Anglosphere

Singapore Pundit on China (and India, and Singapore)

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(My good friend whom I’ll call Singapore Pundit is a businessman who speaks Chinese and has been in Asia, first Hong Kong, then Beijing, now Singapore for many years. SP read this post, and had a few comments. I pass on his thoughts with his permission.)

I read your post on the blog. It is a little like a University of Chicago dinner conversion in cyber-space.

China versus India? Well, I think that both the Chinese in power and the Indians in power both believe that economic development via free markets is the right path. They know that FDI and WTO are important. They also seem to agree that social and international stability are critical factors to economic growth. Interestingly, India has the Kasmir issue and China the Taiwan issue which are both lighting rods for the nationalist in their respective countries. A wrong step by either country over these issues could derail their economic development and unfortunately these issues are so emotional and sensitive that they could blow up.

I would observe that both China and India are very complex countries in all dimensions. Just think of the US and how complicated a place it is and add a few thousand years of history and triple the population and speed up the growth rate and social change and the place is wildly complex and difficult to fully understand.

So, both China and India are difficult to comprehend, hence I agree that the average American doesn’t have a good change to really understand what’s going on either place. Frankly, even the experts don’t agree on many points and have what are strange opinions and outdated views.

I have mentioned to you before that I don’t think that the central government in China and the party are that all powerful and in control. If they are unable to provide steady economic growth and the resulting prosperity and social stability, their reign of power is not going to last and they know it. They very much look to the west and other countries developed countries for models and experience to help them succeed. The big threat to the “Communist” is regional leader completely going their own way and destabilizing the whole country. The leadership in China must look at what is happening in Iraq in fear and cite it as an example of what could happen if they lose control. My impression is that debate and information is much more free in China than what people in the US realize. There is also I believe a desire in large parts of the government to get to more democratic institution and more open society. Deng Xiaoping completely changed China from a truly Soviet-style state to something that in the seventies the US government would identify as a free society (something like Korea, Thailand or Taiwan). Now all of the countries have become democracies with relatively little bloodshed (Taiwan didn’t have any major unrest, where both Korea and Thailand had their militaries killing a significant number of their citizens). This should give us hope. It is possible that China could behave like Germany and Japan in the thirties, but my gut tells me that leader don’t have that mentality.

Most of my Indian friends think that it is very difficult to get things done in India. If the government want to build a road, getting the rights-of-way is almost impossible so infrastructure needed for economic growth is not getting built fast enough. This is hampering economic growth. They actually like the way thing get done in China. It seems that India has a well developed legal system, but it is undermined by corruption.

I am going to slightly change the subject and try to rap up my comments. I saw the national day rally speech of the Singapore Prime Minister. I think you would find it very interesting. All kinds of stuff on being open and critical, taking risk, being Singaporean and patriotic. Singapore is a special one party state. And I suspect that both China and India are interested in what Singapore says and does. Perhaps this is a model of English institutes/ideas married with Chinese administration and politics.

India and China

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This comparison is almost becoming a clich�. But, still, it is an interesting one and potentially enlightening, if handled properly.

This book Asia’s Giants: Comparing China and India got a good review in the current Foreign Affairs, which came in the mail today.

Palgrave’s catalog page: says this:

This edited volume reconsiders the conventional wisdom, which argues that comparative performance (in economic, social, political, as well as diplomatic arenas) of China has been superior to that of India. The book brings together ‘new paradigms’ for evaluating the comparative performance of two countries. Essays show that if not outright wrong, conventional wisdom has proven to be overly simplified. The book brings out the complexity and richness of the India-China comparison.

Any challenge to this conventional wisdom is greatly appreciated. The FA review says the issue of China’s unreliable statistics is addressed, and its about time, too!

“Complexity and richness” are nice buzzwords. I am waiting for someone to make the point that Jim Bennett has repeatedly made, e.g. here:

There�s a link between strength of civil society and civil society institutions and entrepreneurism and prosperity. If this is true at all, and it just seems to be overwhelmingly true, sooner or later India is going to overtake China in the nature and pace of its economic development, and I think shortly after it overtakes it, it�s going to far outstrip it.

I think that India�the rise of India is going to be one of the big stories of the 21st century and the relative problems of China, once they get another two or three decades down the road, is going to be another big story and one that a lot of people aren�t expecting. All you�re�people are mesmerized by the growth curves in China right now. They see pictures of the big skyscrapers in Pudong and, you know, they�re extremely impressed by this, but they�re not looking the fact that China is on the wrong side of a huge transition problem.

If you look at these transition problems in small countries like Taiwan and South Korea, which have very similar social structures, this was a big crisis. It was a huge crisis in Japan, which is not so similar, but had some similar issues, and it led to a, you know, major world war.

China�s got big problems. I hope they work through them peacefully, without an enormous amount of disruptions; but, you know, I�m not going to lay odds on that it�s anything like 80 percent chance of success there. I think they�ve got a 50-50 chance of getting through their democratic transition without major problems and disruption, which are going to be I think the big international crisis of the 2030 or 2040.

China is, as of now, still on the wrong side of a politico-legal transition that India has already made over the course of two centuries. Leaping that chasm is a problem that Japan and Korea, for example, have both made, and not without much turmoil. China will probably not be able to “scale up Singapore” and have developmental autocracy forever. The predation and corruption in this system will choke off growth unless the Chinese move ahead with real reforms at some point, that actually cede power from the gang that runs the place now. China has some major challenges ahead and everybody is just whistling and looking the other way. Meanwhile, India has hidden strengths which will, I hope, surprise the world.

