China at 40! — A Perspective
“Mei You.” These were the first words I heard when I arrived on a night flight in Hangzhou, China in 1992. I quickly realized it meant “No” or “Don’t have.” You would hear it at all times. From finding a taxi, a seat on a train, a slice of cheese, some lemon, a fax machine, a telephone to call home, an English contract, latest banking regulations, you name it and the answer was just “Mei You.” Little did I know that in a span of less than a decade, that will change to “Mei Wenti” — meaning “no problem” — and I would witness one of the greatest transformations in human history. Now, at forty years since China’s opening up, here is a perspective.
China’s rapid rise has captured headlines from Washington to Warsaw, from London to Lima, from Delhi to Dubai, from Tokyo to Tashkent. There isn’t a major country that is not actively executing a China engagement strategy. In less than 30 years it has surpassed most countries to become the second largest economy and is set to claim the number one spot in a decade or so. China is simply too big and too important to ignore. It is the story of the 21st century. It is hard to be indifferent here. The headlines covering China every day are dizzying indeed.
The headlines, however, do not paint an adequate picture of what has transpired over the past 40 years. They hijack the true impact by emphasizing the flavored topic of the day and often paint a biased picture on the two extreme spectrums of admiration and fear. To do it justice, we need the help of big history.
Big History’s Help
Let’s step back several centuries. China had enjoyed an unchallenged primary role as the world’s most advanced nation with the largest economy for more than two millennia. But big forces were in motion — forces that would change the fortunes of mankind forever and shape the modern world as we know it today.
On the one hand, China’s world-trotting Admiral, Zheng He, was touring the world in the middle of the 14th century in command of his impressive fleet of over 300 ships. Traversing much of Asia, Africa and the Middle East, he returned from his sojourns only to report that there was nothing much of note in the ‘outside’ world! China had it all. He wished to go back to discover more, but the new Emperor, pleased with the advancement of his ‘Middle Kingdom,’ ordered the ships destroyed and for such vessels not to be allowed to sail China’s waters. That symbol of inward looking and isolation would prove catastrophic for a proud nation. China had entered a period of decline the like of which it had never witnessed. By the 17th century, China has made no significant advancement in any areas of science and technology and the economy’s momentum was sending a false sense of security to the chieftains of the Middle Kingdom.
On the other hand, two forces were fast at hand in western Europe — the technological advancement following the invention of the steam engine, and the discovery of the new world across the Atlantic. Vast resources and markets awaited the hungry and desperate merchants, innovators and rulers. The industrial revolution was at hand. Soon, colonies were established in the new world; from the Islands of the Caribbean to the treacherous jungles of Mexico and Central America; from the depths of the South American continent to the heart of the mainland in North America. There were vast untapped resources to be exploited, assisted by a constant stream of slaves trade from Africa to the new world and colonization on a scale never before imagined by even the mightiest of empires throughout history. The world was the Western European man’s oyster and with it came new settlements, imported diseases, missionary zealots, merchants, mercenaries, pioneers and discoverers who would create a vast network of empires, colonies and trading routes unmatched in its powers. Globalization 1.0 was in full gear. By 1820, China was still the world’s largest economy and America was a negligible rounding error. The next 100 years would reverse those fortunes dramatically.
This new world had paid off handsome dividends and a new world order was firmly in place. By late 20th century, Western Europe and North America had clearly emerged as the economic, military and cultural power houses of the world with global institutions to protect and propel its world order. In what seemed to be a short period of time in history — a mere 300 years — some 700 million people were living a life of privilege in the ‘first world’ — 600 million in the West and 100 million in Japan who were providing the technologies to be consumed by the West. As for the remaining 90% of humanity — the ‘third world’ — there was poverty, misery, disease and failed states. To help close the gap, there were a host of development programs, charities, NGOs and foundations that would lift them from abject poverty, bring basic resources such as drinking water and attempt to alleviate the effects of diseases and viruses that had been eradicated long-ago in the West. Two catastrophic world wars fought largely on the European theatre and the Pacific Rim, only further cemented the Western orders’ grip on the world and its institutions. The “East” was gripped in a long economic quagmire behind a definitive divide known as the Iron Curtain.
This supremacy also brought with it a meta-narrative: to be able to enjoy the privileges of the ‘first world,’ it was necessary to subscribe to the Western model of development — liberal democracy, rule of law, free elections and the institutions of free trade and finance created to support it all. Some small geographies experimented with it and there were pockets of success, but by 1978, the jury was out and it was clear: 10% of the world was prosperous whilst the rest remained in relative misery and poverty.
