Shanghai’s Gamble
I recently got back from a trade mission to Shanghai. My first time in mainland China, I spent a week being whisked about the city with my mouth open.
It is a staggering cityscape. The sheer concentration of high rise after high rise is exhilarating. Watching the towering shapes flit by from a neon lit expressway feels like being in the future.
We were there ostensibly to sell UK creative services to Chinese corporations. However, it was really a learning exercise in what it would be like to do business in China.
The opportunity is enormous but it’s not for the faint of heart. You need to be based there. You need to invest time building relationships. Staff turnover is over 60% each year (so good luck building a team) and, last but not least you simply don’t get paid.
You sign a contract. You deliver the work. You don’t get paid. You can’t do anything about it. Pause to consider working in a climate like that.
As a business delegation, we were vipped round the Expo (think corporate disneyland meets a light industrial estate). Over 400,000 people visit Expo every day. The stand out attraction is the enormous China pavilion; the tickets to which run out within 15 minutes each morning.
In the last few decades, China has industrialised. Cities have been built. The challenge now is to maintain growth and deliver the same quality of life as we in the “west” enjoy.
The pavilion takes you through this journey. As you walk through, you’re treated to enormous multi-cinema size screens operatically showing the blood sweat and tears spent building the country and the fresh air, swedish kitchen lifestyle that’s the light at the end of the tunnel.
It’s powerful stuff, delivered by Crystal Digital, the company behind the 3D for the Beijing and now the London Olympics. I found it especially thought provoking because when you boil it down, you see that at this moment, the challenge for China set out in such vivid digital colours at the heart of the Shanghai Expo is the challenge for the world.
As just breathing in Shanghai proves, continued growth has to be predicated on low carbon, sustainable technology. When it comes down to it, there are two fundamental responses to climate change:
- down tools, go home and realise modern life is a great big mistake
- invent technology and solutions that make modern life sustainable
China has chosen the latter. Not lightly or tokenistically. They’re throwing the weight of their whole system behind it.
On one hand, this should be remarkably uplifting. Thank god that someone, somewhere in this pigheaded playground politics world has the vision and the clout to actually invest in the R&D needed to develop viable technological solutions to climate change.
Yet why, standing at the heart of the whirlwind, did I feel so nervous?
As Umair Haque points out, “it’s an interdependent world. And in such a world, tracing — and then turning — the ever-more complex, spiraling effects of feedback is what matters”. As we invest in ever more complex technology to support life, we increase the risk embedded in the points of failure in the system.
I discussed my trip with my Dad, who visited Shanghai in the 1970s. He described the cityscape as being “like Cardiff”. Now, Cardiff is a fairly human scale place. It doesn’t take too long to walk from the Castle to the rugby stadium. Shanghai, with its 23 million people is beyond human scale. It has to be serviced by high tech, automated supply chains, just to get by.
Now, imagine there’s some sort of disaster. Say the city has its water supply contaminated. In somewhere of the scale of Cardiff, you’re probably going to be OK. You can always walk to Newport. However in Shanghai, once the bottled water runs out, you’d stand a real chance of dying.
This is classic collapsonomics theory. Fundamentally, “one way or another entropy’s price must be paid”. However, it also reminds me of another (candidate) law of thermodynamics developed by Stuart Kauffman, that ecosystems tend to “self optimise to the edge of chaos”.
In our rush to feed the growth monster (which now has the head of a dragon), we drive ourselves ever closer to disaster. It’s a bit like doubling up when you lose at Roulette. It delivers results every time until the last time, when you lose everything you own.
Will Hutton’s book The Writing on the Wall goes into some depth to argue that the China project will fail without pluralist institutions. Whether he’s right needs to be seen but it chimes with the main lesson I learned: the sheer difficulty of doing business in China.
China is a PLC with a fearsome R&D budget directed into clean tech. If I’m any judge, I’d gamble that it will lead the world in low carbon technology in a few years time. However, even as (“China [overtakes] Japan to become the world’s second-largest economy”, its “per-capita income of about US$3,800 a year”) is a result of the corruption and centralism that hold back its economic development.
We’ve seen this situation before. As Francis Spufford pointed out in this weekend’s Guardian, “the Soviet economy grew through the second half of the 50s at 5%, 6%, 7% a year”.
“American colleges worried that they weren’t turning out engineers in the USSR’s amazing numbers. Bouts of anguished soul-searching filled the op-ed pages of European and American newspapers, as columnists asked how a free society could hope to match the steely strategic determination of the prospering, successful Soviet Union.”
We’ve seen China pull off remarkable growth. We assume it’s unstoppable. However, there’s a big gap between pulling off industrialisation and pulling off sustainable growth and a transition to a high quality of living.
Why do we believe that Shanghai’s gamble is going to come off? What are we going to do when it doesn’t?
Pretend it didn’t happen?
