Is China verging on a new transformation?

Citation

Teck Foo, C. (2010), "Is China verging on a new transformation?", Chinese Management Studies, Vol. 4 No. 4. https://doi.org/10.1108/cms.2010.32304daa.001

Is China verging on a new transformation?

Article Type: Foreword From: Chinese Management Studies, Volume 4, Issue 4

In June this year, I spent two weeks traveling between the cities of Shanghai, Shantou and Guangzhou for a forum, a conference, a presentation, a meeting and a function. The overall impression I got was of a China that is verging on a new transformation. I was invited to participate in Emerald’s new collection of case studies from emerging economies. I asked myself: Is China still an emerging economy? Probably not, for by the time the new product establishes itself, China may have emerged out of the cluster of emerging economies.

Here I reflect on my impressions of China on the verge …

Firstly, from both the forum and conference held at China Europe International Business School (CEIBS, June 17-19) centered on “Practical Wisdom for Management from Chinese Classical Traditions,” you sense that managers and leaders ought to draw from the deep well of 5,000 years of Chinese philosophy. With China becoming a dominant player in global economics, will we see a resurgence of Confucian embedded, managerial thinking?

Insofar as strategy is concerned, I have good reasons to believe that Art of War strategic thinking is already prevalent in the American competitive mindset. Yet, if you study the Art of War in original Chinese characters as used by Sun Tzu to express his profound thinking, you will discover a notable gap. Somehow, the English language cannot quite fully render the deep shades of thinking. This is inevitable given the inherent differences in the nature of the two languages.

Secondly, from my limited visit (just one day, a rainy one) to the Shanghai World Expo (thanks to Professor Claude de Bettignies of CEIBS for the complimentary ticket), I sensed the immense and intense enthusiasm of ordinary Chinese people for knowing about the world despite being stuck in seemingly endless queues. Just imagine a future with the Yuan flooding worldwide markets with the Chinese coming in hordes to replace Americans as global travelers!

Already corporate China is on the verge of implementing a new kind of globalizing by outsourcing a part of its manufacturing operations, the final assembly process, to Chateauroux, France (Business World, July 6, 2010). So, we may begin to see Chinese industrial parks being established across Europe. In a twist of the innovation game too, Hua-wei is planning to establish a R&D center, again in France. Given these developments, surely there ought to be an upsurge in the art of Chinese management?

Thirdly, on the road from Guangzhou to Shantou to deliver a lecture at Shantou University on the “aerodynamics” underlying stock market crashes, I discovered the other side of Chinese growth: the societal imbalances. Whilst China’s rate of economic growth in comparison with the rest of world remains spectacular, there is the thorny issue of wealth distribution. From the outside and statistically-speaking, China may appear to be a land of the new rich but the internal landscape still surprises the visitor.

Traveling about Guangdong province, I witnessed instances of abject poverty, reminding me of similar images from Maoist China. Reflecting upon these scenes, a theory of wealth “concentribution” rather than distribution arose in my mind. For the moment, I am content to let Figure 1 reflect this intuitional idea. As shown, in China, wealth is concentrated among the powers-that-be (often government and cities) and through policy initiatives, wealth is channeled outwards as developments. It may sound a bit odd, but the words spoken by President Obama to a plumber are highly relevant to the Chinese policy makers, the need to “spread the wealth around”[1].

Given that China is on the verge of embracing a new age of industrial relations, perhaps now is the time to facilitate a fairer deal for workers where they will be able to negotiate for productivity based wages or even profit-sharing models. At Sun Yat Sen University, I presented some ideas for a possible series of research papers to the research team under Professor Wang Xiaohui. Of all the cities in China, Shenzhen is where you expect the Lewis curve to peak, as this is where the social experiment by the late Deng Xiaoping began.

Figure 1 Illustrating abstract idea of wealth “Concentribution” within China

Indeed, there may even be scope for a special issue on the “New Chinese Industrial Relations” for 2011. Labor strikes in China, continue to make global headline news. Most intriguingly suggestive is the fact that the Chinese government no longer intervenes on labor strikes, at least not in Shenzhen. So Shenzhen in Guangdong province may be the locus for scholarly research efforts on new emergent Chinese models of labor relations.

In what other aspects is China on the verge?

Besides signs of a new flexibility towards the Yuan, China is on the verge of transforming herself into an innovation driven society. This is likely to happen not just among the peoples in her eastern seafront provinces but in the deep hinterland too. Since innovation is often R&D and technology driven, it is thus timely that we have in Chinese Management Studies a collection of papers centered on technology, innovation and R&D. These are reviewed by Professor Robert Tiong in his own foreword as Special Issue Editor. He is currently the Regional Editor for Asia.

Note

www.conservativeforchange.com/2008/10/obama-proposes-re-distribution-of.html

Check Teck FooEditor-in-Chief