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China: Its Time Is Now

China was once referred to as the “sleeping giant”.  Well, it’s certainly not sleeping now-a-days.  And, it has literally become an economic and political behemoth on the world stage that no one would have ever thought possible a mere 10 to 20 years ago!

China today may titularly retain its communist political background and ideology, but, in fact, China is an authoritarian based, semi-democratic nation that primarily sees itself as a society of entrepreneurial pragmatists and aspiring capitalists.  As one middle-class business person proudly told me: “Forget our imperial, colonial, and Communist past.  We have always been a society of craftsmen, merchants, and traders.  We have always been players in the marketplace, and now we are embracing that heritage in a new and more sophisticated way.  As one of your presidents (Calvin Coolidge) put it – ‘the business of China is business’!”

With a population in excess of 1.3 billion (that’s billion with a capital “B”), China is now poised to vie with the United States and the entire European block for economic hegemony in the world.  And, they want to achieve this status, they want to become “a” major power, if not, “the” world power, by playing by “the rules approved by Western countries.”  That is, they want to be the new “poster child” for the doctrine established by Adam Smith.  They want to be a society based on industry, innovation, productivity, products, and a prosperous and stable working class.

My recent three-week visit to China was a revelation to me.  On my first trip twenty-five years ago, China could, at best, be economically defined as a second or even third world country.  Its cities, highways, transportation system were in disrepair.  Widespread poverty, unemployment, and substandard living conditions were readily apparent.  Foreign owned and financed “industrial sweat shops” seemed to be everywhere, and constituted China’s major source of export and trade.

Today, to walk down the streets of Shanghai (23 million), Chengdu (12 million), or Beijing (16 million) is to find yourself surrounded by all the benefits of urban living, and sadly many of its drawbacks as well.  (Specifically, automobile traffic, congestion, insufficient transportation, and, of course, smog and pollution.)  To begin with, most of the major cities in China are relatively new.  For example, 20 years ago, Shanghai was half of its present population, and contained only about 40% of its present buildings.  Shanghai is architecturally replete with new and modern office buildings, hotels, trade centers, museums, shopping centers, banks, and miles and miles of condos and apartment buildings to house its ever growing population.  Shanghai’s airport is new and constantly expanding, as are all airports, domestic and international, throughout China.  The city is surrounded by six ring-road expressway systems.  Six new subway systems are presently under construction.  And, a new high-speed railway system now connects Shanghai to many other Chinese cities.

Almost anywhere that you go in Shanghai, you will observe an army of well dressed, in fact, fashionably dressed, people decked out in clothing ranging from the Gap, Brooks Brothers, Nike, Canali, Hugo Boss, Lacrosse, and Ralph Lauren as they make their to work or play.  The streets of the city are crowded with Mercedes, BMWs, Volkswagens, Lexus, Buicks, Fords, Audis, Bentleys, Nissans, Toyotas, and Hondas  The stores and boutiques you find along the streets and in the malls strategically placed throughout the city are filled with high-end stores from all over the world, especially from America.  In fact, in some sense, China has become franchise paradise for many American companies: Starbucks, KFC, McDonalds, TGIF Friday, 7-Eleven, and yes – believe it or not – Hooters and Walmart!

According to recent Chinese statistics, the government is predicting a 20% yearly increase for the next five years in the purchase of high-end luxury products, such as electronic equipment of all kinds, computers, couture clothing, designer shoes, purses, and watches.  Other Chinese economic surveys also show a major increase in domestic internal and international travel.  Yet another report indicates that in the next few years, China expects to import goods and services valued at $10 trillion U.S. dollars, and that over 10 billion Chinese will travel overseas.  Finally, the Chinese mainland now boosts the world’s third largest number of  millionaire households at 1,300,000.  Japan has the second largest number of millionaire households, at 1,500,000.  And, the U.S. leads the way with 5,900,000 households.  Independent consultants predict that China will soon surpass Japan and, within ten years, may well challenge America’s number one ranking shortly thereafter.

From my observations and readings, the simple fact is that the Chinese people are now more concerned with economics than politics.  They want, and are in fact, demanding the benefits, products, and lifestyle associated with U.S./Western capitalism.  And it seems clear to any observer of the political scene that the new leadership in China wants to accommodate the demands of their consumer hungry constituents.

In the last month, both President Xi Jinping and Premier Li Keqiang have been traveling the world, building relationships and signing trade agreements.  And perhaps, most importantly, when President Xi Jingping met President Obama, Jinping clearly articulated both his new leadership style and the new desires of his people when he suggested we need to grow and go forward together.  “If our two nations can work together, we can be an anchor for world stability and a propeller for world peace.”

Of course, for all of China’s economic and political progress, there are internal problems that still need to be addressed.  China’s new emerging middle class are mostly urbanites.  Almost half of the Chinese population still live on farms and small villages.  Chairman Mao pointed out in 1949 that – “unless we solve the problem of the farmer/worker revolutionary, progress cannot occur”.  In 2013, according to Sim Chi Yin, a reporter for “The Straits Times” in Singapore, the gulf between China’s booming cities and the country side is so vast that it is a tinder box for social, democratic, and economic unrest.  There are also environmental and pollution issues of all kinds that need to be addressed.  For example, the air quality of Beijing on its best days, far exceeds all American environmental safety standards.  On the worst of days, it literally hurts to breathe.  And often on days of heavy pollution, if it rains, it literally rains mud or more exactly, grey ash.  The other kind of pollution that is negatively affecting China today is the amount of bribery, corruption, and nepotism that has become an institutionalized part of the political and business infrastructure.  Then, of course, there’s the question of Tibetan freedom and the status of the Dalai Lama.  And least we forget, China is still struggling with major human rights issues, political censorship, and freedom of the press.

Yet, even with all of this, many political and economics pundits are convinced that China’s pursuit of prosperity, and its new aspirations to be a major player in economic world affairs, will spill over and help to resolve many, if not all, of its social and environmental ills.  If China can successfully convert to market capitalism and by so doing, expand the democratic liberties of its people – it will alter the economic and geo-political structure of both China and the international marketplace.  One way or another, the future of China will impact the future of all of us.

  • By Katie Geusz on 8.11.2013 at 9:44 am

    Nice summary! I spent significant time in both China and Europe last year, and I was surprised by how much easier it was for me to relate to the average Beijinger than the average Roman. I think a lot of Americans would be shocked to hear that. An Italian in Beijing told me, “In Europe, we feel the weight of the past and that the best is behind us. The Chinese, despite having a lot behind, they look forward, and this gives them this drive that Europe is missing…. They think they are young.” Americans, I would argue, also look forward and consider themselves young. It makes me sad that there is a sense of an unbreachable gap between America and China when really we would make great allies in a lot of ways. It makes me even sadder that misinformation is able to fill the gap and set up our countries to be not only wary strangers but active adversaries. Politics will always be politics (and no one understands this better than the Chinese), but I think there is a real possibility for mutual understanding between the two citizenries.

    Looking forward to taking your business ethics class next semester, Prof. Gini!

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