Chapter 28 Why China Goes Global

With the rise of China's economy in the world, what image will China present to the world?Should we break into the world as a "Confucian businessman", or integrate into the world with constructive "soft power"? ◎Reporter: With the rise of China's economy in the world, the issue of soft power has been raised by the industry. Some Neo-Confucian scholars claim to "change barbarians with Xia" and "integrate the world with Chinese civilization".What is your opinion on this? Chen Zhiwu: China's economic strength is getting stronger and stronger, and it has indeed shaken the world in many ways.One thing is for sure, the vast majority of Westerners are very willing to see the living environment and conditions of Chinese people getting better and better.Whether in the United States, Western Europe or other countries, people hope that the Chinese people will live better and better.The reason why some people see China's rise as a threat is definitely not because they don't want to see Chinese people live better, but because China's overseas image and soft power are somewhat lacking.Now the world is flat. In addition to economic, trade and political exchanges, even the navies and air forces of many countries also communicate with each other. The distance between countries is not as far as before. Everyone hopes to have more transparency and more homogeneous values. Only in this way can I rest assured.

So, what image will China present to the world?What exactly do we have that can help China increase its soft power?This is a very urgent question.Some people think that the Confucian ideas of "peace is the most important" and "the mean" should be exported, and the concept of "being rich is not benevolent" should be preached overseas, so as to enhance China's soft power.Personally, I feel like this doesn't quite get the point.Because everyone's biggest worry is that China's political system is not transparent and there is not enough accountability. The logic and procedures behind the decision-making are uncertain.Everyone is worried about the soft power of such a country.On the other hand, the way to increase soft power is not to promote things with Chinese characteristics to other countries, but to talk more about what everyone has in common.It's like when you go to a friend's house, you won't tell how different you are from him, but you will definitely talk about how similar you are to him, because when most people make friends, they have many common topics, the way of seeing problems, their value If you share the same orientation, you will become friends immediately.If, as the New Confucians say, we should use Chinese culture to integrate the world, what does that mean?Is this to make friends or to conquer others?Not only will this not increase China's soft power, nor will it improve China's image overseas, but it will worsen it.

I have many thoughts on this subject.I feel that some people who study culture do not have a good understanding of the causes behind various cultures.If we don’t understand the reasons behind the culture—why this kind of culture and not that kind of culture—we always talk about culture in terms of culture in the end, and we will never get out of this dead end.So I think on the one hand, people who study culture should get out of this vicious circle of research, and go out of the cultural field more to understand the causes of culture.And once we realize that today's world is no longer what it was yesterday, the culture and values ​​produced by the original environment may no longer be needed.

In the second aspect, people who study culture always like to say that China is a country with a long history, thousands of years of history, and how glorious it used to be. These are true, but don’t stay too self-indulgent in these remarks, after all, it is the past .Foreigners often say this to make us Chinese happy.I think these things can be said, but if we talk too much, it becomes a burden, a burden that prevents us from moving forward. Especially in the past one or two hundred years, this burden can never be thrown away. The glory of the past makes it difficult for us to face today and the future objectively.I always feel that with such a long history and such a big ancient civilization, we should save the world.Therefore, when I hear these people calling for the integration of the world with Chinese culture, I feel that apart from not understanding the causes of culture, they may not necessarily understand what the outside world needs.Therefore, they think that Confucian culture is the best, regardless of whether people need this culture or not, they push it outward.This reminds me of the "Cultural Revolution". At that time, I often learned a sentence, "People in the world, especially people in capitalist countries, are living in dire straits, waiting for us to rescue them."At that time, I really didn't know what the situation in capitalist countries and other countries was like.This certainly sounds exciting, and the sense of mission is really strong.After more than 20 years of reform and opening up, it is now discovered that perhaps this statement should be reversed at the time. Ancient civilizations such as China and India are actually the poorest countries, and people in these countries are the ones who should be rescued.Therefore, when we talk about this kind of thing again today, it is best not to make people laugh, and we don’t want to integrate the world as soon as we have something.Let's solve China's own problems first. Solving China's own problems is our greatest contribution to the world.

In fact, in the huge world, China is only a small part.I have traveled to many countries over the years, and the more countries I visit, the more I feel the world is big.Being in China, it is often hard to imagine other places worth mentioning in the world besides China.After leaving China, you will find that there are countries abroad.In addition to its long history, how much China has contributed to the world, is it proportional to our population? Taking the economic achievements of the past two decades as an example, many people attribute all the credit to these two generations of Chinese people, and they are all made by the Chinese themselves, and no credit is given to Western countries.Is it really?

