China - Follow up
JACK
We have had a number of interesting comments, e-mails, and phone calls about last week’s posting on my impressions of China. I was reminded of the tremendous interest in the largest emerging economy in the world.
I was particularly pleased at the reaction of my friends in China who felt that I was giving a true feeling about what China is today. There was also some concern about our competing with China, a massive force with a decidedly lower wage scale. My answer is that we must learn from history.
I remember when I first started to do business in Japan (1947). At that time, Japan had the cheapest labor and was struggling to emerge from the massive defeat of World War II. Like China today, Japan had to understand the realities of the modern world. It is hard to believe now that Japan was also known for its poor quality merchandise and little or no Japanese technology. General Douglas MacArthur felt that in order to govern Japan, he had to communicate with the Japanese people. In 1947 the only real means of communication was radio, but Japanese radio was totally inferior and completely unreliable. General MacArthur sent quality control experts from the United States to teach the Japanese how to make radios that worked, because he needed a reliable way to get his message across.
There are two powerful lessons that we learned from the Japanese experience.
1. We must reach the general population with the American Message. The United States had to tell the Japanese people that we had no ill will and we would help them to recover. (This goes for the Chinese, the Mid-East and the entire world.)
2. Progress is an evolutionary process. The Japanese standard of living started to rise with the flow of business. I say this to assure all of my friends who are concerned with the standard of living in China. If you measure it by America’s comforts, you must add the time element and realize that if they keep moving in this direction, the living conditions will get better and better.
I mentioned also last week that the Chinese seem to have no prejudice against any religion. I had several questions about the presence of Jews in China. During World War II, one of the very few places that accepted Jewish refugees was China and in the 1930’s and 1940’s, they built a vibrant Jewish community in Shanghai. Julie and I went to visit the synagogue, but it was under renovation in partnership with the government and will be re-opening soon. A number of Jews assimilated into the Chinese culture but never gave up their roots — which was OK with the Chinese. The Jewish population was very much involved in real estate and played a big role in developing the modern buildings and hotels both on the Mainland of China and in Hong Kong. We actually met the original caretaker of the Synagogue, Mr. Wong who is now 88 years old and anxious to meet all the Jewish travelers that come to see his Synagogue. He spoke with gleeful pride of how beneficial it was to accept the refugees from Europe.
Again, the mission of this blog is to share the art of communication, which is the key to a better life both personally and internationally.
Communication is inspiration! Share your thoughts below.
One Comment
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Dear Jack,
It was a moment in my life to have met you, there is so much to learn from you.
As far as cnditions in China is concerned, there is still a large population in the rural area who live with great financial burden. And worse still, the communication infrastructure is in such bad shape that literally ten of millions of rural villagers still have no access to current news. Some still live in caves (by cultural traditions and financial restrictions) and some still believe Mao Zedong is still alive.
To overhaul the situation, the central govt is
a) clustering the small villages into larger one for more effective governance and efficient use of the govt’s resources
b) installing high quality land lines for broadband connection thus allowing broadview and/or practical information exchange between urban and rural people, such as the latest government’s decision for future plans or tips on how to grow a better tomato;
c) inviting private ventures to invest in infrastructure projects such as roads and bridges (in exchange for allowing the ventures monopolised toll collection businesses on those roads and bridges for an agreed number of years);
d) subsidizing villagers to purchase white goods and agricultural tools, seeds, fertilizers and also tax relief. This subsidy had actually lured back many villagers who had already headed off to work at the factories in larger towns. (Consequently causing an increasing shortage of labour, a reason for the factory workers’ wage being driven upwards)
These are some of ways the govt believe would help the villages, and there are lots of them. In the Guangdong province alone, there are 3000 “shortlisted” villages that are undergoing these major change, and Guangdong is only one of the 22 provinces in China. This will start slow but as momentum is gathered, there is no way to stop.
One the opposite side of the spectrum, China is also the largest speculative financial markets in the world. Since the bullish market began last year with numerous large companies listed in Hong Kong and locally, the market has been extremely active. Today there are over 100 million active security accounts for trading everything from equity and bonds to futures and hedge funds. Seeing speculating the market being a quick way to get out of poverty, people are literally mortgaging their houses and pawning their mattresses just to get into the market. With the average P/E ratio exceeding 50 for most listed companies, the environment is very bubbly and a big correction is around the corner. However some analysts believe the govt will do everything they can to keep the market bullish before the end of the Olympics in 2008.
As far as religion is concerned, it was never encouraged since the indoctrination as it is believed “religion is the opium of people”. However the govt is not so much concerned about what religion to which the people wish to devote themselves than the gathering power of people by a religion which could stand against the govt. The Fa Lun Gong is the perfect example. Catholicism is widely accepted and practiced in China, and even come with their Cardinals (albeit not yet approved by the Vatican).
China is so vast and so much is always going on at the same time. I am proud to be its citizen and to see its development of becoming a better place to live in and to do business with.
David Lui
David Lui 05/17/07 @ 8:38 pm