Forbes India 15th Anniversary Special

Reframing the American View of China

The meetings of the top American and Chinese leaders in Washington were arranged to iron out differences and formulate collaboration and commitment, to move from being foes to being friends

Published: Feb 2, 2011 06:29:47 AM IST
Updated: Feb 9, 2011 03:56:00 PM IST

One message became clearly evident during last week’s historic visit of Chinese President Hu Jintao to the United States: that the US government and the American people urgently need to reframe their views of China. A deep look at China, its history and tradition, reveal common aspiration and shared values with the US. The meetings of the top American and Chinese leaders in Washington were arranged to iron out differences and formulate collaboration and commitment, to move from being foes to being friends. However, now that the diplomatic ceremonies have taken place, and before they fade into memory, both governments must take advantage of the momentum built up by the talks and urge their respective governments to push forward policies that are driven by mutual respect and sustainable trust, to the significant benefit of both nations.

mg_43742_china_flag_280x210.jpgChina's growing global influence is not a random phenomenon. For the last three decades, China's political leadership has played a critical role in shaping the transformation of China from a Planned Economy to an unparalleled growth in recent history. To understand China's rapid globalization and amazing economic achievements, we must assess the way its leadership thinks, strategizes, and mobilizes the nation’s resources. We must dig deeper into the psychology of the Communist Party leadership and the policies that are transforming China into a formidable global player. In 2007, China dislodged the United States from its leadership position as the world’s primary engine of global economic growth. China's rise to power is well thought out and carefully crafted. At the center of this remarkable growth lies a unique leadership model with core competencies well aligned to the Chinese context. So far, Chinese officials have performed as competent architects of economic growth and as shrewd psychologists regarding human behavior. The "invisible hand" of China’s leadership is far from reactive or random; the government measures every move it makes, from determining the release of land to the public, to setting exchange rates, and from promoting the growth of selected key industries or individual companies, to hand-picking specific politicians to guard the gates while transforming China into an international economic leader.

China's investment in Africa and its interest in building strong ties with oil producing countries demonstrate long-term thinking driven by bold tactical actions. In his famous book, The Art of War, renowned Chinese thinker Sun Tzu states that the best general is "the one who wins the war without fighting". China is winning global economic and diplomatic “battles” through clear and compelling leadership that think strategically, then back up their economic development plans with the nation’s committed labor force.

China is propelling full steam ahead, and any attempt to stop this progress is futile. Only recently, the US government began to recognize that negotiating with China via “hard power” methods such as coercing China to modify its currency rate or publicly criticizing its domestic policies will not push the Chinese to submit. In fact, U.S. interests are better served by examining its own state of affairs; America’s mounting fiscal debt, declining competitiveness, and political in-fighting are the root causes for its current malaise. By issuing warnings to China, the U.S is putting itself on a collision course that is risky and may trigger more instability and further economic decline. China’s achievements have not caused the decline of the U.S. economy.

In fact, China’s economic successes have been caused by much more than the oft-named reasons of cheap labor or unfair trade practices. Most Americans understand little about modern day Chinese, their painful past, their revived pride, their industrious attitude, strong family values, boundless drive for education and learning, and unbroken resiliency. Over the past three decades, China has elevated more than 300 million people from poverty to the middle class. The nation has built one of the most extraordinary infrastructures in the world. It has improved its public transportation system. It successfully hosted the Olympic Games in Beijing (2008) and the World Expo in Shanghai (2010). While American unions and management were fighting bitter internal wars, the Chinese government, with the help of its creative and driven employment pool, improved its manufacturing base by increasing efficiency and profitability. China has transformed a substantial number of State Owned Enterprises into publicly held, and newly competitive, companies. China's rise to economic power is less due to its currency exchange rate and more the result of an innate commitment to hard work in the pursuit of a better life. The U.S. should demonstrate more respect and admiration for the pioneering spirit of today’s China. Despite the common belief that China is amassing a fortune via the production of goods for sale to US consumers, reality is quite different: While made-in-China Barbie Dolls sell in US toy stores for more than US$20, Chinese makers receive less than 50 cents per doll.

