Sunday, July 03, 2005

The Long Answer

There are only two English language television stations here in Shenzhen, and neither broadcasts in English for the entire programming time. In fact neither broadcasts continuously throughout the day at all, reminding me of the few times I’ve either heard about or seen in movies the famous American Indian Head and national anthem that used to signal the end of the broadcast day for American stations so many years ago. Fortunately for me, both channels here feature shows that largely suit my interests.

Since my arrival I’ve seen fascinating travel and nature shows on Marco Polo, the Nile River, and the South African Coast. Political, world, and financial news programs abound, as well as various documentary-style shows produced by the BBC. A particularly interesting one features a British celebrity chef’s efforts to overhaul the United Kingdom’s public school lunch program. (Being a teacher, I find few things more entertaining than watching the reactions of under-prepared adults’ attempts at coercing a large group of children into unfamiliar actions. “Children DON’T like vegetables! I can’t BELIEVE this! They actually PREFER unhealthy rubbish food!”) When all of this programming is combined with the American shows they air (ER, CSI: Miami, David Letterman, Lost) and the surprisingly similar commercials - albeit in Chinese - the result is a television viewing experience very close to that one might enjoy stateside. In fact, the only glaring difference between the two is the vastly different amount of public service announcements aired here.

During the presidential campaigns a few months ago I remember a prominent party representative being questioned about the incredible amount of money being spent on television ads to advance the cause of his candidate. He gave, what I thought, was a surprisingly relevant answer:

“Companies spend hundreds of millions of dollars each year to convince people to buy the right toothpaste. So no, I don’t think we’re spending too much money on the ad campaign.”

His response made me think about all the commercials I regularly watched, and how little they actually mattered in terms of social education and improvement. I watch a lot of sports, so I noticed how several times in the course of one evening I was exposed to commercials comparing calorie counts between different types of beer, but I didn’t know where to take my empty bottles to recycle them since the privately owned apartment building I live in doesn’t enjoy the benefit of county waste management services.

If you imagine the amount of beer ads you might see during a basketball playoff game or the amount of political ads you might see in October of an election year, you can imagine the amount of public service ads that air here in China. There are commercials here on nearly every topic of social responsibility: water conservation, mosquito control, television viewing responsibilities with respect to children, restaurant quality standards, staying safe in large crowds, dealing with sexual assault, appreciating cultural diversity, how to avoid spreading the flu, why stealing cable is bad, how to properly treat and maintain apartment windows (this one closely following on the heels of a recent rash of cases involving windows falling from tall residential buildings). The list goes on and on, but my favorite PSA has to be the one that educates the viewer on proper methods of customer service. (You mean I shouldn’t just totally blow off a customer if they ask me something? I should be polite to them? and honest too? That’s just crazy talk.)

I’m unsure exactly how the television media in China is regulated, and why it is that so many PSAs air. It seems to me that a disproportionate amount of them are shown on the English channels, but since I rarely watch anything else I can’t say for sure. I do know that a large part of television content is aired on various CCTV stations. CCTV stands for China Central Television, and all of those stations are apparently directly operated by the government. There seem to be several private stations as well – especially here in Shenzhen, with its close proximity to Hong Kong - but how each station’s advertising system is organized, I don’t know. Ultimately, how much any of the business behind airing the PSAs really matters is, I think, less important than the fact that they are aired at all.

In addressing The Short Answer in my previous post I made the point that China was obviously learning from America and other successful capitalist nations to gain insight as to how to most effectively modernize and join the ranks of the most powerful nations in the world. That China was doing so with more models to copy, more technology to utilize, and more human understanding to exploit than any nation that preceded it was resulting in an unparalleled pace of development. This, in turn, was enabling the country to enjoy the unprecedented luxury of avoiding, postponing, and in some cases completely leapfrogging many of the common pitfalls associated with modernization; and after spending less than two weeks in the country it was obvious to me that China was well on its way to becoming a worthy challenger to the United States for the title of World Superpower. I concluded that the U.S. should fear China essentially for its potential to “outamerica” America itself. The caveat to my conclusion was that the U.S. essentially controls its own destiny with respect to China’s rise. I’m not referring to preemptive military action or protectionist subsidies, although I doubt either would hurt China any more than America at this point. I’m referring to America’s ability to reciprocate China’s successful strategies and learn some lessons from its challenger. Public Service Announcements may be one place to start.

Any sports fan can tell you that commercial spots during the Super Bowl are as expensive as advertising on television gets. For the 2005 game, the price was apparently $2.4 million per commercial. Any sports fan can also tell you that there are precious few Public Service Announcements during the Super Bowl. After all, what politician could justify spending 2.4 million taxpayer dollars to remind people to cover their mouths when they sneeze? I don’t know whether the Chinese government pays for the ad time to air their PSAs or whether they simply legislate themselves the ability to do so, but I would suspect the latter. As uncool, and possibly ineffective (I’d really like to do a study on this while I’m here seeing as how they’re essentially attempts at educating an entire society) as these PSA’s are, there is no way the Chinese government would let a big event like the Super Bowl be broadcast without reminding the viewing public many times over about the dangers of driving while intoxicated. (Americans? We just hope that beer companies will take some time after the bikini clad super-models/NASCAR/beach volleyball/burping frog montage to mention it…or at least put it up on the screen somewhere…or at least direct the viewer to the company website so they can learn more...please?).

