Some dreams are personal and some are shared, but the essence of a dream is change, and change is only possible when there is opportunity.
For centuries, America has been the land of dreams, dreams based on what was possible. Self-reliance, hard work and luck could bring financial stability, political enfranchisement and the ability to choose one’s beliefs – a contrast to the “Old World” where success, position and thinking were dominated by entrenched institutions and those with hereditary wealth and power.
For most, their dreams were bought and paid for with sacrifice, but there were no guarantees, even with hard work, delayed gratification and grit, for some, the dream became a nightmare. But for many, America’s vast resources and open society was a beacon of the possibilities, where large numbers realized part or all of their desires through hard work and self-sacrifice.
Today, almost 400 years after the Pilgrims landed in Plymouth, the “American Dream’ is in flux. With a landscape that increasingly resembles the “Old World” of entrenched institutions and hereditary wealth and power, there is uneasiness about the balance and nature of American power and values. As years passed, dreams changed. After World War II, the consumer revolution which powered America’s economy and middle class created new dreams. In contrast to the dreams of the pioneers, which was to be free to live by their own wits, work and values, the latest dreams seems to be about realigning the country around a collective set of values, a difficult task given the diversity of our cultures, opinions and values.
Why this rather long preamble about America if this column is about doing business in China?
Those who fail to understand China’s rapid changing reality and dreams will need to be lucky if they want to be successful in China. The number of China’s consumers is growing, and the stuff of dreams is what propels their buying decisions, so understanding their dreams will help you anticipate, rather than follow the market.
First, put aside your crystal ball. Dreams are not mystical. They are driven by self-perception; the measuring sticks of our own devising. This applies to both individual and shared dreams.
At the moment, China is going through a period of economic adolescence due to a 20-year expansion, which has seen it achieve historic milestones. The problem is that there are two Chinas: the 600 million who can spend one third of their incomes on discretionary purchases and the 800 million who can not. As in America, circumstances and time have radically changed people’s expectations and dreams in China. Twenty years ago, as an individual, if you owned a bicycle, or a watch, or a sewing machine, you qualified as a person of substance. These were the items of desire and dreams. In terms of the family, as a parent, a home, education, a good marriage match to a dutiful and supportive spouse and seeing the next generation born, were the stuff of dreams. Today, to achieve the same level of admiration, as an individual, you would need a Mercedes S Class sedan, a Piaget watch and their own company. For parents, it is now a mansion, an education which includes elite Chinese and international universities, a marriage with someone of similar background and financial security for the generations of the future.
The United States went through a similar metamorphosis in values and goals in the late 1800s. The major difference between our experiences is, China made its transition in 60 years, where we have taken 400.
Today, in China, for the individual, it’s the nouveau riche, “got rocks,” “show bling” period of jets, helicopters, massive mansions, overseas vacation villas, grand tours and diamond-bejeweled cell phone cases. But China’s new wealth is already beginning to bow to the global elite. Fewer logos, more quality and “in the know’ brands are becoming the new “it.”
These luxuries include owning a box at the races in Dubai, membership in an exclusive foreign club, a round of golf with your fellow business titans – all the things money cannot buy directly, or in other words, acceptance. In turn, China’s wealth is reshaping perceptions of luxury, and thereby the dreams of millions who are not Chinese. Having taken over the top spot in luxury consumption of foreign brands, not only are the premium brands chasing the Chinese market but high-end Chinese brands, which now produce exquisite designer goods, are setting up shops in Paris, Milan, New York and anywhere there is money and desire to purchase the things that people dream about.
While little divination is needed to understand the dreams of individuals, the collective dreams of nations are less transparent. A more confident and hard-edged China has emerged recently, and with it questions about how China will use its economic and political clout. Internally the questions are even more complex, as the Communist Party struggles to define itself in its new context. Originally a catalytic means to achieving a utopian society, the Party became the governing architect of New China’s success. But, it was a success that threw out the ideological play book and embarked on an uncharted course.
It has been wildly successful, but as always, any new solution only gives rise to a new set of problems and as China realigns, its individual and collective dreams are in play. Will the Party be able to convince its citizens that the key to a greater China are the sacrifices necessary to make its dream a sustainable reality, or will it take the politically easy path of populist appeasement?
To many in China, the collective dream is about what they want: good-paying jobs, free health care, excellent education, affordable housing, a cleaner environment, a more enjoyable life and transparent accountable governance and processes. But it is not clear if China can afford to provide these, or how they will be sustained, as growth and revenues slow. The difficult part will be calculating and assigning the responsibilities and costs which are part of the realities of making dreams come true.
I guess we shall see and hopefully learn.
Why is this important? Because when dreams and reality meet, there are opportunities to profit and learn. Something to think about as you mull your coffee and think about your own dreams.
Einar Tangen, formerly from Milwaukee, now lives and works in Beijing, China. He is an adviser to Heilongjiang Province, Hebei Province QEDTZ, China.org.cn, China International Publishing Group, Beijing Baotong and DGI DESIGN. He is also a weekly public affairs commentator for CCTV News’ Dialogue and the author of “The Kunshan Way,” an economic development history of China’s leading county level city. While in Milwaukee, he was a partner at Jackson, Morgan and Tangen, president of E-Tech and a senior vice president at Stifel Nicolaus. He chaired various boards in Milwaukee and was a member of the Federal Home Loan Bank of Chicago. Readers who would like to submit questions or suggest areas of interest can send an e-mail to steve.jagler@biztimes.com.
