This summer I once again taught Investment Management and Strategy at the China Europe International Business School in Shanghai, China, my third summer. The 69 Chinese M.B.A. candidates were hungry to learn about the Western capital markets. They’re eager to learn how to unlock the huge amounts of savings so characteristic of the Chinese culture and steer these savings into productive investments of stocks and bonds in their country. They want to assist Chinese and Chinese-Western joint ventures to design investment vehicles such as mutual funds and pensions funds into which their countrymen can channel their savings while at the same time encourage entrepreneurial spirit.
This is not and should not be seen as a commercial or economic threat to the West. Chinese products are now everywhere. We in the United States benefit greatly from the low-priced products, and this has helped keep our inflation rate at historically low levels. It is also true, however, that if American business does not understand China’s emerging industries, we will find ourselves in the same quandary as happened in the 1970s when Japanese automobiles suddenly became a threat to Detroit. Cooperation and raising the Chinese purchasing power will help the United States sell more goods to a more affluent Chinese.
The Chinese consumer base is enormous; those U.S. companies with patience and vision can make this a true win-win situation. Increased learning, better understanding, and less negative judgment will serve us well in the next decade.
If you were fortunate enough to have visited China in the past, go back for a new look. You will be amazed at its progress. For those who have never been there, put it on your travel agenda. You won’t regret it.
Karin B. Bonding CFA
Lecturer
McIntire School of Commerce