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#31
10-25-2005, 02:34 PM
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Re: When China Rules the World
And the winner for "Understatement of the Year" is...........
[ QUOTE ] Mere hurdles [img]/images/graemlins/grin.gif[/img] [/ QUOTE ] clever line, tho 
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#32
10-25-2005, 02:41 PM
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Re: When China Rules the World
[ QUOTE ]
[ QUOTE ] Backwards government? All the smart Chinese are growing the U.S.? You, sir, need to pick up an Economist / Finanical Times / really any periodical even one as lame as Time or Newsweek to get a better sense of where China is in terms of its economy, government (this is not the communist China of yesteryear, not even close), and global initiatives as it begins positionining itself as the next (perhaps only) superpower. It's still years off is my sense, but the incredible progress on the mainland - and as per capita income grows throughout the country - game over man. [/ QUOTE ] So, after 20 years they stopped actively trying to destroy their economy, and now they're no longer backwards from an economic point of view? Heavy state involvement in banks and financial institutions, bribery, corruption, intimidation of foreign investors, no political or human rights, no IP protection, fiddling with currency values, massive income and opportunity inequality between the coast and inland, no domestic consumption to drive growth... Yeah, sounds great. I feel perfectly confident projecting the growth of the last few years indefinitely into the future. Just like S. Korea, Taiwan, Singapore, and Japan. [/ QUOTE ] I don't think I ever said China is a sophisticated economy with great corporate governance and market infrastructure - I just said it was not backwards. It has taken dramatic steps through government and private investment to help build a solid economic / social infrastructure. If you believe that the last 10 years alone has not brought China up from "backwards" status to "emerging market building economy", I would have to disagree vehemently with you. You are incorrect regarding domestic consumption, or spending in general as a driver of growth. Domestic demand, particularly private / domestic consumption has been a driver of growth for China 2004 and 2005 to-date. Heavy state involvement in Chinese businesses / banks, a country with zero infrastructure, is critical to their growth. I don't see this as a negative thing, for now. You seem to list it as a major hurdle facing the country. Would you rather they be India, another country with no infrastructure, but also no driver for implementing economic policy? Most importantly, China is a far different country than S. Korea (easily understood upside in technolgoies... ever heard of Samsung?), which is far different from Taiwan, Singapore and Japan (all 3 of which are fairly mature markets). It's very odd that you would choose to lump Asian countries together in this fashion.
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#33
10-25-2005, 02:46 PM
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Re: When China Rules the World
[ QUOTE ]
The per capita income was like $200 per year just a couple years ago. That can grow by 10% a year for a very very long time before the country resembles a modern one economically. The economy is extremely highly concentrated in just a few places the whole country is trying to get into, but can't. They need more taking over of the guys who really knew how to do it, like Taiwan, they way they did Hong Kong. It's like Einstein being ruled by a cage full of monkeys. [/ QUOTE ] Good point (re- evaluating China as a modern economy). However, I think per capita income in China is a somewhat misleading figure in terms of judging whether or not China is a significant economy and potential superpower. With a market this incredibly large, there just needs to be enough spending power to have significant global impact. Mainland gets the job done. I think China will be judged on its global impact / position, not on the success of the coastal provinces, for now. But as the coastal per capita income grows, imagine the market power of China... disturbing... China is obviously years away (as I stated in my original post), but again, I would disagree that it's a backwards economy, and is beginning to resembling a modern economy.
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#34
10-25-2005, 02:54 PM
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Re: When China Rules the World
[ QUOTE ]
clever line, tho [/ QUOTE ] Thanks. I actually spent a good deal of time studying it in undergrad, and it certianly was an understatment. They are facing some pretty serious problems. The truth is that China has done amazing ever since Deng took over--much better than anyone could have imagined, China is definitely on shakey ground. The one thing that is particulary troubling is the disparity of wealth between the urban areas and countryside. This is the stuff that revolutions are made of.
