Home ConsumerCulture What can be learned from China? Long-term thinking and the ability to adapt is the answer

What can be learned from China? Long-term thinking and the ability to adapt is the answer

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Author Hugh Peyman explains that long-term thinking and the ability to adapt to change has helped China stay ahead of the curve

Some five years ago, in London, I was asked how China had managed to sustain such high long-term growth and transformation. Frankly, I was stumped. I have spent over four decades in Asia, the last 16 years living in China, and no one had ever asked me that question.

As an investment adviser, with the perspective of a development economist, my life seems to have been an endless search for answers to the question of will this or that factor – debt, ghost cities or the middle-income trap among them – cause China’s collapse or at least the oft-feared hard landing. The best reply I could give was that it was not communism, after all, neither the Soviet Union nor North Korea proved sustainable models.

Five years later my answer to the question is that China understands how to manage change. Can it last? Yes, it can, but only if China continues to change.

What distinguishes China, which or the fourth time in its history is rising to become the world’s largest economy, is that it has developed a process to manage change, proven over two millennia. This is not merely about policy but critically is about how to make policy effective. It has identified what is needed from goals, means and people to create and implement successful policy. China’s framework comes from its traditional philosophy that has been shaped heavily by its history, especially the hundreds of years of almost non-stop war that plagued China over two millennia ago. China has experienced eight of the world’s 12 deadliest wars, creating much raw material for Chinese thinking.

What distinguishes China is that it has developed a process to manage change

China’s Change: The Greatest Show on Earth is not a claim for Chinese exceptionalism, indeed quite the opposite. Almost all the 20 essential ideas it identifies are the same or very similar to those on which after 1800 Europe and then North America built 200 years of global economic dominance. These include long-term thinking, vision and pragmatism as opposed to short-termism, myopia and rigid ideology: real leadership rather than failure of the political class.

These were not just the achievements of distant times. They include Britain’s post-war decision to reject a return to the Great Depression of the 1930s by resetting goals for employment, healthcare, education, housing and pensions after 1945; the US space programme put a man on the moon in the 1960s while Helmut Kohl’s long-term vision and determination reunited Germany on generous terms in the 1990s. All these examples are instructive now the world experiences a period of accelerating disruption caused by the eastward shift of wealth, changing demographics, innovation and ever-faster communications.

the world is changing

China understands how to manage a changing world better than most

One thing though does set China apart: an appreciation of the need to understand change. This has informed rulers for some four millennia. No other major economy has such a central text to manage life. It is relevant not just for societies and rulers but firms, families and individuals. All societies have traditional wisdom but none identifies the importance of understanding change as does the Yi Jing, the Book of Change.

Sinologist John Minford says that the Yi Jing is the Chinese book: quite a claim but one well worth considering. It teaches how to manage complexity, opportunity and danger as well as how to handle scale, speed, timing and uncertainty.

First, goals must be set. These will differ in each society and each time. For now, after all the wars, misery and disruption still in mind, China has two broad goals: harmony and stability. Harmony is the most precious fruit, Confucius said. Inclusion would be part of it today. Stability is essential for a strong economy, as Deng Xiaoping said. Traditional Confucianists would also stress the importance of a third-factor moderation, the search for the middle way.

Then come the details, in a two-step process. Crystallising the goals requires long-term 360-degree thinking, otherwise unintended consequences trap the unwary. Vision is needed for effective communication of the main ideas throughout a continent, which embraces people living in very different circumstances and even centuries. Cycles place the goal in the context of time and social evolution. Research discovers others’ responses to similar challenges. All this establishes priorities, which are key to getting things done.

Implementation, the second part of the means to change, requires a combination of approaches. These are the very heart of the how of change. Pilot schemes are pragmatic, as ”crossing the river by feeling the stones” expresses. The end goal may be clear but the precise path rarely is. Individual ideas may well in themselves be good but will fail to take root if done in the wrong order. Sequencing is a favourite concept of the International Monetary Fund but this is no recent insight. Strategist Sunzi, two and a half millennia ago, knew to insist on getting the order right.

“If you are learned, you are never inflexible,” is an opening statement of the Analects of Confucius. Gradualism is far preferable to Big Bangs. Restraint in behaviour and speech is much more effective than bullying or bombast. All hark back to Taoism. Weixin, constant renewal, is almost 4,000 years old. King Tang of Tsang in the 17th century BC had weixin inscribed on his bronze washbasin, reminding him every morning to review everything, every day.

People are central to successful change. They need to be well and broadly educated for many tasks, unlike today when they are often limited by ever-narrower specialisation. How many British foreign ministers or chief executives have even worked abroad for any length of time? They boast only of the number of air miles they clock up, not the number of years spent living in different countries and cultures, let alone showing any deep understanding of them.

People also have to be able to criticise themselves. “When you are wrong do not be afraid to change,” the Analects record. In the West, this is all too often thought of as political suicide. Instead, politicians persist with old, failed ideas and slogans, clearly detached from reality. Ambiguity enables potentially turbulent waters to be navigated. Disruption can help clear away obstacles such as vested interests or leapfrog early stages of development.

By providing a process to manage change, traditional Chinese philosophy can help anyone think through current challenges that are common across the world. Others can learn by looking at China before adapting ideas to their own history, culture and reality.

Hugh Peyman is the author of China’s Change: The Greatest Show on Earth. He has lived in Asia since 1977 and in Shanghai for the last 16 years.  

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