Sunday, July 10, 2011

Post Trip Reflections

Through this trip and course, the most important thing I learned about China and global business that ties into my MBA coursework is that in doing business in China, both individual relationships with manufacturing companies and the larger relationship with the Chinese government are crucial. This was expressed to me by our conversation with Alex at Stream Source. He mentioned that any company coming to China must first understand the government’s plan before constructing its own business plan. This is the nature of business in China. A prime example of this can be seen by the troubles that Google had in China. In conducting business in China one must align their goals with those of the government. If this can be achieved, then China is a very welcoming and encouraging business environment. As for the individual relationships, one of the largest problems is maintaining quality in one’s products. From our conversations with various members of management throughout the trip, it became clear that Chinese companies place a high importance on mutual benefit. A domineering company that is continually trying to low-ball and leverage low costs will not be able to maintain a strong relationship, and in turn will have quality issues. One of the key takeaways from this trip is the importance of relationships and just how to balance them when engaged in outsourcing.

Our business trip to China reaffirmed my perception that China is plagued by energy and pollution problems. In my opinion, these are two prominent markets that are continuing to grow in prominence and that represent an opportunity for a Westerner to export goods. Westerners have the potential to tap into these markets with our progressive green technologies. Just as we saw in the ‘Brits Get Rich’ YouTube segment in our blog posts, I think energy efficient home technologies offer promise. For example, when driving through China on the bus, it was clear that every apartment had an external air conditioner and didn’t have a clothes dryer (Clothes were hanging on large majority of balconies). Low cost and energy/space efficient versions of these appliances would be widely accepted by developers and consumers as the general Chinese public becomes wealthier and energy problems become greater. As for pollution, the Shanghai car sales limitations are a prime example of opportunity. Natural gas and nitrogen-operated vehicles are a chance for China to cut down on automobile based pollution. The West is shifting toward greener vehicles and as China continues to rise, I think this trend will move to the East.

A product that could be imported from China to the US is tea. After visiting the Hutongs, it became clear to me that tea is an integral part of Chinese culture and history. In my opinion, exporting portions of Chinese culture would be a successful endeavor. In my opinion, the West has never been largely influenced by the cultures of the East and tea could be a small cultural product that would be highly accepted. Coffee and tea are a booming sector of the US economy. As Emily discussed, there are no teas in stores such as Teavana that are of the same caliber. A company such as theirs could not only export their product to the United States, but also their story. As was mentioned by Amanda in the tea discussion, starting a monthly tea club that followed the model of wine clubs could be highly successful. Including a pamphlet with individual stories of picking tea in remote regions of China, in combination with the product, could demand a high price.

The most notable ‘best business practice’ that I took away from the Chinese over the course of the trip was the importance of Guanxi, or relationships. Similar to what I discussed in the first paragraph, the Chinese clearly express a strong importance for relationships, networking, and respect. Just as we witnessed at Sealed Air, they prepared a banner, a welcome reception, a tour, and most importantly, sessions to gain our feedback. The Sealed Air team emphasized their appreciation for our visit and input, as well as mentioned their desire to do business with us in the future. The Cal Poly MBA management has clearly taken the principals of Guanxi and applied them to our visits in China. This helps us ‘build the Cal Poly brand’ and aids in changing the perception of the West. I think this also aids in showing the Chinese that the US isn’t only leveraging low cost manufacturing, but is also engaging in mutual learning. Westerners could utilize and learn from Chinese Guanxi, not only in domestic business, but especially internationally. When one shows appreciation and respect, stronger relationships can be built. These relationships form the basis of trust and mutual rewards. On a different note, another ‘best business practice’ that I took away from the trip relates to location. The importance of the physical distance to resources is more strongly expressed in Chinese businesses. For example, at Providence Enterprises they required skilled machinists and transportation, so they were located in a region with a technical school and close proximity to Eastern highways to the ports. American businesses should keep in mind the importance of their relation to resources and less on the importance of being in a desirable location.

In my opinion, one item that developed economies could learn from China’s emerging economy and markets is how to efficiently guide their financial resources. Without sounding like an advocate of communism, it is clear that the double digit economic growth is largely due to the actions of China’s government. Their resource investment is channeled in a manner that effectively builds up the economy. Whether it is in infrastructure, continued investment in enhancing higher education, or the new commitment to enhancing green energies, China demonstrates a model of productivity. In the United States and developed economies, these governmental actions can be easily impeded, but the rise of China should act as a catalyst as to how to appropriate money. One constraint that I believe emerging economies have that developed economies have surpassed is the ability to retain talent. I think this has been better represented by our coursework throughout the year, rather than through our trip. Emerging economies such as China and India are unable to keep their leaders of innovation. Whether this is due to the allure of the American school system or the chance for better opportunities, it is a known issue. China has been successful in beginning to bring people back. This is an issue for these economies because it stifles their growth and creates a lag in their innovation.

Through this trip, I learned that I do have the flexibility that is required of an expatriate to conduct business in China. Personally, I believe that I could add value either internationally or domestically to a firm that is operating overseas. I think I would flourish in a situation where a company would require me to fly to China to solve operational issues. Despite the obvious language barrier, I realized I am a quite a patient person and am able to sufficiently convey ideas. Someone who is easily frustrated and unable to easily cope with the lagging effects of travel will not be an effective international manager. I think I have the personal drive and an engaging personality that would make me effective for a company. In order to be flexible, you have to be willing to step out your comfort zone and I have learned that I’m very capable of this. As for moving to China to conduct business, I feel as though I am flexible enough to manage, but that it isn’t necessarily something that is in my working future. Though I’m able to be flexible in food, activities, and business etiquette, I believe I would better serve a company as a problem solver. On a different note, I do believe it was important to tour Portofino to understand the environment that is appropriate for an expatriate. I also feel as though I would now be able to be effective in choosing someone to conduct international business for my company, having experienced what qualities are necessary.

