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China, Its Growth And The World

As Barry Petersen explains in this Letter from Asia, China is growing, and the world is taking notice.
I'm Barry Petersen and this Letter from Asia comes from Beijing. Sometimes, you get the clear impression that America is, as someone once said, the insecure superpower. One of the things that makes Americans nervous is China's growth on the world state, and with good reason.

According to Ted Plafker, a Beijing Correspondent for The Economist, "They're big, they're moving up and... if things go smoothly for the Chinese, there's no limit to how big they can get and how... far their influence can reach."

Plafker has written a book that says it all - doing business in China. But he thinks business people coming to China may have finally given up on that old myth, "If I could just sell one hamburger to 1.3 billion people."

In fact, the vast majority of Chinese are rural and poor peasants. So, smart American companies are targeting their efforts at the emerging middle class.

Plafker says, "There are 300 million that are there or close to it. That number goes up by the tens of millions all the time. So, the idea is you get in you... create some space for yourself, develop a business and that it grows as... prosperity and standards of living rise and more and more people enter that potential pool of customers. "

The biggest hurdle is often China's uneven legal system where Americans discover it's not what you know, but who you know. "Things don't go by the book all the time if you're in a tangle with someone who... has good backers and... better political connections than the... law won't necessarily go according to the textbook," says Plafker.

Then there is trade; China and Europe have no huge deficit. But America has a deficit of something like 100 billion dollars a year. Why?

According to Plafker, China is selling a lot. " I think it's our voracious demand for... the consumption side. It's not that we're selling too little, it's that we're importing too much. That throws us out of balance," he says.

There is nothing China can do about American buying habits, except happily make and sell us ever more. Perhaps Americans should remember Shakespeare, who had Cassius say to his friend, the fault dear Brutus is not in our stars, but in ourselves.
By Barry Petersen