BOOK REVIEW Eastern promise The Chinese Dream: The Rise of the World's Largest Middle Class and What It Means
to You by Helen Wang
Reviewed by Benjamin A Shobert
Over the next decade, few issues may prove more important for the world's peace
and stability than the development of China's middle class. This group's
evolution will weigh heavily on whether China's economy can make the transition
from export-led growth to domestic consumption.
In addition, as this group's economic needs become increasingly satisfied, they
are likely to look for a greater voice within their political institutions.
Such an awakening could prove to be essential for China's current one-party
rule to be broken and for long-standing restrictions on dissent to be
discarded. Cumulatively, these potential changes - all brought about by the
growth of China's middle class - will prove crucial to calming fears in America
and Europe about China's ongoing growth.
This is not an entirely new aspiration: in his seminal book 400 Million
Customers which examined the promising China market of the 1920's, Carl
Crow wrote:
A very large proportion of the foreigners living in China
are, like myself, primarily interested in selling goods to as many as possible
of China's 400 million customers ... The problems are the same as those we
might attempt to solve at home, with added complications and difficulties ...
The work is always interesting and, in spite of our years of disillusionment,
all of us secretly cherish the thought that a reasonable number of the 400
million may buy our goods next year.
Change
"400 million" to "1.3 billion" and Crow's hopes in 1937 are paralleled by those
of many an American businessman today.
A well-rounded evaluation of why Crow's "400 million customers" did not reveal
themselves has to be concerned with all that happened inside of China since
then: the country's disastrous civil war, the futile political revolution that
left it mired in poverty, and its gradual re-entry onto the world's stage.
When viewed in this light, the most insightful voice that can accurately
capture the China of today - its promise and peril - needs have a sense of the
country's past, but an equally vibrant vision for its future. Thankfully, Helen
Wang's new book The Chinese Dream: The Rise of the World's Largest Middle Class
and What It Means to You, provides such a balanced perspective.
Three main themes present themselves in Wang's book: what her personal story
has to offer Americans in terms of what they may not understand about China's
people; the potential for China's growing middle class to unite the US and
China instead of dividing them; and what it takes to successfully sell into
China's burgeoning middle class.
As part of Wang's book launch, she agreed to spend time with Asia Times Online
and discuss her book in more detail.
Benjamin Shobert: It is inevitable that, in a book like this,
your own personal story comes through. What about your story is most important
for Americans to understand, as it relates to your analysis of China's middle
class?
Helen Wang: Well, I would have to say that it is because I am a
China native but an American citizen that I understand both worlds better than
most. I studied English in college in China, and came to the United States in
1989 to pursue my graduate studies. People in China are more willing to talk to
me than they are with foreigners. I understand them intrinsically, a lot of
things that are unspoken, that are not understood by Westerners.
Shobert: Since you first came to the US, how would you
characterize the changes in how China perceives the US and vice versa?
Wang: Twenty years ago, when I first came to the US, China was
just opening. Chinese had very little information on the world. After all,
during the Cold War we were adversaries. Once China opened, we began to see
that the world was very different than we had been raised to think. And once we
could, we all wanted to go to America. I viewed America as a place for the
impossible, a romantic version of what the world was not - a dream come true.
Even now, young people in China still look up to the US, but that has begun to
change over the last couple of years. Largely because of the financial crisis,
some say: "See, maybe they don't know what they are doing." Also, as a Chinese
living in America, I felt that up until about two or three years ago, American
news coming out of China was very biased - not very right on - but that has
changed recently. I feel the coverage now by American media outlets is actually
quite fair and balanced on China. I think a lot of American media has done a
better job recently of focusing on getting first-hand information in China,
less surface stories, and less American-centric.
Shobert: Do you ever feel that American frustrations with China
show unfounded fears on our parts? If so, what would you say to an American
concerned about China's rise that might help him see China as an opportunity
versus a threat?
