They Love LA

More Chinese tourists are headed to America, thanks to new agreements between US and Chinese governments. And when they come to the US, they come to California.

"The Chinese are surprisingly big spenders when they come here, doling out about $6000 each -- more than visitors from any other nation. They also tend to stay longer -- a California state tourism agency study found that Chinese visitors spend 24.3 nights in the country and 15 in California, on average, while most overseas visitors spend about 10 days in the state.

"Big cities will benefit most as the ranks of Chinese tourists to the U.S. grow by an expected 80% over the next three years, to 579,000 visitors from 320,000 last year. As a favored destination for the Chinese and the only American city served by all three Chinese airlines, Los Angeles could cash in the most."

Beijing Blue Sky Days Hit 244

Beijing is like an athlete trying to get into shape by walking on a treadmill yet eating double cheeseburgers at the same time. Polluting factories have been moved or closed. But auto emissions are rising as the city adds up to 1,200 new cars and trucks every day. Dirty, coal-burning furnaces have been replaced, lowering the city’s sulfur dioxide emissions. But fine-particle pollution has been exacerbated by a staggering citywide construction binge that shows no signs of letting up.

China’s unsolved riddle is how to reconcile fast economic growth with environmental protection. But Beijing’s Olympic deadline means the city needs an immediate answer. The ruling Communist Party envisions the Games as a public relations showcase and is leaving no detail untended. Scientists are cross-breeding chrysanthemums to ensure that flowers bloom in August.

Implications of a Realistic View of China's Poverty

China's political stability may be more fragile than thought. The country faces huge domestic challenges -- an aging population lacking any form of social security, wholesale problems in the financial system that dwarf those revealed in the U.S. sub-prime loan mess and the breakdown of its health system. These problems are as big as ever, but China has fewer resources to meet them than we thought.

And there is the environment. With poor air quality, acute water shortages, massive pollution in major watersheds and many other environmental problems, China needs to make enormous investments in the environment to avoid major disasters. Globally, it will be much harder to get China -- and India -- to make any sacrifices to address problems such as global warming.

For Americans, the new numbers from the World Bank bring good news and bad. On the plus side, U.S. leadership in the global system seems more secure and more likely to endure through the next generation. On the other hand, the world we are called on to lead is poorer and more troubled than we anticipated.

China is Smaller Than We Thought

The most important story to come out of Washington recently had nothing to do with the endless presidential campaign. And although the media largely ignored it, the story changes the world.

The story's unlikely source was the staid World Bank, which published updated statistics on the economic output of 146 countries. China's economy, said the bank, is smaller than it thought.

About 40% smaller.

China, it turns out, isn't a $10-trillion economy on the brink of catching up with the United States. It is a $6-trillion economy, less than half our size. For the foreseeable future, China will have far less money to spend on its military and will face much deeper social and economic problems at home than experts previously believed.

Education is Big Business in China

Here is an amazing success story (so far).

And there is room for many more schools like the SIAS International University in Henan, China.

Nine years ago, Chen launched SIAS International University with less than $2 million, 250 students and a healthy dose of gumption. Today, the school has more than 16,000 students and nearly 50 buildings -- including a Roman amphitheater, French and Italian restaurants and an administration hall with a domed Capitol-like facade on one side and a Forbidden City tableau on the other. A swimming stadium, with an Olympic-size pool, is rising amid lotus and wheat fields.

The school's faculty of about 700 includes 119 foreign instructors, mainly from the U.S. They teach English, history and literature and help students with debate club, cheerleading and marching band -- things unheard of in this country.

"When I left, China was rationing," he said. "Now, it has an abundance of tall buildings and everything. But it doesn't matter how much China grows, it is still lacking in education."

Beijing Transformation

Some nice reflections from this LA Times writer on the transformation Beijing has undergone over the past ten years. From my experience, it is hard for a westerner to comprehend the pace and scale of change in China. It is so unlike anything our societies have experienced or are capable of.

I found Beijing far more electrifying than Paris, unrecognizable from the city I had visited 10 years ago....The truth is this: There was the polluted, awkward, unfriendly Beijing I visited 10 years ago, and there is Beijing now, physically and psychologically transformed.

My International City

In LA, 53% of people speak a language other than English at home.

The data are part of a census report on social, economic and housing characteristics in the U.S. Nationwide, almost 20% of people over age 5 spoke a language other than English at home in 2006.

Some smaller Southern California communities recorded even higher percentages than Los Angeles, including East L.A. (91%), El Monte (83%), Santa Ana (83%), Alhambra (71%), Oxnard (67%), Garden Grove (67%) and Glendale (64%). The statewide percentage of 43% is up slightly from data from a few years ago.

