Western media and academia have for decades perpetuated the fiction that Chinese are neither innovative nor good at business, but fortunately for the rest of the world, both claims are false. It was China’s prosperous economy, grounded in Chinese’ entrepreneurialism and solid support from a pragmatic government, that helped end the devastating Great Recession of the late 2000s.

I see vivid proof of Chinese entrepreneurialism at every turn. Three decades ago, my first phone in China cost USD 450 and I waited three years to get it installed. Today, even Chinese beggars have cell phones and display QR codes for donations. My phone is a Huawei, my computer is Lenovo. And China has rapidly gone from Cashpoor to cashless.

Cashpoor to Cashless

In 1988, we had little cash but there was nothing to buy anyway, and many basic purchases required ration coupons. By 2017, China had the world’s most mobile phones and spent USD 16.7 trillion on mobile payments, compared with only 49.3 billion in the U.S. And the rest of the world is not catching up but falling further behind. It is projected that in 2021, 79.3% of Chinese will use mobile payments compared with 23% in the U.S. and 15% in Germany. Even the remotest villages in Inner Mongolia, Xinjiang and Tibet have internet and villagers buy and sell online.

Chinese are obviously quite savvy at business, and as its influence expands through the BRI, it is comforting to know that, unlike other so-called Great Powers, China has always sought success solely through commercial means. Not once has China colonize far flung lands as the U.S. did when U.S. Senator Beveridge said before Congress on January 9th, 1900:

The Philippines are ours forever….and just beyond the Philippines are China’s illimitable markets. We will not retreat from either… Our largest trade henceforth must be with Asia. The Pacific is our Ocean.

Trade opportunities with China are as illimitable today as in 1900, but foreign nations are discovering that on a level playing field, without navies and armies to enforce so-called “trade”, Chinese are better at business than they’d ever imagined—and that is good news for other countries that seek peaceful coexistence and mutual prosperity.

Are Asia’s Chinese False Capitalists?

In 1988, Prof. Kunio Yoshinara wrote that most of Southeast Asia’s Chinese entrepreneurs are not truly industrial capitalists but “ersatz” (fake, or poor imitation) capitalists—mere monopolists, rent seekers and speculators in collusion with ruling elites.Footnote 1 In May, 1992, Business Week (May 4, 1992, pp. 18–20) also noted:

In short, goes the argument, Southeast Asia’s top entrepreneurs, most of whom are ethnic [Chinese], may be whizzes at making easy money as concessionaires. But they do little to build domestic industries that can compare globally.Footnote 2

In reality, Asia’s best businessmen for centuries have been Chinese—in part because they had no choice. As we see from Senator Beveridges’ speech, even into the twentieth century, Western businesses relied largely on colonialism and military might but Chinese, without Beijing politics or a navy at their beck and call, were forced to rely entirely on business skills and strategy—and this turned out to be good for China because it forced Chinese to become adept at pure business, and they excelled.

Harvard: China More Open and Market-Driven Than Europe

Three hundred years ago, China and India accounted for two thirds of the world’s GDP, and in 2014, Harvard Business Review noted, “Until the early nineteenth century, China’s economy was more open and market driven than the economies of Europe.”

As noted earlier, almost 160 years ago, in 1861, Maclay explained that Chinese merchants used their soft power to dominate business and then to become the “leading” spirits of their adopted homes.

From Rice Seller to Henry Ford of Asia

Mr. Chen Jiageng, the Henry Ford of Asia who founded Xiamen University in 1921, epitomized overseas Chinese’ use of soft power. Mr. Chen left Xiamen as a teen to help in his father’s Singapore rice shop. Within 20 years, he had built a global empire with 30,000 employees in 150 offices and 48 countries, and as a true “leading spirit” he donated over USD10 million (over USD100 million today) to build dozens of schools throughout Asia.

