China The Next 30 Years

ChinaChina = The= The NextNext 30 Years30 Years
A Presentation byA Presentation by
Dr. Tim DosemagenDr. Tim Dosemagen

National FlagNational Flag
The red color of the flag is the symbol of the
revolution, signifying that the political power of the
People's Republic of China is achieved through
bloodshed and lives laid down by countless
revolutionary martyrs who marched forward wave
upon wave in the heroic struggles for the revolution.
In the upper-left corner of the flag there are five-
pointed yellow stars, of which the big one represents
the Communist Party of China and the four small
ones the people of all ethnic groups of the country.
One point of the big star points right up the flag and
of the four small ones each has a point pointing
towards the centre of the big star. This shows that
the Chinese Communist Party is the force at the
core of the leadership of the Chinese people of all
ethnic groups who unite closely as one round the
Party. With the color of the stars in yellow this
means the great cause of socialism has a bright
future. With the flag-staff painted white, that is to
suggest flawless purity and loftiness.

Population TrendsPopulation Trends
 China's future population growth is aChina's future population growth is a
product of past growth. The averageproduct of past growth. The average
number of children per woman has beennumber of children per woman has been
below the replacement level of 2.1 since thebelow the replacement level of 2.1 since the
mid-1980s. Most recent estimates from themid-1980s. Most recent estimates from the
State Statistical Bureau assume that currentState Statistical Bureau assume that current
fertility on a national average is at 1.85fertility on a national average is at 1.85
children per woman. In cities, the fertilitychildren per woman. In cities, the fertility
was estimated at 1.43, in towns at 1.58, andwas estimated at 1.43, in towns at 1.58, and
in rural counties at 2.00 children perin rural counties at 2.00 children per
woman. Whatever population growthwoman. Whatever population growth
we see in the future will be caused not bywe see in the future will be caused not by
high fertility, but by the "populationhigh fertility, but by the "population
momentum" of China's young agemomentum" of China's young age
structure. What will come is a legacy of thestructure. What will come is a legacy of the
1950s and 1960s, when China's fertility was1950s and 1960s, when China's fertility was
quite high and mortality had alreadyquite high and mortality had already
declined. Consequently, China now has adeclined. Consequently, China now has a
large number of young adults oflarge number of young adults of
reproductive age. Their number will actuallyreproductive age. Their number will actually
increase until 2015. This growing number ofincrease until 2015. This growing number of
potential parents is the reason the numberpotential parents is the reason the number
of births will remain high even if fertilityof births will remain high even if fertility
remains at the current low level.remains at the current low level.

 China's population planners can doChina's population planners can do
nothing about this structural increase.nothing about this structural increase.
The problem they face is keepingThe problem they face is keeping
fertility at the current low level.fertility at the current low level.
However, with China's economicHowever, with China's economic
modernization, this may be an uphillmodernization, this may be an uphill
battle, because in a more liberalbattle, because in a more liberal
society many Chinese might notsociety many Chinese might not
accept the government's strict one-accept the government's strict one-
child family policy. This policy haschild family policy. This policy has
already been loosened for parents whoalready been loosened for parents who
were single children themselves, forwere single children themselves, for
farmers, and for ethnic minorities. Infarmers, and for ethnic minorities. In
fact, most population projections forfact, most population projections for
China assume that fertility will increaseChina assume that fertility will increase
slightly to the replacement level of 2.1slightly to the replacement level of 2.1
children per woman. Policymakers inchildren per woman. Policymakers in
China are of course aware of thisChina are of course aware of this
challenge. The family planningchallenge. The family planning
program still has very high politicalprogram still has very high political
priority, even under the most recentpriority, even under the most recent
political administration.political administration.

 On the other hand, there is a secular trendOn the other hand, there is a secular trend
toward small families among youngertoward small families among younger
couples in urban areas. Surveys havecouples in urban areas. Surveys have
documented a lifestyle change among thosedocumented a lifestyle change among those
sections of the urban population that havesections of the urban population that have
benefited most from China’s economicbenefited most from China’s economic
development. They prefer later marriages,development. They prefer later marriages,
later first births, and increased birth spacing,later first births, and increased birth spacing,
not only because these decisions arenot only because these decisions are
promoted by the family planning program,promoted by the family planning program,
but also because they make it easier tobut also because they make it easier to
improve one’s education or pursue a career.improve one’s education or pursue a career.
As in many other developing countries,As in many other developing countries,
fertility in China will probably decline withfertility in China will probably decline with
prosperity. Thus, there are two oppositeprosperity. Thus, there are two opposite
trends: while the necessary liberalization oftrends: while the necessary liberalization of
society is "weakening" the family planningsociety is "weakening" the family planning
program, which might lead to an increase inprogram, which might lead to an increase in
fertility, economic development is promotingfertility, economic development is promoting
a lifestyle change associated with lowera lifestyle change associated with lower
fertility. China’s future population growth willfertility. China’s future population growth will
depend very much on the balance of thesedepend very much on the balance of these
two factors.two factors.

Population FactsPopulation Facts
 China’s One ChildChina’s One Child
Policy created twoPolicy created two
generations of onlygenerations of only
children numberingchildren numbering
over 90 million.over 90 million.
 119 baby boys are119 baby boys are
born for every 100born for every 100
girls.girls.
 The number ofThe number of
unmarried youngunmarried young
men, called ‘baremen, called ‘bare
branches’, isbranches’, is
expected to be 30expected to be 30
million by 2030.million by 2030.
 45 percent of Chinese45 percent of Chinese
women surveyed saywomen surveyed say
they do not want tothey do not want to
give up their careersgive up their careers
to get married.to get married.

Chinese MinoritiesChinese Minorities
 BaiBai  LiLi
 TibetanTibetan  MiaoMiao

The Chinese LanguageThe Chinese Language
 3,000 characters3,000 characters
required to be literaterequired to be literate
 4,000 years4,000 years ofof
pictogram evolutionpictogram evolution

The Chinese LanguageThe Chinese Language
 Two partsTwo parts of eachof each
pictogram - radical &pictogram - radical &
phoneticphonetic
 RadicalRadical = General= General
categorycategory
 PhoneticPhonetic ==
PronunciationPronunciation
 HandHand
 PrayPray
 Pick-pocketPick-pocket

Chinese ReligionsChinese Religions
 BuddhismBuddhism
 TaoismTaoism
 ConfucianismConfucianism
 AnimismAnimism
 AnimismAnimism JudaismJudaism
ChristianityChristianity IslamIslam
BuddhismBuddhism HinduismHinduism
Animism Judaism Christianity
Islam Buddhism Hinduism

Comparative Land AreasComparative Land Areas
China / United StatesChina / United States

Political LeadershipPolitical Leadership
 Chief of State:Chief of State: President XI Jinping (since 15President XI Jinping (since 15
March 2013)March 2013)
 Vice President:Vice President: LI Yuanchao (since 15 MarchLI Yuanchao (since 15 March
2013)2013)

President Xi Jinping:President Xi Jinping:
Profiles of the Chinese PresidentProfiles of the Chinese President
In contrast to the stiff and formal Hu, XiIn contrast to the stiff and formal Hu, Xi
has crafted a more relaxed, sometimeshas crafted a more relaxed, sometimes
bluff political style. He has complained ofbluff political style. He has complained of
officials' speeches and writings beingofficials' speeches and writings being
clogged with party jargon and demandedclogged with party jargon and demanded
more plain speaking.more plain speaking.

