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Just after the 19^th Party Congress in October, when a second volume of Xi Jinping’s Thoughts was published, I quickly moved to order my own copy through Amazon. Weeks later, still no anticipated delivery date. If I am to believe the website Stalin’s Moustache, that’s because Chinese citizens are voraciously buying up books by and about Xi Jinping Thought.

The recent 19^th Party Congress may well require revising many previous publications. At the Congress, Xi followed Communist Party of China (CPC) tradition in presenting a Report (报告baogao) to the 2,200-odd delegates assembled and to the nearly 1.4 billion Chinese citizens more generally. One thing that broke with tradition was the sheer length of his speech: 3 ½ hours. The length resulted in part from the CPC’s comprehensive governance – implicating all facets of Chinese society. That’s lots of ground for a speech – and the Party – to cover. Xi clearly felt comfortable claiming the verbal space, using it to map out a path to Make China Great Again.

Western press reports framed the event as Xi’s fast-track enshrinement among the pantheon of great Chinese Communist leaders. The report championed the leader’s trademark ideology, Xi Jinping Thought on Socialism with Chinese Special Characteristics, which has already been ensconced in the Chinese Constitution. This is notable as his predecessors, Jiang Zemin and Hu Jintao, were inscribed only toward the end of their ten-year tenures, not mid-term.

More specific policy details will appear late 2018, at the 3^rd Plenum of the 19^th Party Congress. What the Report does, however, is set forth a general ideological framework legitimizing the policies to be followed over the next 5 years. That being the case, it is well worth our while to see what sort of leadership powers and prerogatives the Report confers upon Xi.

Measuring the dimensions of Xi’s Authority:

Its height:

Xi not only has some good ideas; he already has “thought,” which, in the CPC’s carefully crafted lexicon means a higher, longer lasting active status in the hierarchy of Communist philosopher-leaders. Marx and Lenin get highest and longest lasting honors; they’re “isms” (主义 zhuyi) as in Marxism and Leninism. Mao and apparently now Xi are just one step below, being “thought”(思想 sixiang). While Deng is officially only “theory” (理论 lilun), I’d still place Deng among the Chinese Communist demi-gods, for reasons explained below. Below them would be Jiang Zemin (even though he has “important thought”) and Hu Jintao. Hence the authority denoted by the term Xi Jinping Thought.

Its length:

The relative authority of isms, thoughts, and subsidiary forms of thinking is determined by the scope of time and space the ideas cover. Marxism covers all time and space; Socialism with Chinese Special Characteristics primarily covers China after the founding of the CPC. Within Socialism with Chinese Special Characteristics, one finds more Communist Party guiding concepts deemed authoritative for some particular segment of time.

Accordingly, each Party congress report presents some clear marker of change, usually depicted in new slogans, which are tied to particular eras much as hit songs evoke distinct periods of one’s life. Some such past “hits” include: Deng’s Reform and Opening to the Outside World, Jiang’s Three Represents, and Hu’s Harmonious Socialist Society. Attaching Xi Thought to a new era (新时代 xin shidai) affirms its long-lasting importance. More than just this season’s hit, it’s hoped that upon hearing Xi’s new tune, generations of Chinese will exclaim, “Honey, they’re playing our song!”

Its depth:

Undergirding all these isms, thoughts, and theories is a notion of progress, or rather of development (发展 fazhan). Indeed, the word pervades the 19^th Party Congress Report, which flatly declares at one point: “Development is the Party’s primary task” – echoing Deng Xiaoping’s adage that “only development is firm reason” (发展才是硬道理 fazhan cai shi ying dali.) Perhaps to state the obvious, development is understood as moving forward along the socialist path, stage by stage, towards some better place. Progress is marked by reaching various “landmarks” along the way. The ultimate destination, communism, is some ways off. Better keep those seatbelts fastened as officially we’re still only in the Primary Stage of Socialism which, according to Deng Xiaoping Theory, will last about 100 years.

The nature of movement along this developmental path differs depending on whether one is moving from phase to phase or from stage to stage. Phase-to-phase, denoting more minor forms of progress, can be characterized as predominantly quantitative change, that is, involving persistent incremental improvements over time. (Think Adam Smith: “the division of labor is limited by the extent of the market.”) Stage-to-stage, however, involves a qualitative change, reflecting categorical transformations between epochs. (Think Karl Marx: feudalism replaces slavery, capitalism replaces feudalism, communism replaces capitalism – all through revolution.)

Xi’s new era denotes that qualitative changes are required, not just more of the same. More specifically, key elements of Deng Xiaoping Theory can be set aside, not as illegitimate but rather as inappropriate for this new stage in history. As the CPC discourse puts it, a new era and its new goal bring with them a new primary contradiction, which means new struggles for the Party and the people.

It’s all so new, and yet….

Two-timing and two-stepping in Xi’s New Era

There’s something distinctive about Xi’s Report to the 19^th Party Congress from the very start. At first, the official title fits firmly in the Party’s standard framework:

Secure a Decisive Victory in Building a Moderately Prosperous Society

Strive for the Great Success of Socialism with Chinese Special Characteristics.

But then the Report’s opening immediately reframes the goal as:

Struggle Tirelessly to Achieve the Chinese Dream of the Glorious Revival of the Chinese Nation (中华民族伟大复兴的中国梦 Zhonghua minzu weida fuxing de Zhongguo meng).

The Report, thus, presents two goals, denoting two framings that coexist throughout. The first goal focuses attention on the future, a socialist future. The second goal focuses attention on the past, a civilizational past. Xi’s not just giving a Report to the Party Congress, he’s leading a revival meeting.

Indeed, the Report lays out not one but two concurrent timelines: one of the Chinese people and the other of the Chinese nation. Xi’s great power derives from him occupying a critical strategic position in effecting progress toward long-standing historical goals for both China as state and as nation.

The Where, Who, and What of Xi’s New Era

A new era denotes Xi’s movement toward the status of Mao and Deng, each of whom is lauded as a progenitor of particular stages of history. Mao proposed the right guiding thought for an era of war and revolution; Deng proposed the right guiding thought for an era of peace and development. (Mao’s “tragedy” according to the definitive Party account of the Mao Era, the 1981 Resolution on Some Problems of Party History, is that he failed to realize that war and revolution had given way to peace and development.)

This new era, says the 19^th Party Congress Report, is still a time of peace and development. Xi doesn’t break completely with Deng, as Deng did with Mao. Moreover, China is still firmly embedded in the Primary Stage of Socialism; it’s still a developing country. The 19^th Party Congress era (2017-2022) spans a 5-year period bracketed by centennial anniversaries of key Communist historical “landmarks” that will help frame stages and their significance in ways that tug at Chinese Communist civic heartstrings.

It is bracketed by, on the one hand, the centenary of the Russian October Revolution (1917) and, on the other, by the centenary of the founding of the Chinese Communist Party (1921). The centenary of the founding of the CPC coincides with the achievement of xiaokang, the concrete goal Deng set forth several decades ago: achieving a moderately well-off society (小康社会xiaokang shehui), a developmental landmark declared by Jiang in 2002 as a goal to be reached in 2020. This goal shaped the polity’s marching orders in the 16^th, 17^th and 18^th Party Congress reports, framing the endeavors of both Jiang and Hu’s rule as well as Xi’s first term.

Now, however, xiaokang is so, well, last stage.

Xi’s new era (新时代 xin shidai) is bounded on its outer limits by another centenary, 2049: the 100-year anniversary of the founding of the People’s Republic of China. What will China find when it gets there? This is part of Xi’s power: the ability to set forth an agenda for the next 30 years.

