The End of Cheap China: Economic and Cultural Trends That Will Disrupt the World (18 page)

CHINESE SOFT POWER

The Chinese government’s most impressive attempt at soft power to date has been the Confucius Institute program. It is a network of learning centers at Western universities, supported with funding from the Chinese government and aimed at promoting the Mandarin language and Chinese culture. Such a strategy works much better than the advertisement in Times Square; it caters directly to students and teaches them to appreciate Chinese culture.

This strategy still has some shortcomings, however. While this program gets young people excited about the prospects of living and working in China, the government has recently clamped down on issuing visas to young foreigners. By being so strict, it frustrates and potentially alienates students who are genuinely passionate about China and want to work there. I personally offered a job to a young Penn State graduate who was excited about working in China. His father owned a restaurant business there, and he was thrilled at the prospect of starting his career there, too. Unfortunately, we were unable to secure a visa for him, which left him frustrated.

Although it has lost the struggle for diplomatic recognition, Taiwan has been much more successful than the People’s Republic at using soft power. Taiwan’s government has paid for Mandarin language training and research stipends for many of America’s leading professors and graduate students through the Chiang Ching-kuo Foundation, which in turn often takes the Taiwanese view in its struggle with the mainland. As China rises in the world, it must become more adept at using its soft power—and it will.

When I was the assistant director of the Centre for East Asian Research at McGill University during the late 1990s, I spent a lot of time raising funds for the university’s programs, as well as traveling to counterpart universities around the world. The South Korean government supports film festivals in universities around North America through the Korea Foundation. They also pay for academic conferences, events, and faculty support. A large part of the funding for McGill’s robust Korean studies program came from the Korea Foundation. This was a great way to build support for South Korea, be it political support or a continued military presence to combat volatility in the North.

The Taiwanese also were very generous, mostly through private foundations and often with direct or tacit support of the government. The Chiang Ching-kuo Foundation, named after Chiang Kai-shek’s son, who became supreme leader of Taiwan after his father died, supported professors’ active academic research. Nearly all of my professors who were over 45 years old had spent their formative years studying China and Mandarin either in Taiwan or backed by Taiwanese money.

Private foundations also financially supported such people as my Harvard classmate Wang Dan, who was one of the student leaders during the Tiananmen protests in 1989. Wang Dan has continued to be one of China’s foremost critics. Backed by Taiwanese money with specific agendas, he will be unlikely to voice anything but opposition to China.

This cooptation of the academic class and its students, which has a trickle-down effect that affects policies governing military exchanges and weapons sales, helps Taiwan advance its agenda. China, on the other hand, is poor at this and does not have a strong lobbying effort within the Western world.

China needs to start funding more academic research and exchange. They should also promote the establishment of foundations using private Chinese money. Too much of China’s soft power has been government controlled and led. As Chinese become wealthier, many of them want to help promote China’s image to the world through their own funding and initiatives.

The government needs to make it easier to set up nongovernmental organizations (NGOs). It is far too afraid of them, which stems from worries that they cannot be controlled and might be fronts through which foreign government will create subversion. The process to establish them should be made easier. Besides, the government has admitted that 90 percent of NGOs operating in China don’t have legal licenses; many simply register as businesses.

Many debates in China focus on how it should build its image abroad. This is extremely important, as we have seen in Africa, where people’s perception of China can potentially determine the future of its relations there. Historically, Chinese leaders have strived to maintain issues of national sovereignty as the paramount focus of their foreign diplomacy. The idea is that the Chinese government won’t intervene in other nations’ affairs, with the expectation that, in turn, no one will inquire into theirs. The Chinese government is good at rattling cages to gain more influence during international discussions, but shies away from taking too large an international role in actual decision making. In the mind of the Chinese government, it is better to spend money on its internal needs, and to let America waste its money acting as the world’s policeman.

