China 2008 - Observations and travel log Report to the Tech Community Friday, October 31, noon Matthew Nemerson, President & CEO Connecticut Technology Council Video Conference Room at the Connecticut Innovation Center

Introductions and China familiarity Overview of the trip Opening observations China environment and growth background Pictorial highlights My final thoughts Dicsussion

Introductions and China familiarity

Overview of the trip

Opening observations

China environment and growth background

Pictorial highlights

My final thoughts

Dicsussion

Quick introductions Have you been to China or the Pacific Rim? Special interests

Quick introductions

Have you been to China or the Pacific Rim?

Special interests

Sponsored by Yale Education Travel My wife was “Professor on Board” 26 travelers Mostly Law School and College grads from 1950s and 1960s with wives Beijing > Xi’an > Yangtze River > Shanghai 18 Days

Sponsored by Yale Education Travel

My wife was “Professor on Board”

26 travelers

Mostly Law School and College grads from 1950s and 1960s with wives

Beijing > Xi’an > Yangtze River > Shanghai

18 Days

Expected Big buildings Great historical structures Growth Chaos Pollution Arrogance Oppression?

Expected

Big buildings

Great historical structures

Growth

Chaos

Pollution

Arrogance

Oppression?

Didn’t expect Humility and introspection Optimism and appreciation for developments Fondness for USA Cleanliness (in Beijing and Shanghai) Quality of Museums Quality of infrastructure Level and expansiveness of growth Obvious challenges to continued growth

Didn’t expect

Humility and introspection

Optimism and appreciation for developments

Fondness for USA

Cleanliness (in Beijing and Shanghai)

Quality of Museums

Quality of infrastructure

Level and expansiveness of growth

Obvious challenges to continued growth

Road Warrior Details Canon Digital SLR – three lens Cannon – Powershot 100 point and shoot Panasonic laptop – 2.3 pounds WE 250 GB drive Conversion boxes Video Flip Sony hard-drive digital movie camera Lots of special plugs and powerpacks

Canon Digital SLR – three lens

Cannon – Powershot 100 point and shoot

Panasonic laptop – 2.3 pounds

WE 250 GB drive

Conversion boxes

Video Flip

Sony hard-drive digital movie camera

Lots of special plugs and powerpacks

Road Warrior Details Uploading to Flickr photos - slowly Bloging with Typepad – when connectivity Skyping when possible – a few problems From PDA wherever I was: Text messaging at $.50 rather than calling at $1.95/minute Getting emails usually and often able to send

Uploading to Flickr photos - slowly

Bloging with Typepad – when connectivity

Skyping when possible – a few problems

From PDA wherever I was:

Text messaging at $.50 rather than calling at $1.95/minute

Getting emails usually and often able to send

Rank Country Industrial production Date of Info. growth rate(%) 1 Sudan 32.00 2007 est. 2 Azerbaijan 31.00 2007 est. 3 Angola 24.40 2007 est. 4 Vietnam 17.10 2007 est. 5 Equatorial Guinea 14.10 2007 est. Egypt 13.80 2007 est. China 12.90 2007 est ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 166 United Kingdom 0.70 2007 est. 167 Belize 0.50 2007 est. 168 Zimbabwe 0.50 2007 est. 169 United States 0.50 2007 est. 170 Saudi Arabia 0.20 2007 est. https://www.cia.gov/library/publications/the-world-factbook/geos/ch.html

Rank Country Industrial production Date of Info.

growth rate(%)

1 Sudan 32.00 2007 est.

2 Azerbaijan 31.00 2007 est.

3 Angola 24.40 2007 est.

4 Vietnam 17.10 2007 est.

5 Equatorial Guinea 14.10 2007 est.

Egypt 13.80 2007 est.