President Hu Jintao:President Hu Jintao:
Profiles of the Chinese PresidentProfiles of the Chinese President
 Xi is the son of reformistXi is the son of reformist
former vice premier andformer vice premier and
parliament vice-chairman Xiparliament vice-chairman Xi
Zhongxun, making him aZhongxun, making him a
"princeling" - one of the"princeling" - one of the
privileged sons and daughtersprivileged sons and daughters
of China's incumbent, retiredof China's incumbent, retired
or late leaders. He grew upor late leaders. He grew up
among the party elite and thenamong the party elite and then
watched his father purged fromwatched his father purged from
power before the 1966-76power before the 1966-76
Cultural Revolution, when XiCultural Revolution, when Xi
himself spent years in thehimself spent years in the
poverty-stricken countrysidepoverty-stricken countryside
before going to university.before going to university.
 He studied chemicalHe studied chemical
engineering at Tsinghuaengineering at Tsinghua
University in Beijing, an eliteUniversity in Beijing, an elite
school where Hu also studied.school where Hu also studied.
Xi later gained a degree inXi later gained a degree in
Marxist theory from TsinghuaMarxist theory from Tsinghua
and a doctorate in law.and a doctorate in law.

Premier:Premier: Li KeqiangLi Keqiang
Vice Premiers:
StateState
Councilors:Councilors:

Head of Government: Premier LI Keqiang
Executive Vice Premier: WANG Qishan
Vice Premiers: ZHANG Gaoli, LIU Yandong, Wang Yang and Ma Kai
Cabinet: State Council appointed by the National People's Congress (NPC)
Elections: President and vice president elected by the National People's
Congress for a five-year term (eligible for a second term); elections last
held March 2013; premier nominated by the president, confirmed by the
National People's Congress

CurrencyCurrency
 TheThe renminbirenminbi oror ren min biren min bi ((
Simplified ChineseSimplified Chinese:: 人民币人民币 ););
literally "people's currency") isliterally "people's currency") is
the officialthe official currencycurrency in thein the
mainlandmainland of theof the
People's Republic of ChinaPeople's Republic of China
(PRC), whose principal unit is(PRC), whose principal unit is
thethe yuanyuan ((Simplified ChineseSimplified Chinese::
元元 ).).
 It is issued by theIt is issued by the
People's Bank of ChinaPeople's Bank of China, the, the
monetary authority of the PRC.monetary authority of the PRC.
The officialThe official ISO 4217ISO 4217
abbreviation is CNY, althoughabbreviation is CNY, although
also commonly abbreviated asalso commonly abbreviated as
"RMB". The Latinised symbol"RMB". The Latinised symbol
isis ¥¥..
 1 USD = 6.13 RMB.1 USD = 6.13 RMB.

Gross National ProductGross National Product

Economic Growth ModelEconomic Growth Model
#1: Encourage#1: Encourage capital inflowcapital inflow
#2:#2: GrowGrow as rapidly as possible whileas rapidly as possible while
controlling inflationcontrolling inflation

Factory to the WorldFactory to the World
Source – National Geographic, June, 2008Source – National Geographic, June, 2008
 For every shipping container bringing materialsFor every shipping container bringing materials
into Guangdong Province, nine go out filled withinto Guangdong Province, nine go out filled with
exports.exports.
 Percent of the world’s umbrellas made in China:Percent of the world’s umbrellas made in China:
70.70.
 Percent of the world’s buttons made in China:Percent of the world’s buttons made in China:
60.60.
 Percent of U.S. shoes made in China: 72.Percent of U.S. shoes made in China: 72.
 Percent of U.S. kitchen appliances made inPercent of U.S. kitchen appliances made in
China: 50.China: 50.

 Percent of U.S. artificial Christmas trees made inPercent of U.S. artificial Christmas trees made in
China: 85.China: 85.
 Percent of U.S. toys made in China: 80.Percent of U.S. toys made in China: 80.
 Percent of Chinese goods sent to the U.S. thatPercent of Chinese goods sent to the U.S. that
end up on Wal-Mart’s shelves: 9.end up on Wal-Mart’s shelves: 9.
 Percent of unsafe toys recalled in the U.S. inPercent of unsafe toys recalled in the U.S. in
2007, including Thomas the Tank Engine, that2007, including Thomas the Tank Engine, that
were made in China: 100.were made in China: 100.
 Number of months a Chinese factory workerNumber of months a Chinese factory worker
would need to work to earn the cost of a Thomaswould need to work to earn the cost of a Thomas
the Tank Engine train set: 6.the Tank Engine train set: 6.

 Try finding a coffeemaker, an iPod, or birthdayTry finding a coffeemaker, an iPod, or birthday
candles not made in China, and you’ll see thecandles not made in China, and you’ll see the
results of what American manufacturers call theresults of what American manufacturers call the
“China price”: Goods can be made so cheaply in“China price”: Goods can be made so cheaply in
China that it’s cornered the market on manyChina that it’s cornered the market on many
products. For Americans, the flip side of lostproducts. For Americans, the flip side of lost
factory jobs is an abundance of good deals atfactory jobs is an abundance of good deals at
Wal-Mart. And despite scares over lead-lacedWal-Mart. And despite scares over lead-laced
Barbies and tainted pet food, the goods keep onBarbies and tainted pet food, the goods keep on
coming, making China’s Guangdong Provincecoming, making China’s Guangdong Province
the world’s manufacturing Mecca.the world’s manufacturing Mecca.

Economic FactsEconomic Facts
 China is expected toChina is expected to
overtake the U.S. asovertake the U.S. as
the world’s largestthe world’s largest
economy by 2030.economy by 2030.
 Urban Chinese earnUrban Chinese earn
more than 3 times asmore than 3 times as
much as those in ruralmuch as those in rural
areas, the highestareas, the highest
income gap since theincome gap since the
start of the reforms instart of the reforms in
1978.1978.
 One in four BeijingOne in four Beijing
residents is a migrantresidents is a migrant
from the country.from the country.
 67 percent of67 percent of
millionaires surveyedmillionaires surveyed
say they aresay they are
sacrificing health forsacrificing health for
money.money.
 Public protests overPublic protests over
pay rose by 50% frompay rose by 50% from
2007 to 2008.2007 to 2008.

The People’s Liberation ArmyThe People’s Liberation Army
 The 2.5-million-strongThe 2.5-million-strong
PLA, a sprawlingPLA, a sprawling
organization of low-paidorganization of low-paid
and poorly trained men,and poorly trained men,
decrepit equipment anddecrepit equipment and
outdated philosophy.outdated philosophy.
 Defense spending rose by 9.6Defense spending rose by 9.6
percent last year to US$22.4percent last year to US$22.4
billion, a slight slowing after 13billion, a slight slowing after 13
years of double-digit growthyears of double-digit growth
increases that have raisedincreases that have raised
alarm abroad. Actual spendingalarm abroad. Actual spending
is believed higher -- as muchis believed higher -- as much
as US$55 billion, foreignas US$55 billion, foreign
experts say, because the totalexperts say, because the total
doesn't include weaponsdoesn't include weapons
purchases.purchases.

The People’s Liberation Air ForceThe People’s Liberation Air Force

The People’s Liberation Air ForceThe People’s Liberation Air Force
 As of 2006 the PLA AirAs of 2006 the PLA Air
Force had a total strengthForce had a total strength
of approximately 370,000,of approximately 370,000,
organized into 45 airorganized into 45 air
divisions. Among themdivisions. Among them
are five bomber divisions,are five bomber divisions,
32 fighter divisions, six32 fighter divisions, six
attack divisions, twoattack divisions, two
transport divisions, 17 airtransport divisions, 17 air
defense divisions [withdefense divisions [with
220,000 troops], and one220,000 troops], and one
airborne army comprisingairborne army comprising
three airborne divisionsthree airborne divisions
with 20,000 airbornewith 20,000 airborne
troops.troops.

The People’s Liberation NavyThe People’s Liberation Navy
 In the past twenty years theIn the past twenty years the
Peoples Liberation Army NavyPeoples Liberation Army Navy
(PLAN) has made(PLAN) has made
considerable strides to evolveconsiderable strides to evolve
into a more modern, activeinto a more modern, active
'green water' organization that'green water' organization that
seeks to operate and influenceseeks to operate and influence
matters further away frommatters further away from
shore.shore.
 Its area of maritime interestIts area of maritime interest
stretches from the Malaccastretches from the Malacca
Straits, to Vladivostok, and outStraits, to Vladivostok, and out
to the so-called “first islandto the so-called “first island
chain" (Aleutians, Kuriles,chain" (Aleutians, Kuriles,
Ryukyus, Taiwan, Philippines,Ryukyus, Taiwan, Philippines,
and Greater Sunda Islands).and Greater Sunda Islands).

