China and the New World Order:
How Entrepreneurship, Globalization, and Borderless
Business are Reshaping China and the World
by George Zhibin Gu
Foreword by William Ratliff
Publisher: Fultus; October 2006; 248 pages
A New World Order in the Making
Is a new world order in the making? The answer: yes.
Up to now, only about 20% of the world's people have
attained solid development, growth, and modernity. Now
the rest are catching up at an unprecedented speed.
This sudden surge in so many late developers suggests
a brave new world in the making.
Several Key Changes
Huge changes are happening, within a
vastly expanded sphere for all people and nations. We
can identify four in particular.
First, wealth making through industrialization and commercialization
has become a universal thing. For a long time, products
made in the United Kingdom, the United States, and Germany
dominated global markets. Today, products made in China,
Mexico, Vietnam, and Indonesia, among other developing
nations, are increasingly flooding the world, changing
the global production map again.
Behind this changing map, interestingly, many poor nations
have rapidly taken on active roles in the global economy.
But their biggest weapon remains low-cost labor, which
provides a working platform for cooperation and sharing
between the rich and poor nations.
Today, most developing nations are extremely limited
in resources and strengths. Hence, for them, this cost
gap is a survival gap. In fact, other than cheap labor
and hard work, they have few advantages. However, it
turns out that low labor cost and hard work do make
For now, manufacturing activities, especially in the
low end of the value chains, increasingly shift to the
poor nations, while the developed nations focus more
and more on a service and high-tech-oriented economy.
This giant change, though only beginning, will impact
the future world economy even more.
Second, all regional markets are connected to each other.
Interdependence is opening up the old national boundaries
dramatically. Most profoundly, the flows of capital,
technology, goods, and people have reached a new level.
Moving from survival of the fittest to rational collaboration
and sharing, life on the earth will never be the same
Third, wealth making has gained a record-high status.
Consequently, old ideology is lost to the new economic
waves. This is a truly golden age for capitalists anywhere,
who can reach all corners of the world for the first
time in human history.
Multinationals are gaining unprecedented power in shaping
global life. Their share of trade approaches 50% and
is still on the rise. Actually, they are warmly courted
by all nations, rich or poor. Courting them has become
a high art for all governments. The new picture is this:
Incentives move the world-not politics, not ideology,
not empty words.
Fourth, hundreds of millions of ordinary people everywhere
have joined the entrepreneurial army. Starting a business
is no longer for the privileged few as in the past,
especially in the developing nations. Furthermore, individual
private initiatives are undermining state domination
especially in many less developed nations. This is hugely
significant especially given that traditional bureaucratic
powers in many developing nations have been strong and
Above all, such changes have happened within a short
time, which is possible only in an increasingly globalized
world. Naturally, more consequences will follow.
Interdependence and Beyond
The sudden surge in late developers
is bound to create ripple effects. Since well over 5
billion people are involved, development in these countries
will be much more influential than ever before.
But this new growth for most late developers started
from extremely low levels. As a result, achieving full
development, growth, and modernity will take a long
time. At present, China and many other late developers
are still bogged down by countless mighty problems,
which make transitions very painful to say the least.
Still, there is no way to overestimate the role of the
developed world in what is happening. After all, the
existing world order is centered on the developed nations.
They collectively control most wealth and the biggest
markets. As the pie expands, the few rich nations are
the biggest beneficiaries. What is more, they continue
to act as an engine of growth as well as a catalyst
for change. Without doubt, the developed nations will
continue to exert the biggest influences as time passes.
All things considered, the late developers should continue
to learn from the developed countries, whose experiences
and lessons are relevant in countless ways. After all,
development is a human issue. In many ways, what is
happening inside the developing nations simply follows
the growth trails of the developed world.
For a long time, the idea of learning from the early
developers did not get enough attention or even was
rejected. Now, more people realize that development
experiences are of universal value; this represents
a basic change. It is this new spirit of learning that
has directly promoted quick growth in many late developers.
China is one example of making progress through learning.
Challenges are plentiful as well. The vast development
gaps remain a key challenge. New conflicts emerge everywhere.
As one example, trade friction has increased sharply
even though record-breaking trade has brought unprecedented
opportunities and prosperity. To handle trade disputes,
nationalistic protectionist measures are still widely
used, and there is still a strong Cold War mentality.
Furthermore, the vast economic gaps have produced more
adverse consequences. In particular, some extremists
wish to address their woes by employing violence. The
terrorist acts in New York City and London took place
largely in this environment, showing, among other things,
the urgent need to close development gaps.
Only after the underdeveloped nations gain reasonable
growth and prosperity will the world walk out of the
old traps of poverty and conflict. As a Chinese saying
goes, "The way to protect the rich to the fullest
is to help the poor gain a better life." Indeed,
with a more progressive mindset, the developed world
would be able to make more contributions to global development
in the next stage.
Despite all the imperfections, the convergent movement
of global civilizations cannot be reversed. A new world
power balance will have to replace the old one. Furthermore,
this new world order will emerge gradually and most
likely indirectly. This is so simply because military
conflicts in the old style will no longer do nations
any good. Indeed, as more developing nations achieve
progress, life on this planet will be more peaceful
This Small Book
This book examines China's new lessons and their implications
for the world. The aim is to identify the key factors
that will promote more positive changes for China and
for peoples everywhere.
Despite all the changes, China's fundamental weakness
is still the overextended, self-appointed bureaucracy,
which is inherently self-serving. Moreover, countless
government officials employ the unchallenged state power
to enrich themselves. In the past five years alone,
some 200,000 corrupt officials have been arrested. Unlimited
bureaucratic power is the mother of corruption.
To abolish this massive bureaucracy remains the number
one task for the Chinese civilization. To move ahead,
China must rebuild its government, society, and economy
completely. So far, China has taken the very first step,
the most significant one, in this brave new direction.
Getting the job done remains a mighty task.
When I wrote this book, I had two convictions. The first
was that studying China's new development in relation
to global development might help one better understand
our changing world as well as opportunities and challenges
in the new century. The second conviction was that the
lessons from China are universally meaningful, for they
concern people's lives as well as development issues.
Above all, development is a global issue that affects
This book consists of 26 chapters, which are organized
into eight parts:
I. China's New Role in the World
II. The Yuan, Trade, and Investment
III. China's Fast-Changing Society, Politics, and Economy
IV. China's Banking, Insurance, and Stock Market Reforms
V. Chinese Multinationals vs. Global giants
VI. The Taiwan Issue: Current Affairs and Trends
VII. India vs. China: Moving Ahead at the Same Time;
VIII. The Japan-China Issue: Evolving Relations in Light
Author George Zhibin Gu is a journalist/consultant
based in China. He has written three other books: 1.
China's Global Reach: Markets, Multinationals and Globalization
2. Made in China: National and Business Players and
Challengers under Globalization and Capitalism (English
edition forthcoming, 2007); and
3. China Beyond Deng: Reform in the PRC (McFarland,
In Portuguese, an original edition of Made
in China (Centro Atlântico, 2005).