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Author Topic: Chinese concept of "worth" vs. U.S. and why it matters  (Read 1915 times)
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pandahalves
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« on: 2011 Jun 09, 01:02:04 am »



One of my close Chinese friends became aware that I collect Chinese coins and let me know that he owned a 100Yuan 1986 Year of Peace gold coin. He asked me to research the coin for him. When I let him know that there were less than 1,000 made and that the coin was probably worth over $6,000 he seemed happy and told me how it was the year he was married in and that the coin will do nothing but "year to year increase in price."  This is a very important reaction from a man who lives off of a meager salary. This reaction is the kind of cool and calm reaction that I see many times over with Chinese people and their valuables. They simply smile and nod then indicate the item is special in some way and thus not for sale.

Contrast this to a distinctly American reaction such as the kind seen in the infamous Antiques Road Show. When someone with a meager salary is told that something is unexpectedly worth a large sum of money you can see the dollar signs light up in their eyes as the dreams of large flat screen televisions, and fancy cars become a reality. For them something of value is seen in terms of its immediate purchasing power. The Chinese don't see today's dollar signs they recognize that they own something meaningful that has real value and that what it is worth today will be worth more tomorrow. This cultural difference is important to grasp when entering any Chinese-centered market. Those who stand to make the most of the coin market or any other market will be those who adopt the Chinese way of thinking, get in early, and view their posessions as truly something special with "worth" beyond dollars.

Edit by tamo42: pix
Edit by badon: moved picture, fixed paragraphs.



* Year of Peace.jpg (24.25 KB, 320x159 - viewed 1294 times.)
« Last Edit: 2011 Jun 09, 10:55:36 am by badon » Logged
r3globe
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« Reply #1 on: 2011 Jun 09, 07:34:39 am »

This is a nice story and a great insight. To top it all, the coin is gorgeous, very much so! Thank you!
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tamo42
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« Reply #2 on: 2011 Jun 09, 08:23:22 am »

That's a good observation. In economics terms, this is called time preference. The lower your time preference, the less you care about getting your value right here and now. The higher your time preference, the more you want what you want right this second.

High time preference people do stupid long term things like go into debt in order to finance consumption. Low time preference people do smart things like save right now so they can consume later.
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« Reply #3 on: 2011 Jun 09, 10:59:16 am »

I front-paged this post. Good job Panda Halves.
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« Reply #4 on: 2011 Jun 09, 11:17:15 am »

Gert Hoffstede is famous for his research on cultural differences (thought in business schools). Here is his arguments:

China:

"Geert Hofstede analysis for China has Long-term Orientation (LTO) the highest-ranking factor (118), which is true for all Asian cultures. This Dimension indicates a society's time perspective and an attitude of persevering; that is, overcoming obstacles with time, if not with will and strength."




now compare this with the US

"The United States was included in the group of countries that had the Long Term Orientation (LTO) Dimension added. The LTO is the lowest Dimension for the US at 29, compared to the world average of 45. This low LTO ranking is indicative of the societies' belief in meeting its obligations and tends to reflect an appreciation for cultural traditions."



(if someone could tell me how to include photos inbetween text it would be greatly appriciated)
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upload your post with the pictures attached. Copy the links from the footer of the post, then modify the post inserting the (img width=300)URL(/img) into the post. It's kind of a pain Smiley. --tamo42


Definition of LTO:
"Long-Term Orientation (LTO) versus short-term orientation: this fifth dimension was found in a study among students in 23 countries around the world, using a questionnaire designed by Chinese scholars It can be said to deal with Virtue regardless of Truth. Values associated with Long Term Orientation are thrift and perseverance; values associated with Short Term Orientation are respect for tradition, fulfilling social obligations, and protecting one's 'face'. Both the positively and the negatively rated values of this dimension are found in the teachings of Confucius, the most influential Chinese philosopher who lived around 500 B.C.; however, the dimension also applies to countries without a Confucian heritage."


source: http://www.geert-hofstede.com/hofstede_dimensions.php


* hofstede_china.gif (5.32 KB, 369x252 - viewed 363 times.)

* hofstede_united_states.gif (5.16 KB, 369x252 - viewed 355 times.)
« Last Edit: 2011 Jun 09, 12:14:24 pm by tamo42 » Logged

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« Reply #5 on: 2011 Jun 09, 11:59:03 am »

Further: From (Stella Ting-Toomey 1999, Communicating across cultures)

The Confucian Dynamism Dimension


A seperate cultural value dimension, Confucian dynamism, has been used by Bond (1991,1996) and the Chinese Culture Connection Group (1987) to explain some of the distinctive behavioral patterns in East Asian cultures. These cultures are China, Hong Kong, Taiwan, Japan and South Korea. Their primary values include a dynamic long-term orientation, perserverance, ordering relationships by status, being thrift centered, having a sense of shame, and emphasizing collective face-saving. The value of tenacity in pursuing one's goals together with the availability of capital for investment help to shape the five dragons and economic growth in the Pacific Rim.