China’s lot during this period was one of wars, famine, foreign occupation and political chaos. In most of its history, China’s wars were an internal affair, thanks to its geographic disposition. China is well protected by vast oceans in the east and the south and rugged mountains and deserts to the west. The northern vulnerability was remedied through a monumental wall which came to be known as the Great Wall of China, protecting it from enemies from the north. Now, however, the western powers had gained in arsenals of war, in riches and in global reach. China suffered a series of humiliating wars. The first Opium War which lasted between 1839–1842 and during which Hong Kong was ceded to the British, was followed by at least 18 battles with the British forces, all resulting in horrific losses and defeat, bringing the Qing dynasty to its knees. The second Opium War some 15 years later, brought the American, French and British forces upon China. Toward the end of the 19th century, Japanese and Russian forces joined the contingent of foreign occupiers of the Middle Kingdom. The wounded body of a proud nation lay in ruins, its summer palaces in ashes and a nation’s hopes and pride of several thousand years shattered. Many parts of China were occupied for the first time in its history and major port cities such as Tianjin and Shanghai were divided into ‘concessions’ taking shape of little countries inside a tired and broken civilization. It was a period of defeat and national humiliation.
It was against this backdrop that the nationalist forces and the communists fought for freedom and independence and by 1949, Mao Zedong founded and created a New China, promising to raise a nation from the shackles of humiliation and defeat. What seemed to be a historical blip of just a few hundred years, had made its mark on the Chinese nation. Never again will they let outside forces define their destiny. China will move at its own pace and its own characteristic. It will define its own path to regain its former glory. This code is imprinted in the minds and souls of every Chinese citizen; from the peasants to the tycoons, from kindergarten students to the elderly, all are predisposed to regain the national pride so bitterly lost to them in the past few ‘short’ centuries.
By 1949 China was reduced to just about 5% of the world GDP. Most Chinese were poor and the founding of the People’s Republic, although unified the nation, brought about some of the greatest suffering of humanity in recorded history. The Great Leap Forward caused an unparalleled famine with more than 30 million dead from 1959–1961 — the largest man-made disaster in history. The Cultural Revolution from 1965–1975 violently tore apart the very fabric of society. Chinese traditional values were destroyed, families were separated, the very concept of trust was shattered and much of the spiritual and cultural heritage of China was brutally destroyed. By the time of Mao’s death in 1976, the trial of the Gang of Four and the end of the cultural revolution, China was ranked as one of the poorest nations in the world. The only thing going for it was the imprint in the mind of its citizens and one hitherto lesser-known figure of the Communist Party who had been purged by Mao during the Cultural Revolution.
Enter Deng Xiaoping!
Following the death of Mao, Deng emerged from re-education camp and outmaneuvered all others to become the de facto Paramount Leader of the nation. By mid-December 1978, he launched a new chapter in China’s history — the reform and opening-up. On the 1st of January, 1979 the United States officially recognized the People’s Republic of China. Forces were being set in motion, but no one could as yet imagine their true implication. Deng began a series of reforms in agriculture, industry, science, technology and military. Keenly aware of the shock his reforms would bring to the system, he introduced ‘Special Economic Zones’ which were ring-fenced from the rest of the country. Here, he could experiment with economic liberalization and personal freedoms, the like of which were completely foreign to China. The best example of this was in the southern fishing village of Shenzhen, next to Hong Kong. Incentives were created for manufacturing and export and soon much needed foreign direct investments would start to flow. What was, at first, labor-intensive and low-end manufacturing, has turned China into an innovation hub and the supply chain nervous system of the world. The small village of Shenzhen is now a mega metropolis of over 10 million inhabitants and home to China’s rapidly developing digital revolution.
Progress was slow at first. The fall of the Berlin wall, the dominos that followed throughout the eastern blocs, and the subsequent worldwide turmoil, seemed to bring a pause to this new momentum. The Western narrative seemed to have become a fulfilled prophecy. Capitalism had emerged and defeated Communism and the world was awaiting China’s collapse and subscription to the Western Order. But Deng and the1.3 billion people who looked to him as their leader were determined to do this with “Chinese Characteristics,” rather than risk the humiliation of kowtowing to western powers again.
