Denton, Luther  Trey

English

Georgia Southern University: Digital Commons@Georgia Southern

Georgia Southern University Digital Commons@Georgia Southern Business in Savannah Articles Business College Publications 2-2-2011 It’S Best to Be Realistic about China Luther "Trey" Denton Follow this and additional works at: https://digitalcommons.georgiasouthern.edu/savannah Recommended Citation http://coba.georgiasouthern.edu/pdf%20files/2011_02_02_Denton_Realistic_China.pdf This article is brought to you for free and open access by the Business College Publications at Digital Commons@Georgia Southern. It has been accepted for inclusion in Business in Savannah Articles by an authorized administrator of Digital Commons@Georgia Southern. For more information, please contact digitalcommons@georgiasouthern.edu. Business in Savannah | businessinsavannah.com | 912-652-0300 Wednesday, February 2, 2011 | 9BiS EAGLE EXECUTIVE BRIEFINGSThe recent state visit ofChinese President Hu Jintaooffers an opportune time toreflect on the state of businessrelations between the UnitedStates andChina.While thereis much politi-cal capital tobe gainedby demon-izing Chinaand inflatingits economicpotential, thiscourse of action is likely topush China in directions notbeneficial to either the humanrights of Chinese citizens northe strategic interests of theUnited States.It is much more helpful toobserve China realistically, tonote its strengths and weak-nesses and to try to negotiatewith the Chinese on all mat-ters of import in a non-zerosum fashion.China is emerging froman extended era in which theChinese people perceive greathumiliation at the hands offoreigners. As China begins toflex its economic and militarymuscle, it remains extremelysensitive to all perceivedslights, both real and imag-ined.All talk of the “Dangersof a Rising China” (a recentfront page headline from TheEconomist magazine) andstrategic discussion of theneed for “containment” of Chi-nese power only exacerbatewhat David Shambaugh, writ-ing in the New York Times,refers to as China’s “aggrievednationalism.”This sentiment is usedby the Chinese ruling partyto consolidate their power,It’s best to be realistic about ChinaTreyDentonjustify policies that under-mine the rights and freedomsof their citizenry and pushChina toward more aggressiveregional behavior.The upcoming release ofthe remake of the movie RedDawn, in which the UnitedStates is occupied by a combi-nation of Chinese and Russianforces, will not make theChinese feel better about ourrelationship.China has the world’s sec-ond largest economy, trailingonly the United States, and isexpected by many to over-take the U.S. in the next fewdecades. A better indicator ofeconomic power, however, isGDP per capita adjusted forpurchasing power parity.By this measure, accord-ing to theWorld Fact Book,China comes in ranked 128thamong the poor nations ofAlgeria, Turkmenistan, and ElSalvador.Income disparity in Chinais alarming, and while thestandard of living found inthe major cities of Shanghai,Beijing, and Guangzhou mir-rors those encountered in thedeveloped world, a large por-tion of China remains woe-fully poor and undeveloped.The Chinese Ministryof Agriculture recentlyannounced the 2010 urban-rural income gap was the wid-est reported in 32 years. Thisis creating a culture of “havesand have nots” in which hun-dreds of millions are gettingleft behind.The Chinese ecologicalsystem is in trouble. Air andwater pollution are at intoler-able levels. Birth defects,asthma and other health prob-lems are largely unreportedand at epidemic proportions.The vast majority of thepeople live in the same areasthat contain the most produc-tive farmland. The percent ofarable land is now down toless that 15 percent of China’sland area.Rampant pesticide andantibiotic use stimulatesgrowth of supergerms.Humans and farm animalslive in such close proximitythat viruses long thought toinfect only animals are jump-ing to human hosts.Even though China is beingrecognized for its effortsto produce “green” energyrelated products, approxi-mately 70 percent of China’senergy still comes from coal.China is also guzzling oil ata rate that surpasses10 million barrels a day,importing about half of thatamount, with oil imports upalmost 18 percent from theprevious year.Finding reliable sourcesof oil is a Chinese strategicimperative and explains muchof their interest in investing inAfrica and other oil-exportingareas. China has shortfalls inmany other natural resources,too, such as timber, havingto import more than a thirdof its annual consumption ofwood.Corruption in Chinaremains a problem, as is thegeneral business environment.Transparency International,in its annual CorruptionPerceptions Index, ranksChina 78th on the list of leastcorrupt nations, worse thanCuba and Rwanda and tiedwith Colombia.Intellectual propertyprotection is lacking, placingforeign companies who dobusiness in China at constantrisk of corporate theft, whichis a problem for domestic aswell as foreign companies,although rarely discussed.The Index of EconomicFreedom prepared by the Her-itage Foundation ranks Chinaas 135th, mostly unfree, withlist neighbors Haiti, Vietnam,and Cameroon.Speculation in the boom-ing housing market in Chinacombined with a dearth ofcomparable-return invest-ment vehicles has led tomillions of new units withno occupancy and a housingbubble that could explode atany time.Future Chinese economicexpansion will eventually becooled by these and other fac-tors. The double digit annualgrowth rates will eventuallyrecede as China grapples withthese daunting issues.Human rights abuses andeconomic inequities withinthe Chinese domestic marketwill continue to confound U.S.leaders as we make room forthis emerging superpower.China will remain perhapsour most important tradepartner and competitor, yetChina is not invulnerable.We should not exaggerateits threat to U.S. economichegemony.Luther “Trey” Denton is director ofthe Center for Global Business andProfessor of Marketing at GeorgiaSouthern University. You maycontact him at ldenton@georgiasouthern.edu.SIGN UP FOR‘BIS BLAST’With Business inSavannah well into its secondyear, we are expanding thefeatures and services weoffer.One of these is ‘BiS Blast,’a once-a-week businesse-mail newsletter that wewill send out each Mondaymorning about 10 a.m.It will include story titlesfrom the previous week’ssavannahnow.com andExchange in the SavannahMorning News as well asbusiness news and featuresfrom the Associated Press.To sign up, go tobusinessinsavannah.comor savannahnow.com/exchange.

It’S Best to Be Realistic about China

https://digitalcommons.georgiasouthern.edu/cgi/viewcontent.cgi?article=1006&context=savannah

It’S Best to Be Realistic about China

Abstract

Similar works

Full text

Available Versions

Georgia Southern University: Digital Commons@Georgia Southern