Research Significance

As mentioned at the end of the general background section, this study attempts to investigate the relative importance of Hofstede’s cultural dimensions, particularly, PD, MAS and LTO. To the researcher’s knowledge, there is no study which measures relative importance of Hofstede’s dimensions. In addition to theoretical application, to consider China and Mongolia in this study has many practical applications for people of the two countries. The following facts, which are substantiated below, show how pragmatically significant this research is.

1. Most dominant foreign population is Chinese.

2. Most foreign direct invested companies are Chinese owned.

3. There are occasional clashes in Mongolia between people of the two countries.

Each of these factors will now be discussed in more detail.

Chinese population in Mongolia

According to Mongolian immigration statistics, the largest number of foreign residents is Chinese, and 9388 of them were accounted for as of 2004 (see Table 1). Chinese population in Mongolia reached a peak of 20698 people in 2011, but the following year this number fell into 12022 (Citizenship and Migration General Authority of Mongolia, 2012).

However, although the table does not demonstrate the last two years reports, anecdotal evidence has it that the population of Chinese people has increased again. The second highest number of foreign people is 2827 Russians who were counted as of 2012. Thus, the

number of Chinese 4.5 times larger than the second most numerous group. As a percentage, Chinese people constitute 44 percent of the total foreign residents in Mongolia (see appendix A, table 1). Besides knowing the population of foreign residents, we can see from Table 2 their purpose for coming in relation to issued residence permits’ status. 26744 foreigners obtained residence permits as employment status, which means the dominant purpose is employment, followed by investing status with 1319 permits issued as of 2012 in Mongolia.

Translation of Table 1: Foreign residents in Mongolia as to nationalities

№ Nationalities 2004 2005 2006 2007 2008 2009 2010 2011 2012 1 Chinese 9388 7325 11547 13578 12716 13248 13714 20698 12022 2

South-Korean 1228 1620 2210 2268 2310 2431 2328 2570 2312

3 Russian 4286 4062 4587 4133 3617 3352 3166 3293 2827

4 American 999 1131 1441 1351 1380 1573 1800 2217 2122

5 Japanese 391 427 652 681 503 521 606 647 631

6 Ukrainian 799 633 743 748 402 250 207 223 191

7 Others 3615 3197 4195 4167 3552 3729 4251 6447 6981

Table 1 source: Mongolian immigration-http://immigration.gov.mn/

Translation of Table 2: Residence permits are issued as of 2012 in Mongolia by status

№ Issued status Total

1 Invited by government organization 216

2 Investing 1319

3 Studying 762

4 Employment 26744

5 For working in NGO, international charity 177 6 For working in religious organizations 77 7 Family members (employee, investor) 957

Total 30252

Table 2 source: Mongolian immigration-http://immigration.gov.mn/

Chinese invested companies in Mongolia

As Foreign Investment Regulations and Registration Department, the Ministry of Economic Development of Mongolia (2012) reported as of June 30th 2012, there are 5951 Chinese companies out of the total 12118 foreign invested companies in Mongolia. 8232 Foreign invested companies representing 67.9 percent of all the foreign invested companies are registered to operate in food and trade sectors, currently most attractive sectors for marketers in Mongolia. The second most occupied sector in Mongolia is named as others having 1504 companies and 12.4 in percentage terms (see appendix A table 3). Thirdly, geology and mineral exploration having 413 companies that are followed by engineering construction and construction materials’ manufacturing with 388 companies and Tourism with 312 companies.

Translation of Table 3: Foreign companies in Mongolia as to sectors

Source:http://www.mongolchamber.mn/index.php

Also China has been the biggest investor in Mongolia for more than a decade. It can be seen from a total amount of foreign direct investment coming from China. In the following table, the nine biggest investor countries are demonstrated with their respective investment amount between 1990 to June 30^th 2012.

№ Industries % Total (1990-2012.6.30)

2006 2007 2008 2009 2010 2011 2012.06.30

1 Trade, foodservice 67.9 8,232 1,112 1,505 1,515 572 731 872 434

2 Others 12.4 1,504 262 21 3 15 14 15 17

3 Geology, mining and search for mining.

3.4 413 22 23 4 12 14 22 17

Source:http://www.mongolchamber.mn/index.php/

Clashes between the people

While all those events take place, the growth of nationalists, who are labeled neo-nazis by the western press, has increased all over the country. Nationalists have instigated a number of raids on Chinese and companies owned by Chinese so far. The following incidents were reported by Xinhua news agency in 2005.

“A hotel, a restaurant and a supermarket owned by Chinese in downtown Ulaanbaatar were attacked overnight, leaving one man wounded, sources said Sunday [27 November].

