Good and bad news in the World Bank’s China Quarterly
The good news in the latest World Bank China Quarterly.
One: The Economist can celebrate - for the first time in a long time, China’s growth really didn’t hinge on net exports in the fourth quarter (see Figure 2).
Even better, the World Bank believes that domestic demand growth picked up, so overall growth remained strong. The World Bank’s calculations though assume “constant terms of trade” — which, as the Quarterly’s authors recognize in a footnote, understates the contribution of net exports to China’s growth in q4. The rise in imports likely reflects an adverse terms of trade shock (economics speak for a @#$%! increase in the price of imported oil) as much as anything else. Still, World Bank is no doubt directionally right: net exports contributed far less to China’s growth in q4 than earlier this year - or in 2005 or 2006.
Two: The World Bank forecast that China’s current account surplus will stabilize in dollar terms in 2008 - rising by only $20b, from $360b to $380b. It is expected to fall from 11% of China’s GDP in 2007 to 9.3% of China’s GDP in 2008, roughly its 2006 level. I hope the Bank is right, thought, I would also expect China’s (nominal) import growth to slow as well if the global economy slows - whether from fewer imported components or weaker commodity prices. Though right now there is little sign of moderation in commodity prices — oil has remained over $90 and wheat is not cheap.
Three: The Bank forecasts that China’s reserve growth will stabilize at around $460b a year. That is still an exceptionally large number, and by any reasonable standard, far too large an increase in reserves. But the absence of any further increase in the pace of Chinese reserve growth would still be good news. However, on this point, I am really not convinced — not if the growth in the banks foreign asses and the CIC are factored in. The incentive to move money into China right now is too strong.
The bad news:
One: The World Bank does not expect the q4 surge in domestic demand to be sustained. The fall in the contribution of net exports to growth consequently implies less growth. For 2008, the World Bank forecasts that China will grow by about 9.5%.
Two: The gap between China’s exports and imports is big enough that a 20% y/y (nominal) increase in imports and 15% y/y (nominal) growth in exports only keeps the trade deficit constant in nominal terms.
Three: The Bank wasn’t able to find much evidence of a real rebalancing of China’s economy. Investment growth continues to outpace consumption growth. Industrial production continues to grow faster than services. So investment and industry are continuing to rise as a share of China’s GDP. The Bank — stepping in for the IMF, which has yet to release its 2007 assessment of China’s economy, let alone look forward to 2008 — notes:
" Investment growth in 2007 overall was only moderately lower than in 2006, and it continues to be higher than consumption growth, thus increasing its share of GDP. Similarly, industrial production decelerated, but it continues to grow faster than services, thus increasing its share of GDP. These developments suggest that measures taken so far to rebalance economic growth away from investment and industry to consumption and services have not yet had a noticeable impact. This is in large part because the fundamental drivers of investment in industry have not yet been much affected."
Pretty strong stuff. And accurate too, best I can tell.
The Bank also highlights another key point - for all the talk of the strong growth in Chinese consumption, consumption is still falling relative to GDP.
"During the last decade, consumption has grown more slowly than the overall economy, as the share of wage income and household income in the economy declined and household savings rate remained high."
Putting in place policies to reserve that slide should be a core policy goal.
The World Bank offers one additional bit of wisdom.
"Given the movements of the US dollar against other currencies, and the growing importance of countries other than the US as trading partners, it is increasingly necessary to look at and discuss China’s effective trade-weighted exchange rate, as opposed to the US dollar exchange rate."
Well said. Most of the real appreciation of the RMB in 2007 — at yes, there was a real appreciation — came from higher inflation, not exchange rate moves. The RMB was more or less flat against a dollar/ euro/ yen basket.
A final bit of good news: The World Bank’s web site indicates that Dr. Kuijs and Dr. Dollar will be answering questions about the Bank’s quarterly report on Tuesday February 19 at 9 am EST. Submit your questions!
Brad,
Why would demand spike up in Q4 - seems convenient.
FT article the other day talking about China invsting 100 billion or so to build 90 plus airports countrywide. Given reserve fiscal position, China ia in a position to create demand?
