Is China still price competitive?

Guest post from Calipe Chong, founder of VipoAsia and author of VipoAsia’s blog

Is China still price competitive?

I have not written any blog for a long time as the recent economic and business developments are more political driven. There are no shortage on reports and news about the apprehension and acrimony that many have felt about China on her rise to economic and military power.

The unexpected high rate of inflation, high increase on labor cost and never ending inflating housing bubble also lead us to believe that China is losing out the world factory status to other emerging countries such as India, Vietnam, Indonesia, etc. Many Chinese and foreign owned factories are moving out of China to these countries to stay competitive. So, has China lost her cost competitive advantage?

It all depends at which angle you are looking at. If you are referring to apparels, shoes and household goods, you are probably right. However it is too early to write off these industries from China. The factories, which provide such merchandized goods and mainly located along the coast lines, are moving inland where the labor and infrastructure cost are at couple of years behind the coastal cities. They also brought with them the manufacturing know-how, management skills, customer base and product knowledge with them to these new locations. Many workers at these inland provinces have worked at the coastal cities before and are familiar with the skills and manufacturing processes. Foxconn redeploys many of its workers from the Guangzhou factories to the inland factories that are close to the workers hometown. Thus the last ten years of painstaking and horrific development on product safety and quality is not to be repeated again.

The less developed countries which offer much lower labor cost bear the same remembrance of China ten years ago. Thus you need to repeat the learning cycle and woes from the products newly produced there. Do the end consumers willing to encounter or tolerate same problems they have had with Chinese goods ten years ago?

Let me make an assumption here. We have a household item that cost $10 from China in early Jan 2010 before the onslaught of labor cost increase. It now costs $12 from the same factory or $10.50 from its inland subsidiary. The similar item from a less developed country could cost $9. If there is no quality or safety concern, I am sure most consumers will buy the $9 item. For needed quality on the product, the consumers will probably buy the $10.50 item. The factory that now sells the item at $12 will repackage it with improved design and quality or just simply branding it as a premium product.

Though the cost impact to Chinese manufacturers is great but not to the extent that diminishes her competitiveness and survival. The reduced export revenue actually turns out good as it forces the manufacturers to focus and meet the requirements of their fellow countrymen. That is why China is still able to maintain a remarkable GDP! The manufacturers have been ignoring the plight of the domestic demand for a long time and it is time to realize the “kings” are now residing in the same town.

It is too early to use the economic models of Japan, Korea, Taiwan, Hong Kong and Singapore to predict the outcome of China. Japan and the Asian “Four Dragons” had grown too rapidly with cost increase outpaced the competitiveness in a short time and forced the manufacturers to relocate the manufacturing base out of the country. China has a large land mass and population with the economic development so vastly different among the provinces. Shanghai and Beijing probably have the worse property bubble crisis than Japan but will not suffer the same scenario as China can spread out the risks across the country. If Shanghai is a country, she will encounter far worst fate than Japan. China has well developed coastal cities on par with the developed countries while still having some less developed inland provinces. She is like a miniature globe herself. That is why the pessimistic anticipation on the collapse of China economy due to the asset bubble burst will not happen imminently. If the economy does fail, it is probably caused by the inappropriate and unrealistic fiscal policies from the central government.

The reduced export revenue on cheap merchandised goods due to higher cost could spell relief to the central and foreign governments as it will alleviate the trade imbalance. There will be less pressure on pushing the yuan exchange rate further. However I suspect the relief is short live for the Western countries. The foreign buyers could not immediately replace the Chinese supplies with those from other emerging countries immediately and thus the higher priced Chinese goods will cause inflation. It will certainly cause nightmare to these governments. It will not resolve the unemployment crisis as there are probably very few factories in the country making similar products. It is no longer competitive for the well developed western countries to produce cheap merchandized goods. You need factories and farms to resolve high employment and not offices and banks. There are few workers in the high tech factories which are usually highly automated.

