Don’t Lose Your Leverage in China

“Once you lose your leverage, you’re gone.”

A business man who got buggered by his Chinese business partners once told me. He was invited to come to China to set up a highly specialized research lab in a major medical facility, and as soon as he had everything up and running, had the Chinese staff trained, it was apparently felt that he was no longer needed. His payments were stopped, his contract disregarded, and he was given the boot. Though he fulfilled his contractual obligations, met all targets, and did exactly what he was supposed to have done in China, he made the worst mistake a foreign investor can make here: he lost his leverage. He fulfilled his end of the deal too quickly, gave too much up front, and removed any apparent reason to keep him around anymore . . .

This isn’t just a point of business in China but a point of culture. It is something that’s manifested in big ways and small — from the dealings of governments to day to day interactions. And it’s something that you can only adapt to one way: you get buggered until you get used to it.

I found a new apartment on a wooded mountain top overlooking the sea in Xiamen. It was on the opposite side of a ridge from the main part of the city. Nobody — not even taxi drivers — knew of its existence. It appeared to have been the perfect writer’s enclave. When the apartment was first shown to me it was very much unfinished. It needed an incredible amount of work — new paint, a new kitchen, modernized bathrooms, a total redo — but the owners assured me that this would be done. No problem, no problem. “We will give you everything. We will make it look just like our house.”

The landlord ran a construction company so when he told me that he would make my new apartment look as nice as his — that is to say, immaculate — there was no reason to doubt it. He actually had his crew actively at work in it and everything appeared to be going as planned. So I signed the contract and paid up before the renovation was finished.

Then the problems began.

A week or so later the landlord called me up and told me that the apartment was ready for me to move into. I showed up with a load of stuff but found that little had been done since the last time I was there. After I paid everything ground to a halt — construction stopped, the crew dispersed. The apartment was cultivated to the point that it could technically sustain human life and then left as-is. There were beds, couches, a coffee table, and two of the bathrooms were given new Western style toilets. There was technically a kitchen — if you call an unsightly, stainless steel table that had an electric hot plat thrown on it and an equally unsightly, stainless steel mini-sink a kitchen.

What was more striking was what the apartment didn’t have: no refrigerator, no closets, nowhere to store anything, one room that was a completely bare cavity, no curtains, and no washing machine. The electricity also continuously cut out, making it impossible to depend on being able to use anything electronic.

I knocked on the landlord’s door. I told his wife that we needed these things. The next time I returned a refrigerator and a washing machine were sitting in my living room.

The washing machine wasn’t hooked up, so I went looking for a place to connect it. There wasn’t one. I talked to the landlord about it, and we decided to just put it in the extra bathroom on top of a squat toilet. The hose was dropped into the bowl with the idea that when the water was released from a load of laundry it would just go in the toilet pee style. Hillbilly, yes, but fair enough. The landlord then grabbed the intake hose and tried to connect it to the plastic spigot sticking out of the wall. The two pieces were not meant to be stuck together, and he eventually tired of impotently bumping them together and just dropped the hose on the floor.

“It doesn’t work,” he announced the obvious. “You can just put water from here into here.”

He indicated that I could just manually dump water into the washing machine with a bucket.

While I don’t disregard my humble rural roots, I can now afford the luxury of having a washing machine that actually hooks up to an indoor water source — a fact that burned even more as this apartment wasn’t cheap.

The next day I knocked on the landlord’s door.

“Can I have some curtains?”

“No.”

“Can I please just have some curtains?”

“There is no way, it’s not possible.”

“Alright, can you please put rods on the wall that I can hang curtains on that I buy myself?”

He agreed but never did it.

At this point the amount of money that it would have cost to properly fix out the apartment was minimal — he had already purchased the big stuff. It would have seriously cost two dollars and about five minutes of time to tell one of his workers to get a new spigot and screw it onto the wall so I could have a functioning washing machine.

But money or time wasn’t what this was about. I was in a game of leverage — a game of seeing how much you can get and how little you can give in an endless push-pull battle. This seems to be a form of entertainment in China, it’s usually nothing personal, but when it gets as petty as having to argue incessantly for things that are as mundane and cheap as a spigot or curtain rods it’s not a game most Westerners are acculturated to find worth playing. It just seems like a petty, demeaning, ridiculous waste of time.

The entire ordeal was my mistake. I saw the dark cultural pit before me and stepped right into it. I paid 100% up front before the job was done, I passed over all of my chips and showed all of my cards face up. I had no leverage. If I had only paid half of the three months + security deposit I would have had something to hold back as collateral to ensure that the work was satisfactorily completed. Now what was the point of doing anything more for me? The landlord had already gotten what he wanted. The only move I had left at my disposal was to be so annoying that he would give me whatever I wanted just to keep me away or ask for all of my money back and just leave.

As a background note to this story this landlord wasn’t in need of money. The guy was a multi-millionaire. The very next day after I paid him, in fact, he rolled up in a new Porsche. Although it is uncertain whether he paid for it or if it was some kind of “gift,” it was surely an indication that he was currently in no pressing need of the measly amounts of money he was struggling hard not to lose to me.

I found it almost impossible to conceive that he would even want to take the time dealing with me over such trifles. I was finding this entire situation to be an incredibly irritating drain of my time, and I could only imagine how much more so this should have been for a guy running a construction company, buying and selling land, paying off cops and government officials, and making so much money that the amounts we were squabbling over were absolutely irrelevant. Logically, this nickling and diming didn’t make any sense. But it’s not about sense, it’s rarely about money, it’s about playing the game — the game of trying to get as much as possible while given up the least possible. It’s a game of pride, a game of Face, a game of showing who’s up and who’s down, a game of power that’s played, for the most part, for the fun of it. This guy probably lived this game to such an extent that the moves he was making with me were mere rote reaction.

“They like this,” a friend who made a life doing business in China told me. “They like you being strong with them, and they will respect you for it.”

So I played. But being strong, in my case, meant threatening to move out. I told the landlord that I would need to have my washing machine hooked up, rods for curtains, and to have the electricity fixed or I would need to leave. He didn’t hesitate. Backing down and giving what he already said no to was, apparently, unthinkable. He sent his wife into a back room and she came out with a thick wad of bills.

This wasn’t an abnormal or even irrational way for things to have gone. This is a country were huge business deals are lost over equally trifling technicalities. It’s not about logic, compromise, or trying make a solid deal. What is competed for in this game is something far more valuable than money.

I’m not angry. If you get angry you leave China. That’s just the way it is. These cultural twists are part of the amusement and fun of being here, and if you take it at all seriously you are well on your way out of the country. This is a place where you could get in a heated argument with someone over something one day, then the next day it’s like nothing ever happened and they smile and invite you into their home. It’s just business, nothing personal, and business in China is a game: you battle it out and play as hard as you can, but when it’s over, it’s over. But if you decide to play this game you must always keep one ground rule firmly in mind: it’s often never over until you lose . . .

*Editor’s note: This is another aged story that was recently found in the dark vaults of Vagabond Journey. The events mentioned herein actually occurred around a year ago.