The China challenge

Just watched Yang Lan’s excellent talk on re ‘The generation that’s making China’.  Echoes much of what Martin Jacques writes about in ‘When China Rules the World‘.

Interesting to think about the challenge of having 200m migrant workers in your country – people who have moved from rural areas to work in cities – where they have less rights, less social welfare support and high accommodation costs.  Within the general population of younger people we also have a disproportionate number of males – because of previous government policy of one child per couple and abortions being used to ensure families had a boy in many instances.

When we read that the US is continuing to push for appreciation of the renminbi (which is ongoing) interesting to think what the impact will be on the 200m migrant workers as the factories for which the work become less competitive.

In the talk Yang Lan gives some feel for the challenges facing this Chinese youth.  The numbers are staggering – even in terms of the examples given re use of social networking or micro-blogging, number of followers for individual movie stars, etc.


Who is afraid of who?

I hear plenty of discussion about people’s concerns over security of data in the cloud. We actually have lots of legislation about where personal data can be held.  And we, in Ireland, tend to think in terms of it’s being OK so long as within Ireland, then Europe and then US.

Interesting piece in today’s FT referencing concerns in US about potential purchase of Yahoo by a Chinese company. Seems they have also had concerns about Deutsche Telekom acquiring a carrier in the US.  And the final reference in the article to concerns re the volume of data now held by Google.

This is moving quickly.  Privacy is on the line.  Many of us are using all sorts of cloud based services to support us in our work and our personal lives.  To be honest most users have no idea(and less interest) in where the data is held.  At least until Facebook is so on our faces in changing the rules as they see fit.

I suspect Chinese and US authorities (and many others) already have very detailed profiles on many people based on online activity.


Some background to China

Excellent history of China

The Ming Empire without its "vassal state...
Image via Wikipedia

Recently read Chinamerica and reviewed here.

I was looking for a basic history book to provide some insight into modern China.

Just read Patricia Buckley Ebrey’s ‘Cambridge Illustrated History – China’ (2nd Edition).  Would recommend this to anyone looking for an outline history.  Not that one reading of 360 odd pages makes for an expert on China.  But it certainly helps in trying to understand some of the background to what is modern China.

Reminds me of how little I learned about China during my school days.  And how we were programmed to measure China’s progress in terms of how it imitated Western culture.  Wrong approach.

Interesting to walk through the different dynasties – their rise and fall (Tang, Song, Liao, Jin, Yuan, Ming, Qing) – through to Mao and modern China.

Now looking forward to reading ‘When China Rules the World’ – having read the background history.


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Review: Chinamerica: Why the Future of America is China

Interesting assessment of the divergence in industrial and economic development between the US and China in the last 10-15 years.

Name:  Chinamerica: Why the Future of America is China

Author:                Handel Jones

ISBN 978-0-07-174242-9

In many respects this book seemed to me to describe the natural follow on from much of what Tom Friedman had pointed out in his excellent work, The World is Flat.  China’s wealth is growing – and with it, its influence and power.  America’s preeminent position on the world stage is under threat, slipping and, in some fields, gone.

We are familiar with the themes: hard work and ambition, flexible labour force, growing population, currency manipulation, lack of respect of intellectual property rights, powerful, central control, controls over imports, growing foreign currency and gold reserves.  Jones provides interesting commentaries on developments in specific industries: automobile, electronics (including contract manufacturing), steel and software.  He also deals with the assimilation of Hong Kong and forecasts a future assimilation of Taiwan – driven by economic imperatives on both sides.

With respect to the US Jones has a number of concerns, including: non competitiveness, lack of commitment to research, disproportionate influence of the agriculture lobby, slipping educational standards.  Most importantly he sees a lack of strategic (medium and long term) planning in the context of competing with China (and other countries).

Living in Ireland I was particularly struck my Handel’s analysis of the educational backgrounds of top leaders in China (pp142-145).  The group is dominated by people with engineering and science backgrounds.  Perhaps this explains the target of 1,000,000 engineering graduates per annum by 2015.  In Ireland we seem to specialise in having governments dominated by teachers, lawyers and accountants.

The automobile industry is an excellent example of contract between US and China.  The US industry has recently been bailed out.  It is crippled by high costs – including the health benefit costs associated with retired workers.  China is currently ahead of its plan to build 15,000,000 cars and trucks per annum by 2015.

China is not without its challenges – in terms of mass poverty, underdeveloped rural society, rising expectations of its people, creating work for its people, competition from other countries, requirement to improve quality of its products.

Jones has not given up the ghost on America.  But he sees a need for change – and outlines this in his 8 point ‘restructuring plan’ – to include:

  • 5 and 10 year planning
  • National metrics
  • Financial support for building corporations to compete
  • Cuts in social spending
  • Financial incentives to increase exports
  • Tax subsidies to build new industries
  • Efficient manufacturing within US

In conclusion Chinamerica provides a useful comparison between industrial and economic growth in America and China over the last 10-15 years.  Jones provides useful insights into the reasons for the divergence and proposes a number of actions required to be taken in order for America to compete on a level playing field.  Will be very interesting to watch how this plays out in the next 5 -10 years.

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