PETERS: NOW IS NOT TIME FOR U.S. TO TURN ITS BACK ON ASIAN JUGGERNAUT

[David Farber <farber () central cis upenn edu>]

PETERS: NOW IS NOT TIME FOR U.S. TO TURN ITS BACK ON ASIAN JUGGERNAUT 

By TOM PETERS 


SYDNEY, Australia 
THE Labor government was recently re-elected here. Yet it aims to toss out much 
of what the working man has gained in the last several decades. Australia also 
may bid adieu to Queen Elizabeth II and become a republic.

Why? A panic to shed a long-standing European bias and focus on the neighboring 
Asian economic juggernaut. I sympathize with the urge. After a month touring 
the Pacific Rim, I'm in shock myself.

Take Malaysia. It's growing at 8 percent a year -- the world slowdown be 
damned. Though Malaysia is officially an Islamic country, Prime Minister 
Mahathir bin Mohamad has no intention of letting religion stall his capitalist 
transformation. Local Islamic doctrine is expanding the definition of jihad, or 
holy war, to include hard work!

The skyline of the capital city, Kuala Lumpur, is a blur of construction 
cranes; sounds of non-stop riveting, even through double-glazed hotel windows, 
make sleep almost impossible. To the north in Penang, Japanese and U.S. 
companies are going gangbusters in electronics: doing sophisticated design 
work, not just assembly tasks as in earlier days.

Here's the drift: First, the Japanese economy took off. Then, as wages and the 
yen soared, Japan started shipping low-value-added work to the likes of Korea, 
Taiwan and Singapore. Next, the Koreans and others raced up the value-added 
chain and began sending lesser-value work to Malaysia and Thailand. Now 
Malaysia and Thailand are also shooting toward the high-end stratosphere and 
exporting lower-wage tasks to places such as Indonesia.

Newly rich Chinese coastal provinces, climbing the productivity ladder in goods 
and services themselves, are shifting mundane activities to less progressive 
inland provinces. And in India, cities such as Bangalore have quickly become 
software design centers.

You've heard about $1,000 business luncheons and $100 melons in Tokyo. But how 
about $1,000-a-bottle cognac slurped by Chinese entrepreneurs? They drink it 
``as if it were Yangtze River water,'' according to an Australian business 
magazine.

Then there's China's first Ferrari (with a $135,000 price tag) and the arrival 
of one delegate to a recent Guangdong Province Communist Party meeting in a 
gold-painted Mercedes. Beijing's first international fashion show was attended 
by Valentino himself -- as an official guest of the government!

Such anecdotes are backed by hard numbers: China's economy, recently 
reclassified as the world's third largest, grew 14 percent in 1992; Guangdong 
increased 19 percent. Fixed-asset investment leaped 70 percent last year in 
``sleepy,'' state-run enterprises, 93 percent in locally run corporations. And, 
oh yes, citizens have been rioting to get share applications in the burgeoning 
Shanghai Exchange. (Fifty-thousand Chinese shareholders are added to the 
capitalist rolls each week.)

A recent Asian survey claimed the Japanese are the least happy people in the 
region. Unhappy, maybe, but wealthy, definitely: not the frenzy of Malaysia, 
but a quiet, pervasive and confident opulence that conjures up a giant 
Switzerland.

Tokyo's Ginza district is closed to cars on Sundays and turns into a massive 
upscale shopping mall. Clothes worn for strolling (and being seen) signal heady 
wages and the ever more valuable yen -- and, recession or not, all-day crowds 
jamming even the Filofax (personal organizers) store suggest a willingness to 
spend.

The story is echoed in the boondocks: In little Wajima on the tip of Noto 
Peninsula, most garages sport two cars. A new-found penchant for big four-wheel-
drive vehicles is causing a problem, though -- the need to re-garage Japan. 
Nissan Terranos and Isuzu Bighorns won't fit in the tiny stalls; walk down a 
quiet neighborhood street, and you'll pass several half-open garage doors with 
Terrano or Bighorn snouts proudly protruding.

In the midst of all this, we Americans (journalists, policy-makers, the man and 
woman on the street) stubbornly continue to focus on Europe, to the extent that 
we gaze at all beyond our borders. We are blowing it and blowing it big by not 
eating, sleeping, breathing Asia.

There's never been a worse time to turn inward. Asia, where our trade already 
exceeds that with Europe, is the teeming center of a huge, sophisticated 
civilization busting loose. Yet Asians are increasingly dismayed by our 
attitude: Are we committed to global leadership? Why is the world's richest 
country (we are) turning isolationist (we are) at the very moment when, after 
half a millennium, they are breaking out?

After a month on their turf, I share the dismay. Now is the hour to embrace 
Asia, to revel in its energy, not run and hide. Should Asians become 
disillusioned and see us as less than trustworthy partners, not committed to 
the long haul, this matchless economic playground could easily turn into a mine 
field.


Tom Peters is the author of ``Liberation Management'' and co-author of ``In 
Search of Excellence'' and is the founder of several Palo Alto companies.