Silicone “Juice” in China

October 27, 2010

In You Can’t Build a New Silicon Valley Just Anywhere by Margaret O’Mara, writing for Foreign Policy magazine, she says, “for many of the would-be silicon cities being constructed by the Russias and Chinas of the world; with their long histories of centralized control, they are still convinced they can order up success.”

O’Mara’s theme is that the success we have seen in California’s Silicon Valley is due to the freedom America’s republic—now a democracy—offers along with loads of money from the government and venture capitalists with no strings attached.

If that were true, explain how China (ruled by Emperors under an autocratic imperialistic monarchy) was more technologically advanced than any country on earth for almost two thousand years.


If you don’t speak Chinese, the English subtitles say it all.

After all, the Chinese invented the stirrup for saddles which revolutionized warfare on horseback, gunpowder, the multistage rocket, the compass, paper, the printing press and pasta along with a long list of other innovations, which changed the world.

Without the Chinese, where would the world be today? See Chinese Crossbow and other Inventions

China may not offer the same individual freedoms the West does, but “face”, which is important in Chinese culture, is a strong motivator to improvise and invent so one gains “face” and becomes powerful and wealthy.

Before Deng Xiaoping and the “Getting Rich is Glorious” generation that he gave birth to, I would have agreed with Margaret O’Mara but not now.

In my next series, The Machines of Ancient China, we will discover more about China’s contributions to the world we live in.

To discover the Chinese advantage, learn about Guanxi in China

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Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too. 

If you want to subscribe to iLook China, there is a “Subscribe” button at the top of the screen in the menu bar.

2 Comments | America, business, capitalism, China, Chinese Culture, cultural differences, environment, science | Tagged: , , , , , | Permalink
Posted by Lloyd Lofthouse

Unbalanced Reporting from a Dream

October 17, 2010

In Unbalanced China from The Wall Street Journal’s The Source, Alen Mattich lists dire predictions of how an imbalanced Chinese society may crash economically.

Anything is possible.  However, if China crashes, the first sound we hear may be the U.S. hitting the ground.

Alen Mattich lists the possibility of a trade war between the U.S. and China which could “threaten to bankrupt whole swathes of industry” if China doesn’t devalue its currency, the yuan.

Mattich is betting this prediction on other countries joining the U.S. in a trade war with China. Some may join but the odds are many will not.

Recently, the BRIC, Turkey, France, Japan and several oil-rich Middle East countries have sided with China against the shaky dollar, and countries like Brazil that depend on trade with China won’t side with the U.S.

Then Mattich mentioned the possibility of China’s properly bubble bursting. The urban property bubble in China represents about 15% of China’s economy and 40% of that property belongs to China’s newly minted millionaires.

In rural China, most of the land belongs to peasant collectives and the government.

In America, when the property bubble burst in 2008, that represented more than 70% of the U.S. economy.

Then the Chinese save an average of about 40% of earnings so the Chinese are not cash poor as the average American, who carries a lot of credit card debt.

Mattich also mentioned China’s aging population. Since 700 million Chinese work in jobs that are not linked to the export-import sector of the economy, I doubt if that will play much of a factor.

When Mattich mentions the one-child policy, he doesn’t say this only applies to the urban population of about 500 million.

The other 700 million rural Chinese are not bound by the one-child policy, and the 56 minorities in China that number 100 million have no restrictions on the number of children families may have.

The problems with many Western predictions about China’s economic future is that they are based on Western lifestyles and spending habits. China’s formula is different.

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Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too. 

If you want to subscribe to iLook China, there is a “Subscribe” button at the top of the screen in the menu bar.

2 Comments | America, business, China, economy | Tagged: , , , , , | Permalink
Posted by Lloyd Lofthouse

The Sinking Dollar

October 17, 2010

The West, America in particular, has been pressuring China for years to revalue the yuan. If the following reports are correct, it seems the US may have lost the fight.

During elections, U.S. politicians often used this issue with China as a scapegoat for lost jobs without mentioning that more jobs have gone to Canada and Mexico since NAFTA was signed.

In fact, I seldom hear or read in the major media about the estimated 11 million jobs that have gone to illegal aliens working in the U.S.

Now, the Wall Street Journal reports that Turkey joined China to shun the U.S. dollar in conducting trade that is expected to grow to $50 billion within five years and $100 billion by 2020.

Another potential blow to the U.S. dollar’s global dominance was reported by Bloomberg Business Week.