As they revalue the currency up (vs. dollar) do they see any direct benefit to GDP (helps inflation)?
s — you have better questions than i have answers. I am not sure why demand jumped up in q4. consumption i guess, driven by a wealth effect from the stock market.
A stronger RMB certainly helps limit inflation. but so far the RMB hasn’t really moved much in nominal terms, so the RMB’s fall (in 07) v the euro offsets its rise v the $. The RMB certainly hasn’t increased as fast as commodity prices.
And then there are complexities created by a slow expected appreciation: it invites more money to come into China, and barring perfect sterilization, the associated monetary expansion might overwhelm the impact of lower RMB import prices from a stronger RMB. The monetary policy dilemmas China faces are very real.
q4 is holiday season. I guess that is the reason of demand spike.
@ Brad
A while back I suggested that just as the USA had exported its inflation during the good times to dollar-pegged (formal or informal) currencies, it would export its recession abroad in the bad times. Watching the markets, that seems to be happening. Global markets are down much further than US markets, despite a delay in dropping until recession in the US was established.
From what I can tell, the ratcheting down of foreign equity markets appears coordinated with the support of US markets. The clearest example, of course, was the collapse of global equities on Martin Luther King day when the US markets were closed. US markets dropped fairly sharply on the Friday going into the weekend, global markets had a huge sell-off on the Monday, and then Bernanke gave everyone a surprise cut of 75bps Tuesday morning before US markets began trading. The net result was a much worse sell off abroad than in the US, and it appears that the proceeds of the foreign sell off were repatriated to support US equities for the next two weeks.
This “lather, rinse, repeat” process seems to be taking the profits from the equity and commodities bubbles and bringing them home to prevent a collapse in US equity markets and banking system.
If this is really happening, the ex-US world is going to be hit harder than the US in the next couple years from asset deflation, although I would expect global credit markets to stay healthier than US credits.
Views?
can we also write it this way :
China is having increasing troubles to find foreign markets for its export.
THe decline of the US economy can already be felt in China with exports rising not as fast as before.
Up to you if this is good sign or bad sign.
china has to eat its own ‘dog food’
US has to eat its own ‘credit’
London Banker: SocGen’s sale of 50 Billion of European indices (none on the US) surely had something to do with the greater fall in Europe vs the US.
No cooling China’s economic engine
http://www.atimes.com/atimes/China_Business/JB08Cb01.html
SHANGHAI - The worst snowstorms in 50 years that devastated central and east China before the Spring Festival or lunar new year may have slowed the country’s economic growth sufficiently for the government to ease macroeconomic controls targeting overheating.
A bunch of government think-tanks and investment banks have already lowered projections for China’s GDP growth rate this year to as low as 8%. The World Bank’s most recent forecast of 9.6% compares with growth of 11.4% in 2007, the fifth consecutive year of double-digit growth in output.
Nevertheless, the post-winter reconstruction and investment, added to the momentum of domestic consumption, will leave China’s economy well placed to offset any slowdown in exports.
Asia’s small and medium-sized enterprises (SMEs) see healthy economic outlook
http://www.atimes.com/atimes/China_Business/JB12Cb02.html
HONG KONG - Stanley Hsu, a Taiwanese businessman, has looked at the future and likes it, whatever dark shadow might be spreading across Asia from the US subprime crisis.
The mainland’s fast-growing economy is encouraging Hsu to splash out on fast expansion of his spa and health club ventures, with a target of opening a new 6 million yuan (US$834,000) club every three to six months.
Hsu epitomizes the optimism among Asia’s small and medium-sized enterprises (SMEs), despite a growing negative impact from the US subprime crisis. Increasing domestic demand in the Asian markets could offset for SMEs the negative impact brought by the US slowdown worries, said Margaret Leung, global co-head of commercial banking at HSBC.
“In the face of growing economic uncertainty in the US, emerging markets still see great opportunity for growth, as intra-Asian trade grows and the small business sector is learning to adapt quickly to changing global conditions,” Leung said.
In Hong Kong 68% of SMEs polled expect local economic growth to maintain the same pace in this half and 26% expect faster growth.
