What if the Impossible…Isn’t?
June 1, 2010
GM’s future lies in China.
It might be heresy, but shock waves would reverberate should GM eventually move its world headquarters out of Michigan to Shanghai, China — which very well could happen.
Perhaps the only thing today that is anchoring GM to the U.S. is $50 billion in taxpayer loans that saved the company from extinction.
GM is already a sales leader in China, where Buick is a sought-after status symbol. GM’s latest forecast is to sell two million cars and trucks in China this year.
Forbes magazine reports that “GM has quadrupled its engineering and design staff in China over the last few years and is investing $250 million to build a research and development center on the Shanghai campus of its new International headquarters.”
In a prophetic comment, Kevin E. Wale, who oversees GM’s China strategy as GM China president, said, “We’re generating a footprint to grow from.”
Things are rapidly changing around the globe, and the state that “put the world on wheels” is not guaranteed to be the auto capital of the world as the 21st century unfolds.
What we once had is now gone. There is a new reality emerging. What we make of this new reality is up to us.
Would anyone be surprised if Detroit lost its premier event, the North American International Auto Show, to China as auto production tilts towards the East?
Change is coming — ready or not!
To stay ahead of the competition in this fast-paced global economy, we need to be constantly asking: “What if the impossible…isn’t?”
China = change
Traveling through China these past 21 years, I have noticed change that is nothing short of phenomenal. Change and innovation are in China’s DNA.To think that China is content to remain the low-cost “factory for the world” is to misread both its recent and ancient history.
Do not believe that the Chinese are stuck with a slow, socialist, planned, bureaucratic economy incapable of competing on the world stage. They are hungry, motivated and have a nationalistic pride that propels them to compete to win.
Want to thrive in business in the 21st century? You better have a global plan that exceeds China’s in terms of hunger for success, willingness to adapt to new ideas and change (and not on a dime, but on a Chinese yuan).
With its 5,000-year history, China has been known for inventions and innovation, from gunpowder to the compass. I suspect the world will awaken to more quality brands from China as this century unfolds, from autos to high-speed trains, electronics and green technology.
According to the Washington Post, in 2009 “China invested about $34 billion in solar panels, wind turbines and other alternative technologies, nearly twice as much as the United States, where spending fell sharply.” (See “With Solar Valley project, China embarks on bold green technology mission.”)
China is already the world’s largest manufacturer of solar panels and wind turbines, and it is investing heavily — and is poised to lead in — advanced batteries, high-speed rail, and electric and Hybrid vehicles.
Making moves
A big focus of Bloomberg Businessweek rankings of top global innovative companies is the rise of Asian companies on the list (along with the ground that the U.S. continues to lose). Also new is the entry of the Chinese company BYD, or Build Your Dreams, a battery maker, with a quarter-billion-dollar investment from Warren Buffet, at number eight on the list. (Certainly, being ranked 8th did not go unnoticed in China, where the number 8 is auspicious in Chinese culture. The word eight, “ba” in Chinese, is similar to the word for “prosper,” “fortune” or “wealth.”) BYD ranked ahead of such long-term innovators as Intel and Sony.Also, a recent survey of top global CEOs detected an innovation “mindset“ in China, citing that “95 percent of its executives thought innovation was the key to economic growth,” and 88 percent of those Chinese executives said they were expanding innovation and R&D budgets — far exceeding the responses of executives from other global businesses surveyed. (See “The 50 Most Innovative Companies.”)
There was a time when what happened in China had minimal impact on our lives. Those days are gone. What happens in China no longer stays in China.
China is the fastest-growing large economy in the world, producing more autos than America and intent on winning the race for clean, alternative energy. China is bound and determined to lead in producing alternative energy technology for cost, environmental and strategic geopolitical reasons.
Talent matters
Given the laser focus that follows a command from the Central Communist Party, there is reason to fear the recent call by President Hu Jintao for even greater innovation, as reported by the China Daily, the premier English language national Chinese newspaper. The Chinese leader said innovation would be fully encouraged and supported by the government, that it was a strategic task to foster young talent and that governments at all levels must create an environment where talent can emerge and be put to use. (See “China to establish innovative workforce.”)Perhaps what should send shudders down our spine as a state and nation that has prospered by the hard work, creativity and innovations of immigrants is that Premier Wen Jiabao went on to say that China would fully encourage and help overseas Chinese students find employment or start-up businesses back in their country.
In a world where the individual, community, state, province and nation with the best educated, most creative and most innovative minds win, this should not be welcome news for us.