A New Goal for A New Era:

The goal, as trumpeted in the Report’s title Great Success of Socialism with Chinese Special Characteristics, cannot be reached in a single bound. Rather, it requires an intermediary goal, each one separated by a distance of 15 years. Thus, on his big stage of history, Xi performs a 2-step dance: first, from 2020 to 2035, China basically achieves socialist modernization (社会主义现代化 shehuizhuyi xiandaihua); next, by 2050 for China becomes a socialist modernized strong country (社会主义现代化强国 shehuizhuyi xiandaihuaqiangguo).

Both goals fit firmly within the logic of CPC developmental stages. A closer look, however, shows that the second melds with a goal that has saturated the Chinese psyche since well before Marx was even a twinkle in Chinese eyes, much less the inspiration for the CPC. This resonance comes forth in a full description of the final goal: a powerful socialist modern country that is wealthy and strong, democratic, civilized, harmonious, and beautiful.

Make that an Old Goal for A New Era:

The phrase “wealthy & strong country” (富强国 fuqiangguo) has been around a long time, wailed by Qing Dynasty scholar-gentry seeking to save the country (救国 jiuguo) from colonialism and imperialism of Japan and Western countries. Over 50 years ago, Benjamin Schwartz titled his book on Yan Fu, the Qing Dynasty official who introduced Spencer’s Social Darwinism to China in the aftermath of the Sino-Japanese War, In Search of Wealth and Power. Just recently, Orville Schell and John Delury saw fit to name their history Wealth and Power: China’s Long March to the Twenty First Century.

What we have here, then, is not a purely Chinese Communist goal. Rather, it’s a goal that hearkens back to China’s initial encounters with Western notions of progress in late 19^th century Qing Dynasty, when China was gripped with fear of civilizational decline that in time gave way to concerns about national sovereignty as Chinese worked to reimagine their polity, as Wang Hui expresses it, in From Empire to Nation-State.

This is where Xi’s speech sounds off-key if listened to expecting a pure Marxist dialect. Terms like “Chinese Dream” and “Revival of the Chinese Nation” just don’t fit with historical materialism, either in tone or substance.

But then the end of the new era comes in 2049, the centenary of the founding of the PRC in 1949, and that immediately evokes what 1949 marked: the centenary of: the commencement of the “century of shame and humiliation” suffered under imperialism and colonialism. This is referenced throughout the Report and evoked by the 2049 goal of building a 近代 (jindai) rather than a现代(xiandai) historical aspiration. Both terms mean “modern,” but each has significantly different connotations. Generally speaking, for Chinese historians, the jindai stage of history starts with the Opium Wars while the xiandai stage starts with the May 4^th Movement in 1919.  A jindai aspiration is a civilizational aspiration, a xiandai aspiration is a nationalist one.

Xi’s Creole Marxism: tradition, the people, and dreams.

The phrase, “great restoration of the Chinese nation,” rings odd relative to traditional Marxism in several respects. First is the very idea of China’s feudal past having anything worthy of reviving. Marxist history finds resolutions to present conflicts in the future, not the past. Under Mao, anything associated with the Four Olds of Feudal China (old customs, old culture, old habits, old ideas) was excoriated, even becoming the object of violent political struggle. Before he helped found the Chinese Communist Party, Chen Duxiu spoke for a generation of New Youth in his eponymously named journal when he railed against Chinese traditional culture.

Yet in the 19^th Party Congress Report, we read of the wonderful things in China’s traditional culture:

“With a history of more than 5,000 years, the Chinese nation created a brilliant civilization, making remarkable contributions to humanity, and became one of the world’s great nations.” These too become part of the repertoire of resources for the CPC to draw upon, a part of Socialism with Chinese Special Characteristics.  When saying this phrase in the Xi Jinping dialect (习近平话 Xi Jinpinghua), not to be confused with Xi Jinping Thought, remember the stress falls more on “Chinese Special Characteristics” than on “Socialism.”

What one sees encoded in the Report is China’s new nationalism, perhaps most clearly connoted in the double ways of referring to “the people.” The term “renmin” (中国人民 Zhongguo renmin) takes on a more civic connotation. When Mao Zedong stood on the podium at Tiananmen Square in 1949 to proclaim the founding of the PRC, he used this term when uttering the famous phrase, “The Chinese people have stood up.” (“中国人民站起来了Zhongguo renmin zhanqilai le. ”) While Xi references a civic notion of “the people” throughout the Report, the term used in conjunction with past and future is (中华民族Zhonghua minzu), which can mean Chinese nation and also Chinese ethnicity. Xi’s speech denotes a nationalism that is both civic and ethnic.

This brings us to a third word that has no place in conventional Marxist lingo: dream, as in China dream (中国梦Zhongguo meng). Historical materialists don’t generally have dreams; they have plans.  “Dream” brings to mind pejorative declamations from Marx like: “Religion is the opiate of the masses.”

This dream, however, has two reference points, one historical the other contemporary. The first is a 19^th Century China debilitated by the scourge of imperialism and opium addiction. The second reference point: another dream that’s out there – the American Dream.

复兴fuxing: A Middle Kingdom once more

While a rich and strong country has been a dream for some time, this dream now seems close to becoming a reality. Accordingly, Xi’s speech begins to revise China’s spatial imagining. As noted above, China officially considers itself a developing country. Much of Deng’s agenda was about development – again, “only development is firm logic” – but a development that was calibrated relative to other, more advanced (发达 fada) countries. China needed to develop at breakneck speed to catch up with (赶上 ganshang) the more advanced countries.

In Xi’s new era, the dynamic changes. Deng broke down Maoist autarchy when he called for learning from more economically advanced countries, including capitalist countries. His formulation placed China in apprenticeship to those countries’ practices. Xi’s Report affirms that in contrast to the former era’s focus on high-speed development, this new era will be about high-quality development. Previously, Deng emphasized developmental “initiative” (积极性 jijixing). Now, the emphasis is on developmental “innovation, creativity” (创新性 chuangxinxing).

Thus, development involves both the tangible and the intangible. On the one hand, the degree to which China is a “strong country” is readily measured through standardized criteria associated with “comprehensive national power,” criteria that distill down to hard power, good old realpolitik. On the other hand, part of being a “strong country” in this new era places added emphasis on intangible factors. Among those highlighted in the Report are civilizational strength as well as international influence, by which is meant not just diplomacy but the effective spreading and inculcating of ideas, such as creating philosophy and social sciences with Chinese special characteristics.

All of this requires the dogged, determined oversight and guidance of the Party in all domains of the polity. Nothing is to be free of the Party’s influence, even the Party itself – which Xi presents as critical to the success or failure of this historic, and historical, mission.

The 2050 goal is presented as aspiration not just for China but for humanity: “The era of striving to achieve the Chinese nation’s dream of China’s restoration, is an era of our country moving closer to the world’s center stage, an era of incessantly greater contributions to humanity.”

What Xi is setting up in the China Dream is an alternative to the American Dream. It is a move to present, if not a challenge then at least a clear alternative to the previous U.S. hegemony in the economic and ideological realm. In part the alternative presented is one of systems – a socialist market economy as a coherent system, an organism distinct from – not subordinate to nor a perversion of – a capitalist market economy. One thinks back to Deng’s adage that both socialism and capitalism have markets. In part, though, it is presented as a civilizational difference, one rooted deeply in the past yet creatively competing for more market share in the future. In 2050, then, China resumes a version of its proper historical position, if not as the Middle Kingdom than certainly as a Middle Kingdom.

