Global Glance: June 27, 2016

A quick look at intriguing international stories

By John Bostwick, Managing Editor, Radius

Welcome back to Global Glance. This week we look at:

• A workplace spanking incident in China
• A new survey showing Asia-Pacific as the new epicenter of the rich

China’s Workplace Spanking Incident

You may have seen a viral video out of China last week showing a bureaucrat in belted slacks and a pressed shirt moving up and down a line of eight people standing inert on a stage, spanking them with what looks like a fraternity paddle. But if you haven’t heard the accompanying audio, you haven’t gotten the full emotional impact of the scene, as the loud smacking sounds imparted by the paddling — and captured by a cell phone many yards away — are truly sickening.

According to an AFP report that contains an embedded video of the incident, the punishment was meted out at a training session for employees of the Changzhi Zhangze Rural Commercial Bank. The victims had apparently lost a competition at the session. An article in The South China Morning Post reports that the paddle-wielding trainer is a certain Jiang Yang, who works for something called the Shanghai Hongfeng Leadership Academy. The “academy” reportedly charges about $15,000 (100,000 yuan) a day for their services, which I’m guessing don’t include trust falls and the name game. According to the Post, Jiang gave an apology online after the video was posted, but added that spanking was “one of the most effective ways to raise consciousness.”

According to all the accounts I’ve read, the video has not gone over well with social-media users in China. A BBC.com piece, for instance, indicates that “people online have been expressing outrage over the treatment of staff,” with one user on a service similar to Twitter quoted as commenting, “Since when does beating employees become a way of raising performance?”

The outcries speak to the evolution of China's workplace culture. But the video is evidence that that culture is still in some ways different from that of the US and many other developed nations. An article in Shanghaist, for example, reports that the treatment in the video is not an isolated incident in China: “Employees who have fallen short of expectations have also been made to crawl around a lake, kowtow to their bosses and kneel on the ground for 60 minutes as punishment.”

An article in The New York Times on corporal punishment in China puts these cases in a wider context. It notes that while corporal punishment was outlawed in China’s schools in the 1980s, the practice of cursing at and hitting children “remains widespread.” A professor from the East China University of Science and Technology is quoted as saying, “The problem is linked to culture. … Chinese culture is very tolerant of it.” The Times adds that “abused children are prone to abusing others when they grow up.” The article is about domestic violence (against children and spouses), but “abusing others” in this case logically extends to workplace abuse as well.

For more on China’s workplace culture and its evolving labor movement, check out the December 28 edition of GG.

New Survey Shows Asia-Pacific Is the New Epicenter of the Rich

Last Thursday the French consulting and tech services company Capgemini released its World Wealth Report for 2016. The survey looks at the prevalence of high-net-worth individuals (HNWIs) by global region, defining those individuals as having more than $1 million in investable assets, excluding certain assets such as primary residence. The report is largely intended as resource for financial firms looking for hotbeds of well-heeled prospects.

A press release summarizing the report’s findings indicates among other things that while the global increase of these HNWIs was a modest 4%, the Asia-Pacific region had a 10% growth in this area. The release says that in the 20 years since Capgemini has produced these reports, “this is the first time that Asia-Pacific is ahead of North America for both HNWI wealth and population.”

Financial firms will not be shocked by this revelation, which is the culmination of a years’ long trend. The release notes that the number of HNWIs and their wealth in Asia-Pacific has actually doubled over the last decade. The region’s growth in wealth in 2015 was nearly five times that of North America, and its growth in the number of HNWIs last year was nearly twice that of Europe. The disparities between Asia-Pacific and Latin America were even greater. The number of HNWI’s in Latin American was down 8% and the wealth in that region down 6%, due largely to problems in Brazil. The release observes that “Japan and China stand out as [Asia-Pacific’s] dynamos, driving almost 60 percent of global HNWI population growth in 2015.”

Barron’s covered the World Wealth Report last week. That article notes that a similar report released this month — the Boston Consulting Group’s Global Wealth 2016 — separates Japan from the Asia-Pacific region and includes all private households, not just HNWIs. Needless to say, this can lead to confusion when trying to compare the reports or when making long-term predictions from them. The article also notes that despite Japan’s description as a “dynamo” of HNWI production, Japan’s citizens allocate on average 34% of their wealth to cash, the highest percentage in the world. David Wilson, a rep from Capgemini, told Barron’s that due to the propensity to hold lots of cash and “an older, less entrepreneurial population, Japan is not expected to be a growth driver in the years ahead.” As for the rest of the Asia-Pacific region, “Capgemini says even conservative estimates see the region’s wealth growing by 7% annually to $34 trillion by 2025.”

BBC.com also covered the story. That piece ends on an interesting tangent, noting that this year, “Oxfam found that the richest 1% now have as much wealth as the rest of the world combined,” and that “the 62 richest people in the world are worth more than the poorest 50%.” Given current world population numbers, that means that if the world’s poorest 3.7 billion people pooled their wealth, they still wouldn’t have as much as the world’s 62 richest individuals.