Thursday, Nov. 12, 2009
Five Things the U.S. Can Learn from China
By bill powell / shanghai
On the evening of Nov. 15, President Barack Obama, the youthful
leader of one of the world's youngest countries, begins his first visit
to China, among the world's most ancient societies. Obama and his
Chinese counterpart, Hu Jintao, have much to discuss. Nukes in Iran and
North Korea. China's surging military spending. Trade imbalances.
Climate change.
But the visit comes at an awkward moment for the U.S. China,
despite its 5,000-year burden of history, has emerged as a dynamo of
optimism, experimentation and growth. It has defied the global economic
slump, and the sense that it's the world's ascendant power has never
been stronger. The U.S., by contrast, seems suddenly older and frailer.
America's national mood is still in a funk, its economy foundering, its
red-vs.-blue politics as rancorous as ever. The U.S. may be one of the
world's oldest capitalist countries and China one of the youngest, but
you couldn't blame Obama if he leaned over to Hu at some point and
asked, "What are you guys doing right?" (See pictures of people around the world watching Obama's Inauguration.)
Could
the world's lone but weary superpower actually learn something from
China? It's a politically incorrect question, of course. China is an
authoritarian nation; its ruling Communist Party deals ruthlessly with
any challenge to its hegemony. It remains, relatively speaking, a poor,
developing country with huge problems to confront, massive corruption
and environmental degradation being Nos. 1 and 1a. Still, this is a
moment of humility for the U.S., and China is doing some important
things right. If the U.S. were to ask the Chinese what it could learn
from their example, it might gain some insight into what it's doing
right and wrong. Here are five lessons from China's success story:
1. Be Ambitious
One day this summer, Sean Maloney, an
executive vice president at Intel, was bouncing from one appointment to
another in northeastern China, speeding along in a van traversing newly
built highways. He gazed out at one of the world's biggest construction
projects: a network of high-speed train lines — covering 10,000 miles
(16,000 km) nationwide — that China is building. As far as the eye
could see, there sat vast concrete support struts, one after another,
exactly 246 ft. (75 m) apart. Each was full of steel cables and weighed
about 800 tons. "We used to build stuff too," Maloney mused,
unprompted. "But now it's NIMBY [not in my backyard] every time you try
to do something. Here," he joked, "it's more like IMBY. There's stuff
happening here, everywhere and always." (See pictures of the largest military parade in China's history.)
It's
not just NIMBYism that constrains the U.S. these days, of course.
America is close to tapped out financially, with budget deficits this
year and next exceeding $1 trillion and forecast to remain above $500
billion through 2019. But sometimes the country seems tapped out in
terms of vision and investment for the future.
Some economists believe that given its stage of development,
China spends too much on expensive items like high-speed rail lines.
But step back from the individual infrastructure projects and the
debates about whether a given investment is necessary, and what's
palpable in China is the sense of forward motion, of energy. No
foreigner — at least not one I've met in five years of living here —
even bothers denying it. And the Chinese take it for granted. When a
brand-new six-lane highway opened in suburban Shanghai in October,
Zhong Li Ping, who shuttles migrant workers to the city and back to
their hometowns, said, "I don't know what took them so long." In truth,
it took about two years — roughly the time it would take to get the
environmental and other regulatory permits for a new highway in the
U.S. If, that is, you could get them at all. (See TIME's photo-essay "The Making of Modern China.")
There's
no direct translation into Chinese of the phrase can-do spirit. But
yong wang zhi qian probably suffices. Literally, it means "march
forward courageously." China has — and has had for years now — a can-do
spirit that's unmistakable. Americans know the phrase well. They
invented it. It used to define them.
Critics of the authoritarian Chinese government would say it's
a system more accurately called "can do — or else." And they have a
point. No one in the U.S. would argue that it should adopt China's
dictatorial style of government. America doesn't need to displace tens
of thousands of people in order to build a massive dam, as China did in
Hubei province from 1994 to 2006. (The value of checks and balances is,
in fact, among the many things China could learn from the U.S.) But you
don't have to be a card-carrying communist to wonder how effectively
the U.S. develops and executes ambitious projects. Ask James McGregor.
He's a former chairman of the American Chamber of Commerce in China and
now a business consultant who divides his time between the two
countries. "One key thing we can learn from China is setting goals,
making plans and focusing on moving the country ahead as a nation," he
says. "These guys have taken the old five-year plans and stood them on
their head. Instead of deciding which factory gets which raw materials,
which products are made, how they are priced and where they are sold,
their planning now consists of 'How do we build a world-class
silicon-chip industry in five years? How do we become a global player
in car-manufacturing?'"