On this trip I was constantly being forced out of my comfort zone. This occurred with everything from meals to the humidity to even the nightlife. First and foremost, I am an extremely picker eater and I definitely went through a crash course in authentic Chinese cuisine. I gathered that to the Chinese, there is a sense that one shouldn’t waste any part of an animal. Little did I think that the heads of ducks, toes of chickens, or stomach fat of a pig were edible. I have certainly gained an appreciation for Chinese food other than Panda Express through this trip. A second example of being pushed out of my comfort zone came with the weather. We are clearly pampered in California with the weather and it really was quite a change to be in a suit, in high temperatures, and high humidity and still maintain intense concentration. A third example came in the nightlife. Personally I have never been a huge clubbing kind of guy and this was another opportunity for me to get out of my comfort zone. Going to the club in Shanghai was not a standard night out for me, but it was an opportunity for me to prospect and network, as well as enjoy time with my classmates. Another way I was pushed out of my comfort zone was at the Silk Market. My initial impulse was not buy anything unless I achieved their ultimate bottom line. I have never been in a market where you can literally bargain for everything. I admit I was initially caught off guard and started out poorly. Once I got used to the environment and course of the negotiations I was able to better achieve my goal. A final example from a business perspective would be when we toured such factories as the Cataria International Textile plant. I have no background in textiles and it can be intimidating to push yourself to ask questions about a subject that is second nature to others. These visits were perfect situations to test my communication and observation skills. All of these experiences forced me to learn things about myself. I have realized that confidence is a key to business. This trip further demonstrated to me the importance personal confidence and courage in the business environment. This trip has also taught me the importance of being pushed out of my comfort zone. Especially internationally, you don’t only learn things about yourself, but it helps you better understand foreign cultures.

Prior to completing the pre-work for this trip, China was a place with which I was largely unfamiliar. As Professor Carr mentioned on the trip, the Opium Wars are hardly discussed in the course of the US education system as compared to other nondomestic British wars that had equal involvement from the United States. I say this in an effort to relay the level of unfamiliarity that most of us had in relation to Chinese history, culture, and customs. Some of the cultural differences I experienced through the course and trip were related to food, outspokenness, religion, and of course, business practices. These are only a short list of the cultural differences; it truly seemed that in every part of each day we experienced a culture shock. One initial difference I found, aside from the food, was the family oriented meals. The ‘Lazy Susan’ on the table created an intimate shared atmosphere. The Chinese people put a huge emphasis on family, especially with the single child rule, and this is another way the importance of family is emphasized. Another difference, based on a small sample, was the Chinese people’s hesitation to put down the government. We live in a free society where people are constantly slandering the president and country. The barefoot doctor that we spoke with in Mutianyu showed this cultural difference. She discussed her tough life under Mao Zedong and her minimal pay, yet she had pictures on the wall of Mao and mentioned that she, “wouldn’t change a thing.” Whether or not it supersedes that of the US, there is certainly a strong sense of national pride. Another cultural difference was the presence of religion. Where the United States was founded upon religious principles and churches can be found in close proximity to each other, with China being the largest Christian nation, the religious presence was not there. Lastly, whether in gift giving, accommodations, or level of professionalism, the Chinese do conduct business differently. In touring factories and meeting with Chinese management, I have gleaned important management techniques and relationship building tactics.

The most important thing I learned on this trip and through the course that changed me as a person was the importance of being grateful for what you have. We are all truly blessed to live in a country where we are free to pursue our dreams and can live largely unfettered by the government. I say this in reflection of our conversation with the ‘Barefoot Doctor.’ She had lived through Mao’s Cultural Revolution and was elected the ‘Barefoot Doctor’ under his rule. She survived on a minimal wage and expressed to us the hardships that she endured through that period. Despite the state of poverty her village was in, she was immensely grateful for her life. The true joy of her life stemmed from her family. The conversation was a strong reminder of the importance of humbleness and gratefulness.

For me, China continues to represent the face of outsourcing. I am confident that in the course of my professional career I will be involved in offshore manufacturing. I have become more attuned as to what criteria are needed to manufacture in China. For example, before hearing such people as Mike Bellamy speak, I was under the impression that even smaller production runs could be cost efficient. This has led me to the idea that China represents the face of outsourcing, as long as you can achieve economies of scale. Aside from IP protection issues relating to small unpatented products, there are high upfront costs and logistical issues in order to begin production. Whether it is the creation and transfer of a new product mold, or the establishing of foreign suppliers, it is clear that moving overseas too early can have adverse effects. China will continue to be the major world hub of manufacturing, but must be used efficiently at the appropriate time to reap the benefits.