Banker — Don’t forget that many parts of the dollar zone are also importing US monetary policy (quite expansionary) and that may have more of an impact than the fall in their exports to the US. China’s challenge is balancing two competing impulses, one contractionary (less US and perhaps more importantly less European demand for its goods) and one expansionary (falling US int. rates in a context where China tends to import US monetary policy)
“I would be very surprised to see the U.S. economy supplanted as the leading global economy anytime soon.” - Larry Summers
Moron, the US Economy has already been supplanted by the borderless European Union as the largest economy in the world. Within a decade, China’s GDP will also overtake the US Economy at current economic growth rates. Forget Neo-liberalism economics that can best be described as an abject failure, if the US wants to regain its title as leading industrial superpower, here is a 10 step program for what to do.
1. Establish coal to oil program
2. Build nuclear plants
3. Drill ANWR. Drill coastal shelf.
4. Develop clean fuels for use when they can carry the economic load at competitive prices.
5. Cut entitlements
6. Reduce/eliminate business taxes on product produced for export.
7. Withdraw from Iraq and Afghanistan. Bring home troops under UN banner. Eliminate funding.
8. Withdraw troops from Germany/Japan .
9. Industrial program for alternative wind and solar power to supplement energy supply.
And foremost,
10. Non-interference in the internal affairs of other nations. (ie. Mind your own damn business ).
DC
Are you commenting on larry summers blog, or Bred Setser’s?
sorry Brad, didn’t mean to call you Bred..
Germany might be the canary in the coal mine. It exports capital goods, which might be the first to suffer and might be more negatively affected than other goods in a global slow-down.
Few points:
1. The World Bank data seems to follow Chinese Official stats for Q4′07.
2. Investment will likely rise, given recent infrastructure damage due to snow storms.
3. Consumption will likely fall given recent stock market declines.
4. How did WB arrive at the $400-$460B range for reserve growth per year? Did they extrapolate a constant rate of growth for exports vs imports vs RMB appreciation?
10. Non-interference in the internal affairs of other nations. (ie. Mind your own damn business ).
OK i think i will begin by refusing to buy brand m-i-c. Perhaps companies making investments there well get the message: you send me poison goods i make it my business to buy elsewhere, what you want to do with your junk is your damn business.
Off-topic Adjustment Forecast:
Canadian Current account heading toward record deficit
Merrill Lynch forecasts $36B shortfall in 2009
Jacqueline Thorpe, Financial Post
Published: Wednesday, February 13, 2008
Canada is heading for a record current account deficit of $36-billion in 2009, a lightning speed transformation from a decade of surpluses as the economy realigns itself toward imports from exports.
Merrill Lynch forecasts the switch will occur this year as Canada moves to a $20-billion deficit from a surplus of $12-billion in 2007. The deficit will continue to swell in 2009.
Although the change will ultimately put pressure on the Canadian dollar, it is very much a function of the loonie’s recent strength–and a strong domestic economy — which will continue to fuel imports. Flattening commodity prices and less dramatic gains from income abroad will also be major drivers said David Wolf, Canadian economist at Merrill.
“Canadian demand is a lot more relative to the world than it was five years ago,” Mr. Wolf said. “Canadians are richer and they are buying more goods and services from abroad.”
The switch may be abrupt for a country used to crowing about its triple surpluses — fiscal, trade and current account — but will be a reflection of strength, Mr. Wolf said.
The current account numbers are the broadest measure of a country’s international trade, including goods, services, investment gains, travel and pretty much everything else. A big deficit would mean Canadians are consuming far more of the world’s wares than they are exporting and would put Canada in a position that the United States has been criticized for over for years.
Still, a $36-billion deficit would be a record in nominal terms but at 2.2% of GDP it will still be below the 4.8% recorded in 1975, the year of Canada’s largest prior deficit. It will also be lower than the United States’ deficit, which is forecast at 3.9% in 2009, and well below its peak of 6.2% in 2006.
More important will be the source of the deficit. The current account deficit days of the early 1990s were driven by large government borrowings abroad. This time it will be a reflection of strong domestic demand and higher relative rates of return at home.
Mr. Wolf had already been forecasting a swing to deficit in 2008 as a stronger dollar spurs imports and compresses the merchandise trade surplus to nearly a deficit toward 2010. Services have been in deficit since 2005. Flattening commodity prices also suggest an improving terms of trade will no longer provide an offset.
