Saturday, April 12, 2008

China, part 1 of ?? : why china matters

So as part of the "what is going on in the world" research, I've been looking at China.
Good magazine has a feature this month called 'Ten Reasons Why China Matters to You'. Some thoughts and synopsis...

From Reason #10-"its achievement scares nations around the world—and excites others—because it suggests that you can rapidly embrace globalization, achieve great income growth, and remain a single-party state by following the so-called China model."
in the Lexus and the Olive Tree. Mainly, that in order to reap the rewards of globalization a country needs to have the infrastructure, ,skill set, and processes; i.e. "software" to deal with the demands of the global market. I'm not sure that China has that. I wonder however, if the sheer volume and population of China is enough to carry the country over the hump as it currently appears to be doing. It is certainly odd to see the I find this interesting as it seems to go against some of the theories posited by Thomas Friedmanprinciples of a globalized economy humming along in a communist country. It seems jarring to me that what I might consider a fairly pure capitalist notion (globalization) is working. I wonder if that regardless of the political hold that the communist party retains, the social forces of the marketplace will erode those principles.

Reason #8 does a great job of laying out some of the challenges that China will face the longer it remains a global player. This brings up the issues of transparency in process- both governmental and business oriented, as well as corruption. There are several separate booms/seas of change going on in China right now- from sexual revolution to the results of the one child act. These will each change and affect to landscape in China- the question is how? And how will/can the government control these changes and mold them (as they have done before) without running up against the forces of the global markets?

From Reason #7- "Frankly, the best crises are the ones you actually hear about, because that means the international press got ahold of them, and those already affected or at risk will get the information they need to protect themselves. Once tracked back to China, Beijing is put on public notice that whatever laxness exists simply cannot be tolerated anymore, with threats of quarantine, bans on exports, cessation of investment flows, and so on. A generation ago, such threats would elicit yawns from China’s ruling elite, but now, with the Communist Party’s legitimacy riding on economic expansion, they’re taken with the utmost seriousness."
I think that now that China has committed itself to being a player in the global markets, it is that marketplace that will have the power and incentives to push forward social reform in China. I believe that many of the issues that people are bringing up and have brought up over the past decades (treatment of workers, human rights, corruption in the legal system, etc.) will not be solved nation to nation. I think that the force that can put the pressure on the government to change these issues is globalization. The global markets have the incentive (more investment, continued growth) as well as the clout to demand these changes. If the above quote is true (and I think that it is) the government has placed itself in a position were it has to listen. I don't think that there is any way that they can shut the doors on the global market now without completely destroying the country.

Reason #6 talks more about the political aspect of China's rise. I think this is where a lot of the uncertainty for me comes in. In order to get what it needs to keep growing and sustaining the growth, China is getting resources from all over- including some pretty unstable places. What happens to the global markets if China's supply is disrupted? If you don't think that will have some adverse reactions here, you are mistaken.... we should be paying much more attention to this than we currently are. This is the type of issue that we simply do not have any control over happening. If we aren't keeping an eye out and see the warning signs, we will be caught off guard.
I know there is a lot of people worrying about design and jobs shifting more to China than they are, and they might be right. I also think that if we keep trudging along as we have been head fixed in one direction, not looking around, and truthfully, not thinking very hard about what we're doing and where we're going, that there is nothing we can do to stop it. That said, I think that if we can wake up, take a deep breath and knock down our self-imposed restrictions on ways of thinking and creating, that we can offer "new". We cannot skate by on our reputation without doing anything to deserve that reputation. It isn't fair that manufacturing jobs are going or gone, it isn't fair that we aren't, as a country, what we used to be in terms of innovation and drive. But whose fault is that? Ours. And the world isn't fair. The longer we spend complaining about it and being nostalgic for when we were the hot market and everyone wanted us, is more ground we will have to cover to catch up.

Reason #5- Apparently I may be an economic determinist as I agree with the following quotes: "I believe economics shapes politics more than the other way around.....That doesn’t mean I want Washington to forgo pushing Beijing’s leaders in the direction of increasing political freedom and transparency, it just means that I have more faith in the transformative power of markets than others do, so I don’t argue for picking fights with China on that score...." I should look more into that economic concept (and this is where a part of my brain goes, "Economic Theory?!? You're in Art School! What are you thinking???"). This reason also brings up my earlier point about a potential crisis affecting us seriously. This is what I get for typing as I read....
The characterization of a "financial 'balance of terror'" reminds me greatly of the Cold War mentality: Us v. Them, both sides understanding the destruction of actually acting on their threats, but needing to perpetuate that image.

Reason #4 addresses some of the environmental concerns about rapid expansion of infrastructure. While I agree that international pressures and concerns may tip the balance to a smarter style of growth, I worry that the cheapness and ease of the "old" way may win out regardless. Also, once you start down that way, the damage gets done very very quickly. So it really won't take a big push to start that avalanche. Especially when you are tyring to catch up to the rest of the world, and are aggressively pursuing growth, there is the danger (proven through history) of looking at the now and short-term future, and ignoring the long-term effects until it is too late. I don't have a lot of faith in humanity here.

From Reason #1- "How America engages China’s emerging elite in coming years could well determine—for good or ill—the lasting contours of the most important bilateral relationship of the 21st century.....Bind America and China together, and globalization cannot be derailed. But set them persistently at odds, and that’s a recipe for unacceptable danger." China is not going away, and we cannot ignore that. To position ourselves into that global chain would be the smart thing to do. After all, you pay more attention to those you work closely with and have constant dialog with than distant acquaintances- regardless of whether you agree or disagree most of the time. It simply affects you more.

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