1. China is the world’s source of personal savings used in the global capital markets and will be the second largest market for everything produced.
2. China’s rise will not preclude America’s decline. China’s expanding production will come from mainly from developing countries. In 2003, America’s global production was 23 percent and stable.
3. China’s leaders will have little choice over the next decade but to unwind state owned banks and let western financial institutions take hold.
4. American system of job-based medical insurance will continue to unravel, until the number of uninsured working people reaches a political tipping point and a battle for universal healthcare.
5. America’s lower energy taxes make energy less expensive than Japan and Europe. Growth in China, India, and Central Europe, and other developing nations will put upward pressure on oil prices. The lack of America savings will produce a dollar crisis and stall the American economy for a time.
6. China saves so much of its income and private businesses retain so much of its earnings – it comes to 40 of China’s annual GDP.
7. China attracted $850 billion in foreign investment, mostly in modern manufacturing operations. Between 2002 to 2005, China attracted almost $333 billion in new direct foreign investments.
8. From its start, China’s tentative embrace of capitalism was fundamentally a political choice, as its leaders sought to distance themselves from the palpable failures of both Maoism and Soviet-led communist movement and focus on driving economic growth and national power it conferred. Chinese leaders opened industries to foreign trade and investment and for the first time allowed the workforce to move from village to bigger cities where the jobs existed. Western joint ventures brought western technology and expertise to China and provided training grounds for the next generation of Chinese managers and entrepreneurs.
9. With so much of China’s growth and progress based on transplants from more advanced economies, most of what makes China modern exists in a kind of economic vacuum without the strong, natural ties to everything else that help maintain intricate forms of economic balance. Jobs could move to India and Bangladesh and this vast disparity makes it much harder for China to develop the kind of integrated national economy that large countries need to maintain their growth and development.
10. China’s state owned banks keep monopoly companies afloat, forcing banks to write off bad loans that drain the working capital from the deposits of ordinary Chinese.
11. Building a world-class manufacturing platform that produces things that most China’s businesses and people can neither use nor afford is creating another pitfall for stable economic progress, since China has to use its high savings to finance a good part of the foreign demand for its own exports, especially to the indispensable American market.
12. The US economy is dependent on the central banks of Japan, China, and other nations to invest in US treasuries to keep American interest rates down.
13. China is a country that provides little medical or old age coverage. The Chinese people save a good part of what they earn for retirement. The personal savings are held in state owned banks and lend to hundreds of inefficient and often insolvent state-owned businesses. Extending basic social benefits will involve shifting billions of dollars from public works, slowing modernization, increasing consumption, belly-up many state owned enterprises, and depleting savings.
14. China has plenty of ambitious people eager to start their own businesses, but no modern banks to provide them financing. A perpetual credit crunch exists for small and medium size businesses.
15. Intellectual rights are constantly being violated or ignored in China.
16. China’s interior highway and rail system are out of date. Materials and finished goods move slowly from place to place and often damaged along the way.
17. Most of China’s pollution is linked to the state’s energy –inefficient industrial plants.
18. The usage of soft coal provides cheap energy and the intense use of fertilizers made China food self-sufficient.
19. China has no equivalent of western consumer product-safety agency. Nor does Beijing have the administrative resources to create a central food and drug regulatory system.
20. The Russian leaders want to avoid the “Russian Trap” of quickly privatizing the state-owned enterprises.
21. In America high corporate earnings help nearly half of all Americans because 40 percent of US stocks are held by pension plans and personal retirement accounts. American workers are racking up impressive productivity gains – more so than the Japanese or Europeans.
22. One-third of all US doctoral degrees in the sciences and three-fifths of those in engineering are awarded to foreign or foreign born students. 40 percent of Silicon Valley startups in 1990s were found by Indian investment entrepreneurs.
23. If the United States is such a powerhouse in advanced technologies, why does it run large trade deficits in these areas? The data shows that technology companies are fully globalizing. Half of the imports driving high-tech trade deficit come from the foreign subsidiaries of US technology companies.
24. Japanese companies still base their employees pay and promotions on tenure and union rules. Labor laws and social conventions that sharply limit firms freedom to fire or reassign most workers ofte prevent them from reorganizing their domestic operations to make their IT investments work for them.
25. If Moscow is commited to serious structural reforms, because of Russian low wages, exports could be competitive worldwide. Every since 2000, the flow of direct investment out of Russia has exceeded the investment in. The Russian politician and oligarchs will not agree to terms of the large western oil companies and so new capital and technologies, and expertise voided from helping develop oil in Russia.
26. Russia has the lowest fertility rates and life expectancy and the highest rates of infant and youth mortality of any advanced or major developing society.
27. Between 2001 through 2008, 2.8 million jobs were sent overseas. These were manufacturing jobs, electronics, auto, and industrial computer. 600 plants were closed down.
28. Complex software allowed companies to breakup complex service and distribute parts to companies anywhere.
29. In the future distributed software communication types will cover wide areas of inventory control, medical diagnostics, engineering, and legal analysis.
30. What happens as competition heats up? Lower wages, less labor benefits, harder times raising price, and slower job creation.
31. China will use investment & technology transfers to become one of two indispensable economies by 2020. Million of farmers will leave the farms to work in the cities.
