Excellent article but it makes some assumptions : The US won't solve its economic problems and find a "new economics" that works Europe and America won't solve their Muslim problem India will solve its Muslim problem Russia isn't a major player There will not be a major war There will not be regime change in China Japan will not find a way to reinvent itself Are ALL these assumptions --and there are others-- correct ? It would be smart to be skeptical. Billy =========================================================== In a message dated 11/1/2010 9:33:13 A.M. Pacific Daylight Time, [email protected] writes:
Well put... -- Ernie P. _http://www.cringely.com/2010/10/the-chinese-decade/_ (http://www.cringely.com/2010/10/the-chinese-decade/) The Chinese Decade Something has been bothering me lately and it is our assumption that China is the world’s next superpower and that we’d darned well better get used to it. Hogwash. We’re into the Chinese decade, not the Chinese Century. The century belongs to India. Last century was all-American. We came into the 20th century a huge but unsophisticated nation. Our industrial might made us a factor in World War I. Our cultural ingenuity caught the world’s fancy in the 1920s and — 90 years later — still hasn’t let go. As a result this will not be the Bollywood Century. The Great Depression secured our place at the table by showing we could take much of the world down with us. World War II saw us save that world, grabbing half a century of global dominance in the process (thanks Dad). But now we’re screwing it up a bit out of inertia and greed and ignorance of the very world we created. We did it to ourselves by thinking that nothing could really hurt us. But in the end that wasn’t true any more than the idea that Harry Houdini’s stomach could take any punch. So we’re giving it up to the Indians. not to the Chinese. China has the population, the will, the educational system, the foreign currency reserves — everything to make it the next global superpower except two things: 1) an emerging middle class generation comparable to our Baby Boomers, and; 2) a functional diaspora (look it up, I’ll wait). In contrast to China, India has only those two things: 1) a real Baby Boomer class, and; 2) a functional diaspora (did you look it up?). Nothing else about India works at all — nothing. India is corrupt and divided. While India has a commercial tradition it isn’t an especially functional one. Fractionalism and factionalism, whether economic, social, or religious, will keep India from ever truly pulling together. But that doesn’t matter because my two original points are enough. What I find interesting is that most people just take it as bible truth that China will be the next superpower because it is so number-oriented (huge infrastructure dollars, huge manufacturing dollars, higher per capital wealth than India, bigger middle class, etc…). Plus it is easier to see China becoming dominant because we prefer, I think, to be economically conquered by people very different from ourselves. And China just seems more different than India. China has all those factories and all that money (our money — isn’t that the way we tend to see it?). China also cheated itself out of a generation through overzealous population control, which might be good for the globe but is bad for hegemony. But the biggest reason why India will win and China will lose is the Chinese stay to themselves too much. They don’t assimilate. Look at the world’s multinational companies. Compare their executives of Indian and Chinese nationality or descent. Indian executives are everywhere. Chinese executives are nowhere. Now remember what western corporate law teaches us — that managers control companies, not their shareholders. China isn’t just the 1.5 billion Chinese, but Chinese inside China plus their diaspora worldwide. Same for India. The big point is not very politically correct but it is nevertheless true — there is a massive disparity in Indian vs Chinese executive representation in the top 500 multinational corporations. You can rattle off the number of Indian CEOs, COOs, CTOs, CIOs, and CFOs then find another legion operating just below the CXX level. My guess is that their comfort with western culture, their English language skills, and — perhaps most importantly — their institutional training by the Brits enable them to be the best bureaucrats and political operators who — even though they may not add a single dollar of value — use those skills to survive in droves and make it to the top. In contrast, you see hardly any high-level Chinese executives in multinational corporations that aren’t Chinese multinationals. Juxtapose this with domestic Indian conglomerates that have managed 10 percent year-over-year growth despite the absurd inefficiencies of the domestic Indian market and you get a phenomenal triangulation move that will leave China in the dust in the next 10-20 years. Then remember that the Indian workforce will still be young and growing in 10 years versus a rapidly aging Chinese population and the fact that India has not only already won in services and pharma, but is proving itself smarter and more innovative in industrial manufacturing, too. China is not a particularly good bet after about 2020, though the Chinese domestic economy will grow like gangbusters for the next few years — hence they win the decade, though not the century. History has shown, too, that India and China don’t play well Both are outrageously arrogant and selfish, China is too top-down and India is too driven by short-term political issues. Chinese companies hate dealing with Indians. Here’s what all this means for the future. It’s very good for the English language, for one thing. That may not seem like much, but it is, at least for those of us who are native English speakers. It’s not that English is so great, you see, but that it is not Mandarin. The Indians will ensure Mandarin does not become the dominant language. And if they can do it they’ll also make sure the RMB doesn’t replace the dollar as it is not in their interests from either a national or a multinational corporation management perspective, either. I suspect the multinational corporations effectively controlled by the indian diaspora won’t even need excuses to work more with India instead of China as China becomes more and more of an ass-pain for the world. Since the Indians control the multinational corporations, they have a vested interest in the U.S. and Europe not completely collapsing. Lucky us. While there’s not much optimism floating atop this idea that Indian managers will allow us to survive as viable economies mainly to keep the Chinese at bay, remember that survival is an absolute prerequisite for resurgence. If we have a hope of making the 22nd century again ours (and I think it can be done) we have to start somewhere. Tags: _China_ (http://www.cringely.com/tag/china/) , _economic power_ (http://www.cringely.com/tag/economic-power/) , _india_ (http://www.cringely.com/tag/india/) , _multinational corporations_ (http://www.cringely.com/tag/multinational-corporations/) This entry was posted on Sunday, October 31st, 2010 at 8:53 pm and is filed under _2010_ (http://www.cringely.com/category/2010/) . 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