Wednesday, January 26, 2011

TED: Understanding the Rise of China


Speaking at a TED Salon in London, economist Martin Jacques asks: How do we in the West make sense of China and its phenomenal rise? The author of "When China Rules the World," he examines why the West often puzzles over the growing power of the Chinese economy, and offers three building blocks for understanding what China is and will become.

31 Comments:

At 1/26/2011 4:28 PM, Blogger Len said...

Will we finally be able to get good egg rolls?

 
At 1/26/2011 5:10 PM, Blogger Benjamin said...

Hey, this is the internet age. Not going to watch some 20-minute video.

Please boil down to one minute highlight film.

Botom line, what did the dude say?

 
At 1/26/2011 5:21 PM, Blogger Rufus II said...

He was just babbling. A bunch of stuff we already knew.

China has the same problem All commie countries have - They can't feed their people. Add this to their need to import more, and more oil, and coal every year, and they'll probably "hit the wall" before 2015.

 
At 1/26/2011 6:16 PM, Blogger Benjamin said...

Rufus II-

Look at temp maps today for China and SE Asia--Thaiand is warm and China is freezing. Therein lies the tale.

Hard to grow much in the snow.

Look for an economic boom in SE Asia.

 
At 1/26/2011 6:53 PM, Blogger Che is dead said...

"China is not like the West, and it will not become like the West." - Martin Jacques

This is absolutely true. Name a single product that was conceived, engineered, produced and marketed in China that the rest of the world wants to buy. China is a kleptocracy. It's advance seems sudden only because it has been able to exploit technologies that western nations had already developed. Hardly the foundation for the dominate world economy.

In order for China to advance beyond simply being a provider of slave labor, the Chinese will have to create. In that regard, I think that the West's position is relatively secure. The Chinese governments paranoia prevents the free exchange of ideas, making creative cooperation difficult. And China's pervasive corruption and it's lack of respect for intellectual property serve to sap creative initiative. So, in this regard, unless they become more like the West, they will be eternally condemned to second place.

 
At 1/26/2011 7:06 PM, Blogger Che is dead said...

"The Chinese state enjoys more legitimacy and authority amongst the Chinese than is true with any western state." - Martin Jacques

How does he know this? The Chinese people have not expressed their support for the state's "legitimacy and authority" at the ballot box. Last year alone there were more than 100,000 illegal protests against the state in China, many of them deadly. Does a a legitimate state have to press it's boot against the necks of it's own people?

 
At 1/26/2011 7:13 PM, Blogger Rufus II said...

Uh, Benny, it's called "Winter." Happens about this time every year in China - just like it does in Iowa.

They have a lot of good farmland in China, Benny; it's just that, to give an example, they plant, and harvest most of their corn By Hand.

Commies cain't do Ag. Nowhere.

 
At 1/26/2011 7:15 PM, Blogger Rufus II said...

Che,

Gunpowder. ;)

 
At 1/26/2011 7:16 PM, Blogger PeakTrader said...

China's and India's GDPs will likely surpass U.S. GDP only because of their large populations.

However, from prior conversations, it seems, the Chinese are delusional about their "superior" civilization.

For example, here's what someone in China said about China's economic theories:

"China's policy makers are masters in making economic policies for a transferring economy. In this field, U.S can not give any advice but only a pupil.

...China's nice economic polices such as 8 employees theory; cat theory, stone theory, SEZ theory, tier development theory, three representitive theory.

Let's sample "8 theory" as it clarifies that it is socialism not capitalism if you are employeeing 8 staffs or below, the policies was implemented in Year 1988, economy was then booming contributed to the theory, hahaa!!

Cat Theory - It doesn't matter if it is a suboptimal economic policies or optimal economic policies, as long as it escalates economic growth, it is good policies.

No-argument thought - Do not debate this anymore."

Here's what someone else in China said to me when I questioned some of his "economics":

"Arthur, you are the most ignorant and arrogant American I have come across with."

 
At 1/26/2011 7:19 PM, Blogger Che is dead said...

I noticed that at the end of his talk he held up a picture showing a large Chinese junk juxtaposed against one of Columbus's ships, as if it's size were an indication of Chinese technical superiority. Well, as one historian put it:

... "the reason they built very big ships was to impress the locals, not because of any technological superiority. Wooden sailing ships of more than about 2000 tons burden have severe technical problems and are less seaworthy than those of more moderate size; that's why a 2000-ton ship remained "very large" well into the 19th century, when iron and then steel frames and hulls became available. The finest of the China tea-clippers, the Cutty Sark, was around 900 tons displacement."

"Even in the late 1400's, European ships were more efficient and the advantage increased over time. Eg., the 'water-tight compartments' of Chinese junks were of value only when the ship hit a rock. In between, they meant that the vessel couldn't have a gun deck, and that moving cargo around was much more cumbersome."

Mr. Jacques seems rather easily impressed.

 
At 1/26/2011 7:29 PM, Blogger Che is dead said...

