Speaker Review: Martin Jacques

On a recent Friday night, I found the free time to watch a TED talk by British economist Martin Jacques.  He eloquently examined the rise of China as a global economic force.  In May, I will be visiting China on a shortened study abroad trip organized by the Institute for International Business.  Here are the key takeaways from his lecture.  

China will continue to change the world

China’s population is 1.3 billion, and within a decade, it will have the largest economy in the world.  For the first time in the modern era, a developing country will have the world’s largest economy.  

We should not assume that modernity equates to Westernization.

China will remain very different than the West.  We should not attempt to understand China in Western terms. We cannot understand China by using Western concepts.  Attempting to comprehend China through a Western lense is the reason why we consistently misunderstand China. 

China is not a nation-state, but a civilization state.

In China, family, Confucian values, and role of the state are shaped by culture rather than the state.  China is enormous in terms of geography and population, therefore decentralized.  However, the most important political value for the Chinese is unity.  We were wrong about our prediction on the downfall of Hong Kong in 1997 because we had a nation-state mentality.  China consists of one civilization yet many systems.

The Chinese state

Jacques pointed out that the state is given a special significance as embodiment of Chinese civilization.  The government is viewed as patriarch of the family, and therefore, its influence is embedded in society in a different way that the West.  The state’s authority flows into the economy and public infrastructure.

Unlike the West, the power of the Chinese state has not been challenged for 1000 years.    

America must respond accordingly.

The world will be shaped by cultures we do not understand and are unfamiliar with.  Given the rise of China and India, civilizations and cultures that didn’t have a voice now will have representation.  

This Week in Politics and Business

The world has been a busy place in the past week.  Here's what you need to know to stay informed on current affairs.

1. The nationwide average for gasoline prices rose for the 26th straight day Sunday.

2. Vladimir Putin claims a victory in Russia's presidential election despite allegations of widespread fraud.  In an article for a Russian newspaper, president-elect Putin called for former Soviet states to form a "Eurasian Union" for economic purposes, but denied the move as an attempt to rebuild the Soviet Union.

3. The cleanup in the aftermath of tornadoes that claimed 37 lives continues.  On Friday, a total of 90 tornadoes were reported across Kentucky, Indiana, Alabama, Georgia, and Ohio. 

4. North Korea agreed to suspend its uranium-enrichment in Yongbyon and further testing of weapons and long-range missiles.  The agreement mark a breakthrough between America and North Korea.  In exchange, the US will provide at least 240,000 tons of food to the impoverished country.  

5. Australian prime minister Julia Gillard easily defeated Kevin Rudd in a Labor Party ballot that contested her leadership. The party has been torn by in-fighting since Ms Gillard’s ousting of Mr Rudd as prime minister in 2010.

6. Egypt will hold presidential elections following pressure from citizens.  The first round will be held on May 23rd and 24th, with run-offs scheduled for mid-June. Final results are expected on June 21st. The election will probably mark the end of military rule.

7. Republican candidate Mitt Romney won the Michigan and Arizona primaries.  Although the margin of victory was narrow over Rick Santorum in Michigan, Romney managed to win his home state.  On March 6th, 10 primaries will be held in what has become known as Super Tuesday. 

8. American's GDP growth rate was revised to 3% for the last three months of 2011, up from an initial estimate of 2.8%. Banks in America expanded their lending by $130 billion in the period, the biggest quarterly increase in four years, while losses from loans fell to their lowest since the start of 2008. The data were taken as more evidence that the American economy is on the rebound.

9. The Dow Jones Industrial Average closed above 13,000 for the first time since May 2008 and the NASDAQ reached a new 11-year high.

10. In his annual letter to shareholders, Warren Buffett answered some questions about who would succeed him as boss of Berkshire Hathaway. The 81-year-old investor suggested that a successor has been chosen, as Berkshire-Hathaway's board was “enthusiastic” about “an individual to whom they have had a great deal of exposure”.  He didn’t name the person, keeping people guessing about the candidates.

