China’s Bad-Service Economy
American politicians love to lament the fact that so many US manufacturing jobs go to China, but they less often talk about the service-sector growth that trade encourages. Based on my experience in China, the US will never lose much of this economic activity to Asia’s economic dragon.
Simply put, the service sector in China is, ahem, not good. Now I should be careful not to throw every “service” job into the same category, but there are some trends that indicate it will be a while before Chinese companies are taking this sector from Americans. Let me give you three examples from this week that highlight institutional differences in mentality between the US and China.
The first is the most mundane: the restaurant experience. For lunch today I went out in a group of seven for a nice Chinese meal. We made reservations (which they held, so that’s a start). When I showed up at the table there were six chairs and two menus. When we asked for tea they brought nine piping-hot glasses. Essentially they were giving us whatever was convenient for them on all fronts. Our actually needs were secondary to their whims.
The second example comes from the more upscale rental industry. My lease is up next month, so I figured I’d poke around and see what’s out there. My real-estate agent showed me a few places that were okay, and then asked if I wanted to see another apartment, which sounded fine, except it was on the second floor of a busy apartment complex. I told them I was only looking for higher-floors in this situation.
He explained, “But it’s really nice. It’s better than where you live.” It didn’t really matter that he had never seen my apartment, or more importantly, that I told him I didn’t want to live on the second floor. He had determined I did want to.
After him insisting several times that I was uninterested, I asked him what the rent was. He told me it was significantly more than what I currently pay. I asked him why I would want to live somewhere more expensive if it was on a lower floor than I wanted. After several more minutes of him telling me I really wanted to live there, I explained him, “不要就是不要。” In the parlance of the women’s movement, “No means no.”
Finally, a company was supposed to deliver a package to my apartment. I spoke to the relevant man who insisted that I had to be home by 6 to pick it up, although I explained that would be difficult. In the end I agreed and shot out of work, dashed home, making it home at 5:53. Unfortunately, I saw that the man (whom I was paying good money to deliver the package) had already come and gone. Irate, I asked him what time we had agreed to meet, to which he did not respond. He instead explained he was already back in the office and headed home (at which point I called him lazy, and he hung up. Not my finest moment.)
Anyway, none of these folks were exactly lawyers or consultants, but there does seem to be a cultural bias against serving the customer. This will surely limit China’s ability to encroach on the US dominance in the service industry in the near and medium-term. Sure there are excellent service-sector firms here, but usually they are staffed by Chinese with abroad experience, whereas any laobaixing can be a factory worker.
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eric responds:
Posted: February 3rd, 2008 at 7:34 pm →
all these services are constrained in the locale. they cannot be outsourced. the level of service on the street level does not seem relevant to America’s relative competitiveness in this category.
having said that, a friend of mine was saying how much she missed good services in restaurants. the tipping culture in america had been much derided, but it does seem to promote good services.
your dilivery ordeal reminded me one of my own. i called UPS to have them pick up something at 8 the next day, specifically asking them to be sure to be on time because i was also catching a flight later. sure enough, after calling 5 times, they told me they haven’t even set out yet at 10:30. i had to ship the stuff in another city. i wonder if this is lack of training on the part of the delivery companies. specifically a company i have a reasonable expectation to be reliable from past experiences, albeit not in china. or maybe there’s great cultural inertia on the part of their Chinese employees.
Larry responds:
Posted: February 4th, 2008 at 12:06 am →
One must remember the “get away with it” mentality to understand all of these irritations. If I can drop off glasses of hot water pretending to be tea and won’t loose a thing, why won’t I. If i get paid just as usual and keep my job by delivering at time of my choice, why won’t I.
Wait till they have unemployment problems, all this may improve. But that will take:
1. Consumers rejecting bad service. If you don’t show me the places I want to see, I go to another agent. If I asked for tea and you gave me glasses of water, I walk out of the restaurent. But this would not be a harmony.
2. Employers know that their customers are choosing with their feet, and employ only people willing to give good service. But this would create “unemployment” and not harmony.
Being politically correct is very important, and therefore, I don’t see it coming even with high unemployment.
chriswaugh_bj responds:
Posted: February 4th, 2008 at 12:35 pm →
As Eric pointed out, your examples are irrelevant because these are the kinds of service jobs that physically can not be outsourced. How many people in Seattle are going to fly to Beijing just for a meal? How many people looking for a house in Topeka will go through an agent based in Wuhan?
But also, for all the stories I hear of crap service in the service industry here, I can tell just as many stories of service that has been at least perfectly adequate, if not good. I have experienced bad service in Chinese restaurants, but most places I go to are good, sometimes even friendly and hospitable.
As for real estate agents, well, real estate agents the world over are evil. They’re like used car salesmen or junk food marketers- their job is to sell you something you neither need nor really want at a price far higher than you’re willing to pay, all the while convincing you that actually, you do desperately desire this thing, and the agent is really doing you a huge favour.
But as for service jobs being outsourced to India or China, it’s the business process thing, stuff like accounting and call centres, and although China’s got a long way to go, I see no reason why she won’t catch up, and fast.
And no, I don’t see it as a cultural thing. I just don’t see enough evidence of crap service being anywhere near as prevalent as us laowai like to pretend to justify that.
Nick responds:
Posted: February 4th, 2008 at 2:38 pm →
I read an article in the South China Times when I was in Hong Kong last month entitled “Why do we need democracy?” (or something to that effect as my memory is fading) The crux of the article was why Hong Kong should hang on to their democratic system for dear life. The point of the article is that years of communism on the Mainland has bred complacency. Let’s face it I wouldn’t outsource architectual design or construction to a Chinese company if my life depended on it. Domestically however, people are simply complacent.
What drives me nuts is when saving “face” totally negates serving the customer or the commonly accepted principle in the west that the customer is always right.
Josh responds:
Posted: February 4th, 2008 at 8:06 pm →
@Chris,
Fair enough, but I was pointing to the overall mentality rather than specific sectors that are going to come over here.
Chuck responds:
Posted: February 7th, 2008 at 12:26 am →
It seems like those people have a Chinese attitude towards service, because,as another poster mentioned, they can get away with it in China. I doubt this attitude is so engrained that an individual enterprise that wants to succeed in an industry that requires service to international customers can’t choose from and train the hoardes of prospective applicants appropriately.