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China and the U.S.:
Examining Cultural Differences in the
Aerospace & Defense Industry
The University of Texas at Dallas
Authors: Collin Zreet and Shawn Stark
November 22-23, 2015
Oxford, UK
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ABSTRACT
Purpose: The purpose of this article is to show the differences that exist not only culturally, but
also technologically in the aerospace and defense industries between the United States and China
utilizing not only Hofstede, but also professional sources including Collin and his extensive
aerospace background and contacts.
Design/Methodology/Approach: Our approach will be two fold looking from the U.S
commercial/defense industries view with the possibility of cooperation of a large national
defense contractor. The other viewpoint examined will be from the Chinese’s view, which is
widely different than the United States in regards to multiple layers including Power Distance,
and others which all cause for a varying approach in the marketplace.
Research Limitations: Due to the restrictive nature of China as a nation and commercial
aerospace/defense contractors not wanting to divulge trade secrets some information may be
more tedious to gather.
Social Implications:The aerospace industries across the world are critical not only to
transportation, but to humanitarian efforts and business which is why this article will help to
show the differences, but strengths that both nations provide in helping to maximize the
aerospace and defense industries worldwide.
Originality/Value:China and the U.S. are constantly examined, but our overall approach is
tremendous in the fact that we will produce a wide variety of valuable information for the use of
professionals and military experts to review and understand the differences that exist. Through
this bridging and collaboration possibilities will exist that may not have existed prior to our
examination of these industries/nations.
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Background/Introduction
Ever since the early twentieth century, China and the United States have been at
odds with each other. With the current rise in China’s economy, this has become truer
than ever. One of the major issues of conflict that this has spilled over into is in the
Aerospace and Defense industry. There have been numerous instances of China
stealing American technology and reverse-engineering and adapting it to their needs
(Cooper, 2009). In the last ten years the Chinese have done everything they can to buy
aerospace/defense items on the black market including jet engines, full fighter planes if
possible, encryption software, and other classified American military and commercial
aerospace secrets. China states that no espionage is ongoing, but time and time again
China has continued their decades old routine of stealing secrets to try to get ahead as
they fell further and further behind due to their country’s communist structure. Times
have begun to change in China after their entry into the WTO and China has begun to
make significant strides in starting the steps to help it become more of an industrial
player than a stealer of ideas.
These changes include more Foreign Direct Investment
into other nations to gain a foothold unlike ever before(Zhang, 2002). Additionally,
looking at China’s five-year plan they plan to make large investments in the aerospace
area along with other critical areas that will only help it to continue down a path of
growth, but hopefully prosperity due to the elimination of the one child policy(Schwaag
Serger, 2007). China though over the last 15-20 years has started to make a large shift
towards overall change in reference to many of Hofstede’s six researched categories.
The one constant in their society is power distance; the other five have and will continue
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to change. China has unique capabilities in regard to cheaper but overall very talented
labor pools and now due to reaching space as discussed by Zhu, Zongpeng.(Zongpeng,
2009)China can use this to their benefit in the aerospace industry as they continue to
grow and work harder to become a global leader in this area.
Cultural Analysis
Figure 1.0 Hofstede’s Six Cultural Dimensions: China and the United States (Hofstede)
From Geert Hofstede’s research, the above Figure 1.0 displays the cultures of
China and the United States across six different cultural dimensions determined by
Hofstede’s research, starting back in in 1980.
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Power Distance
Geert Hofstede defines power distance as the extent to which the less powerful
members of institutions and organizations within a country expect and accept that
power is distributed unequally. It has to do with the fact that a society’s inequality is
endorsed by the followers as much as by the leaders(Hofstede).
