and the local community. This historical legacy helps to account for the paradox
characterizing China today, that high trust is accorded to group members or those with
whom there are special relationships, while others are actively mistrusted.
Chinese culture and tradition is therefore deep rooted and before the nineteenth
century was largely undisturbed by foreign influence. The majority Han people had
managed to absorb foreign invaders, such as the Mongols and the Manchu, into that
culture. Their culture is a strong attribute of Chinese society and its members remain
very self-conscious of it. As Fairbank noted (1987: 367), ‘the influence of China’s long
past is ever-present in the environment, the language, the folklore, and the practices of
government, business and interpersonal relations’. Many writers have stressed the
influence of China’s culture on the way that its organizations are managed .
References:
Fairbank, J. K. (1987). The Great Chinese Revolution, 1800-1985. London: Chatto and
Windus.
ECONOMIC BACKGROUND
The PRC has been one of the fastest growing economies in the world in recent
times. China’s achievement has been a dazzling success and quite unanticipated in many
respects, particularly after the debacle of the Great Leap Forward and the woes of the
Cultural Revolution under Mao Zedong. Since Deng Xiaoping initiated the ‘Open Door’
reforms in 1978 however, it has expanded by leaps and bounds. By the start of the new
Millennium, China was hailed as a coming economic superpower. Living standards have
risen greatly but the distribution of benefits has been uneven. By 2000, nominal GDP
growth was around over eight per cent per annum. Industrial production grew even faster
than this. Per capita GDP was just over US$800, a modest level by international
standards but purchasing power parity was much higher, around US$4,500 for that year,
according to World Bank estimates. The last few years have seen more deflation than
price rises. Those living in towns have done better than those inland over the decade;
urban workers have benefited more than peasants but living standards of both have risen
absolutely even if there have been differences in their relative degrees of prosperity. A
new middle class has also emerged, and a consumer revolution has been unfolding, if
unevenly.
Labour resources, a main feature of China’s comparative advantage, have been
increasingly been more effectively channelled into productive uses than under the
command-economy system. As of April 2001, the latest available official Census
statistics indicate that over 705.75 million people were ‘employed’ in the Chinese
economy at the end of 1999, out of the ‘economically active’ population aged 16 and
over of around 720 million. The employed represented 56.1 per cent of the total number
of Chinese people working. Women comprised 46.5 per cent of total employment, which
is on the high side by international standards, though one should bear in mind that the
Chinese Population Census of 2000 suggested that there were 117 females for every 100
males in the PRC.
The PRC has to date avoided the worst of the late-1990s Asian economic crisis,
but it may not be wholly invulnerable vis-à-vis the possible next one (The Economist
2002b). GDP growth is still buoyant, but bad debts continue to an albatross around the
neck of the financial system. Asian devaluations risk undercutting its strong exports. In
addition, the downturn in the US economy in 2002 augurs poorly for future export
expansion. Recent US tariffs against imported low cost steel from the PRC and elsewhere
may signal stormy times ahead (The Economist 2002a). No doubt, there are further
threats (as well as opportunities) just around the corner.
References