China 12.90 2007 est

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Worlds largest at 104 million 2x the number of manufacturing workers in the US, Canada, Japan, France, Germany, Italy, and the UK combined Computers and computer parts in Guandong Province: “ If there is a traffic jam between Dongguan and Hong Kong, 70% of the world’s computer market will be affected.” A. Harney, The China Price , The Penguin Press, 2008

Worlds largest at 104 million

2x the number of manufacturing workers in the US, Canada, Japan, France, Germany, Italy, and the UK combined

Computers and computer parts in Guandong Province:

“ If there is a traffic jam between Dongguan and Hong Kong, 70% of the world’s computer market will be affected.”

China is the number one producer of solar photovoltaics , with > 200 manufacturers creating 1700 MW of panels in 2007, nearly half of total world production of 3,800 MW. China has become the world's leading proponent of solar heating technology China is among the world leaders in wind energy with as much as 70% of the components made in China. Chinese Renewable Energy Industries Association (CREIA), Scientific American , August 4, 2008

China is the number one producer of solar photovoltaics , with > 200 manufacturers creating 1700 MW of panels in 2007, nearly half of total world production of 3,800 MW.

China has become the world's leading proponent of solar heating technology

China is among the world leaders in wind energy with as much as 70% of the components made in China.

Incidence of Poverty – World Bank-ILO People People Below Below $2/Day $2/Day Late-1980s Late-1990s China 67.4% 50.1% India 83.2% 78.8% Africa 76.1% 76.1% ANEEL KARNANI, THE MIRAGE OF MARKETING TO THE BOP CALIFORNIA MANAGEMENT REVIEW VOL. 49, NO. 4 SUMMER 2007

Incidence of Poverty – World Bank-ILO

People People

Below Below

$2/Day $2/Day

Late-1980s Late-1990s

China 67.4% 50.1%

India 83.2% 78.8%

Africa 76.1% 76.1%

China's population doubled in 50 years to 1.3 billion today. China is home to approximately 20% of the world's 6.4 billion people. 170 cities over 1 million population Total of 56 ethnic groups, of which the largest is the Han Chinese.

China's population doubled in

50 years to 1.3 billion today.

China is home to approximately

20% of the world's 6.4 billion

people.

170 cities over 1 million population

Total of 56 ethnic groups, of which the largest is the Han Chinese.

The Distribution of World Population

PRC government structure II

Policy is not set by government, but primarily by the Chinese Communist Party (CCP) CCP something like a board of directors, but also maintains a parallel organizational structure to that of the government bureaucracy, with Party members overseeing the work of government officials. J. Starr, Understanding China, Hill and Wang, 2001.

Policy is not set by government, but primarily by the Chinese Communist Party (CCP)

CCP something like a board of directors, but also maintains a parallel organizational structure to that of the government bureaucracy, with Party members overseeing the work of government officials.

‘‘ development is of overriding importance’’ ‘‘ development is the top priority’’ ‘‘ overall, balanced and sustainable development’’ gradually giving birth to a scientific philosophy of development specific to China

‘‘ development is of overriding importance’’

‘‘ development is the top priority’’

‘‘ overall, balanced and sustainable development’’

gradually giving birth to a scientific philosophy of development specific to China

Source: Liu, J. and Diamond, J. (2008). Revolutionizing China’s environmental protection. Science, Vol 413, 37-38 CO 2 emissions are rising in step with growing GDP

Compared to the average person in China: Americans consume nine times as much energy, use four times as much water, and release nearly eight times as much greenhouse gas

Compared to the average person in China:

Americans consume nine times as much energy,

use four times as much water, and

release nearly eight times as much greenhouse gas

Large (but controlled) population x sustained high rates of economic growth x increased investments in military and space x growing technological might = world superpower ? Intolerance of social behaviors x mass rural unemployment x corruption x poor environmental conditions x unwillingness to undertake structural reform = collapse of China?

Large (but controlled) population x sustained high rates of economic growth x increased investments in military and space x growing technological might = world superpower ?