Adjusting for GDP (Purchasing Power Parity) on a per-capita basis, China (at $6,567) has a long way to go before it achieves "superpower" status, considering that it ranks #102 according to the CIA, #99 according to the IMF, and #92 according to the World Bank. In fact, on a per-capita basis in 2009, China ranked behind Namibia, Jamaica, Belize, Thailand, El Salvador, and Albania. And the last time the U.S. had per-capita GDP of $6,567 was back in 1932. - Mark Perry

 
At 1/26/2011 8:13 PM, Blogger AIG said...

"It's advance seems sudden only because it has been able to exploit technologies that western nations had already developed. Hardly the foundation for the dominate world economy. "

Korea and Taiwan 50 years ago were also making plastic trinkets with outdated western technology. We should always be careful when predicting the future.

"the Chinese will have to create. In that regard, I think that the West's position is relatively secure."

Its only as secure as we can keep it. Did you hear Barry yesterday? I'm not confident that with a government economic policy, and this government, we can keep much of anything.

"The Chinese governments paranoia prevents the free exchange of ideas, making creative cooperation difficult. "

I don't think their control or paranoia is as bad as you describe it. When it comes to making money, the Chinese don't let a small thing like government paranoia get in the way.

"So, in this regard, unless they become more like the West, they will be eternally condemned to second place."

They know that too. Thats why they send their kids to our universities.

"The Chinese people have not expressed their support for the state's "legitimacy and authority" at the ballot box."

Even the Chinese I have talked to here in the US, while acknowledging that capitalism is clearly the way to go, have a paternalistic regard for their government. I can't tell what that will mean in the future about economic growth, but its not pretty when it comes to military and nationalistic growth.

"it's just that, to give an example, they plant, and harvest most of their corn By Hand."

You sure about that? China certainly has a lot of room to improve its food production, but it will.

"it seems, the Chinese are delusional about their "superior" civilization."

Indeed. But thats just being high off the fumes of growth. The Chinese know they are critically backward culturally and socially. They can see their cousins in Hong Kong and Taiwan. But this argument doesn't exclude the fact that they are changing, fast.

"In fact, on a per-capita basis in 2009, China ranked behind Namibia, Jamaica, Belize, Thailand, El Salvador, and Albania."

Yes but the USSR's per capita GDP in 1989 ranked behind Czechoslovakia, Poland and East Germany; and was about 1/3 of the US. If the military aspect wasn't figured into the equation, the growth of China would have no negative aspects at all.

--------------

While the talk was "more of the same", I think we need to focus on our own inadequacies and the fact that we are letting ourselves slip behind. We're letting our youth turn into a bunch of yuppies with job prospects only in coffee shops, we're taxing ourselves to a slow death, we get memorized by politicians of all creeds...and we find solace in finding a "common enemy" to pin the blame on (speaking very broadly). I've been through that in Europe,and its a self-defeating approach.

 
At 1/26/2011 8:31 PM, Blogger Benjamin said...

Rufus:

Winter? You mean it is not cold there all the time? I am from Los Angeles, you know.

Che:

It all depends if the commie-fascist regime in China takes the next step to a free democratic society.

As for items invented etc produced in China, almost anything today evolves globally.

Is there anything invented and made only in the USA anymore? Computers? Cars? Airplanes?

I think China is far better off than thug states with their oil btw. Oil states seem to sink into crap thanks to easy money and corruption.

The next 20 years will be interesting. If China keeps growing, then it will swamp us, and the Far East will experience an economic boom that will dwarf all previous booms.

I suspect they will have to become a free and open society to get there.

 
At 1/26/2011 9:01 PM, Blogger Rafael Guthmann said...

China is already a larger economy than the US in many respects. Car sales in 2010 totaled 18 million in China, while in the US car sales were only 11.5 million. This indicates that the number of Chinese with the purchasing power to buy cars is greater than the American.

Also, according to some PPP estimates, Chinese GDP in 2010 was 14.8 trillion, while US was 14.6 trillion (depending on the methodology, most estimates put it at ~10 trillion).

 
At 1/26/2011 9:10 PM, Blogger AIG said...

"This indicates that the number of Chinese with the purchasing power to buy cars is greater than the American."

No it doesn't.

 
At 1/26/2011 10:38 PM, Blogger NormanB said...

The fixation of intellectuals with some form of command economy belies reason for they have a great example, America, that became the most economically country the world has ever seen on a per capita GDP basis. We are even 30% above the best that Europe has to offer.

I was around when these same accolades were heaped on the Japanese (remember Japan Inc.?) and have read about the glowing reports from liberals about the power of the USSR which continued into the 1980's.

There is no way a small group of people can allocate resources efficiently. What works is that the multitudes through free market pricing produce maximum economic efficiency.

China will at best top out and at worse nose-dive like the other two did as their failings finally come into view.

 
At 1/27/2011 12:24 AM, Blogger nightlysok said...

Building blocks??? Jacques acts like the Chinese did something on their own due to cultural significance or phenomena.

