"You will put down this insightful book with a much deeper understanding of two of the more indispensable topics of the twenty-first century: China and sound financial practices." Jon Huntsman, Jr., U.S. Ambassador to China, 2009–2011
"This is a timely, well-researched, and tremendously important book…" Maurice R. Greenberg, Chairman & CEO, C.V. Starr & Co., Inc.
"Michael sets out a commonsense approach to wealth and prosperity. It's a must-read." Philip Bullen, CFA, Group Chief Investment Officer, Fidelity Investments
"Lee brings a unique combination of cultural, business, and economic insights. In compelling and clear language, he shows how Americans can engage this new reality." Samuel Gregg, D.Phil., Director of Research, The Acton Institute for the Study of Religion and Liberty
"The more that things change, the more that making money depends on understanding those things that never change. In an immensely readable volume and with a compelling story, The Chinese Way to Wealth and Prosperity provides precisely that." Rabbi Daniel Lapin, Author of Thou Shall Prosper: The 10 Commandments for Making Money
"Lee provides a valuable handbook for anyone wishing to understand what drives Chinese attitudes toward money." Dong Tao, Ph.D., Chief China Economist, Credit Suisse
For centuries, the Chinese have managed to survive and thrive in virtually every part of the world. From nineteenth-century emigrants to twenty-first-century "tiger moms," they have shown remarkable resilience and determination in achieving their goals even under the most challenging of circumstances.
What is the secret behind their enduring success? It's The Chinese Way to Wealth and Prosperitya timeless combination of ancient wisdom and modern strategy that anyone can apply:
- Learn, then earn.
- Get mobile and go global.
- Make connections and return favors.
- Reduce debt and release your capital.
- Play financial defense.
- Defer gratification.
- Love the land.
- Avoid unrewarded risks.
This inspiring and eminently practical guide shows you how to enrich your life, as well as enhance your fortunes. You'll discover the Chinese philosophy of "Sow early, sow often,"reaping the rewards of consistently saving year after year. You'll learn how to honor and practice the time-tested wisdom of previous generations, keeping your priorities in check, placing a value on what matters most, and bringing prosperity into all aspects of your life. You'll find helpful charts detailing how wealth is generated using basic money-building principles very well known to the Chinese people, as well as ancient proverbs and stories that you can apply to today's economic situation. Along the way, you’ll read how distinguished individuals and major companies have thrived all over the world employing these lessons.
The Chinese Way to Wealth and Prosperity offers the wisdom of the past, the keys to the present, and the road map to a strong financial future.
|Publisher:||McGraw-Hill Professional Publishing|
|Product dimensions:||5.00(w) x 7.10(h) x 1.00(d)|
About the Author
Michael Justin Lee was born in Hong Kong and grew up in New York City's Chinatown. A veteran Chartered
Financial Analyst, he served as the nation's first Financial Markets Expert-in-Residence in the U.S.
Department of Labor. He was previously Practitioner Instructor of Finance in Johns Hopkins University's MBA program, as well as Professorial Lecturer of International Business in Georgetown University’s MS in Foreign Service program. Lee currently serves on the faculties of finance at the University of Maryland and George Mason University.
Read an Excerpt
The Chinese Way to Wealth and Prosperity
8 TIMELESS STRATEGIES FOR ACHIEVING FINANCIAL SUCCESS
By MICHAEL JUSTIN LEE
The McGraw-Hill Companies, Inc.Copyright © 2012Michael Justin Lee
All rights reserved.
Obtain "Kung Fu" in Education
In late 2010, Yale law professor Amy Chua published a seminal, controversial article in the Wall Street Journal entitled "Why Chinese Mothers Are Superior." In the article, Professor Chua described some rather draconian techniques that she employed to raise her children. She wrote of a regimen of no playdates, no TV, no computer games, and hours of music practice. That was just the start. For a glimpse into such macabre childrearing, the reading public sent the article into viral territory immediately, after which the spears flew at Professor Chua for her seeming cruelty. As the child of Chinese immigrant parents myself, I objected, but only to the degree to which she took her techniques. I believe she hit the nail on the head in the subtext about the importance of the educational process to Chinese parents.
Coincidentally, right around this time, a very expansive study of global testing results was published which got surprisingly little attention but ultimately is of significantly greater importance than Ms. Chua's personal treatise.
The OECD, the Organization for Economic Cooperation and Development, a major nongovernment institution based in Paris, released the latest results in its influential Programme for International Student Assessment study. This triennial study assessed the reading, science, and math skills of 15-year-olds from public schools in all 34 OECD member states, as well as in a host of other nations. The results were not encouraging for U.S. taxpayers and must have been very disappointing for the U.S. Department of Education.