The People’s Liberation NavyThe People’s Liberation Navy
 It seeks to be a regionalIt seeks to be a regional
maritime power able to protectmaritime power able to protect
Sea Lanes of CommunicationSea Lanes of Communication
(SLOC) and to capture and(SLOC) and to capture and
defend the islands that are indefend the islands that are in
its maritime area of interest.its maritime area of interest.
 It is also being used moreIt is also being used more
frequently to promote friendlyfrequently to promote friendly
relations with other states byrelations with other states by
making foreign port calls,making foreign port calls,
something quite alien for muchsomething quite alien for much
of China's recent history.of China's recent history.

Recent Historical HighlightsRecent Historical Highlights
 19111911 – Dynastic Rule inChina ends with– Dynastic Rule inChina ends with
fall of the Qing, new President Sun Yatfall of the Qing, new President Sun Yat
Sen sworn inSen sworn in
 19341934 – Communist insurgents routed out– Communist insurgents routed out
of homeland, Long March beginsof homeland, Long March begins
 19351935 – Japanese invasion of China– Japanese invasion of China
beginsbegins
 19451945 – Japan defeated by the United– Japan defeated by the United
States, China liberatedStates, China liberated
 19491949 – Chinese Nationalists routed by– Chinese Nationalists routed by
Communists, People’s Republic declaredCommunists, People’s Republic declared

 19501950 – Collectivization begins, along– Collectivization begins, along
with thought reformwith thought reform
 19531953 – Korean armistice. 1 million– Korean armistice. 1 million
Chinese dead. Korea totally destroyed.Chinese dead. Korea totally destroyed.
U.S. maintains foothold on the AsianU.S. maintains foothold on the Asian
continent.continent.
 19571957 – Hundred Flowers Movement– Hundred Flowers Movement
begins and ends. Sino-Soviet split recursbegins and ends. Sino-Soviet split recurs
 1958-611958-61 – Great Leap Forward movement– Great Leap Forward movement
begins and endsbegins and ends
 19621962 – China routs India in border war– China routs India in border war

19641964 – China explodes atomic bomb– China explodes atomic bomb
1966-691966-69 – Great Proletariat Cultural– Great Proletariat Cultural
Revolution gains forceRevolution gains force
19751975 – U.S. withdraws from– U.S. withdraws from
VietnamVietnam
19761976 – Tangshan earthquake –– Tangshan earthquake –
200,000 dead. Mao dies. Cultural200,000 dead. Mao dies. Cultural
revolution ends.revolution ends.
19781978 – Sino-Vietnamese War– Sino-Vietnamese War
begins. Deng Xiao Pingbegins. Deng Xiao Ping
consolidates power.consolidates power.

 19791979 – US - PRC diplomatic relations– US - PRC diplomatic relations
normalized. Chinese economy beginsnormalized. Chinese economy begins
tremendous growth under Deng’s reforms.tremendous growth under Deng’s reforms.
 19821982 – China launches SLBM from Han Class– China launches SLBM from Han Class
SSBN. Population reaches 1,000 millions.SSBN. Population reaches 1,000 millions.
 19891989 – Tian An Men Square massacre – Night– Tian An Men Square massacre – Night
of the black hands. Pro-Democracy anti-of the black hands. Pro-Democracy anti-
revolutionaries quashed.revolutionaries quashed.
 19901990 – China feels first light sweet crude oil– China feels first light sweet crude oil
pinch as prices spike due to Persian Gulf Warpinch as prices spike due to Persian Gulf War
preparations. China becomes a major netpreparations. China becomes a major net
importer of oil. Large scale weapons transfersimporter of oil. Large scale weapons transfers
to Iran and Pakistan begin.to Iran and Pakistan begin.

 19961996 – China threatens Taiwan as a rogue– China threatens Taiwan as a rogue
province by firing missiles over Taiwanprovince by firing missiles over Taiwan
airspace. U.S. commits 2 aircraft carrier battleairspace. U.S. commits 2 aircraft carrier battle
groups (1/6th of its Navy) to the Taiwangroups (1/6th of its Navy) to the Taiwan
Straights. Chinese diplomats state, “You haveStraights. Chinese diplomats state, “You have
your Cuba, we have our Taiwan”. Chinayour Cuba, we have our Taiwan”. China
purchases aircraft carrier from Spain.purchases aircraft carrier from Spain.
 19981998 – U.S. balance of trade deficit with China– U.S. balance of trade deficit with China
exceeds $50,000,000,000.00exceeds $50,000,000,000.00
 19991999 – China completely repatriates Hong– China completely repatriates Hong
Kong. Keel laying on China’s first aircraftKong. Keel laying on China’s first aircraft
carriercarrier
 20012001 – China joins WTO, followed by Taiwan.– China joins WTO, followed by Taiwan.
China joins the US in the Global War againstChina joins the US in the Global War against
Radical Islamist terrorists.Radical Islamist terrorists.

 19991999 – U.S. destroys– U.S. destroys
Chinese embassy inChinese embassy in
Belgrade; massiveBelgrade; massive
Chinese streetChinese street
protestsprotests
 The United States agreed toThe United States agreed to
pay $4.5 million in damages topay $4.5 million in damages to
about two dozen peopleabout two dozen people
injured and the families ofinjured and the families of
three reporters killed whenthree reporters killed when
NATO bombs hit theNATO bombs hit the
Chinese EmbassyChinese Embassy inin BelgradeBelgrade,,
former Yugoslavia.former Yugoslavia.
 U.S. envoys also asked BeijingU.S. envoys also asked Beijing
to pay for damages to U.S.to pay for damages to U.S.
diplomatic offices in China thatdiplomatic offices in China that
occurred during violentoccurred during violent
protestsprotests after the May 7, 1999after the May 7, 1999
bombing.bombing.

 20052005 – China’s economy reaches– China’s economy reaches
$1,500,000,000,000.00, or 1/7th the size$1,500,000,000,000.00, or 1/7th the size
of the U.S.of the U.S.
 20062006 - Population reaches 1,400 millions- Population reaches 1,400 millions
 20062006 - U.S. balance of trade deficit with- U.S. balance of trade deficit with
China exceeds $200,000,000,000.00, orChina exceeds $200,000,000,000.00, or
approximately $500,000 per day, orapproximately $500,000 per day, or
$6,000 per second$6,000 per second
 20062006 – Launch of first manned space– Launch of first manned space
mission by P.R.C.mission by P.R.C.

The Next 30 YearsThe Next 30 Years
20072007 – An automobile manufacturing giant– An automobile manufacturing giant
emergesemerges
Pictured: A Chinese manufactured BMWPictured: A Chinese manufactured BMW

BMW in ChinaBMW in China
 The German manager of a plant, which has a capacity of 130,000 cars per yearThe German manager of a plant, which has a capacity of 130,000 cars per year
(including the new 3 series), said that the quality ratings from his plant are the #1 in(including the new 3 series), said that the quality ratings from his plant are the #1 in
the world for BMW. The work force is “…the most motivated he has ever seen.”the world for BMW. The work force is “…the most motivated he has ever seen.”
 Think about how this plant can afford to make such a beautiful, hand-crafted,Think about how this plant can afford to make such a beautiful, hand-crafted,
products. The answer, of course, is low costs. Almost all of the workers in the plantproducts. The answer, of course, is low costs. Almost all of the workers in the plant
were 20-30 years old and have blue flames coming out from behind when they walkwere 20-30 years old and have blue flames coming out from behind when they walk
down the line. 60% were graduate engineers.down the line. 60% were graduate engineers.
 The starting wage? $180 per month. Think about it.The starting wage? $180 per month. Think about it.
 The gap between Chinese wages and prices and U.S. wages and prices is the mostThe gap between Chinese wages and prices and U.S. wages and prices is the most
powerful organizing force for change in the world today. That gap cannot persist in anpowerful organizing force for change in the world today. That gap cannot persist in an
open global economy. Chinese wages are rising fast as they get access to moreopen global economy. Chinese wages are rising fast as they get access to more
capital. U.S. real wages have risen 9% in the 25 years since 1973.capital. U.S. real wages have risen 9% in the 25 years since 1973.
 The arbitrage pressure created by the wage and price gap is driving the U.S.The arbitrage pressure created by the wage and price gap is driving the U.S.
economy. It works through trade in goods in the old-fashioned way on ships carryingeconomy. It works through trade in goods in the old-fashioned way on ships carrying
goods back and forth. It works by shipping services across fiber-optic cables in thegoods back and forth. It works by shipping services across fiber-optic cables in the
form of photons. Both drive wages and prices together.form of photons. Both drive wages and prices together.

