War and Peace Between America and China




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War and Peace Between America and China





An Economic and Political Analysis of the Taiwan Problem


Terence Kwai*

Chan Hon-Wing*


________________________________________________________________

*We are indebted to the Center for Economic Development of the Hong Kong University of Science & Technology for supporting the research for this book.

Contents



Preface

i – v

Introduction

1 – 19

Chapter 1 : The Worst-Case Scenario

20 – 39

2 : From High-Tech Warfare to Nuclear Winter

40 – 67

3 : The Next Economic Earthquake

68 – 85

4 : If Yes to German Reunification, Why Not Chinese Reunification?

86 – 99

5 : Ancient Chinese Wisdom: Winning Without Fighting

100 – 129

6 : China’s Long March Toward Democracy

130 – 159

7 : Blessed Are the Peacemakers

160 – 186

8 : Realizing the China Dream

187 – 228

9 : Chinese Reunification and China’s Third Way

229 – 269

10: Toward A Pacific Century

270 – 295




Epilogue

296 – 298

Bibliography

299 – 304

About the Authors

305

Notes

306 – 308








Preface


The Taiwan Strait is probably the most dangerous place on Earth. Some informed people may disagree. They may point to the continued trouble in the Middle East and the persistent threat of terrorists. However, nowhere in the world is as dangerous and potentially devastating as the Taiwan Strait.


Most Chinese, irrespective of the differences in their political beliefs, want to see Chinese reunification within their lifetimes. Chinese reunification may be postponed for one decade or another but it is seen by many as the ultimate conclusion to the century of humiliation that China suffered at the hands of European and Japanese imperialism and colonialism.


Presently, many Americans are becoming aware of the rise of China. Their media are beginning to have more substantial and objective reports on China. The image of China carried over by the June 4, 1989 incident at Tiananmen Square is gradually replaced by an image of a modern open economy which is developing at a sustained annual rate of 9 percent for more than 25 years. Americans want to benefit from this sustained economic growth, but they also wish to see peace and stability in the Pacific region. Furthermore, they wish to see human rights respected and upheld in China.


At the same time, Americans are unsure how they should deal with the thorny issues of Chinese reunification. Through consistent and persistent public relations campaigns, Taiwan has instilled among American politicians and the American public the image that Taiwan is good and the People’s Republic of China is bad. Human rights activists and religious leaders also depict the PRC as ugly as well. So we do have the good, the bad and the ugly.


The American government is fully aware of the problems arising from the demand of a sizeable group of Taiwanese people to have a permanent separate entity from mainland China. Americans hope that the problems can be resolved with time. Hence, they hope that both sides of the Taiwan Straits would not seek unilateral change of the status quo. This amounts to the very ambiguous situation which translates simply and directly into: no war, no peace, no unification and no independence. During normal times, such ambiguity may be the wisest choice for the American government. However, we are living in an uncertain world. In this uncertain world, anything can happen and can overwhelm us by surprise. No matter what contingency plans are made, Americans and Chinese may be caught by surprise. We can travel back in time to the events leading to the outbreak of the First World War, when the two opposite alliances did not believe that a war could happen. Still the war came about because of the assassination of a nobleman in Austria. Millions of lives were lost during this war. Furthermore, the sheer tragedies of this war led directly to another even more devastating war, the Second World War.


In an uncertain world, enlightened leadership is called for to reduce all possible uncertainties. One way is to achieve Chinese reunification at an earlier date before a separate cultural consciousness develops in Taiwan and among a new generation of Taiwanese people. Such development would make Chinese reunification all the more difficult. In this respect, we can draw a few lessons from the case of Hong Kong. During the British colonial rule of Hong Kong, Hong Kong has developed a distinct cultural consciousness from that in the mainland. This is not just due to differences in the political and economic systems. Hong Kong citizens were encouraged to think of themselves as Hong Kong people rather than as Chinese. After 1997, the Hong Kong government and Beijing have to exert much effort to correct this attitude. In other words, there is a limit to Beijing’s patience in dealing with a recalcitrant Taiwan. Eventually, the status quo cannot be preserved. Chinese reunification will be achieved even at high costs.


