Letter from China: What if Beijing is right

[SirLancelot]

America was a new invention when it first started out too. "...Things have never worked out that way before." as well.

 

http://iht.com/articles/2007/11/02/asia/letter.php?page=1

 

Letter from China: What if Beijing is right?

By Howard W. French

Published: November 2, 2007

 

BEIJING: What if the doubters have been wrong all along?

 

Big government and an all-powerful state are good, not bad.

 

What if the business cycle, hitherto thought to be inevitable, if completely unpredictable, could be repealed? After all, China's economy is growing at an 11.5 percent annual clip, after years and years of similar performances, and inflation, though up a bit, still seems well controlled.

 

If that's not impressive enough, consider what the Shanghai stock exchange has done. Since the beginning of this year, stocks are up twofold, and over the last five years, the total increase has been nearly fourfold.

[DMikeS4321]

America was a new invention when it first started out too. "...Things have never worked out that way before." as well.

 

http://iht.com/articles/2007/11/02/asia/letter.php?page=1

 

Letter from China: What if Beijing is right?

By Howard W. French

Published: November 2, 2007

 

BEIJING: What if the doubters have been wrong all along?

 

Big government and an all-powerful state are good, not bad.

 

What if the business cycle, hitherto thought to be inevitable, if completely unpredictable, could be repealed? After all, China's economy is growing at an 11.5 percent annual clip, after years and years of similar performances, and inflation, though up a bit, still seems well controlled.

 

If that's not impressive enough, consider what the Shanghai stock exchange has done. Since the beginning of this year, stocks are up twofold, and over the last five years, the total increase has been nearly fourfold.

 

What if, indeed. It seems to work in China, but there are some profound cultural differences that would probably make it impossible in the U.S., for instance.

 

The Shanghai stock exchange has performed magnificently, and I really admire China and the Chinese, but keep in mind.... what goes up, WILL come down. Do you remember the mass hysteria surrounding Japan's success in the 70's and 80's? I remember when Nippon Telephone was valued at almost twice the market cap of AT&T, and it wasn't one fourth the size in sales volume or subscriber base, let alone tech capability. At that time, Japan was practically deified as the source of all marketing and manufacturing wisdom. Ooops! Things change.

 

I would hesitate in this day and age to make any such broad assumption about the validity of the 'Chinese Miracle'. It certainly works in China, but keep in mind, free market economies and free societies are fueling Chinese growth through purchases of Chinese goods. Without Western capitalism, there would be no buyers for the products the Chinese are so adept at producing!

 

I've said before and will say again; we NEED each other. They hold a good part of our debt and currency; we keep their factories humming. They could hurt us by dumping dollars, we could REALLY hurt them by restricting their exports to our markets. It would be a death spiral if either side tried to hurt the other. True economic symbiosis. I think a better observation would be how two international economies with such different political systems can coexist in such a mutually beneficial way.

 

Best Regards

[Randy W]

I remember when Nippon Telephone was valued at almost twice the market cap of AT&T, and it wasn't one fourth the size in sales volume or subscriber base, let alone tech capability. At that time, Japan was practically deified as the source of all marketing and manufacturing wisdom. Ooops! Things change.

 

 

 

 

. . . and I remember when Google was values at 10 times the market capacity of GM - yesterday!

[DMikeS4321]

I remember when Nippon Telephone was valued at almost twice the market cap of AT&T, and it wasn't one fourth the size in sales volume or subscriber base, let alone tech capability. At that time, Japan was practically deified as the source of all marketing and manufacturing wisdom. Ooops! Things change.

 

 

 

 

. . . and I remember when Google was values at 10 times the market capacity of GM - yesterday!

 

It's "market capitilization", but good point nonetheless. How long can THAT last?