Tavis: As we wrap up our week devoted to China, I’m pleased tonight to be joined by a terrific and distinguished panel.
First up, John Chen, Chairman and CEO of the software giant Sybase and former chair of the group of prominent Chinese Americans known as the C100; Professor Cindy Fan is the associate dean of social sciences at UCLA and the author of the text, “China on the Move”; Dominic Ng, the Chairman and CEO of East West Bank here in California and the new chair of the C100; And Janet Yang, film producer and cultural ambassador who served as liaison to China for the filmmaker, Steven Spielberg.
An honor to have you all on the program. Thank you.
Professor Fan, let me start with you. We were talking just a moment ago before we came on the air about my own feelings and I talked about this earlier this week on the special about a sense of hopefulness that one feels when one moves through China as contrasted with a sense of hopelessness that many Americans are feeling now, given the economy, the recession, etc., etc.
There was a poll that we cited earlier this week, the Rasmussen Report, that finds that just over half of all Americans now think that our best days as a nation are behind us. Now that poll, of course, doesn’t represent the views of all Americans, but many Americans think our best days are behind us.
Hopelessness compared with hopefulness all throughout China. What do you make of that distinction, that juxtaposition?
Dr. Cindy Fan: Well, I think there is certain truth what you say. Every time I go to China, I feel very energized myself because, first of all, there’s so many people there, so there’s always something happening.
Also the fact that they’ve enjoyed a double digit economic growth for a good two decades. Also the fact that, you know, everybody’s saying that the 21st century is China’s century.
But having said that, I think that in a globalized world, if Americans are thinking more in terms of how to reposition ourselves and also work with China and other places that are emerging in terms of the economic growth, I don’t think that we necessarily have to feel that hopeless.
Tavis: To your point now about the people, there is stuff happening in China all the time in part because there’s so many people.
Worth reminding our audience, 300 million Americans, 1.3 billion-plus Chinese citizens, which raises the question whether or not China is really a rich country or is China really a poor country.
The overwhelming majority of those folk are poor. They’re not rich, the new rich, the super rich. So either they’re a rich nation or a poor nation.
Fan: I’m so happy that you asked this question. That’s actually one of the essay questions that I assign to my students [laugh]. I got answers really across the range.
I think the most common answer I get is that China is not a rich country nor is it a poor country, precisely what you said. I think what distinguishes China from many other places is the huge gap between the rich and the poor.
The rich is super rich. I mean, they have loads of cash that they can bring to the American continent to buy houses. But at the same time, you’ve got people dirt poor in the countryside with only maybe just a very few clothes to wear.
Tavis: To Professor Fan’s point, Dominic, you are the chairman of East West Bank, a major bank here in California. You know exactly, I’m certain, of what Professor Fan speaks because I was literally just reading some numbers the other day, and I won’t call the cities. I could; you know them well. There are three or four cities adjacent to Los Angeles in this megalopolis called L.A. County.
There are three or four cities where the property values are going through the roof here in Southern California because all these rich Chinese are coming here with cash in hand to buy these houses. You’re not financing these people. They’re coming with cash in hand to buy these homes.
But in this state and around the country, we see property values in certain areas being driven up by all the money that Chinese citizens are pouring into our economy. What do you make of that reality?
Dominic Ng: Well, I just think that, you know, clearly in China every day there is more wealth created, so there are more and more of these folks looking at not only putting the money, investing in their own country, but there’s always that hope and desire about getting better education for their children or maybe a better living environment for their family. So many of them actually choose the path to come to the United States to establish a second home.
So what we’ve seen is that right here in Los Angeles or in San Francisco, many of these neighborhoods that are more fluent neighborhoods are extremely attractive to these folks in China and they want their kids to come here for high school and they want to make sure their spouses can, you know, stay here so that, you know, in a very volatile environment in China and something happens, they always look at America as a safe place for them.
Tavis: Should future American homeowners be concerned about that? I mean, it’s one thing – I have a number of people that work for me. I have a program in my company where, if you work for me long enough and you qualify for it, I will help you become a homeowner.
I think that happy employees make better employees. If you’re on the right track and you need a bunch of things, a bunch of requirements, I’ll help you get into a home. I’ve done that for a number of my employees.
Over the last couple of years, it’s been difficult to help some of my own employees get homes because they’re being out-bid by these folk who are sitting on a bunch of cash. They buy the home, fix it up and flip it and make money off of it. Everybody knows what I’m talking about.
That’s one way that people get intimidated out, get boxed out, of getting into a home. Now you got rich Chinese coming with a bunch of money. Should potential future American homeowners be concerned about competing with Chinese homeowners?
