Since the late 1970s, China has undergone far-reaching economic reforms that have lifted over 800 million people out of poverty – an achievement that stands out in the history of global poverty alleviation. The sheer speed of change is astounding, showcasing China’s ability to adapt and grow rapidly in an ever-changing global landscape in the past. But how will the future look like? Of course, the election of Donald Trump as the new president of the USA for the coming years, will bring an additional dynamic to the relationship between the West and China.
The Social Contract: A Pathway to Prosperity
At the heart of this transformation is a unique social contract between the Chinese government and its citizens. This unwritten agreement says that by adhering to the guidance provided by the state – through policies promoting economic growth, stability, and social welfare – citizens can expect a share in the nation’s prosperity.
This contract has driven a remarkable synergy between the government and the people. The Chinese leadership has focused on economic reforms, infrastructural development, and poverty alleviation programs, fostering an environment in which citizens and entrepreneurs can thrive. However, during Corona times, we have seen that this contract has been challenged. The citizens only give away personal rights and freedom, if the governmental system delivers.
The Role of Government and Community
The Chinese government has played a pivotal role in this dynamic. Policies aimed at economic liberalization, rural development, industrial promotion, and investment in education have empowered individuals, companies, and communities across the country. Many initiatives have led to unprecedented improvements in living standards.
Community and local government involvement is equally vital. Many provinces and cities developed industrial clusters or areas through industry parks. These parks have always been intertwined with local government, branches of the communist party and the authorities.
The Importance of West-China Exchange
As we recognize these achievements, it’s crucial to put an eye on the importance of mutual exchange between China and the West. In a world facing pressing challenges such as economic decline, inflation, regional conflicts, hunger, poverty, and climate change, solutions can only be achieved through collaborative efforts that respect each other’s values and promote continuous dialogue.
The relationship between the West and China should not be limited to the trade of goods, services and ideas but must encompass a holistic approach that prioritizes shared goals and mutual benefits.
Global companies need to be active in China – not only to engage in the market and to learn from their customers, but also to gain competitiveness. With our Western slow-motion way, we should not try to compete at ‘China speed’ (neither in one of the largest economies in the world nor globally) without knowing what is going on in China. However, if we combine the strength of a long-term approach with a broader consensus culture, and the Chinese market insides, as well as some more speed, we gain a new competitive edge. Through business interactions, we create opportunities for mutual understanding, bridging cultural gaps and fostering a more inclusive global community. Moreover, such a dialogue will reduce tensions between nations.
A Personal Reflection
Having visited China almost every year since the early 1990s, I have had the privilege of witnessing the country’s incredible development firsthand. I’ve seen not only the rapid growth of the nation but also the evolution of our company and the development of my colleagues. The Chinese people deeply love their families and children too and they are committed to building a better future, sharing a desire for a common good.
A Balanced Perspective on Values
Certainly, the West observes critical issues such as free speech, personal rights, private ownership of land, and human rights with a particular lens. It’s essential to recognize that our views of the world are shaped by our historical context. Our value framework emerged in the aftermath of wars in the West with a strong impact on individual freedom and rights. However, this may not fully encompass the perspectives of modern, high-density populations in China, and the need for a more collective approach for the society. It might as well not blend in enough of the Chinese historical background.
Population Density: A Comparative Perspective
To illustrate these differences, consider the population density in key regions:
- The Pearl River Delta, including major cities like Guangzhou and Shenzhen, has a population density of around 1,200 people per square kilometer. This area is one of the most densely populated urban regions in the world, reflecting its rapid economic development and migration patterns.
- In Beijing, the capital city, the density is approximately 1,300 people per square kilometer, driven by its role as a political, cultural, and economic hub.
In comparison, the Netherlands has a population density of about 500 people per square kilometer. While this is high by global standards, it is significantly lower than that of the Pearl River Delta and Beijing. The differences in density highlight distinct challenges in urban planning, infrastructure, and resource management in these regions, regardless of the different climatic conditions.
High population density in regions like the Pearl River Delta and Beijing brings both opportunities and challenges. On one hand, it fosters economic dynamism hyper-competition and innovation with ‘China speed’, as a wide and diverse range of talents converge in urban centers. On the other hand, the hyper-competition for resources, jobs, and housing creates significant social pressure and of course increased environmental burden. This framework can lead to heightened stress levels among individuals and families, as the desire for upward mobility and a better standard of living becomes a driving force. The urge to succeed can have many side effects. Managing this social pressure is crucial for sustainable development and the well-being of citizens in high-density regions.
Current Challenges and the Unwritten Contract
Despite its rapid progress, China faces significant challenges, including a struggling housing market and its financing as well as rising living costs. For the first time a young working generation, are confronted with higher costs and an economic downturn. In this context, the government must find a way to manage the unwritten contract between the people and their political leaders. Balancing economic stability with social expectations will be critical to maintaining public trust and fostering continued progress.
China has lost some of its trust in many Western countries and companies due to the behavior of its political leadership. Regaining this trust will require significant effort, especially as Foreign Direct Investments in other parts of Asia have surged, now rivaling those in China. This shift underscores the need for China to re-establish itself as an attractive destination for investment by addressing concerns around governance, collaboration and transparency.
A Call to Action
While China’s achievements in poverty reduction are commendable, the journey is far from complete. New challenges, such as urbanization and income inequality, require fresh commitment. Reinforcing the social contract is essential to ensure that prosperity remains inclusive and sustainable. This involves continued investment in education, healthcare, and technological innovation to bridge the gap between urban and rural areas. This as well opens up many business opportunities for the West and requires innovation to accomplish in a sustainable way.
Moreover, fostering international cooperation will be essential. By working together, countries can create sustainable solutions that transcend borders. An approach open to dialogue, understanding, and shared values will pave the way for a more equitable future.
Conclusion
The strides made in reducing poverty in China are a testament to the power of strategic governance and community engagement. As the nation moves forward, it is crucial to uphold the principles of the social contract and ensure that prosperity is not just a promise but a reality for all citizens. If this does not happen, if a large amount of people gets unhappy, not only the Chinese government, but also the West will be in trouble.
By collaborating with the West and encouraging companies to engage actively in China, we can address global challenges more effectively, support and enhance mutual understanding. Together – governments, communities, companies and individuals – China and the West can continue the journey toward a more equitable society, ensuring that the next chapter of our common history is one of shared success and lasting impact.