Many Chinese people in mainland China believe that the Taiwan problem was created by the United States. President Kennedy once said: “Problems are created by men. Therefore, they can be solved by men.” Americans can play a leadership role in facilitating the process of Chinese reunification, thereby winning the hearts and minds of the Chinese people and their leaders. In reciprocity, the Chinese will try to win the hearts and minds of the American people and their leaders. Reciprocity is at the heart of Chinese culture and civilization. This is far superior to building a missile defense system that can cost far more than $100 billion and yet may prove technologically inadequate and ineffective because of increasing sophistication in China’s missile delivery systems.


To those who are firm in their political beliefs and dogmas, we can retreat to science and religion. As pointed out by Huston Smith in his book, Why Religion Matters: The Fate of the Human Spirit in An Age of Disbelief, neither communism in the East nor progress in the West filled the spiritual hollow in the human makeup. As for the belief that the Age of Reason would make people sane, that reads today like a cruel joke. In the Nazi myth of a super-race (which produced the Holocaust) and the Marxist myth of a classless utopia (which produced the Stalinist Terror and Mao’s Cultural Revolution), the twentieth century fell for the most superstitions the human mind has ever embraced. Modernity’s coming to see the gods it worshiped for what they were – idols that failed – was the most important religious event of the twentieth century. Physics teaches us that human beings are not and cannot be perfect. When I was an undergraduate at California Institute of Technology, we all read the three volumes of The Feynman Lectures on Physics. Professor Feynman is, of course, one of the greatest theoretical physicists in the twentieth century. He was a recipient of the Nobel Prize in physics.


In Volume I, Professor Feynman raised the question: why natural laws are nearly symmetrical but not perfectly symmetrical? This applies to a whole range of important, strong phenomena – nuclear forces, electrical phenomena, and even weak ones like gravitation. How is that nature can be almost symmetrical, but not perfectly symmetrical. We might think that the true explanation of the near symmetry of nature is this: that God made the laws only nearly symmetrical so that we should not be jealous of His perfection. Thereby, we, human beings, are not perfect and cannot be perfect.


If nature is not quite symmetrical, how much symmetry can we expect in human affairs? There can be asymmetrical warfare between America and China even when America possesses far greater firepower than China. Only the Soviet Union would attempt to seek symmetry with the United States by building equal nuclear firepower in a MAD (Mutual Assured Destruction) confrontation. It is enough for China to possess sufficient nuclear warheads and their delivery systems to penetrate America’s shield and blow up major population centers. Then there is asymmetric information and ignoring it may lead to the end of a free-market capitalism because of possible turbulence in the unruly and under-regulated financial markets. Then there is the vertical, asymmetric God-person relationship.


In religion, both liberals and conservatives have their values. The virtue of liberalism is tolerance and the virtue of conservatism is the energy it can infuse into life through the feeling of certainty that the universe is on one’s side. In a way, liberals do not recognize how much an absolute can contribute to life, and in assuming that absolutes can be held only dogmatically, which is not the case.


Both the strength and dangers of liberalism pertain to life’s horizontal dimension, which encompasses human relationships (i.e. relationships between equals), whereas those of conservatives pertain to the vertical, asymmetric god-person relationship. The sobering fact for religious liberals – the one that is causing them to lose ground to conservatives – is that, of the two dimensions, the vertical relation is more important. It argues nothing against justice and compassion to say that those virtues are less important than God, for the sufficient reason that God anchors them in the nature of things. Is compassion rooted in ultimate reality, or is it only an admirable human virtue? That is a vertical question pertaining to worldviews. Liberals inherited their exemplary passion for social justice from parents and grandparents who (for all of their social concern) nailed the horizontal arm of the Christian cross to its vertical arm which (in standard rendition) is longer to symbolize its priority. In their declining concern for theology and worldviews, liberal Christians have in effect turned the cross on its side and made its horizontal arm the longer of the two.