First, if it hadn’t been for the introduction of Western industrial technology during the Westernization Movement in the late Qing Dynasty, if it hadn’t been for the textile industry, manufacturing industry, and modern financial system established during the Republic of China, if it hadn’t been for the establishment of new schools in the late Qing Dynasty to allow generations of Chinese to learn Western science and technology, there would have been no Those basic accumulations, China's economic achievements over the past two decades are impossible. Second, 52% of China's GDP comes from industry, so who invented and created industrial technology?Where did the manufacturing industry, which provides 95 million jobs for China, come from?What I mean is that manufacturing was brought about by the industrial revolution in the West, not an invention of the Chinese themselves.Some people will also say that China's telecommunications industry, electric power industry, and oil industry are all very large, and the mobile phone alone sells hundreds of millions of units a year, and the proportion of these industries to GDP is also very high.But where did technologies such as telecommunications, electricity, and oil come from?And computers and the Internet, railways, roads and air transportation, none of these things are actually created by China.Therefore, objectively speaking, China’s development over the past two decades has of course mainly depended on the Chinese, but if it were not for the introduction of these Western industries and technologies from the Westernization Movement, China would not have today’s automobile industry, shipbuilding industry, and aviation industry. Industry, electric power industry, telecommunications industry, manufacturing industry, petroleum industry, securities and finance industry, etc. These industries are already the pillars of China's economy. The core of China's traditional economy - agriculture, only accounts for less than 15% of GDP.

Therefore, we should continue to study humbly and learn how to enter the world more constructively, instead of rushing into the world as Red Guards of the "Cultural Revolution", saying that we want to "integrate the world".Objectively speaking, among the "powerful countries" in the world in the past 500 years, from Portugal to Spain, the Netherlands, France and the United Kingdom, and then to Germany, the United States and Japan, none of them are those "ancient civilizations" immersed in glorious history all the year round. Greece, not Egypt, not India, why? The common problem of "ancient civilizations" is that they cannot get rid of the burden of historical pride, and they are too noble to "join the world".Will China be able to let go of this burden this time?Can you objectively examine your weaknesses and strengths?

◎Reporter: If the rise of the United States has contributed to the world a set of soft power such as the idea of ​​"democracy", then what might this kind of thing be like if China rises? Chen Zhiwu: I think that China does not have to think about what new ideas it will bring to the world today. It has to elevate the world to another level.There is no need to be so anxious now, because China has just developed, and it has only been 28 years since it took the initiative to enter the world. China's understanding of world history and world order may be even lower, let alone half.Therefore, when you don't fully know what the world is like, you should continue to be an apprentice and don't feel like a master.

◎Reporter: The formation of the entrepreneurial class in China took place in the last 20 years. In the past, there was a fashionable word to describe them, called Confucian businessmen. What do you think of the relationship between Confucian businessmen and Confucian culture? Chen Zhiwu: Although there are various forums about Confucian businessmen in China, what are Confucian businessmen?What is a Chinese businessman? There are 10 opinions for 10 people.Many people will say that Confucian businessmen do not refer to filial piety, but more emphasis on benevolence, righteousness, rationality and trustworthiness, don’t be unkind for riches, and value harmony; don’t hurt everyone’s harmony just to earn a penny more for yourself, and the mean is fine. .In fact, if Confucian merchant culture refers to honesty, benevolence, and loyalty, businessmen from any country, whether Chinese, Confucian, European, or American, will advocate it. Otherwise, market transactions will be difficult to carry out for a long time. This is not Confucian merchants featured stuff.This is why American business schools teach business ethics and so on.

Perhaps the difference between Confucian businessmen and other businessmen is that they emphasize harmony and moderation, but these behavioral philosophies are contradictory to business innovation and technological innovation.In other words, seeking the golden mean in everything and valuing peace are the foundations of the cultural philosophy that has suppressed the development of China's commerce and innovation over the past two thousand years.Because the mean is to "shoot the top bird with a gun", not to pursue the best, but to reward and encourage "mediocrity", and peace is the most important thing, which requires you to give up the pursuit of your own interests and rights.This is the reason why China has always failed to innovate after the "Four Great Inventions" of the Song Dynasty-we always emphasize that everyone should be obedient, obedient, and peace is the most important thing, don't take things so seriously, and don't take things for your own benefit. Bring out your best abilities, and so on.In this sense, if we advocate doing business with Confucian culture, we will suppress the spirit of innovation and entrepreneurial vitality that has been hard-won in the Chinese economy over the past few years.How can there be fundamental development without a culture of excellence?

