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AB 2000 studies

Alain Boublil Blog

 

Autumn in Beijing

While the Chinese capital is getting ready to host the leaders of the Pacific Rim for their annual summit, families enjoy the autumn sun and its last rays to walk in Beihai Park, in the shade of willows bordering the lake and surrounding the White Pagoda. Grandmothers radiate happiness; couples make selfies with their latest smartphone and their children, less and less unique, express their joy. Three generations get together.

 Mao’s generation did not forget the misery and famine, which succeeded a century of violence, civil wars and foreign occupations marked by atrocities. But they also know that this might have been the price to pay to give China its unity and sovereignty. Deng’s generation has just experienced thirty years of development and extraordinary enrichment, somehow unique in its scope and duration in the history of mankind. And when these two generations are watching their children and their grandchildren, they cannot imagine that this progress would be stopped. That is why those who, especially in Europe, predict social explosions and the end of the "Chinese miracle" are wrong. For sure, tensions here and there, appear. But they would not reach the point where the foundations of Chinese society might be challenged and its development be interrupted because no one has forgotten from where the Chinese people come and no one would take the chance to fall back into a situation of violence, misery and withdrawal.

China's wealth is now the prerogative of Deng generation. It meets the needs of its seniors and prepares their children for an even better future. Hence the dynamism of the Chinese economy: those who can afford buying goods are those who have many reasons to spend. Europe is in the opposite situation. Those who are wealthy are those who least need to spend it: estates are substantial and pensions are guaranteed. We entered the 'silver economy', as stated the Financial Times, the economy of greying temples. Meanwhile, their children are afraid of losing their jobs and their grand children cannot find one. How not to wonder about the striking contrast, in terms of growth, between the two continents?

But this does not mean that China is resting on its laurels. Instead, it has begun to change its business model, as the APEC Summit will show. The country no longer intends to be the main factory of the Western world by subcontracting agreements with global industry that finds then a way to supply its customers while taking substantial margins. This era is coming to an end. The country has acknowledged it and promotes, through partnerships with neighbouring countries, the development of huge markets in the fields of infrastructure and energy. China will then benefit from the rise in their standard of living and will become their preferred supplier. The project "New Silk Road" quite reflects this strategy, and if this reference makes some time people smile in Europe, it is due to a lack of culture as in China, this refers to a time when the country was the “Middle Kingdom” and the first economy in the world, which is today a clearly stated objective China is about to reach.

The same reasoning applies obviously to the "Maritime Silk Road" that complements, through port infrastructure development in particular, this strategic project. The West must be aware of the transformations resulting from the integration of China into the global economy in order to prepare for it and enjoy it. Indeed, the continuous rise in living standards that will result from this strategy and that is already obvious in major Chinese cities, will provide substantial new markets to the companies able to foresee these consequences.

The second part of this transition consists in rebalancing the production and the growth model in order to meet domestic demand - which is now solvent, and better spread across the territory. The scheme based on people’s massive migration from rural zones to gigantic workshops where they are housed and from which they can only escape a few days a year to meet their families during traditional festivals is over. And as it is not possible to accommodate everyone in the big cities of the East and South of China that have witnessed this tremendous growth, the production will be relocated in the centre and the west of the country, and will then cause a rapid urbanization that will aim to establish populations in these new production centres. The movement is already engaged.

For China, this is a cultural revolution as the city has always been regarded as a place of corruption or debauchers. The sovereigns remained locked in their palate and the soul of China was located in the mountains or along the banks of the rivers and rice fields, where one could meditate nature’s lessons. Such was the profound message of the Shanghai World Expo in 2010: there were many pavilions dedicated to the glorification of urban civilization and its contribution, particularly in Europe, to the progress of nations. This relocation of economic activity will also be a powerful source of growth. China's level of urbanization is still low compared to other emerging and developed countries. As the mode of energy and services supply in urban areas is quite different from that in rural areas, there are, again, considerable opportunities for companies, which master these skills.China is therefore nowhere near decline or explosion, because its GDP grew by 7.3% whereas before it was closer to 7.5%: it is rather taking a strategic turn, which will bear consequences on the global economic and financial balances.

Instead of being obsessed with numbers, the awful people who spend their time spitting on the graves of those who have embodied and still embodied the greatness of France, should better spend their autumn in Beijing ...

 

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