Xi-ing Double

Xi Jinping’s speech refracts in two ways, much like those 3D lenticular postcards – a.k.a. wiggle pictures – I loved as a kid. (You know the ones: at first look there’s the Cheshire Cat but shift your gaze just slightly and you see only its grin.) The 19^th Party Congress Report, looked at one way, manifests a great Communist leader – a Mao or a Deng. Of course, we’re talking about the “good” Mao not the “bad” Mao. The Mao of Mao Zedong Thought, who proclaimed in 1949 atop Tiananmen Square: “the Chinese People Have Stood Up.” Not the Mao of the subsequent “20 wasted years,” in Deng’s blunt assessment. But tilt the card just slightly and another image of Xi appears: Xi as the latest of a line of great Chinese emperors, concurrently advancing civilization and keeping the barbarians in their place. As used with images, the process is called Xography. As used in reference to the text of the 19^th Party Congress Report, let’s call it Xigraphy.

The CPC worked hard for much of the past century to keep these two images of Chinese leadership on two separate cards. Not always successfully, as I know from personal experience. Some 20 years ago, a grassroots official proudly told me that China had two peasant emperors. One hailed from his district: the founder of the Han Dynasty, Liu Bang. The other? Mao Zedong. At that time, his utterance produced a wave of angst amongst the other officials present, who were quick to interject that Mao wasn’t an emperor. Twenty years later, I doubt they’d be so concerned.

Indeed, Xi’s Report repeatedly calls not just for confidence (自信 zixin) in China’s current system but also in traditional culture.  This is a China that, after nearly breaking its national neck when attempting The Great Leap Forward some 60 years again, now not only speaks of catching up in great strides (大踏步赶上 databu ganshang) but even of taking flying leaps towards glory, wealth and power (向繁荣富强的伟大飞跃 xiang fanrong fuqiang de weida feiyue).

Xi is known as a big fan of Chinese traditional philosophy, and in the Report’s conclusion, he sums up Chinese Communist and Chinese civilizational aspirations through a phrase known to most any student of Chinese history:

大道之行，天下为公

Where the “Great Way” (大道) prevails “all under heaven” (天下) is one community.

These words, from one of the four Confucian classics, the Book of Rites (礼记 Liji), and inscribed on Sun Yatsen’s mausoleum, can be found in traditional centers of Chinese communities around the globe. For them to be accorded a place of prominence in a Party Congress report – indeed, not just the final word but a final proverb! – creates conceptually a political dish that is strikingly retro nouveau.

In Confucian China and its Modern Fate, Joseph Levenson wrote of a China that, having failed as an empire, sought to reclaim victory as a country. It is said that reversal is the essence of the Dao.  Flash forward almost exactly 100 years from Yuan Shikai’s farcical attempt at dynastic restoration in the Republican Era.  Now we see China as country, seeking to reclaim a status as empire. This time, the Great Way refers not to a Confucian Way (儒道 Ru dao) but rather the Socialist Path (社会主义道路 shehuizhuyi daolu) with Chinese Special Characteristics. Guiding China as nation state along the correct path through this new era: Xi Jinping Thought.

 ‘Making Great Again’ – what’s lost in translation

Xi is far from only state leader pushing a mission of national revival. Across the Pacific, Donald Trump came to power on the phrase “Make America Great Again.” There are resonances between their respective aspirations. Both evoke nationalist sentiments that are more ethnic than civic. Both forms of nationalist sentiments evince protracted conscious framing efforts made more impactful through strategic deployment of media resources. Both see restoring greatness as a fraught process, occurring in an international environment filled with grave threats as well as tremendous opportunities.

But one also finds striking differences in their respective formulas on how to make their countries great again:

One views the goal largely proactively, from the perspective of centuries.

The other views the goal largely reactively, from the perspective of only a decade, maybe two.

One vision upholds a unified nation by obscuring differences and repressing dissent.

The other vision asserts one nation over others by accentuating differences and demonizing dissent.

One Party declares it best can “serve the people” through state-led economic redistribution policies.

The other party avows people are best left to serve themselves, promoting laissez-faire and trickle-down policies.

One leader affirms government as a critical part of the solution.

The other leader attacks government as a critical part of the problem.

To paraphrase Mao, what we have here is a whopping contradiction.

Another difference, of course, are their histories and the distinctive flavors of cultural nationalism each can impart. In their efforts to define “great,” each leader has a different pantry of cultural resources to complement the various kinds of civic and ethnic nationalism they’re dishing. Whatever “nouveau retro” cuisine Trump may be serving up, I’m sure the list of ingredients doesn’t include four Confucian classics, Maoist contradiction, or dragon tales.

All joking aside, as Xi and Trump would both agree, we see before us two very different recipes for becoming great again. Beyond simply affirming systemic differences, each intends to cultivate – even entrench – civilizational differences. More work needs to be done to compare and contrast their respective logics.

Fortunately, this being an exi-Xi-sis, not an exi-Trump-sis, I can keep this point provocatively evocative. Besides, key pieces of information – ingredients – have yet to be assembled. Trump’s recently released National Security Policy (December 18, 2017) on Making America Great Again has brought his vision into greater focus through some policy specifics, much as the Report to the 19^th Party Congress’ 3^rd Plenum fall 2018 will do for Xi’s agenda.

In the meantime, if anyone’s got an extra ticket to Xi’s show at the 19^th 3^rd this coming fall, I’ll trade you a Xi Jinping chairman-emperor wiggle picture for it.

The post Exe-Xi-sis on Making China Great Again appeared first on China Research Center.

The next day, the doorbell rings and a team of technicians brings in your new equipment, boxed and wrapped. They unwrap your purchases, set up all the electronics, test them, break up the boxes for recycling and clear out after they have shown you how everything works. By the way, when you ordered the entertainment system, you got a coupon via WeChat for the ergonomic lounge chair, and they delivered that as well. You’ve only lifted a finger and now will be the envy of friends and family.

This is the road China’s consumer market is moving down, and moving quickly. Consider the sales numbers on Alibaba’s platforms Taobao and Tmall on the world’s biggest e-commerce shopping day, Singles Day (November 11), in 2016, US$17.79 billion within 24 hours.¹ Online sales figures for big U.S. shopping days such as Black Friday and Prime Day are in the billions, but still in single digits.

According to PwC’s Total Retail Report 2017, China’s national online retail sales of goods and services for the first quarter of 2017 yielded 1.40 trillion yuan (more than US$200 billion), which was 32.1 percent higher than in 2016.²

These numbers show just how dynamic, and potentially competitive, retailing in China is likely to become. After all, the entertainment system example is not yet a reality, but something both online and offline retailers are working toward that will push them into not just online-to-offline (O2O) technology solutions, but omni-channel solutions involving social media, supply chain optimization and efficient fulfillment options. Alexandra Tirado, CEO of Atlanta-based consulting firm Fortuna Holdings International, which includes China e-retailer JD.com as a client, says that this type of “seamless shopping experience and white glove service” will be the key to success for China’s online and offline retailers. In the online-to-offline conundrum, China’s e-commerce and traditional offline retailers are “looking for ways to connect the online experience to the physical store, and figuring out how to blend technology and the online shopping experience,” says Tirado.

PwC’s Total Retail 2017 report sees the same trends quickly coming to fruition, or “increasing maturity of business in using data analytics and omni-channel technologies to create a seamless customer journey between online and offline channels.”

The omni-channel ecosystem, including efficient use of big data, virtual reality and artificial intelligence, dazzles the imagination and the senses. In reality, there are a few hurdles for retailers to overcome, the main one being the competition between the big e-commerce players including Alibaba’s Tmall and Taobao and JD.com with the brick-and-mortar stores like Gome Electrical, Suning and others.

