Tag: China

Our New “Gilded Age”

The Boomers have been a terrible generation of political leaders. As in the case of most revolutionary generations in history, once the initial stab at change in their youth fell to the wayside, the real talent went into business and technology and changed the world–dramatically–for the better. The dregs went into politics and, in the process, have managed to thoroughly discredit it as a career and force for good in our society.

Last time it was this bad in America was those latter decades of the 19th century. The “revolution” then was the U.S. Civil War, and the crew that came out of that crucible was dramatically altered in character and vision and–most importantly–in personal connections. The bonds forged by war led to a lot of follow-on business development during a great and lengthy boom time. But it was an era much like today: frontier integration thanks to a rapidly expanding continental economy, the knitting together of a sectional economy into world-class “rising China” of its age, huge flows of people and FDI into the country–a miniature version of today’s globalization.

And during that age of booms and busts and the early populism that accompanied it, politics became a very dirty profession, so much so that when progressive icon TR decided to step into the fray, his wealthy NYC family begged him not to do so–it was considered such a huge step down from respectable obscurity. Few of us came name any politicians from that era (distant relation Grant being my favorite), but we all remember the industrial-financial titans, whose very names equal wealth: Rockefeller, Carnegie, Morgan, etc.

via Thomas P.M. Barnett’s Globlogization – Thomas P.M. Barnett’s Globlogization.

China Gobbles Up the World’s Copper

China is prospecting for mineral treasures around the world as it develops faster than any major economy in history. Its copper use is growing so quickly that by 2035 global demand for the metal may outstrip supply by 11 million tons, according to CRU, a London-based mining and metals consulting firm.

More than half of China’s 1.3 billion people live in rural areas. Over the next 15 years, the country will need 50,000 skyscrapers, 170 mass transit systems and urban housing for 350 million people as it develops the interior, according to a 2009 study by the McKinsey Global Institute, a research arm of New York-based McKinsey & Co. That represents a potential doubling of the domestic market for autos, appliances, televisions and other consumer goods.

Copper—first smelted over wood fires 10,000 years ago—is at the center of it all, conveying the country’s electrical pulse and providing the nervous system for the computers, dishwashers and microwaves China makes for the world.

via China Boss in Peru on $50 Billion Peak Bought for $810 Million – BusinessWeek.

China Abandons The Abacus

China said today that it’s raising interest rates by a quarter of a percentage point.

That’s a big deal. China hasn’t raised interest rates since 2007, and the move is a sign of strength for China’s economy.

One interesting detail: It’s the first time in modern history that China’s central bank made an interest-rate move that wasn’t a multiple of .09.

“The reason is that on the abacus, adding multiples of nine was much easier than adding multiples of 10. So the modern People’s Bank of China inherited that special character from the old days,” an economist with Citigroup in Beijing told Reuters. Continue reading “China Abandons The Abacus”

Here Comes The China Navy

China has the world’s second-largest naval service, after only the United States. Rather than purchase warships across the board, it is developing niche capacities in sub-surface warfare and missile technology designed to hit moving targets at sea. At some point, the U.S. Navy is likely to be denied unimpeded access to the waters off East Asia. China’s 66 submarines constitute roughly twice as many warships as the entire British Royal Navy. If China expands its submarine fleet to 78 by 2020 as planned, it would be on par with the U.S. Navy’s undersea fleet in quantity, if not in quality. If our economy remains wobbly while China’s continues to rise — China’s defense budget is growing nearly 10 percent annually — this will have repercussions for each nation’s sea power. And with 90 percent of commercial goods worldwide still transported by ship, sea control is critical.

The geographical heart of America’s hard-power competition with China will be the South China Sea, through which passes a third of all commercial maritime traffic worldwide and half of the hydrocarbons destined for Japan, the Korean Peninsula and northeastern China. The United States and others consider the South China Sea an international waterway; China considers it a “core interest.” Much like when the Panama Canal was being dug, and the United States sought domination of the Caribbean to be the preeminent power in the Western Hemisphere, China seeks domination of the South China Sea to be the dominant power in much of the Eastern Hemisphere.

via Robert D. Kaplan – While U.S. is distracted, China develops sea power.

