Zak Dychtwald at WSJ CEO Council Summit: How Young China Will Change the Country & the World
There are about 80 million American millennials, but roughly 417 million millennials in China. Why is this important? According to Young China: How the Restless Generation Will Change Their Country and the World author and Young China Group founder & CEO, Zak Dychtwald, the answer is impact.
Dychtwald recently spoke Wall Street Journal’s CEO Council Summit – a closed-door meeting of some of the world’s most influential business leaders. Other participants included President of the European Central Bank Christine Lagarde, Microsoft CEO Satya Nadella, leadership expert General Stanley McChrystal, Founder and CEO of DeepMind Demis Habbis, Bill Gates, and more.
Dychtwald’s session focused on the global dynamics of China’s role in trade and geopolitics and America’s role in the world – bringing his insights on China’s millennial generation to address questions like:
- What do young Chinese consumers want? How do they impact global markets?
- What are perceptions of China's government amongst young people?
- How do they view American democracy?
- Who is winning the Innovation Cold War, and what are China's unknown advantages?
- If China had a vote in this election, would they vote for Trump or Biden?
To answer these questions, Dychtwald raised three different issues for discussion:
1. For this young China generation, modernization does not equal Westernization.
China’s increased interaction with the West has led to less attraction to it, not more. Many people are under the illusion of what he calls the “Shanghai Fallacy” – the expectation that increased wealth will push young people to want to be more like their Western counterparts.
This assumption is where marketers, economists, and politicians consistently get it wrong. The reality is that increased exposure to our system has left many young people in China disenchanted with the "city on the hill" they were told about as kids. Interestingly, this young generation is defining what it means to be modern and Chinese on the world stage in real time. Their parents’ generation was defined by moving up Maslow's hierarchy of needs out of subsistence. Now this young generation is grappling with identify questions: "Who are we? What do I want for myself? My family? My country?" It will be a mix of East and West.
While there are parts of Western culture that young people in China love, Dychtwald concluded that the era of "It's better because it's Western" is over in China with this generation.
2. Most of China's spending power and growth potential is controlled by those under 30.
As consumers, China's millennials are akin to America's Boomers: they are redefining every market they touch and hold most of the economic clout. In the U.S., wealth is focused in the 50+ sector. In China, spending is done by the young. Their spending is enabled through China's upside-down demographic pyramid, and a downward funnel of resources, attention, and pressure from the older generations towards the younger.
Different than Western millennials, Dychtwald explained that there is no doubt that China's young will be better off than their parents economically.
3. If the Chinese government had a vote in this election, they would vote for Trump.
Traditional China measures its prowess by two metrics: wealth and power. By this metric, President Trump is only playing half the board. The trade war hurts China’s near-term wealth, but "America First" has meant allies and trade partners second or even further down the list – giving China the room to maneuver and expand their power. According to Dychtwald, four more years of this U.S. power void would be a sizeable gift for China.
Why is this important?
According to Dychtwald, we are at an inflection point in global dynamics, the importance/perception of China, and the role of the U.S. in the world. At a moment where public opinion of China is at an all-time low (according to new Pew data), recognition of China's importance as a consumer and geopolitical player are at an all-time high. And that's not going away.
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