I am sensing a change in China factories. In the past with the abundance of cheap labor, many factories and service providers have low productivity in their operations. Not too long ago, you will probably have at least one waitress standing next to a dining table waiting for further instruction from the customers. Likewise in the factory, it is not unusual to find some workers standing idly on the production floor. Now you will find productivity has gone up in many places. Some restaurants are having radio frequency gadget for the customers to summon the waitress, production processes have been optimized to minimize labor wastage and many factories are automating their manufacturing operations. More tooling fixtures have been used to reduce labor. I have visited some factories in some remote areas and astonish to find sophisticated and high level automation in place. I am sure companies offering automation solutions are having soaring business now.

And you know what! This improved productivity will further enhance China competitiveness and product quality. Her competitors and foes will have sleepless night again!

* This entry has been published with the permission of the author, Calipe Chong of Vipo Asia.  Please visit VipoAsia to access his blog directly and read more of his insight on Asia and the world.

Wise words, from wise men

Seven Sages - Courtesy of Wikicommons

After reflecting on my walk home today of a few potential pieces I was considering posting, I decided instead to share with the readers of CSA some blogs I believe to be worth following.  These blogs are written by fellow globally minded, intelligent, and wise individuals.

Inca Kola News – Otto Rock (his pseudo name), is wise man #1.  He’s a British national / mining analyst / linguist / comedian / good person, who lives and breaths South America.  He’s far more attune with the country of Peru and the greater South American region than I can ever hope to be.  If you want a English language view into South American politics and economics this is site you you must check out.

Vipo Asia – Written by Mr. Calipe Chong, who is also the owner and founder of Vipo Asia, a Suzhou, China based company which provides a valuable service for small to medium sized businesses throughout North America and Europe who want to do business with China.  Calipe is a honest man of integrity from Singapore, who provides fascinating views on topics ranging from Chinese culture, the role of government, China’s place in the world and more.  These views don’t come from books, they come from his 30 + years of experience working in Singapore, China, the US, Puerto Rico and other places.

Wandering China – Bob Xiansheng’s (Mr. Bob), Wandering China Blog mainly collects articles and information from news sources based in three countries – China, Singapore and Australia. They are then presented with a palatable, easy-to-read synopsis.  Bob’s blog are the chronicles on the journey of understanding the imagination of China by overseas Chinese.  His views are insighful, beautifully written and magically logical. Bob is a 3rd generation overseas born Chinese (in Singapore), who currently resides in Melbourne, Australia .  As described on his blog, he was brought up with Western lenses and in fact considers himself  so westernized that he could hardly speak or read Mandarin. He has now rediscovered his roots and humbly shares his views with the world on Wandering China.

Transcending Culture Shock – Written by my good friend, Mr. Justin Calderon, whom I consider Shanghai’s guru on accessing, dissecting, and analyzing pan-Asian culture and geo-politics.  Justin has traveled in 13 countries and regions in the Far East and lived and worked in many of them for extended periods of time.  He is a passionate journalist who strives to understand the world with unbiased eyes.    In addition to this blog, you can also discover and learn about the incredible places he has traveled  by reading his travel blog, The Expenditioner.

Happy reading folks.

China revives The Silk Road

Guest post from Calipe Chong, founder of VipoAsia and author of VipoAsia’s blog

The Ancient Silk Road - Wikicommons

China adopted West Development Strategy since January 2000 to beef up the economic development in the western region to close the gap with the prosperous eastern region at the coast line. In the last 10 years, the central government had financed more than 3.5 trillion yuan ($512.4 billion) to support development of the western region which consists of 12 western provinces, autonomous regions and municipalities with a combined population of about 370 million. They include Sichuan, Yunnan, Gansu and Shaanxi provinces. This year alone, China planned to invest 468.9 billion yuan ($69 billion) for projects in this region.

