Things in China are Not as Negative as You May Believe

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https://www.linkedin.com/pulse/things-china-negative-you-may-believe-paul-beddie/

A majority in the world now have a negative opinion of China according to the most recent analysis by Pew Research. As an American who’s lived in Shanghai since 2012, and Asia since 1991, I frankly find a lot of what’s going on in China to be pretty amazing and more worthy of admiration than scorn. Are things perfect? Of course not. There’s plenty of room for improvement, but it certainly feels like a lot of stone throwing from glass houses by a lot of people around the world.

THE STATE OF CHINA AS VIEWED FROM CHINA

Is there enough discussion and thought in China as to what’s gone wrong in the past 70 years vs what’s going right in China? No. Is China the sum of its 70-year Communist Party history? Hell no - it’s a 5,000-year-old society! Is it a capitalistic and entrepreneurial society and economy? Maybe the most-so in the history of the world. Is there social and economic upward mobility for most people? Absolutely. Is there equal opportunity for everyone? Like every other place on Earth, no, but for nearly all people willing to work hard, the opportunity to seriously improve one’s lot is there.

Democratic? No, but the government stays in power because they continually (for the past 35 years anyway) focus on improving the quality of life for their citizens. And lately the laws and enforcement of the laws are generally designed to get people to do the right thing to maintain a stable, civil and sustainable country. Not an easy thing to do with 1.4 billion people though likely dulling some of the more dynamic edges of a fast-growing economy.  Imagine if the majority of Western politicians and bureaucrats primary KPI’s (Key Performance Indicators) were the citizens’ satisfaction with their lot-in-life, measured via huge AI driven datasets, instead of currying favor with the group that paid them/donated the most money in the last election.

Freedom of information? It’s limited, but it’s also not nearly as constrained as people think it is. There are ways to access most information and the Chinese people are very innovative and generally know what’s going on. But if you want to live your life on Facebook, Instagram, WhatsApp, Line, Twitter, Snap Chat etc. you’re not going to be very happy in China – even with a VPN these are now nearly always inaccessible.  

Are there social safety nets? To some extent yes, but nothing like the West. If you don’t work and you’re able bodied, you’re gonna suffer. Is there a gun or drug culture? No - zero tolerance as both Chinese and foreigners have found to their ill-health. Do people feel safe from violence & crime in China? Almost always yes. If you commit a crime, will you get caught? Highly likely given the ubiquity of security cameras, facial recognition software and AI analytics tools at the government’s disposal.

Is education valued and available? More than anything else – just ask the founders of all those education-tech startups, after-school cram schools or the financial officers of the US, European and Australian boarding schools and universities where all of the 100,000’s of Chinese students pay rack-rate prices with no access to scholarships or student loans. On the other side of the equation are the massive number of world leading R&D and Innovation centers being opened by both Chinese and foreign companies alike in China that pay top dollar.

Is there willingness to change and accept new ways of thinking and doing things in China? Probably more than anyplace in the world at this point in time, particularly as related to societal development and the “digitization of everything”. National pride? You betchya. Is there hope in the future and do people feel the future will be better than the past? No question! The pull of the China Dream, at least domestically, is what I recall the American Dream being when I was a kid.

Are foreigners and foreign companies allowed to partake in the economic growth here? Yes! And it’s continually improving and actually accelerating since the trade war started as I’ve recently pointed out to my Fortune 50 clients. Of course, there are no-go/national security areas and every country has these but even then, China, particularly its entrepreneurs, takes a pragmatic approach to create opportunity.

The chokehold on the Chinese internet is the most frustrating thing for me and my family and certainly holds back China’s global commerce and place in the internet. At the same time the “Great Firewall” has allowed China to create the world’s biggest, most valuable and most advanced e-commerce and fintech economy, bar none (bigger than the next 10 biggest combined!). You’ve no idea about omnichannel marketing, on-line finance and payments or the expectations of the world’s most sophisticated ecommerce consumers until you try to play the game in China – just ask Amazon, Best Buy or Carrefour among others that thought they deserved a right-to-win in China just because.

SO WHAT IS GOING ON? WHY HAS THE WORLD OPINION TURNED AGAINST CHINA?