11.  In the last quarter of 2011, India's economy grew 6.1%.  It was the slowest rate of growth in three years, and put pressure on the Indian Central Bank to lower interest rates.

Reflections from India

Regular readers of Joe’s Musings should rightfully feel deprived of posts.  Good news: I have safely returned from a three week study abroad trip to India, an adventure that consisted of company visits, cultural experiences, and classroom learning.  Today, I’m happy to announce that Joe’s Musings will commence as usual moving forward.

Background  

For the second year, a group of students from the University of Kansas visited major cities in south India to learn about business practices in India.  We were hosted by the Asian School of Business, a small, yet top university in Thiruvananthapuram, India.  We gained an understanding of a wide spectrum of industries through interactive company visits to IT companies, a private hospital and manufacturing plants.       

In addition, I have some thoughts on my experience that could be beneficial for everyone interested in traveling internationally.  This post will be unorganized reflections, but I will include takeaways in the event you are considering a study abroad trip.  In just three short weeks, I experienced things I will remember for a lifetime.  My first piece of advice for prospective travelers to India is to immediately change your mindset about traffic and driving.  Indian drivers are reckless, and will not stop for you to cross the street.  In Bangalore, I saw a motorized rickshaw barrel down a road into a crowd of people, narrowly missing a mother and child by no more than a foot.  Animals, pedestrians, cars, and trucks all share the same road.  Forgot about stop lights and crosswalks.  Indian drivers use their car horn liberally to let pedestrians know “I am here”.   A gentleman at a hotel explained to me Indian consumers keep purchasing passenger vehicles, but the roads are not equipped to handle the rising number of drivers.  Auto sales in India are on pace for a record-setting year.  From October 2009-October 2010, sales of passenger vehicles rose 38 percent!

Takeaway: Research the driving customs in the country you are visiting.

Despite the high potential for economic growth, a common theme persisted among Indian business people we visited with.  It takes a great deal of time and effort to get around the masses of red tap evident in the Indian government.  One professor at the Asian School of Business phrased it well--the government prepares for the future based on yesterday’s demand.

Takeaway:  If you are interested in doing commerce internationally, learn about the opportunities and challenges facing businesses in your resident country.  

Because the British ruled India for centuries before independence in 1948, many Indians speak English.  Even the Bollywood film we watched contains traces of English in a hybrid language known as Hinglish (combination of Hindi and English).  However, a language barrier can present an opportunity to international travelers in other countries to learn the local tongue.   

Takeaway: Learning even the basics of a new language can be time-consuming.  Before you sign up to study abroad, inquire about the languages commonly spoken in other countries.   

The food was above average, and at times, excellent, but there is no substitute for an American hamburger.  Cows are regarded as sacred in India, so finding a genuine beef burger was next to impossible.  However, I particularly enjoyed the seafood selection of fish, prawn, and lobster.  The Indians also carbo-load at every meal, eating rice, idly, and poori.  Dinner is usually served at 9 PM or later in India, so that took some time to acclimate to.  

Takeaway: Bring snacks in the event the meal times are different.  Try the local food, but be careful to eat only cooked food.

I have still not fully processed this experience yet, but I am certain of one thing--my observations in India made me appreciate the blessings we have in the United States.  Although India’s economy is growing rapidly, an average citizen’s standard of living is nowhere near that of the United States. 

India 3

We have just returned from Cochin, Bangalore, and Vembanad.  Here's a selection of photos from the last week.

For the first time in history, the Communist Party was democratically elected by the people of Kerala.

Beach at Cherai

Main actor in Don 2.

We attended a dance show in Cochin.

Stray dog.

Sign in Jew Town.

Mall in Cochin.

Bridge crossing on the way to Cochin.

Coconut milk cost 5 Rupees.

Cows are regarded as sacred in India.

Deer park in Cochin.

Pictures with the locals.

Elisha told me she will start reading Joe's Musings.

Karl Marx

Christian Church.

Sign in a Bangalore shopfront.

Bangalore streets.

Shopkeeper in Bangalore.

Infosys fish pond.

View from the rooftop of Cleanray, an LED lighting company.