President Hu Jintao announced on May 21 at the central work conference that Xinjiang Uygur Autonomous Region would receive 2 trillion yuan ($295 billion) in next 5 years for fixed asset investment to double up its GDP to national average by 2015. The purpose is to improve Xinjiang’s infrastructure, self-development capacity, ethnic unity and social stability. Premier Wen Jiabao also proposed a series of preferential policies to boost Xinjiang, among which was the resource tax reform launched on June 1. The government is trying hard to reduce regional income disparities which have escalated into a big social problem. It hopes to harmonize the strife tension between ethnic Uyghur and Han Chinese.

The vast natural resources on minerals, oil and gas would also provide the return on this vast investment. Central state-owned companies and large private corporations are becoming a powerful engine for the rapid economic growth in Xinjiang.

Kashgar, an ancient Silk Road trading post located in western Xinjiang, has been singled out as an economic development zone meant to increase trade with nearby Central Asian nations. It is to be modeled after the special economic zone (SEZ) of Shenzhen with preferential policies in addition to becoming a comprehensive reform experimental zone. The 50 square kilometer SEZ is planned to boost the city’s economy and population to one million but also drive the economies of the surrounding cities and countries.

To further enhance the connectivity of Xinjiang, the government had begun constructing the second high speed railway line linking it with the inland cities and Beijing. This would make the journey from Urumqi, provincial capital of Xinjinag, to Beijing an awesome 12 hours compared with the current 40.

China has developed her high speed train to a remarkable speed of 350 Km per hour. And she now has the longest high speed train network in the world. She is experimenting train with speed of 500 Km per hour which will be delivered in less than 5 years time. The engineers and scientists are researching train with speed up to 1,000 km per hour. They hope the super high speed train would be operational in 10~15 years time. If that happens, it will revolutionize the whole transport industry and a major threat to short distance flight. The whole supply chain will have to be remodeled.

With the success of her high speed train, she now embarks on a very aggressive ambition to develop transcontinental high speed rail lines spanning across 17 countries. She is planning to develop 3 major rail lines as follows:

(a) Southern route – Kunming in southwest China with Singapore passing through Myanmar, Vietnam, Cambodia, Thailand and Malaysia

(b) Western route – Urumchi in northwest China with Germany passing through Kazakhstan, Uzbekistan, Turkmenistan, Pakistan, Iran and Turkey

(c) Northern route – Heilongjiang in northeast China with South-Eastern Europe through Russia

The whole network links 28 states with 81,000 km railroads. This massive network connecting China with Central Asia and Eastern Europe looks so much like the ancient Silk Road. I call it the Metallic Silk Route. It is mind-boggling and breathtaking for China to visualize such almost impossible feat. China has meticulously setting her plan to rekindle the ancient trading with Central Asia, Eastern Europe, Russia and South Asia.

She plans to build it with her own money in exchange for resources from the respective states. This would help her to tap opportunities and resources from the resource-rich Central Asia and less dependent from her current overseas suppliers. It will probably bring tremendous trade opportunities and wealth to the under-developed Central Asia which has been deprived from the global economy for centuries. Many states may find it hard to resist the China offer. Without the high speed railway, it is difficult for them to sell their resources to finance the nation building and welfare development.

The direct access to Middle East and Eastern Europe without using the sea lanes would mean that China can depend less on the narrow, congested and pirates infested Malacca Straits and controversial India Ocean and South China Sea. Any hiccups at these sea lanes could bring China economy to her knees. Chinese does not like someone holding his throat. The massive man power and resources to build and maintain the Great Wall to deter the invasion from the West is a good example of what China would do to keep her safe.

We need to understand the impact of ancient Silk Road to the countries involved to conceptualize what the Metallic Silk Route would bring to the region. The ancient Silk Road was an important path for cultural, commercial and technological exchange between traders, merchants, pilgrims, missionaries, soldiers, nomads and urban dwellers from China, India, Tibet, Persia, Arab and Rome for almost 3,000 years. The eastern road was made safe from bandits by the Han Dynasty in early 200 BC. Han Wudi managed to foster a safe passage with the various kingdoms in the region.