In Michigan, we talk about supporting education while we have been systematically disinvesting in it over much of the last decade. China, meanwhile, has been putting its money where its mouth is.
Don’t believe the rhetoric that education is our number one priority, follow the money — we now spend more on locking people up than we do on higher education. As the old saying goes, don’t read their lips, watch their hips.
Vice President Xi Jinping concluded the recent central work conference on human resources by saying the government would promptly introduce major human resource programs to help realize the national goal. President Hu concluded his remarks with the statement that China would work to have a large, high-quality workforce and to be a strong world power in terms of human resources by 2020.
Given what the Chinese leaders have accomplished since Deng Xiaoping opened China to the world — double-digit annual economic growth, the world’s fastest growing large economy, and moving 300 million people out of abject poverty — it would be foolhardy to bet against them.
If it is a goal, it will get accomplished. I wish we could say the same in Michigan.
Talk vs. action
While we continued throughout the decades to argue about the governance and expansion of Cobo Hall in Detroit, the Chinese have built four new, ultra-modern convention centers in Shanghai in the last few years.While the Detroit train depot eyesore has stuck out like a middle finger on the Detroit skyline for the past quarter century, Beijing has four new, ultra-modern train stations with bullet trains that are moving people and propelling the local, regional and national economies.
While we posture and talk, China produces results. China is not sitting by idly, waiting for Michigan to get its act together — it is moving forward. Are we?
China can and must be part of the ingredients necessary to re-invent and revitalize Michigan’s economy.
While China changes and grows, we fight change, protect the status quo and stagnate. Changing direction towards China requires bold new vision and leadership. We need to imagine a new Michigan with a greater sense of urgency.
The Chinese are indeed changing, hard-charging, inventing and innovating. Staying even in Michigan means falling behind.
We in Michigan need to imagine this: what if the impossible…isn’t?
Tom Watkins is an education and business consultant in the U.S. and China and served as Michigan’s state superintendent of schools from 2001-2005.
(Also see Dome’s September 2009 feature “China Bridge” by Watkins for a detailed focus on China.)
9 responses so far ↓
1 TIP Lady // May 28, 2010 at 4:34 am
Tom sees the possibilities in China and clearly believes that we should grab hold early so that we can be on the forefront of China’s expansion.
I agree with that theory somewhat.
I also remember however, that before China had their massive explosion on the global front that we were there first.
CHANGE IS THE CONSTANT!! We cannot continue to do the same old things in the same old ways and expect different results. If we don’t believe in our capabilities how can we expect someone else to?
We can however, CHANGE OUR PAST BEHAVIORS ~CREATE NEW BEHAVIORS!! And return to our rightful place as WORLD LEADERS IN INDUSTRY.
Can China be a conduit to us reaching those goals? Certainly it can. Yet the grass always looks greener on the other side of the fence. Let’s get busy planting us some new grass. Our children are our future, we need to invest in them. We have always had they keys to global success we just need to use them. ~The TIP Lady
2 William L. Coale, Ph.D. // May 28, 2010 at 8:42 am
Tom Watkins once again issues a call to action, and once again it will likely fall upon deaf ears. On the bright side, Michigan’s current state of crisis might well indeed provide an atmosphere where government leaders actually MAY start listening, perhaps out of sheer desperation. Regardless, listening is not enough…action, or lack thereof, will ultimately determine the fate of the Great Lakes State. Although it sounds trite, time is indeed running out, and critical decisions need to be made, and a bold, enlightened course must be charted soon, if Michigan is to have a chance at successfully re-inventing itself. The vast Chinese market lies in the waiting…yet what are we doing to leverage that ever-expanding market? We must look beyond our state and national borders and capitalize on those markets. If we don’t, someone else assuredly will. DREAM. ACT.
3 Chris Atkinson // May 28, 2010 at 10:20 am
Building relationships with China as it becomes the largest market in the World is the intellegent path to take. I cannot believe any progressive thinker or intellectual would support treating any different.
4 Steve Zhong // May 28, 2010 at 11:08 am
I do not believe GM eventually move its world headquarters out of Detroit to Shanghai! That should be very bad news to our residents in Detroit area if that happened.
Yet I do not think China’ s rise should harm our life and value. Contrarily it will encourage us to change the status quo and find a right way to get benifit from rising China.
1. Make a more incentive policies to attract people from China invest and set up business in Detroit, encluding investing immigration.