Thanks to the marvels of microphotography, we can now see single nerve cells, and what catches the eye is their dendrites, waving in the air like the tendrils of sea anemones in the hope – so it appears – of touching the dendrites of another cell. When two dendrites do touch, they lock arms and, as result, their cells stand a better chance of braving life’s perils. It is religion in embryo, for religio in Latin means “to rebind,” and bonding and rebinding are what religion is all about. Because human beings have derived from bonding, it becomes incumbent on them to bond with others. “Be ye members one of another,” St. Paul counseled. Confucius’s version reads, “Within the four seas all men are brothers.” Maybe, we can all work toward a bond between Americans and Chinese! Not who we are, which points toward differences, but what we are, which points to similarities. What is our basic essence? Our basic essence is relationship between human beings, a bond so to speak. Within the four seas, all men are brothers.


Science and religion transcend nationalism, materialism, groupism, multiculturalism, capitalism, socialism and communism. We value our hopes, dreams, intuitions, glimpses of transcendence, intimations of immortality, mystical experiences, the elegance of natural laws and our sheer joyfulness at the grandeur of the Universe revealed to us by modern science and technology.


From science, we learn that nature is not symmetrical. From religion, we learn that the God-person relationship is asymmetrical. Applying these lessons to the concerns of the West and Japan with the rise of China, we can say that the relationship between the People’s Republic of China and the Republic of China is asymmetrical. To deny that as some Taiwanese do is a futile effort. Americans should realize and fully grasp this asymmetry. In doing so, they can help restore peace and prosperity in East Asia. Politics is the art of the possible. Presently, Chen Shui-bian, president of the Republic of China, and his staunch supporters are pushing Taiwan into a permanent separate entity from mainland China. They are, by all means, heroic and admirable. However, it should be recognized that those people who seek independence for Taiwan mostly grew up in an island colonized by Japan and later ruled harshly by Generalissimo Chiang Kai-shek and his Kuomintang followers. That is why they wanted self-determination and democracy in the first place. Many of their objectives, such as democracy, personal freedom, market capitalism, human rights, have been achieved. They should realize that an independent Taiwan is politically impossible. Only certain hawks in American Congress would clamor for recognition of an independent Taiwan. All the countries that have diplomatic relationships with the PRC would not give recognition to an independent Taiwan nor would they vote for the admission of an independent Taiwan into the United Nations.


For over fifty years, the United States has been the guarantor of peace in East Asia. It can continue to play this role if it recognizes the danger inherent in an ambiguous policy toward Chinese reunification. Both Beijing and Taipei seek the support of Washington to further their interests. In a way, Washington has been “cool” to both Beijing and Taipei. However, the time has come for a more positive role to be played by United States. Just as the United States has helped solve the German problem in Europe, the United States can help solve the Taiwan problem in Asia. By solving the Taiwan problem in due course, Americans can write a new chapter in world history. In Asia, we may witness the formation of a “Holy Alliance” for political stability, economic growth and technological innovation. The twenty-first century may even go down in history as a Pacific Century. How events may develop and how history may unfold depend critically on the mission of the United States to bring about long-lasting peace and sustained economic growth in this part of the world. As Jesus said, “Blessed are the peacemakers for they shall be called sons of God.” God Bless America!