That's because in these OECD rankings, the United States, the world's most economically dynamic and prosperous country by far, could rank no higher than thirty-first in the world in mathematics. This dismal showing for American mathematical skills has by now become repetitious and expected. But to me, there was a slightly surprising outcome in the science rankings, in which the United States finished twenty-third. Imagine, the powerful United States, home to the mighty MIT and Cal Tech, ranked essentially in the high minor leagues on the science scorecard.
To fully appreciate how dismal this result is requires an appreciation of the sheer scope of America's economic dominance in the world, even now. Not many people are aware that, give or take several percentage points, the American economy accounts for about a quarter of the entire world's output. That includes China's second-place finish. Now that's economic dominance! But it would be hard to square continued economic dominance with these educational results.
The immutable fact is that for a country that has reached the stage of economic development that the United States has, scientific skills are the primary driver of future development. The days when the American economy reflected Thomas Jefferson's ideal of an agrarian society are long gone. Recent statistics reveal that no more than about 5 percent of the American workforce is engaged in agriculture. So as important as agriculture is to any country (there's a bumper sticker I occasionally see that says "No Farms, No Food!" Amen!), the industry can't be counted upon to provide great gains in employment.
Also gone are the days when the smokestacks of heavy industry could provide employment for large numbers of Americans. Since the end of World War II, the sad fact is that heavy industry has ceased to be a growing employer in the United States.
However, as these industries have declined, there has been a dramatic rise in the number of new industries in the knowledge economy, a subset of the service industries. This includes older-line computer companies like IBM and Hewlett-Packard as well as newer software juggernauts like Microsoft, Google, and Facebook. What these and so many more young companies have in common is that they are grounded in the bedrock of scientific knowledge.
This primacy of scientific skills is not limited to countries as highly developed as the United States. It can be argued that especially for countries that suffered decades of stagnation under communism and sputtered in their belated attempts to industrialize, it is science and technology they turn to in order to catapult their countries into the first world. China is a clear example of this, as is Russia.
With the United States so far below the league leaders, it is imperative to examine and adopt some of what the chart toppers have achieved. The list of the top 10 countries for all subject matters was striking in its composition. The city of Shanghai took first place, while South Korea took second, Hong Kong fourth, Singapore fifth, and Japan eighth.
There is an inescapable truth. Something is clearly going right in the Far East. For the sake of our children's futures, attention must be paid to the disparity in scores between these countries and the United States—the problem must be addressed.
What might account for this tremendous difference between the achievements of a few Asian states and those of so many others, including the United States? The simplistic answer is that these countries place a greater emphasis on education. This is obviously true and yet is inadequate in explaining the issue. It leaves open the question of why education itself is emphasized to such a degree in these cultures. The answer to this question is key.
To answer it, we must turn to the greatest sage in the history of China, the great philosopher Confucius. The modern age has not diminished the relevance of the ancient values bequeathed to us by this great philosopher. Although few people today bother to study his teachings in their original form, their impact is undeniable in all the East Asian cultures. It is for this reason that the values of loyalty, relationships, ritual, and conduct are essentially identical in China, Japan, and Korea. And we see these values reflected in the educational success of countries that profess their cultural debt to the philosopher. From the OECD results, the correlation is clear that where the Confucian values remain strong, education flourishes.
THE ROOTS OF CHINESE VALUES
What exactly is Confucianism? There is some disagreement about whether or not it is a religion, but there is no question that it has combined with Taoism and Buddhism, which are unquestionably religions, to form what we know as Chinese culture. Importantly, there is nothing mystical about Confucianism. It is more moral philosophy than religion. Therefore, believers of any religion should find Confucian principles unobjectionable.
Confucius (Kong Zi) himself is sometimes called the "Teacher of 10,000 generations" for his sagacity, but his beginnings were actually quite humble. He was little more than a commoner who despaired of the corruption of an effete dynasty. But he realized earlier than most Western political theorists that the sovereign governs via the consent of the people, even in China's monarchical system. In turn, the ruler has the mandate to listen and rule justly. But when the ruler turns tyrannical, the people have an obligation to set things right back to a harmonious and peaceful social order. His establishment of two-way rules of conduct between sovereign and subjects is paralleled by similar two-way rules of conduct between parent and child, elder and younger sibling, husband and wife, and friend and friend.
As this makes clear, although not innately a religion, Confucianism is a complete moral philosophy for leading a proper life. In totality, the canon of Confucian works, which include some principles not actually written by the Great Teacher himself, ordains an entire belief system in a right and wrong way to live and provides for the governance of human relations on the earth.
