A client of mine directed me to a link of a Tedx talk by Martin Jacques on China. I watched it and liked it so much I wanted to share it with our readers. You can watch and listen to the speech here and below is a transcription of Mr. Jacques’ speech.

It is certainly thought provoking. What do you think?

The world is changing with really remarkable speed. If you look at the chart at the top here, you’ll see that in 2025, these Goldman-Sachs projections suggest that the Chinese economy will be almost the same size as the American economy. And if you look at the chart for 2050, it’s projected that the Chinese economy will be twice the size of the American economy, and the Indian economy will be almost the same size as the American economy. We should bear in mind here that these projections were drawn up before the western financial crisis. A couple of weeks ago I was looking at the latest projection by BNP Paribas for when China will have a larger economy than the United States.  Goldman-Sachs predicts 2027; the post-crisis projection is 2020. That’s just a decade away.

China is going to change the world in two fundamental respects. First of all, it’s a huge, developing country with a population of 1.3 billion people, which has been growing for over thirty years at around ten percent a year. And within a decade, it will have the largest economy in the world. Never before in the modern era has the largest economy in the world been that of a developing country, rather than a developed country. Secondly, for the first time in the modern era, the dominant country in the world, which is what I think China will become, will be not from the west and from very, very different civilizational roots.

Now, I know it’s a widespread assumption in the West that as countries modernize, they also westernize.  This is an illusion. It’s an assumption that modernity is a product simply of competition, markets and technology. It is not; it is also shaped equally by history and culture.  China is not like the west, and it will not become like the west. It will remain, in very fundamental respects, very different.

Now, the big question here is obviously, well, how so we make sense of China? How do we try and understand what China is? And the problem we have in the West in the moment, by and large, is that the conventional approach, is that we understand it really in western terms, using western ideas. We can’t.  Now, I want to offer you three building blocks for trying to understand what China is like, just as a beginning. The first is this: that China is not really a nation-state.  Okay, it’s called itself a nation-state for the last hundred years. But anyone who knows anything about China knows it’s a lot older than this.

This is what China looked with the victory of the Qin dynasty in 221 BC at the end of the warring state period, the birth of modern China, and you can see it against the boundaries of modern China. Or, immediately afterwards, the Han dynasty, still 2,000 years ago, and you can see already it occupies most of what we know as eastern China, which is where the vast majority of Chinese lived then and live now.  Now what is extraordinary about this is that what gives China it’s sense of being China, what gives the Chinese the sense of what it is to be Chinese, comes not from the last hundred years, not from the nation-state period, which is what happened in the West, but from the period, if you like, of the civilization-state. And thinking here, for example, of customs like ancestral worship, of a very distinctive notion of the state, and likewise a very distinctive notion of the family, social relationships like guangxi, Confucian values, and so on, these are all things that come from the period of the civilization-state. In other words, China, unlike the western states and most countries in the world, is shaped by its sense of civilization; its existence as a civilization-state rather than as a nation-state.

And there’s one other thing to add to this, and that is this: of course we know China is big; it’s huge, demographically and geographically, with a population of 1.3 billion people. What we often aren’t really aware of is the fact that China is extremely diverse and very pluralistic, and, in many ways, very decentralized. You can’t run a place on this scale simply from Beijing, even though we think this to be the case. It’s never been the case.

So this is China: a civilization-state rather than a nation-state. What does it mean? Well, I think it has all kinds of profound implications. I’ll give you two quick ones: the first is that the most important political value for the Chinese is unity, is the maintenance of Chinese civilization. Two thousand years ago, Europe, breakdown, the fragmentation of the Holy Roman Empire; it divided, and it’s remained divided ever since.  China, over same time period, went in exactly the opposite direction, very painfully holding this huge civilization- civilization-state- together.

The second is Hong Kong. Do you remember the handover of Hong Kong by Britain to China in 1997?  You may remember what the Chinese constitutional proposition was: one country, two systems. Wager that barely anyone in the West believed them. Ha, window dressing. When China gets its hands on Hong Kong, that won’t be the case. Thirteen years on, the political and legal system in Hong Kong is as different as it was in 1997.  We were wrong. Why were we wrong? We were wrong because we thought, naturally enough, in nation-state ways. Think of Germany’s unification in 1990. What happened? Well basically, the East was swallowed by the West. One nation, one system: that is the nation-state mentality. But you can’t run a country like China, a civilization-state, on the basis of one civilization, one system. It doesn’t work. So, actually, the response of China to the question of Hong Kong, as it will be to the question of Taiwan, was a natural response: one civilization, many systems.

Let me offer you another building block to try and understand China, maybe not such a comfortable one.  The Chinese have a very, very different conception of race than most other countries. Do you know, of the 1.3 billion Chinese, over ninety percent of them think they belong to the same race, the Han. Now, this is completely different from the world’s other most populous countries. India, the United States, Indonesia, Brazil: all of them are multiracial. The Chinese don’t feel like that; China is only multiracial, really, at the margins. So the question is, why? Well the reason, I think, essentially is, again, back to the civilization-state. A history of at least two thousand years, of history, of conquest, occupation, absorption, assimilation, and so on, led to the process by which, over time, the notion of the Han emerged, nurtured, of course, by a growing and very powerful sense of cultural identity.

