The concept of “face” is essential to doing business in China, but recent turbulence has made these ideas even more relevant. They drive political reactions, which power reactions on a commercial and business level.
Face is a complex concept that is generally more simplified and flexible in Singapore. Not so in China, where face can be gained — or lost — in many ways. Face can be many things, but it can never be ignored or purchased.
Face is not just for public use: In public, we often see the concept in operation because the public face is related to how the community, our friends, peers and strangers perceive us.
Face is also private, allowing good friends to talk to each other in direct and — at times — apparently insulting ways without losing face.
This directness gives you face because it affirms the closeness of the friendship. The personal face comes from how you treat your family, deferring to age or looking to their welfare. Evidence of this generosity, sometimes foreign to Western approaches, is a powerful part of reaching long-standing business arrangements in China.
Acknowledging a person’s position and status in a public environment means face is given. You could achieve this through seating arrangements or information on a name card. For government officials, a name card with a long list of official positions and titles gives face. It also comes from the hotel you stay in, how you eat and how you treat others. This aspect of face involves status and deference that is more easily understood in Western terms, although the associated behaviours may differ.
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Face is not given when the deference to status and position is not observed. However, face can be borrowed to increase your own standing — like when you arrive at a meeting by taxi but leave in the chairman’s car with his driver. If your hotel does not have enough face, you ask to be dropped off at a prestigious Western hotel (you are thus “borrowing” the hotel’s face). You stand in the lobby waving goodbye to the driver before catching a taxi to your less prestigious hotel, for you know the driver will report back to the chairman.
Face is lent when you give your car and driver to a friend. Face is lent when you allow others to use aspects of your position to boost their standing in public. Face is lent when you praise your colleague, acknowledging their role in your success. In the West, this acknowledgement is about teamwork and not seen as an aspect of face.
It is not just Western operators in China who need to brush up on their understanding of face in the current environment to avoid accidentally offending. Singaporean business leaders also need to be more alert because the expectations for giving face are higher. Conditions and circumstances have changed during the Covid-19 pandemic, so it is vital to recognise who has gained, or lost, in the intervening period. Next week, we will consider a final four more aspects of face.
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Technical outlook for the Shanghai market
The Shanghai Index breakout is continuing slowly. Although this may not satisfy traders, it is welcomed by investors because a slow escape is often associated with the resumption of a stable uptrend.
The Guppy Multiple Moving Average (GMMA) relationships show diminishing downward selling pressure, making a breakout easier to achieve.
The long-term GMMA is moving sideways but has developed rapid compression. This compression shows a high level of agreement about the price of the index, and the value of the index.
Such periods of agreement about price and value are often followed by periods of significant disagreement.
This is not retreating behaviour. The short-term GMMA, or traders, provide evidence of the direction of the change in sentiment. The short-term GMMA is moving above the long-term GMMA. This is not yet bullish, but it repudiates the previous stronger bearish environment.
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The significant feature is the support level B near 3,210. This is not a well-defined level, but this area has acted as a support and resistance feature.
A successful retreat and retest of this level as a support feature confirmed the upwards breakout and the potential to move to the next resistance level near 3,380.
A weak head and shoulder trend reversal pattern was developing but this is now close to being invalidated by a move above 3,290.
This is a weak breakout, and a successful test of support will confirm an uptrend continuation. Failure of support for a retreat sees a downside target near 3,040.
Currently, the market has a good rally, but no strong directional bias as there is no clear uptrend or downtrend.