But he dramatically raised his deficit projection from a previous forecast of $2-billion in 2008 and $13-billion in 2009 on the view that Canadian net indebtedness will no longer be able to improve so dramatically.
The move into deficit will also highlight how important the Canadian-U.S. trade relationship is, even in a world where the United States sucks in record imports from China and other emerging markets.
As Canada swings to deficits, the U.S. deficit will improve. Merrill Lynch forecasts a U.S. current account deficit of about US$189-billion between 2007 and 2009.
A new surge in commodity prices and loonie however, could throw the forecast askew as could a major domestic retrenchment in Canada.
jthorpe@nationalpost.com
Guest,
Non-interference in the internal affairs of other nations should be the cornerstone of US foreign policy (ie. Mind your own damn business ). US military should leave Japan/Korea and redeploy US Soldiers to only US territory. The Washington Consensus controlled IMF and World Bank should cease and desist in meddling in the monetary/economic policies of Asian nations. Just as what your next door neighbor does late at night, every sovereign nation has a right to self-determination right or wrong.
I am equally opposed to Clinton’s “humanitarian interventionism” in Yugoslavia as I am opposed to Bush’s war for strategic control of the Middle East. Unless there is a direct national secuity risk to the American people, non-interventionism is the only rational and realistic policy. And you are perfectly free to boycott Chinese manufactured products at Walmart or Apple computer.
So why are you complaining about US monetary policy?
“…To avoid possibility of a new cold war, Washington must curb protectionist instincts and Beijing must rethink support for tyrants who control reserves of oil or timber…” http://www.ft.com/cms/s/0589299a-da68-11dc-9bb9-0000779fd2ac.html
http://blogs.wsj.com/economics/2008/02/13/schumer-to-swfs-watch-out/
“So why are you complaining about US monetary policy?”
I complain about US monetary policy because the Federal Reserve’s “war against savers” with my hard earned pension savings earning less than even the official US inflation rate in order to subsidize politically connected and leveraged Wall Street Hedge Funds. The China PBoC doesn’t complain about US monetary policy; it just moves US Dollar reserves into a SWF.
Talk about hypocrisy, the Saudi Arabia dictatorship by the royal family gets a free pass from the US business media, Bush even holds hands with the Saudi king on television, but China gets bashed for relations with Venezuela which democratically elected Chavez under UN election monitors. The Saudi government bans Christians, forbids women to drive, funds Muslim extremists, stones women to death, etc. Sudan’s oil production is jointly produced by a India-China corporation. The US Business media always conveniently ignores India’s state ownership in Sudan. Does the US business media ever mention that US oil companies are leading producers of gas and oil in Burma?
“A Chinese facility that has never been inspected by the U.S. FDA made the active ingredient of a blood-thinner that is under investigation after reports of hundreds of allergic reactions and four deaths among its users.”
“The WTO has sided with the U.S., the EU and Canada in a dispute with China over its treatment of auto-part imports.”
“The WTO has sided with the U.S., the EU and Canada in a dispute with China over its treatment of auto-part imports.”
So what, the WTO sided with China in the dispute over Chinese paper exports to the United States ruling that “China is not dumping paper” in the US. Auto-parts imports are the exception to the rule; US multinational corporations themselves import 70% of Chinese imports to the US. Don’t blame the Chinese for the US trade deficit; Ask General Electric, Cisco, Hewlett Packard, Apple, Dell, Intel, etc.
…and no word yet on whether DC thinks Chinese industrial espionage should be considered “minding your own damn business…”
As long as the US military supports Taiwan’s independence, why is it any surprise that China spies on US military support to Taiwan. The Clinton Administration parked 2 Aircraft Carrier Battlegroups in the 1990’s off the coast of China while then Taiwan President Lee planned to issue a formal declaration of independence. The Clinton-Rubin plan to politically destabilize the China government would have resulted in the destruction of the 2 Aircraft Carrier Battlegroups and possible nuclear war if the US had not backed off.
There’s a fundamental disconnect in David Chiang’s posts. First he complains how awful the US is for messing in other countries business, but then he argues that the US should not interfere in other countries business of its own self-interest.
