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Why Chinese Americans are successful while China still lags behind the U.S.

In a recent interview, Fareed Zakaria, the host of CNN Global Public Square asked Tiger Mom, Amy Chua and her husband, Mr. Rubenfeld’s: How do you explain the phenomena that Chinese and Indians are doing very well in the U.S. but China and India still lag behind the U.S.?  This is an unanswered question that perplexed many readers of Tiger Mom’s new book The Triple Packages: How Three Unlikely Traits Explain the Rise and Fall of Cultural Groups in America. Actually, I was also faced with the very same question when I wrote my book, The Chinese Secrets For Success: Five Inspiring Confucian Values.

To address this question, we need understand that the factors that drive a nation’s success are largely different from those that drive individual and family success, though a few factors drive successes of both a nation and a person, for example, education. By understanding the difference, we can explain why Chinese Americans succeed in the U.S. while China still lags behind the U.S.

A nation’s success depends on its political, economic and social systems. They were built upon many wisdoms and cultural values in human history. For example, ancient philosopher Aristotle wrote “Law should govern.”  French Enlightenment political philosopher Baron de Montesquieu proposed of the separation of political power among a legislature, an executive, and a judiciary. The free market system was championed by British scholar, Adam Smith. Opposing views include Italian Fascism and Japanese Militarism which led to disasters in human history. It is the better political, economic and social systems that help create a better country.

In fact, ancient China had one of the most advanced political, economic and social systems for more than one thousand years. Influenced by Confucian values, Chinese emperors were asked to put people’s interests first. While the rest of world selected their ruling classes by nobility or family origins, China already selected their administrators by virtue and knowledge, using a nationwide imperial examination system which was open to anybody, regardless of family or social status. Confucian pro-education culture also facilitated China’s economic development and technological innovation. In the Song Dynasty (960-1279), China reached its peak of civilization. Its economy took up more than 50% of world’s GDP and Song was the world leader in commerce, banking, manufacturing and technological innovation. Unfortunately, the Song Civilization was brutally destroyed by Mongol invaders in later 13th century. The later Dynasties, Yuan (ruled by Mongol invaders), Ming and Qing (ruled by Manchu invaders) adopted barbaric political and economic systems which put the ruler’s (not people’s) interests first. They also discouraged industrial development, commerce and forbade international trade. As a result, Chinese civilization was reversed and stagnated.

When China stopped her economic development and technological innovation, the West was moving forward with the enlightenment, industrial revolution and establishment of capitalism. The West surpassed China with its modern political and economic systems: Rule of law, free market system, equal rights and democracy. It is best represented by the United States, which has developed as the most economically, technologically, militarily powerful nation on the earth since World War II.  Though China has started adopting many essential elements of modern political and economic systems, such as free market economy and rule of law, it has not yet completed its journey to build a modern governing system. This explains why China is not as advanced as the US yet. Most of China’s serious challenges such as corruption, pollution and food safety have something to do with its weakness in its political and economic systems, not with its personal and family development culture.

Personal and family success depends on a set of cultural values that are related to personal or family development. They include how a society and individuals view education, family, money management, and morality.  In this area, Confucian values illustrate many strengths. Lizhi inspires everyone to have a big dream for their lives, motivating people to work hard and succeed. Qinxue emphasizes education and enables people to pursue a rewarding career. Jiejian advocates people save money and build their financial security wisely. Gujia teaches people how to create a loving and successful family. Zeyou stresses good moral values and advises people to select beneficial friendships. Blessed by their cultural heritage—Confucian values, Chinese Americans and other Asian Americans with an East Asia origin are able to deflect many undesirable influences in American society: consumerism/over-spending, anti-intellectualism and worship of celebrities from pop culture, to become part of the highest-income, best-educated racial group in the US, according to a 2012 Pew Research Center Report.  Many researches have also proved that Chinese/Asian Americans manage their money and family better, resulting in a higher saving rate and lower rates of divorce, crime and obesity.

As I put in the introduction of my book, “After the Chinese immigrated to the U.S., they embraced and benefited from many important Western values such as rule of law, equal rights and independent thinking. At the same time, they retained much of their own cultural heritage, predominantly Confucian values, such as the emphasis on education, saving and devotion to the family. It is the combination of positive values drawn from both Confucianism and Western culture that make many Chinese/Asian Americans successful in their pursuit of the American Dream!”

In summary, it is the weakness of the Chinese political and economic systems that makes China lag behind the U.S. On the other hand, it is the inspiring of Confucian values on personal and family development that helps Chinese Americans succeed in the U.S.

The Great Testimonial of Confucian Wisdom on Money Management

On June 4, 2013, Wells Fargo released a survey report that demonstrates that Chinese Americans save more, manage their money better and are more confident about their current and future financial situation compared to the US general population. On the next day, June 5, in a Time Magazine article “Uh-Oh: We already Started Spending Like It’s 2005,” William Emmons, an economist at the St. Louis Federal Reserve stated, “the rise in consumer spending is somewhat worrying because it’s a product of the saving rate falling back to 2.5%.” This means that the majority of American families will not have sufficient saving for the rainy days and their future retirements.