Power distance in the Chinese culture is something that people grow up with just
like Americans do Thanksgiving and thus for centuries in China it has never been
questioned. The Chinese at a young age are taught to not question those above them
to such an extent that power distance has led to horrific air accidents in similar Asian
cultures as China. One major discussion point that has been discussed across many
research papers and studied extensively by Yang is the question of does tradition
influence people more than realized above and beyond the norm of power distance in
their culture? Farh, Hacket and Leang explored this topic in great detail in 2007(Farh
Jiing-Lih, 2007). Yang dived into this topic in the early 1980’s and determined five traits
that were seen more than not when looking at Chinese culture as a whole. These
included submission to authority, ancestor worship, conservatism and endurance,
fatalism and defensiveness, and male dominance.
As can be evidenced through this
list of Yang’s study, submission to authority is seen as tradition leading to the continued
following of power distance in China. A study performed and discussed in the article by
Farh in 1996 showed that Chinese natives who, after being tested, identified as being
high traditionalists were much more likely to follow in the way of power distance and not
on how authority treated them. Those tested would be more focused on accomplishing
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what was expected from them in regard to social norms than asking too many questions
and causing an issue to arise. This difference can be seen as a major difference
between the U.S. and China as China’s score on a 100 point scale of Power Distance is
double that of the United States at 80 versus a score of 40 for the U.S(Hofstede). The
United States sees challenging authority as the new norm and respecting elders and
following older traditions has fallen to the wayside and in some situations causes
massive instability. These issuescurrently include the ongoing challenges to authority,
mostly police, by an outspoken group of Americans, the government, and even
corporate America by some facets of American culture that feel that they are being
wronged or pushed aside for invalid reasons.
Another interesting aspect to the power distance discussion among researchers
is how in different power distance cultures the relationship of empowerment and
employee satisfaction was affected(Fock, Hui, Au, & Bond, 2013)(Halperin, 2013). The
study based their case on China and Canada which is very similar to the U.S in power
distance per Hofstede and showed that in countries where power distance is high such
as China that subordinates feel out of place when their supervisor approaches them for
their input and do not feel it is proper to be approached in that manner. In countries
such as Canada/U.S where employees have more power the opposite can be seen
where in fact employees feel like their supervisors may be micro-managing them too
much when they continually are asking for input or trying to review their work. These
differences in the aerospace industry as discussed previously can have a massive
affect, including crashes in two separate instances, in cultures with high power distance
where employees are too afraid to question their superior. One such incident involved a
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Korean Air crash that killed all passengers and crew on board due to the co-pilot being
unwilling to question the lead pilots’ continued poor choices around route, landing, and
other vital decision-making, which led to this horrible crash(Halperin, 2013).
Another incident that has been brought to light, that has not been discussed, is
the Asiana flight on July 16, 2013 at San Francisco airport where the CEO of the
company said that the plane had no known mechanical or engine related issue, once
again bringing a highly power distance culture into the spotlight(Ohleiser, 2010). Due
to Korean Air’s multiple flight issues the new national airline became Asiana and the
tradition of power distance cases continued where no one wanted to question someone
above their authority due to the fear of breaking tradition as discussed above.
Thankfully in the incident that occurred at San Francisco International Airportthe
majority of passengers were able to walk away, but loss of life still occurred which in the
situation of a non-mechanical failure is unacceptable. The difference that is obvious in
this situation is in the fact that an American pilot would have no fear of repercussion in
questioning their superior to insure that they are making the correct decisions to avoid a
tragedy. Power distance will continue to be an area in research that will evolve as more
studies can be performed on Asian nations in comparison with lower scored nations
such as the U.S. and Canada showing the negative effects that squashing people’s
creativity and overall self-worth has on an individual tradition or not.Power distance may
be a long standing item in these nations, but one that does not help to drive a society to
be better; it only makes people feel that their ideas are not powerful. In conclusion, the
ideas and not pushing for more in our daily lives can be seen in the fact as to how long
it took China to get to space versus the U.S. who made it to space in the 1960’s while it
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took China over 40 years longer to get there. Power Distance had a huge partinthis, as
people were to afraid to not respect those above them or challenge what would help to
get them there sooner. Not only does it force China to not advance as quickly, but to
carry out espionage on other countries, such as America.