Now, the great advantage of this historical experience has been that without the Han, China could never have held together. The Han identity has been the cement which has held this country together. The great disadvantage of it is that the Han have a very weak conception of cultural difference. They really believe in their own superiority, and they are disrespectful of those who are not.

Or let me give you my third building block of the Chinese state. The relationship between the state and society in China is very different from that in the West. Now, we in the West overwhelmingly seem to think, these days at least, that the authority and legitimacy of the state is a function of democracy. The problem with this proposition is that the Chinese state enjoys more legitimacy, and more authority, among the Chinese, than is true with any western state.

And the reason for this is because, well, there are two reasons, I think. And it’s obviously got nothing to do with democracy, because, in our terms, the Chinese certainly don’t have a democracy. But the reason for this is, firstly, because the state, in China enjoys a very special significance, as the representative, the embodiment, and the guardian of Chinese civilization, of the civilization-state. This is as close as China gets to a kind of spiritual role.

And the second reason is because, whereas in Europe and North America the state’s power is continuously challenged — I mean, in European tradition, historically against the Church, against the sections of the aristocracy, against merchants, and so on — for one thousand years, the power of the Chinese state has not been challenged. It’s had no serious rivals. So you can see that the way in which power has been constructed in China is very different from our experience in western history. The result, by the way, is that the Chinese have a very different view of the state. Whereas we tend to view it as an intruder, a stranger, certainly an organ whose powers need to be limited, defined, and constrained, the Chinese don’t see the state that way at all. The Chinese view the state as an intimate. Not just as an intimate, actually, but as a member of the family. Not just, in fact, as a member of the family, but as the head of the family: the patriarch of the family.

This is the Chinese view of the state. Very, very different to ours. It’s embedded in society in a different kind of way, to what is the case in the West. And I would suggest to you that, actually, what we are dealing with here in the Chinese context is a new kind of paradigm, which is different than anything we’ve had to think about in the past. You know, China believes in the market and the state. Adam Smith, writing in the late eighteenth century, said that the Chinese market is larger, and more developed, and more sophisticated than anything in Europe. And apart from the Mao period, that has remained more or less the case ever since.

But this is combined with an extremely strong and ubiquitous state; the state is everywhere in China. I mean, its leading firms, many of them are still publicly owned. Private firms, however large they are, depend, in many ways, on state patronage.  argets for the economy, and so on, are set by the state.  And the state, of course, its authority flows into many other areas, as we are familiar with, as in something like the “one child” policy.

Moreover, this is a very old state tradition, a very old tradition of statecraft. I mean, if you want an illustration of this, the Great Wall is one; but this is another (shows photograph of a canal). This is the Grand Canal, which was constructed in the first instance in the fifth century, BC, and was finally completed in the eighth century, AD. It went for 1,114 miles, linking Beijing with Hangzhou and Shanghai. So there’s a long history of extraordinary state infrastructural projects in China, which I suppose helps us to explain what we see today, which is something like the Three Gorges Dam (shows photo) and many other expressions of state competence within China.

So there we have three building blocks for trying to understand the difference that is China: the civilization-state, the notion of race, and the nature of the state and its relationship to society. And yet we still insist, by and large, on thinking that we can explain China by drawing on western experience, looking at it through western eyes, using western concepts. If you want to know why we unerringly seem to get China wrong, our predictions about what’s going to happen to China are incorrect, this is the reason.  Unfortunately I think, I have to say, that I think our attitude toward China is that of a kind of “little Westerner” mentality. It’s arrogant. it’s arrogant in the sense that we think that we are best and therefore we have the universal measure, and secondly, it’s ignorant. We refuse to really address the issue of difference.

You know, there’s a very very interesting passage in a book by Paul Cohen, the American historian, and Paul Cohen argues that the West thinks of itself as probably the most cosmopolitan of all cultures. But it’s not. In many ways, it’s the most parochial. Because for the last two hundred years, the West has been so dominant in the world that it’s not really needed to understand other cultures, other civilizations. Because at the end of the day it could, if necessary, by force, get its own way. Whereas those cultures — virtually the rest of the world — which have been in a far weaker position vis-à-vis the West, have been thereby forced to understand the West because of the West’s presence in those societies. And therefore they are, as a result, more cosmopolitan, in many ways, than the West.

I mean, take the question of East Asia. East Asia, Japan, Korea, China, etc.. A third of the world’s population lives there. Now the largest economic region in the world. And I’ll tell you now that East Asians, people from East Asia, are far more knowledgeable about the West than the West is about East Asia.  Now, this point is very germane, I’m afraid, to the present. Because what’s happening, back to that chart at the beginning, the Goldman-Sachs chart, what is happening is that, very rapidly in historical terms, the world is being driven and shaped not by the old, developed countries but by the developing world. We’ve seen this in terms of the G-20 usurping, very rapidly, the position of the G-7 or the G-8.

