Comments by RuDao

Good to us all, no one wants more trouble in this already too troublesome world.

Many of my Taiwanese friends in mainland flew back to Taiwan to vote in fear of DPP might win.

As for those think China might forcefully taken Taiwan, if this does not happen in the next 5 years, it will never happen. Reason is simple, one child policy and a greying society.

Further on legalized bribes vs corruption. People can demand a government to have a "crackdown" on corruption, but what can citizens do to reduce legalized bribes? voting? Isn't this where the legalized bribes come from?

There must be a better way .....

From Rudao:

Can we make a separate graph, adding legalized bribes (donations to political parties, lobbying, PR consultant, etc.) to the more developed countries. Then, make a comparison, using %age of GDP?

Corruption in its nature is "power in exchange for money". We should include all forms of power/money games then this graph will make sense.

There are quite a few industries which in WTO negotiation not opened to the West. Thus, the existence of VIEs.

As a businessman and investor, I am more concerned on which industry will be next. For example, media buying houses such as Carat, Group M, etc. clearly not having the right certificates to operate ... but tolerated by Chinese government so far.

In this global economy, countries as well as companies compete with each other.

Fast decision making is an advantage, which "long arm of the state" may actually increase China's competitiveness in the world.

What about democracy and human rights? First, within the country, there is internet and social network; a dictatorship can not be too abusive (otherwise, revolt will happen, as we all witness these days). Too restrictive on interenet will only result in decrese in innovation and creativity (and competitiveness). Second, outside of the country, there is worldwide media and various worldwide organizations. Both can serve as part of the "check-and-balance" function.

Questions, the old balance of power (justice, admin, legeslative) and multi-party system democracy. If there are other means to achieve the "check-and -balance", how should these structures evolve?

People, especially talented and resourceful people, move to countries where they can prosper.

The worldwide competition is not only on goods, services and resources; more importantly, is on "innovative people and resourceful (i.e. rich) people".

Eventually all countries competing in global economy will have "longer arms" to remain competitive.

The global economy is too complex....only the rich will have the professional resources to properly manage risk and tax (and thus evade the long arms)... quite sad, isn't it?

Deficit - we spend more than we earn
Surplus - we earn more than we spend

Put the above in 20 to 30 years perspective, it is easily to see why USA has a debt crisis while China has huge savings. Of course we all know savings earn interest and create a positive cycle while debt pays interest and create a negative cycle.

Where do we spend the money? List list a few possible end points:
(a) Wasted via inefficiencies
(b) social program to increase people's happiness
(c) defence
(d) pork-barrel programs

Lets examine one by one:
(a) Certainly efficiency, fairness, and transparency do not always go hand-in-hand. I don't know any of my business efficient competitor play fair and transparent. Question: should govenment behave like companies (such as Singapore model)

(b)Problem with social program is Darwin. If you care for a layer of population from cradle to grave, why should they learn? why should they work? This "fat" layer will very soon expand (more honest people give up searching for work, exisiting layer having more babies as this will bring more disposable income). Eventually, social structure will collapse and revolution happen.

(c) Defence. Nothing wrong with stay ahead of competitors on R&D. Three issues ... (1) how much farther ahead, as 70% of all these will never ever be used; (2) should we pay for our "friends" defence while they do business with our competitor? (3) can we reduce the volunteer work to help neighbors mow their lawn? (they way we want, not the way they want; once we go, the grass will grow and the neighbors will tend their gardens their way, but complain that we had ruined their garden)

(d) port-barrel program. This goes with the democracy system. From an economist's perspective, I often wonder the systematic costs for dictatorship (corruption) and democracy. Maybe corruption consumes more, but dictatorship make decision faster, which creates an advantage.

I am pro demacracy and pro business and pro human right. However, all things have constraints and all govenments have budgets, and we should spend only what we can afford, meanwhile create a positive cycle for our children.

All terrorists who hurt innocent people should be hunted down.

Good that an example is made for people who may try to get away with murder.

Next, we will need to fix the system(s) which produce Bin Laden. Young adults tend to be rebelious when their parents try to teach them to follow their way. Maybe it is time for us not to teach other civilization/people to follow our way.

Not sure how many Chinese journals are included in the said list. Not sure how many Chinese scientists publish in English. If you count these factors, maybe the number will look a bit different. I am here in Beijing and personally invloved in four projects which I serve as the commercial advisor. All four are innovations in its field which I think will have globel impact potential. Actually, one has already acquired PCT patent in US, Europe, Russia, India, Japan and a few other countries.