Harnessing and asserting its soft power is China’s best bet; however, it must do a better job. The government recognizes this, and has been spending serious money to promote China’s good name worldwide. Unfortunately, many of their attempts so far have failed to improve China’s brand position.

As the End of Cheap China increases consumption and the demand for better-quality housing and jobs, China’s need for natural resources will only get bigger. Further investment abroad will naturally cause more tension.

Chapter 9

CHINA’S EDUCATIONAL SECTOR

PREVENTING CHINA FROM CEMENTING ITS SUPERPOWER STATUS

I was sitting in an oak-paneled meeting room in a five-star Beijing hotel. Surrounding me were several dozen of China’s smartest and most-talented teenagers and their anxious parents. They were there to interview for a leading boarding school in the United States, and I was there to take my niece to interview.

As we waited, the teenagers asked me about my own experiences decades before as a boarding-school student at St. Paul’s School, the preparatory school in Concord, New Hampshire, that has graduated artists like
Doonesbury
cartoonist Garry Trudeau, government officials like Senator John Kerry and FBI Director Robert Mueller, and business titans like former Mitsubishi Chairman Minoru Makihara. While I was there, Tim Ferriss, the best-selling author of
The 4-Hour Work Week
and
The 4-Hour Body
, was my classmate.

One young man with the broad shoulders of a lumberjack came up to me and asked, “Are class sizes better in boarding schools in America than in China? There are fifty people in my class at my school in Beijing now—it is way too big.” He continued to ask me about curriculum choices and whether there were electives. Next to him stood a slightly pudgy, pimply-faced girl dressed in a plaid skirt and a white, buttoned blouse. She strode up close to me and asked, “Can you please tell me about the extracurricular activities? Can I go horseback riding? How about golf? All the choices are so exciting.”

These students represented the best of China, and they represented it well. They would be the ones changing the face of the country and the world in a few short years, and they seemed to know it. They were not timid, as many Westerners think Chinese youths are, and had no qualms about asking questions, even though I was a foreigner and much older.

These young people were far more worldly and sophisticated than I was 20 years earlier when I was interviewing for boarding school. I was obsessed with baseball cards and Madonna at their age, while these kids discussed Plato and Hemingway. Their fascination with the American way of life was apparent when they discussed why a class size of 8 to 12 in an American institution was superior to 50 students in a top Chinese school, or why being able to make art and play team sports, even if they were not very talented, was an exciting prospect.

As I answered the dozens of questions they asked me, I was encouraged by the quality of the students and their probing inquiries. China was most assuredly raising young adults who had thought-provoking questions, such as one young man, dressed in a navy blue suit with gold buttons, who asked me about how I saw China’s role emerging in the world. After I answered, he offered his own opinion: that China’s rise would be peaceful and would help raise more people out of poverty through business investment.

However, one big problem stuck in the back of my mind as we talked: All these kids wanted to leave China for their education, because its current educational system is failing the country.

As my niece was interviewing, I struck up a conversation with some of the parents. Mr. Chen, a billionaire real estate developer whose firm puts up towering skyscrapers all over the country, pulled up a chair next to me. He wore a diamond-encrusted Omega watch, but he looked a little rumpled; although his clothes were all from extremely high-end luxury brands and must have cost a fortune, they did not seem to fit him right.

Mr. Chen let out a deep, guttural cough, the result of far too many years of smoking or working in China’s old factories. He told me he was conflicted about his choice to educate his daughter overseas. He was reluctant to send his daughter so far away, but at the same time, he admitted to me, “We have to send our child abroad. The Chinese education system is focused too much on rote memory and not how to think, does not emphasize moral reasoning, and does not have extracurricular activities to allow a child to become well rounded.”

Out of the corner of my eye, I could see the other parents nodding in agreement. Mr. Chen continued, “Why shouldn’t our children learn art and drama? Why shouldn’t they play team sports, even if they won’t be the next Yao Ming? Why is everything focused on test preparation and how to make money? There has to be more to life than just money.”