Individualism
Hofstede defines individualism as “The fundamental issue addressed by this
dimension is the degree of interdependence a society maintains among its members. It
has to do with whether people´s self-image is defined in terms of “I” or “We”. In
Individualist societies people are supposed to look after themselves and their direct
family only. In Collectivist societies, people belong to ‘in groups’ that take care of them
in exchange for loyalty.
At a score of 20 China is a highly collectivist culture where people act in the
interests of the group and not necessarily of themselves. In-group considerations affect
hiring and promotions with closer in-groups (such as family) getting preferential
treatment. Employee commitment to the organization (but not necessarily to the people
in the organization) is low. Whereas relationships with colleagues are cooperative for ingroups they are cold or even hostile to out-groups. Personal relationships prevail over
task and company.”(Hofstede)
Individualism can be seen all over the United States in the way that people no
longer have loyalty not only to relationships, but to their employers or the next best
thing.
Whatever is best for the individual is what is best overall among the American
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population. On the flip side China is much more about family and the overall well-being
of the group long before the person. This was studied in depth by Forbes, Collinsworth,
Zhao, Kohlman, and LeClaire around conflict, specifically in the nations of China and
the United States(Forbes, 2011). Conflict per this paper was “most often expressed in
name-calling or other verbal forms of aggression, or in more subtle forms involving
social relationships.”
A great viewpoint of this around America and Japan is in America, “the squeaky
wheels get the grease.” “In Japan, “the nail that stands out gets pounded down.”” A
study performed surrounding conflict including direct and indirect aggression with the
above paper showed that a country such as China with a highly collective society for the
last 50-100 years shows that overall aggression is very low compared to a more
individualistic society as seen in America where both forms of aggression are much
higher due to people thinking more on their own and having more ability to make their
own decisions. While this data it is not surprising as a whole, it is good to note that
indirect aggression in China is still overall lower than in a more individualistic society
which is somewhat surprising as suppression of emotions may be suspected within
China.
While much discussion in research has taken place around the fact that China
has been a significantly collective society, an additional article and a recent interview
with a high ranking military expert both demonstrate that China is moving away from a
collective society to a more individualistic society(Jia-xue, 2009). Jia-Xue discusses this
that “in the last 20 years in China, we would probably find out that, to some extent, the
words and actions may not match, which may explain why it is difficult for many outside
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researchers to get the real picture of the essence.” In Jia-Xue’s work though he locates
multiple researchers dating back as far as 1991 who have seen the gradual increase
also present in the People’s Republic of China.
While some may think this is not the
best move for China, America can show that innovation is more easily achieved in these
circumstances.
Per Jia-Xue annual GDP due to China moving in this direction has
grown from $379 to $10,502 RMB from 1978-2004. Some interesting facts presented
by Jia-Xue show this including divorce rate, privacy rights, and family structure. Divorce
rate YOY from 2003 to 2004 increased by over 21% as couples would rather be
separated than live unhappily, which is a complete individualistic viewpoint. Another
huge indicator discussed by Jia-Xue is family structure showing that no longer do
generations of family live together, but it is more American in the fact that families are
no longer living with their parents, but instead parents and their one child at the time this
research was conducted are living together.
Another large change noted by Jia-Xue is that college students of the “Post 80’s”
period were much more open to changing jobs which would go against uncertainty
avoidance again showing a dramatic change that is occurring in China.
A recent
interview conducted by Collin with a high-ranking U.S. military expert confirms the
findings of Jia-Xue as becoming more and more the case in China. An issue brought up
by this expert is moving forward how will China’s leadership handle this and be open to
working with outside nations and corporations as the country grows. One large growth
area that can be seen is in the fact that China has partnered with Airbus to have their
assembly plant in China as a partnership with the German manufacturer. This can only
be good news for the Chinese and aerospace communities alike as they continue move
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away from collectivism to individualism will only help globalization to occur which is not
a term synonymous with China for the last 25 years(Airbus, 2015).