Terence Kwai

President

China Specialists


Hong Kong Special Administrative Region

People’s Republic of China

July 2006



Introduction


My parents came from a place near Hangzhou in East China that boasts many famous figures in contemporary Chinese history, such as the late Premier Zhou Enlai and novelist Lu Xun. My father claims to be descended from the ruling family of Zhou Dynasty in ancient China (1046 B.C. – 256 B.C.) My father went to Shanghai to start a business. After World War II, he went to Hong Kong and then to Cambodia, where he built a fortune. However, because of the Indochina War which eventually swept into Cambodia, my father lost most of his assets. He came back to Hong Kong with few resources. Having to support an extended family in Hong Kong and in China, he could not afford to send all of his children for overseas higher education. I grew up in Hong Kong and attended a Jesuit secondary school, Wah Yan College, S.J. (Hong Kong), where I was exposed to European history and the Bible. I was fortunate to be awarded generous scholarships and the Josephine de Karman Fellowship to study mathematics and applied mathematics at California Institute of Technology. My advisor at Caltech, Professor Joel Franklin, a great applied mathematician himself, suggested to me that I should consider studying economics and business administration at Harvard. Once again, I was fortunate to be awarded generous scholarships and the 1907 Foundation Fellowship to study in the MBA/DBA Program at Harvard Business School. In the Doctoral Program, I studied under Professor John Meyer, an intellectual giant himself with keen insights into many things. He was a professor at the Harvard Business School, a professor at the Kennedy School of Government and a professor at Harvard University’s Department of Economics. I am thus very much indebted to the American people for their generosity. At Caltech and Harvard, I had laid down a solid foundation for my life-long learning. I worked, for a while, for two Fortune 100 companies in United States and then I returned to Asia. I was invited to join an American management consulting firm and, later, a Swiss management consulting firm in their Asian practices. Years later, together with a few friends, I founded China Specialists, a research and consulting firm, based in Hong Kong.


Let me briefly explain why I write this book. One can characterize the present world as an uncertain world. To start with, Hong Kong is, in a way, a microcosm of a turbulent world. The One County, Two Systems concept, based on which Hong Kong was returned to the People’s Republic of China, is unprecedented in world history. No wonder Fortune magazine had a cover story: The Death of Hong Kong, on the eve of the return of Hong Kong to China.


In the early Nineties, Hong Kong faced a multitude of problems. First, the British had a poor history of decolonization as witnessed in the case of India and Pakistan and in the case of Singapore and Malaysia. Second, the One County, Two Systems concept advocated by Deng Xiaoping is unprecedented in world history. Many Hong Kong citizens were shaken by the June 4 Incident in Tiananmen Square and were considering emigration to foreign countries, particularly Canada and Australia, which are members of the British Commonwealth. Third, a number of American and British think-tanks were suggesting that the People’s Republic of China would soon disintegrate, following the footsteps of the Soviet Union. Fourth, the last governor of Hong Kong, Chris Patten, was introducing democracy into Hong Kong at turbo-speed. In nearly one hundred and fifty years, Hong Kong was governed by the British with little pretension to democratic ideals. To hand back Hong Kong with honor to China, Mr. Patten was destroying the social fabric of harmony that had been existing in the Hong Kong society since the turmoils in mid-sixties.


I attempted to make a contribution towards the stability of Hong Kong. I wrote a monograph entitled The Future of the British Business in Hong Kong. It was sent to the chief executives of British business in Hong Kong. British business dominated the Hong Kong economy in several strategic sectors, such as banking, telecommunications, aviation, electricity generation and distribution, trading and premium commercial real estate. The Future of the British Business in Hong Kong and subsequent work cautioned the chieftains of the British business that it would not be in their interests if the pace of democratization in Hong Kong was too rapid. Even Chris Patten had to bow to the pressure exerted on him by the British big business in Hong Kong.


Hong Kong was returned to China on July 1, 1997. Tung Chee-hwa was appointed as Chief Executive of the Hong Kong Special Administrative Region (HKSAR). In his 1997 policy address, “Building Hong Kong For a New Era”, Mr. Tung said, “In years gone by, the people of Hong Kong, mostly Chinese, have created a miracle that is Hong Kong. Now, being our own masters, I have no doubt we will be able to create an even better future for our city.” Hong Kong calls for a leader with political skills of the highest order – and an abundance of good luck. Mr. Tung lacked vision and failed to develop a coherent strategy for Hong Kong. He believed that promises and good intentions could substitute for the development of concrete policies. After his first term of five years, there were popular demands for Tung to step down. In May 2005, Tung resigned and was replaced by Donald Tsang Yam-kuen, a top civil servant. Mr. Tsang was educated at a Jesuit secondary school in Hong Kong and was further educated at the Kennedy School of Government at Harvard University. It remains to be seen how a bureaucrat can maintain social harmony and further economic growth in Hong Kong. Any system of government, whether democratic or not, faces the need to establish legitimacy in the eyes of its citizens. Delivering a rising standard of living to the majority of those citizens is, under many circumstances, the most reliable way to do so. Conversely, falling incomes undermine the legitimacy that new political structures so badly need. While economic growth makes a society more open, tolerant, and democratic, such societies are, in turn, better able to encourage enterprise and creativity and hence to achieve even greater economic prosperity. Tung Chee-hwa, inexperienced in government affairs, failed to deliver sustained economic growth during his seven years of administration. He was unceremoniously removed from his office in mid 2005 by the central authorities in Beijing.


