"Made in China" doesn't mean what it used to. Manual labor from the country's 1.3 billion citizens was long considered its sole competitive advantage in the global economy. While American business has turned a blind eye, the country's burgeoning skilled work force now stands as its biggest competitive threat. How did this happen?

Too much Walmart.

Americans love to fixate on their largest (in terms of sales) company, and, when it comes to Walmart and China, their focus is stuck on the cheap labor that brings $25 billion annually in Chinese goods. Today, Chinese business is powered by the leadership required to take hold of sectors like finance, telecommunications, and computing. Surprised?

You shouldn't be. A decade has already passed since Lenovo acquired IBM's personal computing division, and every year U.S. investors scramble to get in on new Chinese IPOs. The sleeping giant is stirring.

What are business leaders in China doing that Americans aren't? A great question and one that TalentSmart researchers grew tired of asking. So, they spent a summer measuring the leadership skills of 3,000 top Chinese executives from the public and private sectors. The executives completed the Chinese translation of the American EQ test, the Emotional Intelligence Appraisal. The researchers compared the Chinese executive's scores with those from a matching sample in the U.S.

Emotional intelligence, or EQ, has been the subject of a flood of research during the last decade. It's the single-biggest predictor of a leader's success, regardless of industry. EQ is that "something" that is a bit intangible in each of us. It gives a succinct name to how we manage behavior, navigate social complexities, and make decisions that achieve positive results. And today, it can be measured.

The TalentSmart study revealed American executives lag far behind the Chinese in the two, most critical EQ skills: self-management and relationship management. In a nutshell, these skills amount to a key ingredient in China's economic success and a serious threat to America's ability to compete in the global marketplace: discipline.

American executives average 15 points lower than the Chinese in the EQ skills that have the strongest ties to job performance. Scores in self- and relationship management capture an executive's ability to use emotions to his/her benefit in managing time, making sound decisions, and relating to others. It appears that Chinese executives use these skills to their benefit at work--and in business, actions speak louder than words.

What is it, specifically, that Chinese executives are doing that Americans aren't? They are living the qualities that American executives only pay lip service to. The typical American leader is not willing to expend much energy in seeking feedback, getting to know his or her peers, and following through on commitments for the sake of others. Making business personal is nothing new in China. Executives ordinarily schedule dinner meetings with their staff to talk about business trends, career aspirations, and family. People expect their leaders to set an eminent example in how they make decisions, connect with others, and improve. There is genuine shame in not fulfilling these duties, because people really care about them--everyone knows it's important.

The most successful leaders maximize their EQ, because those who employ a blend of reason and feeling earn the greatest results.