Wang: A lot of America's concerns over China are not realistic.
China is not taking over the world. Those fears are largely untrue. Most fear
is due to a lack of understanding by Americans of China - and that is true of
China's understanding of Americans as well. On one hand, Chinese think they are
always being bullied by the US, but on the other, Chinese have a growing
confidence about their role. A lot of fear from Americans is the result of
people who have never been to China. The two countries are so intertwined that
both must continue to learn from one another. I really encourage people to
visit China - travel the country and get to know its people. I was on a radio
show recently and a small manufacturer of leather goods in the Midwest called
in to talk about China. I encouraged him to see China as an opportunity - I
told him to market his products around the American cowboy - Chinese would love
that.
Shobert: In your book, you talk about "the Chinese dream". What
is the Chinese dream, and how is it the same and/or different from the American
dream?
Wang: When I left China twenty years ago, there was no Chinese
dream. But now there is: now people in China can start a business, they can own
homes, they can drive new cars, and they can send their children to college. In
many ways, Chinese see how Americans live and they want more of the same thing.
The difference is that Chinese are very much focused on their own economics -
they feel that as long as they stay out of politics they can have a good life.
Another difference, I think, is that I believe the American Dream is more than
financial success. It's also about reaching one's full potential as an
individual. In China, individualism still has a negative connotation, as in
other Asian countries. I like to share the story of when I was first in the US.
I had an important decision to make, and asked my American boyfriend what he
thought. He said "you should make this decision based on what is best for you."
I was shocked. In China, we make our decisions taking other people's interests,
such as family's and friends', into consideration. I would also say that, if
the American dream is to work hard and get ahead, the Chinese dream is to study
hard and get ahead. The Chinese worship education, but to the point of
rigidity.
Shobert: Your conversation with Curtis Chin (p. 47) provides an
interesting insight into the generational difference in China. (From the book:
"my parents were brought up to believe in sacrificing for the country. But I
want to focus on my life.") Can you expand on what that illuminates about the
motives of China's growing middle class?
Wang: The younger generation is definitely becoming more
individualistic. Some young people I met in China told me that they want to
focus on their life and not fight for a cause. This generation saw their
parents sacrificing for nothing and they realize that they want to focus on
their economic well-being and stay out of politics.
After Tiananmen Square, the Chinese government made a contract with the people:
they would develop the economy if the people would leave politics alone, then
everyone would be OK. People had seen the government come down on them and they
saw that they had no chance. The people decided to focus on the economy, get a
better life, and the government delivered. You have to give it to the
government - they have done what they promised. A lot of the Chinese middle
class approve of what the government has done. I do believe that will change
over time and they will want more of a voice in politics.
Shobert: When do you think that will change?
Wang: There are growing voices of political reform - those that
want to separate the party from the governance body, a better constitution,
things like that. I think the Chinese will eventually move more to a democracy,
but it will be a form of democracy that will be different than what Americans
understand as democratic government. The Chinese government knows that unless
they continue to open up and become more democratic, they will not be able to
keep up with the pace of economic growths and the people will not be happy.
Shobert: Can you expand on what you mean by a "form of democracy
that will be different than what Americans understand as democratic
government"?
Wang: In the US you have two major parties and you elect
governors, representatives and presidents. I think in China democracy will be
more like what you see in Northern Europe - what some call socialist democracy.
There will be elections, but the people who run for office will be what we call
elites. For China to have a true opposition party will take some time, but I
believe it will happen. The Chinese have studied the Western system and they
see a problem with the US system and its partisanship. They see that in the US,
politicians don't try to do something good for the country, but focus on
defeating their political opponents.
My hunch is China's government will be very different from Americas: China is
very pro-elite and the Confucian hierarchy will always be there. Until China's
middle class becomes the majority, these things may not change, and it could
take another twenty years before the middle class is the majority. Today, the
majority of Chinese are still peasants and not well educated, and until China
can change this, a democracy will not flourish in China. I don't think China
will become a superpower because of these things, and probably the country
doesn't want to be in that role anyway. China wants to focus on its economy. I
just don't see China wanting to take charge of the world.
