Economic challenges of ethnic diversity

"In the beginning stage of industrialization, mixing western people and different ethnic groups can be a hindrance to progress. It can reduce the focus. Countries such as Japan and Germany, where the racial make up is simpler, have been particularly successful at quickly industrializing." -- Chan Wan, columnist and assistant professor. Department of Chinese, Lingnan University. Hong Kong

HONG KONG - Chan Wan was as ever the anthropologist even though there seemed nothing remotely tribal about our surroundings in an everyday Starbucks.

The usual Saturday morning crowd seemed just like people you would find anywhere in the world enjoying their lattes and Americanos in the coffee chain in a shopping mall next to Shatin railway station in the Northern Territories.

But for Chan, who is an expert in the folklore of the people from this northernmost part of Hong Kong, any one of them was just one major setback in their lives away from reverting to worshiping the ghosts of their ancestors.

Chan said the seeming conventionality of the students crouched over their laptops and young mothers trying to keep control of their children might only be on the surface.

"When they have a crisis in their lives, when a family member suddenly becomes sick, gets cancer or even a happy event when someone gets married, they take advice from Feng Shui masters or fortune tellers, some Taoist Buddhists, or engage in some worship of their ancestors," he said.

Chan, 48, is a leading Hong Kong intellectual and is best known for the two weekly columns he writes for the Hong Kong Economic Journal, one on economic affairs and the other on folklore of Northern Territories people.

I ask him, perhaps somewhat naively, how he manages to keep a regular column on what seems such an esoteric subject going.

Someone with a PhD in folklore in China from 1918 to 1949 from the University of Gottingen in Lower Saxony could probably write it in his sleep, however.

"There is a lot of material. The folklore of the area is full of fairy stories and superstitions. The people are mainly farmers and their concerns are often about how they can summon up the magic from the past to take care of their land," he said.

One of the reasons for our interview was to discuss how the coming together of differing cultures, such as in Hong Kong, impacts on the business community.

Does it make it more vibrant than somewhere more monocultural such as the Chinese mainland?

Chan, who is also assistant professor in the Department of Chinese at Lingnan University in Hong Kong, where he teaches creative writing, said the answer was not clear cut but the fact that the mainland was overwhelmingly made up of Chinese people did present it with difficulties.

"I think it is a barrier to actually operating in the world. They find it difficult to expand overseas because they don't understand foreign cultures," he said.

"That was evidenced when the Chinese company Legend bought IBM PC division and I didn't think they fully understood the management culture. I don't think an American company would have made the same mistake. They wanted a big brand and they paid the price."

He insists a mixing of cultures is not necessarily an automatic recipe for success.

"In the beginning stage of industrialization, mixing western people and different ethnic groups can be a hindrance to progress. It can reduce the focus. Countries such as Japan and Germany, where the racial make up is simpler, have been particularly successful at quickly industrializing," he said.

"I think the advantage of diversity is when an economy starts to expand outwards and do business with overseas countries."

Chan, who has a wiry physique and a slightly absent-minded intellectual air, was brought up in the Northern Territories, studied English at the Chinese University of Hong Kong and did his masters there also in comparative literature before going on to study in Germany for almost six years, learning German in the process.

One obvious point to raise with him was whether Asian races had some pre-disposed gene which made them good at business, given the success since the World War II not just of Japan but of South Korea, Taiwan and now the emerging giant economies of India and the Chinese mainland.

Chan believes too much can be made of this because Asia is largely a Western concept rather than a reality.

"Most of the countries in Asia are actually culturally quite different. I think the Chinese, for example, have far more in common with the Germans in terms of being efficient and clear thinking than, for example, they do with the Indians," he said.

He added business development in countries owes much to learning from the experience of others than having anything to do with cultural roots.

"After the Industrial Revolution, Germany learned from England and France and Japan then learned from Germany and now China is learning from Japan," he said.

He added it is also difficult to see the differences between Hong Kong and the mainland in cultural terms.

The Northern Territories had been originally settled by Guangdong farmers who saw the rocky terrain as a safe haven from pirates but they had been joined after the British came by scholars and merchants from Shanghai and Beijing as well as southern Chinese entrepreneurs, creating eventually a broad mixture of Chinese people.