The omnipresence of Western culture

In the West, we discover Chinese culture through our enjoyment of Chinese food and the occasional exposure to philosophers (Confucius), medicine (acupuncture), martial arts (Kung Fu) or films (Crouching Tiger, Hidden Dragon). Otherwise, little is experienced of the culture of the Middle Kingdom.

chinese-movieSource: IMP Awards

On the other hand, when Westerners arrive in China, they are surprised to find Western culture so pervasive. Let us explore the extent of this cultural presence.

Upon arrival at the airport, one will note that the male or female models used on billboards are often from the West. Frequently it is to promote a Western brand, but quite often it is used for Chinese products. The use of a Western model can often be explained by the desire to position the product or service at a high-end level, enticing Chinese consumers to achieve the material wealth and ease available in the West.

As the person journeys further into China, the names on a substantial number of stores will be familiar. Often Western companies have identified the Chinese market of nearly 1.4 billion potential consumers as a market that is worth pursuing, in spite of the many challenges that they will encounter. American and European labels will lease many locations in shopping malls, at times occupying more than 25% of the retail space.

hmSource: Nelson Ching/Bloomberg News

American fast food brands have a strong presence across China as well, with KFC (>5,000 locations), McDonalds (>2,000) and Starbucks (>1,600) leading the way.

kfc-mcdonaldsSource: Wikimedia

As the days go by, one will notice the less obvious manners in which Western culture is present. Western music will often be played in public locations, even in Chinese restaurants. Western artists will tour the largest cities to capitalize on being well-known and liked. Billboards will advertise the latest Hollywood action movies. These movies will generate hundreds of millions of dollars annually in a market that will become within a few years, the second largest market, after the USA.

harry-potter

Source: AFP Photo / Frederick J. Brown

One will also be amazed at the number of people who have a decent notion of English. It is estimated that around 300 million Chinese are learning English. Some in a formal setting like schools (public or private), while others will do it on their own. Their goal will be to capitalize on Western opportunities, might they be work related or personal.

As one stays longer in China, further cultural influence will be experienced starting with the introduction of Western holidays. For Halloween, stores offer masks and outfits. On the evening of October 31, thousands of adolescents disguise themselves and go for a walk in the downtown core of major cities. In late November, it is common to see retail stores or banks posting “Merry Christmas” signs. Stores like Walmart and Carrefour offer Christmas trees and decorations. Commercial streets are lit up, encouraging shoppers to purchase gifts for family and friends.

As one talks to Chinese friends, a key topic of discussion is the education of their child (i.e. 1-child policy). Chinese parents take this topic very seriously, and as a consequence, foreign schools are often a preference, if the parents can afford the substantial annual fees, often equivalent to one-year salary of a well-paid individual. American and British schools and universities have established Chinese locations that use the curriculum and teachers from their home countries.

shanghai-american-school

Source: Shanghai American School

In the field of literature, it is frequent to see a book or a play in its original version or translated in Chinese. Through these, Chinese people are exposed to Western values portrayed by the likes of Shakespeare, Molière, Dickens, Hugo, Hemingway and others.

shakespeareSource: British Council

As one further expands its reach into the Chinese society, Western culture becomes more subtle. The presence of many multinationals operating in China and the actions of multiple NGO’s (Non-governmental agencies) further spreads the cultural influence of the West.

Where is the cultural dynamic between China and the West heading? The first observation is that at this time, the flow of cultural influence is highly unbalanced in favour of the West. This has been the case for as long as China and Western countries have interacted. How will this change in the coming years and decades? At this time, it is reasonable to believe that the material wealth, creativity, openness and social dynamism of the West will probably continue to exert pressure for the continued dominance of the West. For this balance to be more equal, substantial changes would need to occur in China.

Meanwhile, the government is fully aware of the cultural dominance of the West and is taking actions to regulate the inward flow. Strict rules have been placed on the number and the content of films allowed in the country. For foreign corporations, a series of rules clearly delineate their areas of activities, while the Communist Party of China monitors their activity through their presence within each of these corporations. For NGO’s, recently issued regulations constrain their operations.

So the approach is if China cannot match or stem the Western cultural influence, China will contain and constrain it. One must wonder if it will work.

It is to be noted that as the Chinese culture is strong, there is no chance that Western culture will subjugate it. The Western cultural experience will remain a veneer on the Chinese culture. The Chinese will continue to live with the beliefs and the behaviour that have been at their core for centuries.

Pierre Brunet

Mandarin as lingua franca?

With the growing power of China, will Mandarin (Putonghua (i.e. national language)) replace English as the language used across the world?

Whenever people in a nation desire to communicate with people another nation, a language that both parties understand needs to be found. Historically, the language of the nation that had the largest economy or greatest military power was used.

As the means of communication and travel evolved, the process used to select the language changed. Originally, the distance of communication was relatively limited. As the means of transportation increased in speed and reach; from horse, to ship, to plane and finally to electronic, the distance and the number of countries covered increased.

latin-as-lingua-francaLatin was the lingua franca during the Roman Empire and subsequent centuries. Source: Wikipedia

What was a regional requirement became an international need. If we travel back in time, common communication languages were based on regional powers. All this changed in the 17th century with the establishment of colonial empires.

