CHINESE NEW YEAR - Local Entrepreneur John Mills' recalls his business trips to Shanghai and the rest of China in the 1980s
John Mills recalls his business trips to China in the 1980s, before the economy reinvented itself and roared to into life
My first business trip to China was in 1981. Chairman Mao had died in 1976. The switch in economic policy under Deng Xiaoping towards a much more market-orientated approach had only just begun.
What was China like then? Completely different from what it is now. There were almost no cars as nearly everyone travelled about on bicycle.
There were practically no high rise buildings. Living standards were very low. Factories were noisy, dangerous places, usually with primitive looking machinery and equipment compared to what I was used to seeing in the West.
Not many people spoke English. It seemed very foreign.
Nearly 30 years later, of course, all this has changed, especially in the highly developed coastal cities. Year after year of stunning economic growth has lifted hundreds of millions of Chinese people out of poverty, although rural areas have not been so fortunate.
Shanghai looks like New York. Supermarkets look like Tesco and DIY stores like B&Q – hardly surprisingly because major international companies like these now run their own store operations in China. Hotels and restaurants rival the best in the West.
The infrastructure in China used to be typical of the Third World. Not now. China reinvests 40 per cent of its national income every year and this has paid for a massive improvement in roads, housing, factories and their equipment, port facilities and airports, railways and commercial buildings.
Much of China looks and feels surprisingly like Western Europe.
What difference has all this made to doing business with China? Thirty years ago, China largely produced fairly primitive goods at rock bottom prices. This is what got the Chinese going in world export markets.
As the economy has grown, production in China has become far more sophisticated while quality has dramatically improved.
Talent has poured into industry, spurring the growth rate because productivity increases are so much easier to achieve in manufacturing than in most other parts of the economy.
No doubt the Chinese policy of keeping China’s currency super-competitive has had a lot to do with this, but so has the Chinese proclivity for discipline, hard work and high educational standards – and a massive drive to learn English, now without question the lingua franca of world wide business.
This makes it relatively easy to deal with Chinese companies. So too, of course, do massively improved communications.
Thirty years ago, flying to Hong Kong was an expensive adventure. Now everyone can do it. In 1981, almost all messages were sent by telex. Fax and then email then transformed the way everyone exchanges information.
The result is that trade between the West and China now operates on a far bigger scale than when the big changes all began 30 years ago.
Of course, there are downsides. Pollution in China is a major problem. The gap between rich and poor in China is now much wider than it was in 1981.
Corruption is widespread, fuelled partly by the privatisations that provided such unequal opportunities in all previously centrally run economies – as a recently published book China Emerging 1978-2008 by Wu Xiaobo describes all too graphically.
By no stretch of the imagination is China a western style democracy.
Despite these problems, however, there is something very exciting about trading in China.
The vitality of the people you deal with, the innovation and variety of products available, the efficiency with which goods are designed, produced and shipped are all truly impressive.
So is the trust built up across the world as huge sums of money change hands. Globalisation no doubt has its downsides but it has some big pluses as well, as all western consumers know.
• John Mills is managing director of the online shopping company and TV channel JML