What China thinks about China

We read so much, on a near-daily basis, about China's explosive economic growth. But rarely do we look beneath the surface at the factors driving that growth. While China's economy has grown largely on the strength of its manufacturing base, the country increasingly aspires to be a leader in higher-value fields. Those aspirations have led many around the world to worry that China's rise could depreciate its competitive advantage and, potentially, result in its decline.

But what do the Chinese make of all this? It's often difficult to know. Public opinion polling isn't exactly common in China. The Business Software Alliance recently set out to clarify these mysteries and commissioned a unique survey of elites within China. This group of 100 leaders included senior government officials, CEOs, academics and top-tier media. And unlike a traditional survey, ours was based on extensive, detailed personal interviews.

What did we find? First, despite formidable barriers to China's growth, leaders in China display an overwhelming sense of optimism about the country and its future. But after learning last quarter that China's economy is currently growing at its fastest pace in 12 years, their optimism isn't really that surprising.

Chinese elites believe that the rest of the world maintains deeply rooted negative stereotypes about China.

More surprising are the feelings and beliefs that lie below optimism: namely, a strong feeling that the rest of the world misunderstands China, as well as anxiety about competition with India. In short, China's hopefulness is tempered by a keen awareness of the challenges it will face along the path of economic expansion.

Chinese elites believe that the rest of the world maintains deeply rooted negative stereotypes about China--in particular, that the country is undemocratic, lacks transparency and is capable of only low-wage, unskilled labor.

Furthermore, they believe these perceptions are exacerbated by the country?s lack of established consumer brands that are known around the world. Members of China's private sector are especially familiar with this perceived correlation between global views on China and the country's brand deficit.

Needless to say, the Chinese do not feel these perceptions are accurate. But rather than commiserate about being misunderstood, the situation seems to motivate the Chinese. Their perception about how the rest of the world views them also drives them hard to prove themselves in the global marketplace.

As that drive continues to propel China forward, it is sometimes taken for granted by some here in America that China's rise will cause the U.S. to decline. But perhaps we shouldn't flatter ourselves. It turns out that the Chinese don't view themselves as operating in the same league as the U.S. or Japan. Instead, the country that is most often in their sights is India.

And it is that competition with India that weighs often on Chinese minds. While leaders in China feel that their infrastructure and sense of aspiration is greater than India's, they are acutely aware of how the Indians have educated themselves and prepared for a global economy. In particular, they envy India's advanced English-language training, and the fact that Indian schools have been better at instilling creativity and innovation in students. Failure to master those language and applied learning skills is thought to be a key factor holding China back.

That doesn't mean the U.S. can become complacent. The Chinese drive to succeed is sufficiently strong. Over the coming decades, the country could very well exceed India's gains and begin to compete more squarely with the West.

The Chinese also have a sober appreciation of other challenges they face. For example, the Chinese consumer is known for enormous personal savings per capita, but a lack of available tools to manage his or her money. Many recognize that, as the economy cultivates a more affluent class and attracts foreign investors, China will need to provide quality investment products and opportunities for Chinese investors.

Participation in the world economy offers China a means of increasing national power and wielding great international influence. As China expands, it is vital that the rest of the world better understand where the Chinese see themselves headed economically--and the power of China's determination to get there.