A grand performance

Author and consultant Hugh Peyman witnessed, and writes about, China's economic transformation

When asked nearly two decades ago why he was moving to China, author and consultant Hugh Peyman said it was because "it was the greatest show on Earth".

Peyman said the phrase, once used to promote the now-defunct traveling Ringling Bros and Barnum & Bailey Circus, came to mind when he was planning to relocate his investment research business from Singapore to Shanghai in 2002.

"I couldn't tell them it was because my son was 18 and we could now leave Singapore, which would have sounded rather pathetic," he says with a laugh.

Now, after being based ever since in China and witnessing something of an economic miracle, Peyman realizes his response has proved to be prophetic.

He has written a book, China's Change: The Greatest Show on Earth, which examines why China, now the world's second-largest economy, has been so successful over such a relatively short period of time.

"I flew especially to see a friend's literary agent in New York with an outline of the book, and he said some of the subheads are really good. I asked him which ones, and he said, 'The Greatest Show on Earth. I really like that'," Peyman says, laughing again.

The book, which took three years to write and was published this year by Singapore-based World Scientific Publishing, is far from an ordinary business book about China.

It takes China's story right up to the 19th National Congress of the Communist Party of China in October last year and the launch of President Xi Jinping's new era, and encompasses Chinese philosophy, including the almost 4,000-year-old concept of weixin, or constant renewal, as well as many personal anecdotes.

"The idea for the book actually started with a friend of mine asking me five years ago why China was able to do all this," he says.

Peyman, a tall bear of a man in his late 60s, believes China's ability to manage change is one of its "X-factors" and he draws from the ideas of the 2,000-year-old text I Ching, or Book of Changes.

"China has fallen and emerged again at least three times in its history, during the Tang Dynasty (618-907), the Song Dynasty (960-1279) and then the Qing Dynasty (1644-1911). It is only really since 1820 that China hasn't been the leading economy in the world," he says.

Arguably China's biggest revival has been since Deng Xiaoping's reform and opening-up, the 40th anniversary of which is being marked this year.

Peyman says China had reached a point after the "cultural revolution" (1966-76), where it had to change.

He points out that, according to the British economic historian Angus Maddison, China had plunged from being the world's biggest economy in 1800, to being 64th out of 65 of the countries measured in 1913, and by 1975, it was 65th.

"It got to the point where the whole economic system was completely bankrupt, and that was the major turning point," he says.

Peyman says the real turning point for China came in 1992 after Deng's now famous southern tour.

"It was the first time there was an understanding that the economy needed a functioning banking system. The economy was becoming too complex for the then system of allocation to function properly."

It was one thing to recognize the problem and another to put in place the policies to achieve this. Peyman says he drew on his experience in business to understand how China actually managed to do so.

"I am essentially a consultant, so I have to have my 20 ideas, and so I came up with the 20 approaches that China had made to dealing with its problem," he says, laughing once more.

These 20 ideas include pragmatism (summed up by Deng's remark: "It doesn't matter if the cat is black or white, as long as it catches mice"), long-term thinking, a 360-degree view (thought should not be stuck in silos), harmony, education, pilot programs and sequencing.

According to Peyman, sequencing was particularly important to the development of a banking system from the 1990s onward.

"I think that the Western approach would have been more adversarial, with people on different sides of the argument as to what to do," he says.

"In China, it was more a matter of deciding on the best policy and then working out how to make it work through essentially sequencing what needed to be done."

Peyman says it would be wrong to think that China - which has set itself major goals right up to 2049, when the People's Republic of China marks its 100th anniversary - had a monopoly on long-term thinking.

"There are many examples of longterm thinking in both the US and Europe in the 19th and 20th centuries. Abraham Lincoln's move to abolish slavery had no short-term advantage. The British electorate threw Winston Churchill out of office after winning World War II because they didn't want a return to the unemployment of the 1920s and 1930s. Helmut Kohl pressed ahead with German unification in the 1990s, despite many people being against."

Peyman, who was partly brought up in rural Herefordshire in the UK, studied philosophy, politics and economics at Oxford, after which he spent time in Africa.

This led to him co-writing the book The Great Uhuru Railway: China's Showpiece in Africa, with Richard Hall, about the China-built Tanzam railway that opened in 1975 from Kapiri Mposhi, Zambia, to Dar es Salaam, Tanzania.

"I met Dick Hall in early 1974. I did all the travel and he did all the hard bashing, dealing with the politics, which supplied the most interesting part of the book," he says.

Peyman started work as a journalist with Reuters in London before moving to Hong Kong, which has led to him spending more than 40 years in Asia.

He eventually moved into investment research, working in senior positions for both Merrill Lynch and Dresdner Kleinwort Benson before founding his own research company, Research Works, in 1999, which he moved to China three years later.

Peyman says a lot of research is now based on algorithms and done using computers.

"There is less human input, but you still need that. When you are in an up cycle, for instance, you really need to know when to get off the roller coaster. And it is those calls people want to hear."

How does he call China? Although since reform and opening-up China has had an almost unprecedented period of sustained growth, Peyman does not expect any major reversal.

"In terms of urbanization, China still only has one person for between 24 and 25 square meters. This is less than the average of North East Asia and that in the West so there is still room to grow," he says.

He says the argument of his book, influenced by the ancient text Book of Changes, is that China will be able to respond to what is thrown at it.

"Managing life is accepting the fact that nothing stays quite the same," he says.

andrewmoody@chinadaily.com.cn

( China Daily Africa Weekly 08/03/2018 page32)