So far in this blog, I’ve both hailed the possibility of better leaders emerging in China and railed against Chinese government repression.

aNow I hope to connect those dots. Namely, up-and-coming business leaders at multinationals in China have the power to reshape China’s social and political landscape in positive ways.

Even as those 20-, 30- and 40-somethings charge ahead with their companies and their careers, they possess—or are gaining—the intelligence, creativity and clout to improve more than just China’s business climate.

I don’t deny that that business climate alone has been good for the Chinese people. The international trade that has accompanied China’s capitalist push over the past quarter-century has led to tangible new freedoms for millions of Chinese.

And I realize China may not ever look exactly like the Western democracies—which have plenty of warts themselves. Maybe free speech and other individual rights I cherish will never be as strong in the more collective Chinese culture as they are in the United States.

Even so, there’s room for business leaders at multinationals to do more to temper the most disturbing aspects of China. These include continued factory worker exploitation, as documented late last year by BusinessWeek. And the jailing of journalists. And the mistreatment of Tibet, as highlighted in a recent Rolling Stone exposé.

That February 8 piece is replete with sickening accounts of torture by Chinese authorities and of the gradual erosion of Tibetan culture. It hit me even harder as I looked at one of the accompanying photos: an image of an Adidas shop in Llasa. As readers of my earlier blog items may know, Adidas HR executive Angel Yu has stood out for me as a prime example of a new generation of Chinese leaders who are working to combine the best of the East and the West—and who eventually may be prepared to tackle tricky global problems as never before.

I don’t know what Angel Yu thinks of the Chinese occupation of Tibet, or exactly how she can influence her country’s actions there. But it strikes me that she and other rising leaders in the business community can, over the long run, make a significant difference there and elsewhere. Perhaps in Tibet, for instance, Adidas can go out of its way to give opportunities to locals when it comes to hiring and distributing franchises. That could help counteract what appears to be a conscious Chinese policy to flood Tibet with non-Tibetans.

One other piece of the puzzle merits mentioning. Young Chinese business leaders are coming into their own just as the country as a whole is broadening its horizons globally. A recent Time magazine story on China cited a 2006 survey showing that 87 percent of Chinese respondents thought their country should take a greater role in world affairs. Most Chinese, the survey found, believed China’s global influence would match that of the U.S. within a decade.

If the 21st century is going to be, to a large extent, “The Chinese Century,” the kind of China that becomes a stronger world power matters immensely. Will it continue what appears to be its current agenda of cozying up to bad-behaving states with natural resources, such as Sudan, without pushing for reforms? Could it instead offer lessons on capitalist development combined with workers’ rights, as well as how to shift from authoritarianism to greater political openness?

I’m not alone in calling for China business leaders and their companies to embrace a kind of social responsibility. In fact, I found in my reporting that the concept of corporate social responsibility has been gathering steam in China. One company that views leadership development in a social context is computer maker Hewlett-Packard. Arthur Wei, general manager of China Hewlett Packard for Northern China, proudly told me that his firm sees itself as an “executive academy.” That is, HP aims to groom effective leaders not just for itself, but for other organizations in China.

HP wants to “grow with China” by contributing developed talent to the country, Wei says. “That’s the return to the society that we’re doing business with.”

That return is potentially powerful. At its best, HP’s corporate culture has a strong egalitarian streak, prizes integrity and, despite the recent boardroom spying flap, respects the individual.

I hope HP graduates many fine China leaders from its “academy.” And that they and other Chinese leaders now coming of age remake the country to bring out its best and jettison its worst. China needs them to do that. The whole world does.

Don’t call China a lean, mean economic machine.

Yes, it’s an economic machine, what with growth of at least 10 percent for four years running.

And it can be mean—witness the way the country violates basic human rights and has played hardball amid allegations it subsidizes exports through an undervalued currency.

But lean it ain’t. A striking feature of both Beijing and Shanghai is the way so many people are working in jobs that seem superfluous.

Private security guards are everywhere, despite little semblance of public disorder. Shops and restaurants often seem to have more people than they need. At one of the upscale Jenny Lou’s markets in Beijing, for example, three people worked at the checkout counter. One rang up sales while two handled items. This labor-intensive process wasn’t well-coordinated—there was some bumbling along the way.

The dramatic Grand Hyatt Shanghai, which is located in the Jin Mao Tower, meanwhile, had greeters at every turn. One female employee stood at the entrance to the hotel’s lobby on the 54th floor, apparently waiting for visitors to stumble out of the elevators.

You can make an argument that at luxury businesses, piles of people help ratchet up customer service. Or perhaps Chinese consumers are used to high numbers of humans staffing their shops. Excess employees may even be a strategy to please government officials, who have reason to worry about unemployment and resulting social unrest.

In any event, it seems China has a lot of fat built into it. This surprised me given the way the country has otherwise embraced capitalism.

An intriguing twist to this topic comes at the leadership level. It makes sense for executive ranks to have a deeper bench than they might otherwise have in North America or Europe, says Hong Kong-based consultant Maura Fallon. That’s because senior managers in China should ideally be spending 40 to 50 percent of their time coaching more junior leaders, she says. Without such a heavy commitment to people development, Fallon says, China operations will suffer, given the tight market for managers properly seasoned to lead in multinationals.

Many organizations expect the same amount of business decision-making on the part of their China leaders as they do elsewhere—which is misguided, she says. “Companies are so lean that the China executives don’t have time to mentor and develop relationships and trust,” she says. “In China, you can’t be as leanly staffed as you are in the West.”

Employers in China are facing challenges on the compensation front, according to two new studies. Both dovetail with reporting I did in China earlier this year.

On Tuesday, March 13, consulting firm Watson Wyatt said Chinese workers are far less satisfied with their pay and benefit packages than workers in the rest of Asia Pacific and in the United States. According to Watson Wyatt’s study of 180 companies and 60,000 employees in China, only 28 percent of mainland Chinese workers rate their compensation and benefits favorably, compared with 38 percent in Asia Pacific as a whole and 47 percent in the United States.

Faulty communication is part of the problem, according to Watson Wyatt. “[W]hile Chinese workers cite communication as a main driver of job satisfaction, many don’t know how performance is measured or receive a consistent message from their company on the link between high performance and an individual’s pay,” the report said.

Watson Wyatt’s findings are consistent with what I learned about HR departments in China. Although progress has been made during the past decade, the HR field in China is in some respects far from Western standards. That’s partly a function of history. Traditional Chinese enterprises have not had much in the way of market forces to push them to develop sophisticated compensation or performance management skills.

On Monday, March 12, consulting firm Hay Group announced forecasts of real base salary increases for administrative, professional and senior management in 2007 for 50 countries worldwide, based on employers’ projections once inflation has been considered. Hay Group said China tops the table for each of the three job categories, with a predicted a 7.9 percent increase for administrative workers, 7.8 percent for professionals and 8.9 percent for senior management.

By comparison, each of those types of workers in the United States will get real base salary increases of 1.4 percent, according to the report.

“The wealth created by rapid, focused economic development is resulting in a pay boom for Chinese and Indian workers, who will enjoy some of the largest real pay increases worldwide in 2007,” Hern Yin Goh, director of Hay Group Reward Information Services in Shanghai, said in a statement.

Hay Group’s research is in keeping with the steep pay gains for leaders I heard about in China. Helen Tantau, senior partner with executive search firm Korn/Ferry International in Shanghai, told me local Chinese leaders with good track records can expect salary increases in the 10 percent to 20 percent range.

At the root of big salary gains for execs in China is a dearth of managers there prepared to do business in an international setting, combined with strong demand for such expertise amid the country’s fast economic growth.

Even as executive pay goes up in China, Chinese workers’ satisfaction with compensation is falling, according to the Watson Wyatt report. It says that in 2005-06, 21 percent of Chinese workers gave their total compensation package (pay, bonus and incentives) a favorable rating, compared with 27 percent in 2003-04.

Beijing boasts a modern light-rail train, the latest in electronic gadgets and luxurious hotels and restaurants. And yet some aspects of the city seem straight out of the 1800s. While driving with a friend to a section of town with high-end housing, we passed a shepherd and a flock of sheep. Late-model cars share the road with people pedaling carts. At one point I watched a mule or donkey slowly pull a cart across a wide street.

At prestigious Peking University, buying a long-distance calling card on a chilly January day meant standing in an unheated room. Similarly, the restroom of a campus restaurant was in an unheated foyer. And that made visiting it an unpleasant prospect on a day when the temperature was below freezing.

It will be interesting to see the extent to which these contrasts persist as Beijing, and China as a whole, continues to boom. Will the entire society push forward into the 21st century? Will part of it remain frozen—literally—in the past?

Executives today have it good: a big salary, palatial home, good schools for the kids, world-class restaurants and a wide range of entertainment options.

That kind of luxury life isn’t just available in Los Angeles, Paris and Tokyo, though. Beijing and Shanghai have emerged as cities that offer top expatriate managers a cushy, cosmopolitan existence.

Yes, there’s the serious problem of air pollution and some missing creature comforts. For example, at a Starbucks near one high-end housing enclave in Beijing, the bathroom isn’t in the store. You have to walk outside to an unheated facility.

But that Starbucks will give you your gourmet coffee fix. And a few doors down is one of the Jenny Lou’s markets in town, where you can buy cheese and bread, wine from all over the world, and liquors as fancy as Johnny Walker Blue Label Scotch whisky.

Private schools in Beijing and Shanghai cater to expatriate families. There are a multitude of high-end restaurants. The Beijing Golf Club—one of a number of courses in Beijing and Shanghai—boasts of its view of the Great Wall.

You can catch classical and jazz concerts, even some rock ’n’ roll. Eric Clapton recently played Shanghai.

The quality of life is such that expatriates’ pay in China is coming under scrutiny. Like many expats, U.S. executives in China typically make more than their counterparts at home, thanks to a number of factors. These include reimbursements for children’s school tuition and “hardship pay” for living in a difficult place.

Like the hardships of golf, jazz and premium whisky?

“Companies are becoming smarter about how they manage expats in China,” says Eric Fiedler, consulting firm Hewitt’s regional director for the Asia-Pacific region. “Shanghai is really no longer a hardship posting.”