The Chinese Decade
cringely.com
cringely.com
From what my Chinese relatives say, most Chinese businesses are family businesses. Fukuyama's Trust: The Social Virtues and the Creation of Prosperity confirms this, and says that it naturally imposes a size limit. So that may explain the underrepresentation in public corporations.
Otherwise, I agree with the article. BTW, I think it is Thomas Friedman who has been pointing out that a lot of people in India are disappointed with US leadership in the world right now: not effective and they want us as a good buffer to Chinese hegemony.
---start comment--- This is funny, I just wrote about the Chinese middle class a couple of days ago: http://www.pakg1.net/2010/10/changing-chinese-mindset-toward...
I think your points were correct maybe 3 years ago. I don't think they are now. China still has a lot of issues that could cause it to stumble, but I don't think a lack of a middle class is one of them.
As well, I cannot think of more Indian executives than I can Chinese executives. In fact, I think Chinese executives by far have the lead, simply because HK and Taiwan are more westernized and advanced than maybe even India. The simple fact is that HK and Taiwan play nicer with China than a lot of people know, simply because the economics make it worthwhile. There may be a lot of political strife in the news, but there's a lot of money flowing behind the scenes.
Finally, as an expat who's living in China right now, I can honestly say that not only does this middle class exist, their English is pretty darn good. And I'm finding that increasingly often, they have a 3rd language (in my case, I'm running into a ton of Japanese speakers).
So in all, I think this view is a tad outdated. India probably has a bright future, but as anyone who attended the APCAC 2010 conference this year can attest (and even Indian panel speakers there attested to this), India is way behind in a number of areas, especially the infrastructure necessary to really rev its economy up. That investment is only now just starting due to the fact that their democratic government apparently has its first real majority government ever.
And you may wish to fix this apparent contradiction when comparing the middle classes of the two countries....
"China has the population, the will, the educational system, the foreign currency reserves — everything to make it the next global superpower except two things: 1) an emerging middle class generation comparable to our Baby Boomers"
"What I find interesting is that most people just take it as bible truth that China will be the next superpower because it is so number-oriented (huge infrastructure dollars, huge manufacturing dollars, higher per capital wealth than India, bigger middle class, etc…)." ---end comment---
Will there be a larget Indian or Chinese middle class? I agree with the post that India will have a rising middle class of hundreds of millions before China. China's top down politics results in hoarding and exporting cash for wealthy families. Successful Indians seem to have a stronger reinvest in technology mindset.
Furthermore, if you haven't seen a middle class here in your visit here a few months ago, you haven't interacted with people here. I'm living here in China right now, and I interact with the middle class every day at work, on the streets, in community centres, etc. It's for real. If you live here for a few months and seriously interact with the locals and STILL for some reason don't see a middle class, then I'll start taking your opinion seriously on that matter. But it'll be hard because I'm experiencing the exact opposite.
For the record, the super rich are not the middle class. They are the super rich. Don't get them confused. The Hiltons and other big family money in the US can't be considered middle class either, and it really seems to me that you're referring to those types as your "middle class".
I also think a perpetuation of huge income/lifestyle disparity is much more likely in India and China than it would be in the west -- a middle class of 50mm vs. 300mm in China isn't necessarily going to greatly hinder them if those 50mm are in the right industries. China can continue to trade domestic consumer quality of life for external competitiveness. It's probably not the best thing for maximizing utility for the Chinese people overall, but it certainly maximizes national prestige.
I will give him this: looking up functional diaspora in the big G yields equally rambling results.
1 - first 2 entries are Cringely's own
2 - third entry is a Google book excerpt on "Hitler's black victims" which has no use of the word diaspora
3 - fourth is the Facebook open source "competitor"
Other than that, I think he is wrong. India may produce many managers of companies but it does not matter. The chinese will just buy the companies of the world and keep existing managers on staff as employees. The chinese don't really need to show their faces, they just hold the money, the shares and set the rules. (the golden rule. those who hold the gold, makes the rules)
Next, China has a leg up for infrastructure, it is pretty awesome how fast they are building airports, road networks, train systems, power grids, water processing, energy creation, real estate and entire cities. India can't even clean the garbage from their streets let alone agree on major infrastructure investments. New infrastructure spurs and even creates whole new local domestic economies on many levels.
One party rule. Basically, the party can plan the next 5 years, next 50 years and 100 years and execute in amazing detail. They can and do get their best party minds together and plan what is good for the people and actually do it. Can many other countries do the same? Can you see India planning for the next 2 years, let alone 50 years?
English language. They start very young to learn English now in school, it is mandatory. There are 6 million university graduates per year. In 5-10 years, there will be 6-10 million english speaking graduates coming from China - PER YEAR.
Energy. Both china and india are net importers of energy. China is making deals to get Energy (ie. oil) everywhere and anywhere they can. Nigeria, Yemen, Saudi, Iran, Iraq, Caribbean, Canada and every place on the planet they can get it from. Everywhere the 'West' thinks it is not moral, the Chinese are there building infrastructure, making deals and securing energy for their people. Smart. What is India doing to secure their future energy needs?