Intolerance of social behaviors x mass rural unemployment x corruption x poor environmental conditions x unwillingness to undertake structural reform =

collapse of China?

Remember these sentiments: The only way for manufacturers to compete with China is to move operations to China themselves.... “ China makes you sharp or it kills you.” Wall Street Journal March 2004

Remember these sentiments:

The only way for manufacturers to compete with China is to move operations to China themselves....

“ China makes you sharp or it kills you.”

Wall Street Journal

March 2004

Move up the value chain from low value goods – i.e. cars, motorcycles industrial machinery Branch out into design – J&J, research and development, brand creation to compete with higher price int’l brands Acquire rivals and increase economies of scale Retire and speculate on real estate!!

Move up the value chain from low value goods – i.e. cars, motorcycles industrial machinery

Branch out into design – J&J, research and development, brand creation to compete with higher price int’l brands

Acquire rivals and increase economies of scale

Retire and speculate on real estate!!

In December 2004, Chinese leaders agreed to shift the economy to be less reliant on inventment and exports and more toward domestic consumption. One Chinese report referred to this as a move away from the two “strong horses” of investment and international trade toward the “weak donkey” of consumption.

In December 2004, Chinese leaders agreed to shift the economy to be less reliant on inventment and exports and more toward domestic consumption.

One Chinese report referred to this as a move away from the two “strong horses” of investment and international trade toward the “weak donkey” of consumption.

Importing companies contribute to China’s vast pollution That pollution has reached the US west coast and other parts of the world China and other countries compete for energy, food crops, and other global resources (but this also reduces fertilizer loading and the water needed to grow grains and other crops China’s fate is already intertwined with that of the rest of the world.

Importing companies contribute to China’s vast pollution

That pollution has reached the US west coast and other parts of the world

China and other countries compete for energy, food crops, and other global resources (but this also reduces fertilizer loading and the water needed to grow grains and other crops

China’s fate is already intertwined with that of the rest of the world.

The rule of law and the legal system Worker and farmer health, safety and livelihoods Watchdog role of media Grow-at-any cost vs. balanced development And, even with the rising expectations of Chinese citizens, ultimately, remember an important lesson from the west…

The rule of law and the legal system

Worker and farmer health, safety and livelihoods

Watchdog role of media

Grow-at-any cost vs. balanced development

And, even with the rising expectations of Chinese citizens, ultimately, remember an important lesson from the west…

Getting used to world class airports

Getting used to world class airports German Maglev connects to Shanghai suburbs and goes 250 MPH

Beijing extreme

The contrasts

Keeping the place clean

Olympic memories

Tiananmen Square

Tiananmen Square

Forbidden City

Forbidden City

“ Traditional” Peking Duck

The Great Wall

Ming Tombs

Beijing Opera

Temple of Heaven

Hospital of traditional medicine

Summer Palace

At Tsinghua University Platinum Certified

Marian Lectures

Xi’an

The Xi’an terracotta warriors

The Xi’an terracotta warriors

The Xi’an terracotta warriors

The Xi’an terracotta warriors

Xi’an scenes

Changing China

A typical university 40,000 students 4 year old campus Language and foreign trade

40,000 students

4 year old campus

Language and foreign trade

The country side

The 3 Gorges Dam

“ Tangtze” River

The 3 Gorges Dam

The “trackers”

Impact of 3 Gorges Dam

Impact of 3 Gorges Dam

Impact of 3 Gorges Dam

Cultural and economic Impact of 3 Gorges Dam

The biggest city you never heard of… Chongching – 33 million

Chongching – 33 million

The biggest city you never heard of… Fascinating museum about the US during and after war of Japanese occupation

Fascinating museum about the US during and after war of Japanese occupation

Shanghai

Shanghai

Shanghai

Shanghai

Modern lifestyles

Modern lifestyles

Terrific Museums

Terrific Museums – Urban Planning

The acrobats are still going strong

Yale China Educational Trip October 2008

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