Into the unknow ..... a galaxy far from here
where all emperors are bad, and all rebels are good
just that the emperor here was a rebel 41 years ago
Luke Sarkozy and his allies had destroyed the death planet
But will the Empire strikes back?
If the emperor is eventurally killed
The iwoks can finally live free,
or, will Luke turns into yet another Darth Vader?

One definition on "luxury good" is simply something very few other people can get, which can show the status of the person owns it. For example, luxury school only the most porwerful and rich can get in (which exisits in any society).

In this sense, "luxury goods" exisited even in Mao's China. I would say, Mao's personal attendants, would be a luxury.

Therefore, it is good to see people actually "spend" on luxury, instead of on something we will never know.

Laugh from existing luxury goods brands for another 5-10 years. Chinese innovation will probably bring out Chinese luxury brands within a decade (with such a huge domestic market for support).

Just to say a few well-known facts:

~ in 2008 economic crisis, there were 20 million Chinese migrant workers lost urban factory jobs and went home to rural areas
~ in 2011 Chinese New year holidays , there were 2.7 billion tickets sold (plane, train, and bus)
~ people move free in China, period. They (rural vs city) might enjoy different benefit packages, and that might not be "fair", but what in this world is "fair"?

~ Please note there were no "slum" in Chinese cities (let us ask ourselves why, and what could we learn from this?)

~ Beijing is the capital city of China. Historically, throughout the 5000 year history, disgrunted people (peasants) visited the capital to tell their story to the emperor. The Chinese buracratic system and folk lore stories have plenty such cases (if you see a Chinese drama and understand what it is telling, you know what I mean).

~ China is a country which still needs a lot of improvements, anyone denies this, is not facing the fact. However, to say anything China (or Chiense government) did is wrong, has a lot to think about.

~ In a society which grow by 10% a year for 30 years, something is bound to be wrong.

That is all I am saying.

Let us examine this issue ("world factory") from a human race perspective. Is the "World Factory" a more efficient way of producing goods? If the added value greatly exceeded the transactional costs, surely the "distribution" part can be settled via negotiation. (I know commentators will raise the issue of environment/democracy etc. let us assume these parameters hold the same).

Second point: We are discussing moving manufacturing across national boarders like kids moving blocks. It is not that simple. A buyer from Walmart in Guandong can visit 30 factories in one trip (providing quality goods fitting his/her specification), whilist if he/she visit Vietnam or Indonisia, only 2-3 factories can be visited. From my view point, it is not possible to compete with Guangdong as the light industries "world factory" for the next 30 years (please note there are still 700 million Chiense in rural area with literacy rate of more than 90%, potential cheap hardworking labor).

Third Point: High-end manufacturing and design can not be separated. In Shanghai, within two hours transportation (subway, drive, high speed train), a designer can find almost ANY material/parts for ANY industries. From my view, it is not possible to compete with Shanghai metropolitan area for high-end manufacturing in the next 30 years.

If, and a big IF, the above holds, much like Silicon Valley become the world's IT/innovation center for 30+ years, the issue become what governments, businesses, and individuals going to do about it? (Assume going forward, this is the most efficient way for human race to produce things).

In Ohio's comments, I often found wisdom.

The topic is inequality - which is growing in both rich and poor countries.

Most of the points made by Economists I do agree with, except for a few minor mistakes, such as "China's inequality is because of peasants are tied by "hukou" system." We know for sure in 2008, according to Economists, 20 million migrant workers lost their jobs and went home. Also, in 2011's Chinese New Year transportation boom, there were 2.7 billion tickets (plane, train, bus) sold. How could this be if workers are tied by 'hukou' system?

In my view, one key issue causing inequality is globalization. Money, skilled labor, and goods/services are dilivered across boarder. Multinationals become so big, even a single big MNCs controlls revenue and resources excceed those of most countries. WHO ARE GOVERNING THEM? We also know that 5% of the people (with brain, money, know-how, or connection) push a society to progress. These people will seek the lowest tax (or most lax regulated) country to put their money. WHO ARE GOVERNING THEM?

A second key issue is that society become so complex; the investment, tax and financial systems are too much for an average person to understand (so he/she can protect wealth). Only the rich can hire professionals to help them manage money with good returns. The average worker will work hard all their lives and got wipped out in this or next or the following crisis.