Chinese society can be thought of in terms of ‘circles’ of relationships. The most sacred and core of these circles is that of the immediate family. The Chinese will protect and serve this inner circle at all cost. Then comes the circle of extended family and close relations. They are intricately linked and woven to the inner circle and much of life’s interaction is within this circle. Next comes the circle of ‘old friends,’ who are the bridges and connectors to a vast network of traders and merchants. That’s all. These outer circles all bounce and touch each other in the course of daily trade and commerce, but to the Chinese, the concept of community and neighborhood outside of these circles is faint and foreign. The job of the ‘emperor’ with a ‘mandate of heaven’ is to ensure the walls of the nation are protected — as depicted in the Chinese character signifying a nation — and the rights of these circles to freely roam around, softly collide in harmony is preserved. In both the small circles of family and friends and the larger circle of the country, the individual has always been subservient and never in the center. Chinese society is not based on the individual’s rights, but on the welfare of the collective.
The turbulent years leading to the founding of New China and the subsequent disastrous central planning that gave rise to famines and the Cultural Revolution, had all but brought this machinery to a grinding halt and tore apart all of these circles, including the most sacred inner sanctum of the family. The Chinese engine had stopped working and was in need of an overhaul.
Deng knew he had to get that machinery working again and regain the trust of the masses but he was also keenly aware that market reforms, opening up private enterprises, land and agricultural reforms, foreign direct investments and reduction of state-led economy, all flew in the face of the Communist ideals. There were still hardliners who vehemently objected to these reforms and wanted to pursue the euphoria of the Communist era of their founding fathers. Much about the path forward would be unclear and had to be discovered dynamically. To be sure, no nation had ever attempted such a transformation on such scale before. In typical Chinese fashion of turning crisis into opportunities, Deng used the ambiguity to his advantage. Chinese philosophy lends itself to colorful possibilities instead of definitive black and white and structured definitions. Deng’s genius in simplifying his message and bottling them for mass consumption proved effective. It was called ‘Socialism with Chinese Characteristics.’
By 1992, Deng realized that what was largely holding the nation back was the mindset of its own citizens. The wounds of the cultural revolution were still too fresh, the dictates of reform still too vague and the market reforms needed were beyond the skill sets and experience of the communist era bureaucrats. To Deng, the only way to clear the glut was through releasing the energies of hundreds of millions of Chinese. His southern tour in 1992 would go on to become the symbol of rapid acceleration of reforms. In what seemed to be innocent and humorous comments, he reiterated that “It doesn’t matter if a cat is black or white. If it catches a mouse, it’s a good cat!” and he was heard to say his famous words that “to get rich is glorious.”
Whilst the West was confused, the Chinese nation was clear. They knew they can march forward and discover and deal with obstacles as they found them. The Chinese idiom of crossing the river slowly while feeling the stones rang familiar to them once again. His subtle message was well received. It was not the time to debate systems and politics. It was the time to get to work, and do what Chinese people do best — arising to action and marching forward. To be sure what was clear was the “the journey” and not the “destination.” Hence, policy reversals and changes along the way, would confuse the Western observer and operator, but Chinese citizens expected it. Entrepreneurs began to spring up all over the nation. What ensued was an economic machinery the like of which the world had never seen. In a short few years China’s economy surpassed that of Italy in 2000, France in 2005, the United Kingdom in 2006, Germany in 2007 and finally that of Japan in 2010, becoming the world’s second largest economy.
From BRICS to Crest
In 2001, Jim O’Neill coined the term BRICS, claiming that the five major pillars of economic growth in the world — Brazil, Russia, India, China and South Africa — will propel the world into prosperity over the next decades. What ensued was quite a different picture. Between 2001 and 2015, China was responsible for more than 70% of all the wealth created in the BRICS economies. India ranked second at a mere 12% and South Africa was a paltry 1%.
On every other measure, China left all nations in its wake. More than 800 million people were lifted from abject poverty in 30 years, accounting for 72% of the total. India and Sub-Saharan Africa, contributed to net poverty in the same period due to high birth rates among the poor. China rose to become the manufacturing engine of the world, the financier of the developing nations, the largest holder of foreign exchange reserve, one of the biggest creditors to America, the world’s largest market for everything from cars to smart phones, the largest network of super highways and high-speed trains, the largest airports and the most advanced and integrated digital economy on the planet. These are just a few of the accolades that describe the phenomenon that is uniquely China.
It was clearly not the era of BRICS, but rather the era of ‘Crest’ — the big ‘C’ represented by China and the little ‘rest’ represented by all the other developing nations of the world.
