U.S. Treasury Secretary Tim Geithner is speaking this morning regarding China’s currency and the idea that it needs to strengthen. As many of my blog readers know, on behalf of CGSM, I have made a concerted effort to open business relationships with Chinese companies both in the U.S. and in China.
Along with two members of my team I came back last Saturday from a meeting with a prospective Chinese client’s U.S. team in California. We are working out an agreement with them to help them gain awareness and engagement with American entrepreneurs. The people we have met are really smart and have a good understanding of the American market.
Back to Mr. Geithner whose comments centered on the Renminbi (RNB) or Yuan. The first thing I have come to learn in studying the Chinese people, economy and language is:
1) The Chinese do not respond well to ultimatums. Yes the Chinese government is well aware that its policy of not allowing its currency to float offers their growing economy a chance to blossom faster than if it did not. Chinese President Hu Jintao is scheduled to come to the U.S. this week to meet with President Obama for the last time as Mr. Hu is near the end of his term. The new Chinese stealth fighter plane test this week had U.S. Defense Secretary Robert Gates meeting with President Hu – http://nyti.ms/hfcudT . It was a clever strategy for Mr. Gates to visit China since Mr. Hu would have to see him in advance of his visit to the U.S. since a snub would not be good. This is a better tactic than ultimatums.
2) The Chinese government is socialist, the people are not. The expanding Chinese economy is not completely attributable to Chinese protectionism. Chinese people are all about business and making money and they are willing to work extremely hard for less (at least for now) than other first world nations.
3) There are a large number of huge Chinese companies that Americans have never heard of. Alibaba.com actually may ring a bell to some but my guess is less than 1% of Americans have any idea of what this U.S. $ 10 billion company does. Alibaba.com Taobao site is gaining market share quickly and Alibaba.com has visions of being the Wal-mart of China to some. Ever heard of Sinopec? China Mobile Ltd.?, How about Baidu, Huawei or BYD? If you haven’t, believe me, you will soon.
4) Learning Mandarin is a good idea but most Chinese business people under 35 speak English. They have been studying it for years and some companies (Alibaba.com for example) conduct meetings in China (their HQ is in Huangzhou) in English. I have been learning Mandarin Chinese for nearly 4 months and am fascinated by the language (very different) but also by learning about their culture.
5) China will struggle with social programs as it expands its economy. One of my Chinese associates told me that while she is not exactly in love with her job as a COO of a Chinese social media company, she has to work because there is no support system for her parents or family such as social security or unemployment. They rely on her and she feels responsible to continue to help them. This will become a much bigger issue for China, its people and its government in both the near and far future.
I get the feeling that Americans have a certain fear of China. And let’s face it China has more than 1.3 billion people and that in and of itself is intimidating. But keep in mind that they put their pants on one leg at a time just as everyone else does. China has problems and issues to go along with its successes, and both go hand in hand with China’s emergence as a world power – or dare I say “the” world power in the 21st century.
And that might be the thing that bothers Americans most. The notion that the 21st century is not the American Century. That was the 20th century. We now hold the position of not being the leader in the world economy. It is understandably not easy to get used to that notion.
At least it is not easy for me.