Thoughts on a lecture by David Gosset

The Chinese are re-emerging – Confucius is back – Industry 4.0 – How to be more Chinese

Another master of storytelling, David Gosset, brought a fascinating view of the current Chinese relationship with the European or Western world. He gave a mind blowing sketch of Chinese history and what it is, might or could be like to be Chinese. Through a haze of ‘big brother is watching’ and persistent ‘hush, hush’ exclamations he warned us of the power threat of a future China. “When China wakes up… we are talking about a few decades from now, not more, when China will reveal itself as a true super power”.

Our world is a world in change because of the ongoing demographical, technological and geopolitical changes. We arrived from a bipolar over a unipolar into a multi polar world. To understand multi polarity we have to de-center. There is no center possible any longer.

Shanghai’s GDP is already the double of the rest of China combined. Once these other more developing regions come to age we will see the emergence of a super power. We haven’t seen anything yet. The Chinese are determined to re-emerge to an economical level that makes them relevant again. Interestingly the concept of leadership is not a typical Chinese one, so they don’t really want to lead or take the place of the US or Russia, nor do they want to follow behind like they used to do. They want to be the co-designer, or co-architect of the 21st century. And they are going fully global for the first time in their history.

Chinese civilization originates in an antiquity so remote that it’s hard to discover its beginnings. There are no traces of the state of infancy. This is a very peculiar fact to consider when you try to imagine being Chinese.

When the written characters first evolved, during the Shang Dynasty in the second millennium B.C., ancient Egypt was at the height of its glory. The great city states of classical Greece had not yet emerged, and Rome was – OMG – millennia away. The direct descendant of the Shang writing system is still used by Chinese people today. Even today they can understand inscriptions written in the age of Confucius, contemporary language is enriched by centuries-old aphorisms citing ancient battles and court intrigues.

This unchanging nature connects everything. The whole history and culture of China and of what it is to be Chinese. There is a very long continuity of culture in China.

Today there is an intellectual and cultural metamorphosis (throwing off another snakeskin) where at a visible level we have a renewal or re-invention of ‘Chinese-ness’. At an invisible level it is a re-interpretation of the Chinese classical tradition. Confucius is back bringing harmony in China!

Let us keep in mind that modernization does not always have to be a westernization. China missed the first two industrial revolutions of the 18th and 19th century and was running behind with mass production while everyone else was already in the ‘electronic’ or IT revolution of the 60’s and 70’s. They are quickly speeding up during the digital revolution and are focussed to get to the 4th revolution early, or on time. China is now a co-architect of the information age and ready to play a huge role in industry 4.0.

Similar to the development of the online consumer, where many Chinese never had a landline phone before and started browsing the Internet directly via their mobile devices, Chinese companies might just skip certain steps of digitalization.

Chinese industrial enterprises will come up with their own ‘Chinese’ concepts of intelligent interconnectivity, which will foster the development of new business models that will also have an impact beyond China’s borders in the future.

Europe needs the ‘belt’ to be closed tightly. They will need their friends on the other side of the new silk road. Currently the trade partners of China are US, EU and the Asiana countries, but the question is who will be their preferred partner in 2050?

Possibly Africa with it’s abundance of resources. Land for food, a new colonization? Maybe. A 2013 study by McKinsey showed that by 2025 half of the most important global companies will be located in the emergent markets profoundly altering global competitive dynamics.

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An overview of what was going on in China during the 3 first industrial revolutions:

  • 1644 – 1911 The Qing Dynasty
  • 1793 Macartney Mission from Great Britain
  • 1839 – 1842 Opium War between Great Britain and China
  • 1884 – 1885 China defeated in war with France; establishment of French Indo-China
  • 1894 – 1895 China defeated by Japan; treaty of Shimonoseki
  • 1900 – 1901 Boxer Rebellion; allied occupation of Peking; indemnity of 450 million taels
  • 1912 China declared a republic; Sun Yat-sen first President; formation of Nationalist Party
  • 1921 Founding of Chinese Communist Party in Shanghai
  • 1916-1926 Warlord period
  • 1945 Soviet Union enters war against Japan, invading Manchuria.
  • 1946 – 1949 Civil War between Communists and Nationalists results in Communist victory 10
  • 1949 – 1956 Generally seen as the ‘good years’ of Chinese socialism. Land is redistributed to peasants and the economy grows.
  • 1966 After a few years away from power, discredited by the Great Leap Forward, Mao starts the Great Proletarian Cultural Revolution.
  • 1976 The chaos of the cultural revolution ends with the death of Mao.
  • 1989 Violent suppression of Tiananmen Square protests hopes for further political reform and tarnishes China’s iternational image, but has little long term effect on economic progress.
  • 1997 Deng dies, Hong Kong returns to China.
  • 2001 China is admitted to the World Trade Organization and bids successfully for the 2008 Olympics.
  • 2003 China’s economy continues to grow at around 10% a year, some economists expect it to overtake the USA by 2020.
  • May 2016 The Chinese government apologized publicly and officially stated that the cultural revolution had been a mistake.

What will happen if countries like China develop in a total digital way, while back in Europe people are lagging or refusing to change or accept the digital age? It’s something I always notice when I visit Europe. Last time I went home to Belgium I saw four of my friends. It was remarkable that none of them had a smartphone. Three out of four refuse to have a Facebook account. They all believe in the big data conspiracy and are very suspicious when it comes to things that mess with their privacy and personal freedom.

I never found any statistical numbers about these so called ‘naysayers’, but I believe it is a real European phenomenon that goes back to the fight for freedom idea of the sixties. There might be a whole non-conformist generation that refuses to join the information and digital ‘revolution’ how will that affect the future?

Of course China will have it’s own problems to face. Like Henry Kissinger said once in an interview that it is very likely that China will get old before it gets rich. He referred to the growing aging problem as a result of the restricting one child policy.

Individual freedom has never been higher, there’s urbanization with ease to move around, travel abroad and especially study in the west. There’s a lot of freedom to start your own business (10.000 new companies/day). There are 7 million new graduates every year, many of them with degrees from abroad. These people will all start incubators for new startups. The probability to succeed is high, the government has to incubate the incubators.

What we have to do to become more Chinese?

  1. Unlearn the misconceptions we have on China but also show China the ones it has about the West.
  2. Let the Chinese be Chinese. The difference is important.
  3. Leverage for synergies and complimentary resources. We need to be wise, wisdom is difficult to learn, it can only be gained by experience.
  4. Find the middle way, the path, the Dao. It’s all about the art of dealing with these differences and specially with the contradictions. Contradictions are the source of life.

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Mr. Gosset’s Lecture was given during the Asian residency of the EMBA program at the Berlin School of Creative Leadership in Shanghai – May 2016. This is my personal view on what he talked about that day.