Like an overzealous basketball referee (sticking with the sports theme here), China is notorious for keeping a close eye on all its companies. Foreign corporations are outlawed from holding more than a 50% stake in any Chinese business, most large companies are at least partly owned by the government, and the country is carefully and strategically divided into different economic zones. Hong Kong and Macau in the south are both Special Administrative Regions, with different regulations than the mainland with Hong Kong even requiring a separate Visa to enter by air. Even Shenzhen is divided into different zones complete with government checkpoints. (At the airport I had to make sure I got an orange taxi and not a green one because the green ones can’t go into the Special Economic Areas). While all of this may sound like a hassle (which I suppose it is), the flip side of such a diligent government is that it doesn’t let business concerns inhibit its attempts to better society. (China wants you to know that there are ways to get rid of disease carrying mosquitoes, and here’s how. Now here’s how again…and again…and again…). Certainly China’s communists are beginning to learn that economic prosperity is contingent upon free and independent markets. So, will the U.S. learn that social prosperity is contingent upon strong government oversight of those markets and their participants?

Without getting too political, I think a case can be made for America becoming excessively involved in business and corporate affairs; or perhaps better stated, for business and corporate affairs getting excessively involved with America. That elected politicians work closely with union and corporate heads should be a shock to nobody, but whether that relationship is beneficial to the nation can be debated. In some cases, such as Vice President Cheney’s “secret” meetings with oil company executives concerning energy legislation, a case could be made for seeking the counsel of those men most intimate with the industry (although I can think of no legitimate reason why their identities should be kept from the public). Other times, the close working relationships seems to work more to the advantage of the businesses. One recent example could be the current energy bill passed by the House of Representatives that contains protection from lawsuits for MTBE producers whose product leaked into and polluted the groundwater of communities in as many as 29 states. Instead of an overzealous referee, in this case the government comes across as one who has obviously been bribed by one of the teams.

None of this is to say that China understands the role of government better than the United States (personally, I feel like there are too many restrictions here, I can’t even read my own blog!). Rather, the country’s concerns and cautious approach towards private enterprise appear at least somewhat justified, and they show that China is not only learning from America’s successes, but its failures as well. This may explain why despite the country’s embracing of capitalism over the past 20 years, its communist past is still evident through its concerns for the working class (even if the most visible form of this concern is the veritable barrage of PSAs) and the more heavy handed approach to business regulation it takes. America also regulates corporations, as evidenced by seatbelts, the SEC, and child labor laws, but the Chinese government does not seem content with just these basic principles. Instead, China seems interested in a different type of government involvement, a type that results in making business work for it, rather than it working for business (the latter situation being what happens if the U.S. wants to air a PSA during the Super Bowl).

If we imagine our basketball referee was also the owner of one of the teams he was calling in a game, we would have a situation close to that of the Chinese National Offshore Oil Corporation. CNOOC is largely controlled by the Chinese government and recently made headlines for its offer to acquire Unocal, the west-coast based American oil company. This offer, while not directly made with citizen money, is made possible through special loan guarantees by the government. So the offer is ultimately supported by the Chinese public. To draw a comparison, imagine if Ford Motor Company wanted to purchase Volkswagen, except didn’t have the money to do so. Imagine then that Congress voted to give Ford as much money as it needed to make the deal possible until Ford could pay it back. (I doubt whether the American public would support such a move, but if Ford was already half owned by the government and overseen by the State Department, it might be seen as a victory for the nation). While the idea of something like this occurring is almost laughable to Americans, it is exactly what the Chinese are accustomed to. The government foresees a national increase in oil demand and wants to shore up its assets and reserves. Why wouldn't it use businesses to help it do so?

The fact is that, because energy is so important to every nation, the Chinese model is increasingly the manner in which countries have addressed petroleum dependence. The top nine oil companies in terms of reserves are all 100% government owned (in Saudi Arabia, Iran, Iraq, Kuwait, Venezuela, United Arab Emirates, Libya, Nigeria, and Mexico by descending order of available supply). PetroChina is number fourteen on the list and 90% government owned, while ExxonMobil checks in two higher at number twelve. Of course, ExxonMobil is not owned - even in part - by any government, the only company in the top 16 that can say so. (It is interesting to note that the U.S. government is reportedly considering blocking the sale of Unocal to CNOOC on national security grounds, a move that would evidently move it more in line with the approach of the above listed nations).

It would appear the international model for corporate regulation approves of great government involvement in those areas of business that are of great national importance. That America disagrees can be illustrated by the fact that it is the only industrialized nation without a national health care system. While there is obviously a place for government oversight within private enterprise - Arthur Anderson painfully taught us the danger of letting it oversee itself – a consensus about how much and when has yet to be reached. (Personally, I feel the answer lies somewhere about equidistant from where China and the U.S. currently reside).

There are obviously other factors separating China from the United States that could be pointed at to either support or discount its recent rapid growth– democracy and currency market methods not the least of them – and yet the country has clearly acknowledged it has something to gain by moving away from its old economic policies and towards more American ones. The question now becomes whether the U.S. will make a similar realization and adopt any winning Chinese policies (at which point I’ll hopefully figure out where to take my empty beer bottles).

If so, where does that leave Americans? Our quality of life may collectively improve, and we may avoid the embarrassing sight of a Wal-Mart on the White House Lawn, but will not our two countries remain opponents and adversaries? At what point does Cold War II begin? Next time I’ll try to address The Real Answer, and offer a more appealing alternative choice for our nations to make. -joe

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