During the Industrial Revolution the economies of the most rapidly developing countries of UK and USA would see doubling of standard of living in roughly every 60 years. China, over the past 4 decades, has witnessed a doubling of the standard of living four times, in less than 10 years each. That is 6 times the speed of the fastest period of the western economic progress. The average person during the industrial revolution was not even aware of the changes happening around them as they would take shape over many generations. On the other hand, the average Chinese between 1980 and now would be swept away by rapid changes every few years. Such a rapid and sustained change, on such a scale, has never been witnessed by humanity and given the unique construct and circumstances of China versus other large bodies of humanity — India and Africa — we are unlikely to see such phenomenon ever again. China enjoys the largest unified body of humanity that speak and write the same language, partake of same cultural heritage and are driven by same value systems, all under one Chinese tabernacle that goes back several thousand years. This simply is not the case in Africa and India or even the regions of Southeast Asia.
So if we put our big history lenses on, we see that in some 300 years, the west was able to lift roughly 800 million people out of poverty into first-world status and China did the same thing in a little over 30 years. The former entailed untold suffering, slavery and colonization and the latter has so far been done with relative peace. Granted, China’s rise has not been without it’s costs. The environment is the most obvious sacrifice of this great drama. The less talked about, but equally alarming is the shock to the moral and social fabric of society. China has been sustained for over three millennia with traditional Chinese values of Confucianism and Daoism and by adaptation of Buddhist doctrine into its social fabric. The Cultural Revolution ripped these apart and promised to fill it with the ideals of Socialism. The economic disaster that followed and the rapid reforms and subsequent economic growth, left the Chinese people’s empty and thirsting spirits with but one religion — materialism. The pursuit of wealth became the identity at any cost. Corruption, moral decay and greed defined the decades. For long term China observers, the contrast of the innocent days of the 1980s and today’s China are just simply too surreal to describe. Many questions beg answers here for the Chinese people. How sustainable is this model? How will they reconcile this unbridled materialism with the dire need for a deeper belief system? What type of society will this beget and is that congruent with traditional Chinese values? Will the younger generation reject this and demand a fundamentally different approach?
Two Systems
In early 1980s, Great Britain was contemplating the future of its last major colony — Hong Kong. The Hong Kong Island and parts of Kowloon were British territory, but New Kowloon and New Territories were ‘leased’ from China until 1997. Hong Kong, being the freest and most capitalistic society was in a conundrum and the British were seeking ways to extend its life. The Chinese were adamant that at the termination of the lease, these territories must return to Chinese rule, but it was impossible to divide Hong Kong in two, hence, this insistence meant returning the entire territory to the mainland. How would the world be able to stomach handing over the poster-child of capitalism to the largest communist nation? This was no easy task; one which fell to the British Prime Minister, Margaret Thatcher. During her negotiations with Deng Xiaoping, she posed this and many other complex questions. To Deng, it was simple: “One Country, Two Systems.” As confused as the world was about such diametrically opposed systems existing under one rule, it was not at all for Deng and the Chinese people. Therein lie few big clues in understanding of the subtle differences between Chinese and Western societies.
Chinese culture and language is designed to deal with ambiguity. The characters of the language are broad in meaning with beauty and poetry often sacrificing precision and clarity. The Chinese are very comfortable with leaving possibilities to be discovered and are not in need of black and white clarity and waterfall approach to problem solving which is the purview of Cartesian logic of the west. In fact, the most sacred and impactful of Chinese philosophical readings, the Dao De Jing, which is composed of 81 chapters, is supposed to be read in random order as opposed to cover to cover. The ‘logic’ is that truth lies enshrined somewhere and only multiple and varied examination over time can reveal and shed light on it. This, in contrast to the centuries-old western logic of an introductory hypothesis, followed by an argument and a clear conclusion of acceptance or rejection. Chinese people process information differently and thrive in grey areas that are extremely uncomfortable for westerners.
Added to this is the historical perspective of how the United States came to be in contrast to China. Chinese history, whilst turbulent and filled with internal wars and factions, has largely been the history of one nation that has coalesced, over thousands of years, under one indivisible geography, race, culture, language and tradition. Rooted in the culture is the need to preserve and safeguard this ‘Chinese-ness’ by any means, as depicted in many Chinese language characters. The social contract of the Chinese revolves around these principles and the good of society has always been set above the rights and privileges of the individual. This is manifest in every aspect of Chinese life, from the sanctuary of family life, to interactions with friends and behavior at work and social gatherings. Over the centuries, this same mindset is demanded of the citizens by the rulers and emperors. One must simply put country and society before one’s own rights and privileges. This is as true today as it was centuries ago.
