiprecious stone.

More than 1,500 years before Gutenberg “invented” the printing press, Chinese printers used movable type to reproduce books on religion and philosophy.

The Chinese established a recipe for gunpowder, used to make fireworks and explosive weapons, in 1044 – 200 years before it appeared in Europe.

China’s banknotes pre-date the first European use of paper money by 600 years, and as a consequence the Chinese also invented currency inflation and counterfeiting.

The flow of goods from China, paid for in precious metals, so depleted Europe’s gold and silver reserves that in 65 BCE the Roman Senate tried to limit the wearing of silk.

Possibly the first recorded case of industrial espionage involved smuggling out of China the technology behind silk production.