Review of LFM China Trip, Prof Lester (not Thurow) (repost)
*** Why China c.2004 isn't Japan c.1984?
Size, speed of development, strategic relationship with US, authoritarian gov't, dramatic changes in systems of production - leading to large foreign ownership of Chinese production
One estimate - 50% of Chinese exports come from foreign owned/JV's
*** Impact on U.S.
- Consumers: Benefit from reduced price/quality (but really - how much? how much of the cost of a product is the labor cost?)
Point 1 - Durable goods as a % of final goods has increased 16% to 22% from 1990 to today
Point 2 - Services have actually fallen
Point 3 - Impact of China will be more on Mexico and other S/SE Asian countries
- Employers
- Investors
- "Citizens" - a politically stable China is desirable for everyone.
*** Is this growth sustainable?
Resources - in 10 years China will consume 50% of world energy
SOE 'drag'
Political stability and its impact on business climate?
*** Q&A
R&D in China: Mixed results so far. Motorola didn't succeed in doing this - think about senior US designers managing junior designers in China and also worrying about protecting own turf - a bit of a conflict of interest.
Corruption: One factor to consider, as the central government is pulling back fiscally, the different parts of the government are having to fend for themselves. Local governments, by necessity then, is having to "cooperate" to get some revenue for themselves. It's easy to be under the radar screen of central government. However, if it causes social unrest of any type, central government can be very effective - think of Starbucks in Forbidden City - as soon as they realized what had happened, they shut it down, but the fact that it could've happened, shows something.
1:54:46 PM 
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