In mid-2004, I compiled a book, Essential Reading for the Transformation of the Political Economy of Hong Kong, and disseminated it to the political parties and several top government officials in Hong Kong. A learned and thoughtful man may speak before a crowd and get no positive reaction whatsoever. A real demagogue, on the other hand, will distill his thoughts into a few simple-minded expressions and soon have enough admirers to run for public office. It is a requirement for the job. For, en masse, mankind can neither understand complex or ambiguous thoughts nor remember them. The masses have never thirsted after truth. They turn aside from evidence that is not to their taste, preferring to deify error, if error seduces them. Whoever can supply them with illusions is easily their master; whoever attempts to destroy their illusions is always their victim.


In a recent poll, Hong Kong citizens were more concerned with freedom and economic prosperity than with democracy. Basically, I have faith in the future of Hong Kong. Indeed, Hong Kong may be a beacon to the world as to how conflicts arising from different political and socioeconomic systems may be resolved over time1.


From Hong Kong, my interest turned to Japan. I was commissioned by JETRO (Japan External Trade Organization), the international arm of Japan’s Ministry of Economy, Trade and Industry, to undertake three studies: China’s Challenges in the Twenty-first Century, The Transformation of the Political Economy of China, and Japan and China: Prospects for Economic Partnership. I have been an advisor to several major Japanese corporations on strategies for success in China. My interest in Japan was kindled by these activities and I turned to studying, in earnest, the Japanese people, their history, government and business. I have developed a good understanding of the Japanese people and their institutions.


With a good understanding of China, Japan and the United States, I came to believe that the twenty-first century could be a Pacific Century. The Pacific Century can benefit China, America, Japan, a yet-to-be-unified Korea, and Southeast Asian countries. However, we are only at the dawn of the Pacific Century. For things to work out, the Sino-American relationship has to be improved. At the crux of the relationship is the Taiwan problem. The Chinese and Americans must come up with a constructive solution to the Taiwan problem. However, the present situation is not optimistic. China has already surpassed the United States to become Japan’s largest trading partner. However, China is uneasy about Japan. As a ritual, Japanese Prime Minister Junichiro Koizumi pays annual visits to the Yasukuni Shrine, where Japan’s past wars are glorified. A new Japanese defence review identified China as a threat. Its Self-Defence Forces outlined three scenarios of a potential Chinese invasion and are making preparations accordingly. Moreover, America’s military is closely coordinating with Japan, redeploying its troops and strengthening its command and combat capabilities near Taiwan. More specifically, with the latest statement over Taiwan, the US and Japan are poised to use their joint military forces to deter, deny and ultimately defeat potential Chinese military action across the Taiwan Strait.


Let me turn to two well-known Americans for their sage advice. In his book, Blowback: The Costs and Consequences of American Empire (2000), Professor Chalmers Johnson, author of the classic, MITI and the Japanese Miracle: The Growth of Industrial Policy, 1925 – 1975, wrote:


China owes no obeisance to the United States. From 1950 to 1953, at great cost to itself, it fought the American military to a stalemate in Korea. A new policy of containment toward China once again implies the possibility of war, just as it did during the Cold War vis-à-vis the former USSR. The balance of nuclear weapons prevented that war, but this may not work in the case of China, where great asymmetries in manpower between China and any single external power or alliance will always exist. China has the capacity to deter an American use of nuclear weapons by threatening retaliation against U.S. cities. There is also a much firmer foundation for a Chinese government’s resistance to external threats in Chinese nationalism than there was at the time of the British, French, or Japanese depredations over the past 150 years. Many Americans do not evaluate Chinese nationalism correctly, thinking it is whipped up by Communist Party propaganda to suit its purposes. But like American nationalism after Pearl Harbor, it is actually rooted in concrete historical experiences of victimization, including Japan’s attempt to establish a protectorate over China in 1915, its creation of a puppet regime in Manchuria in 1931, and its invasion of the whole country in 1937. The Chinese pose no threat to the territory of the United States, but the Americans (and the Japanese) have done so in the past and conceivably still could directly threaten China. A war with China would almost certainly bankrupt the United States, radicalize China, and tear Japan apart.2