Bloomberg says that the BRIC (Brazil, Russia, India and China) will put up a “strong resistance” to currency controls at the annual meeting of the International Monetary Fund and World Bank in Washington.

The 24-7 Christian News.com says that the U.S. Dollar will no longer be the global currency predicting that the world is going to detach from the US economy in the near future. “China, Russia, Japan and France, several Middle East Arab states have taken the initiative to detach oil from the US Dollar.”

Instead, these countries plan to trade in a currency basket consisting of Japanese Yen, Chinese Yuan, the Euro, etc.

Then Goldman Sachs predicts a sharp slump in the US dollar’s value against other major currencies. Source: Credit Write Downs.com

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Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too. 

If you want to subscribe to iLook China, there is a “Subscribe” button at the top of the screen in the menu bar.

Leave a Comment » | business, China, economy, politics | Tagged: , , , , , | Permalink
Posted by Lloyd Lofthouse

Comparing India and China’s Economic Engines

October 13, 2010

The cover for The Economist of October 2 – 8, 2010, is betting on a race that cannot be won by India.


I opened the magazine and read the two pieces that the cover was about.  One is about India’s surprising economic miracle and the second piece was A bumpier but freer road.

On page 11, I read, “many observers think China has done a better job than India of curbing corruption…”

On page 77, a Western banker was quoted saying, “It’s much easier to deal with the well-understood ‘org chart’ of China Inc than the freewheeling chaos of India.”

After reading both pieces comparing China with India, it was obvious that India would never beat China economically.

The Economist wants India to win this race, because it is called a democracy as is the U.S., but what isn’t mentioned is that China is becoming a republic with a Chinese twist, which is what Dr. Sun Yat-sen wanted.

The reason The Economist is wrong about India is because America’s Founding Fathers hated democracy and they had a good reason.

The Live Journal goes into detail on this topic.  To quote the Live Journal, “It would be an understatement to say that the (U.S.) Founding Fathers hated democracy. They warned against it vehemently and relentlessly. They equated it – properly – with mob rule.

“in a democracy, two wolves and a sheep take a majority vote on what’s for supper, while in a constitutional republic (which China is becoming), the wolves are forbidden on voting on what’s for supper and the sheep are well armed.…

“The Founders, who hated democracy, gave us a free country (a republic). Our (meaning many Americans) ignorance of history, which has lead to a love of democracy, is causing us to surrender our freedoms at an alarming rate.”

Dr. Sun Yat-sen (1866 – 1925), known as the father of modern China, said he wanted to model China’s government after America but by combining Western thought with Chinese tradition.

When he said this, it was 1910, and America, by definition, was still a republic. Once you read the two pieces in The Economist, you may understand why India’s democracy cannot beat China’s evolving republic.

This topic is continued (with more details and facts) at India Falling Short

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Lloyd Lofthouse is the award-winning author of My Splendid Concubine [3rd edition]. When you love a Chinese woman, you marry her family and culture too. This is the love story Sir Robert Hart did not want the world to discover.

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15 Comments | business, China, Chinese Culture, economy, government, India | Tagged: , , , , , , , , , , , , , | Permalink
Posted by Lloyd Lofthouse

The Growing BRICs

October 7, 2010

Until recently, I didn’t know what the BRIC was.  Now, because I spend so much time researching topics about China, I often run into the BRIC.

The BRIC is Brazil, Russia, India and China. In the next few decades, these countries could become the wealthiest nations on the globe alongside America.

Jim O’Neill, who works for Goldman Sachs, talks about the BRIC in the embedded video.

In fact, O’Neill is the one who thought up the acronym for BRIC.

When he stepped into his position at Goldman Sacs, he wanted to know how the world might change economically by 2050.

They discovered that China would become the world’s largest economy before 2050 possibly reaching 45 trillion dollars–twenty times larger than today, and the rest of the BRIC economies would have a much larger share of the global economy too.

Projections also show that India, Russia and Brazil would become larger than the current G7 bypassing Canada, France, Germany, Italy, Japan and the United Kingdom.

Only the US would remain in the top five.

If you are a doubter, consider that the BRIC economies are already having a huge influence on the world, and the potential growth of the middle class in the BRICs could explode four hundred percent in the next decade, which would increase demand for cars, energy and oil.

See Business is a Global War

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Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too. 

If you want to subscribe to iLook China, there is a “Subscribe” button at the top of the screen in the menu bar.

2 Comments | America, business, capitalism, China, economy | Tagged: , , , , , , , , , , , | Permalink
Posted by Lloyd Lofthouse

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