Confucianism obviously isn't the only belief system in the world. The number of competing belief systems in world history must surely be staggering, but among them, Confucianism may be unique in its exclusive focus on becoming "good." In place of a deity, liturgy, or intrinsic forms of worship, there is the teaching of obtaining virtue, and only that. This is known as Confucian moral self-cultivation.
There is instructive value even in the term itself: moral self-cultivation. It places the focus squarely on the self, the individual's will. In placing the focus here, there is an explicit belief that we ourselves can elevate the human spirit beyond where we commence on earth. Already, we can see the beginning of the educational imperative in the Confucian-influenced cultures.
The agenda of Confucian moral self-cultivation is truly ambitious. With rules governing all principal relationships, it is nothing less than a philosophy for setting the entire world into harmonious order. The world harmony that Confucians idealize is predicated upon each of us achieving the ultimate in our callings, and that requires continual education.
Fundamentally, the philosophy teaches that social harmony can be achieved only if humans self-actualize, to use the terminology made famous by psychologist Abraham Maslow. Confucius taught that all people are raw material and possess the same potential, but the potential must be cultivated. In perfect form, the development of that potential is the corrective means to curb any tendencies to stray from ethical behavior, which is an impediment not only to personal morality but to world harmony.
The uneducated human being in raw form would be unable to fulfill his or her personal obligation, but far worse is that such a person would also be delinquent in the monumental responsibility of advancing the world commonwealth. Let us consider the enormity of this responsibility. If one has the tools to achieve something wonderful but does not use those tools to do so, isn't there something morally blameful about that person? If we can move the world into greater harmony simply by educating ourselves but abdicate that responsibility, are we not delinquent in an unforgivable way? Max Weber, who gave us The Protestant Ethic and the Spirit of Capitalism, would certainly have agreed.
For Confucianists, the idea of moral cultivation is not only a possibility but a critical imperative. This then is the philosophical backing behind the Chinese, Korean, and Japanese thirst for education. It is not, as is commonly thought to be, solely for its utilitarian value, although, of course, the ability to profit from one's education is no small thing either. Neither is it for the sake of erudition itself. Someone who is erudite but remains in the Confucian definition "morally deficient" is no better than someone who is uneducated. (In a similar vein, Mark Twain once said, "The man who does not read good books has no advantage over the man who can't read them.")
Now we get to the heart of the matter. The main reason why education holds the esteemed position it does in the Chinese and Confucian societies is that education provides the very and sole means of becoming fully human. Education for its own sake just doesn't cut it.
Can it be any surprise then, with the society's humanity itself at stake, that all East Asian countries and most modern-day emigrants from those countries, such as this author's parents, prize education above all? Whether they know it or not, the entire modern generation of Asians has Great Teacher Kong to thank for imparting this great principle to us.
THE GREAT AMERICAN STORY, PART 1
This is an old story, often told, that readers of a certain age will recognize and some might even identify with. It is the story of generosity and American opportunity. It is also the story of the triumph of the human spirit through adversity and one that epitomizes the Chinese will to create prosperity.
It's about America, and it's not limited to the Chinese people. Consider the inscription at the base of the Statue of Liberty: "Give me your tired, your poor, your huddled masses yearning to breathe free." With that kind invitation, from all corners of the globe, they came to America. Why did they risk everything to journey to a new land usually without speaking a word of English? Although most Chinese immigrants would have entered the country from the West Coast instead, the story is the same as for European immigrants.
Of course, we know the answer already: to seek a better life. That we've heard the expression before does not minimize the grandeur and glory of the goal. We can only imagine what hellish existence they escaped, but their stories would all be similar. They would be harrowing stories of persecution from the king, the czar, the emperor, or some other such potentate. And they would all be true.
But they heard stories about a great place in the new world. They heard stories about streets paved with gold and might even have believed them. They heard about opportunities for religious freedom and tolerance for their beliefs and their skin colors. They heard about unlimited opportunities to make a living or a fortune. And they certainly heard about the chance to obtain educations for their children.
So they ventured forth, bidding farewell to friends and loved ones whom they surely knew they'd never see again. The passage would have been frightening. Cramped, fetid sleeping quarters would provide no relief from the nauseating seesawing effect of the oceans on the ship. Unappetizing meals would be choked down, for there was nothing else to eat. Swarms of young would join together into makeshift gangs for protection against gangs of other people. Out of frustration, minor disputes would sometimes metastasize into great fights.
But after weeks on the oceans, one glorious day, they would see far off in the distance the faint image of what appeared to be a person. One passenger informs another, then another; and before long, hundreds of passengers line the side of the ship facing the image, which grows larger. They can't quite make out the precise shape of it, but they already know what it is. It is much more than the grand gift from the people of France to the United States. It is their dream of a lifetime personified in Lady Liberty.
