The September 2008 weekend of Lehman Brothers collapse was a dramatic scene for everyone. However, the event was in particular shocking and confusing for someone like me, who came to the US to study for law and MBA degrees and then for many years practiced capital markets laws in New York and worked diligently as an investment banker on Wall Street. For a long time I always thought I would bring back the US regulatory framework and cutting-edge financial products to China for its growing financial markets.
But the financial crisis turned everything upside down.
Among the many theories offered by numerous pundits, the Harvard historian and author Naill Ferguson in his book Civilization considered the financial crisis "an accelerator of an already well-established trend of relative Western decline." What the world is experiencing, he asserted, is "the end of 500 years of Western dominance" and the rise of emerging economic powerhouses such as China and India.
In Chinese history, however, the concept of civilization itself has an inherent dynamic and learning nature. Although traditionally "China" meant the "Middle Kingdom" and civilized society (vis-a-vis the "barbarians" around it), in more recent centuries the concept of civilization evolved to became more relative, and it was no longer a concept of geographical region or genealogical group.
The late 19th century scholar Mr. Liang Qichao of the Qing Dynasty summarized it succinctly when he and fellow scholars were puzzled by the China weakness and Western strength: "if China acts like barbarians, then China becomes barbarians; if the barbarians act like Chinese, then barbarians becomes China." Since Qing Dynasty, the world has seen continuous flow of Chinese studying abroad.
The three most recent waves have reflected the different phases of China modernization and the transformation of the world around it. First, with the opening and reform of the country in the 1980s, Chinese Ph.D. students studied abroad in education, science and technology majors relating to China's modernization; many were happy to stay abroad after graduation due to drastic income gap between China and the developed countries.
Second, when China's robust economic growth took off, Chinese students in the 1990s began broadening their scope into law, management, and finance. Because China's build-up of market economy offered cross-border educated Chinese unprecedented opportunities, the number of returning Chinese increased significantly.
Finally, in the third and most powerful wave, the majority of Chinese students in the post-WTO admission era are choosing to return to participate in China's remarkable growth. For the first time, Chinese students would consider "opportunity cost" before they plan for studying abroad.
However, the number of total Chinese students studying abroad is still increasing every year, as a common desire for mastering foreign languages, especially English, has developed in China. Out of families believing in western education, a much younger group of Chinese subtends are now attending high school or even primary school overseas.
Also noteworthy, the new Chinese millionaires from the China boom are making immigration arrangements for their retirement years and children: a joint survey released in April 2011 by China Merchants Bank and Bain & Co. reported that more than half a million Chinese have investable assets of over 10 million yuan ($1.6 million USD), among which almost 60 percent are considering emigrating, have begun the process, or have emigrated.
Yet again it's not a one-way story there: an October 2011 survey by the Bank of China and Shanghai-based Hurun Report, which publishes an annual ranking of China's richest people, indicated that about 80 percent of the wealthy Chinese emigrating, in belief of the China growth story, does not plan on giving up their passports immediately.
From the three waves of Chinese people's overseas studies and immigration arrangements, one could certainly observe the relative economic power shift between China and the West. However, it has more profound aspects than a single-dimensional rise and fall. The current wave still involves complex two-way flow of talents and capital. And is it coincidental that, while the US and Europe are struggling to recover from the financial crisis, China is simultaneously working hard to adjust its export-driven growth model that has been extremely successful during recent decades?
Many more complex questions like that remain unanswered. But I do know that we are living in a very complicated world where the nations are highly interdependent. Our interdependent world not only passes 7 billion populations but is also interconnected through information technology on a historic scale. Consequently, existing conceptual models are unable to cope with interconnected, complex global issues and trends, for which one can be either extremely pessimistic or reasonably optimistic.
A pessimistic view towards to the global crisis, offered by Eurasia President Ian Bremmer in his new book Every Nation for Itself, is a "G-zero world", in which no single country or bloc of countries has the political and economic leverage -- or the will -- to drive a truly international agenda. The result will be intensified conflict on the international stage over vitally important issues, such as international macroeconomic coordination, financial regulatory reform, trade policy, and climate change.
However, optimists are likely to see 2012 as an important historic juncture when the shape of the global frameworks becomes clearer. As the world begins to come to terms with a new political, economic and technological order, we could expect the emergence of new approaches to problem solving, new models for the conduct of human affairs, and new ways of relating to each other in the world. In short, a crisis could well be a transition stage for a quantum leap, if the discovery of quantum leap itself could offer any historical insight.
Exactly 100 years ago, the greatest scientific minds of Europe met to address a perilous state of affairs: while researchers earlier believed the classical physics of Isaac Newton and James Clerk Maxwell already covered all known physical processes, nuclear radiation, X-rays, and other new discoveries rocked the foundations of physics.
In late 1911, more than 20 leading scientists joined a conference to tackle the crisis in no other place than Brussels, Belgium. It was named the Solvay Council after the founding chemist Ernest Solvay, and the youngest member of this group was 32-year-old Albert Einstein. The first meeting of Solvay Council started the quantum revolution, and it would take about two decades before experimental evidence firmly establishing quantum mechanics as a true theory.
History rhymes. Numerous companies, individuals, and entities around the world are anxiously waiting for the current era of uncertainty to pass. The new model for the post-crisis world has far-reaching implications for the globe. We should remain in the hope that the upcoming transformation is generating tremendous opportunities for humankind to live in a more prosperous, more peaceful, and more inclusive world.
The starting point should be a collaborative and multi-stakeholder approach to resolving the global financial crisis. The world urgently needs new global models of leadership, governance and partnership. Like the young Albert Einstein a century ago, the thought leadership of new generation should team in cross-border conversations and brainstorming in the broadest possible context for a quantum leap.
Winston Wenyan Ma, a Managing Director at China Investment Corporation (NYSE:CIC), is the author of "Investing in China" and a Hauser Scholar at the NYU Hauser Global Law School Program. The article reflects the views only of the author.