Strength Through Unity

China has long held a fascination for me. I have lived in China for 6 years, married into a Chinese family and built a network of local friends and associates. However, perhaps my greatest fascination is how it fares in the views of the outside world and how it embraces the challenges of progress. A Nation in development, often misunderstood and frequently criticized (rightly so in many cases), it has been a challenge and privilege to be part of China as it has faced up to external pressures. But, what about the internal pressures? How would it respond to a major issue with the spotlight of the world upon it? How would the country pull together when there is such a disparity between the “haves and have nots”?

Sitting in my office on the 24th floor of a block in Shenzhen, 1000 miles from where the earthquake struck last week, the swaying of the building and subsequent nausea were testament to the shocking power of the quake. Power that has devastated an area more than twice the size of Great Britain; Power that has caused tragic loss of life; Power that has caused countless suffering in an already poor, mainly rural region.

But “China the Nation” has responded with a force of its own, and at the same time may have answered some of the questions above. They have come to exhibit a force of commitment, unity, selflessness and pride. A force that, as a foreigner here, I can describe only as immensely humbling to witness. The huge devastation, loss of life and suffering of those who survived the recent earthquake cannot be overestimated. Neither can the impact that the tragedy has had on the Nation and the way that people from all walks of life have responded with purpose. “Premier of the People,” Wen Jiabao’s sheer presence and his speech that made clear that “Time is lives”, served as a rallying call to the Government, the PLA, police and emergency services and the ‘man on the street.” All of whom have responded with the pride and commitment that anyone familiar with China will recognize.

What has struck me also is how the younger generation, often derided as the “ME” generation has pitched in as well. This generation has been characterized as cosseted as children, well educated, driven and focused upon self benefit and self development. They have been hit hard by the tragic scenes of parents losing their only child or a child losing its family. What cannot be denied though is that the nation has united across demographics to support in any way they can. United in a way that even the pride of hosting the Olympics, would struggle to achieve.

So as we look forward, what can we expect? My hope is an open China with open people, who demonstrate the same commitment to each other. As the economy develops, the Government is committed to improving social standards across the board. This of course all remains to be seen, but for now, seeing “close up” how China and its people have responded to this tragedy gives this foreigner the belief that anything is possible in this incredible Nation.

Having read many of the comments on Western news websites from fellow Europeans and Americans, I was struck by the level of ignorance many people still have about China and its people. Perhaps just as shocking was the amount of people wondering about the impact on the Olympics and the impact upon business here.

In light of the tragic loss of life and devastation, it is hard for someone living here and married into a Chinese family to equate the two quite so simply. But of course, many of the providers were working on the “life goes on” theory and so it does. Hence, we will try to highlight some of the main issues impacting business in the aftermath of China’s worst natural disaster in over 30 years.

Sichuan, where the earthquake was centered, is home to a population of almost 90 million people. It is rich in natural resources and heavy industry ranks alongside agriculture as the major providers of employment and GDP. As people seek opportunities away from agriculture, Sichuan has become one of the major contributors of migrant workers in the manufacturing heartland of Guangdong. It is no surprise that, in response to the tragedy, many of these workers are returning home to assist in the search for and well-being of family members. In fact, as early as today, Guangdong factory owners are warning of a potential labor shortage as the result of migrant workers returning home. By adding this tragedy to labor pressures resulting from the unprecedented snowstorms earlier this year and it is easy to see why labor issues are again a major topic of conversation. The result will likely be higher labor costs as demand outstrips supply.

On the other hand, Guangdong has been here before and is adept at solving this type of problem. It is likely that only the industries that the Guangdong Government wants to re-locate, the low tech, heavily labor intensive industries, such as toys, shoes and textiles will be hit, protecting the labor pools in other higher technology areas, which Guangdong is committed to maintain and develop.

So whilst some businesses, especially those at the lower end who are already hurting from appreciation of the RMB, increasing labor costs and of course materials and freight costs impacted because of higher raw material and oil costs will suffer in both the short and medium term. Other sectors may experience a short term hit. Although, losing some of the low end manufacturing business is not such a big surprise and just follows the normal route of globalization.

Dave Hunter is a British born resident of Shenzhen China for the past 6 years and is one of the partner at International Innovations.