2. There are abundant resouce for tourism in Michigan. There are plenty auto culture for more hundred years in Detroit. We may create a nice surrounding and welcome Chiness poeple to visit. Such as invite those auto fans in China to participate in the big event Woodward Dream Cruise in Detroit every year. Promote and export auto cultures to China and other countries.
3. Recruite more students from China even high school students.
Tom sees the possibilities in China and want to us grab this big chance to restore Michigan’s economy. Actually Tom never stop to build a strong and wide bridge between the state and China in the past decades.
Yes, do it, act but talk. I admair this attitude.
5 KP CHEN // May 28, 2010 at 11:31 am
There are a few books recently published (2008, 2009) in China that Chronicle major events and milestones that define, move and shape the Reform Era of China, from 1978-to-recent.
Many are so interesting. Images. Sights and Sounds.
In Michigan, we can:
introduce classes,
accredit programs,
alchemy contents,
chop suey materials
that are a sort of out of range with the current political correctness … but provide insight or enlightment to our next intellectual breakthrough …
If nobody else does it, then we, by default, or by merit, become The Category Leader.
Say,
mTalk
mSight
mEye
mVision
m Outbid, Outfox, i (of Apple).
You know, Warren Buffet, makes known, Mr. Wang of BYD, to the world … his investment also pays him back …
There may be Mr. Warren Buffet of China, somewhere, could we also find one, and possibly, later on, thank his help and pay him back.
6 sherry Xu // May 28, 2010 at 9:20 pm
As a educator in US, I noticed that American high schools students not just bad at math, language art, but foreign languages. English is mandatory foreign language for Chinese students to take from 5th-12th grades. US still has not realized the changing and realities are.
Right now, a lot of rich Chinese can just sell their apartments in Beijing or Shanghai, and get a huge house anywhere in US.
America used to have lots of money to spend on education, even now compare to other countries, but, I do not think the US education system is ready for the rising Asia, especially China and its language, culture from every single perception.
You are talking about “No child behind”, that make 80% children behind in public education system;
But, education is not like business, it need forethought, leadship, right tools, supportive system and competition, etc.
If we really want more people get jobs and can pay their bills on time, we have to start teach them how to do the basic math problem, do not over spend, second, they need master at least two languages to make sure English is not most spoken language in the world any more. It is Chinese era, even it is hard for Americans to admit or accept. Market is telling you.
To see, to believe, so do not stay in a small town, and still think high school diploma is the first step to start your journey.
7 Mike Mayer // Jun 2, 2010 at 9:47 am
Ethnocentrism and elitism has lulled America to sleep. “We are the best ____” (fill in the blank) has caused us to protect the status quo and resist logic and reality. We have protected our turf and our ideas to our detriment. Now our turf has “for sale” signs on it and the bank owns it – but we had a great time for a while.
We are so short sighted as a people. We are all about “now” – forgetting the consequences of our behavior. Mao warned us that China would win the ultimate battle – and that it may take 500 years. The only thing he really got wrong was how long it was going to take.
We must learn that it can no longer be “our way or the highway”. Until we embrace innovation and get away from personal and societal protectionism we are doomed to become tomorrow’s Rome or Athens. Once we ruled…
8 Curt Crysler // Jun 7, 2010 at 7:22 pm
Tom Watkins is right. The Chinese have come a long way. Longer still if we consider that they started under total Communism and built their society out of its ashes. Moving from one system to another is a difficult task.
The Chinese are not to be feared. They are in a market economy now. They emulated USA in order to get there. They are playing our game. We know all the rules. Will they beat us at our own game? I doubt it.
The thing we should be afraid of is our own country, not theirs. Look to Europe and find traditions that act as road blocks. Are we headed in that direction? We were on top of Europe while we were adaptive . . .while we embraced change, met it head-on.
Unions have become so protective of their own special interest, that change isn’t embraced – change is impossible. Michigan can no longer depend on automobiles for our living. That has become a tradition as well – a road block.
Quality of education in Michigan is in freefall. We used to meet up, team up, and conquer challenges like that. Now it seems impossible. It isn’t impossibile. Tom Watkins used the Chinese as an example. He’s right. They are what we used to be – open to change, adaptable, capable of moving faster than those bound by tradition and special interest.
We need the Chinese to help us remember why we were, and are, a great nation.
9 giggs lei // Jun 8, 2010 at 11:05 am
Tom, i think that GM is still a great company no matters in China or in the US.
anyways, whenever you go to China again, let me know, we might meet up there, ok?
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