Middle class. Have you been there to see the 300+ million people that are now buying apartments, cars, make up, creams, designer clothes et al.? Yup, more people than all of the USA is their newly created middle class. Beijing alone is putting 1000 new cars on the road EVERY SINGLE DAY. There are hundreds more cities with more than 1-2 million people.
Functional diaspora. This argument is pretty moot or even leans towards the Chinese I think. So what you have Indian individuals "integrating in companies". They are individuals, and it means they can produce workers that integrate in other societies, as individuals. The Chinese also have diaspora. It is called China Town. In almost every city in the world has one. They are organized, band together, get real estate in close proximity, create small businesses and make their way and excel in almost every foreign country in the world. Do you see any "Indian Town's" in any city in the world?
My money is on China for sure.
One party rule is a joke. 50 years ago China was a backwater and it wasn't until the 80s when they experimented with capitalism that they even got to this point. 50 years ago the big government plan was planting enough rice to feed everyone. So how much of that 10, 20, 50 year plan was put into effect?
Anyway I wouldn't consider any Chinatown a positive. Except in a few countries (Singapore) Indians don't have an Indian Town because it isn't necessary. Chinatowns exist because of a failure for chinese immigrants to integrate. So they turn to an insular community that can provide resources that they are reluctant to ask of their native neighbors.
In every Chinatown I have been to it is always, always the rich chinese exploiting the ignorant immigrants. This will be the diner that pays staff less than minimum wage, landlords subdividing apartments, and others extracting a royalty for getting you a job. And lets not get started on how local gangs have infused themselves into Chinatown.
Also I find your generalizations about Chinatown a bit offensive. "Chinatowns exist because of a failure for chinese immigrants to integrate." Isn't this true of every cluster of immigrants? You make it sound like it's easy to integrate or something. "In every Chinatown I have been to it is always, always the rich chinese exploiting the ignorant immigrants. This will be the diner that pays staff less than minimum wage, landlords subdividing apartments, and others extracting a royalty for getting you a job. And lets not get started on how local gangs have infused themselves into Chinatown." How many chinatowns have you been to, and I'm sure you know all the landlords and people helping each other out.
I think you're giving immigrants less credit than they deserve. It's hella hard just to decide to stick around here. You can also look up Asian-american bias -- integration isn't just about Asians wanting to integrate. There is a fair amount of anti-asian sentiment in the US. "So they turn to an insular community that can provide resources that they are reluctant to ask of their native neighbors." << This kind of generalization implies that an immigrant has a relationship with their "native neighbors" which is hardly the case when you've just arrived.
Thinking about it the other way around: if you didn't speak Chinese very well and moved to China, wouldn't you also tend toward other english speakers? It's damn hard not to rely on someone you can talk to, when you can barely communicate with your plumber.
I don't know how you can find my generalization offensive but not your own. Chinatowns exists because they are a net positive how? Yet Indians, Malays, Japanese, and Koreans don't need them. I've been only to the C-Towns on the east coast, and lived in one. And it is the rich chinese exploiting the poor. You don't hear about white, blacks, indians, or any other nationalities exploiting immigrants in chinatown. It took NYCPD a decade and a half to crack the triads in NYC C-Town and they are still exert a lot of influence.
As to asian american bias this argument is weak since out of all emigrants (except europeans) Asians face the lowest amount of overall discrimination. Americans don't trust the chinese-americans to run the country (due to that same insular community being perceived as unloyal) but they trust them more than they do africans or african americans to do business with according to this study http://abcnews.go.com/US/story?id=93457. I've never met a taxi driver that says he won't pick up chinese or wouldn't stop in chinatown.
If I did move to China I wouldn't restrict myself to english enclaves, working for english businesses and only befriending english speaking people. But I'm not your typical american either.
As to your assertion that if you did move to China you would immerse yourself, well, perhaps you should go give it a try. I did it for 10 years. I'm not your typical American and I needed to come up for air every now and then and re-assimilate with my Western brethren.
I never said that Chinatowns are a net positive; I simply stated that you're generalizing on a group of people unfairly. My dad immigrated age 20, lived in Chicago Chinatown for some ten years, and he's just fine. The people he became friends with were primarily other chinese immigrants helping him out. Yes he had western friends; but it's very difficult to gain acceptance.
I mean, as a college student I've had two immigrant roommates in the past two years. Both have found it difficult to make friends outside of other immigrants. Even when I actively befriend them, my friends often find it difficult to communicate with them. If they go out with me, they're usually very quiet and uncomfortable because they don't know how to act or what to say. You can't really fault them for that.
If you did move to China you might not restrict yourself to English enclaves, but if you tried to party with a bunch of Chinese they might not get what you're trying to say. Also I apologize, because moving from China to America is very different from the other way around. In China they'll pay white people to stand outside their shops to get more business. It's not like that here in America...an immigrant with an Indian or Chinese accent isn't really sexy, you know what I mean?