World Automobile Production - 2005World Automobile Production - 2005

Car CrazyCar Crazy
Source: National Geographic, June, 2008Source: National Geographic, June, 2008
 China is still in the dizzying first days of its loveChina is still in the dizzying first days of its love
affair with the automobile – it has the sameaffair with the automobile – it has the same
number of cars per capita as the United Statesnumber of cars per capita as the United States
did in 1915 – but it’s racing ahead: Chinadid in 1915 – but it’s racing ahead: China
recently surpassed Japan as the second largestrecently surpassed Japan as the second largest
car market, after the U.S. Car culture hascar market, after the U.S. Car culture has
already transformed daily life, with wildly popularalready transformed daily life, with wildly popular
car clubs, “self-driving” vacations, and drive-car clubs, “self-driving” vacations, and drive-
through eateries, not to mention traffic jams andthrough eateries, not to mention traffic jams and
eye-stinging smog.eye-stinging smog.

Car CrazyCar Crazy
Number of privately owned cars in China:Number of privately owned cars in China:
11,500,000.11,500,000.
Number of additional cars on Beijing roadsNumber of additional cars on Beijing roads
every day: 1,000.every day: 1,000.
Year the government began encouragingYear the government began encouraging
private car ownership in China: 1994.private car ownership in China: 1994.
Number of privately owned cars per 1,000Number of privately owned cars per 1,000
residents in China: 9. In the U.S.: 450.residents in China: 9. In the U.S.: 450.

Car CrazyCar Crazy
 Average number of bicycles owned by ChineseAverage number of bicycles owned by Chinese
families: 1.families: 1.
 Year by which China is expected to have moreYear by which China is expected to have more
cars than the U.S. does now: 2025.cars than the U.S. does now: 2025.
 Percent of people driving cars in China todayPercent of people driving cars in China today
who did not know how to drive three years ago:who did not know how to drive three years ago:
37.37.
 Number of times higher the death rate fromNumber of times higher the death rate from
accidents is in China, per 100,000 vehicles, thanaccidents is in China, per 100,000 vehicles, than
in the U.S.: 4.5in the U.S.: 4.5

Car CrazyCar Crazy
Rank of China among the hottest marketsRank of China among the hottest markets
for Rolls-Royce: 1.for Rolls-Royce: 1.
Price of the most popular Rolls-Royce soldPrice of the most popular Rolls-Royce sold
in China: $397,000.in China: $397,000.
Percent of Chinese car owners surveyedPercent of Chinese car owners surveyed
who paid for vehicles in cash: 96.who paid for vehicles in cash: 96.
Number of McDonalds drive-throughs inNumber of McDonalds drive-throughs in
2005: 1. Number expected by the end of2005: 1. Number expected by the end of
2008: 115.2008: 115.

The Most Economic Car in theThe Most Economic Car in the
World : On Sale In ChinaWorld : On Sale In China

Better than an electric car – 258 miles/gallon: IPO 2010, Shanghai,Better than an electric car – 258 miles/gallon: IPO 2010, Shanghai,
PRCPRC
A single seat car A single seat car
Time from conception to production: 3 yearsTime from conception to production: 3 years
 The company is headquartered in Hamburg , Germany The company is headquartered in Hamburg , Germany
Selling for 4,000 Yuan, equivalent to US$ 600..Selling for 4,000 Yuan, equivalent to US$ 600..
Gas tank capacity = 1.7 gallons Gas tank capacity = 1.7 gallons
Speed = 62 – 74.6 Miles/hourSpeed = 62 – 74.6 Miles/hour
Fuel efficiency = 258 miles/gallonFuel efficiency = 258 miles/gallon
Travel distance with a full tank = 404 milesTravel distance with a full tank = 404 miles

20082008 – The Olympic Games– The Olympic Games

2008 Olympics – China’s2008 Olympics – China’s
AccomplishmentsAccomplishments
#1: Showcase China as a world power#1: Showcase China as a world power
#2: Defeat all nations in total medal count#2: Defeat all nations in total medal count
20042004 Athens /Athens / 20082008 Beijing OlympicsBeijing Olympics
Medals Count:Medals Count:
#1: USA –#1: USA – 102102//110110
#2: Russia –#2: Russia – 9292//7272
#3: China –#3: China – 6363//100100

20102010 – World Exposition to be held in– World Exposition to be held in
Shanghai, the world’s largest cityShanghai, the world’s largest city

U.S. Withdrawal From Asian MainlandU.S. Withdrawal From Asian Mainland
(ROK)(ROK)

The repatriation of TaiwanThe repatriation of Taiwan

 A Fourth Taiwan StraightA Fourth Taiwan Straight Crisis?Crisis?
 Called The Third Taiwan Straight Crisis, theCalled The Third Taiwan Straight Crisis, the 1995-1995-
1996 Taiwan Strait Crisis1996 Taiwan Strait Crisis was the effect of awas the effect of a
series of missile tests conducted by theseries of missile tests conducted by the
People's Republic of ChinaPeople's Republic of China in the waters surroundingin the waters surrounding
TaiwanTaiwan including theincluding the Taiwan StraitTaiwan Strait fromfrom July 21July 21,, 19951995
toto March 23March 23,, 19961996. The first set of missiles fired in. The first set of missiles fired in
mid to late 1995 were allegely intended to send amid to late 1995 were allegely intended to send a
strong signal to thestrong signal to the Republic of ChinaRepublic of China governmentgovernment
underunder Lee Teng-huiLee Teng-hui, who had been seen as moving, who had been seen as moving
ROC foreign policy away from theROC foreign policy away from the One-China PolicyOne-China Policy..
The second set of missiles were fired in early 1996,The second set of missiles were fired in early 1996,
allegedly intending to intimidate the Taiwaneseallegedly intending to intimidate the Taiwanese
electorate in the run-up to theelectorate in the run-up to the
1996 presidential election1996 presidential election..

 The 1995-1996 Taiwan StraightThe 1995-1996 Taiwan Straight CrisisCrisis
 The crisis began when President Lee Teng-huiThe crisis began when President Lee Teng-hui
accepted an invitation from hisaccepted an invitation from his alma materalma mater,,
Cornell UniversityCornell University, to deliver a speech on "Taiwan's, to deliver a speech on "Taiwan's
Democratization Experience." Seeking toDemocratization Experience." Seeking to
diplomatically isolate the Republic of China, the PRCdiplomatically isolate the Republic of China, the PRC
opposed such visits by ROC leaders (Nathan andopposed such visits by ROC leaders (Nathan and
Ross 1998). It argued that Lee harbored pro-Ross 1998). It argued that Lee harbored pro-
Taiwan independenceTaiwan independence sentiments and was thereforesentiments and was therefore
a threat to stability in the region.a threat to stability in the region.
 The U.S. responded by sending two aircraft carrierThe U.S. responded by sending two aircraft carrier
battle groups to the straights of Taiwan.battle groups to the straights of Taiwan.

 A Blue Water Chinese NavyA Blue Water Chinese Navy
 Pictured (right): The People's Liberation Army Navy (PLAN) guided-missilePictured (right): The People's Liberation Army Navy (PLAN) guided-missile
destroyer Shenzhen. Photo: US Navy.destroyer Shenzhen. Photo: US Navy.