Thus far, we have looked primarily at retailers selling electronics and white goods, but the current and pending retail eco-systems can apply to retail ranging from groceries to clothes to services. Most brick-and-mortar retailers are still struggling to adapt to the disruption of their markets over the last 10 years by China’s big technology players, commonly called BAT or BAT-J, to refer to Baidu (search engine), Alibaba (retail, fintech, supply chain), Tencent (fintech, social media) and JD.com (retail, fulfillment).

The worldwide focus on the big technology players, with their successes in e-commerce, fintech and social media, tends to cast a lesser light on smaller players, such as micro-retailers and brand-direct e-commerce, as well as traditional brick-and-mortar players. Yet they also play a major role in the world to come. Perhaps recognizing that adapting to the new e-commerce ecosystem was the only way forward – 52 percent of consumers in China prefer to shop online according to PwC, and 80 percent are willing to pay using mobile payments³ – traditional brick-and-mortar retailers have embraced technology primarily through working with the big tech players, and by developing online retail and finance options of their own.

The major brick-and-mortar appliance retailers, Gome Electrical Appliance Holdings Ltd. and Suning Commerce Group for example, have taken different paths. Yet, consider the range of innovations and investments in the retail sector:

• In 2015, Suning accepted investment from Alibaba of US$4.56 billion and itself invested in Alibaba. The tie-up is widely regarded as part of Alibaba’s online-to-offline strategy, and Suning’s plan to develop better technology support.
• Gome, meanwhile, prefers to go it alone. The company is developing its online platform in-house. It acquired com in 2012, and integrated it into gome.com.cn for better sharing of back-end systems, and thus better data analysis capabilities.
• Late in 2016, Tencent and Baidu decided not to join shopping mall developer Dalian Wanda on an e-commerce platform, but that is not stopping Wanda from expanding in the internet technology space. Two months later, the company established Wanda Internet Technology Group and in March 2017, announced the division would develop cloud services with IBM.⁴
• Even foreign retailers are trying to stay in the game, sometimes with mixed results. U.S. retailer Walmart sold its China online retailer Yihaodian to JD.com in late 2016 for a five percent stake in JD.com.

Starting in 2016, legacy brick-and-mortar retailers have taken aggressive steps to push omni-channel strategies with and without technology partners. Gome Electrical Appliances set the company strategy for 2016 as “total retail strategy,” which the company says includes “fully promoting the integration of online and offline businesses” through technology to support the development of a new retail ecosystem. According to the company’s annual report, that strategy allowed Gome Online to increase revenue by 58.8 percent in 2016 and gross merchandise volume (GMV) by 110 percent.⁵

Significant increases in revenue and GMV, such as those posted by Gome, point to the reasons traditional retailers are still in the game despite disruption by the BAT-J companies. China’s e-commerce market is primarily driven by consumer preferences. Advertising and brand guru Tom Doctoroff says, “O2O is one of the most dynamic – and, for consumers, satisfying — areas of commercial innovation. Offline and online blend into holistic, rewarding experiences.”

Retailers wanting to be at the tip of consumer’s fingertips are looking at three aspects of their business:

• Customer engagement
• Experience-led commerce
• Fulfillment

Gome’s President Wang Jun Zhou stated in the company annual report: “In the present and future, success in new retail belongs to those who successfully combine strong supply chains, new retail trends and scenarios, seamless integration between online and offline, and technological proficiency.”

Customer engagement: All about ease of connection

Responsiveness to customers is the key to customer engagement for retailers. Both traditional and e-commerce retailers are using technology to reach new markets, employing big data, and enhancing that reach with physical stores.

“Having well-placed physical stores could become an advantage for existing retailers if they are able to integrate an innovative technology play that engages consumers in an attractive way,” says retail analyst Mavis Hui of DBS Vickers Securities.

When retailers are able to parse data about customers according to location, income and brand recognition, then link that to an in-store experience, they are engaging customers before they even arrive in the physical store.

Traditional companies have an advantage over pure technology players in that they know their markets and consumers already. By striking out on its own, rather than with a big tech partner, Gome’s ambition is to create a retail ecosystem leveraging the company’s market knowledge and technology. Apart from expanding into the after-sales service market with an Internet of Things (IoT) strategy geared toward smart homes, Gome also has decided to delve into financing solutions for the upstream supply chain and providing trade support, strategies designed to enhance product quality, delivery and fulfillment speed.

For most traditional players, in-house technology development has not been the preferred strategy, and Gome’s new business model is too new to declare it a success or failure.

There are, however, smaller players such as clothing brand Ruhan E-commerce that have used their own technology plays to improve their business. Ruhan created the most prevalent retail trend in 2014, the “Internet star” when the company slashed its marketing and advertising budget and contracted with a young model to influence her followers to purchase their clothes through her posts and videos candidly assessing the clothing and accessories she used. Not only did Ruhan increase sales, but its Internet star also started a trend that other retailers have followed.

Experience-led commerce: All about new technology

Aside from the phenomenon of Internet stars, other retailers rely on Key Opinion Leaders (KOLs), such as the experts in the WeChat electronics forum mentioned in the example at the beginning of the article. From these initial experiences already in play, companies are developing consumer experience strategies using Virtual Reality (VR) and Artificial Intelligence (AI) to enhance consumer experiences.

A VR experience scenario might involve a consumer wearing a VR headset at home to browse a store. Brands and retailers would then use AI to track where the customer’s eyes stopped the longest, or what his or her expression revealed during interactions with products.

PwC noted in its Total Retail 2017 report that Macy’s took a step forward in the China retail market on Singles Day 2016, when the U.S. retailer created a virtual tour of the New York flagship store for Chinese consumers.⁶

As always, Alibaba has its eye on the future and what it will mean to consumers. CTO Jeff Zhang says, “Virtual Reality equipment will become the next corner of the consumer market. Once it becomes more realistic, the VR experience will attract more customers to buy online.”

Fulfillment: Technology optimizing the supply chain

Upstream supply chain and last-mile delivery may be the most exciting but least visible impacts technology will have on retail.

DBS Vickers’ Hui says fulfillment issues are an area where technology players and traditional retailers have converging strategies “given China’s huge land mass and relatively primitive logistics support in many PRC cities. Thus, physical stores could continue to act as merchandise collection points for online orders, or as warehouses or hubs to direct and fulfill last-mile delivery needs.”

Smart companies are looking for a quality play, and to most that means developing an ecosystem, which the big tech companies have done through their long list of affiliates. For Tencent that goes from social media to finance to healthcare and retail, and for Alibaba it means going from e-commerce to finance and then delving back into e-commerce and retail via its partnership with Suning, for example.

Gome’s new subsidiary Gome Fintech has a different ecosystem in mind, the supply chain. It aims to bring financing solutions to the upstream supply chain, where suppliers of products have difficulty getting financing from state-owned banks, development loans, factoring and trade support – all areas largely ignored by banks. Gome has the expertise to impact the supply chain in these areas, as well as make a difference in streamlining the supply chain through enhancing quality via stable supplier financing and leveraging the company’s brick-and-mortar stores for last-mile delivery options or click-and-collect scenarios.

PwC notes another fulfillment issue solved by the use of block-chain data.⁷ For many years, luxury goods retailers have struggled with the problem of ensuring products they sell online are authentic. It was one area in which consumers evidenced a lack of trust in purchasing online. However, with block-chain data, products can be tracked from the factory to the consumer’s front door, authenticating not just the product, but also the entire supply chain.