What make Chinese Americans stand out in their money management? It is their cultural heritage, Confucian values on money management. Knowingly or unknowingly, most Chinese families around the world apply these wisdoms to their lives and benefit from them. Let me give you a few examples.

2500 years ago in the Book of Rites (礼记), Confucianism already advocated people “Size your spending based on your income (量入而出).” If using today’s words, it means “Living within your means.” According to the Wells Fargo national survey, most Chinese Americans follow this tradition very well. 65% of them pay off their credit card debt each month, as compared to 42% of all Americans. In addition, only 11% of Chinese Americans carry credit card debt of $5000 or higher, while 24% Americans reported to do so. What is the benefit of not carrying credit card debt? You do not have give away a large interest payment to the bankers. You contribute most of your hard-earned income back to your family.

The second Confucian wisdom is saving. 2500 years ago, the King of state Qi asked Confucius to define the essence of managing a nation: He answered: Saving. I guess because neither President George W. Bush nor President Obama consulted Confucius on this, we ended up having 16 trillion national debt today. Isn’t it? It is a fact that many American families have not learned such wisdoms, so they have to depend on the very next pay check to make a living.

In Chinese community, saving is an ingrained cultural value passed from one generation to another, regardless if you have read a Confucian book or not. In the Chinese New Year Eve, Chinese families always serve a dish of fish. This is not because fish is good for heart health, or taste reasons. It is because of a symbolic reason. The Chinese pronunciation of fish “Yu” is the same pronunciation of “surplus.” Having a fish dish in the New Year Eve dining table reminds every family member to save, and to have surplus for the following years. Benefited from this wisdom, Chinese Americans save more. According to the survey, non-retired Chinese Americans have self-reported median retirement of $100,000, compared to $45,000 for overall non-retired Americans. During the financial crises when the housing price dropped to the bottom, many working class Chinese Americans were able to invest in real estate not because they are super rich, but because they have savings and good credit histories.

Last but not least, Chinese Americans also benefit from Confucian value on education. With an excellent education, in particular on math, Chinese Americans can better handle many money management challenges such as mortgage financing and security investment.

With good savings for the future and good money management skills, Chinese Americans are more optimistic about their financial futures, according to the survey.

What a difference Confucian wisdoms can make! I hope every one of you can benefit from them and succeed in managing your personal finances.

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How Should We Celebrate Asian Heritage Month?

In May, our nation celebrates the Asian American and Pacific Islander Heritage Month. Many people will watch wonderful performances of Chinese Kung Fu and Indian dancing, and taste delicious Chinese and Korean cuisines. Today, when many Americans are still struggling with various parenting, education, money management, personal and family development issues, I urge them to take it one step further, learn from the great cultural values Asian Americans have brought to this country.

Asian Americans have been recognized as “the Model Minority” by the American media since 1960s. In a 2012 Pew Research Center Report “The Rise of Asian Americans,” Asian Americans are applauded as “the highest-income, best-educated, and fastest-growing racial group in the US.” Following are a few impressive facts:

  1. Family income: In 2010, the median income of Asian Americans was $66,000 while the median income of the U.S. population in general was $49,800.
  2. Education: In 2010, 49% of Asian Americans held a college degree or higher while the percentage for the general American population was only 28.2%. Over 90% of Asian American high school graduates enrolled in college. Their enrollments in our most prestigious universities, including the Ivy League schools, Stanford, and MIT, are several times higher than their 5.6% as reflected in the U.S. population.
  3. Family management and crime control: Asian Americans generally have lower rates of divorce, obesity, crime, and drug abuse than the general population. For example, the divorce rate among Asian Americans is less than half of the national average and the crime rate is only one quarter of the national average.

In particular, Asian Americans succeed in many critical areas in which our nation is struggling, such as science and math education, money management, family stability, and crime and obesity control.  They have also weathered the financial crisis better than any other racial group. Many working class Asian Americans were able to invest in real estate when its price dropped to the bottom.

What are the secrets behind Asian Americans’ success? Their cultural heritages. One of the most important is the inspiring Confucian values on personal and family development. As early as in 1979, Herman Kahn, the world-famous futurist, attributed the rapid economic growth of Japan, Taiwan, South Korea, Hong Kong, and Singapore to the cultural strengths of the Confucian Values. One year later, Roderick MacFarquhar, the world-renowned expert on China and Harvard Professor, declared: “That ideology [Confucianism] is as important to the rise of the east Asian hyper-growth economies as the conjunction of Protestantism and the rise of capitalism in the West.” It also contributes greatly to the rise of China.

It is the same set of Confucian values that also help Chinese, Japanese, and Korean Americans to succeed in the US. After they immigrated to America, they embraced and benefited from many important Western values such as rule of law, equal rights, and independent thinking. At the same time, they retained much of their own cultural heritage, predominantly Confucian values, such as the emphasis on education, saving, and devotion to the family. It is the combination of these positive values drawn from both Confucianism and Western culture that make many Asian Americans successful in their pursuit of the American Dream!

By opening their minds to learn inspiring Confucian values, many families will be able to improve their parenting, education, financial and family management skills. When good values and practices are promoted, families will reap the benefits and our society will advance.