The road which was reputed as 6,400 Km long enabled trade in silk, slaves, spice, perfumes, medicines, jewels, artifacts, glassware, etc. More importantly it allows the spread of knowledge, ideas, teachings, culture, food, music, language and religion. All the countries not only gain wealth from the immense trading but also intellectual development from the diverse countries. Many inventions and thoughts were developed. It had flourished the civilizations at both ends of the continent. Buddhism was brought to China from India while Islam was brought to Central Asia from Arab. There are many Chinese Muslims living in western China right till now.

The Turks who came into power after the fall of Mongol Empire had literally cut off the Silk Road around 1400 AD. It had deprived the West from access to beloved silk and spice from the East. This had compelled Portugal and Spain to find an alternate sea route to the East. The success of the maritime explorers brought Europe to Asia and had helped it to become colonial powers for centuries. Without the quest to the East to acquire the commodities, the global development would not be what it is today.

In ancient time, the Romans would pay gold for the silk from China. And now China is buying resources from Central Asia with her huge foreign reserves. The Metallic Silk Route allows her vital oil and gas import from Middle East and Russia to flow in through an alternate route. This is a very critical strategy to sustain her huge consumption of energy. And she is also less vulnerable on the negotiation table with the less friendly countries.

China attempts to revitalize trading with her western neighbors is sensational and formidable in this new century. She cannot do it alone. Besides the contiguous states along the railway lines, she also needs the investment and involvement from the well developed nations to succeed. This spells great opportunities for companies willing to venture in this new frontier. This will be a new chapter in global trading.

In twenty years time, the whole Asia will revive her glory, might and global dominance once again after a millennium gap. The impact would be far greater than the ancient Silk Road era. The wind of power and influence never stop circulating around the globe.

* This entry has been published with the permission of the author, Calipe Chong of Vipo Asia.  Please visit VipoAsia to access his blog directly and read more of his insight on Asia and the world.

Different facets of China

Guest post from Calipe Chong, founder of VipoAsia and author of VipoAsia’s blog

Different facets of China

China Daily reported on July 31 that China had just overtaken Japan as the world second largest economy. Yet her per-capita income grows modestly to US$3,800 which is miserably small compared to US ($46,730) and Japan ($33,280). It is interesting to see a communist state which was a less developed country just thirty years ago has achieved the formidable status in such short time.

Her economic performance has baffled many economists, academics and politicians inside and outside China. Standard economic theories do not explain China model adequately. Many economists have predicted that her property bubble is going to burst with humongous damage the world has never seen. Yet she is still able to hang on to the property growth. Not so long ago there was still wide media coverage on the infamous poor quality in food, products and services. But now, some well developed countries are setting up tariffs to block some Chinese imports to protect their own industries.

Conflicting theories and hypothesis have been published to depict the China model on her success and failure. All seems to be true. Why is it so? I like to use the analogy of seven blind men touching different parts of an elephant and each claiming they know what an elephant is like. Yes China is so huge and diversified that you cannot find another country similar to her state of affairs.

The fundamental of her administration is a socialist system managing a capitalistic economy. She does not adopt all the western economic practices. The practices and theories are selected and customized to her needs. Even the communism which Mao Zedong preached was different from Russia.

Her exploded economic development with the high rise buildings, higher standard of living and the expensive cars on the road have led us to believe the capitalism is at work. The Chinese are very capitalistic indeed but not the administration which is a unique socialism that China has evolved it into. You do not find the local financial institutions behaving like their peers on the Wall Street across the ocean. Also when the state owned corporation chiefs want to overly compensate themselves, you will find a directive from the central government to curb the remuneration and bonus for these chiefs. The chiefs have to quietly adhere to the directive. President Obama has to fight acrimoniously in the Capitol Hill and with the media to push his course. Thus using the western yardstick to comment China is stepping on the wrong foot.

