Powershift
[via Capital Ideas Online] Crystal gazing by Dan Denning in his book The Bull Hunter
“The year is 2050. The Middle Kingdom, formerly known as the People's Republic of China, is the richest, most powerful nation on the planet. Its thousands of factories hum 24/7, cranking out 60 percent of the world's textiles, sophisticated electronics and computers for the world's IT industry, and over 40 percent of all cars-including the largest auto company in the world, General Motors International, a Chinese blue chip.
A dozen new cities along the eastern coast - sprung up overnight as the result of massive migration from the interior - are packed with skyscrapers that gleam with steel and chrome during the day and glow with neon at night. The Middle Kingdom's middle class, some 300 million strong and young, likes its nightlife. Massive superhighways and new railroads connect enormous port facilities in Guangzhou, Dalian, and Shenzhen with the rest of the country. Iron ore comes in. Wheat goes out. And oil delivered by pipeline from Russia and from an endless fleet of Saudi tankers ensures the Middle Kingdom will retain its position as the world's number one consumer of oil.
American nannies, yammering in newly learned Mandarin, hustle the children of Beijing's elite merchant class around the Forbidden City, teaching the next generation of entrepreneurs how in less than 100 years a backward and totalitarian nation became the most successful economic story in world history - and did it by design.
But how did they do it?
In retrospect, it should have been easy to see. In the early twenty first century, the economic problems in America were there for anyone with the wit to see them:
Ø A $600 billion trade deficit
Ø A steady loss of high-wage manufacturing jobs to China and Mexico
Ø A near-zero personal savings rate, high credit card debt, and an epic housing bubble
Ø A government deficit of some $44 trillion. . . and a series of foreign wars that depleted the country's treasury, polarized the population, and alienated the world
While America spent and gorged and fought costly wars in the Middle East, the People's Republic of China quietly went about building itself an economic dynasty. It made few enemies and many friends-especially in countries rich with the natural resources China so desperately needed.
Ø It accumulated more than US $2 trillion and then started spending it . . . to buy the raw materials and resources it knew it would need in the not-too-distant future.
Ø It replaced the United States as the number one destination for foreign direct investment. China didn't have capital. But it didn't need it. It got the western world to build factories for it.
Ø It played a clever strategic game to secure access to the world's most precious commodity: oil. Without realizing, the United States played exactly into China's hand-alienating the Saudis, who found themselves a new superpower protector in Beijing.
These things happened quietly. . . and, more important, deliberately.
Yet few Americans-indeed, few investors at all-were able to grasp what was going on and then take the steps necessary to make windfall profits from it. They missed the opportunity of an investment lifetime.”
“The year is 2050. The Middle Kingdom, formerly known as the People's Republic of China, is the richest, most powerful nation on the planet. Its thousands of factories hum 24/7, cranking out 60 percent of the world's textiles, sophisticated electronics and computers for the world's IT industry, and over 40 percent of all cars-including the largest auto company in the world, General Motors International, a Chinese blue chip.
A dozen new cities along the eastern coast - sprung up overnight as the result of massive migration from the interior - are packed with skyscrapers that gleam with steel and chrome during the day and glow with neon at night. The Middle Kingdom's middle class, some 300 million strong and young, likes its nightlife. Massive superhighways and new railroads connect enormous port facilities in Guangzhou, Dalian, and Shenzhen with the rest of the country. Iron ore comes in. Wheat goes out. And oil delivered by pipeline from Russia and from an endless fleet of Saudi tankers ensures the Middle Kingdom will retain its position as the world's number one consumer of oil.
American nannies, yammering in newly learned Mandarin, hustle the children of Beijing's elite merchant class around the Forbidden City, teaching the next generation of entrepreneurs how in less than 100 years a backward and totalitarian nation became the most successful economic story in world history - and did it by design.
But how did they do it?
In retrospect, it should have been easy to see. In the early twenty first century, the economic problems in America were there for anyone with the wit to see them:
Ø A $600 billion trade deficit
Ø A steady loss of high-wage manufacturing jobs to China and Mexico
Ø A near-zero personal savings rate, high credit card debt, and an epic housing bubble
Ø A government deficit of some $44 trillion. . . and a series of foreign wars that depleted the country's treasury, polarized the population, and alienated the world
While America spent and gorged and fought costly wars in the Middle East, the People's Republic of China quietly went about building itself an economic dynasty. It made few enemies and many friends-especially in countries rich with the natural resources China so desperately needed.
Ø It accumulated more than US $2 trillion and then started spending it . . . to buy the raw materials and resources it knew it would need in the not-too-distant future.
Ø It replaced the United States as the number one destination for foreign direct investment. China didn't have capital. But it didn't need it. It got the western world to build factories for it.
Ø It played a clever strategic game to secure access to the world's most precious commodity: oil. Without realizing, the United States played exactly into China's hand-alienating the Saudis, who found themselves a new superpower protector in Beijing.
These things happened quietly. . . and, more important, deliberately.
Yet few Americans-indeed, few investors at all-were able to grasp what was going on and then take the steps necessary to make windfall profits from it. They missed the opportunity of an investment lifetime.”