Masculinity
Hofstede defines “a high score (Masculine) on this dimension indicates that the
society will be driven by competition, achievement, and success, with success being
defined by the winner / best in field – a value system that starts in school and continues
throughout organizational life.At 66 China is a Masculine society –success oriented and
driven. The need to ensure success can be exemplified by the fact that many Chinese
will sacrifice family and leisure priorities to work. Service people (such as hairdressers)
will provide services until very late at night. Leisure time is not so important. The
migrated farmer workers will leave their families behind in faraway places in order to
obtain better work and pay in the cities.
Another example is that Chinese students care very much about their exam
scores and ranking as this is the main criteria to achieve success or not.”
Masculinity
or competition for China can be seen throughout their nation as they continue to want to
push harder and harder ahead and continue to execute to achieve domination
worldwide.
Masculinity is the most similar characteristic seen between China and the
United States with a score of 66 for China and 62 for the United States(Hofstede). One
interesting fact discussed in the research performed by Hofman and Newman is that in
higher score masculine cultures the potential for unethical behavior, including bribes,
increases as people are more willing to bend the rules within society to gain that
competitive edge(Newman, 2014). In this paper Hoffman and Newman discuss the fact
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that the Chinese government is establishing more regulation around CSR which
international consumers are requesting and the government is realizing is a main driver
of employee commitment which in turn helps to make competiveness in the marketplace
easier to achieve a key component of masculinity.
Another main driver of outside forces that are causing China to make this
implementation rapidly is the fact that China is a huge player in the global supply
chains. Consumers around the globe are pushing for companies to treat their
employees right and not to have them working in substandard working conditions that
would not be acceptable to them. Additionally, in this journal the authors discuss a
survey of 113 senior executives in China who all believe that CSR can only have a
positive impact which shows from my viewpoint the overall change of what masculinity
ultimately entails; that it not only means being competitive but having a workforce that is
competitive and not just cheap labor. One interesting point that should be taken into
account that is analyzed in the journal entry is the fact that in more masculine oriented
societies some managers like the gain in reputation that is seen from the positive social
attributes gained through CSR.
On the flip side feminine societies are more concerned with the overall well-being
of the population at its root which neither the United States nor China is focused on as
discussed above. Hoffman and Newman perform research within this article on how
masculinity, in conjunction with CSR, either positively or negatively correlates. One
finding surprised the authors as seen in this discussion “In contrast to what was
hypothesized, those high in masculinity were found to exhibit greater organizational
commitment when they had positive perception of their organization’s CSR toward
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society.” The expected outcome from more feminine oriented societies showed the
expected outcomes as hypothesized by the authors. This in turn has made what effect
if any CSR has across Chinese culture much more difficult to measure as both
masculine and feminine orientation showed so much similarly. As the authors conclude
this leaves a large area open for more research as to how CSR, China and the
influence of an overly masculine oriented society.
The aerospace industry is one that operates under a very competitive or
masculine orientation. Due to this companies are ultra-competitive in regard to what
will be the next significant development by either the U.S. or China in the aerospace
industry. Large scale competitors such as Boeing, Bell Helicopter, Lockheed-Martin,
Rolls Royce and others continue to help push the United States and with the newly
announced partnership with AirBus in China this can only help China. Furthermore, the
fact that China has made significant strides including making it to the moon, but more
importantly the fact that their government is being more open to change than ever
before is the most significant milestone seen here.
Uncertainty Avoidance
Geert Hofstede defines Uncertainty Avoidance as how a culture responds to aspects of
the future. Does the culture try and control the future or do they sit back and let it
happen? How do they react to situations in which they cannot control? The higher the
score, the more likely the culture is to try and control the future and the less comfortable
they are with ambiguity.