You cannot use Japan property bubble burst or even the recent Dubai case to explain China property phenomenon. You can use it if China is only Shanghai. Though the property price in some major cities is outrageously high beyond one imagine, China has so many other cities to lessen the impact. There are four forces in play and each trying to control the property development. Firstly the central government wants to curb the price increase so as to allow the low income group to own a home. The local governments rely on the sale of land for their revenue; while the property developers want to manipulate the market for their profit. And lastly the home buyers want to speculate to make hefty profit too by borrowing from a pool of relatives and friends. The collaboration between local governments and property developers against the central government will put up a spectacular show of who is mightier. The home buyers will determine the tip of the balance. That is, if more home buyers believe the price will keep escalating and flock to the sales office, the central government will introduce more drastic legislation to cool the market. The Chinese government needs to find alternate investment vehicles for her rich citizen in order to alleviate the heat on property speculation.

The major coastal cities are well developed with the standard of living comparable to developed countries. The western and some central regions are less developed and offer the same kind of opportunities and environment the coastal cities have provided two decades ago. Thus there is still ample growth opportunity for China. Many companies have moved inland to avoid the higher operating cost at the coastal cities. China has a combination of high tech industries and low cost manufacturing base. It is too early to foretell that many manufacturing companies will leave China for cheaper place elsewhere. Many companies had indeed left for India and Vietnam but also some of them had quietly returned to China too as there is no other place like China that could offer cost competitive environment plus a huge growing market. And also the competent and hard working workers at comparative low cost are another strategic leverage China has.

As for the Chinese, they are too large to be generalized. With 1.3 billion people, you can always find both extremes from the malevolence to most humble people on the street. There are many “Forrest Gump” everywhere complementary the unscrupulous people preying on the innocents. Many younger Chinese have adopted the western beliefs and way of living. But when it comes to distress and problems, they usually refer to the ancient wisdom for the solution. This is probably why some of the westerners are caught off guard with the Chinese reactions. There are no lack of heroes and generous donors during disasters. It is one of very few countries where the soldiers carry spades and rescue kits in the disasters instead of riffles to deter looters. On the other hand, one has to be very prudent with strangers on the street. Many foreigners have been cheated by them. Henceforth the good and bad experiences that the foreigners have encountered are just various aspects of life in China.

Looking at the hindsight, is not this situation similar in almost every countries? There are always the good, bad and ugly in every race and society. The Chinese is just like everybody staying next door and colleagues you either love or hate in the office.

Similarly, regions and ancient philosophies are also intertwined that they are far from the originals. Buddhism, Confucianism and Taoism are three most widely accepted religion and practices in China for thousands of years. You can find Taoist deities in the Buddhist temple and vice versa. Zen is often practiced by Buddhist and Taoist. Current Confucian teaching had been mixed with Taoist thoughts which in turned were borrowed from some ancient philosophies and suppositions. Most Chinese live by the principles and practices from these three teachings. Even the Muslim and Chinese Christians observed some of the Chinese rites. Foreigners are not familiar with these Confucianism, Taoism and some ancient teachings and thus they easily misunderstand the Chinese and the culture.

China has a facet in every angle. One has to be discreet when writing about the course of events in China or anticipating her moves. There are many self-opposing conditions, practices and thoughts which the western world is not familiar with. The Chinese has mastered the art of balancing the “Yin” and “Yan” and survival skills from thousands of years in war and conflict.  Welcome to China!

* This entry has been published with the permission of the author, Calipe Chong of Vipo Asia.  Please visit VipoAsia to access his blog directly and read more of his insight on Asia and the world.

Labor cost in China

Guest post from Calipe Chong, founder of VipoAsia and author of VipoAsia’s blog

Labor cost in China

Recently there are two labor unrest cases widely reported in China. This is uncommon as the Chinese media usually do not report such cases involving big foreign MNC in China. Besides trying to demonstrate her openness in news reporting, there could be a subtle change in mindset on how much the government could tolerate the wage abuse by employers. It is a well known fact that the local government is very accommodating to big foreign companies in their prefecture as the latter would provide labor and tax revenue. Thus many such companies could get away with labor abuse and flouting regulations.