And there are two consequences of this: first, the West is rapidly losing its influence in the world. There was a dramatic illustration of this, actually, a year ago at the Copenhagen climate change conferenc where Europe was not at the final negotiating table. When did that last happen? I would wager it was about two hundred years ago. And that is what is going to happen in the future. And the second implication is that the world will inevitably, as a consequence, become increasingly unfamiliar to us, because it will be shaped by cultures and experiences and histories that we are not really familiar with or conversant with. And at last, I’m afraid, take it America and Europe are slightly different, but Europeans, by and large, I have to say, are ignorant, are unaware about the way the world is changing. I’ve got an English friend in China who said, ‘the continent is sleepwalking into oblivion.’

Well, maybe that’s true, maybe that’s an exaggeration. But there’s another problem that goes along with this, that Europe is increasingly out of touch with the world, and that is a loss of a sense of the future. I mean, Europe once, of course, commanded the future in its confidence. Take the nineteenth century, for example. But this, alas, is no longer true. If you want to feel the future, if you want to taste the future, try China (shows photo of statue of Confucius); there’s old Confucius. This (shows photo) is a railway station the likes of which you’ve never seen before; it doesn’t even look like a railway station. This is the new Guangzhou railway station for the high-speed trains. China already has a bigger network than anywhere else in the world, and it will soon have more than all the rest of the world put together.

Or take this (shows photo); now this is an idea.  It’s an idea to be tried out shortly in a suburb outside of Beijing. Here you have a mega-bus, on the upper deck it carries about two thousand people, it travels on rails down a suburban road, and the cars travel underneath it. And it does speeds of about up to 100 miles per hour. Now this is the way things are going to move, because China has a very specific problem, which is different from Europe and different from the United States: China has huge numbers of people and no space. So this is a solution to a situation where China’s going to have many, many, many cities over twenty million people.

Well, what should our attitude be toward this world we see very rapidly developing before us? I think there will be good things about it, and bad things about it. But I want to argue, above all, a big-picture positive for this world. You know, for two hundred years, the world was essentially governed by a fragment of the human population. That’s what Europe and North America represented. The arrival of countries like China and India, between them thirty-eight percent of the world’s population, and others like Indonesia and Brazil and so on, represent the most important single act of democratization in the last two hundred years.  Civilizations and cultures which have been ignored, which had no voice, which were not listened to, which were not known about, will have a different sort of representation in this world. As humanists, we must welcome, surely, this transformation.  And we will have to learn about these civilizations.

This big ship here (shows photo of two model boats) was the one sailed in by Zheng He in the early fifteenth century on his great voyages around the South China Sea, the East China Sea, and across the Indian Ocean to East Africa. The little boat in front of it was the one in which, eighty years later, Christopher Columbus crossed the Atlantic. Or, (shows photo) look carefully at this silk scroll made by Zhou Zhou in 1368. I think they’re playing golf. Christ! The Chinese even invented golf.

Welcome to the future!  Thank you.

 

 

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Photo of Dan Harris Dan Harris

Dan is a founder of Harris Bricken, an international law firm with lawyers in Los Angeles, Portland, San Francisco, Seattle, China and Spain.

He primarily represents companies doing business in emerging market countries, having spent years building and maintaining a global, professional network. 

Dan is a founder of Harris Bricken, an international law firm with lawyers in Los Angeles, Portland, San Francisco, Seattle, China and Spain.

He primarily represents companies doing business in emerging market countries, having spent years building and maintaining a global, professional network.  His work has been as varied as securing the release of two improperly held helicopters in Papua New Guinea, setting up a legal framework to move slag from Canada to Poland’s interior, overseeing hundreds of litigation and arbitration matters in Korea, helping someone avoid terrorism charges in Japan, and seizing fish product in China to collect on a debt.

He was named as one of only three Washington State Amazing Lawyers in International Law, is AV rated by Martindale-Hubbell Law Directory (its highest rating), is rated 10.0 by AVVO.com (also its highest rating), and is a recognized SuperLawyer.

Dan is a frequent writer and public speaker on doing business in Asia and constantly travels between the United States and Asia. He most commonly speaks on China law issues and is the lead writer of the award winning China Law Blog. Forbes Magazine, Fortune Magazine, the Wall Street Journal, Investors Business Daily, Business Week, The National Law Journal, The Washington Post, The ABA Journal, The Economist, Newsweek, NPR, The New York Times and Inside Counsel have all interviewed Dan regarding various aspects of his international law practice.

Dan is licensed in Washington, Illinois, and Alaska.

In tandem with the international law team at his firm, Dan focuses on setting up/registering companies overseas (via WFOEs, Rep Offices or Joint Ventures), drafting international contracts (NDAs, OEM Agreements, licensing, distribution, etc.), protecting IP (trademarks, trade secrets, copyrights and patents), and overseeing M&A transactions.