As most of you know Wealth of Nations Advisors continues to remain positive on the China growth story. Significant opportunities will present themselves to asset owners and asset managers in the delivery of financial services as China continues to ease capital controls. Australia in particular is set to benefit with the signing of the financial services component of the free trade agreement , which is expected to be signed within the next 12-18 months.
Within the context of seeking out these new financial opportunities, a question we may need to ask is do we really understand China and its people? Can we afford to assume that business in relation to financial services is conducted the same in China as to what we understand in the West? Just because China is modernising, is it also westernising?
Martin Jacques delivered a Ted Talk back in 2010 titled: Understanding the rise of China, where he highlighted that it’s a widespread assumption in the West that as countries modernise, they also westernise which he states is an illusion. It’s an assumption that modernity is a product simply of competition, markets and technology. It is not. It is also shaped equally by history and culture. China is not like the West, and it will not become like the West. It will remain in very fundamental respects very different. Now the big question here is obviously, how do we make sense of China? How do we try to understand what China is? And the problem we have in the West at the moment, by and large, is that the conventional approach is that we understand it really in Western terms, using Western ideas. We can’t.
Jacques offers three building blocks for trying to understand what China is like, and something one may wish to bear in mind when engaging with China in the future.