Silk Road International Blog

Following up on yesterday’s blog regarding US immigration policy and the so called China Threat, I found this article in the NYT very apropos. Click here.

For 4.1 million college graduates in China this year there are approximately 1.5 million jobs. Most Chinese college graduates are from technical or vocational colleges with only a small percentage coming from the social sciences.

This seems to me to be a tailor maid opportunity for the US. With the US economy needing an increasing number of technical workers and Chinese wage expectations below US minimum wage couldn’t the US allow a greater number of these students into the US for work experience? This is a great opportunity for the US to fulfill its own needs and strike a great public relations coup too—when was the last time that the US was seen as a benevolent benefactor?

Another uniquely disturbing situation is the well published gender in balance in China rising generations. As Chinese are limited to one child, or stiff penalties for subsequent births, the number of males in China greatly outnumber females. Now, I’d be the first to admit that college grads would be more “marriageable” than their lesser educated counterparts. I don’t know what % of these men are or will soon be college graduates, but it has to be at least a small percentage, right? If we combined the numbers of under and unemployed Chinese graduates with the estimated 30 million Chinese bachelors that have not opportunities to marry (due to Chinese desire for male offspring) the US could foster the creation of generations of Chinese American citizens with close personal ties to the US.

While this latter appendix may be more amusing pondering than realistic option, the premise is realistic—The US has multiple opportunities to improve its relationship with China. Many options could improve both economies and the personal ties that bind the two nations.

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I’ve actually been told by other Americans that I’m “helping the enemy” by living and working in China. Are Americans really that insecure or really that stupid?

I’m by no means in love with China, but by the same token, China is no threat. In my opinion, the biggest threats facing America today are our collective lack of international education, our debt and our entitlement mentality. North Korea, maybe. But not China.

I’m convinced that increased engagement is the best international policy that the US can take. International exposure and competition can’t hurt the US and will only increase our ability to continue to project influence into the foreseeable future. In the light, China is an opportunity that Americans can either profit from now or pay for later.

News reports regularly confirm that the most competitive US companies are doing what the US government will not—participate in Chinese growth. While Congressmen continue to argue over Taiwan (do you really think that we step into a cross straights fight at this point?), currency devaluations, security and piracy, other US companies are plowing ahead and solving problems or eliminating conflicts on their own—and making billions in the process. These companies are making it financially painful for either the Chinese or US governments to have any type of military conflict.

Whatever your thoughts about Wal-Mart’s labor history are their growth in China is another example of the codependence and financial sense of the US/China relationship. Wal-Mart will have 80 stores in China by the end of the year and would be the China’s 5th largest trading partner if it was a country. Other visible US companies that are “aiding and abiding” include Visa, McDonald’s, Coca Cola, Pepsi Co. (KFC, Pepsi, Pizza Hut), Starbucks, Buick—these are just the ones you can see everywhere, everyday in China. And AmCham says that the growth of American business in China will double this year—smart money! Next year I expect to add scores of US and foreign banks to this “visible” companies list.

The fact is that China is a great opportunity for anyone in the world, but especially the US. US and Western European educated professionals can, according to one recent news report, have their pick of jobs while 65% of graduates from Chinese universities will be un or under employed this year alone. The ascension of China to WTO standards will only bring more opportunities for US companies who are already WTO compliant by nature of US business/governmental standards.

But the US government and educational systems continue to shackle the US and its future generations. Why do we still only get Spanish, French and German offered as foreign languages in high school? WWII ended 60 years ago—get over Western Europe already! US business is innovative and adaptable; that’s what’s made it us the biggest economy in the history of the world. So why is the pre-collegiate education system so archaic? Why is it that most US students can’t find China on the map but Chinese students can name the US president, and typically read some English by Junior High?

Not only are we generally under internationally educated but the restrictive visa policy of the US makes further contact, professional exchange and even legal immigration more difficult than necessary. The US government is bad for US businesses—unless you are your senator’s pet pork project. So much for free trade.

