CHINA: FROM GLOBAL PAWN TO GLOBAL PLAYER

CHINA: FROM GLOBAL PAWN TO GLOBAL PLAYER Harmony versus rivalry: THE challenge of the 21st Century By Professor Jean-Pierre Lehmann (September, 2007)...
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CHINA: FROM GLOBAL PAWN TO GLOBAL PLAYER Harmony versus rivalry: THE challenge of the 21st Century

By Professor Jean-Pierre Lehmann (September, 2007)

IMD Chemin de Bellerive 23 PO Box 915, CH-1001 Lausanne Switzerland Tel: +41 21 618 01 11 Fax: +41 21 618 07 07 [email protected] http://www.imd.ch

CHINA: FROM GLOBAL PAWN TO GLOBAL PLAYER | Harmony versus rivalry: THE challenge of the 21st Century

Recently I was asked to chair a session on the theme “China and the World” at the Inaugural Meeting of the New Champions convened by the World Economic Forum in Dalian. That subject, China and the world, the world and China, will be a dominant theme and challenge through the next few decades of the 21st century.

Look at the past to understand the present In fact, there are few better venues one can think of than Dalian to illustrate the remarkable changes in the “China and the world” paradigm. Dalian is highly strategically situated on the Liaodong Peninsula, in Manchuria, now referred to as North-east China. Included in the Dalian administrative district is the port of Lüshunkou at the very tip of the peninsula, better known in Western history books as Port Arthur.

A battlefield for the "great powers" In 1894-95 occurred the first of three Sino-Japanese wars. Since the beginning of the 19th century, the great Chinese civilization and empire was in full decline and battered by incessant civil and foreign wars. Japan emerged easily victorious and demanded Taiwan and the Liaodong Peninsula from China (Taiwan remained a Japanese colony until Japan’s defeat in 1945). The problem was that, for geopolitical and economic reasons, Tsarist Russia also coveted the peninsula. The port adjacent to Dalian is the only ice-free port in that region, which would serve perfectly as the terminus of the trans-Siberian railway. So Russia was deeply opposed to Japan’s territorial ambitions. Germany, which was keen to see Russia engaged in eastern expansion, therefore diminishing pressure on Berlin in Europe, offered to support St Petersburg. France, which was keen to build on its alliance with Russia to try to contain Germany, could not possibly let Russia and Germany have a fling: a ménage à trois was de rigueur! Hence these three powers ganged up on Japan, in what was known as the “Triple Intervention”, forcing Tokyo to give up its claim to the Liaodong Peninsula.

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CHINA: FROM GLOBAL PAWN TO GLOBAL PLAYER | Harmony versus rivalry: THE challenge of the 21st Century

Shortly afterwards Russia occupied the peninsula and established Port Arthur. In that part of North-east Asia, so crucial to Tokyo’s imperial ambitions, apart from Manchuria, the other great prize sought by Japan was Korea. Tokyo proposed to allow St Petersburg a free reign in Manchuria, and in exchange the Russians would let the Japanese take over Korea. The Russians refused, as a result of which the Japanese went to war with Russia in 1904 by attacking and seizing Port Arthur. It was one of the bloodiest battles ever, inaugurating what was going to be a very bloody century. Japan won the war, kicked the Russians out of the Liaodong Peninsula, in 1910 colonized Korea, and from 1931 occupied the whole of Manchuria which became the puppet state of Manchukuo.

Pawn on the international geopolitical chessboard By the early 20th century that erstwhile great old Chinese empire had become nothing more than an impotent pawn on the international geopolitical chessboard. Although China was not colonized per se, as was, for example, most of India, the imperial powers did carve up bits and pieces of the country in what were referred to as exclusive spheres of influence. The result, as Sun Yat-Sen, the nationalist leader of China’s 1911 revolution, claimed, was that China was a “poly-colony” – the victim of an imperialist gang bang. Thus, when Mao Zedong victoriously marched into Beijing in October 1949 he proclaimed the “Liberation” of China and in his first speech stated: “never will China be humiliated again”!