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Referring to Figure 1.0, China scores 30 points out of 100 in this dimension. To
the Chinese, truth is relative and laws are flexible to suit the situation at hand
(Hofstede). They are also comfortable with ambiguity, which can even be seen in their
language that is full of words and phrases that have ambiguous meanings (Hofstede).
This comfortability with ambiguity also allows them to be very adaptable and
entrepreneurial, as evident in that 70% to 80% of Chinese businesses are small to
medium sized and family owned (Hofstede). There is also a recent trend of Chinese
engineering firms bypassing traditional innovation cycles, creating new Launch-TestImprove methodology, creating instant feedback from customers from newly launched
products (Williamson, 2014). This entrepreneurial spirit is pushing Chinese technology
firms into the future at a faster rate than ever before seen in the country. Along those
same fronts though, other countries are wary to enter into the Chinese market because
they careful about protecting their own intellectual property in China. Because of their
situational nature, as reflected in their Uncertainty Avoidance dimension, they are more
willing to bend the rules to fit their needs. International companies are losing up to 20%
of profits in China because of this (Schotter, 2014). This is most easily seen in
counterfeit items like toys, movies, and music. As explained later, this also pertains to
the aviation industry.
On the other hand, the United States scores a just below average score 46 in the
Uncertainty Avoidance cultural dimension. Americans are fairly willing to accept new
and different ideas when it comes to technology, business practices, or food, as well as
favoring freedom of expression in terms of ideas and opinions of others (Hofstede).
Americans also do not require a lot of rules to be governed and are less emotionally
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expression compared to cultures highly rated in the dimension (Hofstede). Recently,
there has a swing in the culture as more people are in fear of government control with
the creation of the National Security Agency (NSA) and other governmental security
agencies since the attacks on September 11th, 2001 (Hofstede).
It is very interesting that the Chinese culture scores low in Uncertainty
Avoidance, showing that they are comfortable with not being able to control their future,
yet they are heavily investing is their military forces. They have been upgrading some
of their aircraft, training more fighter pilots, and starting to develop a ballistic and land
attack cruise missile program (U.S. Congress, 2010). This shows an aggressive
offensive stance, which would be typical of other countries that try to control their
country’s future through military might. Though the United States scores a moderate 46
in this dimension, it is mostly indicative of a dually-natured culture. Americans are very
accepting of new technology, as previously stated, but are less accepting in other areas
including governmental control.
From a personal interview with a high-ranking military expert, it was concluded
that Chinese military officials do not necessarily follow the overall Chinese culture
detailed by Hofstede(Interview with Marine Corps Lt. General, 2015). Due to recent
uncertainty on the international military stage, the Chinese military has greatly increased
in size and training. With changes in the Japanese military and isolationist policies of
some Western countries, China has risen in Eastern Asia to protect their interests.
Typically, according to Hofstede, the Chinese are comfortable with ambiguity and do not
try to conform and control the future. This divergence in Chinese culture of the military
elite is an indicator in a shift in recent Chinese culture.
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This is a growing concern for the American military as they have vested interests
in the Pacific Ocean, including the protection of their own border. Despite having a
fairly average Uncertainty Avoidance score, the American military has always been
quite large and very active in controlling international situations. Though American
military spending is always a hotly debated topic, and isn’t always funded (see the most
recent budget sequestration), it is still world’s largest and most formidable military.
On the Commercial side of the Chinese economy, we are also seeing a very
recent proactive push to control and expand their local businesses. As Hofstede
explains, because of their comfortability with ambiguity, the Chinese are very adaptable
and entrepreneurial. As seen with the automobile industry in Japan 1970s and in the
Republic of Korea in the 1980s(Cusumano, 1985)(Park, 2003), the Chinese are taking
Western technology in the aviation industry, reverse-engineering the technology, and
then manufacturing it at lower cost because of larger labor forces in China. Part of this
is contributed to corporate espionage where Chinese officials create ways to find out
technical information from Western corporations. One of the most recent and prevalent
examples of this is with the Joint Strike Fighter (JSF) F-35 Lightning II, currently in late
stage development with Lockheed-Martin, the world’s largest defense contractor in the
world, located in several offices across the United States.
