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Commentary: How China Opened My Eyes


As I walked through the brand-new, $2.4 billion international airport in Guangzhou, China, I marveled at the soaring stainless-steel beams, the four-story, palm-filled atrium, and the state-of-the-art technology. Inaugurated in August, the airport can handle 27 million passengers a year and 1 million tons of cargo from the Pearl River Delta's thousands of export factories.

Just days earlier, as I departed from Mexico City's 50-year-old airport, I prayed that rain wouldn't shut down the two puddle-prone runways. Two years ago, President Vicente Fox set out to build a new airport, but machete-wielding peasants whose land was to be expropriated scuttled the project. Instead of insisting on the importance of a modern gateway to a $627 billion economy, Fox caved in. Today the airport is undergoing a $430 million facelift that merely postpones the capacity crunch, because there's no space to build additional runways.

As BusinessWeek's Mexico City bureau chief, I have chronicled how China has siphoned precious investment and jobs from Mexico. But it wasn't until September, when I got a fellowship to travel through China for two weeks, that I saw with my own eyes what Mexico is up against.

The trip was fascinating -- and sobering. Fascinating because China is developing at a pace that is remarkable to behold. Sobering because it drove home to me how stagnant Mexico looks in comparison. I knew China had the edge over Mexico in cheaper labor and lower taxes. But China's real advantage lies in the whole package it offers investors: impressive infrastructure, able managers, an enthusiastic workforce, and -- above all -- spirit.

What do I mean by spirit? The sense the Chinese have that anything is possible. Case in point: At a Motorola Inc. (MOT) facility we visited in Chengdu, dozens of software engineers gathered for a lecture on The Seven Habits of Highly Effective People. A bit corny? Sure. But the engineers were listening raptly, determined to learn how they might earn the performance-linked stock options their plant manager dangled before them.

What else sets China apart? On the streets, I was approached by young people eager to practice the English they had learned in school: In 2002, China made English classes mandatory starting in grade school. In Mexico, English is still optional, even though the country is next door to the world's biggest English-speaking nation. Efra?n Pay?n, a Mexican businessman who also visited China in September on a trade mission, was floored by the Spanish-speaking translators the government provided. "Their Spanish was perfect," he marveled. "They have really worked hard to get where they are."

The Chinese certainly have a long way to go. Democracy is nonexistent. Pollution is dire. Joblessness is a big problem. But its drive and enthusiasm still give China an edge over Mexico. In an A.T. Kearney Inc. (EDS) study of the world's most attractive destinations for investment, released on Oct. 12, Mexico fell to 22nd place, down from No. 3 the previous year. China, meanwhile, has ranked No. 1 for three years. "Unfulfilled reforms in key areas such as telecom, infrastructure, and energy -- and the magnetic pull of China -- have led global investors to rethink Mexico," wrote the authors. "In Mexico, if you ask anyone where Mexico is going in the next three to five years, no one knows," says Carl Rianhard, president of OpenTec, a Mexican developer of Web-based e-learning applications, who has visited China several times.

What should Mexico do? Invest in better education. Build more highways. Open the energy sector to private investment. Enact real tax reform to pay for all of the above. That's the standard prescription. But how about this proposal: All Mexicans in a position of leadership -- in business, education, or government -- should buy a plane ticket to China now and see for themselves what Mexico is up against. They can fly to one of a dozen major airports China has built in the past decade (vs. one for Mexico), travel along 17,800 miles of highways (Mexico has added just 1,670 miles in 10 years), roam the bustling shopping districts, and see how a giant is reawakening. Then they should fly home and start the serious business of reawakening Mexico.

By Geri Smith


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