Reflection on Visit to China

• Alex Naydenov

Post-Trip Re-evaluation of Six Topics

Introduction

After visiting Beijing and Shanghai my existing perceptions of China not only changed but it helped me to view the world as a more mature person. I am no longer ignorant towards countries I have never visited and only knew from what I have read or researched. Prior to my visit, I believed that I had a pretty good understanding about China as a communist country with the fastest growing economy of the world. However, I was not prepared for the magnificent and mind-blowing views from the Great Wall and the Olympic Facilities, the delicious food, and the meaningful conversations with the local students we met. I was humbled to discover a culture that existed for over 4,000 years and people that are friendly and hospitable. As a result, I developed a deeper appreciation for the Chinese society, traditions, and way of life.

Chinese Culture & History and Impact on Chinese Business Today

My perception about Chinese culture and history went on a whole new level when we had the opportunity to visit the Old Hutong area in Beijing and explore the local life and traditions. The walk along the alleys and the visit to a local house gave me a memorable glimpse of the traditional way of living and the sense of pride Chinese people carry for their cultural heritage. I felt that the Old Hutong represents a long period of history and it has become the living encyclopedia of the city that everyone deeply cherish.

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My cultural views about China continued to shape with the visit of other important landmarks in Beijing such as the Olympic Facilities, Forbidden City, Tiananmen Square, and the Great Wall. In Beijing modern architecture mixes harmoniously with the preservation of older buildings and historical places. At the moment I entered the Bird’s Nest and the Water Cube and later the Tiananmen Square, I was surprised to discover just how modern China is. In fact, the urban areas in Beijing and Shanghai are somehow similar to Chicago or NYC with the glass skyscrapers, fashionably dressed people, and busy streets.

However, what really took my breath away is the Great Wall. The place is not just a testament of a great engineering; it symbolizes the connection between the legendary past and present time and it made me realize the uniqueness of China. It suddenly put things into perspective of how old China is and how new the history of my country is. The Great Wall is a must see place if a person wants to experience the infinite sense of time, traditions and beauty, and even a sense of harmony.

During my personal interactions with many students from Peking and Tongii Universities I learned first-hand that they deeply value integrity, loyalty, and hard work. Chinese students emphasized that the image you built for yourself throughout the years ultimately defines your future career development and success. Such observations were confirmed by AmCham presenters who also believed that honesty is one of the virtues greatly valued by the Chinese people. Many local businessmen run their business on the principle of honesty and hard work in order to establish their brand. Thus, learning to understand and appreciate local values becomes imperative for conducting a successful business with China.

Government, Political, and Legal Environment

Prior to my trip, I strongly believed that China’s government is very similar to the former Soviet Union and the political system is primarily authoritarian. I was really surprised to discover that although the communist party has been in power for over 60 years somehow the political environment has remained flexible and adapting to the changes. In reality, when the other communist systems crashed, China was able to survive many political turbulences and become a major economic power. However, there are still things that really bothered me during the visit, such as the restricted Internet sites. Many important social media sites and search engines which I take for granted in the United States have been blocked in China.

In my conversation with local students they have expressed mixed opinions about the existing political system. A few were optimistic that the new party leader Xi Jinping will help the economy and stop the corruption, while others preferred to change the subject. Nevertheless, all of the college students focused on the fact the communist government controls every aspect of their lives with tight censorships. They also commented that in addition to blocking social media websites the government has many levels of control over everything that is going on online for example deleting blogs if found inappropriate.

Prior to the trip, I believed that the Legal System has been a major accomplishment for the communist party because China has put in place strict laws that prevents the rise of monopolies. It also modernized the existing tax system that held accountable for due taxes everyone from the regular employees to major corporations. However, I find some facts about the criminal justice system in China quite disturbing. The country has a very high conviction rate of 99%, which clearly shows that something is wrong with the system. For instance, the police has enormous power and the advancement of the officers depends on how many convictions they help to obtain, thus they resort to any measures to get a confession. I believe that If China wants to be respected in the world’s arena, the existing criminal justice system needs to be in line with the international norms and all citizens to be treated with dignity and respect.