In 2009, there was a breach of security in the Joint Strike Fighter program and
large amounts of sensitive military design data were copied (Hjortdal, 2011). The
incident was traced back to the use of USB memory sticks and has also been tied to an
effort by Chinese cyberhackers(Hjortdal, 2011). This knowledge would allow China to
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know the capabilities and weaknesses of the bomber, as well as enough information to
be able to reverse engineer and manufacture a comparable aircraft.
Another interesting theory of this transfer of knowledge is that some of it is
coming through academia in American universities. According to the National
Foundation for American Policy (NFAP), graduate students in several engineering and
other technical disciplines are quickly outpacing native students in American universities
(See Figure 2.0).
Figure 2.0 International Students in High Tech Graduate Degrees in the U.S.
(Anderson, 2013)
In an intellectual atmosphere, the transfer of information is encouraged and is
eventually brought to home countries when students return home after graduation.
Companies are more protected about this kind of information, where they stand to lose
profits and the viability of their business, where academic institutions do not have as
much to lose. This unintended migration of information lets other countries easily jump
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the gap in developing technology, if these international students were to return to their
home countries and companies.
Long Term Orientation
Long Term Orientation is the cultural dimension that describes how a culture balances it
ties to its cultural history while dealing with challenges and changes of the present and
future (Hofstede). Low scoring societies tend to hold more past with their cultural
traditions, while higher scoring cultures make way more new ideas for the future
(Hofstede).
China scores a high 87 in this dimension, showing that they believe more in the
context of situations in the present, which we also saw in the Uncertainty Avoidance
dimension (Hofstede). This also manifests itself their adaptability of traditions and
strong desire to save and invest money for the future (Hofstede).
On the opposite side of the spectrum, the United States scores very low in Long
Term Orientation, with a score of 26 (Hofstede). Americans are very concerned about
what is good and evil and is actually the only Western civilization since the beginning of
the 20th century in which church attendance has increased (Hofstede). A recent Gallup
Poll even shows an overall slight uptick in church attendance (0.7%) from 2008 to 2009
(Newport, 2010). American businesses measure success on a short term basis,
providing financial statements on a quarterly basis, which drives results in individuals
working towards quick results (Hofstede).
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Figure 3.0 Church Attendance in the U.S. from 2008 to 2009
From a general business perspective, the Chinese business-seller relationship is
very reciprocal. If a salesperson does a favor for a buyer, a similar favor is expected in
return in the future. In this instance, this is in-line with their scoring with for dimension,
as they make sacrifices in the present for a favor in the future. Research suggests,
though, that these favors need to be strategically made for the sake of the business and
not overused, as suspicion of corruption may break the trust that was initially gained in
the relationship (Lee, 2005).
Despite China’s high ranking in this cultural dimension, they have traditionally
been behind a majority of most developed countries in terms of a military air force.
According to Political Scientist, Roger Cliff, before a Congressional hearing May 2010
over China’s emergence in aerospace and defense industries, China is in the process of
becoming a fully modernized air force that would be similar to what the United States
and Europe had in the 1990s, though they are not there yet (U.S. Congress, 2010). The
People’s Liberation Army (PLA) Air Force has seen some more recent changes in past
few decades. Back in 200, the PLA mostly flew Russian-made MiG-variation attack
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fighter aircraft from the 1950s that mostly utilized visual-range missiles and no mid-air
refueling capabilities (U.S. Congress, 2010). At the time of the mentioned
congressional hearing, May of 2010, the PLA has upgraded about a quarter of their
aircraft to fourth-generation models with beyond visual capabilities and precision guided
missiles (U.S. Congress, 2010). There has also been a vast improvement in the
training of pilots and military exercises (U.S. Congress, 2010). This adaptability has
allowed China and the PLA to greatly cover the gap between it and its Western
counterparts, though it has not quite closed the gap. They still have a large portion of
their air force using old technology and their training is still not at the same standard as
the United States.
