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A New China: Playing by the Global Rules of Engagement

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In recent years, China has often been cast as an unstoppable force, determined to fuel growth on its own terms, at any cost. But based on my recent trip to China, were I met with a range of private and public sector leaders across 6 cities, it's clear that the reality inside is quite different than the view from outside. A new China is emerging -- one that is strikingly more responsive to what's happening outside its borders. Here are just a few trends I noticed along those lines:

Green Growth: As the number one carbon emitter in the world, China is often characterized as anti-environment, but I was surprised to note that green energy is far more mainstream there than in the U.S. This is a trend that manifests itself from the grassroots to the top levels of business and government. In cities like Chonq Qing, for example, 80 percent of the motorbikes in the street are electric. But on a larger, national scale, China is now the world's top investor in alternative energies, and nearly every new industrial project in the country integrates green technology.

While a key driver is a new focus on environmentalism, it's also about growth, cost and competition. As the New York Times recently reported, China plans to unveil a five-year national energy conservation plan in the coming weeks. From the initial sketch, the plan seems to be very much a response to external market forces -- China sees that rising oil prices could compromise their economic competitiveness and national security, and are adapting to that reality.

Innovation and Intellectual Property: While China is well known for its manufacturing prowess, it is less so for research and development -- until now. In November 2010, China launched their National Patent Development Strategy -- a plan that aims to double the number of patents to reach 2 million by 2015. As a result, China is expected to surpass the U.S. in patent filings this year. With this plan, the country is making strong moves to begin fostering innovation and entrepreneurship -- capabilities that are integral to sustainable, long-term success on a global scale.

This move has interesting implications: Building a patent culture is not just about growth, but also about sending a strong message to those who have doubted or even challenged China's commitment to intellectual property rights in years past. Based on my discussions with the National Copyright Administration, it's clear that the current leadership understands that improving China's track record -- particularly with major global players like Microsoft and Apple -- is critical to being viewed as a responsible business partner. The Copyright Administration is making moves to legally, economically and culturally align with the global "rules of engagement," demonstrating further bending to global trends.

Cultural Exchange: Throughout history, China has been a markedly closed society, but with the country's growing global influence, this too is starting to change in a major way. One of the first glaring signs came in 2008 with the opening ceremony of the Beijing Olympics. That four-hour performance was a demonstration of intense commitment to introducing Chinese culture to the rest of the world. More recently, when President Hu Jintao made his state visit to the U.S. last month, China launched an unprecedented ad campaign in Times Square and on global broadcast networks to show the face of the Chinese people.

While there is still a long way to go to break down the walls that have kept the outside world away, I think we are seeing the start of a new willingness from China to engage foreign audiences on a human scale and make the country more accessible. This trend is the foundation of the "China 360" project that I am developing in partnership with the China Center to promote Chinese cities that the West knows little about, from Tanjin to Chongzu in western China, that are becoming major centers of growth and influence in the country. These cities have the ambition to become "the new Shanghai" and have potential to go even farther because they're developing in a holistic way -- becoming centers of business, culture, education and talent.

Engaging Beyond Borders: Finally, because my trip coincided with the unraveling of political regimes across North Africa, it was hard not to notice a shift in China's geopolitical posture as well. While the Asian superpower has never been viewed as a major actor in international crises, its quick move to send a Navy warship to Libya in late February to evacuate 30,000+ of its expatriate citizens caught many by surprise. This was the first time in history that China has supported a civilian evacuation on this scale.

The government then followed with a somewhat surprising agreement to back UN sanctions in Libya on the grounds of human rights offenses. These moves point to the fact that China is now an intertwined political and economic player with immense commercial interests in the region and large volumes of citizens living abroad. China recognizes the stakes they have in the global economy, and their actions in the Middle East show a new willingness to get involved to protect them, even if that potentially exposes them to political risk for domestic policies. It will be interesting to see what long-term implications this has.

Overall, I believe China's actions signal an understanding that the only way to achieve strong, sustainable growth is to effectively operate on a global scale, which means adapting to the ways the outside world works. As recent events have demonstrated, no country can afford to isolate their markets or their people from the rest of the world. Rather than walls to keep ideas and investment out, successful markets need to build pathways in, and the winners will be the doers. China still has more to go in that direction, but it's clear that its strength and promise for the future is this ability to bend and respond to the directions in which the world at large is moving.