The Chinese Communist Party = The Harvard Alumni Association, With An Army, On Steroids?

Will China succeed in it’s attempt to move more from a manufacturing economy to a services economy? (My numbers could be off, here, and don’t hold me to this — but as I remember services currently make up roughly 80 percent of the US economy; while in China it is just over 40 percent.)

See what the following three pieces have to say on the issue:

What is your current hypothesis on the issue of whether China can, will and when successfully transition to from a manufacturing economy to a services economy? On the trip will you be open to collecting evidence that only supports or refutes your hypothesis? And how will you reconcile the two bodies of evidence? And in a week or two, can you collect and observe enough evidence to reach a reliable statistical conclusion re: your business hypothesis?

One suggestion I can provide is while we are in China, step back and watch, and I mean really watch and observe, people crossing a busy intersection.

Hundreds of people, numerous cars, numerous bicycles, no rules, chaos (at least to us). Yet, it somehow works — everybody gets to the other side and on their way for the day. It is not easy, it is not pretty, and may not be how we would do it, and can be unbelievably frustrating (e.g., how they are handling the environment), but somehow, someway, sometime they get it done. This metaphor is insignificant. And the Chinese have been moving forward, at certain times faster than others and even at times they have moved backward – e.g., the Cultural Revolution — for the better part of 3,700 years, so why would that change? And will this shift in their economy be a good or bad thing?

The answer is probably yes and no, and it also depends on who you ask and what stake they have to win or lose in the game, and whether they are a member of the optimist club or the doom and gloom club.

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2 Responses to The Chinese Communist Party = The Harvard Alumni Association, With An Army, On Steroids?

  1. Morgan O'Hara says:

    Just a warning: I like playing devil’s advocate. Last year, 90,000 people were killed on China’s roads, according to the New York Times. With vehicle ownership increasing big time, that number will go up big time. With more cars on the road, then not just the number, but also the probability of getting into an accident increases. China has the worst road safety record in the world, and it’s probably going to get worse. It’s estimated that by the year 2020, there will be a half million auto related deaths in China, annually.

    With regards to how they are handling the environment, the NY Times cites a report prepared by Chinese environmental experts which estimates annual premature deaths attributable to air pollution will reach 550,000 in 2020. That’s a conservative estimate, prepared by Chinese experts.

    The Chinese certainly get it done. And they’re working with big numbers, so maybe the above mentioned stats are negligible. But I have a feeling that at some point, just getting it done is not going to be good enough. Going back to the “The Post American World,” Zakaria talks about the efficiency of Indian corporations as compared to the bureaucracy and poor administration of the big Chinese companies (the meritocratic corpocracies). As they continue to transition away from manufacturing, I imagine the Chinese will struggle unless they start getting things done right. Maybe Western companies like What If! Innovation will help facilitate the Chinese transition. And I’m not saying I know what right is. But closing your eyes and hoping you don’t get clipped by a car when crossing the street sure doesn’t seem like it.

  2. Chris Carr says:

    Nothing wrong with playing Devil’s advocate.

    Yes, the traffic in China can be crazy dangerous. The good news is that our bus outweighs the competition and the laws of physics are in our favor should a fender bender occur.

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