The misconceptions of China

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Jakob Bolding has worked and lived with his family in China for over ten years. Having studied International Business and Chinese at the University of Southern Denmark and Copenhagen Business School, he is now responsible for the development of procedures and tools, as well as for the investigation and formulation of policies within our company. In this blog post, he shares some of his own thoughts and observations about living and working in China for over a decade.

What is China? On the surface, an easy question to answer: The People’s Republic of China, as it is formally known, is a country in East Asia. It the largest population of any nation in the world, and over the last 30-odd years, it has seen phenomenal economic growth. It is known for its Great Wall, Terracotta Warriors, the Forbidden City, or adorable pandas (both the well-known black and white variant and its lesser-known “cousin”. the reddish and brown lesser panda).

However, once you go past the surface of China as a concept, many people still seem to have a hard time fully understanding the country and its population, with even self-proclaimed “China experts” sometimes resorting to old tropes and stereotypes when referring to the country. In this post, we will try our best to avoid the most obvious pitfalls and look beyond the surface in order to present a point of view that not everyone outside the republic might be aware of.

First though, a caveat: Due to the sheer magnitude and diversity of China, it is nearly impossible to group all the, often contradictory, changes and currents of this massive country neatly into one generalised and coherent narrative without falling short in some way. This blog is not intended as a country review or an end-all gospel outlining the future of China.

Instead, this post is intended as a viewpoint to contrast some of the, occasionally outlandish, claims that can be heard from people with an opinion on the country. It will zoom in on just a handful of topics and, via a personal lens, provide thoughts and observations that can inform and perhaps even surprise a reader or two!

The misconception of China

While news out of China has dramatically increased over the last ten years, it seems clear when talking to people who have never been that many people still struggle to imagine what the country is and is not:

Outsiders often assume that China is a poor, less developed, and largely rural country with a limited (and often highly labour intensive) industrial capacity centred on just a few population-dense cities such as Beijing, Shanghai, or Guangzhou in the eastern and south-eastern part of the country.

To the extent that foreigners, who have not been, acknowledge Chinas economic progress and industrialisation, the country is somehow still perceived similarly to the image of the Soviet Union during the cold war: With run-down, meagre collective farms marring the countryside and cities consisting of monotonous grey buildings in a never-ending barren concrete landscape. Its inhabitants imagined as uniformly clad workers that toil away on assembly lines at all hours of the day.

What seems to elude most people is that these notions are grossly outdated and incorrect. Chinas experimentation with market reforms in the late 70s and 80s have dramatically changed not only its economy, but also its society and the country as a whole. This has happened at breakneck speed, as changes that were decades in the making in the west have been achieved in just 10 or 15 years in China.

An example of modern China and its impressive infrastructure: the photo shows Shanghai’s Nanpu Bridge stretching across the Huangpu River. The bridge is located right next to the office of TJ Squared. Source: Shutterstock

Today, China is a highly developed, modern and industrialised powerhouse, with strong competencies in labour- as well as the capital-intensive industries. Resources have been directed from coastal eastern regions towards the typically less developed inland regions, creating economic growth and lifting millions of citizens out of poverty.

With bustling cities, a rapidly growing middle-class and a highly developed and sophisticated domestic market, China is a confident country looking towards the future. Through focused and aggressive investments in education, infrastructure and research and development, the country presents itself as a global contender for the leadership in scientific and technological innovations.

China at the forefront of science and technology

When talking about Chinese innovation, the country is often mentioned in connection with the copying of advanced technologies and piggybacking on the developments that others have made.

However, when looking at the 2020 Global Innovation Index, China surpassed all other countries with the highest number of international patent applications under the WIPO Patent Cooperation Treaty (PCT).

Coming in at an overall position as number 14 out of 137 countries in the index, China had the highest percentage of total trade of intangible assets and export of creative goods, while it was in the top 3 when it comes to Global R&D companies, global university rankings, trade, competition, and market scale.

Everyday technological advancements

The Chinese society is, generally speaking, very curious about new technologies and digital solutions. As opposed to the notion that some might have of a conservative and tradition-bound society, the Chinese are often at the very forefront when accepting new gadgets or technologies into their life.

