I am in Shanghai to give a Master class to 200 Chinese CEOs.  I have a day free and went out to explore.

In one of my previous blogs, I was lamenting the loss of national cuisine because of globalization. I was upset with the Italian pasta – pizza menu’s colonization of local restaurants.  In Shanghai, I had to put my foot in my mouth.  I walked into a Chinese restaurant for lunch. Alone. None of the waiters spoke English.  “Aha,” I said to myself, “what a great opportunity to savor local cuisine.”  I opened the menu. All items were written in Chinese characters and, in small letters, the English translation.

Here is a sample of the national dishes:

– Mixes the auricular auriculars

– Fish seed spinach chicken gizzard

– Does the hot baby vegetables

– The water boils the beef

– The shrimp explodes the rice field eel

– Flutters the fragrant crab

– Does the fragrant fish head

– Blood is flourishing

– Harsh rice field eel silk

– Acid juice wu participation

– Juice beauty burning hoof

– The string burns the prawn

– And the best of them all:  The Beijing onion explodes the fat cow.

I chickened out, and went for the pizza.

I was in Shanghai three years ago. Anyone who visits China comments on how quickly the country is changing. Thus, I will not be saying anything new if I report on the immense high rises, the real estate boom, the vast highway system, etc.  However, something else caught my eye.

In the news, the President of Argentina was visiting to sign an agreement for 10 Billion dollars worth of goods and services from China. The newspaper is also informing us that Chancellor Merkel of Germany is visiting to negotiate buying Chinese output.  And that’s not all. Britain’s Minister of Foreign Affairs is also visiting to look for ways to increase the economic cooperation between the two countries.

China is busy. Busy. You can feel the energy. Waiters don’t walk; they actually run. Sales people would not let you go without you buying something.  Western employees, in comparison, exhibit the energy of a camel, while the Chinese are like squirrels.  The Chinese have a clear, very focused goal: to make money.

In my lecture, I was emphasizing the importance of organizational culture. One of the top businessmen who was on the panel told the audience, “don’t forget to first make money, then worry about culture;” the audience agreed.  With such a strong focus on making maximum money, some cross the line of what is legal. Accordingly, corruption is rampant. (Prosecutors recovered 4.6 Billion dollars from corruption and bribery from 2005 through May 2010, the China Daily Newspaper reports on July 16, 2010). I am told corruption is widespread, all the way to the top of the government, and faulty products like tainted milk or toxic children’s’ toys, are routinely sold to the people.

During my visit, television and the daily newspaper interviewed me. Since my lecture was on the lifecycles of organizations (systems) and was promoted as “Learn How to Predict Your Future Problems Today,” they asked me where I think China is on the lifecycle and what its future problems are. Let me share with you my answer.

China is in Go-Go galore. Its’ rate of change is remarkable. And when a system changes especially radically, not all subsystems change in synchronicity. China’s economic subsystem has changed the most.

Deng Xiaoping, who led the Chinese economic reforms, said “first economic changes, then political changes” (which is the opposite of what Gorbachev did). The political system has changed the least and is showing the strains.

The first sign is that, one wonders, “What does it mean to be a communist in China?” Communism was supposed to bring the dictatorship of the proletariat, i.e. workers, and negate capitalism, i.e. the idea that capital generates value. In China, capital is recognized because private property has been legalized and, additionally, China has its own stock market. Next, they accept capitalists and entrepreneurs into the communist party. It is like sleeping with the enemy. Thus, what kind of communism is this?

The party needs a new political ideology to reengineer itself. As a communist party, it is supposed to take the side of the workers and protect them from capitalist exploitation. What is happening is the opposite; Chinese workers are routinely exploited, and some of the states don’t even have legislation for a legally required   minimum wage. So workers are starting to strike. (“36 pay strikes over 48 days in Guangdong”, the above newspaper reports)

A workers strike in a communist country is akin to a stockholders strike against the stock market in capitalist countries. Additionally, the trade union has lost its way. How can Union leaders fight for the workers when the leaders are members of the communist party, which is trying hard to advance the economy and encourage foreign investment, and thus, is siding with the capitalists?

So far I have not seen anywhere the red flag, or the Hammer and the Sickle– the symbols of communism, anywhere. No pictures of Marx and Engels. Not even Mao. I asked my host, “when did Mao die?” and he answered “hundreds of years ago”; meaning to say Mao is pure history.

To me, China is not an ideological, political competitor. It is an economic powerhouse.  It is more American than America in its economic behavior, and will threaten American world hegemony. To me, the question is not whether but when.  German Chancellor Angela Merkel has committed support to the designation of China as a full market economy, so what political/ideological divide are we talking about?  So what are China’s future problems? China cannot have a free market system, growing middle class, growing economic elite of millionaires and still maintain a one party rule, especially when the party does not follow its own charter and is corrupt to the core. I expect political turbulence, which will start within the party by openly breaking into factions, which will eventually lead to political democratization.

Retarding this political breakdown are two factors: cultural adherence to authority, and the focus of the people on making money; as long as the people feel the economic boom is working for them (making them money), the problems of their political system preoccupy are pushed aside.

I have one final observation on a totally different subject. Everywhere I went, I saw young people, and the girls, up to about age 30, look smart, alive, have perfect figures, big captivating smiles, and behave in a non-defensive, sweet manner. The older women are drastically different in appearance and behavior: cold, distant, hard, have a take-no-prisoners attitude, almost insensitive. Why is that? What happens when they get married?

Stay tuned. My next stop is Paris.

Sincerely,

Dr. Ichak Kalderon Adizes