See 10 things to do in Shanghai.
See 10 things to do in Beijing.
Some of this is the natural arc of a huge, fast-growing country in
the process of modernization. The U.S. in the late 19th century was
nothing if not what Intel's Maloney would call an IMBY country. America
was ambitious. There's no secret formula to help the nation get back
its zeal for what it used to enthusiastically and sincerely call
progress. But even though the U.S. is a mature, developed country, many
economists believe it has shortchanged infrastructure investment for
decades. It possibly did so again in this year's stimulus package. Just
$144 billion of the $787 billion stimulus bill Congress passed earlier
this year went to direct infrastructure spending. According to IHS
Global Insight, an economic-consulting firm, U.S. spending on
transportation infrastructure will actually decline overall in 2009
when state budgets are factored in — this at a time when the American
Society of Civil Engineers contends that the U.S. should invest $1.6
trillion to upgrade its aging infrastructure over the next five years.
When the economic crisis hit China late last year, by
contrast, almost half of the emergency spending Beijing approved — $585
billion spread over two years — was directed at projects that
accelerated China's massive infrastructure build-out. "That money went
into the real economy very quickly," says economist Albert Keidel of
the Carnegie Endowment for International Peace.
But it's not just emergency spending on bridges, roads and
high-speed rail networks that's helping growth in China. Patrick Tam,
general partner at Tsing Capital, a venture-capital firm in Beijing,
says the government is aggressively helping seed the development of new
green-tech industries. An example: 13 of China's biggest cities will
have all-electric bus fleets within five years. "China is eventually
going to dominate the industry for electric vehicles," Tam says, "in
part because the central government has both the vision and the
financial wherewithal to make that happen." Tam, a graduate of MIT and
the University of California, Berkeley, says he does deals in Beijing
rather than Silicon Valley these days "because I believe this is where
these new industries will really take shape. China's got the energy,
the drive and the market to do it." Isn't that the sort of thing
venture capitalists used to say about the U.S.? (See pictures of the global financial crisis.)
2. Education Matters
On a recent Saturday afternoon, at a nice restaurant in central
Shanghai, Liu Zhi-he sat fidgeting at the table, knowing that it was
about time for him to leave. All around him sat relatives from an
extended family that had gathered for a momentous occasion: the 90th
birthday of Liu's great-grandmother Ling Shu Zhen, the still spry and
elegant matriarch of a sprawling clan. But Liu had to leave because it
was time for him to go to school. This Saturday, as he does every
Saturday, Liu was attending two special classes. He takes a math
tutorial, and he studies English.
Liu is 7 years old.
A lot of foreigners — and, indeed, a fair number of Chinese —
believe that the obsession (and that's the right word) with education
in China is overdone. The system stresses rote memorization. It drives
kids crazy — aren't 7-year-olds supposed to have fun on Saturday
afternoons? — and doesn't necessarily prepare them, economically
speaking, for the job market or, emotionally speaking, for adulthood.
Add to that the fact that the system, while incredibly competitive, has
become corrupt.
All true — and all, for the most part, beside the point. After
decades of investment in an educational system that reaches the
remotest peasant villages, the literacy rate in China is now over 90%.
(The U.S.'s is 86%.) And in urban China, in particular, students don't
just learn to read. They learn math. They learn science. As William
McCahill, a former deputy chief of mission in the U.S. embassy in
Beijing, says, "Fundamentally, they are getting the basics right,
particularly in math and science. We need to do the same. Their kids
are often ahead of ours." (See pictures of China on the wild side.)
What
the Chinese can teach are verities, home truths that have started to
make a comeback in the U.S. but that could still use a push. The
Chinese understand that there is no substitute for putting in the hours
and doing the work. And more than anything else, the kids in China do
lots of work. In the U.S., according to a 2007 survey by the Department
of Education, 37% of 10th-graders in 2002 spent more than 10 hours on
homework each week. That's not bad; in fact, it's much better than it
used to be (in 1980 a mere 7% of kids did that much work at home each
week). But Chinese students, according to a 2006 report by the Asia
Society, spend twice as many hours doing homework as do their U.S.
peers.
Part of the reason is family involvement. Consider Liu, the
7-year-old who had to leave the birthday party to go to Saturday
school. Both his parents work, so when he goes home each day, his
grandparents are there to greet him and put him through his
after-school paces. His mother says simply, "This is normal. All his
classmates work like this after school."
See pictures of Beijing.
Read "Can China Save the World?"