Race to the future

For most retailers, both brick-and-mortar and e-commerce, a key path to the future is through partnering with existing technology companies for the latest in technical advances and for investment. In speeches over the last year, Alibaba’s founder Jack Ma has been calling for both technology and traditional companies to improve their research and implementation plays for big data, cloud computing and artificial intelligence.

Players not traditionally in e-commerce or with a strong technology backgrounds have heavy lifting to do in terms of investment, financial as well as talent costs, in making technology aspirations reality. Partnering with one of the existing tech players, or subcontracting to a technology partner (TP) is an attractive proposition for scaling and financial reasons.

But the retail industry has seen advances with privately owned and more innovative players like Gome and Suning making moves in the past 18 months in O2O sales and supply chain financing options.

In a recent speech, Alibaba’s Ma predicted that “new technology will become our future product, and service innovation is the most important foundation, and to achieve this online and offline business and consumer experience will be the at the core.”

While retail and its supply chain appear to be at a technology inflection point, it is clear that the race to adopt technologies involves identifying the best technology solutions to satisfy customer needs and demands.

The post China Retail’s Newest Inflection Point: From E-commerce to Omni-channel appeared first on China Research Center.

These executives included:

• Robert C. Goodwin, Jr. – EVP and General Counsel, Chindex* (1984- 2005); currently Professor and Vice Dean, University of Maryland
• Ming Xie – VP of Business Development, Chindex/UFH (1993- present)
• Zhongying Pan (Sylvia Pan) – Project Assistant, Chindex who joined in 1995 and later became VP and General Manager of Beijing United Hospital (2008- present)
• Xuming Bian – Obstetrician and Consultant to Chindex/UFH (1994- present)
• David Hofmann – Administrative Director, Chindex (1993- 2005); currently China consultant, Hofmann Advising
• Judy Zakreski – VP U.S. Operations, Chindex (1994- 2015); currently Executive Vice President, EkPac China Inc.

Note that I served as Project Manager at Chindex from 1994-98

*Chindex was previously parent company of UFH

Have Vision, Perseverance and Adaptability

In the early 1990s, most observers dismissed Chindex International’s efforts to establish UFH as a radical, impossible dream. A private, foreign-invested western hospital in China had no precedent, and lacked a clear path to approval.

The core team of UFH executives I spoke to unanimously agreed that in these early years, Roberta Lipson’s vision – and the “can-do” spirit she infused in those around her – carried the organization.

“[Setting up Beijing United Hospital] was truly unique and is directly related to Roberta’s perseverance,” said Robert Goodwin, EVP and General Counsel.

“We simply refused to take no for an answer every time we hit a stumbling block,” added Judy Zakreski, who managed relationships with western suppliers and advisors. “Our [goal] was to make sure that [the hospital got] established and operating in full compliance with all of the laws and regulations, no matter how long it took.”

Ming Xie, VP of Business Development, praised Lipson for her boldness. “There was a lot of ‘feeling the stones while crossing the river,’ because we needed to convince and change the minds of a lot of authorities in the Ministry of Health and other regulatory bodies,” he said. “Maybe because some on the team were foreigners, they failed to appreciate the size of the task, enabling us to dare to go forward.”

In fact, the team originally received approval for a birthing center, focused on serving expatriates – a deliberate strategy to start small and build trust in China, before expanding the scope. As UFH established a track record and market demands evolved, the center became a women and children’s hospital, and subsequently grew to a network providing a full range of healthcare services.

Admit when you are wrong

No one on the core team imagined UFH would be as big or successful as it has become today. While China’s growth did not surprise them, the velocity and scale of the country’s economic transformation caught them all off guard.

For example, more than half the patients today are Chinese, said Sylvia Pan, the GM of Beijing United Hospital, the UFH network’s flagship center. “I don’t think any of us could have ever anticipated that! It has pushed us to respond quickly to our rapidly changing patient base.”

The willingness to show humility and admit they didn’t see what was coming, the executives all stressed, should be a requisite for any westerner who plans to work in China.

“It’s important to accept up front that market access in China is difficult, that nothing is really simple, and that regulations are always changing. In this way, nothing can truly surprise you,” said Zakreski. She brings that philosophy to many of the western clients she works with. “[You need to] deflate the ego, be constantly willing to learn, and [have] an open mind to consider – not necessarily accept – different approaches to addressing a challenge.”

All credit those early years, and doing business in China, for making them nimble, resolute and creative in conducting business – key skills to surviving and thriving in their careers since.

Think long, but focus short

In the early 1990s when Chindex raised financing, the company declared its goal was to create a multi-hospital network. While that was known by the core team, they admitted to a maniacal short-term focus on getting the first hospital in Beijing up and running.

“I always assumed BJ United would be successful. Not only was that the Chindex mindset but I couldn’t imagine not meeting our publicly announced plans,” said Goodwin.

Fostering a strong partnership and agreement with their joint venture partner, Chinese Academy of Medical Sciences, took close to a year. Ensuring Chinese approval authorities understood how the hospital would fit into China’s healthcare system – and getting approval – took close to two years. And making sure the right steps were taken to design and build a world-class healthcare facility spanned close to three.

Several observed that this “short-term” focus helped Chindex and UFH avoid the trap many multinationals fell into at the time and still fall into today: Perpetually labeling China a long-term market becomes a handy rationale for letting losses pile up or clinging to a business model or strategy that isn’t working.

Lacking deep financial resources, they reflected, forced the team to be incredibly resourceful. For example, they did not use an army of highly paid consultants or intermediaries. Conducting much of the fieldwork themselves gave them direct exposure to market realities, enabling them to make decisions more rapidly.

Understand how you fit into China’s “system”

Goodwin, Xie and Zakreski firmly believed that the hospital’s strong foundation was due to establishing a strong joint venture partnership and securing the early licenses and government approvals.

“There were a continuing series of challenges to be solved on a regular basis but, to my mind, none of them was unusual in a project of this nature,” said Goodwin. What helped the most, he reflected, was Lipson’s and Chindex’s reputation within the Chinese medical community.

At the time of UFH’s founding, Chindex had been operating almost 15 years in China, providing medical equipment to China’s top hospitals and having established a formidable track record of honesty and genuine concern for improving healthcare in China.

“Chindex was always unique in approaching the market from the perspective of how can we help China do what they currently do better,” said David Hofmann, Administrative Director at the time. The early work was making sure the Chinese authorities understood how UFH would fit into the Chinese healthcare system, and what role it would serve.

“In terms of making things work, it is essential that you have a story as to why your proposal or project is of benefit to China,” advised Goodwin. “Approval authorities are not impressed that your venture will help make money for your organization. They may be impressed if you can show how many employees you will train, or how the local population will benefit from [your] services.”

Of course, not every western company enters China with 15 years of relationships under its belt. Xie, the VP of Business Development, is highly skeptical of how westerners approach China, which he feels is based solely on reading the relevant rules and regulations. He advises newcomers to take more time to determine what national or regional authorities want out of a relationship. He himself spends significant time cross-referencing information with people in the know.

“If one’s partner is a public hospital, [that partner’s] interests will diverge dramatically from a small, private one,” Xie said. “Too many western companies fail to appreciate the Chinese history, politics and ecosystem.”

“My basic advice would be to take it slow and forget the approaches that you took in the U.S. or other countries,” commented Goodwin. “You need to listen to the interests and concerns of your Chinese counterpart and see what you can do to create a win-win situation.”

Zakreski, who now advises companies that face complex regulatory needs, concurred. She recommends having someone on the ground in China engaging key stakeholders, which is hard do from one’s home country. She added that having some level of guanxi (relationships) is important, because it allows a constant flow of nonmarket information.

