Lecture on China by Mary Kay Magistad

Tonight, I am covering Mary Kay Magistad. She has been an award winning foreign correspondent. She opened NPR’s first Beijing office. She has covered a wide range of foreign policy issues, including the crackdown on the Falun Gong Spiritual sect and the increasing tensions in the Sino-US relationship. She has also extensively covered events in Africa, including the genocide in Rawanda as well as the challenges of famine in Ethiopia.

The event is a free program. The MIC is a part of the World Affairs Council. It is a member supported organization which has members only event, but tonights program is a public program. The MIC is trying to “bring the world to Minnesota”. They are working tonight with PRI. PRI is located in the heart of Minneapolis. Many news providers are cutting foreign coverage. PRI is expanding its foreign coverage. PRI identifies unmet needs and tries to create content. The current media trend is to reduce foreign services.

Tonight the focus will be on China. The event is extremely well attended. The crowd is speaking excitedly about the presentation. I spoke to someone who followed Magistad’s career and she is enthusiastic about tonight’s presentation. Of course, I take the opportunity to mention the efforts to save Dollhouse while enjoying lemonade and cookies here at the library.

Here is a brief excerpt of part of her speech which she gave near the end of the lecture on censorship in China relating to Google.

Magistad is covering China during a period of rapid urbanization.

Magistad makes several general observations. China is trying to become more independent. China sees innovation and creativity as key to its future. China is envious of America’s soft power. The current focus is on developing soft-power. Magistad notes that the Chinese are increasingly focusing on innovation and the urgency of developing creativity.

One thing which helps promote innovation is the internet access. According to Magistad, 400 million people are online in China. She notes they are sharing ideas over the internet and through the use of mobile phones. Nevertheless, Magistad states China continues to try to control things in a top-down state run way. Innovation will be difficult under these circumstances.

Magistadt drops into a historical overview of Chinese innovation. She notes that historically, China was very innovative for about 1500 years and then it dropped off during the Ming Dynasty (1300-1500). Ming adopted a neo-confuscionist agenda which promoted heirarchy and ritual. This occurred during the European renansance.

Magistadt gives a brief overview of the industrial revolution in Europe highlighting the emergence of the steam engine and access to coal which fueld the development of industrial factories. Magistadt also feels that the colonial impulse also facilitated the development of western societies. She notes that contact with new cultures created more innovative opportunities for the West, as they were exposed to new ideas.

Magistadt feels the opportunities in the east and west were also different because of land differences in population and land. She notes the industrial revolution took off because in Europe they had more land than people whereas in China it was the opposite.

Magistadt begins focusing on China in the last century. According to Magistadt, with the collapse of Chinese imperial dynasties there was intellectual foment. However, with the emergence of the communist party, intellectuals were prosecuted. This was brutally repressive period in China marked by repression and death.

Magistadt talks about a reform era emerging in the 1970’s, where the Chinese began to approach things more pragmatically. Today, the Chinese communist party is promoting innovation.

Magistadt feels that China is hoping to develop its own ideas to profit from royalties and move away from manufacturing for American tastes. The opportunity to continually rely on being the worlds source of cheap labor is short lived. According to Magistadt, the cheap labor jobs are disappearing in China as well. She asserts China is increasingly going to have to turn to automation or manufacturing innovative high end products to survive.

Magistadt highlights the fact that China is working in areas of biotech and computer technology. China is actively attracting talented people and trying to pull them away from areas like Silicon Valley. Magistadt notes that China’s patent office is booming- they granted 200,000 patents in 2008. Magistadt feels that many of the patents are not all that interesting. She asked an individual associated with Chinese patents to name a patent that has become a popular global commodity. The individaul cannot. Magistadt concludes China’s patents do not seem to be resulting in global commodities.

Chinese innovation currently focuses on incremental innovations.

Magistadt begins exploring what is wrong about the current approach in China. She notes that in research labs, scientists are given hard deadlines. They have a specific time frame to develop something. There is not a lot of room to fail in China. Magistadt suggests that there needs to be room for failure in order to innovate. In the United States, people celebrate failure (but not until someone has succeeded). Magistadt also feels the Chinese system encourages people to cut corners. Ocassionally, there is patent “plagarism”.