If China has been so 'great' for two thousand years vs the Romans, then why did the Japanese invade, rule and occupy them less than 80 year ago?

The building blocks that rebuilt them were the American army defeating the Japanese, and the American consumer buying their cheap goods and American industrial engineering showing how to make those goods; all due to American free markets, and low government intervention. Of course it looking more and more like a command economy in the states with the Obama-socialists taking over.

 
At 1/27/2011 4:04 AM, Blogger PeakTrader said...

PPP doesn't take into account quality differences. That's why many Chinese shop at Wu-Mart instead of Wal-Mart, which they consider a luxury store.

Here's what Xinhua reported about China's per capita GDP:

China's per capita GDP to hit US$3,000 by 2010
2008-01-04

BEIJING -- China's per capita GDP will reach 3,000 US dollars by 2010...would reach 6,000 US dollars in 2020 if it maintained the current growth rate.

The country's per capita GDP had grown by about 200 US dollars annually in the last two years to 2,200 US dollars in 2007.

My comment: The Chinese were adding $200 a year to real per capita GDP (at $2,000, or 10% growth), while the U.S. was adding $1,000 a year to real per capita GDP (at $45,000, or 2% growth).

Remarkably, in a labor abundant country, China had a labor shortage recently. So, it seems, China has already reached some barriers to growth, which should worsen as its population ages (from its one-child policy).

 
At 1/27/2011 5:41 AM, Blogger Dityo Ramadhani said...

This comment has been removed by the author.

 
At 1/27/2011 7:21 AM, Blogger Dityo Ramadhani said...

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At 1/27/2011 1:43 PM, Blogger sethstorm said...


PeakTrader said...

...and that is one good reason why I have my contempt for their economic system. And for those in the US that decide to use it as a way to get around our laws.

 
At 1/27/2011 1:46 PM, Blogger sethstorm said...


nightlysok said...

China is worse off in that regard, since criticism of their government or business tends to be a life-ending move.

They aren't Communist, they aren't capitalist, but they're the worst of both mixed together.

 
At 1/27/2011 2:04 PM, Blogger Ron H. said...

"...and that is one good reason why I have my contempt for their economic system. And for those in the US that decide to use it as a way to get around our laws."

sethstorm!! You're back. I was afraid you had gotten a job, and no longer had time for us.

 
At 1/27/2011 3:23 PM, Blogger Sean said...

Fascinating. Thanks for the link.

 
At 1/27/2011 3:41 PM, Blogger Michael Hoff said...

AIG:

"They know that too. Thats why they send their kids to our universities."

HA! Big mistake! That won't make them more western. That'll make them more communist.

 
At 1/27/2011 6:03 PM, Blogger juandos said...

"China's and India's GDPs will likely surpass U.S. GDP only because of their large populations"...

Hey PT or anyone else for that matter, do you know if China and or India have saddled themselves with 'nanny state programs' that eat up as much of their budgets as it does ours?

 
At 1/27/2011 6:15 PM, Blogger Ron H. said...

Rafael Guthmann said...

"China is already a larger economy than the US in many respects. Car sales in 2010 totaled 18 million in China, while in the US car sales were only 11.5 million. This indicates that the number of Chinese with the purchasing power to buy cars is greater than the American."

AIG responded:

"No it doesn't."

In case that's just a little TOO concise, I will elaborate. I hope he doesn't mind, and if he does, I'm sure he'll let me know.

There are 50 million cars in China, and 250 million in the US. That probably means that 5 times as many people in the US can afford cars as in China.

the 18 million new cars sold in China are mostly additions that haven't existed before. The 11.5 million in the US are mostly replacements for existing cars by people who can already afford one.

 
At 1/28/2011 2:03 PM, Blogger . said...

I'm glad that the terribly undemocratic situation in which improvements in medicine, technology, manufacturing, agriculture, and other areas that have been driven by people in the less-populated west and shared with people in other places will finally come to an end. As humanists, we can all applaud that, certainly. I'm also glad that the western notion of individual freedom will be put in its place -- how arrogant for such a concept, which has always been outnumbered by the practice of tyranny and statism, both across geographies and across centuries, to exercise an influence all out of proportion to the numbers. As humanists, we can all applaud individual freedom taking a back seat to the squalor and oppression that far more people have experienced. Nasty brutal and short -- that's my motto.

 
At 1/29/2011 12:45 PM, Blogger Che is dead said...

China has blocked the word "Egypt'' from the country's wildly popular Twitter-like service, while coverage of the political turmoil has been tightly restricted in state media.

China's ruling Communist Party is sensitive to any potential source of social unrest.

A search for "Egypt'' on the Sina microblogging service brings up a message saying, "According to relevant laws, regulations and policies, the search results are not shown".

The service has more than 50 million users.

Egypt not trending in China, AP

Legitimacy and Authority

 
At 2/02/2011 11:31 AM, Blogger Tylerrapi506 said...

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At 2/03/2011 1:16 PM, Blogger smd said...

Is this what an economy that will surpass the US does with all that extra cash?

Chinese Ghost Towns

 

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