Another characteristic of Confucian businessmen may be that they pay attention to relationships in everything, emphasizing informal transaction methods, rather than talking about laws and contracts at every turn.This way of doing business is not a big problem for small-scale businesses in agricultural societies.However, for today, when the market scope and transaction scale have been greatly expanded by modern technology, this method will have many problems.Taking the Asian financial crisis as an example, Southeast Asian businessmen and Korean businessmen under the influence of Confucian culture naturally like to talk about relationships.South Korea, Thailand, and Singapore, where the crisis occurred that year, have always been deeply influenced by Confucian culture.They emphasize interpersonal relationships rather than the rule of law and strict protection of their interests through formal business contracts, regardless of legal and political institutions.As a result, before 1997, in countries such as South Korea, Malaysia, Thailand, and Indonesia, government-business collusion was rampant, and many behind-the-scenes transactions sowed the seeds of crisis.In other words, the business rules of Confucian businessmen place more emphasis on interpersonal relationships than the rule of law. Rights and responsibilities in transactions are often unclear, and problems accumulate and eventually erupt in the form of financial crises. This Confucian merchant culture, which does not like formal contracts or formal laws, also makes successful merchants "not rich for three generations."Because Confucian businessmen underestimated the role of formal contracts and laws, they could not entrust a successful enterprise to professional managers and let them manage it.Because if there is no reliable guarantee of the rule of law, enterprise ownership and management rights cannot be separated, and the boss cannot rest assured.Therefore, successful Chinese family businesses can only be taken over by their children and grandchildren. It is not difficult to imagine the probability that the second and third generations will be able to manage them well, so it is not surprising that "wealth cannot reach the third generation".Under such circumstances, do you want the new generation of Chinese entrepreneurs to learn Confucian businessmen instead of better management and business studies? ◎Reporter: The world is flat.The wave of globalization and China's reforms has forced the immature Confucian businessmen to "go out". They actually represent the image of China's rise.But the current situation is not optimistic, including the setback of CNOOC's merger and acquisition earlier, and now TCL Group's defeat in Europe and BenQ's announcement of the bankruptcy of its European mobile subsidiary. Lenovo seems to be struggling in the United States.This casts a cloud over the recent internationalization of Chinese enterprises and Confucian businessmen. What do you think?What is the mainstream view of them in the Western intellectual circles?Does their experience also imply the dilemma of Confucian culture going out? Chen Zhiwu: I attended a meeting in New York two weeks ago, and I was talking about similar issues.In the near future, will Chinese enterprises succeed in going global?In my opinion, if 4-5 out of 100 companies go global successfully, that would be pretty good.This is not to say that Chinese companies should not go out, but should go out, but the expectations should not be too high, and it may still be time to pay tuition fees.For example, the Chinese businessmen we mentioned earlier value relationships rather than formal legal contracts. This kind of business culture makes Chinese companies have to take a long detour abroad. For example, at the end of 2004, Lenovo and IBM will sign a merger agreement in the United States.When Lenovo executives got off the plane at the New York airport, they found that there were no senior executives from IBM to greet them?So I felt very annoyed.I heard that when they had a formal meeting with IBM management the next day, the first thing they talked about was this issue.Because in the eyes of the Chinese, this is not giving face.But in fact, Americans don’t think so. They think that you can arrange the car and go to the hotel by yourself. We agree on where to meet the next day, and we can meet there when the time comes. Why waste so much money? Time to meet at the airport?We must know that the cost of everyone's time is very high.Americans are very pragmatic. They may think that there are many professional hospitality companies in the United States, and it would be good for you to pick one and let them pick you up, because it will be the most efficient. For another example, 3 years ago, I met an executive of Deron.At that time Deron bought a small aircraft manufacturing company in Germany.The director of Delong's German company is a German. He can speak English and German, but he can't understand Chinese, but Delong's executives can't speak English, let alone German, so I became their translator.From the beginning to the end, I felt that Delong's executives didn't pay attention to the German executive they hired, let alone have any communication with him.At that time, I wondered in my heart, this Deron is amazing, how will they manage this German aircraft company after they bought it?They neither understand the cultural habits of Germany nor the way of doing business in Germany. How can this kind of merger be successful? There are many challenges and problems for Chinese enterprises to go global, but the biggest problem may be to politicize the purpose of overseas M&A rather than commercial investment.Lenovo itself is controlled by the state, but they themselves say it is non-state-owned; CNOOC, which failed to acquire Unocal in the past, is a state-owned enterprise;At present, most of these companies