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Laszlo Montgomery on China’s business culture and history

by Carl Thoren

November 20, 2013

Laszlo MontgomeryIt began as a hobby, then turned into an obsession. In 2010, Laszlo Montgomery listened to his first history podcast. Because of his years of working in China, he naturally looked for a China history podcast, but couldn’t find one. So he started his own. Now, the China History Podcast reaches listeners in over 60 countries, who value the podcast for making Chinese history entertaining, thanks to Laszlo’s casual storytelling style. There are now over 125 episodes, each one extensively researched.

Although not a professor of history, Laszlo Montgomery has a long and rich history with China. He first became fascinated by China when Deng Xiaoping visited the US in 1979, which inspired him to study Mandarin. He first visited China in 1980, then moved to Hong Kong in 1989. For over 20 years, he has worked for Chinese companies manufacturing products for the US domestic market, helping them export and market consumer goods.

We sat down with Laszlo recently to discuss the importance of understanding Chinese history and culture, the history of “made in China” and changes in the world of manufacturing.

Transcript

When I began studying Chinese was when the US and China began diplomatic relations. In fact, it was just a few months after Deng Xiaoping came to the United States and really kick-started US-china relations.

I moved out to Hong Kong in 1989 and have worked for a number of Chinese manufacturing companies selling “made in China” products to the US mass-market.

History podcasting is just something that I took to. There are all kinds of them out there and I naturally subscribe to all these feeds and listen to all these guys and nobody was doing anything on China.

Understand the history, understand the people

History is just one aspect of the culture. So having that understanding of Chinese history and culture to a certain extent—it just allows you to make a better connection.

I think people in China are no different than any other people anywhere in the world: they have their culture and they are proud of it. And they like people to know about it and appreciate it.

So when you know something beyond “Chairman Mao” or “Deng Xiaoping” or “Qin Shihuang”, when you could go beyond that and you know something else or maybe you know a few words or phrases, they really appreciate that. I think people from any culture appreciate when people take the time to get to know about where they’re coming from. It gives them a sense a pride.

Painful memories of imperialism

World War II has been over for 68, almost 70 years. In the American context it really seems so long ago. But the Mayflower was in 1620—it’s like 24 years before the founding of China’s final dynasty.

The treaty of Shimonoseki was 118 years ago; the Treaty of Nanjing was 1842. So in the context of 3,000-4,000 years of history, it’s still as fresh as a daisy. I think there’s still that lingering sense of being pushed around and having been such a great and powerful civilization pretty much since about the Han Dynasty, which goes back to the time of ancient Rome, up until China sort of lost their way right after around the Qianlong in the Qing Dynasty.

To have been really the alpha male in the whole world in terms of the most powerful and technologically advanced country and culture, and then suddenly to find themselves in such a horrible spot—getting stepped on and kicked in the teeth. I think a lot of pride that you see today and this sort of overdoing everything—be compelled to do things on these scales—these long bridges, these beautiful buildings, these incredible airports and infrastructure projects. I somehow feel they are trying to make up for some lost ground during the last 150 years of the Qing Dynasty until China really found its way under the current government.

The long history of “Made in China”

You hear about “made in China” today and we all know so much is made here. But stuff has been made here always. Porcelain, tea and silk, are their signature exports for so many years. People have been coming from the west and interacting with China since the sixteenth-century onward. They’ve always been a great exporter and they’ve been very very involved in international trade. What you see today is just a continuation of what’s already been there.

When the Western people were coming to China, the goal was to be able to open up factories, to bring their western technology here and their Western products, and to manufacture here for the China domestic market. That didn’t just start in the 1980s. That was always the goal.

You know the story—if the Chinese would only add an inch to the hem of their garments and gowns, it would keep the looms of Manchester spinning indefinitely. To get into this market and to be able to manufacture here for the domestic market—that goes back to the 16th, 17th century.

Looking ahead: The end of cheap labor?

In terms of my world and what I have always been in, which is everyday general merchandise, China has now become too expensive for a lot of these things, like maybe FOB China, two dollars and under, things that will sell in the US mass-market. A lot of China manufacturers are really suffering right now. And a lot of them are going out of business and there’s a lot of consolidation.

It’s really tough to find workers now. When I first came to China to do business in 1985, workers came to you. You didn’t have to go to them. And if you needed a hundred workers, just hang up a sign in front of the gates to your factory, a massive amount of people would just come looking for jobs. Those days are long gone. Now we have to send people out to Anhui, Jiangxi, Hunan and Sichuan, looking for workers and making all kinds of promises to them.

There’s really nowhere else to go. There’s Vietnam, there’s Indonesia, there’s Thailand, all these other low-cost places to do business. But as somebody who’s actually in the in the industry, I could say that just because some place is cheaper to buy the product there, maybe 10 or 20 percent cheaper—there are other parts to this whole world of supplying the mass-market than just the price.

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