Mr. Chen was both patriotic to China and a passionate global citizen. He designed XMU’s architecture with Chinese roofs and Western walls and columns to reflect his ideal of modern, international education grounded in traditional Chinese values and culture. His vision so impressed Chinese and foreigners alike that in 1920, the year before XMU opened, Paul Hutchinson wrote:

This school [Xiamen University] is entirely a Chinese institution, with no foreign teachers and no foreign connections, and right out in a small Chinese village. The course of study is being made very practical.… When we think of the future days, it is one of the most encouraging things to be seen in the whole of China.

Paul Hutchinson, 1920

1930s “Typical Chinese Industrialist”

In 1936, Lockhart used Chen Jiageng as his model of a typical 1930s overseas Chinese industrialist:

But perhaps the greatest change in Malayan life is the emergence of the modern Chinese capitalist and industrialist… Externally, at least, he is Westernized from the soles of his brown shoes to his tie and collar … there are still amazing examples of men who began life as an ordinary coolie and became dollar millionaires.

… he is a fully-equipped industrialist with the money-sense of a Jew, the gambling instincts of a South African Rand magnate, the modern methods of a Bat’aFootnote 3 or a Ford, and the tireless, persevering energy of an old time Glasgow Scot. He runs banks and newspapers.

He has the stock exchange quotations of the world’s bourses at his fingertips. He is an authority on commodity prices. He owns rubber estates and tin mines. His factories turn out boots, cheap clothing, food stuffs, including canned pineapples, building materials, medicines, soaps, toys and articles made from rubber, and by the latest methods of modern salesmanship he contrives to export his goods to nearly every country in the world….

Above all, he is a generous giver to local institutions, and like American millionaires is fond of endowing hospitals, colleges and other educational institutions….

R. H. Bruce Lockhart, 1936

When the West’s colonial empires in Asia failed during the twentieth century, the firms that had relied upon politics and militaries rather than business principles also failed—and overseas Chinese bought them cheaply. Today, overseas Chinese constitute less than 10% of the population of S.E. Asian countries yet control two thirds of the retail trade and 80% of the publicly listed companies.Footnote 4

Mainland Chinese as Formidable as Overseas Chinese

Yoshinara was wrong. S. E. Asia’s Chinese are obviously quite good at business—but what about mainland Chinese?

History shows that Chinese at home were as adept at business as their counterparts overseas. China not only had a thriving trade but it also had extensive cultural exchanges, with the emperor offering an Alafa (allowance) even to foreigners to subsidize their philosophical or religious pursuits.

“There is no people in the world wealthier than the Chinese,” said the famous Arab traveler Ibn Battuta (1304–1358), who over 30 years traveled farther than any other explorer in history—some 117,000 km.

Marco Polo wrote of Quanzhou, the start of the Maritime Silk Road just 60 km north of my home in Xiamen:

At this city you must know is the Haven of Zayton, frequented by all the ships of India, which bring thither spicery and all other kinds of costly wares. It is the port also that is frequented by all the merchants of Manzi, for hither is imported the most astonishing quantity of goods and of precious stones and pearls, and from this they are distributed all over Manzi. And I assure you that for one shipload of pepper that goes to Alexandria or elsewhere, destined for Christendom, there come a hundred such, aye and more too, to this haven of Zayton; for it is one of the greatest havens in the world for commerce.

Great Commercial and Cultural Crossroads

Ancient China not only excelled at trade and commerce but it was so open to other cultures and religions that the emperor offered an Alafa even to foreign missionaries like Andrew of Perugia, the Franciscan Bishop in ancient Quanzhou who wrote in 1326 that the sum of these Alafas exceeded the entire revenue of some Latin countries:

