China’s long-term thinking is a myth

One of the most common stereotypes is that Chinese are long-term planners and thinkers, while we in the West more often plan for short-term results and profits. Western business leaders are much more driven by quarterly results than Chinese leaders. A famous quote from Jack Ma confirms this:

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“If you want to invest in us, we believe customer is number one, employee number two, shareholder number three. If they don't want to buy that, that's fine. If they regret, they can sell us”.
- Jack Ma

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Western democratic politicians think and plan often up to the next election and show less shame in breaking election promises once they are in office. China, on the other hand, is known for often reaching ambitious five-year targets ahead of time. Beijing has a masterplan for 2049, the centennial anniversary of the People’s Republic of China. The Communist Party of China has a vision for 2121 when it will celebrate its 200 years of existence. The logic goes that China can think and plan long-term because of an authoritarian one-party dictatorship and hierarchical business environment with top-down directive leaders. The saying also goes that China has a lot of patience due to its 5,000-year-old culture. In 1972, Chinese Premier Zhou Enlai was asked about the impact of the French Revolution. “Too early to say”, he replied. Since then, the world has appreciated Chinese leaders for their patience and far- sighted mind to think in centuries.

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The fact that Chinese are by nature more patient and longer-term thinkers is a myth, though.

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In 1972, Zhou Enlai was actually referring to the French Student Revolution of 1968, not 1789; and Jack Ma was too eager to make his shareholders and himself very rich with a hastened IPO in 2020 that failed in the end. If you ever visited China, you will have noticed that as soon as the wheels of the plane touches the ground, the Chinese will be the first ones to stand up to get their luggage and rush to the door. Chinese are probably one of the most impatient, pragmatic and impulsive people on earth. They want the best quality, they want it now, and they want it cheap.

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If long-term planning would truly be the underlying character of Chinese leaders, why did China enforce the one-child policy for almost 40 years that has created an irreversible demographic issue today? If long-term thinking was really in China’s DNA, why were factories allowed to create the world’s biggest polluting engine that damaged the health of way too many Chinese? If the leaders in Beijing were truly far-sighted and visionary, why did they sustain the lockdowns throughout the whole of 2022 which has affected the mental health of millions?

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Chinese leaders are not longer-term thinkers than other leaders.
Chinese are also not more patient than other people.

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But Chinese do have three culturally embedded traits that sets them apart, that allow them to make longer-term policies than most nations, leaders and people do.

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1. Fear of Chaos

Confucius (551–479 BCE), China’s most influential philosopher lived in chaotic times. To reorganize the nation’s social order, the Confucian’s main goal was to help leaders rebuild society and find stability again. He came to the conclusion that most friction in the world is created by worrying about what to do in life. At the same time, he noticed that most people obey societal rules, even when they might get away breaking them. Humans feel most safe and secure when they follow predictable routines that make unimportant decisions become habits.

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This is the same reason why Steve Jobs always wore the same black mock turtleneck, blue jeans and New Balance sneakers. It helped him to focus every day on what mattered!

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Confucius was obsessed with embedding rules, roles and rituals into Chinese society to make people’s life more predictable through social structure known as filial piety - a set of moral norms, values, and practices of respect and caring for one's parents and authority. He understood that leadership is a two-way street. It can energize people to follow a leader, but at the same time leaders need to earn the respect of their subordinates. This societal order makes Chinese a lot less anxious about what they can’t control, and as such enables them to focus better on what is practical.

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After 2500 years, Chinese leaders in business as well as in politics are most accustomed to helping workers and citizens to focus on what can be controlled by setting out rules, plans and targets. This gives 1,4 billion Chinese the secure guidance to focus, experiment and shape the future. The Chinese antidote to avoiding social disorder should not be confused with long-term thinking.

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2. Adaptation to Change

The risk of setting long-term goals can lead people to get disappointed when results are not feasible or achieved. It can derail society and people’s trust in those who set the targets. Many observers mistakenly view the Chinese Communist Party to be a rigid political system that sets rigid targets. But what sets China apart is a cultural appreciation for the need of change written out in the oldest book of all times, “Yi Ching” - the book of change.

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Instead, Chinese rulers have been guided by a 3,000-year-old traditional wisdom to understanding the importance of change. Did we forget that the Party’s leader Deng Xiaoping introduced capitalism in 1978 in exchange of Mao’s ideology that did not approve of private property? China has done more U-tuns in its modern history than any other major government. From the world’s biggest polluter to the biggest renewable energy producer. From a 35 year-long one-child policy to massive new childbirth incentives. Making state- owned banks go public and privatizing state-owned enterprises.

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The easy explanation is that China realized it was a mistake before or the pressure was too high for China to sustain the strict policies. But isn’t that what dictatorships do? We see these U-turns as a sign of fragility of the China model, while in reality the courage and dedication to make them happen should tell us more about China’s strength to manage complexity, opportunity, danger, momentum, uncertainty and change as normal.

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In China, long-term targets are often set in an as broad and interpretative way as possible to give maximum room for change to happen to achieve the goals. These are China’s societal guardrails for 1,4 billion Chinese to all race on a Formula 1 circuit allowing for speed, acceleration, deceleration, risk taking, failure and triumph. The end goal, winning the race, is clear, but how to get there and who gets there first doesn’t matter. Gradual, but speedy progression is how they all try to get to every new finish line. This is what we should understand about the pragmatism of the Chinese. Step-by-step, no delays, no time-outs, always in an orderly fashion, constantly learning and reflecting, and keeping the goal and direction in mind. The Chinese fast-paced adaptation to change should not be confused with long-term thinking.

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3. Collective Power of Dreams

The Chinese are generally believed to have a cultural tradition of collectivism, where the interests and goals of the individual are subordinate to the goals of the group, the family, the civilization, the nation. We see China as a collective society as opposed to the individualistic society of Westerners that is more focused on individual gains. This reaffirms our belief that Chinese are long-term thinkers as they can move collectively towards one far-reaching goal. We can easily imagine Xi Jinping to shout out a long-term strategy and have hundreds of millions of people to follow suit.

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Reality is however very different. China is one of the most decentralized governments around that is much more competitive than collaborative. They rather thrive on doing things different, faster, better, cheaper, ... Chinese are generally more accustomed to be an overachiever than a passive follower. As a kid they are taught by parents and teachers that being the number one gives them more ‘face’ and as such respect. That behavior is a very individualistic trait, not collective. But every achievement or mistake an individual makes is not quickly taken at face-value, but instead the Chinese ‘face’-value is meticulously measured by the group or collective. As such, Chinese trust that any individual can gain more ‘face’-value or ‘visibility’ by surfing on the direction that is set out by the collective – family, network and nation.

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Simply said, Chinese trust that their best bet to be successful is to not swim against the stream but to benefit from the collective power of China’s drive towards a better future. As opposed to common belief, Beijing is not using most of its power to push people into submission, but rather puts most of its energy into pulling 1,4 billion individuals towards a collective dream, a common purpose, better prosperity and more progress in their lives. The collective power of Chinese to dream of a better future should not be confused with long - term thinking.Trust me if I say that The Western belief that Chinese are long-term planners and thinkers is not more than a stereotype, a myth. But they do have three culturally embedded traits that allow them to install longer-term policies than most other nations.

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And because of that, their actions do lead to long-term progress.