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New Model China

China's leaders are gathered for their annual retreat at the seaside resort of Beidaihe. They, and the world at large, are focusing on the succession to President Jiang Zemin and Premier Zhu Rongji. What sort of China will Jiang's successors inherit? Kenichi Ohmae offers his analysis.

Over the coming decades, China will become a thoroughly new form of political and economic entity. Brutally competitive in both politics and world markets, innovative and resilient, China will be more dominant than any nation save America.

Such a shift in the global balance of power occurs only about once every century and is comparable to the emergence of the US as a world power a century ago. The magnitude of this change is due, in part, to a radical and rapid shift in China's governance. Because of its suddenness, it is tempting to write this shift off as a fluke. But China's restructuring is permanent and will affect every aspect of its national life, as well as its global standing.

The People's Republic now embodies two systems: the centralized, autocratic Communist administration, dominated by an outdated ideology and military interests, and the decentralized free-market economic regime. Whether deliberately or not, China is reorganizing itself to balance central authority and common purpose with decentralized freedom, in the same way that nimble companies balance home-office and divisional control. The result is an entirely new geopolitical model--the country as corporation.