And after arriving, these hardy souls would live where they must, in the part of New York City closest to Ellis Island, from which they just exited. This was the Lower East Side of New York City, where life was nasty and brutish and frequently short. The foul quarters of their passenger ship were rivaled by the conditions of their tenement existence, except that this habitation would not be transient. I know the living conditions of the tenements well. I grew up there.
A small number judge the suffering to be not worth it. They reason that if they must live hellishly, they might as well live hellishly in their homeland. But the vast majority endure their existence, never questioning the wisdom of their decision but often questioning their will.
The years pass, and although the older ones may never learn English, their children do. In fact, their children learn a great deal more. They learn the arts and the sciences of the new world. They learn well enough to excel first in grammar school, then in middle school, then in high school. Then the glorious day arrives when they graduate from university and join the ranks of the educated. The parents cannot contain their joy on this day, for it is the dream that propelled them to the United States decades before. They've done it. They've achieved the American dream.
Most Chinese would not have seen the grand lady in the harbor since they entered from the opposite coast. But this path illustrates the Chinese way, and it was shared with the Jews, the Russians, the Irish, the Italians, and myriad people before them. Their common denominator, which the Chinese recognized and epitomized, is the value of education for opportunity.
THE GREAT AMERICAN STORY, PART 2
There is also a newer story and one just as inspiring. It is the story of the American dream in the information age. In this story, the people are less desperate but equally ambitious. They cannot truthfully be described as tired or poor or as huddled masses yearning to breathe free. They indeed have yearnings, but for dreams that cannot be fulfilled in their native lands.
These dreams are of a far grander scale. The dreamers do not wish merely to make a living. They wish to make a killing. These people are even more assured than previous generations that America is the land of opportunity because they already know some who've made millions there. And they wish to share in that prosperity. So they come to America too.
They are not poor; they give up profitable opportunities they have at home. For people with their abilities, those opportunities are considerable, but they are willing to abandon them for the opportunity to capitalize upon their greatest asset, their knowledge and ambition, their true human capital.
They do not travel in cramped ships but in modern airplanes, possibly in the first-class section. They land not on Ellis Island but all across the United States. After disembarking, after a short orientation, they head to the university campuses.
They are not unfamiliar with universities. Most will have attended universities previously. Some will already hold first or even second degrees. But their journey is not over. They thirst for more knowledge, and so they enroll in graduate programs, doctoral programs, law programs, and business programs. They could have obtained this knowledge back home, but they know that knowledge obtained here is more valuable.
So they master their disciplines. They drive themselves harder than they ever have because they must master a second tongue at the same time. But they finish their race.
Then they cash in. That requires the same dogged determination that they devoted to their studies, but they persevere. From whatever country they came, they learn to embrace the fruits of this country's free market. They embrace it on the trading floors of our financial institutions. They embrace it in the labs of Silicon Valley. They embrace it in the executive suites of our major corporations. But wherever they do it, they deploy the human capital they obtained in their educational pursuits. For the newer generations, this is the Chinese Way to Wealth and Prosperity.
DR. AN WANG AND KUNG FU
Oddly enough, the telling of some relatively recent business history—involving Dr. An Wang—is necessary to illustrate this chapter's point about kung fu.
The name An Wang no longer inspires the awe it once did. In a technology age dominated by names like Gates, Dell, Brin, and Zuckerberg, the name Wang seems entirely out of place or at best antiquated. Ah, the difference two decades can make in the computer industry. Only two decades ago, the name Wang was as well known in the industry as IBM.
An Wang from Shanghai was quite a prodigy from early life. With World War II raging around him, he still managed to complete and then leverage his undergraduate degree in electrical engineering into admission to Harvard's doctoral program in physics, completing it in just three years. This might have been achievement enough for anyone else, but not for him.
Excerpted from The Chinese Way to Wealth and Prosperity by MICHAEL JUSTIN LEE. Copyright © 2012 by Michael Justin Lee. Excerpted by permission of The McGraw-Hill Companies, Inc..
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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Table of Contents
INTRODUCTION ACRES OF DIAMONDSCHAPTER ONE OBTAIN “KUNG FU” IN EDUCATIONCHAPTER TWO GO MOBILECHAPTER THREE UNDERSTAND THE VALUE OF GUANXICHAPTER FOUR KEEP DEBT TO AN ABSOLUTE MINIMUMCHAPTER FIVE PLAY FINANCIAL DEFENSECHAPTER SIX DEFER GRATIFICATIONCHAPTER SEVEN LOVE THE LANDCHAPTER EIGHT DO NOT AS THE CHINESE DOEPILOGUEINDEXABOUT THE AUTHOR