My Bio

Hao Xie Photo

Mr. Xie has been doing research and analysis in the United States in the past ten years in the field of regional competitive advantage, business strategy, and global supply chain management. Before founding ChinaAnalysis.Com, he was a senior business analyst at a Fortune 500 company and the founding member of six other companies in both US and China. Formerly, he was an electrical and software engineer, manager of business development and public relations, and business consultant in China for more than 10 years. As a Chinese native, speaking four dialects of Chinese, and having visited almost every province of China and many foreign countries, Mr. Xie understands many subtle differences between China and the rest of the world. Mr. Xie holds an MBA degree in Supply Chain Management and Finance, M.A. degree in Regional Economic and Social Development, and B.S. degree in Physics.

Who is Ruling China?

The answer appears to be simple. President Hu Jintao of the Communist Party of China is ruling the People's Republic of China.

While no longer a governing body recognized by the Constitution since 1982, the Communist Party remains the supreme political authority and power in mainland China through its effective control of the government, the military, and the legislative process, including appointing government officials and formulating the Constitution itself. Formally, the President is elected by the Congress in accordance with the Constitution. In practice, the President is appointed since only a single candidate, recommended by the 25-member Politburo of the Communist Party, stands for election.

The Politburo is the de facto highest and most powerful decision-making body in the Communist Party and, consequently, in the Chinese government. The power of the Politburo is further centralized in the 9-member Politburo Standing Committee. The process for selecting Standing Committee members, as well as Politburo members, occurs behind the scenes. The ranking of the Politburo Standing Committee members is the best indicator of who is the most powerful individual in China, which can be observed through the positioning of portraits in the People's Daily, the official newspaper of the Party. In practice, the membership and ranking of the Politburo Standing Committee is the result of negotiations among the top leadership of the Communist Party.

There are about 70 million members in the Communist Party, accounting for about 5.5% of the total population of mainland China. There are numerous local branches in the government, companies, schools and other organizations where all citizens in China can apply to join the Party. To be approved, they must already be an elite, or have a strong potential to become an elite, in the organization. Similar to what happens in a large corporation, it takes a lot of hard work, skills, and most of all, high-profile networking with the top party elites, for a party member to climb to the top of the power pyramid.

A Country Led by Engineers

Engineering and science are highly valued in today's China, but very few people understand how much and why. Below are some interesting facts:

  • 8 out of the 9 members in the Politburo Standing Committee, the de facto highest and most powerful decision-making body in China, have a degree in engineering;
  • 13 out of the 27 ministers started their careers as an engineer;
  • 30 out of the 62 party and government leaders at the provincial level have a degree in engineering or science;
  • 11 out of the 14 Chairman and Vice-Chairpersons of the People's Congress were trained as engineers or scientists;
  • The President (Hu, Jintao), Vice President (Xi, Jinping), Chairman of Congress (Wu, Bangguo), and Governor of the Central Bank (Zhou, Xiaochuan), all graduated from Tsinghua University, the MIT of China.

Understanding the engineering background and culture of China's leadership is very critical for understanding China. To learn more about the topic, you may read a new book published last year, titled "Rise of the Red Engineers: The Cultural Revolution and the Origins of China's New Class", authored by Joel Andreas.

Chinese Culture vs. Western Culture

Chinese Culture
Western Culture

Collectivism -
Chinese have a stronger sense of belonging to the groups with which they are associated, and often place their group interests above personal interests.

Individualism -
Western people tend to place more value on individual rights, contributions, and achievements.

Hierarchical -
Chinese culture emphasizes the importance of rank and status. People who are older, better educated, and in higher positions are more respected.

Egalitarian –
Western cultures emphasize the equality of human beings, regardless of gender, age, and rank.
Indirect Communication -
Chinese are reserved in expressing their opinions and emotions. Most Chinese hide their feelings inside and avoid conflicts.
Direct Communication -
Westerners are more likely to express their opinions and emotions freely, being frank and honest, whether it's positive or negative.
Relationship (Guanxi) Oriented –
Chinese value close and lifelong relationships with other people in life and at work. They place a priority on maintaining a harmonious relationship over accomplishing personal goals.
Task Oriented –
Westerners have a tendency to focus on getting the work done, and pay less attention to its impacts on relationships.

