Honesty is the best policy

There is an interesting article behind the paywall at The Australian by Greg Rudd the brother of the former Prime Minister. As near as I can make out his argument, it seems to be that the more we engage with Asia, the more we will need to compromise our principles to fall in with the greater level of dishonesty that is, in his view, the framework in which business is conducted to our north. He describes a conversation he had had with a senior Chinese politician in what I can only describe as in a shockingly racist way:

‘You tend to see the good in people, Mr Rudd. People like you. You laugh a lot. But you’ll never make money in China with that attitude. You’ll only be taken advantage of. People will trade off you. They won’t pay you.’

He gave me another piece of advice I’ve always remembered. ‘No 1 rule of doing business in China; never trust a Chinaman.’

When I frowned and said I thought that was a bit harsh coming from a senior Chinese man talking about his own country, he looked at me as if I were stupid.

‘Why would you as a foreigner trust a Chinese businessman when we as Chinese don’t trust each other?’

What, however, interested me was the point Greg Rudd inadvertently made. Our prosperity to a significant extent depends on our honest dealings. Wherever it might come from, this inbuilt honesty is not a handicap. It is one of our major strengths. The cost of doing business is much lower in Australia because we expect others to fulfill their contracts and we shun and often prosecute anyone who does not behave honestly. Our public officials may be incompetent but they are seldom on the take. Others may think us naive but their disdain for our way of doing things is disdain for what makes this a rich country. And if dishonesty is rampant where they live, it is what will keep them poor. Rudd’s conclusion, though, is quite the reverse:

Taking the high ground now on too many issues will eventually lead to a stagnation of Australian living standards down the track. Our morality will strangle our economic growth. It’s just a matter of time.

It may well be a matter of time before business ethics becomes as corrupt as found in other countries, but when and if we descend to such depths, we will not be better for it, neither morally nor commercially. I can only say it’s a worry to find dishonesty promoted as an appropriate way to conduct business in Asia or anywhere else.

This entry was posted in Uncategorized. Bookmark the permalink.

40 Responses to Honesty is the best policy

  1. Rabz

    wudds aren’t waaaaacist!

  2. Infidel Tiger

    What, however, interested me was the point Greg Rudd inadvertently made. Our prosperity to a significant extent depends on our honest dealings. Wherever it might come from, this inbuilt honesty is not a handicap.

    I know a lot of guys in the mining industry who are having to pay large “consultancy” fees to certain business people in Africa and Eastern Europe to make sure contracts are honoured and continue to be honoured. Publicly listed companies as well.

  3. Infidel Tiger – you should get talking with the AWB obsessive over on Akerman’s blog. As far as I’m concerned, the person paying bribes is often a victim and the person demanding them is always a criminal.

  4. Pickles

    One must never underestimate the workings of the fertile Chinese mind.

  5. C.L.

    “…never trust a Chinaman.”

    This has always been the root of Bird’s problem with Soon.

  6. CC

    This is not surprising. Bribery, dishonesty, dishonourable conduct is a way of life in many countries. In certain cultures it’s not even seen as dishonest, but clever.
    Rudd however, is wrong to advocate we compromise. The best defense is to keep a strong ethical business culture here, and punish those who don’t do business our way.

  7. Splatacrobat

    //http://www.youtube.com/watch?v=GzC5HT1Qhmo”>I like Chinese

  8. Infidel Tiger

    “…never trust a Chinaman.”

    left arm wrist spinners are the worst.

  9. Infidel Tiger

    This is not surprising. Bribery, dishonesty, dishonourable conduct is a way of life in many countries.

    It’s also why the wealthy from these countries choose to invest their money in places like the US and Australia for safekeeping, where the rule of law still exists.

  10. Jim Rose

    doing business in corrupt countries is always a challenge. many take-in a local partner who knows what is required of him.

  11. Chris M

    This is because the west was built on the foundation of Christianity where truth is the central tenet; pagan cultures hold no particular significance or regard for truth as we still do. In China ‘honour’ (pride) trumps truth.

  12. Shem Bennett

    While dishonesty ought to be shunned I think there is a lot that can be said about the value of a poker face. I think that’s an area where English-speakers could learn from the Asia. Morally and commercially.

  13. wreckage

    If you have to enforce every contract through legal channels, the economy will come to a grinding halt. You can’t prosper if the great majority aren’t honest and forthright.

    Yet another reason why freedom of speech must be protected. When the law requires people lie and prevaricate to avoid revealing illegal thoughts, lying continually becomes a part of the culture. A worse disaster for freedom, honest relationships, and a society of conscience rather than “face” can scarcely be imagined.

