Eurasia Newsletter

bringing the minds of Asia, Canada and Europe together

Month: February, 2014

Verlagerung

The German word Verlagerung belongs to the current vocabulary of the European business world. It means moving or transfer or shifting. It is being used a lot in relation to Asia: Verlagerung nach Asien. What does this mean?

First, it means transfer of business operations to Asia. This is what is usually called in English “offshoring”. A manufacturer decides to move part of its operations to an Asian country to benefit by tax breaks and low wages. Swiss companies have an extra reason for doing this: they escape from the high-priced Swiss franc, which has put them in a situation where their customers can’t afford to buy.

But Verlagerung is also used to mean the shifting of power and wealth to Asia. In this meaning, it indicates that European and Western companies have to focus on pleasing Asian customers. The sun is rising in the East.

Western business people like to think of Asia – and China in particular – as a business opportunity: they are going to sell what they already make to a huge new market. All those millions of Chinese are just waiting to buy cars, appliances or whatever else. Americans especially see globalisation that way. American companies take what they make for the domestic market and sell it to new markets in Asia. It’s a one-way street. The American company makes more money, and the new Asian customers just adapt to the American product.

This kind of thinking is to a great extent counter-phobic. Westerners are made nervous by the increasing wealth and power of Asia. They are particularly alarmed when Asian investors and industrialists buy up Western companies. So it is comforting to think of oneself as still a “winner” who just makes money out of Asia. The party will not be over at least for another generation, so the thinking goes. Yet the ground is already moving under our feet, and we shut our eyes so as not to see.

Pros and cons of cultural diversity

People around the world have been reading that the Swiss have voted to put a brake on foreign immigration because the character of the country is being diluted and the quality of life for the Swiss is going down. Switzerland is a bit like Japan – a long economic success story due to people pitching in and working together, sacrificing individualism to the common identity. Both nations cast a doubtful eye on foreigners.

In Japan, everything works well because the Japanese do it together. They work together so smoothly, they have every reason to keep out foreigners, and a go-it-alone Japan was always able to defend the archipelago against all comers. At least until the disaster of 1945. Even then, Japanese esprit de corps was a decisive factor in the country’s recovery and rise to economic power. But Japan has been stagnating since the 1990s. At the same time, the Japanese population is ageing and declining, which brings the spectre of mass immigration as in Western countries like Switzerland.

Japanese firms would now like foreigners to join their executives and boards, to get outside the cultural “box” and have some new thinking. This is not going to be easy. The Japanese do not take well to diversity and have a streak of xenophobia. On the other hand, the Japanese language seems to be an almost unsurmountable obstacle for foreign managers. So some companies are trying to to attract foreigners by making English their working language. Not Chinese, interestingly enough, although the mainland is the historic source of Japanese civilisation and may well also represent the future of Japan in a Sinocentric world.

The e-commerce company Rakuten, which is expanding by buying up competitors in Europe and America, intends to require its employees to know English. “No English, no job” says the CEO. English is already the language of the board. The whole staff is supposed to conform. For the Japanese, the diversity that goes with globalisation speaks one language, English. A European might wonder if the English-only approach really leads to diversity, or if it will just mean a stifling new homogeneity. For languages are not culturally neutral – not even English.

For years we in the West have admired the successes of Japanese management and wondered if we could imitate it. The Japanese themselves now seem desperate enough to abandon the collectivism and homogeneity that made their kind of management possible, and open the door to foreigners – Westerners, who will bring Western ideas of management back with them. The whole thing sounds as difficult as squaring the circle.

East and West

Where does the West end and the East begin? Or where does the East end and the West begin? What constitutes East and West depends, of course, on where you stand. The East is whatever is East of you, and the West is whatever is West of you. Yet we know that there is more to East and West than that. When someone in China talks about the West, they probably are thinking mainly of America, which of course is East of them, not West. So there is a further meaning to the terms East and West – a political, an ideological one.

This political or ideological meaning keeps changing, if one looks at it from a European point of view. Most of us can still remember the definite meaning East and West had in the Cold War: the West was the United States and its allies, what Americans called “the free world”, and the East was the Soviet Union and China and their allies, what Americans called “the Evil Empire” and such things. Since the Cold War ended, we no longer hear of the East, and, although the West is constantly talked of, no-one seems very sure of what the term includes. The Western world can now mean anything you like; it usually means what was the West in the Cold War, and so oddly enough it seems to include Japan.

Looking back further in European history, we see a constant ideological opposition of East and West, although the meanings of the terms keep changing. There is always a threat looming in the East. The story starts with the ancient Greeks, for whom the threat from the East was the Persian Empire. Here we already see recurring elements of the East-West myth: the plucky, democratic Greeks stand up to the vast Oriental despotism of Persia. At a later stage, the Greeks cast the Turks in the role of the Persians; and indeed for the whole of Europe, the threat for more than a millennium was the Moslem East, or the Orient. Indeed, the term Orient usually referred to the Moslem world, what we now call the Middle East. In the 19th century, when the British talked about Orientals, it included Greeks, since they too belonged to the Eastern Mediterranean. When I was a student, “Oriental languages” was a department that studied Hebrew and Arabic. “Oriental” was a catchword for all things in the Bible that were culturally different.

Gradually in the twentieth century, the Orient became the Far East, and “Orientals” came to mean Chinese and Japanese. These were regarded as a threat to Western interests: once the Japanese saw the error of their ways and accepted American occupation, China became the candidate to fill the role of “Oriental despotism”. We are likely to get more of this rhetoric as China asserts its new power in the world.

Meanwhile, there is – at least in Europe – an uneasy awareness of etymology that was never there before. We remember that “Orient” originally means the place where the sun rises, and “Occident” (West) means the place where it goes down. The Germans, who avoid learned Latin words, call the two Morgenland (morning land) and Abendland (evening land). These days we Europeans are having eerie feelings of sunset about the West.