The expression, “The road to hell is paved with good intentions,” is attributed to St. Bernard of Clairvaux, who authored a similar thought in 1150. Nearly 1,000 years later, not much has changed.
It is apparent that with the best of intentions our leaders are trying to fight today’s economic crisis with yesterday’s economic strategies. As the eyes of the world look to the United States to unravel the economic riddle it created, few in China have a sense that there is much going on, other than well-intended reactions to the day-by-day situation.
“Half-pats” are foreigners who speak Chinese and who already live and work in China. They are generally younger than age 35, and in addition to speaking and writing Chinese, most have studied Chinese culture and/or religion. They become valuable after they have acclimated to China in general and their area in particular, which takes about three years. Because they are already in China, have dual perspectives, experiences and local knowledge, they have become one of the most sought-after group of employees for foreign enterprises doing business in China and Chinese businesses doing business abroad.
Last week, I sat with a group of young twenty-something “half-pats” who had been in China/Beijing for about three years each. As a group, they covered the political spectrum from liberal to libertarian, but on several issues they all agreed: they believe they are better off in China than they would be in the United States, and they believe that the current effort to prop up failed businesses and their management teams with billions in cash is ridiculous.
Why is this noteworthy? There are two reasons: they seem to grasp the fundamental economic issues we face better than most of our experts, and “half-pat’s” are the new “ex-pat’s.”
“Half-pats bring skills, knowledge and commitment to the Chinese marketplace which their “ex-pat” predecessors lacked. Instead of viewing their China experience as the price of climbing the corporate ladder, “half-pats view China itself as the opportunity. Having listened to a number of discontented “ex-pats” as they verbally mowed down every aspect of their existence in China vs. the focused and upbeat chatter of “half-pats,” its easy to see why employers, foreign and Chinese, are looking to hire them.
Taken from a purely economic view, Chinese workers are paid about a one-third of their U.S. equivalents. A “full boat” “ex-pat” costs about two times more than a U.S. employee. A “half-pat” earns about 1.5 times their native Chinese counterparts.
For example: a middle manger who would cost you about $50,000 in the U.S. would be $100,000 as an “ex-pat,” $25,000 as a “half-pat” or RCP (returning Chinese professional) or $16,000 for a local. Taken together with the generally more positive attitude and usefulness of “half-pats,” it explains why the ‘”full boat” “ex-pat” position is on the endangered species list.
As linguistic and cultural hybrids, “half-pats” and RCPs are becoming one of the new components of China’s global economic engine. As they become the dominant force manning the bridges of Sino-U.S. commerce, their attitudes and perceptions are increasingly important. As individuals with dual perspectives and experience, they become the de facto translators and spin masters of U.S. policy, culture and economics. Their incredulity at the actions of our policy makers will have a profound effect on perception of those they talk to.
Of my group, two were American, one was Canadian, two worked for international Fortune 1,000 companies and one was six months into having started his own business. I asked each what they thought of the current U.S. Treasury Secretary’s economic crisis plan. They made it clear that they did not think he had a plan. To them, the “bad bank” idea sounded like a sleight of hand to use taxpayer funds to bail out incompetent companies and their management teams.
I asked them what they would do with the automakers and banks. They replied that those companies which were unable to run their business should go through bankruptcy and not be bailed out by taxpayers.
I asked them if there was a danger of world economic collapse if the current set of financial institutions were to fail. They indicated that the banks have already failed and it would be better to have the market value the pieces that could be salvaged from bankruptcy rather than throwing good money after bad by supporting failed institutions and management.
I asked them what role, if any, the government should take. They split between letting the market take its course and having the government stimulate the economy by funding direct economic stimulus projects to create tangible assets and jobs in areas such as infrastructure and green technology.
Asked about the credit crunch, the group’s opinion split. One suggested that most of the businesses asking for loans currently were not creditworthy, and the problem was the markets, not the money supply. The other two suggested that rather than injecting funds into problematic financial institutions, the government should use solvent financial institutions to administer a government loan pool. In other words, rather than creating a “bad bank,” they should create a “good bank”.
It was refreshing to talk with a group of young people who had reasoned practical opinions and suggestions. In many ways, they seem to be the new pioneers of their generation, and I wish them well.
For those of you who plan to venture into China, you should look carefully at the resources available. There are more than 300 known alumni of the University of Wisconsin-Madison residing in Beijing alone. Two of them were part of the group I talked to, and there are thousands more from the UW and other schools and businesses from Wisconsin throughout China. Tapping into this community can be a useful and cost-effective part of your China business strategy.