32. China and India will junk state monopolies, open to western investment, own domestic competition, attract capital to build modern factories, and abandon government crony selection of suppliers.
33. Heavy manufacturing will disappear in advance economies, such as, autos, steel, appliances, and electronics.
34. America and Japan are investing in China: knowledge, relationships, supplier networks, manufacturing in foreign transplants.
35. Europe is fighting shrinking domestic economies and experiencing slow growth and high taxes.
36. Americans accept harsh competition and spend ½ in ideas as production. These ideas provide new innovations and job creation and receive foreign investment.
37. Great conflicts between the US and Iran or North Korea are unlikely. China is two decades away from becoming an imperial power. Globalization cannot guarantee peace. Deep economic relationships have not precluded war.
38. India’s GDP is small than Russia’s or Brazils.
39. India success has been in software programming and generic pharmaceuticals and competitive with global leaders from Europe and America.
40. From 2000 to 2003, India accounted for barely seven-tenths of 1 percent of the world exports. 60 percent of India’s population still works in agriculture, compared to 14 percent in Russia and less than 50 percent in China. The productivity of India’s vast agricultural workforce is 1 percent that of American farmers.
41. The 20 percent held Indian Jobs in reasonably large businesses in manufacturing and services is about 15 percent as productive as that of Americans in similar jobs.
42. India is less open to foreign technologies and expertise and growth depends on domestic consumption rather than investments and exports.
43. In 2004, India received $5.3 billion in foreign investment and China received $60.6 billion out of $233 billion. India attracted less FDI than Poland.
44. India’s dismal infrastructure and suffocating government regulation make it hard to generate profits in the subcontinent.
45. The national and state governments still own most of India’s electrical power generation and distribution operations.
46. China has open its energy sector to American and European imports of thermal and clean power generating equipment, gas, hydropower, and wind turbines, large-capacity pump storage units, advanced nuclear power station equipment, gas desulphurization equipment, and middle and high voltage capacitors. China produces four times the amount of electricity as India. 40 percent of India power is given away or stolen. India’s business sector is one of the least energy intensive.
47. India’s banking system is more developed than China’s. The Reserve Bank of India has direct 45 percent of all business loans be given to small and medium size-businesses. Businesses that help create a self-sustaining village.
48. India’s national literacy rate is 146th out of 177 countries.
49. There are six thousand Indian institutions of higher education graduating 2.5 million people per year.
50. A recent survey of human resources managers at U.S. and European multinationals reported that just 25 percent of Indian engineering meet their standards and 10 percent of those with degrees in arts and science. India universities produce fifty to hundred graduates who compare favorably with their counterparts.
51. Japan’s workers produce goods and services worth on an average of $34.40 per hour is 40 percent less than the average value produced by American workers, a good justification for higher US salaries, where incomes per person in Europe and Japan ranging from $29,200 to $32,700 compared to $42,000 in the United States.
52. Japan and Europe zoning make it harder to build factories or shopping mall suburbs, large-scale stores, and labor regulations preventing retailers from staying open in the evening and manufacturers from adjusting shift scheduling.
53. Japan send 49 percent in exports and receives 63 percent in imports.
54. Japan historically has legal prevented foreign investment. In 2000s, foreign investment as a share of GDP was one-seventh that of the US. Japanese laws still bar foreign companies from using their stock to buy a Japanese company, hostile takeovers are virtually impossible, and friendly bids are routinely rejected.
55. Japan walls off its domestic companies from contact with global leaders in their industries or sectors. The combination of extensive regulatory protections for tens of thousands of inefficient small companies and the absence of competition from companies from other advanced countries destroys the need to develop their own technologies and best practices, and adopt others. The US produces innovation.
56. Japan is the least productive advanced country.
57. Since 1990, Japan has spent more of its GDP on research and development than the United States, much of the difference is America’s R&D in defense areas.
58. In America, every dollar sent abroad in foreign direct investment produces $1.14 gains at home.
59. Korea is the greatest small economy success story of the last half-century. When Korea War cease-fired, the South was one of the poorest places on earth. Korean’s railroad, ports, hydroelectric dams, factories, and mines were all developed in the North, around the Yalu River; and by 1945, the factors and plats of the northern Korea accounted for one-quarter of Japan’s industrial base, during Japanese occupation. In 1960, seven years after the armistice, South Korea’s GDP was $2.3 billion and a per capita income of $79 were among the lowest in the world. By 2005, South Korean income had reached $16,800, a thirtyfold increase since 1960 and the country’s GDP topped $800 billion, a fifty fold increase since 1960. The North’s GDP was $30 billion, less than 4 percent of the South’s.
60. The basic strategy of Korea’s long line of dictatorial economic reformers – jump-starting selected industries by giving favored companies such as Samsung and Hyundai huge loans from state-run banks, special tax breaks, government contracts, and other bureaucratic favors – came from Japan.
61. From the 1960s, Korea opened its economy to imports of raw materials, parts and machinery, so its budding companies could use them to produce exports. The new Korean producers of steel, heavy machinery, autos, industrial electronics, shipbuilding, metals, and petrochemicals received 60 percent of all Korean bank loans. Since 2000, Korean exports have jumped to 40 percent of GDP, driven by global demand for many Korean products.
62. Korea didn’t import modern industrial base from advanced global companies.