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What China Needs Is Chinese-Style Globalization

2008/1/28 15:48:56

Recently, the American subprime debt crisis has caused those major U.S. financial institutions — once worshipped as idols by China's domestic financial investment community — to lose tremendous face and suffer tremendous damage. In the field of financial investment, there have never been idols. Risk is fair to everyone. What once made you brilliant may be the very trap that ultimately buries you — and on this point, there is presumably no difference between China and America.

This inevitably makes one wonder: if our own brokerages, funds, and financial institutions — raised in sugar water — were to face such a situation, how many could survive? A market economy is not the Garden of Eden. Can anyone guarantee that something similar will never happen here?

Now, everyone loves to blindly follow globalization and internationalization. But do we truly need to globalize and internationalize? Meat rotting in your own pot is always better than rotting in someone else's. Behind all that globalization and internationalization, there has never been a shortage of interest allocation between nations. And more importantly, globalization and internationalization have always involved the question of which country dominates. Let's not mince words — the globalization up to now has always been dominated by America. The so-called globalization trend we're following is, frankly, just an American-guided global economic game where all the rules are controlled by others. Do we really need to shamelessly beg to participate in such a game?

What China needs is Chinese-style globalization. China's market will inevitably become the world's largest. With this source of attraction, we can fully integrate the markets of East Asia, or even all of Asia — a great Asian economic body that could even include Russia. Within such a vast system, there would essentially be no need for globalization at all, because the entire globe would be drawn into the powerful gravitational pull of this enormous economic body.

Globalization should not mean the globe dissolving us; rather, with ourselves as the source of attraction, we should continuously consolidate through fluctuations into an ever-larger source of attraction, thereby absorbing the globe within it. That kind of globalization is probably what the Chinese people should truly pursue. A great Asian economic body driven by the four cores of China, Russia, India, and Japan, encompassing over half of the world's population and economic scale — couldn't that change the world's economic order and rules? Order and rules are never a priori — they are always the result of the resultant force of real interests. Everything is possible, and possibility is achieved through practical operation.

To be honest, when it comes to our enterprises — especially financial investment enterprises — competing in globalization under American game rules, it's really hard to be optimistic. It's like playing mahjong where the players on either side of you are in cahoots — your chances of winning are essentially zero. Some might counter: then why has our manufacturing industry achieved brilliant success? That's merely because the others' strategic focus wasn't there.

Our brokerages, raised in sugar water, still rely on despicable tricks like adding warrants to plunder small retail investors to fatten themselves up. Imagine — in today's American-style internationalized, globalized market, could such cushy deals exist? Institutions nurtured through such methods, once they go out and face those predatory sharks and tigers — could anything good come of it?

So the best strategy is still to stay at home. Being dominant at home isn't anything to be ashamed of — the key is whether your home is big enough. The home that is China's economy is indeed big enough. As long as we methodically become the world's largest market, the world's largest source of attraction, we can globalize our own game rules. This way, our sugar-water-raised brokerages can at least secure the best positions in their own home, at least having the advantage of home turf. If you're hosting the mahjong game in your own home and still lose to outsiders, then the best course of action would be to buy a block of tofu and bash your own head against it.

Thus, should a crisis similar to this subprime debacle occur, we would also be able to handle it well — at least the whole world could share the pressure with us, as America does now. And if our sugar-water-raised brokerages run into problems, we could still bring in outside capital to buy stakes and fill the holes, just as those world-famous American institutions are doing now.

So the key to solving the problem is ultimately making our financial market the global leader, making our economic scale the global leader. That way, no matter how the meat rots, it rots in our own pot. At that point, what would there be to worry about?

In this world, no one is smarter than anyone else, especially in the highest-level market games. The key is who sets the rules and where the card table is placed. Among people of equal skill, winning and losing actually come down to rules, home turf advantage, and harmony of conditions. Our strategy cannot start by assuming we're supermen and everyone else is a fool.

Our greatest advantage right now is the "momentum" of China's economic takeoff. This "momentum" is both national destiny and the inevitable manifestation of economic development laws — something no one can take away. With this "momentum," even ordinary people can soar to the heavens. We only need to ride this "momentum" to achieve our global economic strategy. And the greatest failure would be to self-strangle this "momentum."

We are fortunate to live in such an era, because we happen to be right in the explosive main upward wave of China's economy. Here, we need only go with the flow — no supermen are needed, because any so-called superman merely achieves greatness by riding the "momentum." To ride the "momentum" to achievement, to make globalization Chinese-style — that is probably the thing we should be doing above all else.