In my opinion, a highly biased western press combined with a large number of dubious “China Experts” with little to zero on-the-ground China experience along with an anti-China political agenda to push that are primarily responsible for the negative global perception of China that’s evolved in the past 2-3 years. This is actually the opinion of nearly every foreigner I know that lives here now.

There are of course numerous, well documented and legitimate issues with the way China treats some of its minority groups, the inability to express some ideas without fear of punishment, both real and perceived, the challenges in relocating around the country, and the suddenness with which rules and laws can change resulting in unexpected jeopardy.   This does make certain aspects of life her challenging for sure. Unfortunately though China is generally not unique in the world. I’m definitely not saying that because other countries also do these things it makes it alright, but because of the way the global media reports these issues, one can be forgiven for thinking it only happens here.  

And for people that lived in China 15, 10 or even just 5 years ago that are put forward, or who promote themselves as, China experts? China changes faster than the weather and anyone pontificating on China who hasn’t spent significant time in country in the past few years has an old and likely incorrect imagination of what the place is like at a granular level.

THE HONG KONG ISSUE  

I was just in HongKong last week and I saw little to support the severity of the images and reporting that is being broadcast around the world by CNN, BBC, etc.   That said, I work with people in Hong Kong every day of the week and it’s definitely being disrupted, and the weekend protests are real and happening.

From what I’ve seen in the Chinese press this weekend, it does look like the protesters/rioters/freedom fighters/terrorists (take your pick) have taken things to a new level. Is China honoring the Agreements on keeping the place fully Democratic till 2047? Unfortunately, no. Is life better in Hong Kong or in Shenzhen/Guangzhou, just across the border? For the average person, the realistic answer is its probably better Shenzhen/Guangzhou. If you’re one of the gilded expat bankers in the SAR, the answer is definitely NO.

I can’t contemplate any place in the world right now being as tolerant of what’s going on in Hong Kong for this long without a major police or military intervention to shut it down. Imaging 18 consecutive weekends of escalating protests in a Baltimore, Liverpool, Nantes, Fukuoka, Hamburg, Adelaide or other 2nd/3rd tier city and the national government involved basically doing nothing but finger waving while the global media is camped out reporting on it.  How does this end?  I don’t know but Hong Kong is very negatively impacted while China is walking on eggshells and seems to be in a Catch-22 position no matter what it does at this point.

CHINA AS THE DOMINANT GLOBAL POWER?

I think the global “old guard” are freaking out at the realization that China is on track to dethrone the US to become the largest single economy in the world in the next 10 years. And the country and people are legitimately expecting to take their place as a leading global power. Does China look to dominate the world as a military power the way Western Powers and especially the US have since WWII? I don’t see evidence of it at a global level but in the Asia region, it’s likely.

Does China look to dominate the world economically through commerce like the US used to? Unquestionably!  Will it succeed? Time will tell, but many Chinese Fortune 500 companies, now as many as in the US, will struggle to go global in the near to medium term. These companies have come-of-age in an economy of Chinese consumers that are unique in their willingness to try new things, have little loyalty to brands and have fast growing disposable incomes.

Consumer’s in the world’s emerging markets however may actually prefer Chinese products and business models and the world may be on a path to once again bifurcation a-la the US/Soviet Union Cold War era but this time over the economic model vs a political model. But with 300 million new Chinese middle-class joining the existing 600 million middle-class citizens in the next 10 years, a lot of Chinese companies may simply decide it’s just easier and more profitable to stay home than go global to reach the Fortune 100 ranks.

DOES THE GLOBAL OPINION MATTER?

So the world is now seeing China through a negative lens instead of the global economic growth engine/miracle that it happily encouraged and massively benefited from for the past 30 years (but for which we may never recover environmentally – but that’s another story…). The next 20 years of history will be very interesting and exciting to experience – so many challenges, so many opportunities! The world will need to stay “woke” to avoid geopolitical catastrophes and proxy wars.  Does it matter that global opinion is unfavorable to China now? I think not. But, the world does need to get a reality check on the way its perceiving China in the future if we’re to avoid a clash of civilizations on a historic scale.