Last week I spoke to a Chinese business delegation visiting at Forbes. These were mostly genuine entrepreneurs, not the state-favored moguls we often read about. However, a few in the group had made one of our lists, either individually or by their companies, so of course we had a spirited exchange about those rankings and whether we journalists get it right. I also picked up plenty of discontent with government policies, maybe because of the slowdown in China.
What I didn’t get around to, in the time we had that morning, was some thoughts–a list, if you will–I had compiled about things Americans don’t know or get wrong about contemporary China. Let me try the 5 handy items here:
1) Americans know that Chinese businesses can be fiercely (some would say unfairly) competitive with foreigners. They less often realize how much competition exists within the Chinese market, although that is becoming more apparent in new-economy sectors such as Internet commerce, as rivals like Tencent, Sina (+Weibo) and Alibaba become popularly traded stocks. Like other nations before it, China is effectively breeding some top corporate players by forcing them to compete at home so they are honed for the international stage. At the same time, financing through state banks is not always aligned with the best-quality borrowers, a mismatch. This combination does not make it easy for many a Chinese businessperson.
2) Americans know that China is vast but they often do not realize how different its regions can be and how that spells difficulty for any business, foreign or domestic, trying to bridge the various markets. Although the ongoing troubles in Tibet and the Muslim west of China are awakening a wider understanding, the fact is that different policies and characteristics in the Han-dominated rest of the country make it a checkerboard. In a nation where rule of law is tenuous to begin with (as I heard about from our visitors), this compounds the business challenge.
3) Americans know that “China Inc.” is foraging for resources, especially energy and basic foods, around the world. However, even in cities with sizable numbers of immigrants, they may be unaware of how vast the Chinese diaspora has become in recent years. Millions have followed either their personal or commercial desires to places where they can get a foothold in developing or changing sectors. That means not just Africa and Latin America, but “old Europe” as well. Go to Italy, as one of my colleagues recently did, and you see many Chinese–and they aren’t just tourists.
4) Americans know that officials in China wield tremendous power (for better or worse), but they less appreciate how often rules from the top are contested or flouted along the way. The Chinese Communist Party is disciplined–and in fact, it is going through a particularly rigorous “anti-corruption” purging at the moment–but powerful factions remain, and plans and orders can go unexecuted or altered. A coda to this concerns the Chinese military, which is pursuing aggressive stances against neighboring countries at various levels of command without necessarily the directive of top leader Xi Jinping–even though Xi exerted special authority over the forces. (Relatedly, though Americans may think the huge People’s Liberation Army is a mighty potential foe, within China there is understanding that many of its conscripts are ill-suited to much of any activity.)
5) Americans have been conditioned, by virtue of the unending number of diplomatic conflicts with the People’s Republic around the world as well as some of the economic battles, to think the Chinese people’s interests are vastly different from their own. This is less true than many believe. My experience in Asia is that, at least in urban circumstances, Americans have more cultural similarities to Chinese than to most others. In other words, as veteran Washington Post correspondent John Pomfret observed in a recent Foreign Affairs review of a collection of outsiders’ first impressions of China, a central discovery is that “most Chinese want to live as Americans do.”
So, that’s my quick 5-point corrective on China. What are your observations?