Coming from a background in supply chain management, I was not only surprised, but quite impressed by the Chinese infrastructure. After driving through Shenzhen it became evident that the Chinese road system (in the areas we visited) was highly developed and maintained. As compared to the freeway system in Los Angeles, the road system in Shenzhen appeared brand new and much more highly maintained. In looking at the road maps of Shenzhen and Beijing one could see the efficiency of the road layout as well. The Yantian International Container Port was another great example of the infrastructure of the Chinese supply chain. In order for China to meet the United States demand for goods, as well as that of the rest of the world, the country relies on a highly developed system. Prior to our business study trip I was not expecting anything close to the level of development that currently exists. As I move toward a career in supply chain and logistics, what I now know about China has given me a substantial advantage. I have a deeper understanding of not only internal factory product flow, but also the greater external movement of products from the East to the West. China will continue to be the outsourcing center of the world and I now feel as though I will be able to leverage opportunities and be an effective international manager.

Saturday, June 4, 2011

Book Review- The Post-American World

Overview:

The Post-American World uncovers the position that the United States finds itself in regards to the existing and upcoming superpowers. ‘The rise of the rest,’ as it’s referred to, is a worrisome prospect for Washington as it garners a lessening importance on the world’s stage. “America is still the single most important country on the globe, able to exercise influence in every realm and on every continent in a way that no other major power can. It remains…the default superpower” (pg. xxvi). Though the United States will retain this title for the time being, Zakaria explores the effects that such countries as China and India have had on degrading this title. As these countries grow economically and politically, they are inevitably challenging Washington’s role. In this book Zakaria explores the reasons behind the power loss and suggests how the United States might retain/alter its role. Zakaria utilizes historical frameworks and comparisons to provide evidence for his reasoning. The author of the book is Fareed Zakaria, who is also the author of another New York Times bestseller, The Future of Freedom. In addition to being an esteemed author, Zakaria hosts a show on CNN called Fareed Zakaria GPS and is the editor of International Newsweek. The book was published by W. W. Norton and Company and was copyrighted in 2008. The book retails for $15.95 and can be found under the ISBN 978-0-393-33480-7.

“We still think of a world in which a rising power must choose between two stark options: integrate into the Western order, or reject it, becoming a rogue nation and facing the penalties of excommunication. In fact, rising powers appear to be following a third: entering the Western order, but doing so on their own terms” (pg. 36). Zakaria’s purpose in writing this book is to inform the general public about what the ‘rise of the rest’ actually means to the United States. He aims to educate the reader about how, as a nation, we should respond to the new global allocation of power. He also subtly impresses upon the reader the importance of learning from history. Zakaria’s knowledge of history allows him to expertly compare such military endeavors as the war in Iraq to the 1899 Boer War. “The analogy is obvious; the United States is Britain, the Iraq War is the Boer War… The familiar theme of imperial decline is playing itself out one more time” (pg. 173). Zakaria does not seek to attack the United States or China’s foreign or domestic policy, but objectively shows the reader what the post-American world will resemble when, “…everyone feels empowered (and) can choose to bypass (the) Western ‘center’ entirely and forge their own ties with one another” (pg. 36). Zakaria effectively uses a conversational tone that allows him to transition from history to personal stories without distancing the reader. The structure of the book is arranged in a logical manner. It allows the reader to follow and grasp the main concept of the declining power of the United States, before delving into historical and future outlooks on the prospects of the United States and China. He concludes by giving us a personal, introspective look into just where his opinions stand.

One of Zakaria’s greatest achievements comes from his description of the areas where the United States still remains number one in the world. “…Economists used to discuss two basic concepts, capital and labor. But these are now commodities, widely available to everyone. What distinguishes economies today are ideas and energy. A country must be a source of either ideas or energy. The United States has been and can be the world’s most important, continuing source of new ideas, big and small, technical and creative, economic and political” (pg. 210). Zakaria discusses the innovative and entrepreneurial nature of the United States, as being something unmatched in the world. It is mentioned that the United States higher education system is our country’s ‘best industry.’ Understanding that this industry is our source of competitive advantage, allows the reader to understand two of our main competencies as a nation. Our educational system attracts foreign talent which is then retained. Though Silicon Valley’s can be found throughout the world, the United States undoubtedly has the most. The power of the United States to retain the world’s most innovative people is unmatched. This feeds into its ability to be demographically vibrant. The great demographics of the United States create a system for more technological, scientific, and managerial advances. Understanding these competencies of the United States gives readers a more full understanding of how the United States has been able to maintain dominance in the world.

Another area where Zakaria achieves distinction is in his historical frame of reference that he gives the reader. This is seen in his discussion of how the West has become synonymous with modernity. “Modernity has come with the rise of the West, and so it has taken a Western face. But as the modern world expands and embraces more of the globe, modernity becomes a melting pot” (pg. 85-86). By tying this concept to the world and then more specifically to China, the reader can better understand China’s rise. Allowing the readers to first gain an understanding of how the power came to the West and describing the ‘ruthlessly pragmatic’ path that China has chosen, the stunning economic growth rate that China has achieved becomes more understandable. Just as modernity was defined by western practices, it is now being redefined by eastern advances.

The Relevance of the Post-American World

The true relevance of Post-American World comes in its discussion of China/United States relations. “Just how peacefully China can rise will be determined by a combination of Chinese actions, other countries reactions, and the systemic effects that this interaction produces. Given its current size, China cannot hope to slip onto the word stage unnoticed. Its search for energy and raw materials, for example, is entirely understandable” (pg. 115). It is inevitable that as China continues is rise to prominence that countries will begin to turn to China and the world will become more easterly centric. As countries gain more of an economic and geopolitical stake on the world’s stage, countries will rely less on the United States as a parent country. As these economic powerhouses gain a stronger role in the world order, the role of mediator will arise for the United States. “…These rivalries do give the United States an opportunity to play a large and constructive role at the center of the global order. It has the potential to be what Bismarck helped Germany become in the late nineteenth century- Europe’s honest broker” (pg. 233).