To the extent that a new technological invention provides a useful solution to a need, the Chinese public, as a whole, will typically adopt it almost overnight, completely changing entire industries in the process.

One example is the popular app WeChat that (so far) integrates social media, a direct messaging service, telephony, online shopping, car-hailing, event ticketing, hotel booking, electronic payment, public transportation and much more in one “super app”.

From old to young, you will be hard-pressed to find a Chinese citizen who currently does not utilise this app on a constant and daily basis in their life, with its use constantly increasing as more and more features are integrated via add-ins.

“I remember when I first came to Beijing in 2009, at that time, electronic payment was slowly being introduced, but cash was still largely king. Fast forward to a couple of months ago when the clerk at my local corner store almost fell off her chair as I tried to pay for a can of soda using the change I had in my pocket: “Everybody uses WeChat, or Alipay, here in China and this foreigner wants to pay with cash” (what a caveman!) she told one of the other patrons,” remembers Jakob.

Another related example is the size of the sharing industry in China. Everything from the sharing of bikes, umbrellas, electric scooters, mobile telephone chargers, and car rides are shared and managed via a few clicks on one’s mobile phone.

Due to China’s large consumer base and the efficiency of developers who cater to their demands, China’s domestic sharing economy was already strong and vibrant when other, often Western, competitors started going global.

China’s sharing economy is booming. Here an example where a customer is about to rent one of the millions of sharing bikes found all around the country through WeChat. From: Shutterstock

This is perhaps best exemplified by the Chinese ride-sharing service Didi Chixing. In 2016, the company outperformed and bought Uber’s Chinese operations and is now, directly and indirectly, competing with Uber in several international markets, despite many outsiders having never heard about it.

Chinese institutions and public service providers are also onboard the digitalisation train, with official apps to facilitate smoother, and faster, service in areas such as healthcare, banking, insurance, renovation, and public information.

“There are apps and plug-ins that provide parental guidance, public information, options to see medical test results, tax return filings, insurance purchase, money transfers, self-service wedding registration, and self-service residency registration. All while you can scan your local trash can to receive money back for recycling cans, boxes, and so on- based on weight.

It is hard to imagine any country offering the same plethora of services readily available in such an intuitive and comprehensive way as in China. While other countries might offer (some of) the same services, you will often need to download 15 dedicated apps or, even worse, wait for hours and hours in a queue at your local public service agency,” says Jakob.

In China, the digital solutions mentioned above are not restricted to the bigger cities; it is a country-wide phenomenon also found in low tier cities and small towns.

Although impressive in itself, one can argue that the biggest contribution of the drive for digitalisation in China is actually how it has helped to increase accessibility to services, goods, and people across the large distances that are found in China.

Strong infrastructure and transportation

Considering that the landmass of China is roughly the same size as Europe (including the Ural Mountains), it becomes apparent that the country is enormous. To cater to a population roughly double the size of all the citizens in the EU zone, all-around, solid infrastructure is needed if stable and equally distributed developments are to benefit the whole country.

Coming from a trailing position in the 80s and 90s, China has leapfrogged technological advances that took much longer in other countries. For example, the country has partly ignored the landline in much of the progression of its telecommunication infrastructure, moving directly to replace it with the mobile network.

Another example is in the progressive move towards cashless payments, hinted at earlier. While other countries for a long time relied on credit cards before moving on to payment via mobile phone, China moved almost directly from cash to mobile payment over a very short period.

According to Deloitte, China ranked first globally in mobile phone ownership already in 2018, and the country currently boasts the world’s most developed and sophisticated 5G network that is constantly being expanded with as many as 130000 new base stations activated in 2019.

Road transportation

Moving from one aspect of China’s infrastructure to another is the country’s position as a world leader when it comes to transportation.

On the roads, China currently has the world’s largest market for battery-powered cars and is one of the front-runners in driverless technology, with the Chinese city of Shenzhen testing fully autonomous cars, without backup drivers behind the wheel, as the first country in the world in 2020.

