The Rising Chinese Economy and Its Impact
Some economists believe that China's rise as an economic power is simply another case of an Asian country making decent headway much like Japan or South Korea. But management professor and international business researcher Dr. Oded Shenkar disagrees. In The Chinese Century, he writes that China's ascent has more in common with the rise of the United States a century ago than with the recent progress of its predecessors and followers. Shenkar writes, "What we are witnessing is the sustained and dramatic growth of a future world power, with an unmatched breadth of resources, lofty aspirations, strong bargaining position, and the financial and technological wherewithal of an established and business-savvy Diaspora." He writes that China's impact on the world will be enormous.
The Chinese Century describes the impact that China's rise will have on business, employees and consumers around the globe. By exploring the factors that play a role in its rise, and its impact on the United States, Shenkar assesses what companies and employees will need to do to remain competitive as China's role in the global economy expands. He writes that the "dislocations" that result from China's growth as a global economic force represent a fundamental restructuring of the global business system.
Planes, Bicycles and Automobiles
Not only is China a country of 1.3 billion people, but it is already the largest market for Boeing's commercial aircraft and American machine tool makers. It is also Volkswagen's biggest foreign market (ahead of the United States). China makes 70 percent of the world's toys, 60 percent of its bicycles, half its shoes, and one-third of its luggage. Shenkar points out that China's size also means a vast pool of human resources. With its unlimited supply of menial laborers; a growing number of engineers, scientists and skilled technicians; as well as an educational system that continues to be modernized and stocked with foreign-trained faculty, Shenkar writes that China is poised to overcome its problems (of which there are still many) and emerge even stronger from the process.
How can companies, employees and consumers prepare for the new economy? Shenkar writes that the protectionism of a trade war would be a severe mistake, "producing grave consequences for all." He also explains that we all share the responsibility of maintaining the perception of fairness, and the belief in opportunity for all must not be undermined.
Japan and India
For those who might believe that China's rise to prominence as an economic power is equal to that of either Japan or India, Shenkar breaks down the factors that point to China as its own, robust force. For example, Shenkar writes that a "crucial difference between Japan and China has to do with their capacity for innovation and propensity for entrepreneurial and international activities." He explains that historically, China has been an innovator, while Japan has been an imitator or an incremental improver, rarely producing radical innovations. China's advantages in innovation, size and timing suggest that, as substantial as the Japanese impact has been, the Chinese impact is likely to be much larger, more sustainable and broader in terms of economic sectors.
When comparing India and China, Shenkar writes that India is only gaining in a narrow range - software, back-office operations and call centers - while China is globally competitive in a variety of industries, from textiles to appliances. This makes India's presence felt in the outsourcing market but does not necessarily translate into a country-wide impact.
For businesses to succeed in China, Shenkar explains that "a company must do its homework, understand how the Chinese environment works, and determine how to develop and protect a competitive advantage under different game rules." He adds that this same formula also applies to the entire China game.
Shenkar also makes many forecasts, including: If current trends continue, China will surpass the United States to become the world's largest economy in two decades, maybe even sooner. He concludes The Chinese Century with the thought that how we handle the coming challenge "will define much of the world our children will inherit."
Why We Like This Book
The Chinese Century presents a fascinating and detailed look at the factors that have shaped where the global economy is today, and provides valuable insights into the international transformation that is taking place both in the United States and Asia. By focusing on the jobs that are at stake and the new realities we are soon to face, Shenkar offers the foundation on which effective strategies and responses can be built.