Yes, big corporate employers in China will tell you
the best students coming out of U.S. universities are just as bright as
and, generally speaking, far more creative than their counterparts from
China's élite universities. But the big hump in the bell curve — the
majority of the school-age population — matters a lot for the economic
health of countries. Simply put, the more smart, well-educated people
there are — of the sort that hard work creates — the more economies
(and companies) benefit. Remember what venture capitalist Tam said
about China and the electric-vehicle industry. A single, relatively new
company working on developing an electric-car battery — BYD Co. —
employs an astounding 10,000 engineers.
China, critics will point out, doesn't produce (at least not
yet) many Nobel Prize winners. But don't think the basic educational
competence of the workforce isn't a key factor in its having become the
manufacturing workshop of the world. It isn't just about cheap labor;
it's about smart labor. "Whether it's line workers or engineers, we're
finding the candlepower of our employees here as good as or better than
anywhere in the world," says Nick Reilly, a top executive at General
Motors in Shanghai. "It all starts with the emphasis families put on
the importance of education. That puts pressure on the government to
deliver a decent system." (See pictures of the best-selling cars in China.)
And
the Chinese government responds to that pressure in some intriguing
ways. It insists that primary-school teachers in math and science have
degrees in those subjects. (Less than half of eighth-grade math
teachers in the U.S. majored in math.) There is a "master teacher"
program nationwide that provides mentoring for younger teachers. Zhang
Dianzhou, a professor emeritus of mathematics at East China Normal
University in Shanghai who co-chaired a committee charged with
redesigning high school mathematics programs across the country, says
recent changes have begun to reflect more of a "real-world emphasis."
Computer-science courses, for example, have been integrated into the
math curriculum for high school students. And China is placing even
more importance on teaching young students English and other foreign
languages. If you think China's willingness to constantly fine-tune its
educational system is not going to have much of an impact 20 years from
now, there's a 7-year-old boy in Shanghai who'd be happy to discuss the
issue with you. In English.
3. Look After the Elderly
it's hard to imagine two
societies that deal with their elderly as differently as the U.S. and
China. And I can vouch for that firsthand. My wife Junling is a
Shanghai native, and last month for the first time we visited my father
at a nursing home in the U.S. She was shaken by the experience and
later told me, "You know, in China, it's a great shame to put a parent
into a nursing home." In China the social contract has been
straightforward for centuries: parents raise children; then the
children care for the parents as they reach their dotage. When, for
example, real estate developer Jiang Xiao Li and his wife recently
bought a new, larger apartment in Shanghai, they did so in part because
they know that in a few years, his parents will move in with them.
Jiang's parents will help take care of Jiang's daughter, and as they
age, Jiang and his wife will help take care of them. As China slowly
develops a better-funded and more reliable social-security system for
retirees — which it has begun — the economic necessity of generations
living together will diminish a bit. But no one believes that as China
gets richer, the cultural norm will shift too significantly. (See 10 health care–reform ads.)
To
a degree, of course, three generations living under one roof has long
happened in the U.S., but in the 20th century, America became a
particularly mobile and rootless society. It is hard to care for one's
parents when they live three time zones away.
Home care for the elderly will most likely make a comeback in
the U.S. out of sheer economic necessity, however. The number of
elderly Americans will soar from 38.6 million in 2007 to 71.5 million
in 2030. But, says Arnold Eppel, who recently retired as head of the
department of aging in Baltimore County, Maryland, "There won't be
enough spots for them" in the country's overwhelmed nursing-home
system. Appreciating the magnitude of the coming crisis, the U.S.
government has begun to respond. Two new initiatives — Nursing Home
Diversion and Money Follows the Person — expand subsidies for home
elder care, and the Veterans Health Administration has just put in
effect its own similar initiative. "The whole trend will be into home
care, because nursing homes are too expensive," Eppel says, noting that
nursing-home care in the U.S. costs about $85,000 annually per
resident.
In China, senior-care costs are, for the most part, borne by
families. For millions of poor Chinese, that's a burden as well as a
responsibility, and it unquestionably skews both spending and saving
patterns in ways that China needs to change (see Save More, below). For
middle-class and rich Chinese, those costs are a more manageable
responsibility but one that nonetheless ripples through their economic
decision-making. Still, there are benefits that balance the financial
hardship: grandparents tutor young children while Mom and Dad work;
they acculturate the youngest generation to the values of family and
nation; they provide a sense of cultural continuity that helps bind a
society. China needs to make obvious changes to its elder-care system
as it becomes a wealthier society, but as millions of U.S. families
make the brutal decision about whether to send aging parents into
nursing homes, a bigger dose of the Chinese ethos may well be returning
to America.
See how to prevent illness at any age.
See pictures of Shanghai.
