China business strategy winner compensates loser

It was economist Paul Samuelson who came out with the classic dictum in international trade saying “winners can compensate losers”. In every business deal that China makes there is an underlying idea of sharing benefits. Domestically or abroad China business strategy opts for win-win relationship rather the lopsided win– lose.

In fact over the past centuries, Confucian culture & Taoism have tempered the  Chinese psyche by practicing yin-yang dynamics. Let us examine an outcome where winner takes it all, not leaving the other party anything. This breaks the equilibrium of yin-yang that should exist between the two parties harmoniously.

The winning party gets wealth along with arrogance. The losing party erodes his wealth and gets vengeance towards the winner. Multiplication of this scenario finally ends up where there is social division, dissension, dissatisfaction leaving a bad state of affairs to prevail in the society as a whole. During the Warring States Period (476 to 221 B.C.), China underwent throes of crisis both militarily and economically due to this.

Even in military adventures, Sun Tzu the famous strategist insisted that collateral damage be minimised on the part of the enemy at the same time losses are cut down from the proponent’s side as well. Sun Tzu went little further and enjoined the dictum that losing party be treated as humanely as possible.

Captives were treated with food & provision. In persuasion of war objectives if there is an escape route available in the horizon for the losing party Sun Tzu commanded not to block that exit route. Significantly, as regards to warfighting per se Sun Tzu recommended winning without fighting as the noble option as, war anyway results in death & destruction.

Applying the same principles in business strategy China is always willing to share spoils equitably. In the case of massive trade surplus built up in trade with USA, China was ready & willing to invest in US Treasuries to prop-up the value of Dollar on one hand and plough back surplus into US economy on the other.

However, USA is not relenting at all, because its business strategy dictates winner takes it all and the loser must be condemned as the Latin expression goes, “Vae Victis” meaning woe to the conquered. American society is driven by the single minded purpose of accumulating wealth to oneself. Their leitmotif is to be an absolute winner in every endeavour. 

A change of heart is now necessary to uplift the millions of people in America who are below the poverty line. As a policy measure America must opt for equitable distribution of wealth along with the economic imperative of “winner compensates loser!” 

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist