I have travelled the length and breadth of China over time, excluding Tibet and Mongolia. I read and hear many opinions about China, although it seems that few actually go beyond Shanghai and Beijing, the major well known cites, which in my view tends to color their experience, so I thought I’d post my own thoughts…..hope you enjoy them!
China has 1.3 billion people, we all know the number although we may have no idea just how many a billion is, what’s more meaningful to me is that of the 1.3 billion, perhaps 260 million, or about 20% may really be in a position any time soon to buy anything and are therefore the “real” market in China—still, it’s as big as the United States!
Putting the number in perspective is hard, but maybe it’ll help to consider Shanghai. In 1994 there were 150 high rise buildings, today there are 1500!
Or Beijing, a city of contrasts. It’s the clash of two different worlds, the old and the new. It’s a vibrant city, where the form of government, Communist, and the style of commerce, Capitalism, work in amazing harmony. The old neighborhoods and the new hotels and fabulous restaurants seem somehow to co-exist in a wonderful montage.
Yet in Guilen or Yongshou little has changed in 150 years or so except for the introduction of TV and cell phones. They still fish using Cormorants. They’ll put a collar around their neck, so they can’t swallow, and every so often they remove the collar so the bird will get an occasional fish to eat and then stay excited about catching them—quite amazing.
Guanzho, which the west used to call Canton, is a thriving city, full of market opportunities, and will likely replace Hong Kong as the primary money center. Its airport, as an example, is a modern, well functioning, well designed facility that would put nearly any airport in the US to shame. Especially one as poorly designed and run as Seattle’s.
Climbing the mountains to a village like Taoshin you will find a paper industry largely unchanged for generations, with little outside contact and little need for any.
Or Xidi, which the locals visit because it’s so picturesque, but few foreign visitors find it. It has largely escaped the new economy and continues to exist as it always has, with small irrigation streams passing by each home providing water for cooking, bathing, fishing and flushing that which needs to be flushed, all at different times of the day, so it seems to work, and has for hundreds of years. No changes needed or anticipated!
Xian, which due to the unearthing of the warriors has become a tourist destination. Yet, short of the few businesses that serve the tourist little else has changed. Food is still grown and sold from small mats, with one vendor’s food virtually undistinguishable from the next. If you enter into a conversation trying to help one of them differentiate their pomegranates from the next, like we practice in the west, they look with confusion and ask what would they then due to their neighbors business, with an attitude of incredulity that anyone would suggest a practice that would elevate one above the others, and profit one while hurting the less creative. This isn’t a market likely to happen in our lifetime!
In China nearly 20% of the population still lives on the banks of the Yangtze River, which is also about more than 10% of the world’s entire population. It’s a unique river; it’s the only river that, at Cloud Mountain near Yichang, begins to run to the north; all others run south! So the river exists in Shanghai, otherwise, if it had continued to run to the south as all others do, it would’ve exited into the Gulf of Tonkin. Imagine how that would’ve changed both China and the world! It begins in Tibet and ends in Shanghai, about 4,000 miles, easily the longest river in the world.
The people have enormous pride in their country, everything is the “biggest, best and most famous” yet they have little personal pride. For the most part, they seem to have bought communism hook, line and sinker. There seems to be little desire for improved productivity or mechanization aside from that which is unavoidable, it might displace workers. Yet they build the Three Rivers dam, and displace who knows how many people, needing to create whole new cities and flooding critically important history in the process, without a lot of concern for what would be lost. Every new regime seems bent on destroying the heritage along with all memories of the past, yet the history of the country is profound and evident at every turn.
There is virtually no established religion, they just exist without complaint, it s what makes Tiananmen Square such a unique and impressive event. It’s still largely an agrarian economy with tea making, ink and paper major industries in the countryside, and with the average pay about $1,000 a year, leaving not much for anything beyond that necessary to survive.
So, what to make of China. It’s a country as much about exporting to them as it is importing from them. They import a great deal, more then we think, importing more than any other country except the US and Germany. They can and do produce high quality products, but they need careful oversight.
What concerns me more then anything else is our perception. We don’t take them seriously enough. They are rapidly becoming a major consumer, especially of oil. They have hard currency we have come to rely on, assuming they will continue to invest in us because they have no other safe haven and because they need our consuming markets. It is going to change! If China, India and Russia succeed at co-operating and implementing a common Euro-like currency, which they are actively trying to do, with little or no recognition in our country that this is even an issue, we will face an enormous barrier to our ability to continue to fund our extraordinary debt, and we will face a resource competitor unlike anything we’ve ever experienced—most of the world’s population, most of the developing demand, a lot of the worlds intellect, drive and natural resources, all wrapped into one regional entity; the prospect is indeed daunting. Its concerning enough to contemplate the ASEAN market integration and separate currency, but this one would truly to impact the very fabric of our day to day lives in immeasurable ways.
More on the impact of Viet Nam and Cambodia later!!
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