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Dr. Robert Kapp's Policymakers Seminar Series Lecture, July 9, 2004

Dr. Kapp began the lecture by discussing the problem of the US perception. He rightly pointed out that in the entire history of the United States, we have never really known a time when China was not collapsing. To Americans, China has always been an extremely poor country, vulnerable to disease and foreign invasion.

Kapp believed that Americans had developed the following four views of China: 1) China needs us, and we are their tutors 2) China is the next western horizon, the extension of manifest destiny 3) China is sedentary, unchanging and incapable of modernization 4) China represents a vast American commercial opportunity, simply by sheer numbers

Americans have also been vulnerable to what Dr. Kapp calls the “China Tide Syndrome.” There is a deep-seeded belief that evil things emanate from China which threaten our way of life. This has been represented by the Chinese dope fiend in the opium dens, the Red Chinese communist of the 50s and 60s and finally by the foreign worker, stealing American jobs and money through a large trade imbalance.

These perceptions have been passed by time, however, and for the most part are no longer accurate. In reality, it is a new world. China is now able to perform skilled service operations at a high level, previously the domain of the United States, at developing-country costs.

Dr. Kapp next discussed the internal issues with China becoming a global economy. Before Deng Xiaoping came to power, Kapp noted, China had an absolutely paralyzing xenophobia. However, as part of his plan to develop and modernize the PRC, Deng called a meeting of scientists, a group heavily persecuted during the Cultural Revolution. Deng gave them the necessary freedom to pursue their intellectual interests, changing course significantly by stating, “Scientists are workers too.”

Since, China has become the world’s largest recipient of FDI, and there is a deep commitment to improving the knowledge and skills of Chinese workers. However, there are a few issues that remain unresolved with regards to China’s tremendous economic growth. The movement to a market economy has created vast wealth inequalities, with a rich eastern coast and an extremely poor interior. As the poorer Chinese continue to get left behind, trouble may follow. Additionally, the closing of state owned enterprises has caused a social security crisis in the country. Previously the ward of these SOEs, China must now find a way to care for its aging population.

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