Ng: Not really because the numbers we’re talking about are relatively very small. You know, forget about the United States as a whole country. If you’re just even looking at places that are extremely attractive to folks from China like Los Angeles or San Francisco or New York, even within these cities, we’re still talking about only a few neighborhoods desirable for them.
The vast majority of, let’s say, Los Angeles have homes that are a very reasonable price. I think the bigger competition really are the investor type of buyer. There are too many of those flippers who will buy to sell, buy to sell, which caused the folks who are actually buying to stay.
For those folks, they are not able to buy the home because they’re not moving fast enough and also the financing is not available. I think that’s an issue, I think, that’s affecting the home ownership in America right now.
Tavis: It didn’t take ten minutes in this conversation, John, for someone to suggest, namely your colleague next to you – I shouldn’t say suggest, but to repeat that oft heard mantra that the 21st century belongs to China.
I ask you, sir, how long this can go on? I mean, no society just keeps going and going. China’s been around a long time, but they’re on a roll right now. How long can this go, this economic growth, unabated?
John Chen: Well, I don’t know how long it’s gonna take, but I like to go back to an earlier question. If I’m having to write an essay as schoolwork –
Fan: – you’d get an A [laugh].
Chen: Well, it’s debatable or not whether you like the answer or not [laugh]. I actually think China’s a poor country. The reason it’s a poor country is because, like you all pointed out, it’s not evenly distributed. The GDP is $7,500 a person or just like, you know, one-fifth of Japan and the UK and you consider those a very wealthy country, and we should.
I do agree there is lopsidedness. You know, there are people driving Ferraris, there are people trying to put kids through school, and the dichotomy there. Everybody understands that.
That itself actually, if this continues to expand, this miracle that you just talk about will end because the whole Chinese growth miracle is based on peace, is based on hope like you pointed out. It’s based on everybody has a share of it.
I’m not a predictor of doom. I would say for the next maybe 20 years, 30 years, China should have internal consumption demand making enough to continue, assuming the political environment is stable not only inside the country, but around it. I know you interviewed Secretary Kissinger and, on China, I think that’s the number one fear.
The number one fear is this stability either inside or outside China is not gonna be able to maintain. So I say, if the condition remains like it is today, not to mention there are lot of flashpoints out there. I mean, the latest news about the South China Sea issues.
You know, there are a lot of issues going around. Assuming the new leadership of China is able to manage all that. One would hope that they could and have high hopes that they would be, so this growth can be easily another two or three decades.
Now that said, I want to make a comment about the first statement you made at the beginning of the show. I actually think, you know, maybe us Americans – I’m always a positive thinker, as you know in previous conversations. I think we’re just going through relativity. I mean, relatively speaking, we’re not seeing what we have seen in the last 20 or 25 years.
Going forward needs some kind of structural changes, invention of some sort, reinventing ourselves. China came from nothing. In the last 30 years researching the miracle, no wonder everybody has that level of hope and they should; the deserve it.
But on the absolute basis, this is still the largest economy and I still have hope that we’re gonna be able to turn it around. I can’t turn it around in 12 months or 24 months, but you’re gonna have to focus on our ability to innovate. As you know, I’m in the technology business.
Tavis: Is that your way of saying that we should not be scared of China? Because there are lot of people sounding that bell.
Tavis: We should not be scared.
Chen: Absolutely, they shouldn’t be scared of China at all.
Tavis: Janet, one of the things that was palpable to me wasn’t just that sense of hopefulness that you feel when you move around the country despite the challenges.
I also felt a sense of restlessness when you talk to ordinary, everyday people. They’re not stupid. They know this gap between the have-gots and the have-nots in widening. They know the majority of folk in their country are poor. They see the Ferraris; they see the wild, out of control consumption.
They literally, as you know, limit the number of Louis bags, the number of Gucci bags. They limit the number of bags you can buy at one time because there’s just so much money flowing in the streets of Beijing and Shanghai.
So what say you about that restlessness that over time – John makes a strong point – assuming that political environment remains stable? That’s a big assumption.
Janet Yang: I actually probably have a slightly different point of view because I think, historically speaking, China is used to being at the center of its own universe.
It’s had a very, very strong civilization for thousands of years and I think they feel that this period is just a return to what is the norm for them where they are flourishing, and the period where they were relatively weak, compared to the West, was actually an abnormal period of time.
So I feel that the people are in general, even the ones that are less wealthy, are proud of their country and they’re willing to go along with the program that the government has basically led them along. I see amazing peaceful coexistence between rich and poor.
I’ve been living in Shanghai for the last several months working on a movie. You know, you walk down certain little alleys – [unintelligible] they call them – and peoples’ lives have not changed for 100 years. They’re cooking outside, they live in one-room apartments and you turn the corner and there is that Lamborghini showroom.