PRC: 2 Carriers planned
64+ Destroyers/Frigates
India: 1 Carrier
28+ Destroyers/Frigates
Japan: 59+ Destroyers/Frigates
South Korea: 38+ Destroyers/Frigates
Australia: 14 Frigates
NavalNaval
CapabilityCapability
Taiwan: 29+ Frigates
Indonesia: 32 Frigates

Pacific Submarine Order of Battle
Source: “Combat Fleets of the World 2002-2003”, Naval Institute Press
TAIWAN
4
SINGAPORE
4
RUSSIA
31
IRAN
3
AUSTRALIA
6
SOUTH KOREA
15
NORTH KOREA
84
JAPAN
17
INDONESIA
2
PAKISTAN
10
INDIA
17
CHINA
65+
Over 250 Submarines in the AOR

Chinese Aircraft Carriers…Chinese Aircraft Carriers…
 Goal 1:Goal 1: Learn from the bestLearn from the best
 Chinese delegates to observeChinese delegates to observe
a U.S. military exercise talka U.S. military exercise talk
with an American pilot duringwith an American pilot during
preparations in the area ofpreparations in the area of
Guam, the United States,Guam, the United States,
June 18, 2006.June 18, 2006.
 A Chinese delegation hasA Chinese delegation has
been invited by thebeen invited by the
commander of the U.S. Pacificcommander of the U.S. Pacific
Command, Admiral William J.Command, Admiral William J.
Fallon, to observe the militaryFallon, to observe the military
exercise, which was held fromexercise, which was held from
June 19-23, 2006. [XinhuaJune 19-23, 2006. [Xinhua
Photo]Photo]

Chinese Aircraft Carriers…Chinese Aircraft Carriers…
 Goal 2:Goal 2: Establish a powerEstablish a power
projection capabilityprojection capability
 Since the early 1980s, whenSince the early 1980s, when
Western military officialsWestern military officials
began gaining tentativebegan gaining tentative
access to the People’saccess to the People’s
Liberation Army (PLA) afterLiberation Army (PLA) after
decades of isolation, analystsdecades of isolation, analysts
have debated the question ofhave debated the question of
whether China would buildwhether China would build
aircraft carriers. We now haveaircraft carriers. We now have
the answer: yes, China isthe answer: yes, China is
building aircraft carriers. Thebuilding aircraft carriers. The
debate now shifts to newdebate now shifts to new
questions: What type, whatquestions: What type, what
size, how many, and howsize, how many, and how
soon?soon?

20342034 – China’s economy projected to– China’s economy projected to
exceed the size of the U.S., at currentexceed the size of the U.S., at current
annual growth rates. (U.S. 2.2%, Chinaannual growth rates. (U.S. 2.2%, China
8%)8%)
ChineseChinese economic influenceeconomic influence reachesreaches
hyper-power statushyper-power status

Economic InfluenceEconomic Influence
Today, the US and Asia-Pacific account forToday, the US and Asia-Pacific account for
nearly 60% of the world’s GDPnearly 60% of the world’s GDP

In 2006, the US
and Asia-Pacific
nations consumed
over 55% of the
world’s energy

 Increasing OilIncreasing Oil
ConsumptionConsumption
 IncreasingIncreasing
competition for oilcompetition for oil
reserves / explorationreserves / exploration
 Oil and power: AOil and power: A
Chinese-built oil tankerChinese-built oil tanker
heading for Iran.heading for Iran.
China's long-term $70China's long-term $70
billion deal to buybillion deal to buy
Iranian crude oil andIranian crude oil and
natural gas begins anatural gas begins a
new power relationshipnew power relationship
that deeply worriesthat deeply worries
Washington.Washington.

Highest Economic Growth (1991-2001)Highest Economic Growth (1991-2001) (% increase(% increase
in real GDP)in real GDP)
1.1. BosniaBosnia
22.622.6
2.2. ChinaChina 9.89.8
3.3. VietnamVietnam 7.77.7
4.4. IrelandIreland
7.17.1
5.5. SingaporeSingapore 6.96.9The world’s fastest growing economies
are in the Asia-Pacific region

The United States is no longer theThe United States is no longer the
major trading partner of Southmajor trading partner of South
Korea or Japan…Korea or Japan…
It’s ChinaIt’s China

Japan and China are theJapan and China are the
largest foreign holders of USlargest foreign holders of US
debt.debt.
 Significant potential impact on interest ratesSignificant potential impact on interest rates
502
194
59
705
Japan
China
Caribbean
Other
$ Billions

20492049 – China’s population projected to– China’s population projected to
stabilize at 1,400 million, begins slowstabilize at 1,400 million, begins slow
decline.decline.

Demographic InfluenceDemographic Influence
Largest Populations (Largest Populations ( 20062006)) (M)(M)
1.1. ChinaChina 1,3351,335
2.2. IndiaIndia 1,0851,085
3.3. USUS 301301
4.4. IndonesiaIndonesia 230230
5.5. BrazilBrazil 178178
The Asia-Pacific region comprises
60% of the world’s population

Demographic InfluenceDemographic Influence
Largest Populations (Largest Populations ( 20502050)) (M)(M)
1.1. IndiaIndia 1,5311,531
2.2. ChinaChina 1,3951,395
3.3. USUS 408408
4.4. PakistanPakistan 349349
5.5. IndonesiaIndonesia 294294

A Chinese retirement crisisA Chinese retirement crisis
The one-child policy comes home to roostThe one-child policy comes home to roost

Shrinking WorkforceShrinking Workforce
 It’s the biggest demographic revolution inIt’s the biggest demographic revolution in
history: The number of China’s elderly ishistory: The number of China’s elderly is
ballooning thanks to improvements in medicineballooning thanks to improvements in medicine
and sanitation, while the number of people bornand sanitation, while the number of people born
after the government’s one-child policy went intoafter the government’s one-child policy went into
effect in 1979 is dwindling. China’s immenseeffect in 1979 is dwindling. China’s immense
workforce, key to today’s boom, will shrink afterworkforce, key to today’s boom, will shrink after
2015. The country should be able to fill jobs by2015. The country should be able to fill jobs by
continuing to tap underemployed rural laborers.continuing to tap underemployed rural laborers.
But by 2050, close to a third of China’s citizensBut by 2050, close to a third of China’s citizens
will be over 60 – three times the currentwill be over 60 – three times the current
population. China’s only children will have topopulation. China’s only children will have to
support two parents – another burden.support two parents – another burden.

 Building up PakistanBuilding up Pakistan  Building up IranBuilding up Iran

China’sChina’s Silkworm MissileSilkworm Missile
 Thousands sold toThousands sold to
Iran since 1982Iran since 1982
 Purpose = Close thePurpose = Close the
Straight of HormuzStraight of Hormuz

Chinese Space ExplorationChinese Space Exploration

AA ChineseChinese Moon Mission…Moon Mission…
 Goal 1:Goal 1: Establish a permanentEstablish a permanent
lunar presencelunar presence
 China has started assembly ofChina has started assembly of
their Moon rocket, with antheir Moon rocket, with an
unmanned orbiter scheduledunmanned orbiter scheduled
to take a trip around Moon into take a trip around Moon in
2007. Speaking to the Xinhua2007. Speaking to the Xinhua
News Agency, Luan Enjie -News Agency, Luan Enjie -
commander of the Chang'e 1commander of the Chang'e 1
Lunar Orbiter "Round theLunar Orbiter "Round the
Moon" project - noted theMoon" project - noted the
Moon rocket is beingMoon rocket is being
assembled and tested, withassembled and tested, with
the new launch facility andthe new launch facility and
mission control currentlymission control currently
taking shape.taking shape.