4. Save More
You've now heard it so many times, you can probably repeat it in your
sleep. President Obama will no doubt make the point publicly when he
gets to Beijing: the Chinese need to spend more; they need to consume
more; they need — believe it or not — to become more like Americans,
for the sake of the global economy.
And it's all true. But the other side of that equation is that
the U.S. needs to save more. For the moment, American households
actually are doing so. After the personal-savings rate dipped to zero
in 2005, the shock of the economic crisis last year prompted people to
snap shut their wallets. Now that it's pouring, in other words,
American households have decided to save for a rainy day. The savings
rate is currently about 4% and has gone as high as 6% this year. (See TIME's photo-essay "A New Look at Old Shanghai.")
In
China, the household-savings rate exceeds 20%. It is partly for
straightforward policy reasons. As we've seen, wage earners are
expected to care for not only their children but also their aging
parents. And there is, to date, only the flimsiest of publicly funded
health care and pension systems, which increases incentives for
individuals to save while they are working. But China, like many other
East Asian countries, is a society that has esteemed personal financial
prudence for centuries. There is no chance that will change anytime
soon, even if the government creates a better social safety net and
successfully encourages greater consumer spending.
Why does the U.S. need to learn a little frugality? Because
healthy savings rates, including government and business savings, are
one of the surest indicators of a country's long-term financial health.
High savings lead, over time, to increased investment, which in turn
generates productivity gains, innovation and job growth. In short,
savings are the seed corn of a good economic harvest.
The U.S. government thus needs to get in on the act as well. By
running perennial deficits, it is dis-saving, even as households save
more. Peter Orszag, Obama's Budget Director, recently called the U.S.
budget deficits unsustainable — this year's is $1.4 trillion — and he's
right. To date, the U.S. has seemed unable to have what Indiana
Governor Mitch Daniels has called an "adult conversation" about the
consequences of spending so much more than is taken in. That needs to
change. And though Hu Jintao and the rest of the Chinese leadership
aren't inclined to lecture visiting Presidents, he might gently hint
that Beijing is getting a little nervous about the value of the dollar
— which has fallen 15% since March, in large part because of increasing
fears that America's debt load is becoming unmanageable. (See TIME's special report "Obama After a Year: What's Changed, and What Hasn't.")
That's
what happens when you're the world's biggest creditor: you get to drop
hints like that, which would be enough by themselves to create
international economic havoc if they were ever leaked. (Every time any
official in Beijing muses publicly about seeking an alternative to the
U.S. dollar for the $2.1 trillion China holds in reserve, currency
traders have a heart attack.) If Americans became a bit more like the
Chinese — if they saved more and spent less, consistently over time —
they wouldn't have to worry about all that.
5. Look over the Horizon
The energy that so many outsiders feel when they are in China and that
President Obama may see when he is there comes not just from the
frenetic activity that is visible everywhere. It comes also from a
sense that it's harnessed to something bigger. The government isn't
frantically building all this infrastructure just to create make-work
jobs. And kids aren't studying themselves sleepless because it's a lot
of fun. A few years ago, I interviewed Zhang Xin, a young man from a
deeply poor agricultural province in central China. His parents were
wheat farmers and lived in a tiny one-room house next to the fields. He
had graduated from Tsinghua University — China's MIT — and gotten a job
as a software engineer at Huawei, the Cisco of China. His success,
Zhang told me one day, had changed his family forever. None of his
descendants would "ever work in the wheat fields again. Not my
children. Not their children. That life is over." (And neither would
his parents. They moved to prosperous Shenzhen, just north of Hong
Kong, soon after he started his new job.)
Multiply that young man's story by millions, and you get a
sense of what a forward-looking country this once very backward society
has become. A smart American who lived in China for years and who wants
to avoid being identified publicly (perhaps because he'd be labeled a
"panda hugger," the timeworn epithet tossed at anyone who has anything
good to say about China) puts it this way: "China is striving to become
what it has not yet become. It is upwardly mobile, consciously,
avowedly and — as its track record continues to strengthen — proudly
so."
Proudly so, because as Zhang understood, hard work today means
a much better life decades from now for those who will inherit what he
helped create. And if that sounds familiar to Americans — marooned, for
the moment, in the deepest recession in 26 years — it should.
===
China's schools are adding more creative and practical topics to their notoriously rigid curriculum.
China is experimenting with eco-friendly technologies, from electric
cars to urban wind turbines like this one in southeastern Shanghai.
Masons at work in front of the China Pavilion at the future site of Expo 2010 in Shanghai.
Most Chinese seniors live with and are cared for by their relatives.
See pictures of China's electronic waste village.
Find this article at:http://www.time.com/time/world/article/0,8599,1938671,00.html
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