November 01, 2006

Global Scenario Planning: On the Road in the Middle Kingdom

by Charles Perrottet

Recently, I traveled to China for two weeks. Unsurprisingly, this trip personalized my awareness of an immense and different country. But, perhaps because of the amount of time I have spent working with scenarios over the past 15-20 years, it offered much more. China is beautiful, fascinating, and varied. Its future is, however, significantly less predictable than that of any other major country in the world today.

My visit began in the business and financial center of Shanghai, proceeded on a cruise up the Yangtze, and ended in the capital city of Beijing. All of these areas are in the midst of change that is occurring at a faster pace and on a larger scale than has ever occurred anywhere else. In varying degrees their futures all seem to be at a kind of precarious balance point that could be dramatically shifted by events both inside and outside of China.

Shanghai epitomizes the booming economy of China. I was told that the first skyscraper in Shanghai was built only about fifteen years ago. Today, the skyline is broken everywhere by an estimated 200 modern towers soaring in a variety of architectural styles. Mall-like centers are sprouting in the city, and there is a special aggressiveness to the traffic snarls, as new drivers try to exercise the freedom that a personal vehicle brings. Shanghai reflects China’s economic juggernaut more than any other city, and it feels like the emerging global financial center that it is. But what will happen if the government can’t continue to provide the energy to power the buildings and the cars? What will happen if the banking system, with its unadvertised fragility, is not able to strengthen its systems before it experiences a serious slump, induced by a negative cycle in real estate or some other economic bump?

From Shanghai I flew to Yichang and traveled in a bus to the Three Gorges Dam. From there I embarked on a ship to travel up the Yangtze for the next four days. I learned again about the scale of the engineering to build the dam, but was much more struck by the immensity of the social engineering that was required by 400 miles of water that would rise by up to 300 feet. More than 1.5 million people have been resettled. In the simplest cases this involved merely tearing down a village or town and rebuilding it on higher ground. Of course this, in turn, necessitated building new roads, water, sewers, etc. In many cases, however, such a simple solution was precluded by the nature of geographies that left no room on higher ground where a population could be moved. In these cases people were relocated, sometimes thousands of miles away. Of course, they could no longer fish or farm in these new locations, so many were retrained so they could assume manufacturing jobs. This has all been accomplished with magnificent efficiency. But what if large numbers of resettled people find they cannot be assimilated into their new life? What if this occurs unevenly across more or less loosely governed regions?

Following four days of cruising through startlingly beautiful scenery, I disembarked at Chongqing. This city, of which I had never heard, was described as having a population of roughly 31 million people. I have since learned that differences in vocabulary have combined with lax statistics to enlarge the population claim. It seems that the Chinese sometimes refer to a “city” when we would speak of a “province.” Perhaps this city, unknown to me, was merely 5 or 10 million people.

From Chongqing, I flew to Beijing. This is another city that is being rebuilt at an unimaginable pace. It has a different feel from Shanghai, though. Fueled in part by the spur of the 2008 Olympic Games, there is new construction almost everywhere. Someone joked that the Crane is China’s national bird. An array of modern hotels, new transportation systems, restaurants, and stores are all being superimposed on a city already swelling with economic growth. What will happen if some of this is not ready for the Olympics? Or, what will happen to all this new infrastructure after the Olympics? The hope, of course, is that publicity from the Games will help drive still more foreign investment and interest in the nation. What if it’s not enough or, hobbled by weakness elsewhere, there is a downward spiral in investment and tourism?

Many of the possibilities that have come to mind are compounded by a population that is just discovering affluence and (some) new freedoms. I spoke with several Chinese during my trip who remember their families being split up to avoid starvation; who remember being prohibited from saying anything at all negative about China; and whose knowledge and freedoms even now are restricted. How long will China’s increasingly affluent and educated population accept these restrictions? How will their discontent be channeled?

I focus on problems here only because the achievements and opportunities seem so obvious. But, to a professional writer of future scenarios, so many externalities could interact to alter this that I couldn’t help wondering… “What if?”

Thoughts?