A third issue is the 'social safety network", as a large portion of population gets social handouts and can manage a decent living (eat enough, has a place to stay, cloth to wear, no luxury goods, but plenty of time to play computer games). According to Darwin, this class of people will grow and creating a huge drag on economy, until the society decide not to support them anymore (then, it becomes ugly and the rich ones will move out). Education and culture will become key competitive advantages, so does a safty network which only help the urgent, but educate the poor, also provide a system if they perform, they have a chance to advance. Therefore, my view on appropriate social safty network is "common food, common shelter, and education".

For each nation to control this situation is impossible. As Cayman, Virgin Island, Hong Kong and many other countries will offer safe heaven for the rich. Just for illustration, if UK has a max individual income tax of 50%, and Hong Kong has 15%, if you have money, where will you invest to create jobs?

In this globalized world, countries are competing with each other, creating external constraints for domestic policies. The most efficient ones will win in this economic game, i.e. countries must be run like corporations, efficient and dictatorship, quick decision making and fast market moves (to get better brain, better know-how, more money and investment). Check and balance style democracy slows down decision making, which we can see clearly is what happened (see recent Economists article on Obama and China). Come to think of it, no major MNCs emerge (with my limited knowledge) via an internally democratic system, all dictatorships.

I am an old Chiense American with my large family in NJ, DC, and CA. I am now an entreperneur in China in media and communication while my six siblings and their families in USA.

Two amongst my 15 nephews and neices are unemployed. Both have very supportive and well-educated parents. Both are very smart but rebelious, both play computer games 10 hours a day, pumping gas and flipping burgers for 8 hours and sleep for 6 hours. Both dropped out of college, with very good scores and for no reason that I can understand. Both have very low self-esteem, as other cousins they grew up together usually have law or doctor degrees and getting six figures income.

When I talked to them, both expressed that they don't have a problem living a low-income life, as there are "more important things" than money and career in life (which I inteprete as computer games).

What were the problems?

~ parents and family had been too supportive; we sponsor them each more than 3-4 times to colleges and Universities, each time result in drop-out, with no consequence to pay (if they are willing to go back to school, obviously, we will agian sponsor them)

~ two many options in life, resulted in no option chosen

~ income from flipping burgers and pumping gas is too high, supporitng not only basic needs in life, but also provides enough resources for their desired life-style, playing games

~ influence from boyfriend/girlfriend since high school, who were also spoiled kids

~ social safety network is too solid, creating a false sense of security that no matter what happens, they can live a respectable life

Can the above life-style continue? Unfortunately, in a globle economy, it can not. Low skill jobs will be replaced either by automation or by labours in other countries. Taxi drivers in Beijing works 14-16 hours a day, earning RMB 3000 (in a good month), or, roughly USD 500.

What will happen is social security network will be losen, it will be focus more on "helping the urgent, not helping the poor". Money will only be enough to satisfy basic needs (common food, common shelter), but nothing will be given for aspirations and esteem.

Higher tax on rich people can not improve the situation. For two reasons, first, as Darwin taught us, if there is a class of people who do not make an effort to live a decent life (from their perspective), the class will be filled very fast. More resources, more people will chose to live that way. Second, in a globle economy, people and money move over national boundaries. If Hong Kong's personal income tax is 15%, while all the privilages (travel across the world, own assets around the world, etc) are the same as what USA/Europe can provide, why pay 50% personal income tax in other countires?

Not taking any pro or con perspective on Dalai Lama, no right or wrong, just try to say what I think will happen:

Nothing and no political change will happen in Tibet for 100 years, unless there is World War III. After 100 years, as it happened numerous times in world-wide history before, between a massive culture and a much smaller culture under its rule, they merge. It will be very difficult to tell Han Chinese from Tibetan Chinese even 50 years from now. The younger Tibetans that I know, they care about material wealth more than historical bagages (many of them are happy with the privilage a Tibetan status brings them such as allowed to have more than one children). Just like the rest 99% of Chinese, they flock to Shanghai and Beijing where there is a chance, and they are not discriminated against their will. Very few of them believe in Dalai Lama, but due to family tradition, they do pay certain respects to the person.

The dilution of population goes two ways, Han Chinese (which really is about 50 different people and languages merged together over the past 5000 years) goes to Tibet to do business, man the political infrastructure (road engineers, electricity stations, schools, public servants, military personnel, etc.). On the flip side, young Tibetans go to SH/BJ/GZ seeking better lives.