There, after the Archbishop was consecrated …we obtained an Alafa from the emperor for our food and clothing. An Alafa is an allowance for expenses which the emperor grants to the envoys of princes, to orators, warriors, different kinds of artists, jongleurs, paupers, and all sorts of people of all sorts of conditions. And the sum total of these allowances surpasses the revenue and expenditure of several of the kings of the Latin countries. As to the wealth, splendor, and glory of this great emperor, the vastness of his dominion, the multitudes of people subject to him, the number and greatness of his cities, and the constitution of the empire, within which no man dares to draw a sword against his neighbor, I will say nothing, because it would be a long matter to write, and would seem incredible to those who heard it. Even I who am here in the country do hear things averred of it that I can scarcely believe…. In this place I continue to dwell, living upon the imperial dole before-mentioned.… Of this allowance I have spent the greatest part in the construction of the church; and I know none among all the convents of our province to be compared to it in elegance and all other amenities…. ’Tis a fact that in this vast empire there are people of every nation under heaven, and every sect, and all and sundry are allowed to live freely according to their creed…. Farewell in the Lord, father, now and ever. Dated at Zayton, A.D. 1326, in the month of January.

Even into the twentieth century, Westerners marveled at Chinese business savvy, as well as their integrity. In 1912, Reverend Pitcher wrote of Chinese businessmen in In and About Amoy:

... what shall we say of them? They are a part of a wonderful people ... in business circles, the commercial world, they have the reputation of being the most straightforward and conscientious merchants in the whole Eastern hemisphere.... You may always depend upon the man with whom you may be dealing to deliver the goods. No matter how much they may lose in the transaction the Chinese have the reputation of fulfilling their contracts every time to the letter.

Confucian Innovation in Business

Chinese are obviously adept at business, but what about the contention that they lack innovation and only copy others? In July, 2011, diplomat.com asked, “How does China kill innovation?” A March, 2014 Harvard Business Review article that acknowledged China’s historic openness to trade was entitled, “Why Chinese Can’t Innovate”.

In May, 2015, U.S. Vice President Joe Biden said in a speech to the USAF Academy, “I challenge you, name me one innovative project, one innovative change, one innovative product that has come out of China.” That same year, Carly Fiorina, former Hewlett Packard CEO, wrote in her book, Rising to the Challenge: My Leadership Journey:

Although the Chinese are a gifted people, innovation and entrepreneurship are not their strong suits. Their society, as well as their educational system, is too homogenized and controlled to encourage imagination and risk taking.

Many experts opine that China’s rigid education curriculum stifles creativity, but if that were true, how did ancient Chinese with their rigid Confucian education invent everything under the sun? In reality, Chinese have long been innovative in governance, science and business precisely because their rigorous education gave them a foundation for critical thinking and problem solving.

Confucius himself was quite creative, and he taught by asking questions that forced students to think on their own rather than parrot what he’d told them. He said, “If I show one corner and the student cannot deduce the other three, I do not repeat the lesson.”

One decade ago, the Western media trumpeted Chinese’ lack of creativity. Today, they are changing their tune. In April, 2019, Daniel Coughlin wrote for MSN Money titled “28 Incredible ‘Made in China’ Innovations That Are Changing the World”Footnote 5:

Scientific and technological breakthroughs that will blow your mind. A beacon of eye-opening innovation, including this month’s historic moon landing, China is becoming the global leader in everything from artificial intelligence and robotics to green energy … we put the spotlight on 28 recent advances that reveal why the planet’s most populous country is rapidly getting ahead.

Confucian Education: Key to Innovation, Business and Government

Legends say the ancient Three Sovereigns improved people’s lives by teaching them fire, farming and building houses, but Chinese have had no problem innovating on their own ever since. As the saying goes, “indigo is bluer than the plant itself,” meaning the follower has surpassed the master.

Confucian education provided not only the intellectual foundation but also the moral imperative for innovation and commerce to feed, clothe and care for China’s teeming population, which even 2000 years ago numbered 60 million.

