O Poder da China - Ricardo Geromel

Nǐ hǎo, dear reader! Before you start reading, it is necessary for you to ask yourself "What do I know about China?" and "What is my perception about China?". Write down your answers and see if they will be the same after this reading.

If you're reading this summary it's probably because you've realized what a major player China is on the world stage today. However, you may be here out of pure curiosity and want to understand more about Asia's largest economy - and the world's second largest.

Whatever your motivation may be, knowing more about the book "O Poder da China", by Ricardo Geromel, will allow you to learn the most important facts for you to understand China and how important it is in your life, even if in an indirect way.

So read on to decode the secrets of the Chinese market and its millennial yet innovative culture.

About the book "O Poder da China"

The book "O Poder da China", in English it would be "The Power of China", was published on October 1, 2019, by the publisher Gente. It has 374 pages, divided into 5 chapters and an appendix.

The aim of the book is to understand and decode China from key questions and essential tools for doing so.

About the author Ricardo Geromel

Ricardo Geromel has a degree in Business Administration from Farleigh Dickison University in New Jersey; a Masters in Management and a specialization in Innovation and Entrepreneurship from ESCP Europe, the oldest business school in Europe.

Geromel is fluent in 5 languages and has worked on 5 continents, in different sectors, as an agricultural commodities trader for the Noble Group, Asia's largest diversified commodities trading company.

He also worked as Project Manager in Guinea Conakry for the Bolloré Group, a French conglomerate that operates the largest integrated logistics network in Asia, responsible for accounts of Brazilians such as Vale and Odebrecht.

Ricardo started a football startup in China to bring professionals to be trained in Brazil and acted as managing partner of the Fort Lauderdale Strikers, a professional football team in Florida. In addition, he was one of the founders of the San Francisco Deltas, a professional soccer team created in Silicon Valley.

He has also been writing for Forbes USA since 2011, as well as authoring the best-seller BI. LIO. NÁR. IOS.

To whom is this book indicated?

The book "O Poder da China" is a suitable reading for entrepreneurs and businesspeople who seek to know more about the Chinese market and the changes in the global scenario.

However, it is also a suitable read for students and professionals in the field of technology.

Main ideas of the book "O Poder da China"

• China is a box full of surprises;
• Accepting the changes in the global scenario is the fundamental for a good entrepreneur;
• The West does not have the East as an agenda;
• We live in a technological duopoly;
• Learning about China has become the basics;
• China will be the world leader of the next technological revolution.

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THE BASIC TOOLS TO DECODE CHINA

Geromel is adamant that there is no expert in the world who knows everything about China or has completely decoded it. His exact words were:

"If anyone tells you they know China deeply, run. The brightest people (Western or Eastern) with the most time in the country are the first to explain how changeable it is here."

So here are some tools to understand and analyze this Asian titan in its magnitude.

Scale

"I trust in God, all others must bring data."

In general, the West is ignorant about the East. The views or prejudices are based on common sense. In Brazil, for example, the approach to issues related to China as a whole tend to be superficial.

China is not part of our agenda.

And that is why information about the Chinese market still invokes such astonishment and fascination. Our Western brains were not trained to interpret the absolute numbers of that country.

Thus, we are easily impressed by their results, but a tip is to pay attention to how to interpret these results.

In the information age, it is not the information itself that has value, it is the interpretation of the information that generates wealth. Therefore, the first tool is scale.

Do a simple rule of three to compare Chinese numbers with those of other countries. But, consider population size, investments, number of unicorns, etc.

Speed

The speed with which things happen in China is hard to process. Nevertheless, the growth of the economy has shown signs of stabilizing and the annual double-digit growth is no longer expected.

996

The 996 is the model that guides the lives of the majority of the Chinese population. However, it is particularly used in technology companies.

It is a Chinese cultural habit to work 12 hours a day (from 9 to 9), 6 days a week.

Author Ricardo Geromel explains that this is directly related to the population factor - there are more than 1.4 billion people.

So from an early age you are taught that you have to work hard and put in a lot of effort in order to compete with others. However, the 996 ends up being highly criticized in the West because of cultural differences.

For example, Geromel cites a situation where he discussed with a colleague about the difference between China and Silicon Valley and came to three conclusions:

1. He could not quote his colleague's name in a public way;
2. The world is waking up to the fact that China is already and will undoubtedly continue to be one of the major players of the new economy;
3. The work culture in Silicon Valley is nowhere near the brutal routine at Chinese tech companies.

In contrast, he also looks at the idea of Tim Ferris' book "The 4-Hour Workweek" and questions the idea of a work week of only four hours.

Government

In China, the government is omnipresent and is the pillar of society. We cannot understand China without understanding the Chinese government.

The government is the centre of the tripod of tools presented - culture is the metal that built the tripod. However, it is necessary to understand that the country went through different political moments until it had the current configuration.

Despite the negative view that the West has, the author explains how the government - without ignoring the problematic issue of its democracy - was responsible for the country's growth.

This change is based on China's entrepreneurial spirit, which goes beyond the business world. Entrepreneurship has changed the ruling political party and the country.

That spirit is not only manifested in government. It is also in the desires and decisions of ordinary people.

In the West, there is a fear that machines and innovations could make humans obsolete, but the norm in China is to try to use innovations to optimize human labor.

CHINA, INNOVATIVE SUPERPOWER

During the Cold War, the technology sector was bipolar as was the rest of the world, as it was divided between US and Soviet power.

Currently, we have a duopoly of the sector, where US power has remained, but a new technological giant has emerged... China.

It is the leader in the number of unicorns - with an estimated 202, as it is difficult to access exact data from private companies - followed by the United States.