At about 11:30 p.m. Saturday, a group of nearly 40 gangsters tried to break into the

"Beijing Supermarket" in downtown Ulaanbaatar, the Mongolian capital. They destroyed a door and windows before getting away.

On another occasion, a Chinese restaurant was attacked by some unidentified people.

At 1:00 a.m. Sunday, "Fu Xing", a hotel owned by Chinese, was raided and its reception

room was seriously damaged. One man staying in the hotel was injured and three mobile

Translation of Table 4: FDI in Mongolia by countries in one thousand USD

Country name % Total

(1990-2012.06.30) 2008 2009 2010 2011 2012.06.30

1 China 31.71 3,650,996.96 497,800.88 613,058.80 176,038.36 1,015,265.04 167,496.52 2 Netherland 23.16 2,667,036.01 4,069.20 51,028.60 232,962.18 1,816,714.10 556,240.28 3 Luxemburg 9.01 1,037,196.26 195.8 1,012.65 25,589.47 476,652.07 525,896.34 4

Virgin Islands(UK)

7.48 861,441.27 6,157.89 19,305.18 101,986.27 610,933.11 28,070.02

5 Singapore 5.45 627,075.05 32,339.86 9,359.44 31,075.00 402,738.17 136,974.92 6 Canada 4.23 487,595.94 2,739.57 1,028.00 147,811.12 72,288.16 15,302.75 7 South Korea 2.93 337,736.42 41,765.41 31,673.98 38,763.43 54,972.59 26,950.22

8 USA 2.54 292,657.89 6,466.89 2,571.52 13,911.20 127,238.95 49,728.36

9 Hong

Kong(ROC) 1.8 207,007.21 1,757.81 11,032.44 80,148.35 54,366.84 25,289.38

phones were reported missing (Xinhua, 2005).

In addition, fights and clashes between Mongolians and Chinese are not only instigated

by the former but are also provoked by Chinese. Regarding this issue, The Economic

Observer, the English web-based edition of ‘The Weekly Chinese Newspaper’, reported its

investigation. The article written by Song, Zhang, and Wang (2012) reveals some clues to

clashes or fights.

The Chinese manager, surnamed Wang, of a Chinese restaurant, who has been in

Mongolia for more than four years, says clashes between Mongolians and Chinese take

place once in a while, yet sometimes it’s the latter’s fault.

According to Zhao Jurong (赵巨荣), head of a real estate company in Mongolia, thriving

Mongolian construction industry has resulted in demand for a massive number of

construction workers, which has appealed to many Chinese. Clashes implicating Chinese

workers aren’t unprecedented thing in Ulaanbaatar.

In most cases, clashes arise from language barriers and misunderstanding one another.

Most Chinese workers in Mongolia come from southern China where the language dialect is

very fast and high pitched. Conversely, Mongolians raise their voices when arguing, or they

speak with low voices. When being in a close contact with southern Chinese people,

Mongolians may misinterpret Chinese talk and think that Chinese are trying to scold them.

Chinese workers could also exacerbate problems through their own manner. Some of them stigmatize Mongolians by calling them alcoholic or indolent. Sometimes they scorn

Mongolia’s lack of industrialization in comparison with China’s or say, “Mongolia was once our territory”. Of course Mongolians dislike such insults.

Zhao said that a group of construction workers tends to come together from the same area of China from twelve to a hundred people in it. If one or few Mongolians have a clash with that number of Chinese, certainly they will have trouble. In cases of this situation, Mongolians occasionally call nationalists. As a result, clashes turn into a gang war at times.

Generally, the strained relationship between Chinese and Mongolians is so fragile that it can easily turn to a fight, clash or an argument. Merely signing cooperation and mutual development agreements is not adequate to bring harmonious results. Therefore, to reach the goals of the agreements, cooperation between regular people must be carefully fostered in certain ways, one of which may be introducing work-related value distinctions of the two nations to potential businessmen and employees.

If intercultural communication between a Chinese employer or manager and Mongolian workers is taken as unproblematic, it could be an underlying exacerbation factor for organizations or possibly can lead to losses as many famous unfortunate cases such as ones in the introduction.

People with experiences of several months and long stay abroad have increased intercultural competence (Behrnd & Porzelt, 2012). However, most Chinese coming to Mongolia are unlikely to have experience of living abroad or be conscious of cultural value differences. By the same token, most Mongolians who work with Chinese might not have experience of working with foreigners, nor might they be aware of cultural value differences, particularly when culture is viewed through work-related values rather than obvious cultural distinctions such as clothing, food, objects and artifacts.