This post examines the stark difference between Chinese business practices and Western business practices regarding contracts. This is not a superficial difference, nor a mere matter of outward custom. Rather, the presence of contracts in Western business – and minimal role of contracts in the Chinese context – reveals a deep divide in thinking about obligations, property rights, respect, social hierarchies, and relationships. There are two senses of the word “contract-less” in this blog: first, it refers to the lack of contracts and second, to the varying, sometimes minimal, importance of contracts.
Although contracts seem to provide the greatest security, there is also security in the alternative – IF you understand how to navigate relationships. This is s simple yet comprehensive, cross-cultural guide to contracts.