China’s Melting Pot

by Joseph Luk

Last August, I joined an educational tour, the China Energy Trip, led by students from Jiaotong University in Xi’an, Shaanxi. The trip started in Shanghai, took us through Henan province, and ended in Xi’an. The group was a collection of roughly 20 students and recent graduates from around the world—Belgium, Norway, France, Germany, Austria, Chile, Spain, Saudi Arabia, and the United States— drawn to the trip by the technical nature of the sites we visited. We toured steel plants, recycling stations, auto factories, and wind museums to learn about China’s energy sector. We also experienced the region’s culture by visiting a Shaolin monastery in Henan and tasting Chinese-Muslim food in Xi’an.

Members of the group held varying views on how to shape China’s energy future, and each participant’s motivation for joining the trip mirrored their countries’ business relationship with China. A Chilean student said he came to learn about China because its economy is driving Chile’s boom in copper exports. Participants from Norway and Belgium were interested in learning how to raise living standards, but were simultaneously baffled by China’s challenges in governing a vast population with diverse geography. The French and German students were armed with a body of technical knowledge they thought could be applied to China’s energy market. For example, my roommate showed me an innovative French wind turbine designed for single households. The Germans were fascinated by engineering and the impressive growth of China’s solar industry. And the American students demonstrated their mixed love and fear of China by acknowledging China’s technological advances, while also critiquing its intense resource use and environmental degradation.

As we toured more factories over the next few days, I saw evidence of China as a “melting pot” of ideas and people. I learned that the Baosteel Group Corp.—China’s state-owned steel company—has a manufacturing plant in Shanghai that co-opted Japanese technology to make its steel. Shanghai Volkswagen Automotive Co., Ltd., a joint venture of the Shanghai Automotive Industry Corp. and Volkswagen Group, showcased German machinery that manufactured cars for the China market. As we toured a foreign-owned waste reprocessing plant, I discovered that the plant owner was Malaysian of Chinese descent. Though the plant was running at a loss, the owner felt it was his duty to contribute positively to his heritage by treating and recycling Shanghai’s waste in an eco-friendly manner. The trip allowed me to witness how so many nations had a stake in and have influenced China’s development. The takeaway was clear: China could not have risen to its position today without its friends from abroad.

Because I grew up in Hong Kong, my bias was to expect a showcase of China’s domestic achievements, its self-sufficiency, and “rising up.” The trip, however, erased those preconceptions and taught me that there are other players shaping China’s future. Without foreign investment and new ideas, China’s economy might not be as dynamic as it is today, and its technological progress would likely not be as rapid.

A company’s products are now assembled from components made from all over the world. Supply chains have become so fluid and intertwined that few products are now made in just one country. I learned on this trip that while we often think that products are “made in China,” it turns out that things made in China could not be what they are without input and technologies from around the world. China may be the workshop of the world, but now I feel equally compelled to view it as the workshop “by” the world.

[author] Joseph Luk ([email protected]) is assistant editor of the China Business Review. [/author]