Manage Those Relationships

Hofmann emphasized that the goal setting up Beijing United Hospital was not to stand out; it was to build lasting relationships, something that Pan, the current GM, and Xie agreed with.

Goodwin, the lawyer, said it best: “Savvy investors learn that relationships with party officials are equally as important as legal arguments, and they develop an approach that covers all the levels of the decision-making apparatus. My belief is that the future will not change much so long as the judiciary is not independent.”

They all emphasized the need to have continuous efforts placed on managing key relationships, citing how many western organizations make the mistake of focusing solely on the setup phase. After Beijing United opened in 1997, Pan’s work, for example, began in earnest: She kept in constant contact with local authorities to understand their points of view, their concerns and to seek advice.

Forming industry groups and staying in touch with the American Chamber of Commerce enabled the team to influence policy direction on a larger scale between the U.S. and Chinese governments. It’s no coincidence that Lipson, Goodwin, Hofmann and Zakreski have held a variety of roles over the past 30 years with the U.S.-China Business Council, the American Chamber of Commerce, or interest groups based in Washington, D.C.

On the China side, Pan serves as the only Chinese representative on the JCO, the top international hospital accreditation commission, which helps set international healthcare and hospital management standards. And she, Lipson and other UFH hospital leaders are increasingly sought after by Chinese healthcare officials for their advice on improving China’s healthcare system.

Shatter the cross-cultural divide

The executives I spoke to average 25 years of doing business in China, but they surprisingly shied away from making any blanket statements on how Chinese culture operates.

“When you look at case studies of Chinese companies you see that, like western companies, they are all over the lot in terms of management style,” said Goodwin. “But there is a consistency in that all of them function within a Chinese cultural framework.”

To understand that Chinese cultural framework, the executives were critical of many “cross-cultural” training, finding it shallow, or downright dangerous in the stereotypes people came away with.

“Learning how to use chopsticks and exchange business cards properly is fine but the real issue is whether you can figure out how someone from another culture thinks, what is important to them and why,” he added. “You’ll never get everything right but at least you’ll be asking the right questions if you approach it that way.”

They stressed that relationships between and among people play a larger role in China than in the U.S. and Europe, which tend to be more “legalistic” societies where rules assume more importance.

To break down cultural barriers, Goodwin puts many of his executives and students through simulations and negotiations, to help them see what their Chinese counterparts may be facing. Xie encourages executives to talk to people on the ground to get multiple reference points.

Hofmann highlighted the need to recruit people with a more global mindset, and to foster more cross-border exchanges. Early on, UFH’s Chinese partner, the Chinese Academy of Medical Sciences, sent its representative, Dr. Zeng Su, to visit the U.S. to better understand the UFH vision and model. Dr. Bian, having spent time in the U.S., also helped bridge the two healthcare systems. Hofmann and the team also brought western doctors to China.

To accelerate “acculturation,” Pan, the Beijing United Hospital GM, gets new UFH employees out of the classroom and into Chinese hospitals. She wants her western employees to see more of China’s healthcare system, so sends them to VIP wards, Tier II and Tier III hospitals, so they can experience firsthand the top and bottom of the Chinese healthcare system.

“They realize China is complex and there are many Chinas,” she said, noting that they come away better understanding the attitudes of Chinese patients. “For instance, Chinese place more emphasis on family ties in decision-making than westerners do, and Chinese patients question their doctors much more than their western counterparts do.”

As the patient base at UFH has become increasingly Chinese, she added, it has become increasingly imperative to train UFH staff in this way. For example, elderly Chinese are much more inclined to want their daughters to schedule C-sections, which often runs counter to the desires of their western-influenced children.

“As the healthcare provider, we need to understand and be prepared to manage this dynamic.”

Localize by teaching the “why”

Across industries, western executives struggle with how to best segment the Chinese consumer market, maintain their brands and meet local needs. Americans, reflected Goodwin, do not appreciate the speed of change that has occurred in a generation in China, and therefore find this challenge to understand Chinese attitudes incredibly difficult.

“All our patients are well-off and regional differences not so stark,” said Pan. “But in general, we see the biggest divide among generations, and between those who have a more international outlook versus those who have never left China.” Training their doctors to manage these differing expectations has been critical to ensuring patient satisfaction.

Differences in their Chinese patient base can be seen, for instance, in attitudes toward antibiotics. “Many Chinese patients who are accustomed to Chinese hospitals, feel if they don’t get a prescription, then why are they paying high fees to visit the doctors?” Pan said, emphasizing that UFH does not prescribe antibiotics at the same rate as Chinese hospitals. “One local patient, after seeing our price list (among the highest in Asia), half-jokingly asked if the staff kneeled when serving them!”

“To be able to explain why to customers, you need to first explain why to your own employees,” she said. “Teaching them the WHY is actually more important than the HOW.”

To fully prepare staff, UFH created an academy, a prestigious yearlong program for registered nurses, to instill and practice the network’s ICARE values. During my visit, I attended the graduation of more than 20 nurses, their largest group to date. The curriculum was designed by a blend of western and Chinese nursing professionals. Without this academy, UFH could not find the right talent and skill in the marketplace, Pan commented.

Hofmann, now based in Washington, D.C., remains surprised how many westerners continue to believe China is the land of cheap labor and is backward in terms of technology, when in fact the opposite is truer, particularly in Tier I and Tier II cities. Pan said wage differentials between her top western and Chinese staff no longer exist. In fact, some of her top Chinese get paid more.

Pan also attacked the myth that Chinese millennials are selfish and lack drive.

“Nothing could be further from the truth,” she said. “You can’t generalize. The employees we have are driven, want to learn, need a sense of achievement, and – perhaps more than any generation – want a sense of purpose. Volunteering is much higher than in the past.”

To stay in touch with that generation born after 1990, she conducts lunches with many employees, and is highly active on Weibo, the Chinese social media equivalent to Twitter.

Hold firm on non-negotiables

At the same time, they all agreed, one can be too culturally sensitive. They all attacked a common sentiment that you cannot be direct in China, and that certain topics are taboo. Goodwin, the lawyer, warned: “You just need to do [be direct] in the right context.” Zakreski urges all clients to determine “non-negotiables” and stick to them.

“When I was handling a particularly tricky legal case in China back in the mid-1980s the common wisdom of ‘China experts’ was that you had to be careful not to address certain subjects or disagree with those officials you were interfacing with,” Goodwin said. “While there were indeed some subjects that were best avoided, that list was fairly short and the notion that you had to agree with a particular approach in a negotiation for fear of offending your hosts was just nonsense.  The real issue is that you need to display genuine respect for the people with whom you are interfacing , and if you do that you can be quite frank in your expression of disagreement.”

Reconsider your competition

On the subject of competition, all noted that while the number of competitors has heated up, the market has also grown considerably and the level of sophistication varies. Well-heeled western firms are the most direct competitors, but UFH recently went private and raised additional investment from the private equity group TPG. They believe UFH can remain the market leader if it continues to deliver quality care and attract the right talent.

They believe the threat of domestic private competitors is overblown, and that UFH competes in very select, high-end healthcare, a space where local firms have not shown they can go – yet.

Xie, VP of Business Development, said: “Domestically invested medical bodies are very different than UFH, many of them hope to make ‘quick money,’ raise capital and they ‘advertise’ to bring in patients. This is not the greatest in terms of word-of-mouth reputation.”

The more serious threat, said Pan, is the rise of China’s state-owned public hospitals, and Xie added the Chinese government has gotten very serious about addressing the country’s healthcare needs.