Zakaria is not shy in expressing his thoughts on how the United States should cope with the changing global environment. He excels at the end of the book by discussing his position. The reader is able to formulate their own opinion before Zakaria expresses his own. By breaking his thoughts into six points about how the United States must act in this new era, he allows the reader to gain a firm understanding of his remedy. His six points are as follows: the United States must now prioritize and choose between what it wants, create a structure of rules, practices and values that it and the world will follow, engage all the worlds powers without exclusion, address problems with a smaller scale mentality, think asymmetrically and don’t over respond to baiting, and lastly, re-legitimize the power of the United States through its ideals.

This book also serves a unique purpose to pose the reasoning behind recent changes of countries with new emerging economies. Whether due to lacking economies or military prowess, countries have historically turned to the United States for conflict resolution and protection. “They all believed in the glory of their own cultures. But they also believed that at that moment in history, in order to succeed economically, politically, and militarily, they had to borrow from the West” (pg. 73). Zakaria exposes the change in this ideology. As these countries have developed sustaining markets and greater political stability, they are finding less of a reason rely on the United States. This is happening across the globe and it greatly impacts our role in the world. This is a key point that Zakaria expresses throughout the book.

Where Zakaria Excels

Perhaps the place where Zakaria provides his greatest insight is in the seventh chapter, American Purpose. Building off his analysis of the United States emerging role as the ‘honest broker,’ he pointedly discusses the new position as a nontraditional superpower. He suggests that the United States create a precedent of one that consults, cooperates, and compromises with foreign countries. “…It is a crucial role because, in a world with many players, setting the agenda and organizing coalitions become primary forms of power. The chair of the board who can gently guide a group of independent directors is still a very powerful person” (pg. 233). Zakaria excels in explaining how the United States must assume this role. This is expressed through his comparison between Britain in its ‘heyday’ and the current United States.

Zakaria uses historical comparisons in order to give the reader a more relatable understanding of the current global positions. He is extremely effective in the analogies that he makes and provides the readers with a relatable reference. This serves as an extremely effective tool to highlight his reasoning. Britain at the peak of its empire was subject to a power struggle by the United States and Germany. For Britain, it was a question of how it could compete with countries that were over twice its size and were rich in natural resources. “Early on, as it saw the balance of power shifting, London made one critical decision that extended its influence by decades: it chose to accommodate itself to the rise of America rather than to contest it” (pg. 177). The United States today finds itself competing with a domineering economy and a country of over a billion people. Zakaria excels in highlighting this comparison to pose the idea that the United States must accommodate the ‘rise of the rest’ instead of undermine it.

Where Zakaria Falls Short

Zakaria’s goal of the book was to discuss the choices that the United States has in sustaining itself through the ‘rise of the rest.’ This was largely addressed through the constant discussion and comparison between the United States and China. Zakaria centers the book on the current and historical comparison of these two countries. Though India represents a major stakeholder in the world today, I found it odd that chapter five was almost exclusively about India. Early in the chapter Zakaria poses the question of whether or not India will become the next China. He simply states that, “Western businessmen go to India expecting it to be the next China. It never will be that” (pg. 133). Personally, this statement gave the chapter less importance. Zakaria came to the conclusion that India is essentially a poor version of the United States.

In addition to the chapter ‘The Ally,’ I found the section on ‘God and Foreign Policy’ in chapter four to be meaningless. Zakaria attempts to bring relevance to the section by stating such points as, “…one quickly recognizes that concepts like qi are as central to their mind-set as a moral Creator or free will is to Westerners” (pg. 113). These comparisons don’t aid in the understanding of the rise of China. In my opinion, the section didn’t serve more of purpose than to mention that the Chinese outlook on foreign policy is a culmination of different ideas than that of the West. Personally, there were sections scattered throughout the book that were merely informative and should have been omitted.

Though I found Zakaria’s final discussion of his six recommendations for the United States incredibly insightful, I was still left unsatisfied for certain questions posed throughout the book. Typically in the closing of each chapter, he would pose a series of questions, such as, “Can Washington adjust and adapt in a world in which others have moved up? Can it respond to shifts in economic and political power?” (pg. 214). He intends for the reader to formulate their own opinion, but the information is too shallow to come to a definitive conclusion. It would be more beneficial to the reader to judge the validity of Zakaria’s conclusions for each section based on his information presented. Instead, I was left pondering these questions as he jumped into the next subject.

Conclusion and Recommendation

The Post-American World truly reveals to readers the need for the United States to adjust to the ‘rise of the rest.’ Readers can take Zakaria’s recommendations and make their own judgments. What is clear from this book is that the world around us is changing. This book stresses the need for the United States to be more accommodating and accept its declining role of worldwide ruler. I would highly recommend this book for anyone who is looking to gain a scholarly perspective on the changing paradigm of global control. This book has personally created a new drive to educate myself on the constantly changing layout of global power and changes to American foreign policy. The ‘rise of the rest’ is an issue that will define our generation, not only in business, but in culture. I would challenge Zakaria’s recommendations on the concern that these changes would mean a massive overhaul of the current foreign policy of the United States. Whether these recommendations are feasible or not, one thing is clear, that the United States must adapt. “There is only so much America can do about its relative power. As others grow from low starting points, its relative weight will slip. But there is a great deal that Washington can do to redefine America’s purpose” (pg. 219).

