The Future of China's Economy

The Future of China's Economy Well, China celebrates 30 years of reform. So in 1978, it opened up the economy and so this is the 30th year anniversary. It’s a very, very big year in China and everybody in China from the lowliest worker to the to the top entrepreneur or manager has seen what China has done over 30 years where literally hundreds of millions of people have been lifted out of poverty and now they are just very visible signs of wealth’s all over the country. You do not think over again, probably in the last five years that’s probably been the single biggest change as how much wealth has been created in the country so everybody sees it. Everybody wants to participate. Everybody is, first of all, they’re very proud of what their country has done. Very optimistic about the future and they all want to participate and you know if they are far enough along in life that maybe they will never going to really participate. They want their son or their daughter to participate so there is tremendous emphasis. If you are a manager in China, constantly benchmarking your classmates to say okay, you know, am I getting the same opportunities that they are? And if you are not then they are kind of going to look for the employer that is going to give it to them. If you are a worker, it’s basically okay, I am working and I probably got much you know, sound or safer more stable life today, probably living better what my parents did but I am sure that my son or my daughter to also you know participate. So the emphasis for all of that is on hard work really getting ahead focusing on the opportunities and education and I can’t tell you how strong every Chinese parent. I don’t care what they are doing. They emphasize you know the importance of education. China is not imperialistic in the sense, they are not looking to go out and take over other countries. They want to hold on to what they have that is why when they talk about Tibet or Taiwan you know they are just not going to give up what they already have kind of under their umbrella. Obviously, they are very concerned about getting enough natural resources for you know, to fuel their economy so you know they are now kind of doing partnerships around the world with -- in countries where maybe countries like the United States would want them to be but they’re doing this out of a sense of survival. They need those resources but other than that, China is really more concerned about getting that 900 million people and getting them up. The income ladder so you do not have such a big income to spare it because that is kind of the one thing that the leadership worries about. It’s this big income disparity between those 400 million and those 900 million. So for China -- understand that’s a very difficult task to have ahead of them and so that is what they pay attention to and that is what they’re focused on. So in that sense, I would not be worried as a sovereign nation about what’s going on in China because I think that they’ve got more than enough to do with their own population. I think from a business point of view, you have to look at China’s huge opportunity. If you do not do the right things, I won’t deny the fact that is going to be a huge threat to your business but that does not take a way from the fact that for every company that’s got products and so forth and established business practices this is the biggest market coming on stream and it’s got to be a big, big opportunity. I do not see you know one of the issues with China is there is no separation of power between the party, the government, the banking system, the legal system and everything else. I mean the party controls everything. I do not really see that changing in my lifetime so in the next 10 years, I would still see that as you know, as being the way in which the governments run but look, China is capitalistic really as almost any country in the world. In my business components, it is not as strategic industry in that sense or there is literally, probably less government regulation and control in our industry than there is in a comparable industry in United States.