Fast forward to 2007 Humiliation is clearly not a word one associates with China today. The country has already become the world’s global economic locomotive, the underwriter of America’s massive debt, the mover and shaker in markets in Asia, the Middle East, Africa and Latin America, the forthcoming host of the 2008 Olympics in Beijing and the 2010 International Expo in Shanghai. Of course this has not occurred without turbulence. Turbulence has gone from the ridiculous – e.g. the “bra war” between the EU and China in the summer of 2005 – to the much more serious – e.g. the disputes over territory and energy between Japan and China – to the potentially catastrophic: rising Sinophobic protectionism in Washington that many American business speakers at the Dalian meeting warned about. This is a specter that could plunge the world back into the tragic follies of the previous century.

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CHINA: FROM GLOBAL PAWN TO GLOBAL PLAYER | Harmony versus rivalry: THE challenge of the 21st Century

Harmony becomes the key word In the meantime, the Chinese wish to reassure the world – and themselves – that they are not bent on revenge and do not wish to see a repeat performance, albeit with the actors playing quite different roles, of the bloody 20th century. The operative word, prominently displayed in Dalian as in all Chinese cities, is harmony. With the picture of a Stradivarius on huge posters, the accompanying caption urges us all to engage in building a harmonious society – a harmonious global village. Harmony is a profoundly Confucianist concept. Confucius (K’ung-fu-tzu) lived in the 5th century BCE at a time when China was in a state of endemic wars. Confucius preached that cultivating the virtues of benevolence, charity, magnanimity, sincerity, respect, altruism, diligence, kindness and goodness, was an imperative in order to achieve social harmony and peace. For us in the West, reared on Machiavelli, Metternich and Realpolitik, harmony sounds both strange and rather airy-fairy! We believe in the inevitability of conflict and the balance of power. Thus, Thomas Friedman, the renowned peripatetic American pundit, in an article (“Iraq Through China’s Lens”, 12 September, 2007) in the New York Times written from Dalian refers to China as “America’s biggest geopolitical and economic rival”. Between “harmony” and “rivalry”, there is clearly a quite profound dissonance. Why Friedman refers to China as a “rival” rather than a “partner” and of course occasional “competitor”, I am not sure. He is clearly playing to the American Sinophobic protectionist gallery. But this is worrying. To paraphrase a well-known Chinese saying, at this dawn of the 21st century we may be in a situation of “same bed, different dreams: one dream (of harmony), and one nightmare (of rivalry)”.

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CHINA: FROM GLOBAL PAWN TO GLOBAL PLAYER | Harmony versus rivalry: THE challenge of the 21st Century

The rest of the world should accept China's new stance We should take the offer of harmony seriously, probe and explore, no matter how initially flaky it may sound. We in the West must not forget what a terrible hash, to put it mildly, we made of this planet in the 20th century, and which continues today, notably in the invasion of Iraq. Alternative paradigms, concepts and policies are surely well worth pursuing. Rather than saber-rattle à la Friedman, let us give harmony a chance and engage with the Chinese to try to achieve it. It is a pretty daunting task, but the other options are devastating. Concretely we must jointly engage in building a robust global order – order enhances harmony – recognizing the forces and challenges of the 21st century, and a dynamic, inclusive, equitable, open global market economy, in order to try to avoid disorder and conflict. Business leaders have a huge and potentially highly constructive role to play.

Jean-Pierre Lehmann is Professor of International Economy at IMD and Founding Director of The Evian Group. He teaches on the Program for Executive Development (PED), as well as the Building on Talent (BOT), Orchestrating Winning Performance (OWP) and Mastering Technology Enterprise (MTE) programs.

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CHINA: FROM GLOBAL PAWN TO GLOBAL PLAYER | Harmony versus rivalry: THE challenge of the 21st Century

RELATED PROGRAMS

PROGRAM FOR EXECUTIVE DEVELOPMENT - http://www.imd.ch/ped Building Global Leaders - Preparing the global executive of the future Program Directors Martha Maznevski and Allen Morisson - Learn to drive performance in a fast-changing global environment - Discover how to build a better business: gain skills, create networks and inspire others - Reach your leadership objectives with personal coaching - Get ready for IMD's Executive MBA degree

BUILDING ON TALENT - http://www.imd.ch/bot Powering the Next Generation of Managers - Broaden business understanding and improve personal effectiveness of younger talent Program Director Leif Sjöblom - Prepare yourself for higher responsibilities - Acquire the business and leadership knowledge necessary to work across the organization - Apply the new learning in your company and deliver results

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