Trust and Written Contracts

One very curious and frustrating difference I've encountered in working with a Chinese CEO and a US consultant is that in China the level of trust is inversely related to the amount of paperwork. I've known this CEO since I was born pretty much, our individual level of trust is as high as you can get. He has no experience with Americans, but because of our trust level, he basically gives the nod on everything I suggest, including the hiring of an US consultant on certain monetary terms. Great, I thought I was done, so did the consultant, until we presented the actual contract to be signed for the work and the compensation. It took an additional two weeks in which I had to translated the contracts word for word into chinese, and there were two of us who were bilingual and answered a question about almost every word in the contract, and this was after the consultant himself had explained the contract in a 4 hour marathon session. For that additional week, I was literally at the CEO's house and talked nightly till 2am. Note, the contract totaled 3 pages, 12 point font, and were exactly the same terms that before the CEO had verbally agreed to. Seeing this process, I decided to do mine the Chinese way, by verbal agreement. No paperwork. No issues, and I do get paid in cash and stock.

You may say this is because of the difference in personal trust level between me and the other consultant, but in China personal trust levels are transferrable. They had no doubts about this consultant because he was introduced by me, until there was paperwork. In China, deals between trusted people are done verbally and almost without mentioning of specific details. We all know about getting business done over meals etc in China, but no one tells us that if they trust you the deal is done without actually talking about it or writing down the specifics. Handing a written contract to them actually makes them reverse their trust level, because by writing everything down the Chinese are getting the message that you don't trust them, therefore they revert their position to one of distrust. While in the US, nothing counts except for what's written down.

Note, this is with a company and a CEO who had no previous exposure to working with the US or Americans. The general "message" in China about working with Americans that's in the newspaper stories is one of mistrust. There are a lot of incidents of Chinese companies being completely screwed over by Americans and they have no idea what happened.

So, how to deal with this? Unless you have enough comfort to work without the written agreement, the only thing I can say is be prepared to spend that additional week or two, with translators, with someone they can trust to answer all of the questions correctly and will represent your interest with integrity. Be patient and be persistent and understand that this is not a personal level of distrust against you.