Monday, October 17, 2005

What globalization means in China

This summer, Beijing celebrated the opening of the newest restoration of a section of the Great Wall, Juyongguan, to tourism by inviting a world champion skateboarder from the West to soar over the wall for a first unveiling of its kind.

I arrived in Beijing a couple of days too late to witness the daredevil stunt but the huge U-shaped ramps were still in place. I was in Beijing to attend the 2nd annual international education exposition and some of the discussion sessions were staged at the scenic setting.

The expo was organized by Beijing city education department as a convenient way for high school students to become acquainted with various colleges and universities at one setting. I was told that among the 600 some booths at the expo, about 160 represented schools from outside of China. Major U.S. institutions such as Berkeley and Yale were present, as well as schools from Australia, Canada and U.K. I even saw schools from Russia and South Korea represented at the expo.

Despite China’s increasing public and private investment to take in more students, now at 4.5 million a year, the average chance of any high school graduate getting accepted to college is still a paltry 1 in 5. The less fortunate either wait to apply again or forego further education or go abroad.

Most come from single child families and many of those parents are willing to invest their entire savings to send their one child overseas for a quality education. One of the foreign educators I talked to volunteered that recruiting students from China has become an increasingly important source of revenue which explains why so many schools were at the expo.

However, the flow of human capital is increasingly bi-directional. First wave flowing into China consisted of ethnic Chinese Hong Kong and Taiwan that opened factories and settled inside China since the early 1990’s. Next were the “returnees” originally from China returning from the West to start high tech companies, a trend becoming pronounced since the turn of this century.

On my recent trip, I began to see China as a magnet for professionals from around the world, where ethnicity is irrelevant. A young Norwegian wanted to follow his girl friend from Oslo to Beijing and asked me about his prospects of employment. He had a degree in computer science from an American university and quickly found a job after he arrived.

I recently met an investment banker, formerly from the San Francisco based Robertson Stephens, who decided to join an American founded merchant bank in Shanghai. He is white and doesn’t speak Chinese but is locating in Shanghai by virtue of the demand for his skill set.

I told him that his story reminded me a new French fusion restaurant just opened in Xintiandi, the upscale district of Shanghai. The chef previously worked in a well known restaurant in San Francisco. He is white as is the partner managing the restaurant and the maitre d’. I asked the three of them what they were doing in Shanghai with no Chinese in their background. Their reply was that they saw a better future for their careers in Shanghai than San Francisco.

The investment banker surprised me by expressing concern over the future of the new restaurant, which he frequented. When pressed to explain, he said the fengshui of the place is terrible! Fengshui is a traditional Chinese “science” of geomancy. Most Chinese business people would not fail to consult a fengshui expert when they move but is hardly a concept I would expect a non-Asian to understand.

These anecdotal stories reflect the remarkable degree China has integrated into the world economy. No one could have imagined how far today’s China has changed from the days of the closed society behind the bamboo curtain under Mao’s regime that persisted until 1976.

The latest issue of Foreign Affairs, America’s most influential magazine of its kind, contained two thoughtful articles written by two influential thinkers from Beijing. One by Zheng Bijian sought to explain the peaceful intentions of China’s rise to prominence. The other by Wang Jisi examined the U.S. China bilateral relations and pointed out that China economic development is not a zero sum game and comes not at the expense of the U.S.

For advisers of Beijing’s central government to participate directly in America’s most influential forum on international relations is unprecedented, somewhat akin to Karl Rove writing for the People’s Daily. It would behoove the U.S. to respond in kind. The U.S. Congress should be at the forefront in building a positive bilateral relationship. So far the body seems to understand less about today’s China than even the general public.

Rumor has it that Senator Chuck Schumer will attempt to resurrect the threat of levying a duty on Chinese made goods in the current Congressional session. Such a move ignores the interdependence of the two economies and seeks to impose a lose-lose regimen on the bilateral relationship. I hope his colleagues and the American public will treat his proposal with the disdain it richly deserves.

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