More than half of the time, I agree with Happyfish18, but not this time.

Of course, China should do more electric car, which is why Warren invested in BYD a few years ago. However, asking a still poor Chinese to buy expansive electric cars is like well-fed person asking skinning young boy to take on diet (for his own good).

If you live in Beijing or Shanghai, the traffic is so bad, you will probably take subway half of the time. Almost on a quarterly basis, BJ and SH are announcing new subway lines. The high speed rails linking BJ and SH with nearby citis has been well-documented.

Most likely, Chinese will continue to buy cars (my view is it will exceed the chart's projection), but these cars will remain in the car park until weekends and holidays.

So, do not be too pessimistic on the pollution effect. Use Japanese's car usage to project pollution in China is probably more precise than using USA's.

Meanwhile, the world economy needs a boost, the Chinese car sales has kept German economy going strong, and why not.

Further more, please note the population pyrimid. China is growing old fast (due to the one child policy, an fast aging country tends not to be too aggressive). The main task for Chinese leader in 15 years will be to keep up with the (already pretty good) liviing standard.

India is full of young Indians, strong nationalism for India is SURE to happen in 10-20 years. India will be VERY aggressive in world politics, whether it is a democracy or not.

Below is what I posted in another related topic on USA-India-China relationships.

Let us look at geography: China is encircled by historical foes and strong countries, Japan, Russia, India, Korea and Vietnam (the only country who defeated USA in USA's prime time). USA and the West have little to fear further Chinese expansion, except for a few disputed islands. This is because if China wants to have any kind of expansionist ambition, it will step on one or all of these strong neighbour's toes. For China to defeat any of the country above will be very very difficult. As for China to fight India in the Indian ocean, it is almost a mission impossible (just look at the map and it is easy to see why). It is to China's interest to befriend with India, amongst all its strong neighbours. Peaceful rise is not one of the option for China, it is the only way. Nationalism will eventually yield to pragamatism.

While India, three sides are open oceans, to the north is Himalaya and Tibet. When India gets stronger, it is most likely to be very nationalistic. India has already acquire an aircraft carrier when its GDP is a quarter of China's. With blue ocean on three sides, Indian navy can go anywhere it wants. The dispute with China on the northern border will eventually be resolved via negotiation (as China needs to befriend India to protect its trade routes, one of these days, it will give India what it wants; and China's political system can probaly propoganda its way out to its people and address the settlement as a "victory").

Where will India's attention going to turn? If China backs off, dealing with Paks will be easier. What will happen then when India have a very strong navy in the Indian ocean (China has already paid toll)? who's interest will India going to challenge 10-20 years from now? What is there to gain for India in the North anyway?

I will not be surprised in 10-15 years time, next US president is visiting Beijing try to get China's support to "counterweight" India's rising power and potential threat (for example, to Diago Gacia).

As a counter arguement to Vishnugupta

Let us look at geography: China is encircled by historical foes and strong countries, Japan, Russia, India, Korea and Vietnam (the only country who defeated USA in USA's prime time). USA and the West have little to fear further Chinese expansion, except for a few disputed islands. This is because if China wants to have any kind of expansionist ambition, it will step on one or all of these strong neighbour's toes. For China to defeat any of the country above will be very very difficult. As for China to fight India in the Indian ocean, it is almost a mission impossible (just look at the map and it is easy to see why). It is to China's interest to befriend with India, amongst all its strong neighbours. Peaceful rise is not one of the option for China, it is the only way. Nationalism will eventually yield to pragamatism.

While India, three sides are open oceans, to the north is Himalaya and Tibet. When India gets stronger, it is most likely to be very nationalistic. India has already acquire an aircraft carrier when its GDP is a quarter of China's. With blue ocean on three sides, Indian navy can go anywhere it wants. The dispute with China on the northern border will eventually be resolved via negotiation (as China needs to befriend India to protect its trade routes, one of these days, it will give India what it wants; and China's political system can probaly propoganda its way out to its people and address the settlement as a "victory").

Where will India's attention going to turn? If China backs off, Paks will be easy to deal with. What will happen then when India have a very strong navy in the Indian ocean (China has already paid toll)? who's interest will India going to challenge 10-20 years from now? What is there to gain for India in the North anyway?

Chinese and Indians, think hard!