FILE PHOTO: A staff member wearing a face mask walks past United States and Chinese flags set up before a meeting between Treasury Secretary Janet Yellen and Chinese Vice Premier He Lifeng at the Diaoyutai State Guesthouse in Beijing, China, Saturday, July 8, 2023. Mark Schiefelbein/Pool via REUTERS/File Photo
A few days ago, the Harvard Business School Asia Pacific (HBS AP) Board meeting took place in Jakarta. As we were halfway into our discussion on the global economic issue concerning how the US-China decoupling playoff would impact businesses in Asia, a fellow board member seated next to me alerted me to the breaking news of China’s former Premier Li Ke Qiang’s untimely demise.
I had the privilege of meeting with the late Premier Li back in 2015 and I would fondly remember his legacy as the master architect that introduced his “Internet Plus” policy, aimed at driving economic growth through integrating the Internet, cloud computing and big data with traditional industries transforming them as the core pillars of a digital economy.
I also remember sharing the Internet Plus Strategy to the Asia Pacific Mayor’s Conference during the G20 Summit in Brisbane, and said that if Adam Smith were alive today, he would have agreed that what Mr Li had done was simply demonstrating how the invisible hand of the economy could really create wealth for the nation by empowering the conventional factors of production with the power of the internet.
In short, the late Premier Li was an economic visionary, a pro-market reformist and a champion of globalisation, with razor sharp commitment in developing the Chinese economy from a structural-reform perspective.
Fast forward to today. From 2015 till now, history has not been kind to the world.
We have survived one of the worst-ever global pandemics that brought the global economic machinery to its knees. No amount of Keynesian or Marxist theories were sufficient to guide us through such an unprecedented socio-economic crisis at the planetary level. To escalate our challenges further, the relationship between the world’s two largest economic super-powers has declined to a historic low, notwithstanding such a gloomy economic backdrop.
I can still vividly remember when President Xi made his most courageous and hopeful speech during the 2017 Davos meeting, advocating the benefits of globalisation and China’s readiness and willingness to participate in building a common prosperity for the human race; various global media from the West applauded him for his global leadership and visionary stamina.
Today, the fact remains that the world is being pushed towards a decoupling state. In Asean countries over the past 18 months, we have seen almost every country being asked or put in a most uncomfortable position – to choose side.
Quoting from one of the board members today, the potential crisis between the two nation states is real, and if things go south, it would make the Ukraine conflict nothing in comparison.
Therefore, it is indeed timely that HBS AP Advisory Board has taken it upon themselves to engage this thorny issue. Many questions were raised, dialogues were held in a genuine and cordial manner. Wise comments, such as how business has to be a force of good, competition is good but cooperation even better, were shared and received overwhelming resonance from the floor.
As a global billion-US dollar academic entity, the fundamental soul-searching question we asked ourselves, was how can HBS become a better force of good given the evolution of China-US relations. The following were three key suggestions that I have shared with the board.
Firstly, the world is in urgent need of value-based leadership.
When I was studying at St John’s Institution in Kuala Lumpur during my high-school years, this prestigious school gave me the best academic content with the most committed teachers. But, what I gained the most from this journey, was not about the best knowledge or best teaching that I had received in the class room. Instead, it was the school motto, Fide et Labore (By Faith and Work) that has become the moral compass for my life.
HBS’ mission statement says: “We educate leaders who make a difference in the world.” We need to inject more moral-based values as to what sorts of leaders we hope to create in the future. We need to care more about the non-business forces that are disrupting the very healthy progress of industry. The world that we are living in today is becoming too complex and quite honestly, a bit too dangerous with all the irresponsible political narratives and the damage of any hate-speech can bring. If we are not careful, business leaders who are taught to just focus on the mindset of a zero-sum-game, will very soon find themselves having no more beans to count.
This calls for HBS to take a more proactive stance in galvanising and creating a non-antagonistic and a non-zero-sum-game future looking business mindset that focuses on a global force of GOOD. We must embrace a level-headed mindset in building the sustainability of the world, rather than leaving the destiny of the world to the irresponsible policy makers and most of the toxic political rhetoric that shapes our lives.