Macfarlane — Empire Of Tea

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[cross-posted on Albion’s Seedlings]

Macfarlane, Alan and Iris, The Empire of Tea: The Remarkable History of the Plant that took over the World, 2003. (also published as Green Gold: The Empire of Tea). 308 pp. in small format.

In past blog posts, I’ve reviewed several books that help us understand the dynamics of international trade over the last thousand years or so. Our world has been globalized for a very long time and we have examples of how the two ends of Eurasia had very different needs, interests, and capacities. In one such case, the elements of material culture (glass-making and glass-using) were to have profound impact on how Westerners viewed the world in advance of other cultures. Alan Macfarlane’s book on Glass was a well-written and stimulating account of the role of glass-making in global technological change.

Macfarlane has followed up with a similar, but rather more personal, book on one item of material culture and trade – the tea leaf. His family were tea planters in Assam (northeast of India) during the mid-20th century, and Empire of Tea is co-written with his mother, who experienced life as memsahib in the 40s and was emotionally traumatized by the plight of the agricultural workers on the Assamese tea plantations. The harsh physical demands on the workers picking the tea leaves continue to this day.

Empire of Tea, per normal for a book by Alan Macfarlane, reflects encyclopedic research with a deft and approachable written style. It’s a small book and a relatively quick read, and very well organized, but one comes away with a strong sense of the botany, medicinal effects, history, economic impact, and social import of tea in human history over the last 1500 years. An excellent starting point to the literature, in other words.

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Anderson — The Long Tail

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[cross-posted on Albion’s Seedlings]

[based on a free review copy provided by the publisher]

Anderson, Chris, The Long Tail: Why the Future of Business is Selling Less of More, New York, 2006. 238pp.

In late 2004, about the time that the Anglosphere Challenge was published, WIRED magazine editor-in-chief Chris Anderson wrote an influential article called The Long Tail.

Looking at the sales figures of companies in a new generation of online industries (such as digital jukebox company eCast), he discovered that substantial corporate income was being made from the vast array of goods which didn’t appear on anyone’s “hit” list. Sales figures showed a so-called power law distribution. As one moved down the sales ranking, sales volume dropped dramatically. In the new world of online marketing and distribution however, people were responding to more choices in products (the “Long Tail” of the sales distribution curve) by purchasing a wider variety of goods. Vendors were selling less of the lower ranked items, but in aggregate were actually selling more. As Anderson puts it, “popularity no longer has a monopoly on profitability.” The early online success stories were companies that carried the “hits” of their industry but offered a new and efficient way to find and access older and less famous choices.

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The so-called Pareto principle … where 80% of sales come from 20% of catalog items … was giving way to a new and more attenuated sales pattern. The Long Tail of sales persisted, in modest but significant numbers, as far down the sales ranking list as anyone wanted to measure. Whether it was ITunes, Netflix, Amazon, Rhapsody (an online music rental service), or eBay, it seemed clear that even a huge inventory of goods, if matched successfully with a large enough pool of purchasers, would attract sales of almost every item. The cleverest retailers were finding new ways to lengthen the Tail (add inventory) and fatten the Tail (increase unit sales).

At the time, Anderson proposed three rules for generating a Long Tail business.

  1. Make everything available.
  2. Cut the price in half. Now lower it.
  3. Help me find it.

Anderson’s article generated plenty of “why didn’t I think of that” moments and the phrase Long Tail has since become a dot-com buzzword and a handy way to encapsulate how the Internet has become a streamlined vehicle for providing, finding, and selling many kinds of goods. Some of those goods can be dropped on one’s shoe (as Amazon, eBay, and WalMart.com prove every day) and some of those goods (like eBooks and music files) seem more like an electronic dance between your credit card, your computer screen, and perhaps a digital appliance.

Now Mr. Anderson has assembled a more thorough, more data-rich inspection of the Long Tail concept. By working closely with economists at prominent universities, and using a Long Tail weblog to engage the assistance of a community of readers, the author has evaluated a number of Long Tail industries (and actual sales data sources), to see whether his ideas about the Long Tail in his earlier article hold up under scrutiny.

The short answer, with a few modest caveats, is Yes.

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Reynolds — An Army of Davids

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[cross-posted on Albion’s Seedlings]

Reynolds, Glenn, An Army of Davids: How Markets and technology empower ordinary people to beat big media, Big Government, and other Goliaths, Nelson Current, 2006, 289 pp.

Glenn Reynolds (the Instapundit) has carved out a unique niche in the blogosphere for the last five years with an amazing stream of interesting links (often with brief commentary), an eclectic set of hobbies and intellectual enthusiasms, and a law professor’s expertise in sorting through the legislative and legal whims of American society. Mostly libertarian, with a proactive attitude on personal and national safety, he remains as one of the few prominent “one-man band” bloggers to remain active through the years since 9/11. His energy and productivity are legendary and his influence, I believe, is substantial and growing.

In Army of Davids (AoD), he summarizes his personal experiences with the changes wrought by technology in the last decade, especially those which allow ordinary people to create goods and services which were once the province of large organizations. And he investigates topics that have long held his interest: beer-making, music, the Internet and broadcast media, games, nanotechnology, politics, space exploration, and life extension.

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