In comparison to long-term orientation characteristics of the Confucian dynamism dimension, members from cultures like Pakistan, Nigeria, Phillipines and Canada score low in this dimension. Some of the characteristics associated with the short-term orientation include: short to medium term planning, being spending centered and emphasizing individual face saving.


Short term orientation: Personal survival/security, Personal respect/dignity, individual face-saving, short to medium term planning, spending centered, short to medium term outcomes.
Examples: Pakistan, Nigeria, Phillipines, Canada, Zimbabwe, UK, US, Germany

Long term orientation: Social order, hierarchical respect, collective face saving, long-term planning, thrift centered, long term outcomes
Examples: China, HK, Taiwan, Japan, S. Korea, Brazil, Thailand, Singapore

To better understand the Confucian dynamism dimension, a brief look at Confucian philosphy is helpful. Confucius was a Chinese philospher of practical ethics who lived from 551 to 479 B.C. His practical code of conduct emphasizes hierarchical societal structure and appropriate family role performance. Confucinanism remains the fundamental philosphy underlying Chinese values, attitudes and behavior. The following two principles guide Confucian philosphy: 1) superiors in the workplace must act with virtue, and those in inferior positions must obey their superior; 2) one should act dutifully toward one's parents and elders, reciprocally in one's obligations, and respectfully in role differentiation. Confucianism includes core values such as "servillity, frugality, abstinence, diligence, hard work, patriarchal leadership, entrepreneurial spirit, and devotion to family.
Notably: Confucian dynamism emphasizes both traditional values and adaptation to economic change in the environment.


I guess this can help us understand Chinese behaviour in collecting coins too...
 

ref:
Bond, M. (1991) Beyond the Chinese Face. Hong Kong. Oxford University Press.
Bond, M. (1996) The handbook of Chinese psychology. Hong Kong. Oxford University Press.
Cinese Culture Connection. 1987. Chinese values and search for culture-free dimensions of culture. Journal of Cross-Cultural Psychology, 18, 143-164.
« Last Edit: 2011 Jun 09, 12:25:26 pm by DiggingNorway » Logged

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« Reply #6 on: 2011 Jun 09, 12:26:40 pm »

That's interesting that the differences have been quantifies in some way. There are several historical reasons why this is true, but I guess all that matters now is that it is true.
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« Reply #7 on: 2011 Jun 09, 12:33:58 pm »

yes, but we have to take into account that cultures (norms constraining human interaction) changes over time, these studies are all performed before the great economic expansion in China... we would expect to see some changes between generations, income levels, rule of government, exposure to other cultures and the like. However, it is well understood in social sciences that Asian countries do have a longer term perspective than do western countries.

How this will evolve is more uncertain as some form of "westernization" probably has occured... But then again; experience tells us that when a culture/country is overexposed to external influence a "counter trend", usually in the form of increased appriciation of traditional "national" symbols, clothing, music, art, etc, occurs, leading the population to seek "security" in their old traditions...
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« Reply #8 on: 2011 Jun 09, 12:35:07 pm »

Truth is relative. I thought the Chinese Cultural Revolution has changed many of cited behavioral patterns of Chinese folks, even to this day. In particular, I remember Mr. Mao said something like "Ten thousand years is too long; grab the morning and evening" that's still being frequently quoted. "Live this moment" seems to be the general attitute of my many Chinese friends.
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« Reply #9 on: 2011 Jun 09, 01:06:13 pm »

dobedo: Yes, I also am expecting that the inclusion in the globalized financial world have had an impact on behavior, atleast for some strata of the population, we all remember the crazy gambling and bubble in Chinese stocks once ordinary people got access to the market, in addition many Asians are quite prone to gambling... social sciences are confronted with the impossible task of generalizing human behavior and the research by Hoffstede (now twenty year old data) might not be so relevant anymore..

I guess the best way is to analyze Chinese coin investors' behavior in the market, and also keep in mind that behavior might change in the event of crises. If Chinese coins are good investments is crises are yet to be seen I guess. I can imagine young urban social mobility-strivers behaving to a less extent as Hoffstede implies, that they are more influenced by Western thinking. Personally I know Chinese that speculate wildly in real estate, and young students heavily invested in stocks... that might place precious metals in a favorable position in the event of a crises, I dont know. we should note the strong collectivism though, if coins get (more) popular demand will increase perhaps more than in more individualistic cultures...
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