Terms of engagement should be equal

Updated: 2012-04-06 07:55

By Andrew Moody (China Daily)

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Terms of engagement should be equal
Paul Cheng says if the US and China were to engage in military conflict, both would be major losers. [Feng Yongbin / China Daily]

Notions about China being a threat are based on misconceptions, says author

Paul Cheng, the well-known Hong Kong politician and businessman, believes China has become a convenient punching bag for the West in recent years.

The 75-year-old, who exudes a certain old-world charm, says the problem often lies in China's intentions being misunderstood or, worse, misrepresented.

"China has certainly become the punch bag during the US elections. What I feel is that these ideas about China being a threat are based on misconceptions and generalizations," he says.

Cheng, who was speaking in his suite at the China World Hotel in Beijing, has, in fact, just written a book, On Equal Terms: Redefining China's Relationship with America and the West under his Chinese name Zheng Mingxun, which explores some of these issues.

"My point is that China has a culture of non-aggression. Have you ever heard of China invading another country before? No."

He argues if the United States or China were ever to engage in military conflict, such as in the Pacific over various territorial rights, both would be major losers.

He also insists it would be an unfair contest since the US defense budget of close to $700 billion (525 billion euros) is seven times that of the world's second largest economy.

Terms of engagement should be equal
"For China or the US to go into a conventional war does not make sense. It has got to be a lose-lose proposition. The two are so interdependent. China owns a lot of US debt, the US relies on exporting to China and China relies on exporting to the US. All these are inter-related and interconnected," he says.

On Equal Terms stands out in that it is one of the few books of this genre written by someone of Chinese origin.

Cheng, who speaks English with a slight American accent, believes sometimes Western authors miss some of the finer points of the Chinese perspective.

"I wouldn't say they get it wrong. They may not appreciate some of the subtleties such as things like guanxi, which means trusting each other, and mianzi, Chinese face. That is not just about being humiliated but giving face to the other person, making the other person look good," he says.

Cheng, who is currently chairman of a private equity group and holds a number of directorships, was a prominent politician in Hong Kong up to and including the return of the former British colony to China.

Some say Hong Kong has become more Westernized in recent years despite moving back to China but Cheng is skeptical of this.

"I once told an expat friend that you guys, who fly in and out of here all the time, think you are in Hong Kong, but you are not. You still do not know what the real Hong Kong is like."

Cheng says Hong Kong's newly elected chief executive C.Y. Leung may find many problems in his in-tray, not least the growing inequality between the rich and poor.

"We have a wealth-gap problem. How you stop that is another very difficult issue. The problem is that if you start doing things to disincentivize the wealthy sector, they are not going to invest. They will go somewhere else. That might have a more adverse impact on the poor than if you did nothing."

Cheng says, however, he has empathy with the poorer sections of the community.

"These things are a real dilemma because you also stand on the side of the people having trouble finding housing because the poverty standards are so high. That is why there has to be a balance somewhere. Hopefully the new administration coming in will do something about that."

Cheng was born in Gulangyu island, Xiamen, Fujian province, but at the age of two, when the Japanese invaded, his grandfather arranged for the family to move to Hong Kong. Unusually for the time he was brought up by his mother alone because his parents divorced with his father going off to become an academic in the US.

Cheng attended La Salle College in Hong Kong and then went to Lake Forest University, Illinois at the time American consumer society was taking off in the mid-1950s.

He began his career in consumer products and marketing as a brand manager with Richardson-Merrell in New York with which he returned to Southeast Asia with roles in Malaysia and Thailand.

This led to an impressive business career and him eventually becoming chairman of Inchcape Pacific, one of the oldest British international trading companies.

One of the major backdrops to his business career has been the phenomenal rise of China which he did not see coming in the 1970s.

"Of course not. I started coming here in 1972, shortly after Richard Nixon's visit. When you came out of your hotel, and in those times some of the hotels were only for foreigners, you had hundreds of people waiting for you, like we were from Mars. They came to look at women's hairdos, their different dresses. It was a sea of gray and green then. The change is unbelievable."

He believes the recent furor in the US and in the West in general about the Chinese taking away jobs is unrealistic.

"Why is Apple being assembled here? It is because Steve Jobs used to make changes at the last minute. If you do that in America you have to wait for a few weeks.

"In China they will change it over a weekend. Those jobs will never go back to America unless they are willing to lower the minimum wage to $2 an hour. The trades unions would never accept that," he says.

Cheng believes the pressure being applied on China to revalue the yuan takes no account on the likely impact on the China economy.

"What would happen if they revalued the yuan too fast? Any rise in the value would affect exports and exports affect jobs. China is worried about jobs, too, and they have a lot more people to take care of than America.

"Washington is trying to say you need to revalue by 20 to 30 percent. Can you imagine the impact of that? It is not a fair demand."

Cheng says there are many misconceptions as to how China's system of government operates.

"China is run like a corporation with a board of nine leaders with a 10-year tenure and after that another board comes in. There are a lot of negotiations inside the Party but once things are decided, it is very united," he says.

"In America things sound good - 'one man, one vote' - but the electoral college is very complicated."

Cheng, who has a British wife, Janet, originally from Yorkshire in England, says he would like to see more of a peaceful coexistence between China and the West.

"I have connections in both the West and China and I hope they will trust each other more and be at peace, for the sake of the next generation."

Pu Zhendong contributed to this story.