Origin of the Term ‘Chinese Wall’

A ‘Chinese Wall’ is a commercial term that means a virtual barrier that is applied within a company or organisation to maintain confidentiality between the two parts.

But is this term a comparison to the Great Wall of China? if so on what basis, and how did it originate?

In order to get to the bottom of this one it is first necessary to understand something of the history of the ‘Great Wall of China’ or more accurately the history of Chinese ‘Walls’

There is no doubt that China is famous for ‘The Great Wall’ but the first point to understand is that the picture postcard image of the wall that we usually associate with it is a relatively recent structure built during the Ming Dynasty and that wall building in China has a much longer tradition stretching back more than two thousand years before the construction of this most recent phase.

Many of the Chinese dynasties built or rebuilt walls for various reasons, the earlier ones to fortify smaller kingdoms that are now just regional boundaries in current day China. Later building was to lengthen, join up separate sections and to improve, and building on such a grandiose scale served to glorify and strengthen the dynasty as much as to provide physical defence.

The scale of the walls is without doubt impressive; at over 5000km total length and at many different separate locations they are still not all comprehensively mapped and surveyed, geographically let alone historically. Further sites are still being discovered and unearthed even today, the wall is monumental in years as well as in kilometers.

It is very likely that reports of Chinese walls got back to Europe from as early as the 13th century by way of the overland merchants and travellers using what we now call the Silk Road trading route. The Venetian Marco Polo is the most famous of these people however any mention of a ‘Great Wall’ is conspicuous by its absence from the chronicles he published and to which he owes his fame.

This absence can be explained in several ways, but the essential point is that at the time of his visit eight hundred years ago, the Ming Dynasty wall in the Beijing region which we are all now familiar with, had yet to be built. The term ‘the Great Wall’ is purely a western invention and was certainly not established in Marco Polo’s day.

Also his hosts, the Kublai Khan and the Han Dynasty were not wall builders at all but had effectively breached the wall built by earlier dynasties when they invaded from Mongolia in the north in order to gain power over the Chinese in the south. The walls would therefore not have been considered by his hosts as their own creation and may even have been viewed with some contempt. It is also likely that having ceased to serve any purpose almost one hundred years before, in many areas the walls were in a poor state of repair at the time of his travels in the 13th century.

During the Han Dynasty the walls took on new purposes and no longer performed purely as defensive structures. In some regions the walls became an important feature to exert control over the conquered Chinese, initially providing defence to the Chinese in the south against further attack from the uncivilised Mongols of the north in return for which taxes could be collected. Later the walls prevented travel and migration in both directions with the advantage that the dynasty could capitalise on the resultant trade. The walls provided a useful focus and means of communication for the governing organisation of the day.

With the benefit of this limited history it is now easier to see how the ‘Chinese Wall’ term has arisen:

If a company chooses to operate a Chinese wall, the workers and more junior management can be likened to people on opposite sides at the bottom of the wall. Each is able to manage its own part of the company in isolation but with complete privacy from the other part of the company on the other side of the opaque ‘wall’. The executive level of the company on the other hand, can be seen as stationed on top of the wall and because of this position, have complete vision and control over both company divisions below. They can if desired, facilitate limited communication between the two sides such that confidentiality is maintained but more importantly can exercise high level management to maintain the integrity of the Company.

This arrangement closely resembles the modern day features of a Chinese Wall arrangement and although whilst admittedly short of conclusive evidence provides a neat answer to the riddle.

It only remains to say that it is common knowledge in business that a Chinese wall, whilst often theoretically providing a solution, in practice is usually less successful and in some instances may be considered not appropriate. For example where legal confidentiality is required to avoid conflict of interest there is often a problem.

In its more general sense, the management structure of many modern day Asian companies and conglomerates feature a very deep, multi layered and firmly established hierarchy with a high degree of opacity laterally which can be said to feature the Chinese wall principle. This model is considered to provide managerial benefit even though it is not widely promoted under western style management principles.

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