that have gone out are state-owned.In other words, if state-owned enterprises spend money on overseas acquisitions, whether they can make money or not, why should they care?Therefore, I am worried that too many bosses of state-owned enterprises or semi-state-owned enterprises have the complex of competing for the title of "national hero", spending other people's money to gain political capital for themselves, and make themselves a "national hero".In the past, the "absence of owner" problem of state-owned enterprises was applied to overseas mergers and acquisitions, and the potential cost would be huge.Now, Chinese companies are too attached to the trophy of going global, which has gone beyond commercial operations. Secondly, our international knowledge and talent pool are basically blank.Few universities in China have the majors to study the culture, history, economy, and geography of various countries, to study the business culture, company practices and history of various countries, but Chinese companies are going out one after another.Therefore, in the past two years, I have suggested to PetroChina, CNOOC and other companies that they should pay some money to open some history majors, economics majors, cultural majors, political majors, etc. for various small countries in Peking University and Tsinghua University, and recruit some undergraduates and postgraduates. Offer them scholarships and research funding.At the same time, these big companies sign contracts with the students, and the students go to the corresponding companies to work for a few years after graduation.This is also very happy for students, because ordinary people who would study the culture or history of Sudan, Kazakhstan and other countries will not be able to find a job after learning these things. Today's domestic universities and enterprises should jointly cultivate such people as the backing for Chinese enterprises to go global in the future.For example, 48 countries came to the China-Africa Forum recently. If the history, society, politics, economy, and culture of these countries are all 5 majors, there are 240 majors.This has little scale effect for universities because the demand for people who understand these small countries is very small.But because of the small number, it is very appropriate for Chinese companies that want to go global today and in the future to make some investment.In this regard, you have to admire the United States. Whenever something happens in any small country in Africa, the Middle East, or Latin America, you can always find a few experts in a research institution in the United States who have been studying a certain aspect of this small country all their lives. Be it religion or art, philosophy etc.Because the American education system is open.Like my children, they learn about different countries every year since they were in kindergarten. Over time, among so many children in the United States, there will always be a few of them who are interested in a certain aspect of a small African country.But in China, everyone pursues the same thing in order to cope with the exam, and in the end they don't cultivate according to their own interests. Therefore, although Chinese enterprises are more and more capable of going out and should go out, it is still too early to truly operate freely in the international economy.China's overseas mergers and acquisitions this year are about US$14 billion to US$18 billion. This scale is still very small, and a random fund management company in New York may manage this much investment.In order for Chinese enterprises to go global more smoothly, it is precisely not to teach them how to do business with Confucian culture, but to teach them more business culture based on law, so that they have the habit of doing transactions according to formal contracts and formal rules , Instead of touching the unspoken rules.Unspoken rules are only suitable for small businesses. ◎Reporter: Due to China's own characteristics, it is just some large state-owned enterprises that can go out now, and private enterprises do not seem to have this ability.Based on what you have observed so far, what is the mainstream view of these state-owned enterprises in the western intellectual circles? Chen Zhiwu: There are two kinds of views in the West.Many economists, government policymakers and private think tanks in the United States do not support the trade protectionist stance of the US Congress, and believe that Congress should not obstruct CNOOC's acquisition of Unocal.However, on the other hand, there are many people who feel that it should be obstructed.Those who support obstruction think that as a state-owned enterprise, CNOOC is an agent of the state, so CNOOC's acquisition of an American energy company in the United States is not an act of a company, but an act of the state.Because of this, I also suggested in the past one or two years that China should set up funds dedicated to overseas resource mergers and acquisitions, and use these funds to support private enterprises as the main force for mergers and acquisitions in overseas markets.Because the more state-owned enterprises do overseas mergers and acquisitions, the more other countries worry about China's overseas expansion.If it is done by private enterprises, the political risk will be much smaller, and the economic benefits will be better. ◎Reporter: If private property rights and a sound financial and insurance market are the economic basis for realizing freedom, democracy and the rule of law, then what is the basis for Chinese entrepreneurship?The path of the older generation of entrepreneurs keeps people discussing their "original sin". Many entrepreneurs were arrested because they lacked a precise and predictable environment, or because their inherent Confucian spirit was out of order. question?What will happen to the next generation of