To feed its millions, China adopted row crops in 500 BC, some 2300 years before Europeans, and started an agricultural research bureau in 200 BC. Chinese invented the iron plow in 300 BC; Dutch sailors saw it in Fujian in the 1600s, took it back to Europe, and in 1730 England patented this “Dutch plow”. In 200 BC, Chinese sowed seeds one at a time, in rows, using multiple-tube seed drills that weren’t widely used in Europe until the nineteenth century. Row crop farming was used in China in 500 BC, 2200 years before the Europeans. The Dutch introduction of Chinese agricultural ingenuity to Europe—row crops, hoeing weeds, iron plow with mouldboard to turn the soil and multiple seed drills—brought about the Agricultural Revolution that heralded the Industrial Revolution.

But history’s greatest agricultural triumph was Governor Li Bing’s Dujiangyan Irrigation Project built about 256 BC. To this day, Dujiangyan not only irrigates 5300 sq. km of land but also prevents floods in ways that surpass even “modern” practices. In the U.S., 1578 dams were demolished between 1912 and 2018 because they impeded fish migration or caused other environmental issues, but Li Bing’s project even today allows fish and ships to travel unimpeded because he used the 4000-year-old Chinese river management philosophy of diverting and channeling rivers rather than damming them. This project has for over 2000 years bolstered the economy of “the breadbasket of West China”.

Scholars helped farmers with seasonal sowing by studying the heavens and meteorology with 4500 years of records so accurate that NASA used them to study how much the earth’s rotation had slowed 47/1000 of a second over the past 3400 years. UK astronomers received the 1974 Nobel Prize for discovering a Crab Nebula pulsar, but in 1054 Chinese astronomers recorded the explosion that created it.

Shen Kuo (1031–1095) wrote of climate change over time and how to prevent deforestation, the use of biological pesticides, pinhole cameras, music and math harmonics, raised-relief maps and morality, among other subjects. In 1856 in the UK, Bessemer patented a modern steel making process but Shen Kuo had described it 800 years earlier.

China’s Confucian scholars also excelled at medicine. Chinese used ephedrine in 2000 BC, and in 300 BC emphasized prevention of disease through proper nutrition, exercise and stress relief—the “healthy lifestyle” approach popular in the West only in recent decades. In 980, Chinese steamed clothes to reduce the spread of infections and in 1000 gave smallpox inoculations.

In 2015, Dr. Tu Youyou received the Nobel Prize in medicine for a malaria cure she based on a 1600-year-old Chinese work (scientists abroad had tried over 240,000 compounds without success).

To better govern their vast empire, Chinese created “projection maps” 1400 years before Mercator “invented them”, and created gridded maps in the second century BC. In the eighth century, Chinese conducted a 2500 km geodesic survey from Indo-China to Mongolia and traveled to within 20 degrees of the south pole to study southern constellations.

To facilitate trade, some 1400 years ago China started the 1100 mile Grand Canal to link Hangzhou and Beijing to the Silk Road and West China. The invention of pound locks for the Grand Canal made possible the European canals, including France’s Canal du Midi, which was considered an engineering miracle in the West even though it was only 150 miles long and built 1000 years after the Grand Canal.

And Chinese of course invented not just paper but paper money, paper playing cards, greeting cards, toilet paper—and, of course, paper books.

China is said to have more books than any other country… In Peking there are several blocks of streets in the Chinese city which are devoted to books. The Hanlin Library contained many thousand volumes. Among them there was one work comprising 23,633 volumes....

Denby, 1900

China’s Confucian scholars also excelled at math, inventing both the decimal system and the binomial math upon which computers depend. In 1535, Niccolo Tartaglia (1500–1557) excited Europeans with x3 + ax = b, but 300 years earlier, in 1248, Chinese mathematician Li Ye (1192–1279) had calculated, ax6 + bx5 + cx4 + dx3 + ex2 + fx + e = 0 (and also claimed that the earth was a sphere), and Chinese mathematician Yang Hui (1238–1298) drew “Pascal’s Triangle” almost 400 years before Pascal’s birth in 1623. A fifth-century father-son team was 1000 years ahead of Europe when they calculated pi as 3.1415929203.