Yes, there’s a restlessness, but I think they feel that the country is on a basic course to help lift up the people, that the level of poverty has been raised quite a bit, the level of education has been raised. I think they’re willing to go along with it. I think this is the best they’ve seen in their lifetimes and I think the youth in particular are very, very hopeful.
Tavis: To underscore that point, I’ll come back to Dominic in just a second. To underscore that point, one of the nights earlier this week, we spoke to the person who is regarded as the foremost poster in China.
For years, you couldn’t ask these kinds of poll questions and you still can’t ask questions in China about elected officials. Barack Obama would love that [laugh]. You can’t ask questions about officials, but you can ask questions about social issues.
So I asked Victor Yuan, on a scale of 1 to 10, 10 being great, 1 being horrible, for those who might have not have seen the show earlier this week, “How do the Chinese people feel about the progress in the country?” He said, “A solid 8.” They feel very good about the direction the country is moving in, that restlessness notwithstanding.
Dominic, back to you. You raised the issue of education earlier. Something else I figured out in my visits, many Chinese citizens absolutely would love to get to America to go to our colleges and universities. They know that we lead the world in college and university level. But below that, they’re kicking butt, you know.
I spent a lot of time at Beijing 101 Middle School, basically a high school, and I was just blown away by what these kids are studying. They’re doing it in Mandarin and in English.
Talk to me about what there is to learn – for us to learn, you think, from the dedication and the discipline of the Chinese people vis-à-vis education.
Ng: I think you raise a very, very good point here. This, to me, is the biggest concern for U.S. We don’t need to worry about China becoming the super power and so forth. What we do need to worry about is that some of the deterioration of public education in the United States because you talk about hopefulness and hopelessness.
In China, in general, no matter how poor these kids are, by and large what I’ve seen – I took many trips to China frequently, you know, seeing the poor and the rich and so forth.
What I’ve seen is that most of the kids, no matter how poor they are, they have strong hope that someday they can have much better. They’re gonna study hard, they’re gonna listen to the teacher and they’re gonna do the best they can, and maybe one day their hope is that they’re good enough to go to school in America or in Australia or Canada and so forth.
Just take an example in Los Angeles. Only 60 percent of our students in high school graduate from L.A. Unified School District. Now that’s a frightening thought. In a way that we always talked about U.S., we want these high-end jobs. We want high-end jobs.
Well, no matter how many high-end jobs that we created here, if we don’t have students who graduated from college with a strong computer science and engineering degree and with, you know, a degree in humanities and art and so forth, we’re not gonna have a lot of kids who actually can take on these high-end jobs. That, to me, is a big issue.
Tavis: Connected to that, Professor Fan, I talked to a lot of kids in Shanghai and in Beijing, some migrant kids who were getting a chance to be educated at better schools even though they’re migrant children, and kids at Beijing 101 who we know are rather well-to-do kids.
The one thing I noticed, though, and many of them would admit it, some of them would not, but if you got them into an honest and authentic conversation which I was able to do, they would admit to you that they do feel the pressure.
Fan: Oh, yes, definitely.
Tavis: This single child policy means that you’re the only child, obviously. You’ve got parents to take care of when they get older and all this responsibility rests on your shoulders. Because of the sheer numbers, there are only so many seats, to Dominic’s point.
There are only so many seats in the colleges and universities inside of China. Then, if you get into one of those seats, there are only so many jobs, given the billions of people that live in China. I’m raising that to ask what you think the long-term impact is going to be of this one child policy in China.
Fan: Well, we’ve already seen some consequences and ramifications and some of them are negative. We’ve already put our finger on the burden that the single children have when they have parents and grandparents who are no longer working and all the pressures on the single children to take care of them.
Also, the fact that China really is only in its infancy in terms of developing a nationwide social security kind of system like in other states. So many older people haven’t really had savings or pensions to rely on.
But we’re also seeing other social effects such as the gender imbalance. The fact that China is still a society that has a strong presence and, given only one chance to have a child especially in the city, there are also some strategies that people have used to ensure that that child is a boy.
So what we are seeing, this term called missing girls or missing women, and we are seeing actually millions of men who are unable to find mates. That could, of course, result in social problems.
Tavis: Just a second, John, because you raised something earlier that I want to come back to. I spent a lot of time talking about innovation, spoke to the head of Microsoft in China, spent a lot of time with my friend Kaifu Lee at Innovation Works.
I’m curious as to your take on the innovation that’s happening in China and whether or not – again, I don’t want to ask whether we ought to be threatened by that, but what do you make of the focus, the real focus? They’re putting a lot of energy behind innovation in China.