Moderation and Humility –
Chinese people have developed the character of avoiding extremes, no matter whether they are extremes of deficiency or extremes of excess, including wealth and fame.

Excellence and Recognition –
Striving for the best and against the mediocre is a motto in many Western cultures. The success of one’s professional or personal life is lauded.

Taiwan and China's Foreign Relations

Why does the Taiwan issue play a central role in China’s foreign relations? Why would some observers claim that the Cross-Strait Relations is in essence Sino-American Relations? A brief review of the history may reveal the answers.

• In 1895, Taiwan was ceded to Japan after the 1st Sino-Japanese War. In 1945, Japan's rule of Taiwan ended after it lost World War II.

• In 1949, with the Chinese Civil War turning decisively in the Communists’ favor, the Republic of China (ROC) government led by the Kuomintang (KMT) retreated to Taiwan, while continuing to claim sovereignty over all China. In mainland China, the victorious Communists established the People’s Republic of China (PRC), also claiming to be the sole representative of China including Taiwan.

• In 1950, three months before the Chinese intervention in the Korean War, the United States dispatched the 7th Fleet to the Taiwan Straits to protect ROC from the PRC. In 1954, the United States and the ROC agreed to a mutual defense treaty.

• Until 1971, the ROC government continued to be recognized as the legitimate government of all China by most NATO governments. However, on October 25, 1971, PRC replaced the ROC as a member of the United Nations.

• In 1972, at the conclusion of Richard Nixon’s trip to China, the United States and the PRC issued the Shanghai Communiqué, in which the U.S. said it "acknowledges that all Chinese on either side of the Taiwan Strait maintain there is but one China and that Taiwan is a part of China. The United States does not challenge that position."

• In January 1979, in the Joint Communiqué on the Establishment of Diplomatic Relations, the United States transferred diplomatic recognition from Taipei to Beijing. However, the United States Congress also passed the Taiwan Relations Act, a law generally interpreted as mandating US defense of Taiwan in the event of an attack from the Chinese Mainland.

• In 1982, the PRC and the United States issued the 3rd communiqué, in which the United States declared its intent to gradually decrease its sale of arms to Taiwan. However, Successive U.S. administrations have continued to sell arms to the ROC in compliance with the Taiwan Relations Act.

• In 1990 and 1991, the Straits Exchange Foundation (SEF) and the Association for Relations Across the Taiwan Straits (ARATS) were established to allow the two governments to engage with each other on a semi-official basis.

• In 1992, the representatives of the PRC and ROC issued the 1992 Consensus. The Consensus is that, on the subject of the "One China principle", both sides recognize there is only one China - both mainland China and Taiwan belong to the same China, but both sides differ on the definition of that one China.

• In 1996, in an attempt to influence the 1996 ROC election, the PRC began conducting military exercises and launched several ballistic missiles over the island. The United States sent two aircraft carrier battle groups into the Taiwan Strait. The PRC quickly backed down. Soon after, the semi-official talks across the Strait broke down.

• In 2000, the pro-independence Democratic Progressive Party (DPP) won the presidential election. Since then, polarized politics has emerged in Taiwan with the formation of the Pan-Blue Coalition of parties favoring eventual Chinese reunification, and the Pan-Green Coalition of parties favoring eventual declaration of Taiwan independence. DPP repudiated the 1992 Consensus and consequently the PRC and ROC entered a period of hostile non-contact.

• In 2008, the KMT party won back the presidency in the ROC. Soon after, dialogue through semi-official organizations reopened on the basis of the 1992 Consensus. On December 15, 2008, the "Three Links" of direct postal, transportation, and trade were restored, ending nearly six-decades of hostility across the Taiwan Strait.

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