Though the United States scores low on the Long Term Orientation dimension,
suggesting that they do not adapt well to changing conditions and are not forward
looking, their military is at the top of its class.
From a policy standpoint, China has also realized that in order to expand the
aviation industry, they need to make some changes. Originally, the Chinese military
had top priority over all air space, creating delays for any kind of commercial aircraft,
thus stifling the commercial sector (Keck, 2001). Now priority has been given over to
the commercial with allowances for military aircraft as well (Keck, 2001). Improvements
in safety regulations, communications technology, and flight navigation have also given
way to improvements in the commercial sector (Keck, 2001). This is also proof of
China’s flexibility with laws and regulations, as pointed out in the Uncertainty Avoidance
dimension.
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Figure 4.0 Projected Growth of Chinese Aerospace Industry (Aerospace & Defense in
China, 2015)
Projections show that while China investing towards the future in the aerospace
and defense section, it will be a slow growth (Aerospace & Defense in China, 2015). As
the Chinese economy grows, it will be interesting to see how the Chinese military
adapts, and if these projections increase, as more than two-thirds of spending in this
market is military spending (Aerospace & Defense in China, 2015). Whether the
Chinese military aviation sector continues to lag behind their Western counterparts, or
they plan for the future and make large investments for the future, is still to yet to be
determined. This might also suggest a difference between the commercial and military
segments of this industry, where the commercial falls more in line with the traditional
viewpoints as presented by Hofstede, and the military segment is slowly coming around
to that same assessment.
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Indulgence
The Indulgence cultural dimension is described as the degree of how much cultures try
and control their desires and impulses, based upon how they are raised as a child
(Hofstede). High scoring cultures show little restraint towards their desires, where low
scoring cultures and societies are very restrained and do not give into such desires.
China scores very low in this dimension at a score of 24. Showing high levels of
restraint tend to lead toward cynicism and pessimism across the culture (Hofstede).
They also do not place a lot of emphasis on leisure time at work and often feel that
giving into their material desires is somewhat wrong (Hofstede).
The United States, on the other hand, scores a more normative 68 in the
Indulgence dimension, which is reflective of contradictory attitudes within the culture
(Hofstede). Most Americans have adopted a mantra of “work hard, play hard” being
both diligent in their work, but also very indulgent in their non-work activities. The
American government is also hard at work at fighting the ‘War on Drugs,’ while yet,
American drug addictions are at an all-time high (Hofstede). Some parts of the culture
are more prudent than others, but well-known televangelists appear to be very immoral
(Hofstede).
China is making a growing change in the Indulgence dimension as their economy
begins to grow and expand. With the upshot in economic development, there is now an
emergence of an upper middle class that now has more disposable income to spend on
luxury items. The rise of the middle class in China is also shifting where the wealth in
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the country is. China’s four top tier cities (Shanghai, Beijing, Guangzhou, and
Shenzhen) hold 30% of China’s wealth, while the overall top ten cities hold 50% of the
country’s wealth (Langlois, 2013). Compared to the United States, the top ten cities
only own 25% of the country’s wealth (Langlois, 2013). Research suggests that this
spread will continue with a substantial increase in buying power from those outside of
China’s top tier cities (Langlois, 2013)
According to Goldman Sachs, excluding large luxury items like private jets and
personal yachts, the luxury market in China reached $6 billion in 2004, accounting for
12% of the global market and was predicted to increase 25% each year between 2006
and 2010 (Wang, 2011). McKinsey even predicts that by 2015, China will own more
than one-third of the world’s luxury market (Atsmon, 2012).
