China, the sleeping giant, has awakened
The concept of the corporation as we know it today is one that has arisen only in the last 150 years but has nevertheless managed to radically transform nearly every aspect of our society for better or for worse. Our entire lives are now unavoidably dictated by the actions of corporations and, as the author of The Corporation, Joel Bakan, puts it, “[Corporations] determine what we eat, what we watch, what we wear, where we work, and what we do.” From being able to stroll through aisles upon aisles of seemingly endless bounties of food from around the world, to having nearly all of human knowledge instantly accessible from a device that can fit in the palm of our hands, corporations have afforded many individuals around the world luxuries and innovations which were entirely unthinkable to even the wealthiest just a couple centuries ago. However, these have all come with the price of such things as environmental destruction, economic inequality, and loss of freedom, just to name a few.
Corporations seem to bring to the world just as much bad as they bring good. The criticism echoed by many that corporations are emotionless entities chasing profit above all else is one heard time and time again and one which we are all familiar with. Unlike most fear-mongering, contrarian criticism, there actually seems to be some truth to this. One of the main talking points of The Corporation centres around the diagnosis of modern corporations as being psychopathic in their nature. Bakan claims that, since corporations are considered “legal persons” in our society, they can also be subjected to medical criteria used to diagnose mental disorders — in this case, psychopathy. Specifically, corporations are irresponsible, are grandiose, try to manipulate, and exhibit asocial tendencies and a lack of empathy. Corporations often refuse to accept responsibility for their own actions and are unable to feel remorse. Lastly, “corporations relate to others superficially — ’their whole goal is to present themselves to the public in a way that is appealing to the public [but] in fact may not be representative of what th[e] organization is really like.’” These characteristics are immediately clear upon consideration and are ingrained in the very idea of what a corporation should be. In fact, in some respects, it is illegal for a corporation to act otherwise. In most countries, the law includes the “best interests of the corporation” principle which forbids any motivation for actions other than those which are, as the name suggests, in the best interest of the corporation and its owners (i.e. shareholders). As Bakan puts it: “Corporate social responsibility is thus illegal — at least when it is genuine.” This means that, for example, if the corporation’s executives were to hold a charity fundraiser for a certain cause, they could technically be sued unless the charity was directly benefiting the corporation and its shareholders financially. It is not very difficult to see what is wrong with this way of thinking and to consider the future ramifications of such a mindset.
In the last two decades, a new corporation has emerged and has managed to take the world by storm. This corporation is comprised of thousands of smaller sub-corporations across all sectors and employs 1.3 billion employees — by far the largest workforce of any single corporation in history. This corporation is known as China, and it’s changing the way people do business. Napoleon Bonaparte once said, “Let China sleep; when she wakes she will shake the world” (“China’s fitful sleep”). Sometime during the mid-1990s, the sleeping giant was awakened and shake the world she has. The top four spots on the Forbes list of “The World’s 2000 Biggest Public Companies” are held by different Chinese banks (Chen) and, in 2014, China surpassed America as the world’s largest economy as measured by purchasing-power adjusted GDP (Bird). Chinese society is different from Western society in many ways and this results in vast differences in the way in which the two are governed. While Western corporations rarely have any personal responsibility to the populations of the countries in which they operate and are more or less free to operate in whichever way they desire that will increase profits, Chinese corporations are, on the other hand, either run directly by the government or have a heavy government influence in their executive branches. What sets Chinese corporations apart and what has allowed them to succeed at unprecedented levels is that, unlike the way in which Western corporations must act in the best interest of their shareholders, Chinese corporations are much more concerned with acting in the best interest of China as a whole — as though China itself were one large Western-style corporation with smaller sub-corporations acting in its best interest. This has allowed China to see value in places which Western corporations see none and thus outbid the rest of the world with prices they see as fair but which the rest of the world sees as wildly overpriced. For example, Chinese corporations are able to overprice resources because they factor in how it helps sustain and provide employment opportunities for its population. It is through this difference in business motivation that China has been able to effectively take over the world’s many resource markets and become the world’s largest economy.
