Tag Archives: china

Book Review: The Coming China Wars

Peter Navarro: The Coming china Wars
Where they will be fought and how they can be won

Why is it that men like to read books about war?
When I was a boy, my favourite books were in sequence “Biggles in Finland”, “The Cannons of Navarone”, “The Lord of the Rings” (an epic war story), etc., etc... However, the more I learned in the army, the less inspired I am by the so-called heroes of the battlefield. The most paradoxical book on war I find “The Art of War” by Sun Tzu (Sunzi), which focusses on identifying conflicts and resolving them without battle. It repeatedly makes the point that war is horrible and counterproductive. Nevertheless, what led me to read the book was the title that allured to some primal male driver to learn the secrets to conquer and win.

Peter Navarro continues in this ancient Chinese tradition to explain in great detail where potential conflicts are likely to arise in the coming years, where China will be involved. Just like Sunzi, (but contrary to the official sub-title printed large on the cover), Navarro suggests way to resolve the issues to avoid war.

The conflict areas are too many to recount, but they range from environmental issues (water scarcity, pollution, land degradation and desertification) to social tension induced by demographics, income distribution and urbanization. Some darker sides include the growing HIV epidemics, international drug trade and counterfeited medication finding its way around the globe.

Navarro has chosen to research the problematic issues one by one, with numerous details and facts, which makes the book very convincing.
However, I think he misses the systemic structural problem in China today – the disfunctional feedback mechanisms in society. Due to the nature of the current political system, information is sometimes hidden behind layers of secrecy and distorted by propaganda.
Democratic societies have the advantage of transparency – many eyes look at issues and feedback mechanisms are in place to identify problematic areas and address them. It often works, but not always, of course.
In centrally controlled regimes, the well-intentioned planners only have access to part of the information and become a bottleneck in the dynamics. Even though they can act with more force and momentum, they are locked down by their relatively small numbers and the time delay in the feedback.

Some of the problems described in the book are related to resource depletion, which can be described by a typical first order differential equation with delay. The longer the delay, the larger the probability of catastrophic failure. One very readable book that describes the dynamics of resource depletion is “Limits to Growth”, by Donnela Meadows, published initially by the Club of Rome, which takes on a global perspective. I am sure that the same type of analysis can be done on China, and quantify the detrimental effect of the delay and distortion of the available information.

This year, the prices on grocery soar, to which the party officials react by blaming speculators. I doubt that is the root cause.

By knowing what is going on and increasing transparency, I think China will be able to tackle most of the issues raised by Navarro. )They could start by removing the block on the PeterNavarro.com website.) But not all can be handled by China alone. For the future of our planet it seems again that we have to collaborate and act on information!

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Book review: … business in China

How to Manage a Successful Business in China
by Johan Björksten and Anders Hägglund

Despite the pretentious title, this book is a well-researched low-key introduction to one way of building businesses in mainland China. Maybe it is the Swedish-Chinese way. Both the authors have first hand experience from what they are talking about, which they generously share through examples and anecdotes. Both of them have been very successful in building profitable organizations, one from scratch and one as a dependence of a multinational corporation.

One of the authors is a renowned expert on Chinese, and teaching Chinese to foreigners. Therefore, it comes as no surprise that one of the main recommendations is to learn Chinese if you want to be successful in China. Still today, most foreigners coming to work in China do not learn more than a handful phrases and a most basic vocabulary. Chinese is considered impossible to learn. On the other hand, imagine going to the US without speaking English – what is the probability of establishing a successful business? It is almost ridiculous.
I am sure that Chinese is a “learnable skill”.

The most startling part of the book talks about guanxi – “connections”. The authors demystify this concept and show the equivalent concepts in the Western business tradition. Sometimes the cultural differences are smaller than we imagine.

Another myth of the one-billion-customer-dream that is debunked by the authors is that China is one homogeneous market. It is not. The vast area, the poor communications and logistics and the cultural differences makes China a difficult terrain to conquer. In many ways, China is like the European Union, with the same legal basis but different consumer preferences and with bureaucratic and practical problems for each sub-market to penetrate. Shanghai is as different from Kashgar as Paris is different from Vilnius.

The book is written in a classic schoolbook manner, which makes it slow to read and slightly boring at times. Nevertheless, it is a good counterweight to the abundant extatic China Fever literature.

After a Beijing brunch with one of the authors, I start to get the feeling that China is not so easy to describe in a book because of all the paradoxes. Speed is one example; some things are extremely fast in China, but other things are excruciatingly slow. They can build a house in a week, but it can take months to get the right stamp. How can I ever “understand” this? Maybe it is like quantum physics – you can never understand, only “get used to” how things work.

China is a worthy challenge!