These parents were people who had benefitted the most from reforms since the end of the Cultural Revolution. They were the sons and daughters of high government officials, wealthy businessmen, and famous celebrities. These were supporters of the government, yet they planned to send their children out of China to get a good education. It seemed like they all feared for their children’s futures if they didn’t send them abroad to study, unless immediate changes could be implemented to China’s education system. In a survey of three dozen wealthy Chinese with investable assets more than $10 million, my firm found the majority are obtaining foreign passports or thinking about it, not because they dislike the government but because it opens up more educational opportunities for their children.

One of China’s greatest challenges is reforming its one-dimensional education system. It simply does not adequately prepare Chinese young people for the challenges and opportunities they will face in the global marketplace and in a country that is shifting toward a more service-based economy. Successful business executives, teachers, and government officials will not be created by educational systems that only teach students how to take tests and memorize answers, but by learning how to evolve and adapt quickly to changing conditions.

The problem is not merely academic, nor is it one that only has repercussions for the distant future. The problem is already hitting China’s business community and Chinese society in general. The educational system teaches students how to memorize the right answer, but doesn’t train them to have the creativity to develop a new right answer. As I wrote in Chapter 2, multinational corporations have told my firm that the biggest problem they face in China is recruiting and retaining labor, in part because of the weak talent pool.

As jobs become rely more upon brainpower than muscle power, companies are desperate to hire top people—yet nearly 15 percent of the more than six million fresh 2010 university graduates could not find a job several months after graduation. One Shanghai-based senior executive at a multinational financial-services firm told me with frustration, “Graduates just don’t know how to think analytically. They are great at doing what they are told to do, but they are terrible when it comes to creating something and taking initiative. We have to hire—we’ve even lowered our standards to do so—but we can’t hire people who cannot think.”

There is an obvious mismatch between the demands of the job market and the aspirations of China’s youth on the one hand, and the skills provided by the educational system on the other. The government, to its credit, has been increasing access to higher education as it recognizes that the long-term strength of a country rests with an educated workforce. The number of annual university graduates has soared from one million 15 years ago to more than six million in 2010 from over 2,000 universities. Only about 30 percent of high school graduates continue on to college in China—low as compared with 70 percent in the United States, but quite good for a country with a massive population whose universities were all shut just 40 years ago.

The growth in the number of university graduates, however, is no indicator of the quality of the education they are receiving. The standard class size is too large, so there is no individual attention in the classroom, and teachers must emphasize rote memorization and test grades to standardize the system. Individual schools are not allowed to change the curriculum at all, so there is no focus on the method of learning, only upon exam results or changes for different levels of academic achievement. For this reason, there is little classroom interaction and next to no emphasis on critical thinking.

The college entrance examination, the
gaokao
, is central to the problems between the Chinese education system and the job market. After high school, students who hope to attend the country’s universities sit for several days straight taking the test that will determine which school they will attend and the major they will study. It is an extraordinarily crucial moment in their lives. Because the exam is only administered once a year, this is a nerve-wracking experience, and the entire country quiets down as students prepare. Construction stops. Car horns go silent, and police are out in force to stop any noise that might bother test takers. The whole country understands the importance of these tests, and in unified solidarity people will inconvenience themselves on students’ behalf.

Unlike the application process in America, high school grades, leadership, and extracurricular efforts are not taken into account unless a student is an extremely brilliant talent. Only prestigious academic awards, or an exceptional offer of matriculation without examination, relieve a student from the stress of the gaokao. Gaining admission without taking the test is an incredibly elite route, and most students don’t enter this way.

The high stress levels it imposes on students and society, and its narrow focus on the results of a single exam, are not the only flaws of the gaokao system. It also forces students to select the major they want to study and the university they want to attend before even taking the test. Government-set quotas and higher enrollment qualifications for different majors lead students to choose majors for all the wrong reasons. Often the choice is not based on genuine interest, but rather on the likelihood that the student will achieve the cutoff score for a given major. For example, some highly competitive majors, like international finance or world economy, require higher entrance test scores than less competitive majors like literature. This is very different from the American way, which uses general aptitude tests as a standard for every university, regardless of major.