He gave the following sobering comment:


The question is whether the United States can adjust to the emergence of a new great power in Asia. Will it deal more effectively and less bloodily with China than, say, the former hegemon Great Britain did in the early twentieth century, when it failed to adjust to the emergence of new centers of power in Germany, Japan, and Russia? The current trend of events is not promising.3


In his book, Does America Need a Foreign Policy? Toward a Diplomacy for the 21st Century, Henry Kissinger wrote:


Taiwan had become a deeply symbolic issue for many Americans. It was the inheritor of the legacy of goodwill acquired by the Nationalists for their staunch resistance to Japanese imperialism in the Second World War. And it became a symbol for the so-called China lobby, which was outraged by the Communist victory in the Chinese civil war and was determined to prevent its culmination in the takeover of Taiwan. Many – including those of us who engineered the opening to China – had great sympathy for the effort of the Chinese on Taiwan to create a meaningful and democratic basis for an autonomous existence. A wide consensus has always existed in the United States opposed to the forcible return of Taiwan to China.


But the issue is also profoundly symbolic for Beijing. Taiwan was where the dismemberment of China started – the first province to be annexed by colonialists. Its unification with the mainland is considered even by Chinese who do not share the views of the governing party as a “scared national obligation” which can be deferred for practical or tactical reasons but never abandoned.4


Most great statesmen were less distinguished by their detailed knowledge (though a certain minimum is indispensable) than by their instinctive grasp of historical currents, by an ability to discern amidst the myriad of impressions that impinge on consciousness those most likely to shape the future. This caused that ultimate “realist” Otto von Bismarck, who engineered the unification of Germany in the Nineteenth Century, to sum up his vision of statesmanship in a reverential statement:


The best a statesman can do is to listen to the footsteps of God, get hold of the helm of his cloak, and walk with him a few steps of the way5.


Chinese reunification is inevitable. Any attempt to halt it will be futile. Were Taiwan to achieve formal American recognition of a separate status, as some of its spokesmen and supporters now seem to seek, this would risk a military confrontation and guarantee a political crisis that would divide Asia and turn Taiwan’s role in the resulting tensions into a global issue.


Twenty years ago, I wrote an article stating that since the fall of the Qing Dynasty in 1911, China has undergone a turbulence not unlike the religious wars in Europe. In medieval Europe, obligations were personal and traditional, based neither on common language nor on a single culture; they did not interpose the bureaucratic machinery of a state between the subject and the ruler. Restraints on government derived from custom, not constitutions, and from the Universal Catholic Church, which preserved its own autonomy, thereby laying the basis – quite unintentionally – for the pluralism and the democratic restraints on state power that evolved centuries later.


In the sixteenth and seventeenth centuries, this structure collapsed under the dual impact of the Reformation, which destroyed religious unity, and of printing, which made the growing religious diversity widely accessible. The resulting upheaval culminated in the Thirty Years’ War, which, in the name of ideological – at that time, religious – orthodoxy, killed 30 percent of the population of Central Europe.


Out of this carnage emerged the modern state system as defined by the Treaty of Westphalia of 1648, the basic principles of which have shaped international relations to this day: The treaty’s foundation was the doctrine of sovereignty, which declared a state’s domestic conduct and institutions to be beyond the reach of other states.


Since the fall of the Qing Dynasty, the Chinese people have endured great hardship and suffering. It is time for China to carry out socio-economic reforms to prove what Mencius, China’s Second Sage, says about human nature:


Opportunities of time vouchsafed by Heaven are not equal to advantages of situation afforded by the Earth, and advantages of situation afforded by the Earth are not equal to the union arising from the accord of Man.


