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November 30, 2000

From Our Correspondent: Hirohito and the War
A conversation with biographer Herbert Bix

From Our Correspondent: A Rough Road Ahead
Bad news for the Philippines - and some others

From Our Correspondent: Making Enemies
Indonesia needs friends. So why is it picking fights?

Asiaweek Time Asia Now Asiaweek story

OCTOBER 15, 1999 VOL. 25 NO. 41

China's Prospects
In Shanghai, a conference of capitalists ponders the country's future

It was the biggest gathering of top capitalists in the world's largest communist state. But the paradoxes of the Fortune Global Forum, held on Sept. 27-29, did not end there. Pudong district in Shanghai, the host city, was a showcase for space-age skyscrapers - many of which were eerily empty. During the banquets, Chinese guests often wielded knives and forks, while Western delegates struggled with chopsticks.

Held on the eve of the People's Republic's 50th-anniversary celebrations, the forum had as its main theme "China in the Next 50 Years." President Jiang Zemin gave the keynote speech. Foreign participants wanted to flag their interest in China's vast potential markets - and perhaps pick up a thing or two about tapping them. For their part, the Chinese were keen to rub shoulders with the helmsmen of some of the world's most successful companies, and to present their own views of China's challenges and directions. Notable comments gleaned by Asiaweek's editors and correspondents:

The Fortune Global Forum
• Day Three
The World According to Welch: The GE Chairman's masterful show
• Day Two
Henry Kissinger: Still a Media Star
• Day One
Shanghai sparkles for visiting CEOs: Let the deal-making begin
• Interview
The Value of Advice: Antoine Jeancourt-Galignani of IBLAC

The Fortune Global Forum Website

AsiaBuzz: Versions of China
The Shanghai confab was full of wry moments

Kenneth Courtis, chief economist for Deutsche Bank Group Asia Pacific
"When the U.S. and China negotiate, the situation is unique. It is the superpower of today sitting down with the country that sees itself as the superpower of tomorrow. The discussions are about the transition. So they are not just about making room for China [in the global order], but making room at the top. China should become a core member of the WTO, the G-7 and the IMF. That means other countries will have to cede power - which is a very difficult decision for the West to make. But it must be made in order to develop a genuine mutuality of global interests. Then progress can really be made."

Mickey Kantor, former U.S. commerce secretary and trade representative
"During the Cold War, we [Americans] were afraid of the strength of Russia and China. Now, we should be concerned about their weakness."

photo Lee Kuan Yew, Singapore statesman
"My discomfit arises from the fact that even Chinese in their thirties, who will be in charge in 20-30 years, are beginning to get disenchanted with America. You have offended a whole generation of [younger] Chinese with [all the] China-bashing. You do that with a country with records that go back thousands of years, and you are creating unnecessary debits that you will have to square out in the future. The more you press [Beijing] to do these things [that you want], the more they will find it impossible, because it's an affront."

Justin Lin, Peking University economist
"China's biggest problem is state-enterprise reform. It eats up resources and will be a drag on development. Privatization will not solve the problem; just look at Russia. The state enterprises will ask for help from the government, which is obliged to bail them out as it is responsible for policy in the first place."

Jack Welch, chairman and CEO of General Electric
"We all have to go faster and faster. Hate bureaucracy with a passion. Hate it, beat it, don't let it be there!"

Zeng Peiyan, chairman of the State Development Planning Commission
"The central government will simplify red tape and boost the powers of local authorities to approve foreign-invested projects. Since becoming minister, I have instructed the Planning Commission to set limits on the time it takes to rule on submissions. We should give a clear 'yes' or 'no' answer as soon as possible."

Ueshima Shigeji, president and CEO of Mitsui & Co.
"Our biggest failure in China was in marketing. In the 1980s, we sold our products to China as a single, unified market - and lost a lot of money. We learned that China consists of segments - the coast vs. the hinterland, urban vs. rural. Each segment has a different culture, tastes and history. So we developed a strategy of 'tailored marketing.' "

Jorma Ollila, chairman and CEO of Nokia
"In China, you cannot just duplicate what you have done in other markets. We have given Chinese characteristics to our phones. China is different from the rest of the world."