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#36
10-25-2005, 03:24 PM
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Re: When China Rules the World
[ QUOTE ]
I don't think I ever said China is a sophisticated economy with great corporate governance and market infrastructure - I just said it was not backwards. It has taken dramatic steps through government and private investment to help build a solid economic / social infrastructure. If you believe that the last 10 years alone has not brought China up from "backwards" status to "emerging market building economy", I would have to disagree vehemently with you. [/ QUOTE ] Well then you vehemently disagree with me. WSJ published an interesting account of Rupert Murdoch's efforts to invest in China. As a free media proponent who had claimed that his satellite network was a threat to totalitarianism everywhere, he was much disliked by China. Shortly after that speech, private ownership of satellite dishes was outlawed. Gaining permission to do business there required an elaborate series of kowtowing and obsequiousness to various party officials. Despite its growth, China is in no way comparable to a modern economy. At the moment, growth and foreign investment proceed anyways, just because there is so much opportunity for profit. As China joins the ranks of developed nations in terms of domestic costs, labor costs, etc., opportunities will decrease to the point that they no longer compensate for the risks and costs of gov't interference, bribery, theft of IP, or de facto confiscation. [ QUOTE ] You are incorrect regarding domestic consumption, or spending in general as a driver of growth. Domestic demand, particularly private / domestic consumption has been a driver of growth for China 2004 and 2005 to-date. [/ QUOTE ] Source? I am aware they've been trying to break out of the classic export reliance that characterizes a lot of E. Asian economies. It remains to be seen how successful they have been and will continue to be. [ QUOTE ] Heavy state involvement in Chinese businesses / banks, a country with zero infrastructure, is critical to their growth. I don't see this as a negative thing, for now. You seem to list it as a major hurdle facing the country. Would you rather they be India, another country with no infrastructure, but also no driver for implementing economic policy? [/ QUOTE ] India is accomplishing a good deal with purely private venture capital and other forms of non-state financing. The short-term results may be less impressive, but how comfortable would you be running a business with the Chinese government as a silent partner? [ QUOTE ] Most importantly, China is a far different country than S. Korea (easily understood upside in technolgoies... ever heard of Samsung?), which is far different from Taiwan, Singapore and Japan (all 3 of which are fairly mature markets). It's very odd that you would choose to lump Asian countries together in this fashion. [/ QUOTE ] As you may or may not be aware, SK, Singapore, and Taiwan are three of the four "Asian tigers" which experienced massive growth in past decades which has recently slowed, in part because of government intervention in currency. Japan of course was the last country that was a huge peril to US economic hegemony. We all know how that turned out... Got to run, but I have a couple more things to say about export dependence.
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#39
10-25-2005, 03:30 PM
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Re: When China Rules the World
[ QUOTE ]
This is the stuff that revolutions are made of. [/ QUOTE ] If only that were true. I can't help but keep remembering a snippet on one of the news networks. Either during or just after the Tiannamen Sq. "ruckus," reporter stops an old man on the outskirts of town, riding his bike back home. When asked his opinion of the "ruckus," the old man said, "That's city business. It doesn't concern me." And that, to this day bothers me. If he was anywhere near voicing the popular opinion of the people living in the countryside, where the majority is, there won't ever be a successful revolution. And their struggle to merely survive will continue. And their "leaders" will continue to live the good life. [img]/images/graemlins/frown.gif[/img]
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#40
10-25-2005, 03:34 PM
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Re: When China Rules the World
Revolutions come from the middle class, usually, not the poor. The poor are usually just trying to scrape by and terrified that any change will only make things worse and wipe them out completely. Plus it's hard to organize and agitate when you're working 12 hour days and it's all you can do to cram some food in your face at night before you flop down exhausted. What the poor often really want most of all is a little more food or rest, not to gamble what little there is of their meager lives on what change might bring. The peasant is often a born conservative.
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