Dean Srikant’s email a few days ago on the issue of Israel and Palestine is a good example. By openly acknowledging the fact that there is no place for anti-semitism to exist in any form in the campus, and at the same breath saying that Islamophobia is equally insidious and should not be tolerated as well. This boldly endorses the value system that HBS stands for. We are an intellectual community that allows for the presence of differing opinions, but all arguments must be rooted in facts.
And more importantly, there must be zero tolerance for hate speech.
Unfortunately, we don’t see such bold and courage stance being made for the case of China-US relations.
All we often see, is that academia and certain business community working together to uncover more facts to further strengthen the belief and the argument for a decoupling world, by finding more so-called fact-based avenues to further contain the growth of China. We all agreed today that this was a lose lose proposition.
Secondly, we must aim to develop a new generation of leaders that embrace the spirit of ambidexterity. The essence of ambidexterity is about embracing the opposite. The new reality of the US-China relations means companies will need to look at globalisation very differently.
Contradictoryness is a norm. A great wise leader never becomes wiser by always finding fault with others, but instead, he is humble enough to look within himself to reflect internally on what really had gone wrong within.
For instance, have we spent enough effort on deep-diving the fundamental domestic issues that have contributed to the decline of the American Dream? The HBS case methods has no doubt became an institutional role model in modern education.
But my fear is that the issue of such magnitude cannot be enlightened by critically unbundling a single company or industry. Furthermore, what if the answers that we are looking for in helping mitigate the crisis of China and the United States are not to be found in the future, but instead be reflected upon from our history?
Think about it. Back in 1948, in the month of June, Bell Labs held the very first press conference to announce that its scientist had invented the first transistor, that became the very technological foundation and advancement to the chip war today.
Alos in1948 the Chinese communist was still fighting with the KuoMingtang and China wasn’t even born yet.
What has gone wrong in the past 75 years that resulted in the United States losing her prominent role in technological advancement that they are so afraid of the rise of China today ? Why haven’t we referred more to the Thucydides trap of Dr Graham Alison and found more ways to resolve some of the domestic problems that are plaguing the US economy then and today? Great diplomat-scholars such as Kishore Mahbubani have written some deeply analysed masterpieces on why such complex domestic problems were not well managed by such a great nation. All we need to do, is to humbly reflect within and recognise that perhaps this might be the way to find the half solution that forms the tragedy of the common? Think ambidexterity in critical problem solving.
Finally, we need to help facilitate more ping-pong diplomacy.
Under the new leadership of President Claudine Gay, supported by the passionate reformist spirit we see in Dean Srikant, not to mention the professional zeal of Senior Associate Dean Debora L. Spar, there is no doubt that we will see greater academic breakthroughs from this great institution.
Having said that, we can have all the best courses in international relations, global trade policies and the geopolitical crisis management; or even building more digital and technology platforms in all aspects of our teachings; nothing would compare to having a direct engagement and site visits to China by the students.
This is the best way to provide first-hand experience and insights away from the mainstream pictures portrayed by the mass media.
Khazanah National Bhd, the Malaysia’s sovereign wealth fund where I am a board member, had a one-week site visit to Shanghai recently. You cannot imagine how the visit transformed the mindsets of the entire participating board members, with regards to China not only as a destination for investment, but more importantly as a precious source of learning.
Industry leaders can no longer afford to be confined in the cocoon of business issues alone. It took a long time for many to realise that digitalisation was the most potent disruption to many business models. It should now take a much less time for us to recognise the fact that a poorly managed China-US relationship will bring about the largest catastrophic outcome not only to the business world, but to the very world we are living in.
As the starting point, perhaps we should gracefully accept that the Competitive Advantage Theory of Michale Potter might be less relevant today, as the world must not be seen from a zero-sum-game perspective. In a nutshell, squeezing China will equally hurt the United States too. Better still, HBS could aspire to produce the next generation of diplomats with a greater level of technical expertise armed with a mutual problem-solving skills. The world is in desperate need of statesmen and diplomats like Henry Kissinger and Zhou En Lai to untangle the historic predicament that we are in.
Lau Seng Yee is Harvard Business School Asia Pacific advisory board member and a former senior executive of Tencent Holding Co. The views expressed here are the writer’s own.
