[bwd]

There may be some wisdom, but not a whole lot. Hiring on referrals is based on the idea that people will not refer idiots to you for fear of depleting their social capital, providing you with a fairly strong selection mechanism for talented candidates. Being forced to hire the relatives of your mate regardless of their skills does not strike me as very beneficial.

[baguasquirrel]

Hiring on referrals is tricky. It's like what Steve Jobs and Joel Spolsky have said. The A ppl hire the A ppl but the B ppl hire the C ppl. So yes, it's less than ideal when you can be already be reasonably certain that credentials mean something (i.e. someone with a degree in chemical engineering is at least halfway capable of maintaining a part of a chemical plant), or you can look at things like what sort of papers they've published, what OSS projects they've contributed to, etc.

As for the hiring relatives regardless of their skill... this matters when skill really matters. When you're in a winner-takes-all field like finance or tech, it can be very much less than ideal and we myopically don't recognize that the rest of the world gets on without being exceptional at problem solving.

The flip side to the hiring relatives bit is that native-born Chinese are generally able to extract higher loyalty and work ethic from their relatives because of these same bonds. There is the feeling that you are all together.

So for all the talk of China steamrolling the world, I just don't believe it. You have to look at what benefits and costs this sort of culture provides. You get high societal stability, and a caring family that will support you, but one that can in some ways hold you back as well. Their societal structure may have worked extraordinarily well with manufacturing, but tech? I refuse to ever say that someone, or some group can't do X, however I will say the jury is still out on this one.