To those who think China is a growing threat to the US (and can actually find China on a map), I just have a couple of questions. First, how does a strong Chinese economy hurt the US? It doesn’t—rich Chinese people buy US production and travel to the US. More Chinese businesses use more Western developed tech and buy more Western materials/goods. US companies wish the rest of the world would grow as fast as the China market.

Second, is a balance of military power more or less likely to force a confrontation? If history, even recent history, is a forecast of the future, we are more likely to head back to the Middle East as the loan super power than the Eastern Asia in a “balanced” world. And the dirty secret of cold wars is they can be financial and technological bonanzas for participating economies. If the European Union was growing at 10% a year would be scared because Italy and Germany and some former Soviet republics are members? Besides, what country, the US included, doesn’t want to be more “powerful” and have more influence?

China is growing fast but it is not a physical or financial threat to the US today. Nor will it be in the coming decade. But, China is a threat to people in the US that are scared of change, are scared of competition or are undereducated. The US needs to get over it’s self.

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On a personal level I really enjoy working and living with the Chinese. They are interesting, interested, and very kind. But environmentally, I’m not all that pleased with living in China.

On Thursday, as I was coming into Shenzhen from Hong Kong, I was robbed at the boarder. It happened right in the middle of the metro station with video cameras, police and security all around. I was glad to have two young ladies report the theft to the security guards and try to help me identify the robbers. But ultimately the security guards and the video surveillance operators all said “it’s not really my responsibility. You should be more careful.” The police came 45 minutes later and said the same thing and added “you’ve lived here a long time; you should know what it’s like.”

In addition to this bad experience, the fourth time in 3 years that I’ve been robbed here, there were four news articles in the last week identify separate issues that ultimately will and currently do now limit China’s potential and influence. The four issues are increasing pollution, a new bird flu outbreak (reported in HK but not in China), limited housing options for the middle class and limited civil and human rights for those opposed to or even reporting on the government.

Now, despite the pollution and the theft I’m obviously in China because of the opportunities. But with each theft, each new disease outbreak, each new scare, I plan ways to leave. And despite the head-long lemming-like plunge of foreign money and companies into China, I’m not alone. Chinese people would love to be able to leave, if only for a visit to somewhere else (as evidenced by the rapidly increase numbers of Chinese tourists abroad). Even though people want to leave, I’m not predicting a brain drain any time soon. China’s economy is too robust for that. But I am claiming that the Chinese people are China’s greatest resource. And the lack of government enforcement of environmental and social regulations combined with the increasing corruption (as defined by the World Bank) to me means that the bureaucratic infrastructure is what is sucking a healthy % out of the economy and the spirit of individuals.

While every conceivable degree of growth is monitored and ostensibly controlled by the government, more influential is the lack of security, both moral and physical, that people fell and fear in China. With an increase in corruption, pollution, disease (and subsequent lack of reporting) and a glass ceiling for the new middle class means that more and more Chinese are becoming disenfranchised with “just” economic growth. Chinese are much better off, especially in the urban centers, than ever before, but at what price? Economic growth has served as a brilliant distraction from the host of problems that accompany rapid and uneven economic growth for many Chinese.

Another equally effective and must less costly distraction has been the arrival of the World Cup. China didn’t make it into the World Cup (and it looks the US will soon be out too) but that hasn’t limited the Chinese from participating. There were/are fears that Chinese gambling syndicates will try to influence some of the matches. Everyday in the office buildings in Shenzhen I see people coming to work wearing shirts of their favorite teams (Brazil and England mostly). You can’t help but hear the cheers and groans of people staying up all night to watch the matches live (matches are from about 9pm to about 5am each night). The World Cup has generally given everyone in China something else to talk about, drink about and enjoy together. Chinese I know were even disappointed to see the way that Japan lost their first match to the Socceroos. Empathy for the Japanese is a major achievement!

Maybe the Chinese government should get out of the environment and crime control business and into football more. It’s working on a personal level already.

DD

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