entrepreneurs? Chen Zhiwu: Due to well-known reasons in China, many resources such as land in China are state-owned, and entrepreneurs have to deal with the government.At the same time, the government has a lot of approval procedures, especially in real estate, finance, energy, and telecommunications. Whichever industry is more profitable will have more regulation, which raises the threshold for entering these industries.You have to be connected and combined with power to get those approvals.In this way, in a highly regulated society, the institutional environment is actually very inefficient, and good people are forced to become bad.Rent-seeking, bribery, and bribery have room to breed.Therefore, in order to become a successful entrepreneur in China, except for a few people, more people have established very solid government relations through bribery, so that you can enter industries that are not easy for others to enter, and get others that are not easy to get s project. But having said that, a very interesting phenomenon is that companies in emerging industries, such as software, computers, and the Internet, are new and have relatively few existing regulations. In addition, companies in these industries can go public overseas, making these companies Rich people and entrepreneurs from emerging industries have had fewer problems so far.For example, Zhang Chaoyang, Shen Nanpeng, Jiang Nanchun, Shi Zhengrong, etc., these people's wealth is achieved by listing in the United States, which is very sunny.Therefore, various phenomena and trends in China are becoming more and more complex and diversified.In this sense, the entrepreneurs cultivated by emerging industries with less government control are not "Confucian businessmen" entrepreneurs, but "world-type" entrepreneurs, which is the future of China's economy.These phenomena are of course worthy of our careful consideration. ◎Reporter: The biggest difference between domestic enterprises and enterprises in advanced commercial countries is the difference between the rule of man and the rule of law.Do you think this part of Confucian businessman's "rule of man" can be internationalized?Democracy and the rule of law and industrialization which comes first? Chen Zhiwu: If the "rule of man" of Confucian businessmen is really internationalized, isn't it going backwards? Democracy seems to many people to be something from the West. In fact, it is only a modern thing that democracy has been systematically realized.Even in Western countries, although democracy first existed in ancient Rome and later in the city-states of the 12th and 13th centuries, it did not actually become popular, and it really took place in the 17th and 18th centuries.This is because, if it is an agricultural society, the scale of interests is small, and the transportation conditions cannot keep up, then even if the power of the government is not restricted and there is no democratic structure to control the power of the government, the relationship is not too big, because The resources that the government can get are very few, and if they abuse their power, the harm they will bring to the people is limited.However, with the emergence of railway technology and the appearance of steam ships, if the government's power is not limited, the damage to society will reach an unprecedented level.For example, the social security fund exceeds trillions, and a CCB has several trillions in deposits. This scale of resources has never been seen in Chinese history. One institution can control so much wealth of the people.So, looking back, if the Qing government could have a CCB or ICBC controlling so many resources at that time, if the Qing government could reach out to mobilize such bank resources at any time, then the life of the Qing government would be much better.However, at that time, there were no such financial institutions, no such large enterprises, and no railway system, highway system, or air transportation system to help them mobilize resources, so the agricultural society really did not need democracy. The rule of law in the West was only perfected in modern times.Although there were courts and the rule of law in the past, until the mid-19th century, bribery in American courts was also a common occurrence.The sound rule of law and democratic system in the United States today has a lot to do with modern media. Newspapers, television, the Internet, and various means of communication publish the words and deeds of all those in power before the eyes of the world.In other words, before there were no telephones, televisions, so many newspapers, and the Internet, the black box operation of American power was also very serious.In this sense, Western countries were also ruled by men at the beginning, and they also relied on relationships to do things.It's just that with the strengthening of people's awareness of rights and the advancement of technology, the West has gradually transitioned to the rule of law in the past 800 years, and it is always improving. Confucian culture was born in an agricultural society. Before there were roads, railways, and sea transportation, merchants basically did business locally.In the case of a limited business scale, the black-box operation caused by interpersonal relationships has little impact, and it is not easy to damage the interests of the parties too much.But in today's China, transportation, communication and industrial technology have greatly increased the scale of business and the scope of the market. If we still operate according to unspoken rules, the situation will be very different. Therefore, before and after Chinese enterprises go global, they should keep Confucian culture at home. Not only should they not try to bring Confucian business culture to the world, but they should accept and get used to business operations based on law and use more professional lawyers.