Jacques outlines some uniquely Chinese core characteristics, some going back to Confucius: the civilization-state as opposed to the nation-state, racial unity, and the use of a tributary state formula to spread power. China is not unique in its role as a classic mercantile country, one that imports raw materials, exports finished goods, and obtains control of natural resources in other countries. In this sense, China is following the path of England, Japan, and Germany; the difference lies in its exercise of economic, rather than military, power. As has happened in the past, other countries are responding to the emergence of a giant on the geopolitical scene by forming new relationships—e.g., the relationship between the U.S. and India.

In China there is a strong sense of the past and a belief that the past heavily influences the present. Coexistent with this is a feeling of superiority to other countries and cultures. The same phenomenon was seen in France, whose language once dominated diplomacy. Paradoxically, China is a “country in motion, its people living in the present.” Visitors to Chinese cities struggle to find familiar landmarks after an absence of just a few years.Although there is much to challenge in Jacques’ conclusions, all financial professionals will find valuable information and insights in his book. We all agree that there is an urgent need to learn and understand as much as possible about China. However, we should be cautious in making forecasts about this dynamic society, one that is closely connected to the global economy.