It's about the gambling

Interesting statistic about the differences between the American and Chinese gambling public. While Macau recently passed Las Vegas in producing more gambling revenue, Las Vegas has over 7 TIMES as many hotel rooms, and is probably better know as an entertainment capitol these days than just as a gambling destination.

As the Chinese grow in affluence, will their appetite for the whole entertainment menu grow to outstrip their hunger for gambling?

Macao last year overtook Las Vegas in total gambling revenue, thanks to China's economic rise and passionate bettors like Wu. But although money from gambling makes up virtually all of Macao's tourist-related revenue, it makes up about half for Vegas, which has more than 130,000 hotel rooms versus about 17,000 in Macao.

Trees and Global Warming

One environmentalist argues that a key to fighting global warming is to use more wood products, stimulating the planting of more new trees. He says that young trees absorb more carbon dioxide than old trees.

To address climate change, we must use more wood, not less. Using wood sends a signal to the marketplace to grow more trees and to produce more wood. That means we can then use less concrete, steel and plastic -- heavy carbon emitters through their production. Trees are the only abundant, biodegradable and renewable global resource.

China's Problems are Our Problems

What is happening on the other side of the world will one day affect our side of the world. A long and detailed article in the NY Times.

But just as the speed and scale of China’s rise as an economic power have no clear parallel in history, so its pollution problem has shattered all precedents. Environmental degradation is now so severe, with such stark domestic and international repercussions, that pollution poses not only a major long-term burden on the Chinese public but also an acute political challenge to the ruling Communist Party. And it is not clear that China can rein in its own economic juggernaut.

Public health is reeling. Pollution has made cancer China’s leading cause of death, the Ministry of Health says. Ambient air pollution alone is blamed for hundreds of thousands of deaths each year. Nearly 500 million people lack access to safe drinking water.

Chinese cities often seem wrapped in a toxic gray shroud. Only 1 percent of the country’s 560 million city dwellers breathe air considered safe by the European Union....

Environmental woes that might be considered catastrophic in some countries can seem commonplace in China: industrial cities where people rarely see the sun; children killed or sickened by lead poisoning or other types of local pollution; a coastline so swamped by algal red tides that large sections of the ocean no longer sustain marine life.

China is choking on its own success. The economy is on a historic run, posting a succession of double-digit growth rates. But the growth derives, now more than at any time in the recent past, from a staggering expansion of heavy industry and urbanization that requires colossal inputs of energy, almost all from coal, the most readily available, and dirtiest, source.

Interpreting the Middle East

Some interesting observations in this LA Times opinion piece on the clashing worldviews when interpreting the conflicts in the Middle East. I agree with this quote: "ideology cannot be defeated by concessions."

...the Mideast's central conflict is not territorial but ideological. And ideology cannot be defeated by concessions.

Emissaries also still believe that "the Occupation" blocks agreement between Israelis and Palestinians. In the West, the term usually means the territories Israel conquered in the Six-Day War in 1967....

Instead, the heart of the problem is that many Palestinians -- Fatah and Hamas, in particular -- and even some Israeli Arabs use "Occupation" to refer to all Israel.

Ah, The Benefits of Central Planning

This article in the LA Times points out some of the cultural differences between American and Chinese societies, as well as some of the related political differences. Interesting observations.

It sounds good to me to not have to deal with hearings, environmental impact reports, high-priced labor, etc. Maybe LA would have a modern airport if we lived in that kind of environment! BUT, Americans would not give up their right to "participation," even with the accompanying lack of progress.

Primary factors I see in the Chinese ability to make fast and huge changes are:
1. The people's acquiescence to government action because of their belief that the relative good for society outweighs the personal cost they have to bear for progress. A supporting factor for this, but not the dominant factor that Americans would like to think it is, is their lack of recourse. Americans do not understand this profound difference in worldview and values.
2. The minimal cost of labor, which I would guess is roughly $5/day compared to probably $100/day in the US.
3. The lack of checks and balances in their top-down system, which ensures expedient action for decisions made by the leaders.

China seems little hindered by the pressures that plague transit projects in the West.

Financial woes sandbagged New York's Second Avenue subway for about 80 years until ground was broken this spring. L.A.'s subway system, whose westward march was halted at Western Avenue in 1996, has been constricted by environmental, political and financial pressures.

In China, labor is cheap, the land belongs to the government, air pollution is the primary environmental concern, and political pressure moves largely in one direction -- from the Communist Party leadership on down.

"If the government wants to do something, even if the conditions are not ready for it, it will be done," said Zheng Shiling, an influential Chinese architect who teaches at Tongji University in Shanghai.

