I came across the name Gordon Wu in an item in a recent Knowledge@Wharton mailing. It was titled “Gordon Wu Sees Huge Opportunities in China’s Rapid Urbanization.” Wu, a Hong Kong native, graduated from Princeton in 1958, and in 1969 founded Hopewell Holdings, a civil engineering firm. “Wu’s Hopewell Holdings — where he serves as chairman of the board – has been a pioneer for nearly three decades in building highways, power plants and bridges in China and Hong Kong. In addition to Hopewell Holdings, Wu heads Hopewell Highway Infrastructure and other companies of the Hopewell Group, whose operations span property development, leasing and hospitality. Queen Elizabeth knighted Wu in 1997 for his contributions to Asian infrastructure – and in effect for building one of the continent’s largest civil construction firms.”
The article is an edited transcript of Wu’s talk at Wharton’s Global Alumni forum on May 26th. It is a refreshing talk. Here’s how he begins:
When I look back at the 30 years from 1949 to 1979, China, under the leadership of Chairman Mao Zedong, was in utter chaos. You will remember the Great Leap Forward of 1958, the Cultural Revolution, and other idiotic economic policies… Mao Zedong, like Joseph Stalin, wanted to make everybody equal. They both succeeded — because they made everybody equally poor.
In India, we don’t engage in plain-speak. Does anyone in India of any stature speak plainly of the “Nehruvian penalty” (as Rajeev Srinivasan calls it) and the utter stupidity of the socialistic policies that condemned India to the “Nehru rate of growth”? The Indian leaders are still trying to do their best in ensuring equality of outcome and the results are evident — heaps of poverty. And where they fail in making everyone equally poor, they engage in the rhetoric of envy, darkly hinting that unless the rich also become poor, there will be social unrest. But here’s more from Wu:
So those 30 years were wasted. While China was trying to make everybody equal, people in Hong Kong and Taiwan had no alternative but to buckle down and try to create some wealth. Hong Kong’s wealth and tremendous economic growth happened in those three decades, as did Taiwan’s.
India beats China in that department. China wasted only 30 years. India has wasted 50 years and its leaders are doing their best to push that to a century. Makes one wonder, doesn’t it, that collectively Indians are rather retarded? We cannot learn from the others. China can. They learnt from what the Japanese had over a hundred years previously. Here’s Wu —
I read Deng’s speeches very carefully, and by about the fourth time it dawned on me that what was going on in China was a replication of what had happened in Japan during the Meiji Revolution (Restoration) of 1868. At that time, Meiji [Japan's emperor] was very young, but the officials in his court were very enlightened. They recognized that if Japan failed to change, the country would have no future. So they sent students and workers all over the world, and they led Japan through a complete transformation in which they remade their educational system, constitutional monarchy and industrial undertakings. As a result, 31 years later there was the birth of a new Japan. I saw Deng Xiaoping’s Open Door policy as nothing more than a replication of the Meiji Revolution.
You know, you don’t have to be a super-duper bright guy to figure that one out. Even I had with my limited understanding figured out that there is something worth emulating in the Meiji Restoration of Japan. Allow me to quote myself from a post from March 2003, “Enlightened Reformation”
The depth of the Indic civilization is awe inspiring when you consider that it has been around for many thousands of years. The Vedas were composed long before the start of the Common Era. The people of India can claim direct lineage to those who composed the Vedas and the Upanishads. The Rig Veda epitomizes in one of its invocations what I am concerned about: adoption of ideas.
Let noble thoughts come to us from all universe.
The puzzle therefore is why has modern day India been so insular and close-minded? (By modern day I mean the last few centuries, and not the period variously called ‘internet era’ or ‘post-industrial era’.) Other countries appear to have become enlightened in that regard. Consider, for instance, the Meiji Restoration:
The Tokugawa bakufu came to an official end on November 9th, 1867 with the resignation of the 15th Tokugawa Shogun Tokugawa Yoshinobu and the “restoration” (Taisei Houkan) of imperial rule. The 15-year-old Mutsuhito succeeded his father, Emperor Komei, and the following year took the reign name Meiji or “enlightened rule,” and signed the Five Charter Oath.
What was the Five Charter Oath?
The Five charter oath (Gokajyo no Goseimon) was an outline of the main aims and the course of action to be followed by the new Meiji era government of Japan after the fall of the Tokugawa Shogunate in 1867 during the Meiji Restoration. The oath set a new path in Japanese history with an emphasis on modernization and the establishment of a new social structure.
I draw your attention to the fifth oath which reads:
“Knowledge shall be sought throughout the world so as to strengthen the foundation of Imperial Rule.”
That, ladies and gentlemen, is what transformed Japan and made it strong enough to dream of world domination and to ultimately grow so economically powerful that the US was forced for the first time after the Second World War to do some very urgent soul-searching.
The successes of the Meiji Reformation can be traced ultimately to their thirst for knowledge and understanding from around the world. They used ‘noble thoughts’ from all universe to learn and then out-do what others had done. They adopted and adapted to the modern world — a world that they indeed helped create at least in part.
It is time for India to have a reformation of its own. It has to have enlightened rule if it is to survive. There is no other way.
Wu points out that in the old China there was equality – in poverty. Now, there are some people who make a lot of money but overall there is prosperity in the land. He points the rapid urbanization of China. “Today we are talking about some people who make a lot of money. Now, 43% of the people live in cities and within the next 20 years, I bet your bottom dollar that the number of people living in cities in China will be the greatest migration that the world has ever seen. Urbanization will probably hit a figure of 80%.”
I have argued here before that India’s development is tied with the urbanization of the Indian population. If we continue to be a nation that lives in tiny little Gandhian villages, we will continue to live in Gandhian poverty, enjoying the Nehru rate of growth, paying the Nehruvian penalty.
There is a sure way to success: stop being stupid, as I have been arguing for a while. (See my thoughts on “Aping for Fun and Profit.”) Wu apparently agrees with me. “Looking back I say, well, we are not going to be that stupid again. We are going to follow sound economic principles. What economic principles? I believe an American businessman has defined them very candidly – they have worked in the past, and I believe they will also work in the future. His name was J.P. Morgan, and he said the only way for someone to make money is either by providing others with services or providing them with capital. That is what China has done – it has become a manufacturing center that provides the world with services. In the beginning, the factory owners were in Hong Kong. They helped the people in China start the manufacturing process. Of course, the Chinese are very smart, and they have learned very quickly during the past 20 years. That is why there is a lot of manufacturing in China today.”
Here is some more quotes, for the record:
China still needs lots of infrastructure and hardware — for instance, telecommunications, power stations, superhighways, hotels, and so on. These are very easy to create, although in 1979 when I first went in and negotiated with Chinese leaders, it didn’t seem to them to be an easy thing to create. I told them that it was the easiest thing. An example is when I was trying to sell my concept of building superhighways in China, I explained that without transportation, there was no way modernization could be achieved or the economy put in order.
If you look at China today, the country already has 40,000 km of superhighways, which is second only to the interstate system in the U.S. with its 75,000 kms. Also, the consumption of electricity, steel and copper are in high demand right now, and China’s needs are driving the world market. The demand for urbanization will create enormous opportunities.
Ah that urbanization bit again. Not for India of course. We have to continue to keep our people in villages, and keep them poor.
One can either be original and smart, or one can be smart enough to copy what others have figured out. The Japanese learnt from the Westerners, and a little over a hundred years later, the Chinese learnt from the Japanese. Will Indians learn from the Chinese at least? Or do we need to continue to condemn hundreds of millions of Indians to dire poverty?