China as an Emerging Superpower: Challenges for China and the United States Edited by Jeffrey E. Michelman Chung Ping (Albert) Loh i COPYRIGHT INFORMATION BRIAN CAN YOU HELP HERE? ii FORWARD The attached volume of scholarly papers serves as a tangible outcome of the second biennial joint UNF-BISU conference, held October 2006 at UNF. Equally as important in my mind, however, are the intangible outcomes resulting from the assemblage of business-educators and scholars from these two 21st century “superpower” nations. The knowledge represented by these papers and the relationships which developed during this conference provide hope that this century can be marked by a never-before possible level of cooperation between the U.S. and the People’s Republic of China. As an attendee, I came away with a genuine feeling that this was not just another academic conference. I believe it was and will continue to be a reoccurring event revealing how to best conduct relationships--not just between the universities of the two participating countries--but between world governments. The power of dialog and collaboration which took place probably is the most important instrument we have to assure that new knowledge is shared, global understanding is achieved, and stereotypical perceptions regarding people from other parts of our world can be eliminated. This conference and the many other international efforts UNF and our faculty/staff have embarked on for several decades, move us to a stage of University internationalization that ensure our taking lead roles in global business, accounting and economics. Coggin College of Business students who assumed leadership roles at the conference as coordinators, presenters and attendees are a perfect example of the transformative nature of such experiences. Their experience and enhanced academic repertoire/portfolio vividly reflect the rich global context that will forever inform their lives. I would like to express gratitude to all those involved in putting this meaningful event together, particularly to UNF’s Co-Chairs Dr. Jeffrey E. Michelman and Dr. Chung- Ping Loh. Additional gratitude also is due to BISU Business Dean Xiaomu Li for his foresight in proposing this series of forums. We also extend our thanks to former UNF Business Dean Dr. Earle Traynham and his faculty including Dr. Jeff Steagall, who developed the foundation for the relationship between our two institutions more than 12 years ago. We will continue these conversations, and hopefully this alliance-building on a biennial basis, hosted next in China by BISU in October 2008. Mauricio Gonzalez Vice President for Student and International Affairs iii iv PREFACE As editor of this volume I have had the unique opportunity to read every paper in its entirety. At times I felt overwhelmed because of the breadth of material that the authors have covered. Yet in the end it is I who hold the most privileged position of all, the one who gets to integrate the ideas into a single volume. Although the papers were originally presented by alternating Chinese and American authors, in this volume I have chosen to present the papers of the Chinese scholars first as they represent what China is today and the great pride that they each take in their country. In contrast, my U.S.-based colleagues, each from their individual perspective, have tried to build on China’s potential, with the unique opportunities and challenges of their respective disciplines, for China’s future. It is this unique juxtaposition of present and future, hope and caution that made for such an interesting conference. We hope that the integration of these ideas will continue to build on the friendship and cooperation that has been developed between Beijing International Studies University, the University of North Florida; the people of Jacksonville and Beijing; and most importantly the blending of American and Chinese cultures and ideas which are happily often distinct from the politics that often separate our two nations. Liang Zhao and Gao Jing establish an important foundation for the papers that follow as they describe the importance of developing frameworks that incorporate the past throughout Chinese society and culture before the west destroys this rich history. Bai Yuan provides an important examination of the growing importance of higher education to China and how the developed world is increasingly providing education for a growing Chinese professoriate. Yuhong Wang presents an interesting analysis of how China’s growth is occurring in the service sector and the impact of both regional differences across the country and the impact of FDI on the service sector. Xiaoning Ni examines the role of China’s burgeoning economy on the both the Pacific Rim and the global economy as well as the importance of the RMB as a growing global currency. Zhao Yuhua provides a critical examination of some of the governance challenges presented by China’s capital markets as growth in this area continues at an ever increasing pace. Xue Tong provides an important discussion of changes in the banking sector as the Chinese government