The first universal language, commonly called lingua franca was French. It was replaced with English in the late 19th or early 20th century because of the substantial colonial empire and the economic might of England, compounded with the economic power of the USA.

Chinese language was the lingua franca within its sphere of influence (Japan, Korea, Vietnam and Mongolia) until the late 19th century. With the weakening of China due to foreign presence, English displaced Chinese.

Now that China is on the ascendance again, with its economy being the second largest, probably overtaking the USA in the coming decade, it is probable that some countries will feel the need to interact with China in Mandarin in order to ingratiate themselves towards China.

In international bodies, English and French are the most common languages used, with Mandarin rarely recognized as an official language.

The key point that changed in the historical dynamic used to determine which language will be used as the international lingua franca is electronic communication. This has forced parties to rely on the power of the word, compared to a face-to-face interaction. In an environment where time is money, compounded by high pressure to rapidly respond to questions or situations, it is important that the language retained be clear. This implies that the language has a low level of contextual relationship to be understood clearly (i.e. that the words can be taken at face value); in addition to being relatively easy to learn. And this is where the Chinese language stumbles, as the words (or characters in this case) used are not precise in their meaning, particularly if any legal recourse is pursued. In addition, learning Mandarin is time consuming as it is complex.

The following graph illustrates the extent to which English is currently spoken around the world by non-native speakers, compared to Mandarin. This numerical advantage of English is substantial and almost impossible for Mandarin to surpass.

non-native-speakersRelative importance of native speakers to non-native speakers. Source: Transpacific Project

Therefore, it is probable that the English language will remain for the foreseeable future, the lingua franca of the world, as the most commonly used international language when people interface across boundaries.

Pierre

The North-East: Shenyang to Harbin

Heading out of Shenyang (population 6.3 million, capital of Liaoning province) on board the high-speed train, we rapidly cross the industrial outskirt of the city. Within a few minutes we are in an empty countryside, as it is November and the cold weather has already been here for a few weeks.

Harbin is 540 km away. At 305 km per hour, it will take us slightly more than 2 hours to reach our destination. This will allow sufficient time to observe the environment as we speed through the countryside.

shenyang-harbin-by-trainJourney by train from Shenyang to Harbin. Source: Google Map

In no time, Shenyang is a distant memory. We only see empty fields except for the dry stalks that are the leftovers of the corn and wheat harvests. The earth is dark colour indicating rich soil. Sporadically we see a person manually tending the fields. The occasional tractor shows that mechanization has reached this part of the country. But the small fields indicate that no large equipment will be used here until the fields are much larger. Horses are seen pulling small wooden carts. There are no barns where equipment would be stored. There are no animals as it would probably be too expensive to feed and house them during the long winter.

The corn collected is air dried in wired cages. No metal silos here where corn could be stored until it is taken away by trucks to the nearest scale and then shipped to market. No mechanization to handle the crop is seen.

The occasional roads that can be seen are paved, but there are few cars on them. Side roads are in hardened earth, which the rain will turn into mud. At times, a lone highway follows the train tracks. Cars and trucks trudge along in both directions. Trucks are heavily loaded with goods that are destined for the few large cities of the North-East.

A few gullies emerge to accommodate small brooks with minimum flow. No trace of any rivers here. The fields must be watered with the randomness of the rains, as there are no traces of water wells. In between fields we see the occasional row of trees that will dampen the effect of the winds on this flat land. Fields carry on as far as the eye can see. There are no traces of forests or any discerning features, with the exception of the occasional cellular phone tower.

Small villages appear every few kilometers. Their size is almost uniform, with 30 to 60 houses located on a few streets that run parallel to each other. All houses are of the same design. They are rectangular, roughly 7 meters by 12 meters. All have the same sloping rusted corrugated roof with two chimneys. There are 4 windows at the front, 2 or 3 at the back, and none on the sides. A solar water heater is located on the roof. An electrical wire is connected to the house, but no trace of satellite dishes. Smoke is coming out of many chimneys as people have already taken refuge inside.

heilongjiangFields and villages in Heilongjiang. Source: Google Earth

A small plot of land at the front or the back of the house seems to indicate a garden that provides vegetables for the family. There are no traces of cars or pick-up trucks that one would expect to see in the countryside. Maybe people have gone to work away from town, but there are no factories around. No large buildings are to be seen in these villages. Where are the schools, hospitals, stores, gasoline stations or other institutional buildings?

Suddenly in the middle of fields, twenty residential high-rises, all identical, at least 8-floor high appear. Many seem empty. There are no cars around, no activity, only lonely buildings. A few kilometers away, another series of high-rises appear, and then 10 kilometers further is Changchun, the capital of Jilin province. There was only a short transition between the fields and the city. We can’t see this city of 4.1 million people as we are in its outskirts.

After a brief stop, we are back in the countryside. We pass within 300 meters of a coal power plant that seems recently built. Its belching chimney and two cooling towers dominate the fields. There are a few piles of coal nearby; a few kilometers away, another coal power plant.