America, on the other hand, was a ‘haven’ for the persecuted, the explorers and mercenaries who fled Europe in search of a new world. It’s founding, recent by any measure but a mere new experience by Chinese historical perspectives, was based on individual rights and freedoms. The Declaration of Independence, puts ‘all men’ at the center and calls on people to “hold these truths to be self evident” that they have “unalienable rights, that among these are Life, Liberty and the pursuit of Happiness.” That momentous document sets the tone for the identity of the nation and the mindset of its citizens. Most American children can recite at least part of the constitution, for it is their “system” that defines them, much more so than their geography or the language and culture. Much of American territory was purchased and annexed from enemies and rivals and many of its inhabitants came from seemingly opposing cultures of the world. As long as they attached themselves to this system and its set of values, they would be America, whether it was a slab of frozen land purchased from Russia or a remote Pacific Island inhabited by natives which was destined to be the birthplace of an American President born to an African father. Patriotism in America is, above all, to this system of “truths.” It is a marvel in human history without parallel and equal. It is, however, uniquely an American experience.
For the Chinese people, patriotism is above all to the motherland, the people, the language and the culture, regardless of the prevailing “system.” In fact, most Chinese children or adults, would not be able to cite a sentence from the Chinese constitution, for it does not define their identity. System of governance is always secondary, as long as it serves and safeguards the Chinese nation and society.
Little wonder, then, that when an American expresses to a Chinese that they will not find prosperity unless they subscribe to these systems of “truths,” the Chinese counterpart find themselves perplexed. Even processing it requires context that is absent from Chinese conception of a good and harmonious society.
Whilst many societies have similar characteristics, China represents the largest and most prosperous body of humanity which runs completely on a different set of values than the West. China’s single-party system and the firm grip of the government on the affairs of its citizen is difficult to fathom for most outsiders. To be sure it has had its share of disastrous consequences and immense human suffering. But they are marching forward with their distinct method and charting a new and prosperous course for their nation. To see this as a deficit is not just arrogant, but unwise. Chinese society has a rich culture of several thousand years. Until recently, they were quite isolated from the rest of the world and had not been called upon to participate in world affairs. That has now changed. In doing so, they will bring a dramatically different set of values and points of view to the table. The world must welcome and embrace that and allow it to enrich human experience as we begin to define the parameters of a much more intricately woven and interdependent world.
What’s Next?
Where does that leave us? China is rapidly moving forward. In its quest to become a modern and prosperous nation, it is forced to innovate new technologies for everything from clean air, to mass transport, new energy sources and smart living. It is likely to be a leader in many human endeavors from biotech to space exploration, artificial intelligence and more. If our posture toward China remains as it is today, they are likely to do many of these things alone!
Humanity is at crossroads. It has never seen so much prosperity and possibilities before. Nearly two billion people are enjoying high standard of living — much of it owed to China over the past three decades. Yet, the rest of humanity is either in relative poverty or in dire suffering. China’s rise has given hope to the “rest” that their time has also arrived, that models of ‘first’ and ‘third’ world and aid programs have lived their lives and proven ineffective and that a new and global order is needed for mankind to live peacefully and securely in a globalized world.
The two main protagonists of the forces shaping the future of humanity are China and the West — represented largely by the United States. What will the attitudes and postures be on each side? Will they act as competitors and enemies or will they decide to leave their adolescent behaviors and act in ways that the coming of age of a mature humanity will demand? Will each side allow their national priorities to be subjugated to the benefit of global priorities that benefit all of mankind, especially in borderless issues such as climate change? Will they, on either side of the ocean, continue to see each other as ‘us and them’? Will the West still insist on their unique system of politics and economy or would they seek to reconcile differences and devise new ways and orders to run the affairs of a unified humanity? Will the West see China as an enemy? Will China still see itself as the center of the universe or act in the best interest of humanity by finally adapting a much needed world view? Does China want to be a hegemon, a vassal state on steroids or a leader on the world stage? If the latter is the desired outcome, will the Chinese culture and system be able to provide a framework and value system that allows ‘other’ countries to co-exist as equals and partner? These are among the many questions that face us all as we contemplate our next moves and as we try to understand and make sense of the noise generated by the dizzying headlines. China’s meteoric rise has allowed us to finally be in a position to ask these questions. Will we, as humanity, whittle down our views and only busy ourselves with the necessary but mundane questions of the day or will we broaden our horizons and ask more pertinent questions, upon which depend the fortunes of humankind?
Shane Tedjarati
Shanghai, 13 December, 2018
Shane Tedjarati is an international business executive working in Asia, Africa, Middle East, Europe and Latin America. He has lived in three continents, including in China since 1992 and speaks Chinese. His personal interests are social and economic history of China and the Emerging Economies.