Chinese investments in infrastructure are not limited to domestic investments alone. The “One Belt, One Road” initiative, announced in 2013, has at its heart the establishment of several transport corridors linking trade between China and the rest of the world, much like the ancient Silk Road. Corrected map from Shutterstock

Rail transportation

On tracks, China today holds the record for the world’s longest high-speed railway system (37900 km in 2020) with bullet trains travelling between 200 and 350 km/hour.

Looking forward, by 2035, the country is expecting to have expanded its high-speed railway network to 70000 km, roughly equal to 1.7 times the circumference of the whole world!

“Due to China’s size, travelling between various regions is often not feasible by car; it simply takes too long. For travel within China, high-speed trains are a real alternative to domestic flights; they have a lesser impact on the environment, per passenger, are cheap, and are often faster”.

“For example, taking the non-stop high-speed train, travelling between Beijing and Shanghai takes just above 4 hours for a distance roughly equivalent to the distance between Skagen in Denmark to Munich in the very south of Germany”. Explains Jakob.

The environment and sustainable energy in China

There is no denying that China’s extraordinary economic growth and development has had an impact on its nature and the environment. However, as China has developed, so too have its priorities towards environmental conservation and protection.

At an international level, China has signed the Paris Agreement and has committed to becoming CO2 neutral no later than 2060, and preferably earlier. Considering China’s emissions today, such an ambitious goal is, in itself, a feat that can hardly be overstated. It is especially aspiring when considering the wavering, and often reluctant, commitments offered by developed nations that, due to their economic muscles, would be expected to already have done much more to reduce their impact on the environment.

Within the North of the country, China has undertaken one of the world’s largest reforestation programs to combat desertification and bind CO2. This program is dedicated to the planting of 87 million acres of trees (equating to the size of Germany).

At the same time, cities all over the country are putting huge efforts into developing the urban space with green areas and planting trees, adding to an average of 13,000 hectares of parks or woods per city per year.

Although there have been discussions about the effectiveness of China’s “greenification” programmes, recent evidence seems to indicate that its efforts are indeed working, and this has become a central cornerstone in the country’s fight to reduce CO2 emissions.

Renewable energy

Closely related are China’s efforts to improve its energy mix to reflect the challenges faced by the world today. Switching from energy production based on fossil fuels to renewable sources, it is China’s ambition that, by 2030, 25% of its primary energy consumption should come from non-fossil fuels.

Within the field of wind and solar capacity, China is already today a global leader, in total numbers, with installed capacities of 253.4 Gigawatt (GW) and 281.5 GW for wind and solar, respectively. (1 GW is equal to the consumption of up to 800000 US homes.

Chinese investments in infrastructure are not limited to domestic investments alone. The “One Belt, One Road” initiative, announced in 2013, has at its heart the establishment of several transport corridors linking trade between China and the rest of the world, much like the ancient Silk Road. Corrected map from Shutterstock

Assuming a conservative utilisation of just 30%, this means that the combined wind and solar capacity of China could power more than 128 million homes.)

Besides harnessing the power of the sun and the wind, China is also relying heavily on its capacities within hydroelectric power to achieve its 2030 goal. With several of the world largest dams being located in China, the world’s absolutely largest power plant is actually a hydroelectric power plant; namely the Three Gorges Dam located in Hubei, which by itself has a capacity of 22.5 GW, contributing to the power supply of 9 provinces and 2 cities, including Shanghai.

A new, more accurate perception of China

Hopefully, this article has helped to provide some insight into what constitutes modern China and also what does not. From science and technology over transport and infrastructure to the environment, China has achieved incredible advances within as little as one or two generations. This is a feat that not many people outside the People’s Republic of China seem to fully comprehend or acknowledge, clinging instead to outdated or tragicomic stereotypes when imagining the country.

This post is, as mentioned previously, not intended to present the full history of China and the many changes it has experienced since the 1970s. It is instead meant to highlight just a few of the results that these reforms have led to, results that one would be wise to keep in mind if one wants to understand what modern China is.

In a related blog post, we will next turn our attention to TJ Squared and its set-up in the Chinese context.

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