Realistic Figures for China's Growth

A respected economist points out in this NY Times article how China's growth figures are wildly exaggerated. The point is not to discount China's growth, but to realize that even at a relatively fast pace, it will take a century to catch up with the US economy.

Using those numbers as a guide, if we consider China’s actual electrical use, which is relatively easy to measure, and do a little math, we come up with this estimate: The G.D.P. in China has been growing somewhere between 4.5 percent (using the average for a rapidly growing country) to 6 percent a year (using the highest rate for Japan), not at the 10 percent rate claimed in official statistics.

The official statistic for China’s overall growth rate is best regarded as an approximate growth rate of the economy of its cities.

The Value of Constraints

An eloquent and positive observation on creatively overcoming obstacles by a software developer, when commenting on efforts to get around manufacturers' limitations:

"It's about embracing constraints," said Chris Messina, 26, an entrepreneur from San Francisco and one of the event's organizers. "These constraints aren't holding us back. They are giving us focus."

Looking for more focus in your life? Pay attention to the walls you are bumping up against!

China's Emissions Growth

A new report says that China has already surpassed the US as the world's largest emitter of greenhouse gases. On a per capita basis, however, Chinese people only account for 1/8th as much as their western counterparts.

It's interesting to me that in an article like this, the environmentalist response is that yes, Beijing has to do more to curtail emissions, but "responsibility also lies in Washington and Brussels and Tokyo..." I don't think you'd ever hear a criticism of American government policy include a disclaimer that you'd also have to consider Caracas and Teheran and Pyongyang culpable.

Still, it makes you wonder if there is more that western foreign policy could do to help China manage their growth more responsibly. For example, could the US offer aid to China to pay the difference between what it costs them to build two coal-powered energy plants a week and the cost of building nuclear plants instead? Wouldn't that kind of aid go a long way in building friendlier relations and help the environment at the same time?

Here are a few more amazing stats about China's growth from the article:

"China's emissions have outpaced predictions because the economy has grown faster than expected. With construction booming, China produces an estimated 44% of the world's cement, Olivier said. And with its factories' fuel needs rising, China has been completing construction of coal-fired power plants at a rate of about two a week.

"In the next eight years, the International Energy Agency estimates, China will build as many power plants as exist today in all of the European Union countries. Birol said the West needs to find incentives to help China invest in cleaner forms of energy than coal, because when coal plants come on line, they generally last decades."

Internet growth stats

From John C Dvorak. Amazing!

"It's actually the astonishing overall growth of the Internet that is amazing. In 1990, the total U.S. backbone throughput of the Internet was 1 terabyte, and in 1991 it doubled to 2TB. Throughput continued to double until 1996, when it jumped to 1,500TB. After that huge jump, it returned to doubling, reaching 80,000 to 140,000TB in 2002.

"This ridiculous growth rate has continued as more and more services are added to the burden. The jump in 1996 is attributable to the one-two punch of the universal popularization of the Web and the introduction of the MP3 standard and subsequent music file sharing.

"More recently, the emergence of inane video clips (YouTube and the rest) as universal entertainment has continued to slam the Net with overhead, as has large video file sharing via BitTorrent and other systems.

"Then VoIP came along, and IPTV is next. All the while, e-mail numbers are in the trillions of messages, and spam has never been more plentiful and bloated. Add blogging, vlogging, and twittering and it just gets worse.

"According to some expensive studies, the growth rate has begun to slow down to something like 50 percent per year. But that's growth on top of huge numbers. Petabytes."

Growing Power Crunch

Where will the world's power come from? And won't the growing production and consumption of the huge rapidly developing nations overwhelm the efforts of currently "developed nations" at ecological responsibility?

From the NYT:

"In part because of these limitations, Indians are, for now, relatively conservative consumers of energy: about 600 units per capita per year, or one-fifth that of a typical American. But that will certainly increase as Indian desires reach those of the wealthy Western countries.

"A recent report by McKinsey Global Institute frothily predicted a fourfold increase in consumer spending by 2025, vaulting India, as it said, “into the premier league among the world’s consumer markets.” McKinsey forecast that India would surpass Germany as the fifth-largest market in the world.

"Driven by the increasing need for power, India has stepped up generation in recent years at the pace of about 6 percent a year. It is a pittance compared with what neighboring China adds on each year and in any case insufficient to keep up with India’s galloping demand.

"The government has promised electric connections for all — which means access to the grid, not round-the-clock power — by 2009. That is a target that does not seem plausible at current rates of power generation.

"The development of power plants, meanwhile, is constrained by a lack of access to land, fuel and water, all of which a power plant needs in large quantities. The power grid remains weak.

