Interview: Author Handel Jones Discusses “ChinAmerica: Why The Future Of America Is China” (Part Two)

“ChinAmerica” (McGraw Hill, 2010, Hardcover, $27.95) Looks At Growing Interdependence Of World’s Two Largest Economies

ChinAmerica by Handel Jones

ChinAmerica by Handel Jones

Recently, Jing Daily spoke to Dr. Handel Jones, founder of the market and strategy consulting and analysis company International Business Strategies (Los Gatos, CA), about his newest book “ChinAmerica: Why the Future of America is China.” In part two of our two-part interview, we discuss the role of culture in China’s rise on the global stage, and whether China can become a “true” superpower with a combination of economic and cultural influence. If you missed part one of our interview, which focused on the increasing economic interdependence of China and the United States and what this means for Chinese and Western companies, check it out here.

Jing Daily: What role do you feel culture plays in China’s rise on the global stage? What kind of interest does the Chinese government, for instance, have in promoting Chinese culture overseas?

Handel Jones: I’ve found that the Chinese are very complex and tend to operate on multiple levels. Also, deep down there’s a very strong nationalistic streak, along with a strong distrust of outsiders. On the surface they can be friendly but it takes an extensive amount of effort to gain trust. So I think the culture is very much oriented towards protecting, being cautious.

In terms of the government, I think the government is, in some ways, very anti-culture because it likes to be in control, and in my opinion the Chinese are very individualistic, very entrepreneurial. As a result, they’re very difficult to manage, even though they conform on the surface. So, in terms of exporting culture, Confucianism is often used as a tool, although how actively it’s really believed is up for debate.

I think from an external point of view, China is actually feeling its way and becoming more assertive, but I don’t think the Chinese are actually that interested in exporting culture. I think what they want is to establish themselves as being very strong and to ensure they don’t have outside influence. They’re very conscious of the past so they’re building very strong defensive barriers.

What role do you think China’s wealth gap and urban-rural divide are having, or will have, on culture?

There clearly is a lot of stress today, and part of it is because families are being broken up by the great internal migration. In many rural areas, what you see is just grandparents and children and no one else. Almost like a ghost town. Right now, the Chinese are building wealth, and as long as they think their children can benefit, they’re making sacrifices. If that changes because of an economic slowdown, there can be pretty significant volatility in China. So that’s why the Chinese government spends so much time and money to promote how well it’s doing. But underneath the propaganda is the Internet. And just like railroads allow physical mobility, the Internet allows mental mobility, and the young people in China today are very different [than previous generations].

So what do you think will happen when China’s so-called “rich second generation” becomes some of the business leaders of tomorrow? Will they be as willing as their parents to sacrifice?

Some young people in China have grown up to be reasonably wealthy. But of course, if you look at the GDP per person in China it’s still pretty low. From my exposure to people in their mid-20s or late 20s, early 30s, there’s still that work ethic, that drive and ambition. The CEOs of many companies like Alibaba, Tencent and so on are still quite young.

Now, the generation behind that is going to be the tough one. They’ve been brought up in reasonable wealth and their grandparents won’t have that much influence on them. So I think it’ll be another 20-30 years until we see a big change in work ethic, frankly.

Even in Shanghai or Beijing, there’s still a drive and remembrance of being relatively poor among people in their late 20s, because the real wealth in Shanghai has only really come in the last 10 years. So if you’re 25 now, you remember that at 15 you weren’t really that rich at all.

What implications do you think corruption and the yawning wealth gap in China will have for efficiency going forward?

Corruption is a big deal in China, and occurs at multiple levels. One is the actual, pure taking of money. Another happens at the State-Owned Enterprises (SOEs). A lot of the top people at SOEs are from the CCP and in some cases are the descendants of the original power elite. And that is a problem. The lack of transparency in the SOEs is a problem, the lack of transparency in the government is a problem, the lack of a free press is a problem. They’re now appointing a new leader (Xi Jinping, expected to take over from current President Hu Jintao in 2012 — JD), and the process is not very open.

I think, again, if the Chinese people feel the country is doing well, they’re willing to make sacrifices.

Let’s look at the idea of a “superpower.” You said China doesn’t care about exporting culture, but they’re spending millions of dollars per year trying to do just that, while a lot of Chinese young people are emulating foreign lifestyles and consuming foreign cultural goods. However, the inverse isn’t true. Will China ever become a cultural superpower?

In terms of being a “superpower,” I think we’re in a world of wealth. The Chinese are doing what it takes to be financially wealthy and financially independent. And I think they’re more concerned with this independence and control than they are about exporting culture. I think the Chinese are more concerned about the Chinese than the outsiders. So the objective of influencing outsiders is of less value than convincing the Chinese that they’re successful, that they’re on the right path.

But on the other side of that is the Internet. It’s controlled in China, but how long will people put up with that? How much do they want more outside content? And I think right now it’s at a tipping point, and the government moved it back a little bit, in terms of the dispute with Google, but Baidu is expanding rapidly, China Mobile is developing its own search engine. The amount of online content available in China is incredible and becoming quite good. So for the younger generation, it’s the feeding of the mind.

I have young Chinese researchers working for me who live on the Chinese Internet, and their thinking process is quite different from older people. Mobile platforms are becoming the center for content, rather than television. Younger people want to have control over what they watch, which means it has to be personal. China’s implementing 4G, and that’s going to bring a huge amount of HD video to mobile platforms. I think the Internet is where we see the real action, in terms of culture and in terms of content, and I think it’s going to become the stress point in terms of globalization. The younger people are very, very savvy.

ChinAmerica touches a little on the relationship between China and India. Of course, India itself is growing rapidly, and some project it could someday become a superpower as well. How do you see relations between China and India progressing in coming years?

I’ve spent a lot of time in India. I’ve set up factories there, and in the IT world India is doing very well. In the manufacturing world they’re trying. But India is actually more corrupt than China. Even though English is much more common there, and their education in math and sciences is very good, India has a lot of internal problems. There’s a lot more conflict in India. I know that India is coming up, but I’m nowhere near as positive on India as I am on China.

Another thing is that there are still border disputes with China. When I’m in China and I talk to the Chinese about “enemies” and “friends,” even though the Chinese government often pushes the US as the enemy, the average Chinese tends to feel reasonably positive about the US, especially the younger generation. In China, Japan is the #1 enemy, but India is the #2 enemy. China’s actually a lot closer to Pakistan than it is to India. So I think there’s this concern partly with the border [dispute], but in reality, with India being strong in software and China strong in hardware, there could be a huge amount of synergy. So far that hasn’t happened. So I’m surprised the two countries are not collaborating more closely. There’s benefits for both countries to do it.

Will this change in the future? Probably. As both countries grow and see the benefits, we’ll likely see them getting closer. But it’ll probably take a little bit of time.

What are your future plans? Are you working on a follow-up to ChinAmerica?

I’m actually working on a follow-up now, on the future of China. Basically looking at their history — they invented a lot of things [in the past] and didn’t use them. Now they’re becoming a potential superpower, but what does that really mean? Will they become a part of the global environment? What will China look like 10 years from now? What will happen to the younger people, in terms of the political environment, the culture, the structure of society? Are they going to be a threat, or more belligerent?

Any plans to publish ChinAmerica in Asia?

It’s being translated in Taiwan and in South Korea, but the Chinese government has banned it as-is. So we’re working on that now. Some Chinese publishers have told us that if we make some minor changes they’ll publish it. But it’ll come out in Taiwan next month and in January 2011, I think, in South Korea.


Jing Daily would like to thank Dr. Handel Jones for taking the time to speak with us, and McGraw-Hill for setting up the interview.

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