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Oct11
Why China's Service Industry Is Different

It's all in the smile.

People compare the rise of the Chinese economy to that of Japan's (every other article I read now does that) and note China's embrace of market economy as a threat to that of America's. But if one takes a good look around in China, especially at the service industry (eg the guys serving you chicken at KFC in Beijing or selling you socks at Isetan in Shanghai), one will notice a missing factor that is present in service industries across the board: the smiles.

More than 40 years since the Cultural Revolution desensitized the Chinese population, many still feel estranged to neighbors, customers and everybody else except government officials. Will China slowly become the only market economy where good service need not be provided to consumers?

spit%5B1%5D.jpgActually, the "problems" (whether one considers them problems or not is one's own decision) I outlined above is part of a grander "problem." It is often said that for any economy to advance on this planet, the hearts and minds of the population must change. If the population maintains a "backward and ignorant" attitude, trade with more developed western nations would be hampered.

Freakonomics' Lesson of Life.

An analogy of this was proved case in point in Stephen D. Levitt's "Freakonomics". It claimed that Rudy Giuliani, then US Attorney, managed to stop New York City from spiraling into a criminal spawn point by using the "broken window" rule: that is, to implement hefty fines for petty crimes in order to halt the spread of indecency from its origins. The scheme effective improved the Mafia situation in New York City and turned the city upright into what it is now.

Should the Chinese think like westerners, at least in terms of business?

Then perhaps this is no different for China. The grand problem is that many people do not adhere to a western sense of etiquette. How people cut into lines at banks, blast rock music at midnight, use car horns whenever possible, spit and squat in public arenas is evidence of this. These problems are even more pronounced in India. Should a tourist from any developed European nation visit China witness this persisting trend firsthand and insist that China will defeat the US in terms of economic power, that would be a sin. First, China must improve its image to the world of consumers, then it should consider sustainable economic growth.

Smiling is Key

So maybe not providing good service to consumers is degrading to the economy in the long run. Maybe a change in attitude, Giuliani-style, would improve the economic outlook of the Chinese economy. Starting with a smile. A simple state campaign to change business and social mannerisms, beginning with the upper- and middle-class in cities that have most contact with foreign businesses, would significantly "modernize" China, at least in the perspectives of western consumers. This may be one small step for China, but would definitely be the start of a great leap forward in becoming a superpower, no?


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