Saturday, March 12, 2011

Book Review- China: Fragile Superpower

Overview:

China: Fragile Superpower recounts the history of China in relation to the country it is today. It explores the thought and reasoning behind the American fear of China the superpower and the Chinese leaders view of an extremely fragile country on the rise. It provides an in-depth discussion of how Chinese domestic issues could spin out of control and put the country at war with itself and potentially America and Japan. The book was written by Susan Shirk. She is the former Deputy Assistant Secretary of State during the Clinton Administration and is a critically acclaimed expert on Chinese politics. The book was published by the Oxford University Press and was copyrighted in 2007. The book sells for $16.95 and is listed under the ISBN 978-0-19-537319-6.

“Are China and America doomed to become enemies in the twenty-first century? Inevitably, as China moves up the economic and technological ladder, it will compete with America and expand its global reach. But a much graver danger is that as China rises in power, the United States will misread and mishandle it, so that we find ourselves embroiled in a hostile relationship with it” (pg. 4). The purpose of Shirk’s book is to educate the public, primarily Americans, about how various internal and external factors influence China’s actions, both domestically and internationally. Her main goals are to establish just how fragile China’s leadership actually is, as well as explain why Americans have a somewhat irrational fear of China’s rise. Shirk has chosen a logical way of arranging the book. The reader is able to grasp the domestic threats and impact of the media on the Chinese public, before reading about the sensitive subjects of Japan, Taiwan, and the United States. Shirk successful writes in a fluid educational manner. She is also very capable of discussing China’s history vividly, as seen through her various descriptions of the 1930’s Japanese invasion and the Nanjing massacre (pg. 154-155).

Perhaps Shirk’s greatest achievement lay within her simplification of how to maintain the domestic stability of China. She clearly states that the ‘formula’ is to avoid public leadership splits, prevent large-scale social unrest, and keep the military on the side of the party (pg.39). By focusing on the view of the Chinese leaders, readers are able to clearly get a mindset of how the public is perceived. For example, Shirk mentions that, “Paranoia is the occupational disease of all authoritarian leaders no matter how serious the internal threats they actually face” (pg. 53). She explains that the leaders must prevent social unrest to prevent the democratic movements that have engulfed Indonesia and Taiwan. Shirk also raises an interesting point that in order to maintain social stability, it is in their best interest to maintain the economic boom. The more Chinese out of work, the more likely they are to head to the barricades.

“It is China’s internal fragility, not its growing strength that presents the greatest danger. The weak legitimacy of the Communist Party and its leaders’ sense of vulnerability could cause China to behave rashly in a crisis involving Japan or Taiwan, and bring it into a military conflict with the United States” (pg. 255). In order to make this book as interesting and relevant to Americans as possible, she does an exceptional job of continually discussing the impact each point has on the United States.

The Relevance of China: Fragile Superpower

“Maintaining a proactive and constructive posture, China will enter the twenty-first century with the image of a responsible big power. With the passing of time, the so-called ‘China threat theory’ will be defeated automatically” (pg. 107). In order to maintain this mantra, Shirk has created a simple and understandable list. China must accommodate its neighbors, be a team player in multilateral organizations, and use its economic ties to make friends. Shirk provides multiple examples of land and policy disputes, such as the Chinese bullying of the South China Sea and their move to claim the Paracel Islands in the mid 90s, that are effectively diminishing China’s reputation. Shirk discusses the natural distrust that such countries as India have towards China. These disputes effectively push these countries to, “… join together… with the United States to try and contain [China]” (pg. 111). Shirk impresses upon readers the importance of joining multilateral organizations. By joining such groups as ASEAN (Association of Southeast Asian Neighbors), China can insure that its politics are not on the table for discussion, but can simultaneously foster trust by engaging in dialogue regarding regional cooperation. In addition, China is able to show the world that they are willing to cooperate by joining such groups as Asia Pacific Economic Cooperation (APEC). Shirk truly emphasizes just how important China’s relationship with America ultimately is.

The external factors discussed are largely centered on three main countries that are all intertwined: Taiwan, Japan, and the United States. Shirk illustrates the true relevance of the book in Chapter 8, The United States, as she discusses how every move that China and the United States make have ramifications on how they respond to each other. For example, the United States’ accidental bombing of the Chinese Embassy in Belgrade was extensively discussed. The Chinese public refused to believe that an accidental bombing was possible with the all of the advanced technology present in the United States. The Chinese leadership feared being considered soft on America and American hatred flared. As set forth in the Taiwan Relations Act, the United States will preserve Taiwan’s independence, but if China makes a move to modify the current state, they will find themselves at war with the United States and Japan. Furthermore, the Chinese believe that, “The U.S. is a superpower, so China doesn’t want to offend it. But most Chinese view Japan as a second-rate power whose economy depends on China’s growth” (pg. 145). Shirk is effective in discussing how the United States is heavily affected by what occurs in Eastern Asia. One of the interesting ideas Shirk posed was that the Chinese believe, “… that the United States engaged with China in order to restrain it domestically and internationally” (pg. 232).

