Ideas: You suggest that China’s increasing market competition has made social connections more important. Why?
Osburg: There is so much competition for patronage from important officials that sometimes a gift or a bribe in and of itself is not enough....You need to find a way to develop a bond with an individual, which is why entertaining and getting them to like you on a personal level is so important.
Ideas: What did you think of the paid sex services that are a standard part of this elite socializing?
Osburg: That was the most uncomfortable aspect of the fieldwork. Initially they would offer me this or egg me on to participate. And I had to work to try to refuse in the beginning without offending them in some way. Once I successfully refused initially, they wouldn’t pressure me again.
Ideas: Where were the wives of these businessmen?
Osburg: They would play mahjong, go traveling, or do a lot of shopping. Many of them no doubt had their own lovers on the side. It’s hard for me to say for sure. I didn’t have a lot of interaction. There is a strong separation from the outside world of business and entertaining and their home lives.
Ideas: How do female entrepreneurs get by?
Osburg: Karaoke clubs and hostess clubs are designed for men to be entertained. Certain women entrepreneurs who are entertaining clients are expected to show up for a few drinks and leave and let the men enjoy themselves but still be expected to pay the bill in the end. There is a challenge in participating in these highly gendered activities of drinking and going to nightclubs. The other challenge is that they face these accusations that their success and wealth is not a product of talent and ability but of having either slept their way to the top or relied on a powerful man.
Ideas: What do you see when you look at the trial of Bo Xilai, once a rising star in China’s Communist Party, who is charged with taking bribes, corruption, and abuse of power?
Osburg: It shows that no one’s hands are clean and that the informal networks I talk about in the book permeate all levels of government in China. And I think that part of the reason the trial has taken so long is that Bo Xilai probably knows about the dealings of lead families in China, and I’m sure he’s threatened to reveal aspects of their dealings if he is treated too harshly. This is what makes dealing with corruption so difficult in China.
Ideas: Why is it important for an American to understand how this world works?
Osburg: Looking more closely at how business and politics operate in China, you start to see a lot of the fragile foundations of many aspects of China’s dramatic growth. A day of reckoning for China’s economic growth is going to come sooner or later, and the global economy is no doubt going to take a hit because of it.
Ideas: Do these elite networks help or hurt China’s development?
Osburg: Ultimately it hurts China’s development. There are young people with college degrees and rising expectations flooding Beijing and Shanghai who are not able to find work commensurate with their status. These young people all say the same thing: There are these people who have these connections and they have monopolized all the opportunities.
Ideas: Any good anecdotes that didn’t make it into the book?
Osburg: Some things I was asked to do but refused: exporting dried rose petals to the US and smuggling Viagra.