Zhang Heng (78–139), a civil servant, invented the odometer, and a seismograph so sensitive that it detected an earthquake 1000 km away. He was also an astronomer, mathematician, engineer, geographer, map maker, artist, poet, statesman and literary scholar—quite versatile for a person of a rigid Confucian education.

History proves that, far from stifling creativity, China’s Confucian education system has long served to foster the intellectual discipline and critical thinking needed to solve the great problems of a great nation. That innovation was seen in Chinese entrepreneurs holding their own against colonial empires, or government officials building the Dujiangyan Irrigation Project 2200 years ago, the Grand Canal 1500 years ago, or the greatest maritime port in the world 1000 years ago. And it’s seen in modern China’s business and government as well.

Innovative Confucian Government Today

Although New China is socialist, its leaders’ values and goals are, in many ways, remarkably pragmatic and similar to those of 500 or 2000 years ago. Those who pass the entrance examination (the new imperial exam) and excel in college are placed at various posts around the country, moving up only if they prove themselves. And not surprisingly, today’s meritocracy is chockfull of engineers with the skills to meet the rapidly evolving needs of China’s one fifth of the planet’s population.

Hong Kong-Apec Trade Policy Group executive David Dodwell wrote in 2017:

The main difference between the U.S. and China is not that one is capitalist and the other communist. Rather, it’s that one is run by lawyers, and the other by engineers.Footnote 6

Confucian Engineer Leaders

Jiang Zemin is an electrical engineer, and Li Peng, a hydroelectric engineer, helped design the Three Gorges Dam. Zhu Rongji is an electrical engineer. Xi Jinping studied chemical engineering. A Swiss ambassador said that Wen Jiabao, who has a postgraduate degree from the Beijing Institute of Geology, has a “mind like a computer”. I attended five meetings in Beijing with Wen Jiabao and each time he replied with statistics to every question put to him on diverse topics—and not a teleprompter in sight.

Given the caliber of New China’s leadership, it is no surprise the nation has undertaken engineering feats that would have shocked even the ancients—such projects as the South to North Water Transfer, West to East Electric Power Project, the “Five Vertical, Seven Horizontal” Highways Project and the Three Gorges Dam and the world’s most extensive hi-speed railway networks.

But all of these pale beside the projects even now in place to complete the Belt and Road Initiative.

BRI: Taking Precision Poverty Alleviation to the World

In 2017 the World Economic Forum reported that from 1990 to 2005, China had accounted for three fourths of global poverty alleviation. The goal of China’s entrepreneurial leadership now is to use the BRI to tackle poverty in other nations as it has at home—by building fundamental infrastructure that will empower people to lift themselves from poverty.

A century ago, the world thought that China was on its last legs, but foreigners intimate with the ancient nation’s history and spirit were confident the country would not just survive but thrive. Gamewell wrote in 1919:

China is not like ancient Egypt, whose greatness has departed though she still lives on. China is a vital force whose largest possibilities of development lie before and not behind her. A new fresh life is beginning to course through the nation’s veins.

Today, that new fresh life is coursing not only through China’s veins but through other nations as well—yet this inflames yet another Western fear—that China is out to conquer the world.

I understand Western nations’ fears because after five centuries of colonialism, they fully believe that a powerful China will behave as they did, perhaps crying as the U.S. did in 1900, “The Pacific Ocean is ours!”

Fortunately, Chinese have never sought conquest. If ancient Chinese had harbored even the faintest imperialistic tendencies, today the entire world would be speaking Chinese.

As Maclay pointed out in 1861, Chinese won in business through pure business principles, and as the “leading spirits”, gave back. Today, China is helping other nations to build their infrastructures.

It’s also showing the world how to tackles pandemics with science, not politics—an important lesson, because on this small planet we can attack borderless problems only with borderless cooperation.