When Heaven is about to confer a great office on any man, it first experiences his mind with suffering, and his sinews and bones with toil. It exposes his body to hunger, and subjects him to extreme poverty. It confounds his undertakings. By all these methods, it stimulates his mind, hardens his nature, and supplies his incompetencies. Men for the most part err, and are afterwards able to reform. They are distressed in mind and perplexed in their thoughts, and then they arise to vigorous reformation. When things have been evidenced in men’s looks, and set forth in their words, then they understand them. If a prince have not about his court families attached to the laws and worthy counselors, and if abroad there are not hostile states or other calamities, his kingdom will generally come to ruin. From these things, we see how life springs from sorrow and calamity, and death from ease and pleasure.6

Being a Chinese, I believe that what Mencius says applies to this generation of Chinese leaders and the Chinese people. They will be leading China into a century of great achievements and great contributions to the world.


In 1984, I wrote a book entitled Strategic Planning and Control: A New Dimension to Asian Business. It was published by The Hong Kong Management Association. My boss, Robert Travis, an American who was in charge of the Asian practice of the international management consulting firm I was working for, wrote:


Without attempting to provide arbitrary answers, Mr. Kwai skillfully addresses many fundamental questions about how East Asian enterprises should plan and operate … The book itself illustrates one of the primary advantages of the Oriental approach to management in the way that controversial issues are presented for consideration without forcing a position or conclusion. The reader then has an opportunity to objectively reflect on these issues.


In a way, this is the approach adopted in this book.


In 1995, Qian Ning, the son of Qian Qichen, China’s former foreign minister and a deputy prime minister, wrote a book entitled Chinese Students Encounter America since his return from graduate studies in the United States. The book became an instant bestseller in China. He wrote about the Chinese students in America:


An America scholar surveyed Chinese students on the subject of returning to China. The results showed that the reasons for staying in America was quite specific: low living standards in China, the inflexible personnel system, poor facilities for scientific research, and limited opportunities for personal growth. The reasons were easy to understand. But the reason some chose to return was primarily an abstract patriotic sentiment. The American scholar was deeply puzzled by this result, since patriotic sentiment is a rather stale concept in American society.


He was puzzled, perhaps because he had overlooked a simple fact: China in modern times has been a weak country, and that weakness has saved patriotic sentiment from going out of fashion among Chinese.


For China, sending students abroad was not a simple gesture of cultural exchange but, rather, the shouldering of a burden in its determination to further the country’s development. This was a reality that the students had to face.


This was a very Chinese way of thinking. It seemed as if the students not only had to bear the heavy burden entrusted by history, but they also had to be willing to make personal sacrifices. History showed, however, that it was precisely this Chinese sentiment that sustained the spirit of the nation. The sentiment allowed China, after enduring more than a hundred years of humiliating weakness and poverty, to see a ray of light at the dawn of the twenty-first century.7


This book is dedicated to those Chinese students who returned to China after completing their studies in the United States. Dr. Albert Schweitzer, the German doctor who went to Africa to practice medicine, says, “one thing I know: The only ones among you who will be really happy are those who will have sought and found how to serve.”8 We hope to serve China and the Chinese people. In writing this book, we hope to make a small contribution toward the betterment of the Sino-American relationship.


During the Twenty-first Century, there would be nothing more significant than the Rise of China. Richard Nixon, former president of the United States, says: “China now is awakening, and it may soon move the world. Exotic, mysterious, fascinating – China from time immemorial has tantalized the imagination of Western man. However, even the prescient Tocqueville, who predicted 150 years ago that the United States and Russia would emerge as two great contending world powers, could not have foreseen that the nation that potentially could decide the world balance of power in the last decades of the Twentieth Century, and that could become the most powerful nation on Earth during the Twenty-first Century, would be China.”9


The question is, of course, how the rest of the world would react to the Rise of China? In one way or another, the Rise of Germany and the Rise of Japan in the late nineteenth and early twentieth centuries had brought about two world wars. Is China a strategic partner or is it a strategic competitor? Probably, China is a strategic dilemma.

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