Shobert: In your book, you talk at length about the role of
Chinese consumers and their emphasis on being status conscious. Does that mean
you have to be a luxury brand to be successful in China?
Wang: Not at all. If you understand the Chinese mentality of
status consciousness you know they want to appear good to their peers. In the
US, Pizza Hut has a certain brand reputation, but in China, Pizza Hut is
positioned as trendy, as chic. The interiors of the restaurants are almost
designed to make the chain look like a fusion restaurant - they don't have the
mass-market look or feel. Ramada Hotels is another example: in the US it is a
budget hotel, but in China it is an affordable but quite hot hotel - for the
Chinese it is positioned as a luxury.
China is definitely an opportunity for companies to reposition their brands.
Companies like GM have done a good job of listening to their Chinese customers.
Because labor in China is cheap, many Chinese who can afford a GM Buick can
also have a chauffeur. So GM made sure to have the Buick keep a lot of space
for people in the back seat. This also is important because Chinese like to
drive their parents around town on the weekends, and the spacious back seats
are a way of showing honor and success to their parents. Obviously, for
companies like GM and Ramada, being in a market with such a growing middle
class is very important, and for GM in particular, success is also achieved by
truly listening to customers' needs.
Shobert: One last question about the role of China's middle class
and political reform. Americans have historically justified working with China
through belief that the country would ultimately democratize. You suggest that
China's path might be slightly different from what Americans anticipate. But in
your book you briefly mention a regression in political liberties that you
sensed in 2009. Can you elaborate on this?
Wang: Chinese politics have tightened a bit since the Olympics.
In part, this is because Chinese hardliners in the party started to see side
effects in the people that they did not like - they saw the people becoming
very materialistic, and serious moral decay in society. They wanted to go back
to the socialist system, and at the same time, the Chinese government's fears
over social instability and chaos grew. The Chinese government may also think
they can have more control now because they have a much better reputation than
they did twenty years ago - they have done a good job - and they feel they need
to maintain a high level of control in order to continue doing what they have
done. I would say that they understand the need for political reform - many
people told me that democracy is an unstoppable trend. I think if Americans had
a better understanding of where China is coming from over the last one hundred
years - how chaotic it was - people in the US would have a better appreciation
of China's politics. Sun Yat-sen wanted to build a democracy in China one
hundred years ago, but the country was not ready. It's not just the government.
The people also fear chaos, and some told me that they would rather have a
corrupt government than another civil war.
Wang's book argues that China's middle class is essential to three things:
China's economic well-being, China's political liberalization, and America's
economic well-being. A fourth may be implicit: that successfully engaging with,
and profiting by, the explosive growth of China's middle class may be a
necessary reminder to Americans of what we have lost - not in economic terms,
but the vision of a better future.
As an American, it is all but impossible to put Wang's book down and not feel a
slight pang over the belief China's people have of what their tomorrow will be
like. In a moment where Americans feel the weight of their falling living
standards so heavily, of mortgages and government programs that feel more like
burdens than blessings, many have begun to question whether the American dream
will ever again be attainable. China's middle class reminds us that at times
hope, drive and determination are all we really ever have, and all we truly
need.
The Chinese Dream: The Rise of the World's Largest Middle Class and What It
Means to You by Helen Wang. Bestseller Press (November 10, 2010).
ISBN-10: 1452898049. Price US$16.95, 244 pages
Benjamin A Shobert is the managing director of Teleos Inc
(www.teleos-inc.com), a consulting firm dedicated to helping Asian businesses
bring innovative technologies into the North American market.
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Change
"400 million" to "1.3 billion" and Crow's hopes in 1937 are paralleled by those
of many an American businessman today.