The first case involved Foxconn where 13 suicide attempts were made and caused 10 deaths. Some employees citing to journalists that the tough management and long working hours (80 hours of overtime in a month) are the main stress they are enduring. The victims were young with average age of twenty and unlike their parents, are less tolerable to hardship, ambitious and more solitude which could be the result of the one-child policy.

With the bad publicity and customer pressure, Foxconn increased 30% on the basic monthly wage for most of its 800,000 employees in China. The production operators have their wages increased from RMB900 ($132), which is the minimum wage level, to RMB 1,200. And Foxconn is also considering providing housing allowance for 80,000 employees in its Yantai plant in Shandong province. The annual cost would amount to RMB200 million ($29.3 million).

The second case was the strike by the workers of one components manufacturing plant of Honda in southern province Guangzhou. The strike had caused four other Honda assembly plants to shut down production. Honda subsequently increased the basic wage by 24%.

There were also reports about trade unions and local communities forcing some US fast food chains to raise the workers wage to the stipulated minimum wage level in China and Hong Kong. To shun the bad publicity, many of these fast food chains have reluctantly agreed to meet the minimum wage level for their workers.

Such wage increase in Foxconn and Honda has created severe repercussion to other factories especially those at coastal provinces. The workers may demand wage increase and follow the Honda example. Labor supply at the coastal cities is already very tight and the employers have to increase wage and benefits to attract workers. One Hong Kong businessman commented on a TV news interview that 2,000 to 3,000 Hong Kong companies in Guangzhou would encounter difficulties to match the pay rise by Foxconn and Honda.

The current skyrocketing increase in property price and some inflation on food have put tremendous stress on cost of living for many Chinese. Consequently the pressure is exerting onto the government to address the issue. Without an effective curb on property price increase at the moment, the government may want to increase the income level for her citizen especially the lower income bracket to combat the rising living cost.

China may also want to sway away from a sweatshop industry which she is widely known as. The low cost merchandised goods do not seem to be appreciated by her American and European customers. Not only are the customers putting immense pressure to force China to appreciate the yuan (RMB), the local trade unions and politicians are targeting China as the culprit for their woes on unemployment and loss of competition. Thus it makes better sense for Chinese government to increase labor cost to soothe the trade friction with their US and Europe customers than to appreciate her exchange rate which will cause acute economic and political pains to the country and the people.

Many Chinese I have talked to and also from the Chinese blog websites are showing anger on those foreign countries forcing China to adhere to their demand to appreciate the yuan while insisting on low cost goods as many foreign buyers do not agree to price increase whenever there is an appreciation on the yuan. To further aggravating the situation, some countries are putting up trade barriers to fence off the competition from China. This acrimonious trade dispute will lead to further misunderstanding and hostility not only between countries but also people from both sides.

China is also embarking on her fiscal policy to spur up domestic consumption. This will reduce her reliance on export to maintain economic growth. After all she needs a balanced economic structure for sustained growth and social harmony. Unfortunately the increase in domestic consumption has met limited success other than the housing and luxury goods. Henceforth an increase in income for the masses will boost the domestic consumption.

Thus I sense the Chinese government is giving indirect consent to the trade unions to bargain for higher wages. Though the Chinese government implicitly allows the wage to increase to appease her citizens, the cost competitiveness is not lost. Many of her inland provinces are providing abundant resources and manpower to accommodate the low cost manufacturing. However the price will still be higher than what the foreign customers are accustomed to. The transfer of technologies, management knowledge and labor skills from the coastal cities to the inland industrial parks will ensure their strategic leverage and competitiveness against other low cost manufacturing countries.

This may help China to reconcile relationship with US and Europe with the slightly higher product cost. After all, an increase in domestic consumption would also increase in import too. And this will help the foreign companies to fulfill their goal to capture the immense China market.

* This entry has been published with the permission of the author, Calipe Chong of Vipo Asia.  Please visit VipoAsia to access his blog directly and read more of his insight on Asia and the world.

Difference in upbringing between China and America

Guest post from Calipe Chong, founder of VipoAsia and author of VipoAsia’s blog

Not so long ago, I had read from newspapers how teenagers were treated by their parents in the East and West.

