China on the Brain

As Businessweek's Bruce Nussbaum writes: "At the World Economic Forum, it's now very cool to be Chinese." That's true.  Everybody wants to exchange name cards with the Chinese businessmen here.   Comments about currency revaluation made here in Davos by Chinese participants have even moved markets.

Bill Gates made waves Friday night when he said that China has created a "a brand-new form of capitalism" that is better for consumers than anything before it, and lavished praise on Chinese leaders. (Note that Microsoft's China experience has not always been smooth.)

All sessions related to China filled up quickly, including the Update: China 2005 panel, which I moderated on Wednesday. (Thanks to Kaiser Kuo for writing this very nice summary.)  The China fever is apparently making many Indian participants jealous, according to this Indian journalist.

In my China update session, there was much talk by  panelists about how China has defied all pre-existing economic development models. Whether or not the "China model" can successfully be copied by other countries remains to be seen. Some of the panelists believed that China is also developing its own unique models of politics, government administration... and possibly, even for diplomacy.

Yet there are also many questions and uncertainties amidst the China fever. In my China update session, there were a number of questions about China's human rights issues and its ultimate military intentions. Concerns about possible Chinese military action against Taiwan came up in more than one session.

In a speech to the forum, Chinese vice premier Huang Ju (webcast here) sought to reassure the world that economic develop is China's top priority... and that this development can't happen without peaceful cooperation with the rest of the world. "China's development will by no means pose a threat to others," he said. "We have set a policy that we will not menace others even when we are developed." As they say, only time will tell.

In talking about China's goals for the year 2020, Huang said that in addition to raising per capita GDP to $3000, he hopes that in 2020 China will have an "improved democracy system" - an oblique admission that China's political system needs work if it is to become more accountable to the people.  But some of the Chinese participants at Davos this year have chafed at what they sometimes felt was a "lecturing" tone by Westerners about China's political system.  One Chinese businessman challenged congressman Barney Frank in his claim that democracy as the West knows it should be considered a universal value. "What about Chinese values?" he asked.  Frank said both in the session and on this blog that he believes democratic values are neither Chinese or Western, but universal.

Having spent nine years living and working in China as a journalist, here is my take on the "democratic values" debate:  Of all the people in China who I got to know well - from itinerant artists to farmers to students to intellectuals to government officials - I never met anybody who didn't believe that "democracy" is something China needs more of. The problem is they want to get from here to there without revolution, violence, or risks to their jobs. Most Chinese now have enough to lose after 25 years of reform. They don't like foreigners lecturing them about how they should run their country even if they don't like the way the current leadership runs it - it's called pride. But some Chinese will also admit that the embarrassment of outside media scrutiny and diplomatic pressure is also helping to change some less-than-democratic government behaviors.

Comments

[Tim Stearns]

No one is like the Chinese -- not even the Chinese; and that's why most companies have never made a profit there! Skip the hype and mirrors of the WEF. Buy a much cheaper book, the Chinese Tao of Business (http://www.chinesetao.com)for a more realistic perspective.

[zhang]

I think Rebecca's assessment of Chinese sentiment is fair and true. Lots of people believe it takes 2 to 3 generations for the mainstream consensus on political system to evolve to a more Western one in China. Despite our attempt to rationalise the way history goes on, there are very real problems in China that is causing massive sufferings: life in many rural Chinese villages are dire; the living standard of migrant workers in cities is so terrible it most likely will make most urban Chinese too disgusted to contemplate. The legacy of the cultural revolution followed by a rat race to get rich is has left social compassion behind. There is very little cohesion to hold the Chinese people together (not even ugly narrow nationalism), society is stratified at an alarming rate. (5 years after graduation, a student from rural areas may not even want to remember where she came from.) The Chinese government still needs to be pressed (nicely) to take real steps to curb corruption and build the rule of law. The economic miracle was created without rule of law, but other temporary "commitments" that does not benefit the other non-economic areas. Parts of China have taken the most straight-forward and single minded way to wealth, causing much negative "externalities". Will China become a "super power"? A giant manufacturing base is not a "super power". China still have much to work on.
Finally, i was just watching the terrific debate BBC World hosted on the 29th. Though there are quite a few Chinese faces, they have largely stayed out of debate while McCain, Faisal, Slaughter and other members of the international community debated like friends. China needs to get in there!

[p]

Sad to hear Bill Gates make a fool of himself ... he is wealthy but not a genius ... Microsoft is already a mature and declining business ... he has no vision for his company or the rest of humanity ... By the way many echoed similar words of Japan during the hype of the Japan Inc wave. China will beocme a super power, almost any senior high school student can see this ...