……and On toand On to MarsMars
 Goal 2:Goal 2: Reach MarsReach Mars
 The Chinese, who have madeThe Chinese, who have made
it no secret that they wish toit no secret that they wish to
beat the United States tobeat the United States to
becoming the first humans onbecoming the first humans on
Mars, are throwing vastMars, are throwing vast
amounts of money into theiramounts of money into their
exploration program. Theyexploration program. They
began Moon mission projectsbegan Moon mission projects
in 2004. Space officials semi-in 2004. Space officials semi-
jokingly refer to the inevitabilityjokingly refer to the inevitability
of the “red planet” as rightlyof the “red planet” as rightly
belonging to China’s futurebelonging to China’s future
generations.generations.

Taiwan Strait
Miscalculation
Korean Conflict
India-Pakistan
Miscalculation
Philippines
Counterterrorism
Jemaah Islamiyah
Operational Area
Key Security Issues

 More Joint VenturesMore Joint Ventures
 ““McDonalds China CEOMcDonalds China CEO
Jeffrey Schwartz said thereJeffrey Schwartz said there
would be 25 to 30 morewould be 25 to 30 more
openings in the next 12 toopenings in the next 12 to
18 months, as both gas18 months, as both gas
stations and drive-throughsstations and drive-throughs
are booming, as carare booming, as car
purchases by newlypurchases by newly
affluent drivers speedaffluent drivers speed
China’s transformationChina’s transformation
from a bicycle culture to afrom a bicycle culture to a
car culture.”car culture.”
 --Associated PressAssociated Press, 1/2007, 1/2007
 McDonald’s First Drive-upMcDonald’s First Drive-up
in Beijing, openedin Beijing, opened
1/19/071/19/07

 Escalating WeaponsEscalating Weapons
RacesRaces
 ““China’s apparent successChina’s apparent success
in destroying one of it’sin destroying one of it’s
own orbiting satellites withown orbiting satellites with
a ballistic missile signalsa ballistic missile signals
that its rising militarythat its rising military
intends to contestintends to contest
American supremacy inAmerican supremacy in
space…This is the otherspace…This is the other
face of China, the hard-face of China, the hard-
power side…Japan, Southpower side…Japan, South
Korea and Australia areKorea and Australia are
among the countries in theamong the countries in the
region (pressing) China toregion (pressing) China to
explain the test.”explain the test.”
 -- New York TimesNew York Times, 1/2007, 1/2007
 China’s anti-satellite shotChina’s anti-satellite shot
of 1/18/07 makes it theof 1/18/07 makes it the
third nation to deploythird nation to deploy
such weaponssuch weapons

 Friction with U.S. spyingFriction with U.S. spying  The U.S. had been monitoring China'sThe U.S. had been monitoring China's
military buildup, that was (and is) intendedmilitary buildup, that was (and is) intended
to intimidate Taiwan against pursuingto intimidate Taiwan against pursuing
independence. In April 2001, a mid-airindependence. In April 2001, a mid-air
collision high over the South China Seacollision high over the South China Sea
crippled an American reconnaissance planecrippled an American reconnaissance plane
and destroyed a Chinese fighter plane andand destroyed a Chinese fighter plane and
its pilot. After the Chinese jet struck the U.S.its pilot. After the Chinese jet struck the U.S.
surveillance plane, the American pilot madesurveillance plane, the American pilot made
an emergency landing on the Chinesean emergency landing on the Chinese
island of Hainan, sparking an internationalisland of Hainan, sparking an international
stand-off.stand-off.
 Presidents George W. Bush and JiangPresidents George W. Bush and Jiang
Zemin chose diplomacy over militaryZemin chose diplomacy over military
alternatives or trade sanctions, after U.S.alternatives or trade sanctions, after U.S.
officials expressed sufficient regret over theofficials expressed sufficient regret over the
incident and acknowledged enteringincident and acknowledged entering
Chinese airspace without permission. ChinaChinese airspace without permission. China
accepted this resolution that did not assumeaccepted this resolution that did not assume
U.S. responsibility for the accident. After 11U.S. responsibility for the accident. After 11
days the 24 crew members were released,days the 24 crew members were released,
but the crippled spy plane remained on thebut the crippled spy plane remained on the
island.island.

 Friction with Chinese spyingFriction with Chinese spying  In the mid-1990s, nuclear experts madeIn the mid-1990s, nuclear experts made
suspicious comparisons between newsuspicious comparisons between new
Chinese weapons and America's mostChinese weapons and America's most
advanced warheads. FBI investigatorsadvanced warheads. FBI investigators
determined that U.S. secrets had beendetermined that U.S. secrets had been
stolen from the Los Alamos Nationalstolen from the Los Alamos National
Laboratory during the 1980s. A lab physicistLaboratory during the 1980s. A lab physicist
was arrested.was arrested.
 Taiwan-born physicist Wen Ho Lee, aTaiwan-born physicist Wen Ho Lee, a
naturalized U.S. citizen, had transferred topnaturalized U.S. citizen, had transferred top
secret nuclear codes from the lab to his ownsecret nuclear codes from the lab to his own
home computer, allegedly as a safeguardhome computer, allegedly as a safeguard
against a computer crash, and then threwagainst a computer crash, and then threw
the tapes away. He pleaded guilty to onethe tapes away. He pleaded guilty to one
felony count of mishandling classifiedfelony count of mishandling classified
information, and was sentenced to timeinformation, and was sentenced to time
already served.already served.
 The Cox Report - written by House SelectThe Cox Report - written by House Select
Committee on Technology Transfers toCommittee on Technology Transfers to
China - determined that the ChineseChina - determined that the Chinese
Communists have obtained secretsCommunists have obtained secrets
involving every nuclear weapon in theinvolving every nuclear weapon in the
American arsenal. American arsenal.

Cooperation in the global war on RadicalCooperation in the global war on Radical
IslamistsIslamists

 The North KoreanThe North Korean
ProblemProblem
 If no KoreanIf no Korean
unification:unification:
 Nuclear Japan?Nuclear Japan?
 Nuclear South Korea?Nuclear South Korea?
 Nuclear Taiwan?Nuclear Taiwan?

Chinese Nobel PrizesChinese Nobel Prizes in biochemistry andin biochemistry and
applied biomedical researchapplied biomedical research

MegaTrend #1:MegaTrend #1:
Accelerating WesternizationAccelerating Westernization

Increasing Labor UnrestIncreasing Labor Unrest
 Chinese workers recently suspended aChinese workers recently suspended a
labor protest in the city of Liaoyang in thelabor protest in the city of Liaoyang in the
country's economically depressed north-country's economically depressed north-
east. The decision was made in the hopeeast. The decision was made in the hope
that the authorities would deliver on athat the authorities would deliver on a
promise to release four detained laborpromise to release four detained labor
leaders if the demonstration stopped.leaders if the demonstration stopped.
 The authorities have stepped up their effortsThe authorities have stepped up their efforts
to quell the protests by unemployed workersto quell the protests by unemployed workers
in the region, using military policein the region, using military police
roadblocks to prevent protesters gettingroadblocks to prevent protesters getting
through.through.
 But in the oil producing city of Daqing, alsoBut in the oil producing city of Daqing, also
in the north-east, mass protests werein the north-east, mass protests were
reported to have continued, though on areported to have continued, though on a
smaller scale.smaller scale.
 There were 8,700 protest incidents in 2006.There were 8,700 protest incidents in 2006.

Rising EnvironmentalismRising Environmentalism

International Support For AutocratsInternational Support For Autocrats
 Guinea-Bissau (AP) -Guinea-Bissau (AP) - ChinaChina paidpaid
for the marble and tile parliamentfor the marble and tile parliament
building soaring above thebuilding soaring above the
crumbling homes of this formercrumbling homes of this former
Portuguese colony, and is alsoPortuguese colony, and is also
promising a dam and apromising a dam and a militarymilitary
hospital - all with none of thehospital - all with none of the
politicalpolitical strings Western donorsstrings Western donors
might attach.might attach.
 Intent on cementing ties acrossIntent on cementing ties across
AfricaAfrica, China is active even in, China is active even in
impoverished Guinea-Bissau, aimpoverished Guinea-Bissau, a
small nation with littlesmall nation with little industryindustry, no, no
oiloil and few exports.and few exports. ChineseChinese
Foreign Minister Li ZhaoxingForeign Minister Li Zhaoxing
ended a two-day visit there, part ofended a two-day visit there, part of
a tour that includeda tour that included ChadChad,, BeninBenin,,
Central African Republic,Central African Republic, EritreaEritrea
andand MozambiqueMozambique..