Despite the differences in the way it operates, China still seems to act as one exceptionally large Western-style corporation which begs the question: does China still share the same fundamental characteristics, both good and bad, as the rest of the world’s corporations? Well, China’s effect on the developing nations of the world has been largely positive thus far unlike the effect Western corporations have had in the same areas. Many reports have shown that China is seen by the people of these nations in a much brighter light and that they are much more optimistic about the consequences of doing business with the economic superpower (Moyo 163). China has managed to develop symbiotic relationships with resource-rich impoverished nations in which it provides economic development in the form of infrastructure and employment in exchange for resource supplies as opposed to the rarely successful aid-based approach of the West. China may be striving to colonize the world for its own benefit, but it is doing so in a manner different from the exploitative methods of past colonizing nations which left those colonized in a state much worse than before their colonization. So, at least in the way China interacts with the rest of the world, it is fairly different from Western governments and multinational corporations. With respect to China’s approach to its internal operations, the aforementioned discussion of Chinese sub-corporations acting in the best interest of the Chinese society as a whole as opposed to strictly its shareholders is one of the most significant ways in which China is set apart from the West and that has allowed it to succeed at such a rapid pace. However, China is not better than the West in all of its differences. China has been known to neglect the rights of its workers time and time again which is quite unexpected considering its aim to act in the best interest of the country as a whole. Chinese labourers are often subjected to very poor working conditions with horrendous health outcomes and skyrocketing death tolls which fall well below the standards of the West. In this respect, China differs very much from the West but, unlike the case with the previous differences, is worse than the West. With regards to the environment, China’s mindset is very similar if not identical to the mindset of Western corporations. China has, for many years, failed to take action to solve its climate crisis and the resultant pollution that has severely affected the health of its population. Across the world, China is responsible for much of the deforestation and ruthless mining taking place in order to harvest resources to facilitate its growth. It is with this that China does not differ whatsoever from the history of Western corporations. The argument repeated by many suggests that it is only fair for China to be allowed to be relatively careless in its environmental policies in order for it to be given the opportunity to grow economically in the same way the West grew many decades ago. This argument, however, entirely ignores the fact that China’s growth is occurring during a time in human history in which climate change is a severe threat, in which we as a species are aware of this threat, and in which we as a species possess the technological means by which to overcome this threat. It is indeed true that China will not be able to grow in the same way as the West once did, but this cannot be avoided or used as an excuse for carelessness. However, not all of the differences in opportunity China faces are bad. In fact, these past decades during which China has grown have featured a level of globalism and technological innovation unimaginable by the West during its growth period. These features are precisely what has allowed China to grow at the pace it has and so it should be made clear that China already has had advantages in its growth and should not attempt to excuse its carelessness by claiming the West had an unfair advantage.
One final question remains: if China acts as one large Western-style corporation, and if Western-style corporations have been diagnosed as psychopathic, then can the same diagnosis extend to China as well? Well, China can be seen as irresponsible in the way it has issued lines of credit to underdeveloped countries around the world. In 2009, Chinese banks issued US$250 billion in loans to other countries, 12.5 times more money than that issued by America (Moyo 77). With the countless times credit crises have brought down entire economies throughout history, a credit issuance of this size is likely to have severe consequences in the future, mainly for the underdeveloped countries involved. Through its many mind-boggling infrastructure projects such as the 3 Gorges Dam, Tianjin Harbour Industrial Zone, South-to-North Water Diversion Project, and Ningdong Energy and Chemical Industrial Base, China has attempted to prove to the rest of the world that it is capable of amazing feats of ingenuity in some of the most grandiose ways possible. For many years, China has worked to try to manipulate global markets through currency manipulation and resource hoarding which has resulted in artificial exchange rates and market trends, benefiting China as a whole while damaging the rest of the world economy in the process in many ways, including a large increase in trade deficit for many of the world’s countries (Moyo 143). Both China as a whole and Chinese individuals have exhibited a lack of empathy in many cases. As a whole, China cares very little about the internal politics of the nations with which it conducts business so long as the agreements in place are maintained, unlike the Western characteristic of playing a large role in the countries being dealt with. As individuals, Chinese people have shown extreme apathy even towards other Chinese in cases such as that of a toddler wandering into a busy street, being hit by two cars, and laying on the ground for six minutes while dozens of people passed by without even hesitating to stop (Brill). Many similar cases exist and reveal a serious issue present in Chinese society in which its population is, to some extent, unable to feel remorse. This inability to feel remorse extends to China as a whole as it is rarely affected by the issues dealt with by the countries it does business with and does very little to help. With respect to its environmental impact on the world, China has thus far refused to take responsibility for its actions and has taken the lead as the country with the highest emissions rate for the main atmospheric gas in global warming, carbon dioxide (“China now no. 1”). And finally, China’s relations with the rest of the world are fairly superficial in that China seems to be solely interested in its own benefit and, despite its vast economic resources, has rarely provided anywhere near the amount of aid provided by the West. Although China may be benefiting the countries it does business with, this is merely a side effect of the fact that China is directly benefiting in the process and there has never been a case in which China has provided such an economic boost to any countries which have been unable to exchange resources. It follows that, as the aforementioned points have illustrated, China can be classified as psychopathic which is in agreement with its resemblance to a traditional Western-style corporation in its nature.
Alas, it seems as though the flaws of the corporate way of thinking that experienced in the past will remain for the time-being as China continues to control the rest of the world at an increasing pace. We can only hope that the pattern of the standardization of past-luxuries and rapid innovations in technology will also remain as China Inc. expands its dominance. The time of China’s awakening has arrived and we must wait to see the extent to which she shakes the world and whether this shaking is for the better or for the worse.
Bakan, Joel. The Corporation. Toronto: Penguin, 2004. Print.
Bird, Mike. “China Just Overtook The US As The World’s Largest Economy.” Business Insider. 8 October 2014. Web. 15 June 2015.
Brill, Yvonne. “Civilized society distorted by moral apathy.” China Daily. 18 October 2011. Web. 15 June 2015.
Chen, Liyan. “2015 Global 2000: The Largest Companies In China.” Forbes. 6 May 2015. Web. 15 June 2015.
“China now no. 1 in CO2 emissions; USA in second position.” PBL Netherlands Environmental Assessment Agency. Web. 15 June 2015.
“China’s fitful sleep.” The Economist. 17 July 1997. Web. 15 June 2015.
Moyo, Dambisa. Winner Take All. Toronto: HarperCollins Publishers Ltd., 2012. Print.