CHINA: It may be big, but no dinosaur
Published on May 24, 2004
Finnish diplomat urges objective view of Asian giant's future
K I Woo reviews a presentation on the future of the Chinese economy by a former Finnish ambassador to China and Thailand
The Nation recently featured an interview with a leading Charoen Pokphand Group official about his company's continuing investment in China. During the past several decades, many global companies have invested in China.
Pali Rutanen, a former Finnish ambassador to Thailand and China said that in many ways when people talk about China it sounds like they are talking about a scenario from Spielberg's "Jurassic Park" film.
"When we talk about China, we know there is 'something big out there' but we really don't know what it is. Neither do we know if it's threatening. We know it's there and it's big," he said.
Rutanen had some great advice for businessmen who want to invest in China but are worried by the "bad news" that is regularly prophesied in the press. An old ambassador friend who was born in China once told him that every year Western journalists asked him if this was the year China finally collapses. His friend said that every year he gave the same answer: "China will not collapse."
Last week's Business Week cover headlined again the possible overheating of the Chinese economy and its possible effect on regional and global economies. Objectivity on China's future, Rutanen said, has historically always been obscured by intellectual, cultural and political mindsets.
Despite doubts about the accuracy of China's economic data, Rutanen said few doubted China's more than two decades of unprecedented growth. "We all know that China is emerging not only as a continental economy but also as a regional engine for growth," he said.
As for those businessmen who are concerned with problems such as corruption and huge migrations from the farms to the cities, Rutanen said that the Chinese government has a track record of muddling through even during crises.
China, he said, has had quality sustainable growth during the past several decades. "The leadership have been and are committed to reforms, know the problems and are ready to go through painful structural changes," he said.
On a recent China visit, Rutanen said that a top Chinese official told him that the country was avoiding big bangs such as those that happened in the Soviet Union. "Russia went through shock therapy - all shock and no therapy," Rutanen quoted the official as saying.
From his experience in China and, prior to that, as a Finnish representative to the Organisation for Economic Development (OECD) for six years, Rutanen said the Chinese government had quietly over the past three decades surrounded itself with an expanding group of young and pragmatic technocrats, many of whom were educated in the US and Europe. "You now see young Chinese experts working everywhere - in the OCED in Paris and in many of the top global think-tanks," he said.
China, he said, has 500,000 students studying overseas, 90 per cent of them in the US. "About 150,000 of these students have returned and have brought new management and political ideas," he said.
Rutanen said that a Japanese technocrat recently told him that he feared that if his government didn't implement reforms now, Japan would become an eastern province of China tomorrow. "These are not threats but challenges that all neighbours are feeling when dealing with China," he said.
To really understand China, Rutanen said, people must travel throughout the country and "see the dragon inside China". "There are so many unknown immeasurable factors inside the economy which make China move," he said.
China, he said, is again emerging as an active, confident and sophisticated player in the international arena. Moreover, any fears of an unstable government transition may have been alleviated by last year's premiership hand-over to Hu Jintao.
"Last fall in Helsinki, Henry Kissinger said that the recent smooth changes in the Chinese government guaranteed ten years of political peace in the country."
China's current and future global economic stature, Rutanen said, has had a wide effect, even as far away as his home country.
"The president of Finland recently reminded us all that we cannot draft Finland's new globalisation strategy without fully understanding China's dynamic factors," he said.
The country's dynamic new national technology innovation policies are also expected to ensure China's future influence.
Rutanen said that China was adopting a national innovation system similar to the one established by Finland, involving seamless cooperation between the country's research institutes, government and business. "This triangle has been one of Finland's strengths," he said.
Finnish companies such as Nokia, he said, view China as a critical research and development platform. "For sophisticated multinationals, China is much more than a market-place, its an R and D platform for developing global standards," he said.
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