Where Shirk Excels

Shirk is able to effectively convey the fragileness of Chinese leadership. She proves the point that China does have severe internal problems, and that it is not the threat Americans envision. China is a country in danger of leadership schisms that could put the entire communist regime in a fight for survival. Public protests and the influence of the internet put the country at risk of imploding. Shirk mentions that, “Taiwan is a question of regime survival—no regime could survive the loss of Taiwan” (pg. 182). Americans in particular need to become more knowledgeable about the true difficulties in China’s path to becoming a superpower. Shirk does an amazing job of showing the vulnerability of the Chinese communist regime.

Shirk clearly understands the importance of history to the Chinese people. “People in China see every Japanese act through the lens of history and fail to recognize the impact of China’s own actions on Japan” (pg. 146). The inability of China to let issues in history remain that way is prohibiting its peaceful rise. Two chapters of Shirk’s book focus specifically on China’s relations with Japan and Taiwan. The sheer animosity that fuels the relationship between China and these countries is somewhat foreign to Americans. Taiwan’s independence, or its remaining status-quo, is a key factor to sustaining peace in Asia. Shirk does an exceptional job at explaining how public opinion drives how China responds to issues with each country. China feels a sense of entitlement to Taiwan, after it was usurped following WWII. China wants to have ‘One China’ and Taiwan is part of it. Understanding that if China were to regain Taiwan, it would end the ‘Century of Humiliation’ for China is crucial to understanding its foreign policy. As for Japan, China refuses to forget the devastation caused by the Sino-Japanese War. The Nanjing Massacre and the persistence of Japanese leaders to visit the Yasukuni Shrine are issues which fuel today’s China. Shirk does an exemplary job of explaining China’s actions in historical terms.

The severe media censoring measures taken by the Chinese leaders is an area of intrigue for Americans. This book discusses the media in terms of history first, that “… mass media’s sole purpose was to serve as loudspeakers to mobilize public support for party policies” (pg. 81). It has since evolved into a governmental tool to sway public opinions. Shirk is effective in discussing how the internet is becoming more accessible and harder to manage. She mentions that China is quickly becoming home to the world’s largest number of internet users. Understanding the changing role of the web in China helps the reader to understand the change in opinion leadership. Shirk expertly discussed what she called the “commitment trap” (pg. 95). People in China care most about national security and U.S.-China relationships. Fearing looking pitiful in response to American actions, China will bad mouth America in the press to appease its people. This brings about a large risk that if China proposes a rash decision against America, it’s people will expect China to act on it. Shirk does mention that, “Party leaders have been using their control over the media to protect the country’s crucially important relationship with the United States from negative public opinion” (pg. 99). A lapse in this relationship management could have severe consequences.

Where Shirk Falls Short

In order to understand the final chapters of China: Fragile Superpower, it was important for Shirk to provide an in-depth retelling of history. She provided a substantial amount of background information to understand just how long-standing China’s grudges and international issues with other countries go. Though such occurrences in history, such as when Japanese leaders visit the Yasukuni Shrine where Japanese war criminals are buried, are extremely important in how the Chinese view the Japanese, they are discussed far too often. I felt as though there were numerous historical altercations that were mentioned repeatedly, but didn’t serve to further the reader’s understanding of events or perspectives. Its repeated mentions of the Yasuknuni Shrine and the Nanjing massacre served to make the book seem more like a history book than an informative thought-provoking novel.

Though I enjoyed Shirks writing style, I found it hard to find her voice within the text. Given that Shirk is an authoritative expert on the matter, I would have preferred reading more about her opinions on certain points. For example, I found it intriguing to hear her opinion on the thought that China needs to change its citizens’ opinions of Taiwan, that they have fostered too strong of views on the subject. Shirk then interjects by saying that, “… it is hard to imagine China’s leaders feeling secure enough to try to persuade people that the Taiwan issue isn’t as important as they once thought it was” (pg. 211). Shirk had provided much evidence that by changing the Chinese public’s extremist views on Taiwan could solve problems, but it was refreshing to hear her voice on the actual plausibility of this occurring. An example of when it would have been insightful to hear her opinion was related to Japan’s global ranking. She closes the Japan chapter by citing a quote from a young finance Ph.D. Though I found his opinion stimulating that Chinese-Japanese relations will improve once China is considered number one globally, it’s my opinion that Shirk could provide a more educated and knowledge opinion. She is a foremost authority on the subject of China foreign relations and I would have appreciated more of her thoughts.

I found that throughout the book, Shirk would often pose statements that were immediately contradicting others. For example, she discusses Chinese hegemonism in that there is a long-standing Chinese belief that America wants to keep emerging powers down, particularly China. This point is continually discussed and referenced in her history as a reason why China has always been so mistrustful of the United States. She later goes on to reference that “… in 1996, the general Chinese public was very friendly toward the U.S. and admired Americans in almost every way” (pg. 230). Another example of how Shirk contradicts her own statements was in the chapter, The Echo Chamber of Nationalism. Throughout the chapter, Shirk discussed how party leaders control media and the internet. “Senior officials themselves also increasingly go online to sample public opinion… Cyberspace has, to some extent, gradually evolved into a valuable place to gauge public opinion” (pg.100). These statements immediately contradict another statement of hers only a few pages later, “Party oligarchs agree that online venting is relatively harmless” (pg. 103). Comments such as these are confusing to the reader. It appeared to me that the media has a dramatic impact on the party leaders. The book referenced an account of a massive protest that was spread solely through the internet. Clearly there is a very real worry about the media in the eyes of the leaders.

