Oil and vinegar. Mixed properly, they turn a simple salad into something special. But unless they are properly stirred up then all you’ve got is a layer of bitterness floating over bland & lifeless oil. If something doesn’t energize the ingredients to keep everything active and moving, then you are left with the worst of both worlds.

For the last few years the brisk back & forth of ideas, personnel and trade between China and the US have been stirring things up enough to keep the mix vital and exciting. But now there are signs that the energy needed to keep international exchanges of ideas and high-level trade active is dissipating.

If that happens, it is going to leave us all with a very unpalatable mess.

China and the US are both fairly insular, inward-looking societies when left to their own devices. We like one another well enough when given half a chance and a very good reason for interacting – but our default-mode is to not pay much attention. For much of the last 10 years, mutual engagement seemed to have been a win-win proposition. Since the recession hit, however, both nations have been focusing inward on separate solutions to our individual problems. Whether you feel that is right or wrong, it’s important for managers to know which way the trend is heading.

Moods are solidifying on both sides of the water. The newness is over. Average Americans have come to see China as cheap factory that cranks out low-quality goods and destroys jobs. Chinese have been taught that this American Recession was engineered to undermine China’s economic progress. If the global economy doesn’t improve soon, economic tension will continue to drive a wedge deeper and deeper between Main street views in both countries.

Entropy is replacing energy. The ideas are less big, the ambitions more modest, and the lies are the same old lies. We used to dream bigger. There used to be talk about big initiatives and expansion. Now we’re back to tired bickering about 8% growth targets and exchange rates. The biggest new idea of the last year has been about the renmenbi becoming an international currency (which is unlikely in the next 10 years).

Firewall is working. Don’t underestimate this one. China and the rest of the world have a completely different way of using online tools and communication networks. It’s not about translation – it’s about insularity. Chinese internet users are getting a filtered, localized view of the outside world – and they like it that way. A few years ago, there was talk about the democratizing, leveling effect of the internet. Now it has become a tool for establishing and reinforcing the status quo.

Numbers are falling. Fewer and fewer bright young Chinese grads are getting jobs with multinationals in China. Those companies are sending fewer expats over. In a way, it’s a great sign that localization and efficiency are taking hold. But it’s also keeping a lid on cultural exchanges. Working for an MNC and maybe accepting an overseas posting used to be a pretty standard middle-class aspiration – at least in Shanghai. Now the hot jobs are stable, reliable civil service posts.

Propaganda is working. In the days when a Chinese kid could go to a good local college and have a reasonable expectation of finding a good job with an international firm, we were all able to laugh off the lifeless Chicken-little rhetoric coming out of Xinhua and People’s Daily op-ed section. Not anymore. The young generation, obsessed with the unemployment situation, is far more cynical than the graduating class of 1999. Their resentment and disappointment is being channeled outward – and it is working.

This entry was posted on Monday, May 18th, 2009 at 8:41 am and is filed under Marketing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.