"As to asian american bias this argument is weak since out of all emigrants (except europeans) Asians face the lowest amount of overall discrimination." Bias is bias -- this is a weak statement comparing levels of discrimination. It's really hard to quantify bias because bias is exhibited in different ways to different cultures as you yourself have demonstrated in the above comment. The kinds of bias that Chinese face are simply different, and what I'm trying to say regarding that is that the kind of bias makes it hard for asian immigrants to make friends with many westerners. Sure Americans trust the chinese to pay money for a taxi ride, and they trust Chinese competence in business perhaps, but the fact that they won't vote for an Asian gives you an idea of what their attitude toward Asians in terms of friendship, loyalty, etc looks like.
Also, I guess you're from the east coast but you've never been to a k-town? Brown town? Malays and Japanese you see less of because their population densities in the states are lower, but I think your generalizations may be influenced by some bias of your own.
I sure don't see Chinese university graduates doing H1B work in California living in SF Chinatown; Mountain View, Palo Alto, and SoMA are a lot more popular. Second and third generation Asians (although not necessarily or mostly Chinese) seem to live in specific neighborhoods like Daly City, but this is primarily old people and poor people.
Modern economic immigrants assimilate; modern refugee-type immigrants (e.g. the huge town of Somalis in Maine) self-segregate. The huge Vietnamese community on the West Coast is sort of in both camps -- the older people came right after the Vietnam war as "boat people" refugees, and today a lot of people come from Vietnam for economic reasons and live elsewhere.
It seems this is customary for most restaurants in the US, Chinese or otherwise.
What would be the other options? A democracy where 700 million peasants are voting as a majority to elect a party that gives the best health care and farm subsidies? (instead of the best interests of the country)
Wars and huge government squandering TRILLIONS of the hard working American people's tax dollars. It is a shame isn't it? America was doing so well...
Basically, the Communist Party's role in China's economy miracle is overrated. If you read the history, it was that people broke the law first and then Party just mend it and let it go. That's, the ad-hoc market economy after all.
Maybe it's not in the best interests of the country to have 700 million peasants? Most Western countries have about 2% of population employed in agriculture. Can China continue to keep its agricultural population politically stuck in the early 20th century?
We shouldn't be blind by the elite-leading economy in China these days (the PE etc.). Actually, I am quite worried about these "smart people looking after everyone's interests".
I mean if you look into American history it's a lot of repetition. Packingtown / chinese sweatshops. It's the same thing over again! Leaving the farm for the industrialized city...yeesh.
A choice between "ignorant peasants" or "smart people looking after everyone's interests" is simply irrelevant / nonexistent. The problem right now is developing infrastructure to modernize a country.
So should India keep allowing expansion of their peasant classes / caste? Should the "untouchables" (lowest caste / class) continue to be allowed to have 7 or 8 kids in India? Is creating huge numbers of more poverty stricken people in the lowest caste, the best for India? Will they make it even up one caste level (let alone "middle class")?
Both countries are far from perfect, my point is that China has the upper hand over India.
I have been there - and haven't seen anyone buying cars, designer clothes and apartments except expats and a few rich locals kids. Beijing is putting 1000 new cars on streets that are already in gridlock.
One party rule sounds like it could accomplish a lot in 'the best long term interest of many'. I am not sure there is evidence of this working. They have completely rebuilt entire cities like Beijing and Shanghai - but at the cost of other regions. Have they put a modern hospital in every region of the country?
It is acknowledged that somewhere around 25% of the population is now middle class.
"A McKinsey report, Preparing for China’s Urban Billion, predicts that China’s urban population will expand from 604 million in 2008 to 926 million in 2025, and hit the one billion mark (out of a total population of 1.5 billion) by 2030. By 2025, China’s urban economy will generate over 90 percent of its GDP, over 200 of China’s cities will have more than one million residents, and approximately 70 percent of its urban population will be middle class."
and
"While China's middle class right now consists of only a quarter of the population, they are set to grow to nearly half the total population by 2020, according to Euromonitor. That means that 700 million out of the estimated 1.45 billion people of 2020 will have an income of roughly between 80,000RMB (11,800USD) to 120,000RMB (17,700USD) a year."
What definition of "middle class" are we using?
Poor people in the US have big screen TVs and a car (or two). (In fact, rich people are more likely to not have a TV - it's a status thing.)
Here's a test - do "middle class" Chinese want to come to the US and start out poor?
Reports estimating numbers in 2025 also doesn't represent what is going on there now.
Additionally 12k-17k per year isn't enough to afford much in their urban areas. They wouldn't be able to afford to go out for coffee and meals regularly let alone own an apartment in the city or a car.
$15,000 USD goes a LONG way with living costs like this.
Your original claim was "Middle class. Have you been there to see the 300+ million people that are now buying apartments, cars, make up, creams, designer clothes et al.?"
Now we are talking about far less than 300 million making 15k per year and scraping by renting a small apartment and unable to go buy coffee regularly, let alone cars/housing.
http://www.wikinvest.com/concept/Rise_of_Chinas_Middle_Class