Payday in China, Why Don’t You Pay Asshole?

Today is payday at Zhong Lun. I am glad to get the cash, since it pays my rent, but I am really here since this firm has a contract with me to pay me for business I am bring to the firm, and that isn’t happening.

China doesn’t have a functioning legal system, and that means that personal disputes are impossible to resolve, as with money I am owed by other partners here. The overall structure works, and I am paid a monthly salary. But, individual debts are not honored since there is no way enforce them.

Here is a conversation I had last week. I spent 4 weeks contacting venture capital firms in the USA that do business here in China, to invite them to meet with us. A big one agreed to visit us, through a contact I have in the USA, and I sent an email around the firm inviting partners to join this.

I expected a hearty reply, but instead received this:

Shanghai Partner: “Jeff, I have a friend who has worked at that [potential client] for a few years, so that should be considered my existing client.”

Me: “Have they already given you any business?”

Partner: “No, but that doesn’t matter. I already know these people.”

So, what is really happening here is this. You set up an agreement with Chinese. They interpret in a way that benefits them, even if it ignores work you have done, and money you need to survive. And you ultimately have no recourse.

It is the same story with Microsoft and US movie companies here. They spend a lot of money making and marketing their products. Then, Chinese copy them, and the system here prevents them from getting paid.