Another problem that Magistadt notes is the lack of collaboration between the government labs and the consumers.

Finally, Magistadt notes that the government is approaching innovation for nationalistic reasons. She comments that the Chinese are not as interested in having joint ventures, they want things to be primarily Chinese. Magistadt notes some of the Chinese labs are beginning to embrace partnerships and collaborative innovation.

Magistadt feels there is also a bit of misguided perception as to how innovation occurs. She asserts it is usually small private companies that come up with innovation.

Magistadt makes several other observations about challenges in the Chinese private sector. She notes that the Chinese government continues to favor the state sector. The private sector is finding it harder to get loans or access to the courts. Despite this, Magistadt says there is an immense amount of energy in the Chinese private sectors and says there is a young high-tech generation that is very successful. She uses the example of a 25 year old who became a millionaire by developing BBS software in China.

Magistadt talks about the stifling environment of Chinese educations. According to Magistadt, the Chinese education system encourages rote learning and stifles innovation. Magistadt also notes that students are currently engaged in cramming too many courses in a very short period of time. According to Magistadt, they end up trying to accelerate graduation at the expense of learning how to think critically.

Finally, according to Magistadt, the Chinse market is increasingly focused on short term gains, rather than long term ones. The Chinese, she asserts, are focused on small innovations rather than developing original, but risky endeavors.

According to Magistadt, the more advanced economies of the US, Europe, and Japan, must create new innovative products to grow the market. Magistadt does not think incremental innovation will work in these economies.

The Chinese markets, according to Magistadt, are instead focused on making something 80% as good, at 50% of the cost. Magistadt states that the Chinese come up with goods that meet the needs of the people they are selling to in markets like Africa, even if the products are not best in class. (The assumption being that the Chinese goods are affordable to these markets and hence adopted.)

She speaks about intellectual property problems in China. She talks about the problem of intellectual piracy. In China, there is very little recourse against piracy. Taking a bigger look, there is a serious problem with the rule of law in China. The courts will follow the party rather than the rule of law.

Magistadt turns her attention to the Chinese consumer markets. She notes the consumer market is not yet large enough in China as the Chinese simply do not spend as much on consumption. Magistadt notes that the Chinese tend to save more. Still, Magistadt notes a trend: consumption is increasing at the rate wages are increasing.

Still, Magistadt concludes most income in China is still spent on necessities. The Chinese complain about a lack of social safety net. In China, you need cash on hand to pay for the hospital first- if you have insurance they will reimburse you after the fact. This means many Chinese must have the cash on the table to afford the medical care up front.

Basic schooling is also another area of expense. Magistadt also notes that in urbanized China you must pay for your child to go to school.

Magistadt states that many middle class Chinese aspire to have homes, but property prices have dramatically increased. According to her, mortgage payments are 50-60% of their income. Magistadt suggests there is a property bubble in China because the government is profiting through the sale of the right to use property (but not the right to own property).

Magistadt briefly touches upon the currency imbalance. She talks about the benefits of domestic Chinese consumption in which the Chinese currency rises against the dollar.

Magistadt briefly touches upon the issue of censorship. She focuses on the recent episode of internet censorship as highlighted by the Google situation.

Magistadt also notes that there is social unrest in China. She asserts that there are huge demonstrations in China and that domestic unrest is a serious issue in China. Some of this is the result of the technology as flash mobs are easy to form now that the Chinese have widespread adoption of mobile phone technology.

After her speech, Magistadt answers many questions and answers. She stays well after the lecture. Rather than approach her to discuss China (as interesting as the topic is), I opt to give her two press releases about my efforts to save the show. I’m not sure if a distinguished journalist will take a greater interest in these efforts, but I must at least try. My story would require courage to cover. Perhaps the information will find a way to the appropriate place. So far, there is only the community newspaper article, the city pages article, and a few blog posts to highlight my efforts.

One Response to “Lecture on China by Mary Kay Magistad”

  1. […] You can find the discussion of Mary Kay Magistadt here. […]

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