Chen: Well, you have to admire the fact that they are very motivated. They’re motivated most by ordinary citizens trying to get a better life, more competition, and they’re motivated by the policy of the country to move away from just being blue collar labor, by adding more value so that they could make more money in the kind of global scene. You know, I have only to admire them.
However, I also would like to point out that there are many reports that said that today a lot of the kids that graduated in China are not globally competitive. I mean, I operate a multi-national company in China. I don’t know whether the number is correct statistically showing there’s about ten percent of the graduates that are competitive globally, but they are very good. They’re very, very hungry, to Dominic’s point earlier.
It’s all about, you know, our kids aren’t hungry enough because we have a lot of entitlement. Please go to school. If you fail, you know, it’s your teachers’ problems. You know, you shouldn’t fail. How dare you fail my kids? I’m gonna go and write a letter to the board or something. I think our mindsets in this country are very different from their mindsets.
Tavis: Sounds like “Tiger Mom”, Janet [laugh].
Yang: [Laugh] It’s really another Tiger Mom. I try to be a Tiger Mom.
Chen: That’s a big difference. But the innovations are – really you have to take the Chinese innovative competitiveness seriously. But, again, that said, that doesn’t say anything about us not being able to do well.
One other thing I think we also need to tie to in this whole innovation thing in the United States going forward is our immigration policy is all out of whack. That’s a different topic, but we will have issues with getting the kids graduated and helping our industry. But we do need to grab some other good kids.
Tavis: Before my time runs out, Janet, not to my surprise, I was tickled – I guess it’s a good word – by the craving that Chinese youth have for our culture. They love our music, they love our movies, they love hip-hop, they love the fashion.
You’re in the business of entertainment. What are we to make of the fact that they crave our culture?
Yang: I’ve seen it and one thing that’s changed is the level of exposure that they’ve had, of course, is that there is all this piracy which, of course, has a terrible name here.
But I have to say there’s a slight silver lining to that cloud because their tastes now are really the same as the rest of the world. So movies open day and date. You know, “Inception” opens at the same time in America and in China. “Avatar” had the second largest box office in China next to the U.S.
So this has made the studio very, very hungry for the Chinese market and, for the first time ever, because I’ve been kind of going back and forth between the two for decades now, for the first time, I see that the big Hollywood studios are at China’s door hoping to get a piece of the action there.
Tavis: A lot of consumers. Why not?
Yang: A lot of consumers, a lot of resources there also to make films, to help influence media and shape things that a lot of local films that are doing extremely well now. So they’re learning the film techniques of the West.
That’s why I find China very exciting beyond the material wealth and growth. It’s a very creative place, I find.
Tavis: Before my time runs out, Dominic, I asked this question of former Secretary of State Henry Kissinger some days ago on this program. Your quick take on what our economic implosion, how that’s been interpreted inside of China.
Ng: Well, I think that it’s really interesting because when I visit the past couple of years, every time when I talk to the banking regulators, to the major bank CEO, the chairmen over there, they always ask this question about how the heck happened, the things that screw up.
So, clearly, they view it as a big lesson to learn. That is they want to make sure, particularly in a country that to a certain extent government has a big part of controlling the economy, they want to make sure that there is no way on earth their banking industry would explode like the way that we do here.
So this is the kind of things that I clearly see that the Chinese government are watching very closely to make sure that they would never get themselves into that situation.
Tavis: John, I’ll give you the last word. Your sense of the future of U.S.-China relations. I ask that because now that Jon Huntsman is in the race, we don’t know what’s gonna happen with the Republican nomination.
Chen: And Gary Locke’s going there.
Tavis: And Gary Locke is going to China. My sense is that China is gonna be higher up, whatever that means, on the political agenda over the next year as we move toward this race for the White House. So, very quickly, your take on the future of U.S.-China relations.
Chen: 2012 is gonna be very choppy and I think there’s a bunch of people in Washington and Beijing doing their utmost best so that this doesn’t go out of control. But we’re gonna have a lot of mistrust statements, some political motivator, some not.
Tavis: Anti-China rhetoric?
Chen: Anti-China, and the Chinese feel stronger. I mean, I mentioned earlier about South China’s seat. We should take a look at that, you know, because they are feeling that they now have a right to say something.
Tavis: John Chen, I want to thank you for coming on.
Chen: Thank you.
Tavis: Professor Fan, thank you for your time. Dominic Ng, thank you as well, and, Janet, good to have you on as well. I enjoyed my trip there and I hope the audience – you, that is – have enjoyed this week of shows, including our all-star panel tonight.
That’s our show for tonight on China.
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