China's Rise

Kavya Shivashankar, 13, of Olathe, Kansas, wins the finals of the Scripps National Spelling Bee, in Washington, on Thursday, May 28, 2009. In the background her parents, Sandy Shivashankar, left, and Mirle Shivashankar celebrate. (AP Photo/Jacquelyn Martin) AP Photo/Jacquelyn Martin

The night skyline in Shanghai tells the story of modern China. The business of the country is business -- a global mix of companies in on the economic boom.

And some of the faces of China's businesses today can be seen in entrepreneurs such as Scott Minoy and Sheldon Habigger -- Americans who run a successful restaurant in Shanghai; an architect from Chicago whose business is thriving there; and two Chinese women educated in the United States, who went back to their home to seek fortune.

From the morning rush hour to the bustling nightlife, Shanghai epitomizes China's burst toward First World status.

"They want to raise their standard of living so that it meets western standards for a middle class society," says Ken Lieberthal, an expert on the development in China. "They think all of that will raise their stature in the world a great deal. After all, they have more than 20 percent of the world's population."

The economy is the engine driving China's rise toward becoming the next superpower. But the government's soaring ambitions are evident in other areas as well. China has recently launched a man into space. It's building the world's largest dam, the Three Gorges. Ground has broken in Shanghai for the world's tallest building. And everything is gearing up toward China's great coming out party at the 2008 Beijing Olympics.

Habigger had lived in China for five years when he met Minoy, and together they decided that Shanghai was ready for a restaurant serving healthy western food with some Chinese flavors. Element Fresh is their first venture, and they plan to open more and franchise the concept.

"We're participating in social change. We're participating in economic change. We're helping define some of those changes … those rules that hopefully will be here 50 years from now," says Habigger.

Minoy and Habigger are not the only ones optimistic about the future. Construction is everywhere in Shanghai. Architect Ben Wood already had a successful practice in Chicago when he came to Shanghai in 1998 to design one project: the Xin Tian Di nightlife district.

Five years later he has a 20-person office in the city. And Wood says work will keep him busy for the next 10 years.

"Anytime you've done the biggest project you think you're ever going to do in your life, they offer you yet another bigger one," says Wood. "I don't know how long that can keep up, frankly, but right now it's on fire."

Jing Chen and Sharon Liang got their graduate degrees in the United States – they even had high paying jobs there. But they decided the real future was back home in Beijing, where they've started their own mortgage lending company.

"It's definitely more exciting in China because you just don't' know what you can accomplish in the end," says Chen. "You can be anybody."

As China grows, many Americans see that as a threat. Some say: "They're taking our jobs with all their low-cost labor." But economists answer that America has to keep creating new, higher-skill jobs rather than compete with China on low-skill work.

"We shouldn't, in the United States, want to compete with people whose salaries are $1,000 a year," says economist Nicholas Lardy. "We have to keep moving up."

There is another fear in America: The booming Chinese economy will fuel their military, which loom as a threat to the United States.

Ken Lieberthal says China won't be a military threat for many years.

"There's no question, but that they have to make choices between throwing a lot of money at the military or fundamentally focusing on economic development," says Lieberthal. "They have clearly chosen to focus on economic development within that mix."

For all the optimism about China's economic future, the country of 1.3 billion people has enormous problems as well. Most of the people live in rural poverty. In the big cities, air pollution is very bad. And traffic problems will only get worse as China's middle class buys more cars.

The Three Gorges dam is being built to stem enormous problems with flooding and lack of rural electricity.

And one great issue looms over China's future: The prospect of a battle over Taiwan's independence. The Chinese military has regular war games to prepare for that possibility, and the government has said it is prepared to go to war and sacrifice everything -- including the Olympics and the economic boom -- if Taiwan continues to push to be a separate country.

"This is a society in, almost, unbelievably rapid and disruptive change. [It] is growing very rapidly, but it is in many ways walking a tightrope," says Lieberthal.

Even the successful business people in China say nothing comes easy in the country where hidebound communist bureaucracy still rules.

"You go to one thing and you think you can do it and two days later another official says you can't," says entrepreneur Minoy.

So, for all the boom times in China, it is a country of paradoxes. The country has unlimited potential for the future, but it faces a long road ahead to overcome the past.
  • Rome Neal

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