  14. Oh come on

    Business in mainland China is based on networks of influence, rather than morality as we would see it. The Chinese attitude to people they deal with who are outside the network* and who they are liable to screw over with no notice is ‘Who are you? Do I know you? You aren’t family, so I don’t owe you anything’.

    *as the vast majority of westerners are – but that also extends to unconnected Chinese, so it’s not a racial thing)

  15. Eyrie

    We now know not to do business with Greg Rudd.

  16. Woolfe

    Should ask the people waiting for payment from a Chinese company running a new iron ore mine near Karratha. There are lots of them.

  17. Token

    So I’d love to know whether Greg Rudd believes the same about Chinese in Hong Kong, Singapore and Tsiwan.

    Strangely many people are able to conduct trade in those countries without the problems of the PRC.

    So is it a problem with the PRC or Chinese. It is clear which is true, and that Mr Rudd has transferred his experience there on all Chinese.

    What is it that Rabz called this attitude? It is very accurate.

  18. Abu Chowdah

    The way we are facing a wave of criminal migration by sea, it won’t be long before our culture has a strong streak of ethics in line with Afghan barbarians, Iranian mafioso and the Liberation Tigers of Tamil Elam. All bolstered on a wave of leftist relativism and apparatchik favouritism.

  19. Baz

    Could not agree more – glad you picked up the same conclusion.

  20. It’s also why the wealthy from these countries choose to invest their money in places like the US and Australia for safekeeping, where the rule of law still exists.

    Yep that is why money is just flowing into the Australian manufacturing industry. FWA and unions are esentially above the law. No other corporations can behave like unions. To sumarise the federal governments atitude it is if you are not on handouts expect to pay more tax. If this was China Craig Thomson might be looking at the death penalty right now where as here he is protected by the prime minister.

    The cost of doing business is much lower in Australia because we expect others to fulfill their contracts and we shun and often prosecute anyone who does not behave honestly. Our public officials may be incompetent but they are seldom on the take.

    This is partly true but go back into ancient history 25 years ago and every police force in the country was on the take. Every council was on the take for developement applications. Every high union official was on the take if you wanted to put up a building more than 2 stories (still same in Victoria I believe). So who is one of the primary targets of crooks it is foreigners all ways has been and always will be.

    Now if you make the crony capitalism arguement you must be kidding if you think that it does not exist here think of all the union involvement in superannuation, think of money given out to companies who support government policies or are union shops. To operate many businesses in Australia you must deal with unions in a corrupt manner. The reason it doesn’t come out much is who is going to tell as the business is breaking the law also. Businesses are also not that stupid as to not know even if they are not directly involved union officials are often corrupt.

    Chinas population is 50 times ours so when you consider all our corruption multiply it by 50 to get the Chinese number (just think they have 50 Craig Thomsons or Gordon Nuttals in high positions to our 1).

    Another point to make is in some countries the perception is actually worse than reality and other countries visa versa. To give an example the tap water in Bangkok is fine and I have no problems drinking it but I have never met a Thai who trusts it due to good marketing by bottled water companies and lack of trust of government. Australia is probably the visa versa case where we think that everything is fine but it is not, it is a constant battle to keep the crooks under control.

  21. Chris M

    AC is right. I read a letter from a US serviceman in Iraq describing how everyday life works there. If you get a tradesman in to do a repair on your house it becomes a battle of wits between the two who will successfully rip the other off. The tradie may be able to get payment for an incomplete or shoddy job or he may be able to use cheap second hand parts. The home-owner may be able to get the tradie to complete the job before he pays him in full, thus saving himself from having to pay the full bill.

    Such is the way of Islam (and other similar pagan cultures).

  22. Chinas population is 50 times ours so when you consider all our corruption multiply it by 50 to get the Chinese number

    You have no idea what you are talking about. The communist party is a hyper-bloated all pervasive blood sucking vampire tick that is sucking the lifeblood from every part of chinese society.

    You can’t do business in china without paying someone off and everything is licensed to ensure there are never-ending stream of income for communist officials and local police.

    Thieving, lying, cheating and self-protection have become a way of life in a society devoid of anything that resembles culture, values or morals.

  23. Phil E Steyn

    If you think it’s bad in China,you’d better steer clear of India where it’s worse. And in India we have the advantage that they speak English (sort of)

  24. Phil E Steyn

    If you think it’s bad in China,you’d better steer clear of India where it’s worse. And in India we have the advantage that they speak English (sort of)

  25. the nephew of the last emperor scam exists inside the walls of the forbidden city.

    Now it’s not possible for the authorities that manage the Forbidden City, to not be aware of this scam as it is the largest yet restricted access, “souvenir” shop in the place, yet it continues to thrive with its feeder network of “tour guides”, indicative of just how thoroughly corrupt authorities in china are.