"What the state cannot provide efficiently, many take for themselves. The World Bank estimates that at least $4 billion in electricity is unaccounted for each year — that is to say, stolen. Transparency International estimated in 2005 that Indians paid $480 million in bribes to put in new connections or correct bills.

"The country’s energy needs are one of the government’s main arguments for a nuclear deal with the United States, which would allow India to buy reactors and fuel from the world market.

"But even if the deal goes through, it would lift nuclear power, which provides 3 percent of India’s energy, to no more than 9 percent, said Leena Srivastava, executive director of the Energy and Resources Institute, a private research group.

"Similarly, in the coming years, alternative sources of energy, like wind, are expected to double, but to no more than about 8 percent of supply.

"Coal will continue to dominate power generation, and already more than a third of India’s coal plants do not meet national emissions standards."

Catching Confucius

This from the LA Times. Those familiar with China have been aware of the spiritual interest and opportunity for Confucianism as well as other spiritual movements for many years. This one combines the endorsement of the government with good marketing.

Since the publication of her enormously popular book on the teachings of Confucius late last year, Yu Dan has been racing from college lectures to book signings, TV appearances and speaking engagements. The public can't seem to get enough of this overnight sensation who has turned dusty old Confucian teachings into a Chinese version of "Chicken Soup for the Soul."

"I never expected this," the smartly dressed 42-year-old said in a hurried interview from the back of the black Audi taking her to the airport. "In the 21st century, our value system is changing; people are faced with a lot of confusion and choices. The classics are not just fossils. They are a value system that can help us find answers to modern-day problems."

For more than 2,500 years, the Confucian doctrines of filial piety, moral righteousness and hierarchical relationships were the guiding principles of life and government in China and most of East Asia. Then the Communists came to power and Chairman Mao declared Confucianism counterrevolutionary and his Red Guards ransacked temples dedicated to the philosopher.

Today, China is charging ahead with dizzying economic growth and breathtaking social change. But many believe the world's most populous nation has lost its moral and spiritual anchor. Enter the wisdom of Kong Fuzi, or Master Kong, as Confucius is known in China — interpreted by a woman.

"I'm amazed," said Hong Huang, a cultural commentator and publisher of fashion magazines in Beijing. "Her success has a lot to do with the fact that modern China has an identity crisis and spiritual crisis. The only value system we have today is money. Everybody is looking for the Chinese meaning of life."

Cyber Crowd Control

Here's a report of users coercing a website into altering its policy. Where will this lead?

"'Social media is something of a Pandora's box,' said Internet analyst Greg Sterling of Sterling Market Intelligence. 'Communities create deeper engagement, word of mouth and viral promotion of your content. That's how sites like MySpace and YouTube got to be so popular. The other side of that is that it's often hard to police communities. You have to be willing to tolerate certain things you wouldn't tolerate from your own employees.'"

Look to Youth

There's a huge need for developing business leaders with practical experience and good education. While China's universities have grown rapidly, business schools lag behind, mostly because of a lack of qualified teachers. Business training is a great field for development, as noted in this LA Times article.

...MBA[s]... are highly sought after in China, whose scorching growth has left companies scrambling to fill management positions. Foreign firms complain of high turnover and poaching wars in their executive suites.

"China has a real leadership development crisis right now, mostly because of the unique circumstances of the Cultural Revolution," said Doug Guthrie, a China business expert at New York University.

Guthrie was referring to the period from 1966 to 1976, when Communist leader Mao Tse-tung closed the universities and sent the country's brightest young people to the countryside to be "reeducated." Instead of managing companies, these now 50- and 60-year-olds are toiling in factories and driving taxis.

When Rafael Pastor, chief executive of Vistage International Inc., an organization of CEOs, interviewed people to run his new office in Shanghai, he was shocked at their youth. His top candidate for the managing director's job is 39 years old.

"He's great," said Pastor, a former investment banker and executive at News Corp. "But he's only got as much experience as a 39-year-old person can have. There's no way I can find a more seasoned person."

In an effort to close this experience gap, Chinese universities such as Tsinghua are reaching out to U.S. institutions such as MIT's Sloan School of Management and USC's Marshall School of Business for help establishing programs to teach China's first generation of professionally trained business leaders. Universities have formed transpacific partnerships, sharing professors, students and curriculum.

That infusion of foreign assistance has helped boost the number of Chinese MBA programs from nine in 1991 to more than 100 today. In 2004, China graduated about 10,000 MBAs, compared with 139,000 such degrees in the U.S.

But Chinese universities, like the companies they are serving, can't expand fast enough because of a shortage of teachers, Pastor said.