FRIDAY |FEBRUARY 8, 2008| PHILIPPINES

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'In the midst of the Spanish colonia-lists, the Chinese had already sparked the capitalist impulse.'

Red dragon in the Year of the Rat


Congratulations on getting rich" (Gongxi facai) is the common greeting for the Chinese New Year.

In fact, in the Deng Xiaoping Era, "to get rich is glorious."

Indeed. China is now the world's fourth largest industrial base and the "world's largest market for electrical appliances." What made this possible is the reality that "the Chinese people love nothing more than playing with money." [James McGregor. One Billion Customers. Lessons from the Front Lines of Doing Business in China. New York: Wall Street Journal Books, 2005]

Plus the fact that even the ChiComs believe in the necessity of ushering the capitalist stage in China. Four years before the victory of the New Democratic Revolution, Mao Zedong made a political report to the Seventh National Congress of the Communist Party of China: "Some people fail to understand why, so far from fearing capitalism, Communists should advocate its development in certain given conditions. Our answer is simple. The substitution of a certain degree of capitalist development for the oppression of foreign imperialism and domestic feudalism is not only an advance but an unavoidable process. It benefits the proletariat as well as the bourgeoisie, and the former perhaps more. It is not domestic capitalism but foreign imperialism and domestic feudalism which are superfluous in China today; indeed, we have too little of capitalism." [Mao Zedong, "On Coalition Government," April 24, 1945]

Way ahead of Mao, it had already been contended that the Chinese market, along with the colonization of America, had given "to commerce, to navigation, to industry, an impulse never before known."

"The bourgeoisie, by the rapid improvement of all instruments of production, by the immensely facilitated means of communication, draws all, even the most barbarian, nations into civilization. The cheap prices of its commodities are the heavy artillery with which it batters down all Chinese walls, with which it forces the barbarians' intensely obstinate hatred of foreigners to capitulate. It compels all nations, on pain of extinction, to adopt the bourgeois mode of production." [Karl Marx and Friedrich Engels, "Manifesto Of The Communist Party," From the English edition of 1888, edited by Friedrich Engels]

Why are we now surprised that the tables have been turned? That Chinese commodities, which are among the cheapest on Earth, are a deluge in America and elsewhere?

Particularly in the Philippines. More than a century before the American invasion, and in the midst of the Spanish colonialists, the Chinese had already sparked the capitalist impulse. This observation about the Chinese in the capital is illuminating.

"The great object of the Chinese shopmen appears to be, to show the most varied, and frequently miscellaneous, collection of goods in the smallest possible space; as, their shops being for the most part not more than ten feet broad towards the street, leaves but little space besides the doorway to display the attractions of their wares, and every inch has to be made the most of by them. These China shopkeepers have nearly driven all competition, except with each other out of the market, very few Mestizos or Spaniards being able to live on the small profits, which the competition among themselves has reduced them to. A China shopkeeper generally makes his shop his home, all of them sleeping in those confined dens at night, from which, on opening their doors about five in the morning, as they usually do, a most noisome and pestiferous smell issues and is diffused through the streets. The Mestizos cannot do this, but must have a house to live in out of the profits of the shop; and the consequence has been, that when their shopkeeping profits could no longer do that, they have nearly all betaken themselves to other more suitable occupations, from which the energies of their Chinese rivals are less likely to drive them.

"The number of Chinamen in Manilla and throughout the islands is very great, and nearly the whole provincial trade in manufactured goods is in their hands. Numerous traders of that nation have shops opened throughout the islands, their business being carried on by one of their own countrymen, generally the principal person of the concern, who remains resident at Manilla, while his various agents in the country keep him advised of their wants, to meet which he makes large purchases from the merchants, and forwards the same to his country friends.

"Besides having many shops in the provinces, each of these head men is generally in the habit of having a number of shops in Manilla, sometimes upwards of a dozen being frequently all contiguous to one another, so that any one going into one of his shops and asking for something the price of which appears too dear, refuses it and goes to the next shop, which probably belongs to the same man, and is likely to buy it, as he is apt to think - because they all ask the same price - that it cannot be got cheaper elsewhere, so gives the amount demanded for it, although it is probably very much too dear." [Robert MacMicking, Esq. "Recollections of Manilla and the Philippines, During 1848, 1849, and 1850." London: Richard Bentley, New Burlington Street, 1851]

What a game. For those who want to play with the Sons of the Yellow Emperor, a few caveats are in order.

In 1998, the People's Republic enacted a law prohibiting house-to-house sales in the wake of riots provoked by the collapse of a pyramid scheme. China changed its policy and allowed direct selling in the 21st century only after its entrance into the World Trade Organization.

More lessons from the front lines of doing business in China include:

1. Study proverbs like "Zhi lu wei ma" ("Point at a deer and call it a horse."). That is, saying one thing and doing another.

2. Gu wei jin yong, yang wei zhong yong: "Make the past serve the present, make foreign things serve China." This is a Qing Dynasty slogan often quoted by Mao.

3. "Politics in China is a feudal and brutal contact sport." [McGregor, p. 13]

Lastly, keep in mind the famous Mao dictum. "All things," not just political power, "grow out of the barrel of a gun." ["Problems of War and Strategy," November 6, 1938]

 
 




















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