Roger Enrico, chairman and CEO of PepsiCo Inc.
"Some people call them losses [in China]. I call them investments."

Wu Jichuan, Chinese minister of information industry
"We're not restricting any specific foreign company from investing in our IT sector. But in a country as large as ours, we must have our own intellectual-property products. As for advanced foreign technology, we should adopt and emulate, transfer, digest, attract and, especially, innovate."

photo Jerry Yang, co-founder of Yahoo!
"We don't walk into a country with an ideology, saying here's what the Internet can or should do for you. We try to find out what the [country's leaders] want from the Internet, and what role they think it can play in their country. We try to work with that."

Zhu Lilian, Chinese minister of science and technology
"The development of China's high-tech companies pivots on two factors: financing and technical expertise. We are currently building our system for venture capital. In terms of human resources, we seek to change the distribution system. [Technicians and managers] will have shares of companies."

photo Gerald Levin, chairman and CEO of Time Warner Inc.
"By nurturing and giving expression to local talent in their own cultural terms, companies like ours can have an important role to play in fostering international harmony."

Liang Congjie, president of Friends of Nature (China)
"If all Chinese wanted an American lifestyle - with a car, TV sets, refrigerators - the entire world's oil supply would not be enough to satisfy China alone. China, like other developing nations, should promote lifestyles that are simpler and less materialistic. For them, a consumerist way of life may not be affordable. So globalization is a double-edged sword - transferring not only new technologies, but also new materialist lifestyles and ideas. Every foreign company wants to sell its products to 'the China market,' but that would lead to the depletion of resources."

Nicholas A. Lardy, senior fellow at the Brookings Institution
"Only 0.8% of all loans [by banks in China] are going to the real private sector."

Gao Xiqing, vice chairman of the China Securities Regulatory Commission
"In the next few years, we will be striving for a much more open system where the Securities Commission doesn't need to give approvals [for stock-market listings]. We are now fleshing out the necessary rules and regulations for a market economy, providing for acquisitions and mergers, and corporate governance. We also are considering ways to amend laws so that start-ups with small profits can go public and raise capital."

Liu Yonghao, top entrepreneur and chairman of the New Hope Group
"An entrepreneur in China faces so many psychological pressures. You need to have a special strength and endurance to succeed. Initially, we couldn't borrow from the banks, so we had to raise capital on our own. We built our business, our brand and our image. Then the banks came looking for us, offering loans. Entrepreneurs in China should not count on help from the government; otherwise, they won't be able to grow quickly."

Zhang Ruimin, president of the Haier Group and award-winning entrepreneur
"While visiting Sichuan province in 1997, I found that the peasants there were washing their farm produce in their washing machines. The produce was getting stuck. Some people suggested that we teach the peasants not to wash their vegetables in the machines. But the peasants wanted to do this. So we designed a machine that would wash both clothes and produce. It sold well. If you design your products according to your customers' needs, you will succeed."

Wang Qishan, executive vice governor of Guangdong province
"I had to use Peat Marwick to handle the bankruptcy of GITIC because our accounting firms are inadequate."

Raymond Chien, Hong Kong executive councilor and chairman of
photo "To use an Internet term, Shanghai can be considered a 'portal' for Hong Kong businessmen wishing to tap into the affluent Yangzi River delta. And Hong Kong is a portal for Shanghai businesses wanting to access global markets. As long as Hong Kong maintains a separate currency, there is great complementarity between the two. But if the two systems begin to converge, the competition will become more intense."

Henry Kissinger, former U.S. secretary of state and national security adviser
"The Chinese Communist Party will change in the next 50 years as much as it has changed in the past 50 years."

Photos by David G. McIntyre - Black Star for Asiaweek

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