As a result, in order to enter a prestigious domestic university, students often commit themselves to the wrong major for four years. One student I met named Helen told me she pursued Middle Eastern studies at the prestigious Peking University not because she wanted to, but because it was the department with the lowest required test scores, and she really wanted to go to Peking University to make her parents proud. After she graduated—hating her area of study by that point—Helen went to the United Kingdom as soon as she could to pursue a master’s degree in business.

Additionally, students often enter a university unprepared to make sound decisions about their future course of study, and frequently apply to majors like accounting because a relative or family friend suggested it as a stable and suitable career. For the next four years, these students are forced to study a major they probably knew very little about when they applied. After all, when I applied to university I wrote in my college essays that I wanted to become an anthropologist and study in the Congo. That dream went out the door my first day at McGill University in Montreal, when I ended up in a Chinese-studies class and fell in love with Chinese paintings.

For the select few who get into a university, there is little to no flexibility to change your course of study. There is also almost no room to take any electives outside of your chosen department. This means that Chinese universities are graduating people who spend four years learning about biology or accounting and nothing else. It produces classes full of students who are arguably good at one discipline, but who are unable to synthesize any outside information into their narrow frame of reference. This is a crippling flaw for those hoping to succeed in today’s fast-paced and integrated world.

Sitting in front of my desk was a young woman named Mimi, 1 of 10 applicants for an entry-level position at my firm out of 2,000 graduates in 2007 who made it to the final round of the interview process. She wore a conservative, dark-blue suit that matched her plain face, and was so tall that she made the chair she was sitting in look like a toy. She had on a wristwatch with a cartoon face. I think it was Hello Kitty.

Mimi was about to graduate from the famed Shanghai Jiao Tong University, where former President Jiang Zemin went to school, with a degree in accounting. As she fidgeted in the chair and kept moving her legs to get into a more comfortable position, I asked her why she was interested in market research rather than accounting—after all, the big accounting firms like KPMG, PricewaterhouseCoopers, and Deloitte were adding thousands of positions a year.

She immediately stopped moving around and answered quite directly, “I applied for accounting at Shanghai Jiao Tong as a major because my mother’s friend thought it was a good career path for a girl, so I checked the box. I had no idea what accounting was. After my first class, I hated it and wanted to try something else, but I wasn’t allowed to change majors. I like CMR because I like the idea of working on an apparel project one day, a hedge fund due-diligence project another day, and a chemical project the next. I need a more broad-based understanding of the business world. I want to get as far away from accounting as possible.”

Mimi’s response was similar to so many I had heard in interview after interview. Few people told me that they liked their major; they had chosen it for all the wrong reasons many years ago, and usually hated it. For their first career step, they all seemed to want a job that would gave them broad exposure, because they were tired of looking at the same area over and over again.

I liked Mimi, but ultimately we did not hire her. Despite her earnest wish to expand her mind, she seemed unable to think creatively in our interviews.

Notwithstanding these problems, many parents in America wrongly believe China’s educational system is still far superior to America’s because of its unique ability to breed test takers. The
New York Times
reported in late 2010 that Shanghai’s high school students performed better than American high school students on a standardized test administered by the Organisation for Economic Co-operation and Development, the Program for the International Student Assessment. Many in America took the test results as proof that American students were lagging behind Chinese students in ability and that China’s system is far superior. U.S. Secretary of Education Arne Duncan said he saw the test scores as a “wake-up call” for America. In a misguided column for the
Washington Post
, Vivek Wadhwa argued that America needs to “fear” China’s youngsters graduating from Chinese universities, because they will use their innovative abilities to start competing against Silicon Valley’s greatest minds.