The Chinese “Miracle”

Shanghai Skyline
Shanghai, China is the epicenter of the Chinese Miracle. Image by f11photo/Shutterstock

14 December 2019 – The following essay is a verbatim copy of one I recently posted to a Global Business discussion site in response to a link emailed to me by Dr. Tiffany Jordan of Keiser University.


Thank you, TJ, for sending along a link to Steve Sjuggerud’s documentary on Chinese development. History teaches us that 5,000 years ago, China was one of two (maybe three, if you count Central America) population centers (the other was Egypt) where folks independently invented civilization. You can’t go far wrong by betting on people that smart!

The second factor in this story is that one out of six human beings on this planet is Chinese. With that many really smart people let loose to work together, they’re bound to push the limits of economic development. The last time that happened anywhere was in the 18th century when steam technology was let loose among the newly liberated populations of England, North America, and Europe. The resulting Industrial Revolution was a similar game changer. People from the countryside flocked to the cities to make the most of revolutionary technology, and made vast piles of wealth in the process. Sound familiar?

So, what could go wrong? The known preference of the Chinese people for long power distance is what could go wrong (Hofstede, 1993). Since Qin Shi Huang patched together the Chinese Empire in 221 BCE (Shi, 2014), the country has had a nearly unbroken record of authoritarian rule, which is why, after all this time, they’re still stuck with “emerging nation” status. The latest period of lax central control started in the mid-1970s, when Mao Zedong lost control of his Marxist People’s Republic (PRC), and good things started happening in China.

China is home to two philosophies at opposing ends of the power-distance spectrum: Taoist egalitarianism and Confucian formality (Carnogurská, 2014). Taoists insist (among other things) on individual self-rule. Confucionists insist on respect for authority (Zhou, 2011). You can guess which philosophy Xi Jinping’s power-grabbing PRC favors! It is no accident that the slowing of China’s economic expansion immediately followed Xi’s re-institution of central authority. The stark contrast can be seen in the difference between the miracle on the Chinese mainland and the even-bigger miracle that has been playing out in Hong Kong.

I’m always ambivalent, however, about investing in the Chinese “miracle.” Back in the early 1990s I was asked to duplicate my success helping expand an American electronics publication into Europe by doing the same thing in China. With images from Tiananmen-Square events fresh in my mind, I declined. Unlike my corporate bosses, I just didn’t trust the PRC leadership to play nice. That corporation is now out of the publishing business! I’d done the same thing in the 1970s when I declined the last Shah of Iran’s invitation to take our Boston-based Physics Department to Tehran University–just before their revolution broke out. (Whew!)

China is not Iran, and Xi Jinping is not Mohammad Reza Shah. Pres. Xi likes leading the fastest-growing economy on the planet, but is facing his big test with current events in Hong Kong. Will he figure a way to defuse that uprising, or will his unenlightened cronies in Beijing push him into a disasterous reprise of Tiananmen-Square? I’m not jumping onto the Chinese bandwagon until I see the result.

References

Carnogurská, M. (2014). Xunzi, an ingeniously critical synthesist of Chinese philosophy of the pre-Qin period. Journal of Sino – Western Communications, 6(1), 3-25.

Hofstede, G. (1993). Cultural constraints in management theories. Executive, 7(1), 81–94.

Shi, J. (2014). Incorporating all for one: The first emperor’s tomb mound. Early China, 37(1), 359-391.

Zhou, H. (2011). Confucianism and the legalism: A model of the national strategy of governance in ancient China. Frontiers of Economics in China, 6(4), 616-637.

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