“It’s not that [state-owned public hospitals] have a lot of money (although they do). It’s more that they can make big changes quickly, if they want. They have the advantage of a top-down hierarchy – we western firms can actually be very slow,” said Pan. “Many westerners consider the public hospital system here outdated, but that belief itself is becoming outdated. Many of the new hospital leaders there are quite brilliant and ambitious. For UFH, we see these as opportunities, or imperatives, to cooperate or partner.”

Look forward: The next 20 years

Everyone agreed that doing business in China remains complex. Managing this requires talent. On the bright side, they observed that there has been an increase in western executives who have a better understanding of China, as well as firms that have almost entirely localized their China offices.

But a rapidly evolving China, Pan said, has really forced westerns to rethink their place in the new world order. “Honestly, I think some westerns are lost. There used to be a feeling of superiority, and when they come here, they are no longer the top, and they no longer have the top salaries.”

No one wanted to predict China’s future. The irony, said Zakreski, is that the reduction of tariffs and “openness” that came with China’s entry into world bodies has largely felt like it has been accompanied by an increase in regulatory hurdles.

“This doesn’t mean that there isn’t opportunity for western companies in China. It just means that there is no longer a default approach of finding a distributor and exporting your product to China,” she said, citing licensing technology as one alternative.

Overall, the executives voiced concern with the increased nationalism and growing restrictions, but also said that every period of China’s past 30 years has been filled with concerns! They believed staying to a core mission, being persistent and adaptable, and fostering talent – the same things that got them to where they are now – are the best ways to manage future change and deepen UFH’s premium service and established brand.

“There is a lot of money in China right now,” they all said. “People think healthcare is easy. It is not.”

The post How United Hospitals Continues to Lead in China: Reflections from the Founding Executives appeared first on China Research Center.

The rise of China, or more specifically the empowerment of the People’s Republic of China (PRC) state, is presenting the world with such a double-barreled, historic situation: a shifting power distribution and a profound choice about how the nations are ordered in the system. The systemic change implied by the new Chinese power is poised to surpass that associated with the long Cold War. On the one hand, the rapidly ascending power of the PRC state promises a great power redistribution that will make Beijing an alternative (even exclusive) power center for the region and then the whole world. Chinese leaders have already openly claimed that they are leading a revolutionary change in the world order, upending the Westphalia Peace established “more than four hundred years ago.” On the other hand, and more profoundly, as I argue in my new book (The China Order: Centralia, World Empire, and the Nature of Chinese Power, Albany, NY: SUNY Press, 2017), rising Chinese power presents the world with a choice about the ordering principle of world politics. Therefore, it is no exaggeration to say that the future and fortune of human civilization rests heavily on how the rise of China is managed.

Despite significant scholarship on the subject, the nature and the meaning of the rise of China remain tentative, uncertain, and disputed. I contend that a key problem is that our existing understanding of the Chinese worldview and the nature of the rising Chinese power is insufficient, often inaccurate, and even misleading. I then propose that a careful rereading of the Chinese history in fact offers a rather straightforward, simple, and clear picture about the implications of the rising Chinese power, which may actually disappoint many “overly complicated analyses and overzealous advocates that frequently misinform and misguide.” (The China Order p. 5)

My rereading of the Chinese history has yielded evidence suggesting a holistic answer to questions about the nature of the rising Chinese power through analyzing the China Order—an ideation and tradition of governance and world order that give China and the PRC their key characters. “The China Order, the Chinese world empire order, is based on a Confucian-Legalism imperial state, the Qin-Han (秦汉) polity, authoritarian often totalitarian in nature, that justifies and defends its rule with the Mandate of Heaven to unite, order, and govern the whole known world, the tianxia (天下 all under heaven). It denotes a worldwide Qin-Han polity, a Qin-Han world order.” (The China Order p. 5)

Unlike many other world empires or attempted world empires (from the Egyptian pharaohs, the Inca, to the world Fascist and Communist movements), the China Order was practiced effectively for many centuries and united the whole known world in Eastern Eurasia from the third century B.C. to the mid-nineteenth century, albeit with frequent pretentions of unity and several, impermanent intervals of disunion. There was only one major pause of the China Order in the Chinese World: the Song Era (10^th through 13^th centuries), with rich, significant but underexplored lessons. The Qin-Han world empire political system of the China Order has also rejuvenated itself a number of times in the Chinese world. It has been highly attractive and even addictive to the ruling elites (Han Chinese or Non-Han Chinese alike) inside and even outside of the PRC as a deeply internalized part of the millennia-old Chinese culture and worldview. To many in China, the China Order is not just a viable, but also a superior world order, an ideology and a political system representing peculiar socioeconomic norms and culture values. The China Order has fundamentally shaped the Chinese World distinct from that in the post-Rome Mediterranean–European World under a de facto and later de jure world order of divided world polity with international competition — the Westphalia System. It explains the great West-East divergence between Europe and China. The China Order is a world order that is structurally and normatively incompatible with the Westphalia world system.

Since 1949, the Chinese Communist Party (CCP) has reincarnated the Qin-Han polity in the PRC and has sought political legitimacy and security through reordering the world in its image, like the previous imperial rulers. After some pauses and withdrawals after Mao Zedong’s fiascoes, including an attempt to launch world revolution, today’s CCP has been selectively accepting the Westphalia system with the aim to return to the China Order another day. As the CCP becomes ever more wealthy and confident, there is a significant revival of the China Order ideas in the PRC under the general banner of “the China Dream” and the mission “to construct a human community of common destiny.” The rise of the PRC, therefore, “with a modified but tenacious Qin-Han polity in charge that predictably seeks a new tianxia world order, represents a clear and consequential choice about political governance and world order for the humankind.” (The China Order p. 4)

Historically and comparatively, the Qin-Han polity and the China Order underperform for the Chinese people. The record of the Qin-Han polity has been the same in the PRC, which has been a suboptimal giant with inferior governance and barely average record of socioeconomic development. Yet, today, “the PRC has an increasingly unobstructed and selectively unilateral access to foreign markets, resources, and especially technology so it enriches and strengthens rapidly without being itself efficient and innovative. An inherently suboptimal giant plagued by an inferior governance, the PRC state nonetheless still rises to be very formidable and competitive in international relations.” (The China Order p. 216) Thanks to its extraordinarily strong extraction capability, the PRC state is already a rich and mighty player—“moving in to the center of the world stage,” claimed Beijing officially. The rise of the PRC is thus ushering in a new round of power redistribution in the international system on a massive scale, together with its ideal of reordering the nations.

To the peoples of Eastern Eurasia, the Qin-Han polity was grossly suboptimal and even disastrous in its record of governance, economic development, and technological innovation. The best of the glorious Chinese civilization was the periods when there was an absence of the China Order: the pre-Qin Era, the Song Era, and the time since the late-19^th century, contrary to the much-distorted official Chinese narratives and claims. To the peoples of the world, a revival of the China Order would mean largely the same fate the peoples had in the Chinese World after the third century BCE.

As the logic of the China Order would predict, rising Chinese power will not stop short of reordering the world unless and until the very Qin-Han polity is transformed and/or the ever richer and more powerful PRC is checked. How to manage the rising Chinese power and how to make the grand choice for the world order will determine the future and fortune of the United States, the world, and for the Chinese people themselves.

The window for an effective, peaceful choice is still open, and there is evidence to trust the Chinese people to make the right choice together with the other nations, provided that they are given the full information and freedom to reread their history and to choose. The great people of China are fully capable of controlling their destiny and steering a great course in history that is different from the China Order, and in so doing make the world and China a better place. Hopefully, the effort to analyze the China Order through rereading the Chinese history may just be a small step in that direction.