The true reason behind China’s economic rise is better told through 1.3 billion individual stories of modern Chinese individuals driven to improve their lives. Consider that entire generations of younger rural Chinese are leaving their home towns and migrating to the nation’s industrial centers to work long hours and under hard conditions, just to provide for their families and ensure that their children can enjoy a better life. These ‘migrant’ workers tend to complain far less and work far harder than their counterparts worldwide. In fact, the majority of China’s factory workers undertake their jobs with a strong sense of optimism and a belief that tomorrow will be better. Unlike other societies, China’s literacy rate is among the world’s highest. China’s respect for knowledge and education is deeply embedded in its culture.  

Westerners living and working in China know that most Chinese families will do everything within their power to ensure that their children succeed in school, as academic skill is a highly respected ticket out of poverty. The majority of China’s current entrepreneurs and business owners hail from the countryside, born to parents who instilled in them the values of hard work, continual learning, dedication and endurance. Are these values different from those of American’s founding fathers? Today’s Americans will find much to admire and learn from today’s Chinese. The US was quick to admire Japan when Japanese manufacturing raced to the global forefront in the 1980s and 1990s by developing “total quality management” .  Now, by adopting a more open mind and replacing preconceived notions with reality, Americans will see that China shares essentially the same values as those held most dear to the US; today’s Chinese are truly capitalistic, industrious and competitive. While the West rails against China for its poor record on pollution, modern nations forget that they spent more than 200 years to recognize the environmental damage their domestic companies were wreaking on the environment.

China’s officials are now working hard at correcting past mistakes, and protecting the environment by promoting sustainable energy by investing in green cars, wind and solar energy. For instance, the Shenzhen local government recently passed a law stating that, by 2015, all of the city’s taxis will operate on batteries. Meanwhile Hainan Island, with its beautiful coastline, has developed a 10-year plan to prevent developers from destroying its hundreds of bays. While other nations are struggling to balance their budgets, and some countries remain in danger of bankruptcy, the Chinese government has remained responsible, conservative, stable and strong. While the West is attempting to escape from its economic demise, China is improving its industrial base. It no longer perceives itself as a cluster of factories, but as a strong and thriving industrial base that is driven by technology, innovation and a "can do" attitude. Over the past decade, China has been steadily opening up and improving its capital markets. The nation continues to send hundreds of thousands of its youth to study abroad (especially to the US, which is still considered by many Chinese as the world ‘center’ of quality education). The Chinese government, despite its imperfections, is launching tough policies on counterfeiting, corruption and illegal activities. It is implementing strict measures against local governments and real estate developers to halt coercive and corrupt methods of land acquisition from poor farmers. China’s legal system is far stronger than it was pre-WTO. Western companies are more willing to operate in China more than any other countries; they do so because they know China is committed to growth and development, and thus offers an attractive investment environment.

US policymakers negotiating with China would be wise to avoid resorting to unilateral methods of punishment. The recent move in the US Congress to get tougher on China is unproductive. Simply put, hard power tactics from the US will be met with equally tough responses from China. In addition, the use of such methods actually punishes the American people by harming US competitiveness. Instead, the US should adjust its attitude and begin viewing China as a formidable economic player with whom to identify solutions together, through an honest dialogue between respected partners. Both sides must work together not for the short haul but for many years to come. Borrowing a lesson from traditional Chinese philosophy, a far better method would be for the US and China to strive to erect a “golden bridge” (jinqiao in Chinese) that benefits both sides equally by fostering two-way communication. Only in this way, can the world’s two largest economies build the trust necessary to cooperate and together address the global challenges ahead. Therefore, last week’s meetings of the heads of state will only prove truly historical if the momentum is maintained and action taken. If both sides truly commit themselves to a future of cooperation and communication, mutual benefits will be attained. This would benefit not only the US and China, but the entire world. If this momentum can be carried on, and an open and positive dialog is sustained, the world’s largest economies can begin to effectively and positively address key global challenges. 

Shalom Saada Saar  is a Professor of Management Practice, CEIBS

[Reprinted with permission from The China Europe International Business School.]