The monotony of small fields and villages is back. Some fields have been set on fire to burn the left over dry vegetation, which will fertilize the fields for the next growing season. Unfortunately, these fires will also increase the pollution, mainly particles in suspension in the air, for which China is well known.

One hour after leaving Changchun, the train rolls into Harbin (population 5.3 million, capital of Heilongjiang province). The transition from fields to the cityscape is instant. Low rise buildings surround the brand new station that remains to be connected to the subway system. The countryside is long gone, but never far from any city as almost 50% of China’s population still lives in a rural setting.

Over the coming years, the migration of tens of millions of people from the countryside to the cities will continue. It is obvious that the countryside is overpopulated to take care of the existing fields. Mechanization will progressively be used as the standard of living continues growing. What will happen to all these small villages? How will the people who migrate to the cities thrive? So many questions remain.

Pierre

Trump on China

The improbable has happened. Donald Trump will be the next President of the United States of America. So, what are the possible implications for China? Let us look at what might happen from the most probable to the most challenging.

trump-in-china

A Chinese newspaper with the headline ‘Outsider strikes back’ above a picture of Donald Trump. Photo: AFP

The first topic regards the Trans-Pacific Partnership (TPP) free-trade agreement, which Trump has repeatedly stated that he would not sign because of his position that free-trade accords ship jobs outside the USA. The non-implementation of this accord goes against the desire of all countries in Asia to expand free-trade. The framework of the TPP was pro-market and was designed to set the stage for Western-based market economy rules. With this agreement not proceeding forward, the context for free-trade agreements in Asia moves in favour of China with its desire to see a strong presence of the state in the market.

Another approach favoured by Trump is to focus on America and take its distance from the rest of the world, as long as it is not about terrorists that can attack the USA. A Trump presidency would probably scale down the Pivot to Asia that the Obama presidency has taken. This implies that smaller countries in South East Asia will see their position weakened in regards to the territorial disputes in the South China Sea, where China has claimed vast areas within the “nine-dash” line. This will embolden China to continue and even expand its land reclamation efforts and force smaller nations to negotiate an agreement with China.

scs

The other aspect that was clear in the Trump campaign is the desire to see foreign countries that benefit from the military protection of the USA, carry a greater percentage of the cost of their defense. The benchmark of this cost is 2% of GDP, as clearly spelled out within NATO (North Atlantic Treaty Organization). In Asia, two key countries might be affected by this policy: South Korea and Japan. The most worrying is Japan, which is facing China in a contest of will in regards to projecting its influence across Asia and maintaining control of small islands that China asserts belongs to them. Currently Japan has been increasing its military buildup and freeing itself from parts of the constraints of their constitution imposed by the USA in 1945. At this moment, military spending by Japan is constrained to 1% of GDP, while for China it is almost 2% based on an economy 3 times larger. It is possible that the tension between China and Japan will continue to rise, allowing the Chinese government to continue its assertive policy towards Japan.

china-japan-island

The biggest question in regards to the dynamic between the USA and China relates to trade. Over the last 2 decades, millions of jobs have been lost in the USA and moved to China because of a much lower cost of operation (labour and material). This cost advantage might have been compounded by the weak value of the Chinese currency (RMB) relative to the US dollar, and possibly by market manipulation where State Owned Enterprises dominate (dumping of goods in sectors that are in overcapacity, particularly the steel sector). Not much can be done by the USA to influence the cost of labour or raw material in China, but substantial action can be taken by the USA on currency and dumping.

On currency, the key expression to watch for is “currency manipulator”, where China would be deemed to have weakened its currency relative to the USA currency in a manner that would reduce the costs of goods produced in China. If President Trump officially states that China has manipulated (i.e. weakened) its currency, a series of actions are automatically initiated. This could lead to substantial duties imposed on all or parts of Chinese imports into the USA, with possible counter duties imposed by China on US goods imported into China. Then a trade war between the two countries is a prospect.

What makes the situation even more challenging is that these events need to happen within the framework of the World Trade Organization (WTO), which would take years to rule on these actions. Would President Trump be willing to work through a third-party international body? Not sure, as he has stated many times that third-party bodies have impeded the development of the USA. This is where all bets are off, particularly if President Trump takes action on his frequent comments: “China is sucking us dry. They’re taking our money. They’re taking our jobs. They’re doing so much. We have rebuilt China with what they’ve taken out.”

The overarching point on the economic front that is confronting the USA is the fundamental realignment that I made in a previous posting (Time over for the West to dominate – Oct. 22). China wants, in fact needs, to continue growing economically at a rate that is 2 to 3 times higher than the US growth rate. So, relatively speaking the Americans will feel that they are not dominating the world anymore, and therefore that America is not great. Will the USA accept that China is overtaking them? That is the fundamental conundrum of this election.

gdp-realignment

The relative importance of the USA shrinks to the benefit of Asia. Source: The Economist

Unfortunately, history indicates that any switch of country that “dominates” has not happened peacefully. It is to be hoped that a modern society, where people understand the mistakes of our forefathers, will find a solution to this transition. I remain hopeful, but the upcoming Trump presidency will keep us on the edge of our seats for the upcoming 4 years.

Pierre