China opens innumerable doors

By John Ross
0 Comment(s)Print E-mail, February 26, 2013
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Accurately analyzing and predicting China's economic development has earned me a living, and opened innumerable doors, for more than twenty years. It also gave the satisfaction of seeing individual interest and skills linked to the world's biggest story – the growth of China's economy and China's 'national revival'.

My relation with China started unusually as I analyzed its economy for more than twenty years before I could visit. The interest started in the 1980s when, for theoretical economic reasons, I concluded China's economic reforms, launched by Deng Xiaoping, should achieve great economic success. Nevertheless for a long time China remained unfashionable - not today's front page news. Soon after I began following China, the most widely held international theory was that it would be a relative economic failure while real economic progress would be in Eastern Europe and Russia where Gorbachev introduced reforms and rapid privatization began.

As these economic analyses were inaccurate in 1992, I wrote an article which changed my life. Its title 'Why the Economic Reform Succeeded in China and Will Fail in Russia and Eastern Europe' explains itself - it analyzed why China's economic path would produce great success and Russia and Eastern Europe would fail in comparison.

Publication of this in Russia created a sensation. I predicted inflation in thousands of percent, accompanied by industrial collapse, but China's economy growing rapidly. This led to public debates with Russia's Vice President, the President's Chief Economic Adviser, meetings with Russia's Foreign Minister, TV appearances, contracts with multinational companies etc. At the beginning of 1992 this analysis was received with widespread skepticism, by year-end its predictions were already confirmed for both China and Russia. Nevertheless despite publishing analysis based on China's economy I had no direct contact with China at all – the work was written from the point of view of theoretical economics.

Nor was I able to visit the China for a prolonged period. In 2000 a client, Ken Livingstone, was elected London's Mayor. He invited me to take charge of London's economic policy. Only in 2005 was I able to first visit China – a country whose economy I had been analyzing for decades!

When London's Mayor changed in 2008 I knew China's economic success would continue so I wanted to continue relations with the country. I became a Visiting Professor at Shanghai's Jiao Tong University combining a minimum six months a year living in China with continuing visits to India and Russia and a London base.

Naturally living in China gave far more knowledge of the country, but as the analysis formed two decades earlier had stood the test of time this deepened but did not fundamentally change my analysis of China's economy.

The most significant problem is my wife has to remain in the UK most of the time as one of my daughter's is a world ranked dressage rider and my wife helps the practical side of this. So we compensate by taking incredible China holidays ranging from classic tourist sites (Great Wall, Terracotta Warriors) to a 'swimming pool' rest holiday in the island resort of Hainan which was so comfortable that I am slightly embarrassed to say we never left the hotel complex for 10 days! As we adore good food China's inexhaustible cuisine is integrated in these plans – my wife saying I raved about fish I ate at Yichang on the Yangtze for two years before I could take her there (after sampling she decided it worth waiting).

I love poetry and have long read in translation classic Chinese poets – my personal favorite being Li Bai, perhaps because he was (in) famous for his liking of wine. My Chinese friends naturally vastly improved my Chinese literary knowledge.

In another cultural direction I worked with and came to like the Chinese pop star Li Yuchun/Chris Lee – winner of a Chinese equivalent of Pop Idol. I teach about her in courses on branding and some Chinese readers of Lee Weekly were doubtless bemused to find a foreign economics professor rated as one of her top 10 fans in 2012!

Last year's great discovery was that computer translation technology has improved to a point which makes possible not only reading Chinese media online but participating in weibo – the Chinese 'microblogging' parallel of Twitter. Via weibo I can communicate not only with colleagues and friends but enormous numbers of Chinese 'netizens' – in 10 months I received 66,000 weibo comments. Netizens turned from virtual into physical friends in several cities.

Are there difficulties to being in China from a foreigner's perspective? From a practical point of view very few. Culturally the most difficult thing to adjust to is Chinese unwillingness to say 'no' in a direct fashion. It wastes a lot of time – I prefer American directness. But apart from that the openness of people in China is very familiar to a multicultural Londoner.

Professionally the most annoying problem in analysis of China is sloppy statistical arguments – too much use of anecdotes instead of serious quantification. As someone writing about China's economy for over twenty years I have grown tired, if slightly amused, by habitual predictions of a crash 'soon' in China's economy. Such inaccurate predictions over several decades usually turn out to be based on some anecdote instead of serious statistics. This allows ridiculous myths about China's economy to be spread – for example that China's investment is inefficient when it is far more efficient than the US or Europe, or that China has been slow in developing consumption when it has had the fastest growth of consumption of any major economy.

But all this is secondary to the main facts. China has the fastest growing major economy in world history. By being in China today you are participating in history in a way not possible in any other country. For an individual what is important in that could be business opportunities, to be at the cutting edge of economic trends, to see hundreds of millions of people achieve a decent living standard, to see the evolution of a country that is simultaneously the oldest and most modern in the world or a million other things. But at this point in history China is where the world's action is, the place to be.

It is also 'win-win'. Provided a foreigner remembers they are a guest in China's house, they do not own it, the hospitality of China's people is tremendous. A foreigner learns from China, but China understands it learn from other countries. It is a basis of difference but equality – the most solid of foundations for mutual respect and liking.

To see history made, to take advantage of the openings created in countless fields, to be able to combine that with a culture and good food is irresistible. A China dream.

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