Just last month, many parents in China were almost hysterical when their child sat for the college entrance examination. They would put up at hotels next to the school so that they would not be late by the morning traffic. Reported incidents were common on rifts between motorists and parents who self-volunteered as traffic warden to stop cars from coming near school to prevent noise getting into the examination hall. Many parents would take leave from work to stay at home to coach the children and accompanying them to school. June is the most stressful month for parents with children taking “Gaokao” which is the college entrance examination.

In the West, parents do concern very much about their off-spring performance in school. They would work very hard to save enough money to see their children to have the highest education possible. However they would not act in a very protective manner like the Chinese.

Some parents even encourage their child to take up very dangerous endeavor. Young teenage girls from US, Australia and Netherland had their parent consent and encouragement to make solo sail around the globe. There is an America teenage boy attempting to be the youngest person to scale Mount Everest. He had already successfully reached many of the top peaks in the world. His parents are in full support for his courageous attempt.

Such support from parents to fulfill the dreams of their off-springs in these dangerous feats is unimaginable by the Chinese parents. My mom told me that I would always be her boy as long as I am a bachelor. I remembered how my mom told me not to go near water, road, etc for my own good when I was a child. I have seen this attitude very common in China after living here.

I see the subtle difference in upbringing between America and China. In China, the parents attempt to provide everything to the child and are very protective; while in America, the child is given more freedom to develop on his or her own. The Chinese businessmen would like the son to take over the business while the young American has the option to choose otherwise. Bill Gates does not leave all his fortune to his children. The paternal culture in China is analogous to giving fishes to the fisherman while American parent teach the son to fish.

This is a much generalized statement. I have seen some Chinese parents allowing their sons and daughters to strike out on their own while some Western parents are as protective as the Chinese parents. I am comparing the general trends that I have seen in both countries.

Another observation is how school conducts its education. In China the parent would fault the school if it does not provide sufficient homework. The Chinese education is to read more books, do more homework, remember more data and figures and score more points in examinations.

The America education, on the other hand, put less emphasis on final examination results and wanting the student to develop his or her ability. From primary schools to colleges, American students would stand in front of the class to relate their experience and insights while the Chinese students would take whatever the teachers say. Just sit there and listen. I guess that is the reason why you find the American articulating very confidently in public speeches or business presentation. If you attend a seminar dominated with Chinese audience, you will find very few raising questions. They are just not comfortable to stand up to speak.

When a Chinese has a tragedy and become paralyzed, he would expect his family members to take care of him. Many Americans having the same ill fate do not want to be treated as a handicapped person. They want to be independent and some of them have even tried to perform feats such as running hundreds of miles, swimming across the channel, scaling some heights, etc. Their perseverance and zeal are admirable.

And when it comes to mass mobilization, the Chinese outdo everyone. The precision display in its 2008 Olympics Opening performance demonstrated to the world on its militarized discipline of the soldiers and students. Few countries could match her achievement in such large scale performance.

The Chinese way of disciplining the young to follow orders and acceptance of filial piety as one own responsibility has helped to develop a harmonized society. The Confucius ideology is deep rooted in Chinese culture and has transpired the Chinese to be humble, righteous, polite and filial. The Chinese emphasizes on society (country) over self has produced many heroes and heroines against the enemy and natural disasters since ancient time. The numerous heroic acts and generosity shown two years ago in Sichuan earthquake is a classic Chinese behavior. This could not have happened without the unique Chinese upbringing.

I am not criticizing the Chinese way of upbringing nor adoring the American way. The Chinese has produced many talented scientists and engineers while the US has her problems on the rampant juvenile delinquency. There are merits and shortcomings in both systems and environments. We should learn from each other the good and discard the bad. There is something we can adopt in between from the Chinese to manage the masses and the American way of promoting individualism.

* This entry has been published with the permission of the author, Calipe Chong of Vipo Asia.  Please visit VipoAsia to access his blog directly and read more of his insight on Asia and the world.