According to Geromel, the representation of this duopoly in the new digital economy comes from the domination in the number of global unicorns and the amount of capital invested in startups by investment capital funds.

As capital is the fundamental factor governing innovative and mature ecosystems, it is extremely logical that there is a great abundance of capital in the world's leading innovation hubs.

A very common type of investment in China is venture capital (VC), or risk capital, a type of investment focused on companies up to medium size with high growth potential, but still very new and with low turnover.

While it is not known for sure how much China invests or has set aside to invest in high-tech companies, there is a consensus that the biggest VC in the world is the Chinese government.

No wonder the "Messi of the tech investment world" is Chinese. Investor Neil Shein is, according to Forbes, a two-time winner of the 2018 and 2019 Midas list.

Another major highlight of Chinese power is Hangzhou. The city is home to numerous government initiatives, whose purpose is to host one of the main hubs of innovation and support for startups in the world.

In addition, Dream Town was built there, a 3, 000 km region considered the entrepreneurs' paradise, in which it has more than thirty incubators and 1, 386 funds with committed capital of more than 40 billion dollars.

While in Hangzhou one of the main focuses is startups, elsewhere in the world governments support giant, established tech companies - the United States has facilitated for Tesla 's factory and Amazon 's warehouses/office; and in Brazil, we have the Manaus Free Trade Zone.

Another important point to be highlighted is the huge Chinese investment in Artificial Intelligence (AI). If for you AI is too high-tech, remember that, who knew how to send an e-mail or use an Excel spreadsheet thirty years ago was also called a futurist.

In other words, the future of the world and the next technological revolution is from AI. And, China will be the leader of this revolution.

CHINA IN THE WORLD

In the third chapter of the book "O Poder da China", Ricardo Geromel provides an overview of China's international relations. In a simplified manner, he points out the most relevant issues of these relations.

Let's see below:

China versus United States

In purchasing power parity (PPP) terms, China has been the world's largest economy since 2014. However, the fact that China passes the United States as the world's largest economy is not necessarily a bad thing.

However, it is a topic that worries many people, with Graham Allison, a Harvard professor and political science expert, being one of those concerned.

He was responsible for popularizing the term "Thucydides' Trap", which describes that when an emerging power threatens to dethrone a superpower, the most likely outcome is war.

Empirical data reveal that in the last five hundred years, twelve out of sixteen cases (75%) in which a rising great power threatened to displace a dominant power ended in war.

On the other hand, some fear the possibility of a war between the two powers - whatever kind of war - and among these people stands out Stephen Schwarzman, one of the 100 richest men in the world, according to Forbes.

He is the creator of the Schwarzman Scholarship - designed to prepare young leaders who will serve as a bridge between China and the rest of the world in addressing the major geopolitical challenges of the 21st century.

China in Brazil

Since 2009, China has become Brazil's largest trading partner, after 80 years of domination by the United States as the largest partner. The beginning of the China-Brazil partnership was due to Brazil's agrarian exporter profile.

China's first wave of investments sought to ensure food security for its population of over 1 billion people, focusing mostly on commodities such as soybeans.

With time and the advent of BRICS, the investment has gone beyond the agricultural field and reached the field of renewable energy, mining, technology, education etc.

Chinalization of Africa

China's investment in African lands follows the premise of the following Chinese proverb: "If you want to prosper, first build roads".

Therefore, the country decided to invest in developing the infrastructure of African countries to ensure access to raw materials that are there.

The "Chinaization" of Africa is highly criticized by countries in the West for believing that China has predatory practices of domination.

The New Silk Road

The New Silk Road and the New Digital Silk Road are nothing more than China's new ways of establishing and encouraging free trade around the world. While the United States practiced an "America First" policy, the Asian giant sought to expand its influence by encouraging other markets.

PROTAGONISTS OF CHINA'S NEW ECONOMY

The fourth chapter focuses on an analysis of the protagonists who have shaped the country's new economy. It is not only people or companies that have shaped the Chinese style, but also business processes and behaviors.

Below is a list of the protagonists cited by Geromel:

• ALIBABA and Jack Ma;
• ANT FINANCIAL;
• NEW RETAIL;
• CASHLESS SOCIETY;
• TENCENT and WECHAT;
• SHENZHEN;
• The Coffee War in China;
• PINDUODUO.

We recommend reading the full book "O Poder da China" for more details about the protagonists.

EDUCATION AND STUDY IN CHINA

It is necessary to understand some characteristics of the study model in China:

• Scale: China has an extremely high investment culture (time, money, commitment, etc.) in education compared to other countries, and a high number of people majoring in hard sciences and technology;
• Government: There is support and encouragement through private and public initiatives that are linked to the education and study sector (the Confucius Institute is an example);
• Gaokao: It's their SAT exam and it's highly difficult, feared and competitive.

It is from the encouragement of the technological sector and education that China has grown and left everyone impressed with its strength and power.

What do other authors say about it?

To understand the American model, you should read the work of Michelle E. Messina, "Decoding Silicon Valley", so you will unravel Silicon Valley, understanding its innovation hub and where great companies had their start and development, such as Facebook, Google, Apple, and, of course, Tesla Inc.

The next indication is the book "When Cultures Collide", by Richard D. Lewis, because it is a didactic guide with practical situations that help to understand how intercultural relations work in the globalized business world.

Finally, we have the book "Think Again" by Adam Grant, which will help you understand the need to rethink what we hold to be true and how we view society.

Okay, but how can I apply this to my life?

• Be curious and use Google to learn more about the world;
• Rethink your way of looking at the Eastern mentality, don't be biased;
• Be disruptive and look to stay one step ahead;
• Live in the present, but remember the past and think about the future.

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