Economy, Globalization and Intellectual Property Rights in China

In the past decade China’s economy grew substantially, however, the economy took a step back due to the global economic crisis. In my conversations with some of the Peking’s students they said that current economic strategy of the Party is to focus more on sustainable and high quality expansion rather than on the growth rate alone. They said that 7 percent GDP growth for 2014 was still an impressive number and the current economy was strong and resilient. The government strategy is to strengthen and expand the imports over the next five years in order to bring more opportunities for trade and cooperation with the rest of the world.

In recent years, China has enforced laws to safeguard intellectual properties and rights. For example, foreign companies have to register their company trademarks in order to ensure that all of the rules are followed. In our visit to Cisco, an American multinational corporation, in Shanghai we had the opportunity to tour the facilities and touch base on various topics including the Intellectual Property Rights in China. In the past, Cisco has filed a lawsuit against Chinese network maker Huawei for unlawful copying, but in recent years China has strengthened its legal framework and amended its IPR laws in order to conform to the WTO Agreement.

Banking, Finance, and Corporate Governance

In the past decades, China’s banking system has grown from a single bank to a new modern system that includes four of the largest commercial banks in the world. The Chinese government continues to hold a key position in the management of the banking system, however, they have been successful in weathering a few serious finance crisis. I believe that the banking sector will continue to grow with China’s acceptance in the WTO and allowing for the foreign banks to participate. In addition, China needs to create friendlier regulations and taxes that will attract foreign and domestic investors.

In recent years, China experienced an increased demand for second homes which stirred the real estate market and made investing in the housing very attractive, a cycle that can build the house bubble. I have witnessed the crisis of real estate in the United States and I know how dangerous bursting of the bubble could be for the people and economy. In order to control the real estate prices, the government put some purchase restrictions on residential properties, not allowing a second residence. Although, a bit drastic such intervention helped to contain the rising housing prices. However, many Chinese investors started to look at other alternatives such buying properties in the big cities of the United States and other parts of the world.

In conversation with local students about the debt issue in United States and China, we come to the conclusion that the average American family owns bigger properties but their debt to income ratio is higher than that of the Chinese. I live in a large house, but I know that my parents constantly worry about their loans and possibility to lose their home if they become unemployed. In this regard, I believe that Chinese families maybe sleep better at night knowing that they will still have a roof over their heads if an adversity hits them.

China’s Approach to the Global Financial Crisis

When the global financial crisis hit the United States in 2008 it inevitably affected the rest of the world, including China. In order to protect the economy the government introduced a RMB 4 trillion stimulus package that would encourage the consumer spending and rebuild major infrastructures. Such financial strategy proved to be a success because it boosted the economy. The government also approved multiple tax rebates in order to help the exporting companies and aid the struggling economy to survive the financial crisis. During my visit to Beijing and Shanghai it was obvious that people took advantage of the program and bought new cars, housing, or started their own business. One of the Chinese students remembered the stimulus money and mentioned that her parents had the opportunity to buy a bigger apartment, because the interest rates were low and it helped to secure a very favorable loan, which was not possible in the past.

U.S.–China Trade Issues

The trade between the United States and China is an important part of the profits for both countries. At the moment, China is the third largest market for the American exports. However, there are some serious issues that put the trading relationship in jeopardy. I believe that the biggest problem hindering the interchange is that China is not a fully free market economy due to the communist regime. For instance, China does not have solid policies in place that would protect the international business partners. Another problem is that the American companies doing business in China do not receive an adequate protection of their intellectual property rights. United States has lost almost $4 billion in trade due to piracy and counterfeited goods.

I had the opportunity to discuss with some of the Chinese students their views on the knockoff items that many Chinese companies produce and then export to the United States. They believe that the problem is really serious because the counterfeit industry is massive and it continues to grow. In addition, Alibaba the biggest online commerce, claims to be committed to crack down on the barter of fake goods on its platform, but as soon as one vendor gets blocked another one takes his place. I believe that the collective effort of the Chinese government, enforcing severe punishments, and the major internet distributors can help to contain the existing problem.

Conclusion:

My spring break to China, stripped away all the prejudices and stereotypes which I carried about the real life in China and gave me the opportunity of the lifetime to see some of the most amazing landmarks in the world. The real experience of China’s traditions and business interactions helped me to free my mind, learn to make better judgements, and identify my priorities in life.