Conclusion and Recommendation

China: Fragile Superpower gives readers a transparent look into how the Chinese leadership operates. The fragility of the Chinese leadership is exposed and the reader gains insight into whether or not to fear China as a superpower. For anyone who is looking to gain in-depth knowledge on what factors drive Chinese politics, I would highly recommend this book. In reading this book you gain insight into historical occurrences that the Chinese have refused to let die. In addition, reading this book has furthered my interest in Japan and Taiwan. It would be compelling to read other books on the same subject matter, but from the perspective of Japan and Taiwan. This book has truly expressed just how fragile China and its relationship with the United States remains. Perhaps China, with its incredible economic development, should be allowed to join the G8 and create the G9. In closing, I agree with Shirk as to how China must rise. “The best way for China to rise peacefully is to behave like a responsible power and accommodate to the current superpower, the United States” (pg. 219).

Sunday, December 5, 2010

Book Review- Postcards from Tomorrow Square: Reports from China

Overview:

Postcards from Tomorrow Square: Reports from China gives readers a topical view of economic conditions in various regions of China. It explores the truths and myths behind the American conception of the growing economy in China. The book was written by James Fallows who lived in China during the 1980s and again from 2006 to 2008. He mentions that China “is simply too big and too contradictory” (pg. xiv) to represent an overall picture of the country. Fallows has compiled 12 articles of his first-hand accounts from his living and traveling in China while working for a newspaper called The Atlantic Monthly. The book was copyrighted in 2009 and published by a Division of Random House, Inc. The book costs $15.00 and is under the ISBN 978-0-307-45624-3.

“What are we thinking in considering China an overall threat? Yes, its factories are formidable, and its weight in the world is huge. But this is still a big, poor, developing nation trying to solve the emergency of the moment” (pg. 142). The purpose of Fallows’ book is to expose the vast array of social and economic conditions in China. Fallows is able to provide a firsthand comparison of the progress China has made. Having twice lived in China, separated by roughly twenty five years, he is able to account for the progress the country has truly made. He wants readers to question the current belief that China is simply the United States’ competitor. This book is intended for a broad audience. He aims to influence the general public’s view of China. This book is particularly useful as an initial introduction to China for anyone preparing to travel there. Rather than giving a reader an in-depth understanding of how China functions, the book simply gets the reader thinking about China in a non-stereotypical manner. Fallows utilizes a conversational tone in his writing. As a writer for the Atlantic Monthly, he is able to successfully write in an objective, informative manner.

The Relevance of Postcards from Tomorrow Square: Reports from China:

China and the United States are becoming increasingly more mutually dependant on each other. Fallows discusses how the Chinese government has invested heavily in American currency. If the value of U.S. currency plummeted, the 1.4 trillion dollars that China has invested in U.S. treasury notes would vanish. It is imperative to understand that the success of each economy is important to the other. Fallows states that China is reliant on the U.S. to purchase its goods and the U.S. is reliant on China in order to leverage cheap labor costs. This book is relevant for any company that does any business in China. It gives the reader a more realistic vision of what the Chinese world of manufacturing entails. Fallows states that, “The problem in China is typically the opposite: Foreigners don’t know where to start or whom to deal with in the chaos of small, indistinguishable firms” (pg. 82). This book reveals the fast-paced cluster of companies operating in such places as Shenzhen. It is crucial to understand the basics of China prior to creating an offshore manufacturing operation. Fallows spoke with an Irishman stationed in Shenzhen, named Liam Casey. Casey simply states that, “Supply chain is intellectual property” (pg. 84). This book demonstrates Fallows’ opinion that someone manufacturing in China must be able to leverage relationships in order to be successful.

Fallows also presents China as an economic opportunity for the United States. He discusses how the U.S. can capitalize on the exorbitant amounts of pollution in the city. As mentioned in the book, “The business of improving China’s environment can be a very attractive business indeed” (pg. 208). This book finds relevance in looking to the future prospects of China. The United States will be looking to aid the 750,000 Chinese people who die prematurely due to pollution, while reaping the monetary benefits. As mentioned by Fallows, “Trying to build anything more at the moment – sewage-treatment plants, for a start, which would mean a better life for its own people, or smokestack scrubbers and related clean technology, which would start to address the world pollution for which China is increasingly held responsible” (pg. 157). In the chapter titled China Makes, The World Takes, Fallows states how the demand for cheap goods propagates the low standards of pollution. For example, if the production cost of an Ethernet cable rose from three dollars to four dollars, corporations might look to switch the entire operation to a country like Vietnam. The economic and environmental problems that China faces are our problems as well. Fallows has complied a book that is both relevant to the current operations in China, as well as the prospective opportunities of the future.

Where Fallows Excels:

Fallows’ greatest achievement in his book is his comparison of the different lives the Chinese lead. Fallows presents a China that is completely foreign to that of the traditional American understanding of the country. One of the first experiences discussed is his visit to Broad Town. It is a city constructed around the business tycoon Zhang Yue’s fantasy. The town is the manufacturing center for Zhang’s industrial air conditioner plants. All employees receive free housing and food, as well as moderate pay, by Chinese standards. The employees have no reason to leave their manufactured city. Mixed through the city are Zhang’s extravagant displays of wealth, from his Versailles-like palace, to his scaled replicas of the Great Pyramids. What shocked me most was Fallows’ account of the apparent cleanliness of the factory. He describes how most Chinese factories operate with the motto of, “If it’s worth doing, it’s worth doing sloppily,” (pg. 44) but Broad Town operates on the Japanese paradigm of cleanliness.