Fei-Ling Wang, The China Order: Centralia, World Empire, and the Nature of Chinese Power, Albany, NY: SUNY Press, 2017. www.sunypress.edu/p-6460-the-china-order.aspx. Available also on Amazon: www.amazon.com/China-Order-Centralia-Empire-Chinese/dp/1438467494/ref=asap_bc?ie=UTF8

The post The Rise of China: A Major Choice for the World appeared first on China Research Center.

Because India is situated at the very geographic center of the South Asia-Indian Ocean region, Indian civilizational influences have washed repeatedly over that vast region. Indian patriots are keenly aware of this history, and it is easy to assume that Indian influence in the region is somehow natural or inevitable. That may indeed be the case, but the breadth and vigor of China’s efforts to make itself and its policies attractive to the publics and governments of the region suggests that Indian soft power faces a new and very strong competitor.

Dr. Parama Sonha Palit’s book, Analyzing China’s Soft Power Strategy and Comparative Indian Initiatives, offers an interesting and solid study of an important but under-researched aspect of China’s rise in Asia: the scope and character of China’s exercise of soft power. After extracting from the secondary literature a working definition of soft power (the attractiveness of a country) and exploring the evolution of Chinese scholarly thinking about soft power with Chinese characteristics, Palit examines China’s pursuit of soft power in several geographic regions, starting with South Asia. The overarching purpose of China’s soft power activities in the region, Palit concludes, is to establish the image of China as a benign power. Palit turns to a survey of the various mechanisms China uses to advance this soft power goal. The list is long.

Diplomacy: China’s leaders travel frequently and strategically, explaining China’s policies and inveigling foreign support for those policies, assisted by a large and growing cadre of well-trained young diplomats assigned to regional capitals. China participates effectively in multilateral organizations, including a few that it effectively controls (e.g. the Shanghai Cooperative Organization), and is frequently able to block activities adverse to China’s policy interests.

Information: Agencies of the Chinese government (including the Information Office of the State Council) issue a substantial and growing volume of documents outlining and defending China’s policies. An array of attractive magazines – often targeting specific foreign audiences and explaining China’s views – are supported and guided by the government.   The Xinhua News Agency provides global coverage educating China’s people about foreign events, and educating foreign audiences about China’s own policy perspectives. China Central Television (CCTV) offers an attractive view of China and presentation of China’s view of world affairs. Party and state organs guide almost all these information activities.

Economic: The huge size and rapid growth of China’s economy, plus China’s success in lifting hundreds of millions of its citizens out of poverty, hold considerable attraction for foreign firms and governments.   Foreign governments seek trade and investment with China. Beijing occasionally uses foreign hopes of expanded economic cooperation in a carrot-and-stick fashion to influence foreign policies in other, non-economic, areas of interest to Beijing. China also provides loans or grants to countries it views as strategic. Foreign governments sometimes find Chinese assistance more attractive than loans by Western countries that carry transparency stipulations. Repayment obligations derived from Chinese loans give Beijing further leverage. Multiple lavishly funded infrastructure projects linked to China often are attractive to countries in the region.

Cultural Diplomacy: Confucius Institutes serve as gateways to interest in China’s civilizational heritage. Presentation of China as an ancient, glorious but non-Western civilization appeals to non-Western countries perhaps resentful of histories of Western domination. The nonviolent, harmony-seeking nature of China’s traditional Confucian civilization is juxtaposed with the violent, conflict-ridden and exploitative nature of Western civilization.

Higher Education: China recognizes U.S. leadership in higher education as a major component of the great influence of the United States in the world. Beijing is striving to turn China into a leading global provider of higher education through dispensing of fellowships, recruitment of prominent foreign faculty, linkups with leading non-Chinese universities, and establishment of English language-based programs to attract foreign students. The objective is to educate coming generations of foreign leaders, giving them in the process an understanding of China’s view of the world.

Supplying higher education to bright and ambitious young men and women from South Asian countries will probably be a key factor influencing the relative status of India, China and other countries in future decades. Palit offers an interesting discussion of China’s “aggressive marketing” of Chinese university study to South Asian youth – initiatives that include participating in exhibitions, offering scholarships for students and faculty, or establishing programs using English as the language of instruction. When Xi Jinping visited India in 2014, for example, he announced plans to offer 10,000 scholarships for South Asian students and faculty. Tertiary education in China also has the distinct competitive advantage of being much cheaper than study at American, European or Japanese universities. Palit notes that large numbers of Bangladeshi and Sri Lankan students are studying medicine in China.

One of the most intriguing questions raised by Palit’s study is whether China might actually become the dominant purveyor of soft power in the South Asian region. This is not a concern raised by Palit herself.  Although the book title promises to examine “comparative Indian initiatives,” there is no systematic effort to compare India’s activity in each of the areas deployed by China and enumerated above. Chapter 9 addresses “Indian Soft Power:  Strategies and Approaches,” but does not compare Chinese and Indian efforts in, for example, trade with and investment in South Asian countries, the scope of the two rivals’ respective information operations in key South Asian countries, the frequency and level of leadership exchange visits, or the number of South Asian students who receive tertiary education in India and China. It would be interesting to know how India compares with China as a provider of tertiary education to youth in key South Asian countries. This could be a major variable influencing the reputation and status – the soft power – of India and China in the region over a longer period. Palit acknowledges this by discussing the Chinese side of the equation, but comparison with India’s role is absent. It is widely understood that Indian universities have educated large numbers of youth from across South Asia. Is China now surpassing and supplanting India in this crucial regard?

A comparison of the reciprocal exchange of high-level Chinese and Indian leaders with various South Asian countries would also be interesting. Palit examines the coming and going of China’s leaders, and explains how such visits help create a positive, benign image of China.  Data comparing visits by Chinese and Indian leaders to South Asian countries is readily available – for example on the websites of the foreign ministries of various countries – but none is provided by Palit. Similarly, one searches in vain for comparison of the information operations of China and India in South Asian countries. In such economic areas as trade and investment, comparisons of Indian and Chinese roles with South Asian countries (e.g. trade with India and China as percent of various South Asian countries’ total trade) would be useful. Palit’s presentation of data suggests that China is about to surpass India, or perhaps already has, in soft power in South Asia. India is only “beginning to articulate soft power… in a more forceful fashion that any time in the past.” (Italics added.) India’s soft power effort has been “less pronounced in scale in the past than similar Chinese efforts.” It is “likely” that under Prime Minister Narendra Modi, India’s soft power effort will “undergo some fundamental change.” India’s soft power efforts labor under considerable burdens, Palit says. India’s stress on its history of cultural influences in the region is “somewhat risky” in that it “might give rise to fear of cultural colonization by India… India’s ability to command respect is considerably diminished by the resentment it meets in the region.”

India, like almost every country in the world, is pondering its response to the remarkable rise of China as a leading power. The question is more portentous for India because it has long dominated the geography of South Asia as well as the maritime flanks constituting the Indian Ocean.  Repeated waves of Indian cultural influences did indeed wash over India’s home region and the broader world. And China was kept far away by burdensome geography and technological backwardness. Now those barriers are vanishing. China is becoming a major power, perhaps the major power, in the region. A robust literature has emerged already on the swift development of Chinese naval power across the Indian Ocean, on Beijing’s ambitious One Belt, One Road infrastructure-building efforts, on China’s rise as the leading economic partner for most of the countries of the region, and on China’s push for deeper partnership with countries from Myanmar to Bangladesh, Nepal, Pakistan, Iran and Djibouti.  Despite omissions about India’s efforts to counter China’s soft power rise in the region, Palit’s study adds an important component to the observation of the evolving rivalry between these two ambitious and proud powers.

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