continues to liberalize this industry. Chunming Ye follows Tong’s study by examining the impact of a changing financial services sector on innovation, efficiency and risk in this sector. Xiaomu Li ties the previous papers together by examining how China’s travel services sector has changed and how these changes will set the stage for the 2008 Olympics. Harry Rothschild presents a fun transition with his paper that presents an American’s view of how Chinese history and culture are often adjacent to or in conflict with contemporary Chinese society. This paper is followed by Tom Leonard’s critical examination of Chinese Military policy and its relationship to the U.S. perspective on China. Mina Baliamoune-Lutz and Jing Yi Ju provide an important discussion of the impact of FDI on China’s burgeoning export market and the resulting income level within the country. Chung-Ping Loh, John Akin, Will Dow and Peter Lance present a timely analysis of the challenges facing China’s healthcare sector as the transition from a country served solely by Traditional Chinese Medicine to one that finds a challenging co-existence with both the perspective and costs of Western Medicine. Robert Frankel and Yemisi Bolumole examine the major challenges for China’s logistics infrastructure as well as how technology can be used to look at solving these problems in the future. Adel El-Ansary and David R. Whitsett present an important analysis that although there are 1.3 billion potential customers in China, making them customers and keeping them as customers will require unique marketing strategies that understand the Chinese culture and environment. John MacArthur and Ziming Rao examine the impact of Chinese culture on the development of management accounting systems that must be developed to bridge the gap between a planned economy and the development of private enterprises that are forced to react to v market demand. Finally, Christie Shea and I examine the challenges presented from guanxi and U.S. businesses trying to take advantage of opportunities in China. The conference would not have occurred without the support of Deans Xiaomu Li and John McAllister. We all appreciate both their leadership and support. Financial support from the Jacksonville Chinese community (the Jacksonville Chinese Association in particular), our good friend Tai Mak who continues to support our China initiatives, the Division of Student and International Affairs and the UNF Flagship Program in International Business were all critical to making the program possible. Vice President Mauricio Gonzalez’s support of our initiatives in China continues to be appreciated. Moreover we are quite pleased that 5 Coggin College of Business students were involved in the conference as co-authors and presenters. An event like this does not take place without an outstanding organizing committee comprised of Robb Frankel, Andres Gallo, Tom Leonard, Mu Lin, Chung Ping (Albert) Loh, Harry Rothschild, Jeff Steagall, Earle Traynham, Bobby Waldrup, Yi (Derek) Ye, Debbie Wang and Mei Zhao. Mu Lin, in particular, provided extraordinary support as photographer during the conference. Sam Kimball, the Chair of UNF’s English department provided critical help and insight into editing this volume and Leanna Payne for help with the manuscript. Chung Ping (Albert) Loh provided invaluable support as both the conference co-chair and an editor of this volume. Most significantly, we all need to thank Jeff Steagall whose insight into the importance of International Business to UNF has been the cornerstone of everything that we have accomplished, including this conference. Jeffrey E. Michelman University of North Florida Jacksonville, Florida, USA November 2007 vi vii CONTENTS Preserving the Historical Character of China: The Creative-Culture Industry and the Hosting of the 2008 Olympic Games in Beijing Liang Zhao and Gao Jing, Beijing International Studies University The Trade Pattern of the International Education Service And its Theoretical Interpretation Bai Yuan, Beijing International Studies University Investment Development of China’s Service Industry Under the Condition of Opening a Dual Economy Yuhong Wang, Beijing International Studies University Status Quo of Chinese Economic Influencial Power: Observations on Statistic Data Xiaoning Ni, Beijing International Studies University Analysis of Shortcomings of Chinese Corporate Governance within a Parent- Subsidiary Framework—Examples from 196 Listed companies Controlled by SASAC Zhao Yuhua, Beijing International Studies University Measurement of Banking Service Trade Liberalization in China Xue Tong, Beijing International Studies University The Opening of China’s Financial Services Market—Risks and Controls Chunming Ye, Beijing International Studies University China’s Travel Services Trade: Analysis of BOP (1985-2004) Xiaomu Li, Beijing International Studies University Connecting Past and Present: A Tang Dynasty Renaissance in the 21st Century Norman Rothschild, University of North Florida Views from Beijing and Washington: China’s Foreign Policy and Military Strategies Thomas M.