Zhang’s utopia is presented as an immediate contradiction of the lives of the residents of Western China. Fallows discusses a trip to the western provinces, where he saw the subsistence economy in which nearly 300 million people are trapped. In the chapter After the Earthquake, Fallows recounts his trip through four rural western villages that were ravaged by earthquakes. He describes it as a desolate area with few luxuries. To further distinguish between the vast differences in the lives of the Chinese people, he discussed how different people recall the most colossal disaster in modern Chinese history. “If they said the Cultural Revolution, it meant they were from the city and viewed losing their careers and being sent to the farms as the ultimate hardship. If they said the Great Famine, it meant they were country people who had seen many of their neighbors starve” (pg. 237). By showing the diversity of the country, it enables readers to be more open to different views of China.

By constantly relating China back to the United States, Fallows is able to give his work more relevance. For example, in the chapter The $1.4 Trillion Question, he compares China’s slower and more balanced growth to the rapid growth of the U.S., which has left us reliant on China’s subsidies (pg. 168). Another example of a similar comparison arose in identifying pollution issues. He exposes a similarity in that both the U.S. and Chinese government “are afraid to make the public pay the true cost of cleaning up the country” (pg. 206). Fallows wants to create a different image of China in the minds of his readers. By providing these comparisons, he is able to create a meaningful text.

A final point that Fallows clearly distinguishes is that China is heavily regulated. Both social and business interactions are highly controlled or monitored. Whether relating to the internet or business regulations and protocol, the government is present. In retelling his experiences in Shenzhen, a reader can grasp the chaos that takes place in outsourcing manufacturing. Fallows effectively sums this up in saying, “Today’s China is a disorienting combination of the very tightly controlled and the seemingly out-of-control” (pg. 235).

Where Fallows Falls Short:

Postcards from Tomorrow Square: Reports from China was a quick and interesting read with few flaws. One of the issues I had with Fallows’ writing was his unwillingness to take a stand. Though this may be the nature of The Atlantic Monthly’s publications, I was irritated when he did not chose sides in presenting contradictions. For example, Fallows presents The Great Firewall as a measure instituted by the government to control what its people can view and to screen activity with other countries, but later mentions that it is “ostensibly a way to keep hackers and other rogue elements from harming Chinese internet users” (pg. 171). After finishing reading the chapter The Connection Has Been Reset, I was left with an unsure idea of how The Great Firewall currently operates, both before and after the Olympics. He then states that all “the government cares about is making the quest for information just enough of a nuisance that people generally won’t bother” (pg. 180).

As mentioned previously, the book is a culmination of articles which were written while Fallows was living in China. This led to the inclusion of topics that did not serve to state crucial points. For instance, the third chapter, Win in China, was all about a Chinese game show based on the idea of the American show The Apprentice. The point of the chapter was to express that China had fallen behind in innovation and that they hoped “that the program would encourage more people in China to start their own businesses” (pg. 64). In addition, I found that the chapter Macau’s Big Gamble did not add much to the book. Macau is a gambling haven that has been economically growing by twenty percent a year. The chapter serves to contrast Las Vegas with Macau in how the strategy and regulations differ. Macau is so small in size that it doesn’t represent the diversity of China that I will encounter.

The other problem I had with Fallows was that he did not expand on certain issues that I believe to be more prevalent. He states, “It is conceivable that bad partnerships, stolen intellectual property, dilution of brand name, logistics nightmares, or other difficulties have given many companies a sour view of outsourcing” (pg. 94). These occurrences are major problems that prohibit companies from outsourcing and have led to IP theft. I personally had hoped to gain Fallows’ insight as to the actual weight of these problems, as well as insight from someone like Liam Casey.

The information presented in the book was based on Fallows’ personal accounts of his experiences. I found one inconsistency though that sparked further investigation. Having studied the Japanese concept of Lean Manufacturing, the cleanliness and order of Broad Town seemed to contradict the anti-Japanese sentiment discussed in the first chapter. The Japanese idea of cleanliness is clearly outlined in such books as The Toyota Way, by Jeffrey Liker. Fallows does make this connection, but does not expand on why. In order to gain greater insight into this paradox, I would suggest additional research on the strategies of business in Broad Town.

Conclusion and Recommendation:

Postcards from Tomorrow Square: Reports from China is a compelling book to introduce someone to China. I would highly recommend it to a person traveling or doing business in China, in order to give them insight into the country. This book is an excellent introduction to the subject of business in China, but should be supplemented by additional books in order to gain a deeper understanding of the country. Based on my background in medical manufacturing, in which I worked with Vietnamese assemblers, I can attest to the difficulties in language and the cultural barriers. Again, this book serves to introduce the chaos of Chinese outsourcing, but must be witnessed to be fully understood. It has furthered my interest in learning about the intricacies of outsourcing. This final quote gives readers insight as to how Fallows views the Chinese American relationship. “A look at China can help America address its main shortcomings – reckless fiscal and foreign policies, delay in moving away from dependence on oil – and perhaps also suggest ways the nations can work together on challenges, mainly environmental, that threaten them and others” (pg. 142).