International Support For AutocratsInternational Support For Autocrats
 Chinese commitment toChinese commitment to
non-interventionnon-intervention
 ““China’s aid andChina’s aid and
investments are attractiveinvestments are attractive
to Africans preciselyto Africans precisely
because they come withbecause they come with
no conditionality relatedno conditionality related
to governance, fiscalto governance, fiscal
probity or other concernsprobity or other concerns
of Western donors.”of Western donors.”
 -- Council on ForeignCouncil on Foreign
RelationsRelations, 2005, 2005

Sinification of Southeast AsiaSinification of Southeast Asia
 ““While American exportsWhile American exports
to SE Asia have beento SE Asia have been
stagnant for the past fivestagnant for the past five
years, Chinese trade withyears, Chinese trade with
the region is soaring…”the region is soaring…”
 ““In the northern reachesIn the northern reaches
of Thailand and Laos, youof Thailand and Laos, you
can find towns wherecan find towns where
Mandarin has becomeMandarin has become
the common languagethe common language
and the Yuan the localand the Yuan the local
currency…”currency…”
 --TimeTime, 2/2007, 2/2007

Sinification of Southeast AsiaSinification of Southeast Asia
 ““In Chiang Saen, signs inIn Chiang Saen, signs in
Chinese read CALL CHINAChinese read CALL CHINA
FOR ONLY 12 BAHT AFOR ONLY 12 BAHT A
MINUTE…”MINUTE…”
 It is no longer aid from theIt is no longer aid from the
U.S., but trade with China –U.S., but trade with China –
carried on new highways beingcarried on new highways being
built from Kunming in Yunnanbuilt from Kunming in Yunnan
province to Hanoi, Mandalayprovince to Hanoi, Mandalay
and Bangkok, or along theand Bangkok, or along the
Mekong River whose channelsMekong River whose channels
are full of Chinese goods – thatare full of Chinese goods – that
is transforming SE Asia.”is transforming SE Asia.”
 TimeTime, 2/2007, 2/2007

Closer Ties With IndiaCloser Ties With India
 China and IndiaChina and India
recently pledged torecently pledged to
double trade by 2010,double trade by 2010,
and agreed to bidand agreed to bid
jointly for global oiljointly for global oil
projects on whichprojects on which
they had previouslythey had previously
been competing.been competing.

Closer Ties With JapanCloser Ties With Japan
 ““(Chinese President) Hu(Chinese President) Hu
(Jintao) has also sought to(Jintao) has also sought to
mend ties with Japan, anothermend ties with Japan, another
longtime rival…”longtime rival…”
 ““Last October, Hu met the newLast October, Hu met the new
Japanese Prime Minister,Japanese Prime Minister,
Shinzo Abe, in Beijing, justShinzo Abe, in Beijing, just
days after Abe took office, adays after Abe took office, a
visit Hu called a “turning point”visit Hu called a “turning point”
in frosty relations between thein frosty relations between the
two countries…”two countries…”
 –– TimeTime, 2/2007, 2/2007

Increasing Use of PowerIncreasing Use of Power

Increasing Use of PowerIncreasing Use of Power
 In a 2006 poll, 87% ofIn a 2006 poll, 87% of
Chinese respondentsChinese respondents
thought their countrythought their country
should takeshould take a greater rolea greater role
in world affairs.in world affairs.
 Most Chinese, the surveyMost Chinese, the survey
found, believed China’sfound, believed China’s
global influence wouldglobal influence would
match that of the Unitedmatch that of the United
StatesStates within the decade.within the decade.

Decreasing U.S. LeverageDecreasing U.S. Leverage
 ““Living with a moreLiving with a more
powerful, non-democraticpowerful, non-democratic
Beijing (will) not be easyBeijing (will) not be easy
for the U.S.” –for the U.S.” – JamesJames
MannMann, Johns Hopkins, Johns Hopkins
School of AdvancedSchool of Advanced
StudiesStudies
 ““In crucial ways, the U.S.In crucial ways, the U.S.
has less leverage overhas less leverage over
China than it ever hadChina than it ever had
over the Soviet Union…”over the Soviet Union…”
 --TimeTime, 2/2007, 2/2007

Decreasing U.S. LeverageDecreasing U.S. Leverage
 China holds billions ofChina holds billions of
dollars of U.S.dollars of U.S.
government assetsgovernment assets
 American consumersAmerican consumers
have come to rely onhave come to rely on
cheap labor in China tocheap labor in China to
provide goods at Wal-provide goods at Wal-
Mart’s everyday lowMart’s everyday low
pricesprices
 China is increasinglyChina is increasingly
capable of going withoutcapable of going without
U.S. and European highU.S. and European high
technologytechnology

Accelerating Chinese PurchasesAccelerating Chinese Purchases
of U.S. Firmsof U.S. Firms

Catholic Pressure on BeijingCatholic Pressure on Beijing
 2/2007: Pope Benedict XVI will2/2007: Pope Benedict XVI will
write a letter to Catholics inwrite a letter to Catholics in
China, and the church willChina, and the church will
work toward diplomatic tieswork toward diplomatic ties
with Beijing as it tries to helpwith Beijing as it tries to help
its suffering faithful there,its suffering faithful there,
according to the Holy See.according to the Holy See.
 Top Chinese bishops,Top Chinese bishops,
including Hong Kong Cardinalincluding Hong Kong Cardinal
Joseph Zen, an outspokenJoseph Zen, an outspoken
champion of religious liberty,champion of religious liberty,
debated the Chinese problemsdebated the Chinese problems
in recent discussions at thein recent discussions at the
Vatican.Vatican.

Stronger Australian TiesStronger Australian Ties
 Australia has good reason to likeAustralia has good reason to like
China. Last week the nationalChina. Last week the national
newspaper, "The Australian" rannewspaper, "The Australian" ran
this front page headline "Tax cutsthis front page headline "Tax cuts
forged in China". Two of theforged in China". Two of the
world's biggest miners of iron oreworld's biggest miners of iron ore
and coal are giants on theand coal are giants on the
Australian stock exchange. TheyAustralian stock exchange. They
have had record sales to meethave had record sales to meet
China's burgeoning demand andChina's burgeoning demand and
are now forecast to inflate by aare now forecast to inflate by a
quarter an already record tax takequarter an already record tax take
by the Australian federalby the Australian federal
government. Tax payments by thegovernment. Tax payments by the
companies expect to add anothercompanies expect to add another
US $3.5 billion to federal taxUS $3.5 billion to federal tax
coffers. Pressure is mounting oncoffers. Pressure is mounting on
the Government to cut personalthe Government to cut personal
income tax rates. –income tax rates. –TCS DailyTCS Daily,,
2/20072/2007

Stronger Australian TiesStronger Australian Ties
 ““ A recent poll found thatA recent poll found that
Australians feel about asAustralians feel about as
warmly toward a newwarmly toward a new
suitor in the region –suitor in the region –
China – as they doChina – as they do
toward longtime allytoward longtime ally
America. Moreover, theAmerica. Moreover, the
poll found that Australianspoll found that Australians
think China is thethink China is the
strongest power in Asia,strongest power in Asia,
eclipsing the Unitedeclipsing the United
States.”States.” McClatchyMcClatchy
TribuneTribune, 1/21/2007, 1/21/2007

Development and DamageDevelopment and Damage
 ““China has managedChina has managed
a century of economica century of economic
development in littledevelopment in little
more than amore than a
generation – andgeneration – and
ravaged itself in theravaged itself in the
process. Today, it isprocess. Today, it is
home to 16 of thehome to 16 of the
world’s 20 mostworld’s 20 most
polluted cities.” -polluted cities.” - USAUSA
TodayToday – 3/2007– 3/2007