Figure 5.0 Worldwide Luxury Consumption(Atsmon, 2012)
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Figure 6.0Growth in Chinese Luxury Consumption (Atsmon, 2012)
Another reaction of this is the relaxation of the one child per couple law, now
allowing couples to have up to two children. While restrictions were eased back in 2013
to two children if one of the spouses was an only child, many did not have an additional
child because of the increased expenses to raise one more. Now with the lessened
restrictions for all couples and an increased middle-class, there is an opportunity for
growth in the Chinese population for greater labor force in the future.
In the Aerospace industry, this applies to both commercial and government
spending. We have seen a growth in China on spending money for their space
program, while seeing stagnation in funding for NASA in the United States. In an
interview with Terry Gross on NPR’s Fresh Air, Astronomer Chris Impey detailed how
China’s space program has been growing 10% each year in the past decade, while
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NASA’s budget has not been growing at all (Impey, 2015). China is even the process of
creating their own space station and have already landed a rover on the moon (Impey,
2015).
Similarly, we have seen a growth in spending for personal private jets in China
and decrease in the United States due to the downtown in the American economy since
2008. The Chinese sales of private jets began to increase in 2009, topping out at 55
purchases from Chinese firms, proving that there was a market for Chinese made luxury
aircraft (Young, 2014). Projections were estimated to hit 350 by 2020 (Young, 2014).
But these numbers began to drop in 2011, and are down to 35 purchases in 2014,
because of investigations into government corruption. This still has not deterred foreign
competitors, like Bombardier, Cessna, and Gulfstream, to enter the Chinese market
(Young, 2014).
Further Research & Limitations
Due to the restrictive and security-related nature of this industry, it was very difficult to
find recent and strongly relevant information on the Aerospace and Defense Industry.
Further research could be conducted as more information becomes declassified and
national tensions ease, but this most likely will not occur for some time. Therefore most
research in this area will be several years behind what it is actually currently happening
in the industry. Access to direct sources will be the most helpful, but once again will be
very hard to come by and will most likely unwilling to divulge direct and recent
information due to security concerns. Opening of ties into China would also allow for
more research into this topic as well.
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As far as further research, there are many other related topics that this study
could dive into. The same research could be performed into Russia’s military and
commercial aviation industry, as they were the initial ones to provide China with aviation
technology, as compared to the United States. Also, the same research could also be
continued as China’s economy grows and see how it does or does not become more
and more like the United States and other Western cultures. Finally, instead of being
compared to the United States, China’s aviation industry could also be compared to
other Asian countries with aviation industries, like Japan and the Republic of Korea.
Conclusion
China and the United States as evidenced throughout this paper exhibit many
differences and have been world’s apart in their orientation for approximately the last
60-80 years, but as time has gone on recently China and the U.S. are exhibiting more
and more similarities. In all areas reviewed by Hofstede the gap has narrowed besides
Power Distance which will remain as a very strong cultural belief of Asian nations.
Indulgence has seen the most momentum to be aligned with the United States, but has
slowed down in terms of its movement, due to the recent economic slowdown occurring
in China. Aerospace will continue to be a driving area of China’s economy and with the
launch this week of their own airplane, this can only help not only America who is
supplying a large amount of component, but China as a whole who will see phenomenal
growth in the aerospace area. When we first started this paper our thoughts were that
we would find that China and the United States were not only vastly different, but
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growing apart further as each day went on. Instead what we found through our
research was a massive migration away from tradition in China and movement towards
a more technological and business savvy country that is willing to be more open and not
so closed. While some outsiders may view even the slightest change of China towards
the American way of innovation and growth as a bad thing it can only help to continue to
push the entire world. Countries that become stale and are afraid of innovation
eventually cause a ripple effect and America has become somewhat stale as American
companies get fearful of spending too much while Chinese companies are willing to
spend.
Hopefully, American companies will see the warning flags now and begin the
process to innovate even further before we as consumers and employees get left
behind.
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