How China Really Feels About the US and World Affairs
Earlier in the month, I read a very astute letter from a reader in the Wall Street Journal (hat-tip: Art Hutchinson) that captures the essence of how China feels about the US and world affairs in general. In it, the author suggests that in regards to the economic recovery, "China would like to see the U.S. economy recover, but not too much -- just enough to allow repayment of its enormous debt to China without making the dollar worthless. A weakened U.S. economy is good for China's long-term superpower aspirations. Global influence follows economic power." And regarding the concept of security and foreign affairs, "China's march to superpower status is facilitated by U.S. distractions abroad. If any rogue regime threatens to attack China, it knows we will annihilate it with no angst about proportionate response or world opinion." This last line is telling.
Having spent a lot of time involved in global transactions over the years -- not to mention a fair amount of time on the ground in China -- I can attest to the fact that most Chinese could really give two figs about how people perceive their actions if such activities do not damage potential commercial or personal relationships. This is a fundamental difference between applied Western commercial and political philosophy and that of China. Moreover, the Chinese feel this way about their own people as well -- they discriminate (or do not discriminate) equally when it comes to refusing to care about what others think. China moves by its own rules set. If that involves mercantilism (as it does in Africa at the moment) or producing the cheapest possible product for Western countries with dangerous parts/ingredients, China really does not care. That is, unless such actions ultimately reflect negatively on them when it comes to their bank balance.
Not that there's anything wrong with this if you take their perspective, especially if you realize where the Chinese are coming from historically and where they want to be tomorrow. As a friend wrote to me the other day, attempting to explain current Chinese policy, he suggested it was important to "remember that Sun Tzu was Chinese". Indeed he was.
- Jason Busch
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While the article is interesting, I'm put off by the generalization of how an entire country feels or does business. Especially that Chinese would supply Western countries with "dangerous parts/ingredients" to produce at the "cheapest possible" level at almost any cost so long as it isn't reducing their profits. It suggests that all Chinese have no ethics, and that is hard to believe, and even harder to say such an obvious broad categorization of a nation of people.
When I refer to the Chinese, I refer to the general policies of its leaders, not necessarily the entire populuation. But for the purposes of this blog, that's what counts.
I have spent significant time studying China academically and working in and with China professionally on the global sourcing front (and have had significant personal financial interest in various Chinese-related endeavors). I think they play by a different rules set than the rest of us. While it is not my place to pass judgement on whether this is right or wrong (nor have I done this in the column in question), it is certainly my place to call it out and to let others make their own decisions.
On the other hand, at the individual level, Chinese are no different than any other people in the world. They eat, sleep and go on the toilet like you and me. The best thing to avoid conflict, like always, is to get to know them better. Then you'll be treated like a family member. I think globalization is the best thing that has ever happen to make this dream come true. Globalization in the end increases the opportunity cost for war, and is the best stabilizing factor the world has ever seen.
What has been shown as major growth in US during last decade in particular has been in financial 'engineering' and creativity - in disposing off built up toxic assets.
It is going to take lot more than just investment in energy, education and health care to bring about real and sustainable change.
On the Chinese (and particularly government) side - yes they have been always least bothered about what rest of the world thinks and have been single minded in pursuing those goals. It certainly helps that they are not hindered by a little bit called as democracy. On the people side - the entrepreneurs and investors - are possibly same as the political leadership or close enough to that status. Their view about reaping most out of the current or any economic conditions is always favorable. They will make most money any which way. As for the genuine proletariat or workers or other people - their views hardly matter. Because of the political system or lack of a transparent system in place.
In this scenario the overall structure does not seem to lead to stability in long run. In spite of best intentions of US government - the expected response (from Chinese establishment) can at best be oriented towards extracting or actually extricating themselves from possible American crash.
On the American business people side - most people seem to be oriented only towards extracting most possible dollar savings (really?) by getting goods from China. and this model also seems headed for disillusionment.
The real shock will be when Chinese establishment will not be able to hold back people's aspirations and they will have to usher in real democracy. None of their preparations seem to be in place for that eventuality. Even today biggest problems that Chinese (and their partner) businesses face are related to managerial talent and infrastructure. If these are the problems in running businesses, it is easy to imagine chaos that will prevail when real talent is required to run as diverse and large a country as China.
Getting ready for that major uncertainty does not seem to be on anyone's radar.