Development and DamageDevelopment and Damage
 ““China’s major rivers areChina’s major rivers are
dangerously polluted, half itsdangerously polluted, half its
cities are choked bycities are choked by
hazardous air, and acid rainhazardous air, and acid rain
falls on a third of the country’sfalls on a third of the country’s
land mass. Thanks toland mass. Thanks to
prevailing winds across theprevailing winds across the
Pacific, the USA is firmly inPacific, the USA is firmly in
China’s firing line.” -China’s firing line.” - USAUSA
TodayToday – 3/2007– 3/2007
 ““China is the major source forChina is the major source for
deposits of mercury, a highlydeposits of mercury, a highly
toxic metal, in the western halftoxic metal, in the western half
of the United States.” -of the United States.” - USAUSA
TodayToday – 3/2007– 3/2007

Electronic EspionageElectronic Espionage
 ““The cyber attack of a U.S.The cyber attack of a U.S.
military computer system hasmilitary computer system has
deepened concern aboutdeepened concern about
cyber-spying and the securitycyber-spying and the security
of the Internet’s infrastructure.of the Internet’s infrastructure.
Chinese hackers were mostChinese hackers were most
likely behind an intrusion inlikely behind an intrusion in
November that disabled theNovember that disabled the
Naval War College’s network,Naval War College’s network,
forcing it to disconnect fromforcing it to disconnect from
the Internet for several weeks.”the Internet for several weeks.”
– Lt. Cmdr. Doug Gabos,– Lt. Cmdr. Doug Gabos,
Spokesman, Navy CyberSpokesman, Navy Cyber
Defense OperationsDefense Operations
Command, Norfolk, VACommand, Norfolk, VA
3/12/073/12/07

Electronic EspionageElectronic Espionage
 The intrusions spotlightThe intrusions spotlight
the soft underbelly in U.S.the soft underbelly in U.S.
cyber security. They alsocyber security. They also
underline the need for theunderline the need for the
federal government tofederal government to
develop policies thatdevelop policies that
define responsibilitiesdefine responsibilities
between the public andbetween the public and
private sectors to fend offprivate sectors to fend off
hackers and terrorists,hackers and terrorists,
say military officials, andsay military officials, and
cyber-security expertcyber-security expert
Jody Westby, CEO,Jody Westby, CEO,
Global Cyber Risk.” –Global Cyber Risk.” –
USA TodayUSA Today, 3/2007., 3/2007.

Spiritual Pollution - BacklashSpiritual Pollution - Backlash
 WhenWhen Sports Illustrated’sSports Illustrated’s swimsuitswimsuit
issue hit the newsstands last weekissue hit the newsstands last week
in China for the first time…thein China for the first time…the
competition was fierce. Readerscompetition was fierce. Readers
here had already seen thehere had already seen the
February issue ofFebruary issue of For HimFor Him
magazine, which features amagazine, which features a
Chinese singer named A Duo onChinese singer named A Duo on
its cover, wearing a white V-neckits cover, wearing a white V-neck
leotard that reveals every otherleotard that reveals every other
inch of her rather substantialinch of her rather substantial
figure. Inside, A Duo poses like afigure. Inside, A Duo poses like a
dominatrix, clutching her breasts,dominatrix, clutching her breasts,
wrapping her naked body inwrapping her naked body in
celluloid and bending, sweat-celluloid and bending, sweat-
drenched, over a submissivedrenched, over a submissive
man.” –man.” – New York TimesNew York Times, 3/2007, 3/2007

Spiritual Pollution - BacklashSpiritual Pollution - Backlash
 ““But in China, where sexBut in China, where sex
is still a taboo subject andis still a taboo subject and
pornography is outlawedpornography is outlawed
by the ruling Communistby the ruling Communist
Party, the images are notParty, the images are not
only highly provocativeonly highly provocative
but perhaps the latestbut perhaps the latest
sign that sex andsign that sex and
sexuality are infiltratingsexuality are infiltrating
the mainstream media.” –the mainstream media.” –
New York TimesNew York Times, 3/2007, 3/2007

Trade WarsTrade Wars
 March, 2007 – The BushMarch, 2007 – The Bush
Administration’s efforts toAdministration’s efforts to
ease economic strainsease economic strains
with China suffered twowith China suffered two
setbacks…with thesetbacks…with the
resignation of a topresignation of a top
official in charge of theofficial in charge of the
China dialogue and anChina dialogue and an
announcement that talksannouncement that talks
on a critical trade disputeon a critical trade dispute
had failed to resolvehad failed to resolve
differences.differences.

Trade WarsTrade Wars
 The United States tradeThe United States trade
representative, Susan C.representative, Susan C.
Schwab, said ”…our efforts atSchwab, said ”…our efforts at
dialogue failed” to resolvedialogue failed” to resolve
disputes over the Americandisputes over the American
charge that China had illegallycharge that China had illegally
subsidized several industriessubsidized several industries
to promote exports.to promote exports.
 Schwab said WashingtonSchwab said Washington
would bring the issue to thewould bring the issue to the
WTO, a major escalation inWTO, a major escalation in
U.S. pressure. “We wouldU.S. pressure. “We would
have preferred to work thishave preferred to work this
out,” Ms Schwab said. “Weout,” Ms Schwab said. “We
regret that was not possible.” –regret that was not possible.” –
New York Times, March, 2007New York Times, March, 2007

Mini TrendsMini Trends
 China has the world’sChina has the world’s
largest number oflargest number of
Internet users – 220Internet users – 220
million – surpassingmillion – surpassing
web surfers in theweb surfers in the
U.S.U.S.
 Chinese is the mostChinese is the most
commonly usedcommonly used
language of thelanguage of the
Internet.Internet.
 Authorities haveAuthorities have
added 171 new popadded 171 new pop
culture phrases toculture phrases to
China’s nationalChina’s national
language registry.language registry.
 31 percent of Chinese31 percent of Chinese
16 or older say they16 or older say they
are religious, fourare religious, four
times the officialtimes the official
estimate a decadeestimate a decade
ago.ago.

Mini TrendsMini Trends
Cell phones in China have grown from 87Cell phones in China have grown from 87
million in 2000 to 432 million today.million in 2000 to 432 million today.
32 percent of Chinese say the Internet32 percent of Chinese say the Internet
broadens their sex life, compared with 11broadens their sex life, compared with 11
percent in the U.S.percent in the U.S.

Predictions….Predictions….

……ScenariosScenarios
Hard recession or depressionHard recession or depression
Forced Taiwan repatriationForced Taiwan repatriation
Re-occupation of the lands ceded toRe-occupation of the lands ceded to
Russia in the treaty of Amur and the treatyRussia in the treaty of Amur and the treaty
of Nerchinskof Nerchinsk
RevolutionRevolution
U.S. attack on IranU.S. attack on Iran
Trade warsTrade wars

Dr. Peter F. Drucker, Dr. Tim Dosemagen,Dr. Peter F. Drucker, Dr. Tim Dosemagen,
and Huang JianDong, of the Peter F.and Huang JianDong, of the Peter F.
Drucker Academy – 1/2005Drucker Academy – 1/2005

Addressing Social and EnvironmentalAddressing Social and Environmental
Problems to Develop EconomicProblems to Develop Economic
OpportunitiesOpportunities
 The Drucker Institute of Claremont GraduateThe Drucker Institute of Claremont Graduate
UniversityUniversity
 http://www.druckerinstitute.comhttp://www.druckerinstitute.com
 The Peter F. Drucker Academy in ChinaThe Peter F. Drucker Academy in China
 http://www.pfda.com.cn/enindex.asphttp://www.pfda.com.cn/enindex.asp
 The Bright China Group’s Bright ChinaThe Bright China Group’s Bright China
FoundationFoundation
 http://www.brightchinagroup.com/enhttp://www.brightchinagroup.com/en

China The Next 30 Years

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