China’s leaders will continue to be major advocates of globalization. It offers them the tools through which their country’s economy and businesses can grow, through which they can extend their reach and influence worldwide, and most of all, through which they can grow a prosperous and thus politically stable state.
They know this path will inherently involve a long, hard struggle, in which many Chinese business and political leaders will gradually acquire the skills and knowledge, especially the soft-power skills, that they need to operate globally. But beyond this lies a greater agenda. China’s leaders know that economic value in the twenty-first century will be created and distributed from knowledge accessed via globalized networks of communications, technology, and investment. Their ultimate goal therefore is the creation of a knowledge-based economy.
This will require balancing the economy’s needs for openness and integration with their own desires to retain political and social control. In this, they will seek to set limits on the country’s engagement with the outside world. Certainly they don’t see themselves as “surrendering” to the forces of globalization. They will not open China’s banking system or stock markets to any major degree of foreign participation. While they have lowered the obstacles to business both at China’s borders and within them, along the way introducing the “flattening” forces of instant connection, and with them both instant communication and near-instant competition, China is not a flat or borderless country. Nor will it become one.
So far, through their openness to the world, China’s leaders have learned that they can increase their own ability to manage their destiny.
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They have proven capable, as we saw in the last chapter, of shaping and guiding domestic public opinion. Thanks to China’s scale and increasing strength, they also believe they will have a growing ability to project their own presence on the rest of the world.
International companies should be excited by the opportunities that a one world with an active and powerful China offers them. But they must always bear in mind the fact that Chinese leaders have their own agenda. However free flowing the connections and flows of goods, information, investment, and people may appear, these are all ultimately restricted. Although many multinationals will tie their future to China, and many Chinese companies will tie their futures to the rest of the world, there will remain limits on the ultimate degree of integration. Conducting business in China and with Chinese companies will remain local in its operations and interactions, and though integrated to an unprecedented degree, it will always be subject to national considerations.
The most successful one world companies will be those that negotiate the multilevel intricacies of relationships with officials, value- chain partners, and customers, then integrate these elements into a global framework. Bringing these complexities into coherent focus is the foundation of any China strategy.
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CHAPTER 6