China’s Xi Should Take a Lesson in U.S. Creativity: Junheng Li

An executive in the Shanghai office of an American private-equity firm decided to conduct an experiment with two groups of MBA interns. He gave the same project to a team from the Wharton School of the University of Pennsylvania and to a team from a leading business school in China.

One group of students gave a well-balanced and coherent presentation. The members of the other team took turns upstaging one another for personal glory and ended up with contradictory conclusions.

No one should be surprised that the American group gave the organized report, while the Chinese students were out for themselves.

But you might have predicted the opposite result, thanks to the assumption that the rigid style of Chinese education and parenting, illuminated in the U.S. by Amy Chua in “Battle Hymn of the Tiger Mother,” creates higher-performing, more disciplined students.

In challenging economic circumstances, it is natural for Americans to look outward for inspiration rather than inward for strength. The visit to the U.S. this week of China’s vice president, Xi Jinping, is highlighting these national insecurities. But Xi, who is expected to become China’s next president, is the one who should be impressed. While some American parents despair that their children cannot compete with phalanxes of Chinese prodigies, more Chinese parents are sending their one and only child to America to be educated. Why?

Soft Skills Required

Chinese are beginning to understand what Americans have taken for granted: to move up the global food chain, creativity, social skills and risk-taking have to be cultivated. These “soft” skills can’t be taught by rote learning -- and are in many cases quashed by the unrelenting focus on the narrowly defined perfection that the Chinese model champions.

I have an unusual perspective of my own. Although the U.S. is my adopted home, I am a product of Chinese tiger parenting in its most authentic form, having grown up in Shanghai in the 1980s and 1990s. I have spent most of my career as a global equity growth investor researching publicly traded companies with defensible intellectual property, including those in China.

Although I have found no shortage of extremely successful companies in China that have capitalized on inventions and designs from abroad, I have found few genuinely innovative business models.

Some American commentators have extolled Chinese work on green technology, but the design is made in the U.S. and Germany, and China imports the know-how. Chinese solar companies, for example, are primarily manufacturing shops and compete on low overhead and labor costs.

In general, for each proven business model in the U.S., there is a Chinese Mini-Me: Google and Baidu, Expedia and Ctrip, Amazon and Dang Dang, YouTube and Youku -- the list goes on. Copycatting is a poor substitute for leadership and cannot be the grounding for global dominance.

Military-style repetition and drilling, the cornerstone of Chinese education, create minds that excel at mimicry, but discourage the spontaneity and experimentation that cultivate young minds to be curious and take risks. The Chinese approach produces workers and followers, not entrepreneurs and leaders.

When children are forced to spend 16 hours a day on homework, they are left with no time for anything else. Social skills are undernourished, which results in a lack of collaborative abilities and empathy later in their adult lives.

Individual Sports

Sports offer a vivid example of the misplaced priorities. China is rightly proud of having won the most gold medals at the 2008 Beijing Olympic Games, but its only “teams” to win gold were in gymnastics and fencing, both intensely solo sports.

Protecting children from failure stops them from exploring roads less traveled and developing an understanding of themselves, both their strengths and weaknesses.

Again, my own experience speaks to this. Sixteen years ago, after studiously memorizing the entire Merriam-Webster English dictionary, I aced TOEFL (Test of English as a Foreign Language) and the GRE, a substitute for the SAT because the standard undergraduate exam was not available in China in the early 1990s. This helped me secure a four-year scholarship to attend one of the best liberal arts colleges in the U.S.

Only upon arrival did I realize that, even with the entire dictionary in my head, my English communication skills were near zero. Unwilling to risk my grades and an academic setback -- even if only temporary -- I picked a major, economics, that had the classes with the highest percentage of students wearing baseball caps to class.

I graduated summa cum laude, of course. Only years later would I realize how much I sacrificed in sticking to a narrow range of subjects. This was when it dawned on me that my most rewarding learning experience was in an art history class that I only took to check off a humanities requirement. Given my lack of language and cultural contexts, I found the class far more difficult than theoretical calculus. It was the only class in my entire academic history in which I got a B.

Americans need to realize that the impulse behind the Chinese model of success is fear-driven -- and that it is fear of failure that hamstrings success.

Until the Chinese system addresses its deficits effectively, its economy will saddle itself with relatively low-value-added jobs making products and services that are invented and managed by Americans.

This doesn’t mean that Americans should rest easy. But Americans would be off-base in thinking that China’s rise means a corresponding loss in American competitiveness. The jobs going overseas exemplify the creative destruction that allows the American economy to continue to move up the value chain. Globalization and labor specialization create a win-win situation.

Americans should focus on what’s worked best for them and should stay true to the attributes that have made the country great: creativity, teamwork and risk-taking.

(Junheng Li is the founder and senior equity analyst of JL Warren Capital LLC, an independent equity research firm in New York. The opinions expressed are her own.)

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

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