  26. you’d better steer clear of India

    At least they haven’t exterminated all traces of culture, something the communists have succeeded at doing in china. Chinese culture, one of the oldest on the planet has been eradicated. Not even the soviet socialists where stupid enough to eradicate Russian culture, but in China bar a few tourist monuments, Chinese culture has disappeared, replaced by deep underground nuclear fallout shelters, the all-pervasive foot soldiers of the PLA and rampant prostitution in 5 star western hotels.

  27. The communist party ALP and union movement are a hyper-bloated all pervasive blood sucking vampire tick that is sucking the lifeblood from every part of chinese society Australian economy.

    Chinese economy booming although with problems Australian economy booming only due to China and would go into deep recesion if China does not keep buying our stuff at high prices for the moment.

  28. Chinese economy booming although with problems Australian economy booming only due to China and would go into deep recesion if China does not keep buying our stuff at high prices for the moment.

    Firstly the Australian economy is hardly booming, most of the economy is already in recession. Secondly what’s your point? We should be thankful to a bunch of criminals, thugs and human rights violators because they buy stuff from us???

  29. john malpas

    so racism is unprofitable?

  30. Amfortas

    Good job Andrew Bolt didn’t write about this or none of us would be able to discuss it without being called ‘racist’ by some officially approved Nong. Still, there is time and there are a lot more Chinese 1/16th bloods here to take him to Court.

    PS. To do business with a Rudd is ruddy dangerous. Ying tong tiddle eye po.

  31. since when have communists been a race?

  32. This is pretty rancid:

    I’m not saying Australia is good and Asia is bad. I’m saying we’re different.

    I would be quite comfortable saying that corruption is bad and good government is good. It’s uncontroversial, or at least it should be in my view.

    We consider ourselves noble, moral and civilised when we insist on Australian standards of pay for foreign workers. Asians think we’re stupid.

    Taking the high ground now on too many issues will eventually lead to a stagnation of Australian living standards down the track. Our morality will strangle our economic growth. It’s just a matter of time.

    Is Greg Rudd telling us to take the low moral road in order to bolster our economic growth? Import ten of thousands of cheap workers to build our infrastructure and then deport them afterwards.

  33. Firstly the Australian economy is hardly booming, most of the economy is already in recession. Secondly what’s your point? We should be thankful to a bunch of criminals, thugs and human rights violators because they buy stuff from us???

    Irving what are you on about? If we are in recession it would be much much worse without the Chinese. You paint things so black and white. This is not the case as I have explained above. There are perfectly good reasons you will be cheated if you are a foreigner.

    To the second part are you calling me or any other investor in stock markets criminal thugs etc. I have direct investments in the Thai market and they are worse than us on corruption etc. It might supprise you but if you starve a corrupt country of money it will only get worse. Increasing the size of the middle class leads to more and more accountability in government or straight out overthrow of dictators such as Marcos or Soeharto.

    So don’t use the union play book which says starve countries of money if their human rights record and wages etc. is not up to scratch making the workers even poorer. This allows the dictators to remain in power longer, hungry people tend to want to eat not get involved in politics.

  34. kelly, you are responding to something I didnt write. stay on topic.

  35. Irving
    You inferred it. To give a more direct answer yes we should be thankful and deal with everyone as it is silly to hurt the poor in spite of the rich. The poor will move up the chain and hurt the corrupt rich eventually if they reach middle class.

  36. Ally

    From what I’ve seen with my own eyes, a lot of Chinese people truly love Australia and the Australian way of life.

    What about the “ugly spirit” that has ruined most of the world and is now coming here/is here? We should be more worried about that.

    I agree with what CC said:

    “The best defense is to keep a strong ethical business culture here, and punish those who don’t do business our way.”

  37. FDB

    He describes a conversation he had had with a senior Chinese politician in what I can only describe as in a shockingly racist way

    Can you explain what’s so “shockingly racist” about his description?

  38. DM

    Fascinating article worthy of much discussion.

    I think Rudd is too pessimistic and I will just bring the following examples to your attention:

    Hong Kong flourished under British administration. An important factor in its continuing success is the relative lack of corruption and the existence of a British-style system of law and administration. The people in Hong Kong cherish their system and no-one would want to replace it with the Chinese system.

    Similarly, Singapore is a successful Chinese/Malay city-state which inherited a British system of law and administration and has continued to flourish.

    So I think there is no reason why Australia should become more like the corrupt Asian countries with whom we trade; quite the opposite is true: our system of law and administration is attractive to less fortunate people and is a great selling point for us.

  39. You inferred it. To give a more direct answer yes we should be thankful and deal with everyone as it is silly to hurt the poor in spite of the rich. The poor will move up the chain and hurt the corrupt rich eventually if they reach middle class.

    you have no idea, you are just parroting rubbish.

Comments are closed.