China Grows Protectionist Alienating Business Supporters

In some ways, I do think the Chinese government has been pretty stupid over the past year in executing its “Pissing Off As Many Countries As Possible” strategy. China rankled the Europeans over its climate change diplomacy at Copenhagen. For all of Beijing’s bluster, it failed to alter U.S. policies on Tibet and Taiwan. It backed down on the Google controversy. It overestimated the power that comes with holding U.S. debt. It alienated South Korea and Japan over its handling of the Cheonan incident, leading to joint naval exercises with the United States — exactly what China didn’t want. It’s growing more isolated within the G-20. And, increasingly, no one trusts its economic data.

This doesn’t sound like a government that has executed a brilliant grand strategy. It sounds like a country that’s benefiting from important structural trends, while frittering away its geopolitical advantages. Alienating key supporters in the country’s primary export markets — and even if Chinese consumption is rising, exports still matter an awful lot to the Chinese economy — seems counterproductive to China’s long-term strategic and economic interests.

via Beijing has alienated the most pro-China interest groups in the United States and Europe | Daniel W. Drezner.

Suicidal iPad Makers

Ask around among the more than 250,000 workers at the Shenzhen complex, and you’ll find explanations. One 21-year-old assembly-line worker, who asked that his name not be used, says conditions at Foxconn, the world’s largest electronics contract manufacturer, make his life seem meaningless. He says conversation on the production line is forbidden, bathroom breaks are kept to 10 minutes every two hours, and workers get yelled at frequently. . So far this year, 10 Foxconn workers have committed suicide.

No one disputes that Taipei-based Foxconn, also known as Hon Hai, has cultivated a tough culture. The company generates more revenue in a year than Apple, Dell, or Microsoft (MSFT). It has grown in profitable obscurity to become an industry juggernaut for a simple reason, says Pamela Gordon of Technology Forecasters, a supply-chain research firm: “It’s the prices. Their prices are lower for high-quality work.” Foxconn won Apple’s order to make the iPhone after Gou directed the business units that make components to sell parts at zero profit, according to two people familiar with the chairman’s actions. Net income jumped 37 percent in 2009 to $2.3 billion, Foxconn’s second-best year on record. Foxconn’s suicides are a reminder of the human cost that can come with the low-cost manufacturing U.S. tech companies demand.

via Why Apple and Others Are Nervous About Foxconn – BusinessWeek.

Wiil China Develop Like US or Japan Did?

Is China like the US in 1890? Or is it more like Japan in 1980? If the parallel with America is right, China is likely to be the dominant power of the next century. If the Japanese comparison is more accurate, then the Chinese challenge to American hegemony could prove ephemeral.

The current mood in the US certainly feels like an exaggerated version of the “declinism” that set in towards the end of the 1980s, when the US was transfixed by the rise of Japan. A recent Pew opinion survey showed that a majority of Americans now believe that the Chinese economy is larger than that of the US. This is plain wrong. At the time the poll was taken, the Chinese economy was around half the size of America’s.

It was this kind of scare that took hold in the late 1980s. Japanese investors provoked angst by buying the Rockefeller Centre in New York – and it was Japan that was the world’s largest creditor nation. Continue reading “Wiil China Develop Like US or Japan Did?”

Goodbye America, Hello China? Think again!

About a quarter of the world's economic output is produced by the United States, whose population is less than a fourth of China's 1.3 billion. So there's a very long way to catch up for a country beset by a variety of Third World problems, from lack of paved roads in many rural areas to water pollution so severe that 700 million people have to drink contaminated water every day, according to the World Bank.

via Goodbye America, Hello China? Think again!- International Business-News-The Economic Times.

How America Can Rise Again

Is America going to hell? After a year of economic calamity that many fear has sent us into irreversible decline, the author finds reassurance in the peculiarly American cycle of crisis and renewal, and in the continuing strength of the forces that have made the country great: our university system, our receptiveness to immigration, our culture of innovation. In most significant ways, the U.S. remains the envy of the world. But here’s the alarming problem: our governing system is old and broken and dysfunctional. Fixing it—without resorting to a constitutional convention or a coup—is the key to securing the nation’s future.

via How America Can Rise Again – The Atlantic (January/February 2010).