This makes no sense to me. If the Clinton-Rubin evil conspiracy is as powerful as he says it is, if the Federal Reserve can mismanage the US economy as much as he says that it does without apparent bad impact, and the people in the US are as lazy and wasteful as he says they are, then it seems that looking at the point of view of US self-interest, that the US should just keep doing what it has been doing for the past twenty years.
Sure lots of other people will complain and scream about the US being unfair and about the US exploiting the rest of the world. But if the US has been as successful as it has been at exploiting the rest of the world as DC says that it has been, it doesn’t make any sense for it to stop.
One thing that the Chinese political leadership has decided not to do is to attempt to challenge US power in the world, and not to oppose US interests when and where it doesn’t conflict with Chinese interests. This is likely to mean that unless the US population gets sick of world leadership, that the US is likely to maintain its hold on world power to at least 2050.
LC — thanks for the on-topic comment. apologies for not responding more rapidly. I think the WBank more or less forecast that the current account and capital flows would both stabilize at their current level, so reserve growth would stabilize. from reading the text, it feels like they paid a lot more attention to their current account forecast than the capital account forecast. they focus more on what is going on in china than how china is impacting the world (that in theory is more for the IMF).
in any case, it would be a good question to pose to Dr. Kuijs and Dr. Dollar electronically.
Twofish,
My basic message has been always consistent, “The US should mind its own damn business in regards to Asia, and especially in regards to China”. The US has no legitimate or legal reason to continually deploy military forces off the Chinese coastline, interfere in the Taiwan issue, or comment on Chinese monetary or currency policies. Right or wrong, the Chinese are entitled to their own national sovereignty in the economic, political, and foreign policy spheres.
DC: My basic message has been always consistent.
Sure, but the problem is that you are not talking from the point of US self-interest. You are saying that the US *should* do something, but if the US has this situation going exploiting the rest of the world to be able to far beyond its means and meddle in other countries for its own selfish reasons, then why (from the US point of view) should it stop?
It won’t stop unless someone stops it, but China figures that it is getting more out of the current situation than changing it.
Who cares about legitimacy or the law? If you are powerful enough, you get to define legitimacy and write the laws, and anyone that complains can be bought off, ignored, or destroyed. Yes, people might hate you, but so what?
Getting back to the topic, one problem with policy recommendations is that the people doing the recommending often have completely different objectives than the people they are recommending to.
For example, I’m still perplexed at how a “balanced” economy is better than an “unbalanced” one.
DC — China doesn’t just set its own exchange rate. it also sets the United sTates exchange rate vis a vis the dollar. And as Larry Lindsey notes, that decisions ends up affecting the composition of output in the us (favoring some sectors over others). I.e. China is now big enough that policies that it regards as its own have spillovers.
incidentally, the insight that a country that pegs its exchange rate also ends up setting someone else’s exchange rate (since you peg against something else) led to the creation of the IMF. currency policy is not solely national.
I am actually quite willing to give coutries a lot of latitude to adopt domestic policies that don’t have big spillovers — you haven’t seen my complain about China’s minimum wage (which irritated Dr. Rogoff quite a bit). but other countries have a legitimate concern about policies with spillovers.
that also obviously applies to uS policies, including the US policy (in W’s first term) of asserting a unilateral US right to launch preventative war, which understandable unnerved much of the world.
What will force the US to stop making messes around the world is the decline in the US economy. As our economic power declines so will our military. I always have to laugh at people who bring up the contaminated toys, etc., exported by China without ever mentioning the infinitely more damaging contaminated debt instruments, filled with toxic waste, exported to the world from the USA.
“Sure, but the problem is that you are not talking from the point of US self-interest.”
The self-interests of the Washington Elites keeps the US global hegemony project going. It certainly isn’t in the economic interest of the American people to see their tax dollars wasted in Iraq or a China containment policy based on weapons aid to Taiwan. What is China to do? Either they can Nuke Washington with a DF-31 missile, or attempt to establish a new economic order among developing nations. Whether you agree or not, a new multi-polar world order is being established today among the BRIC nations of the world led by China. US global hegemony is coming to a rapid end.
http://elainemeinelsupkis.typepad.com/money_matters/2008/02/us-truck-on-fir.html
Brad, just wanted you to know, I mentioned your fixation on China here in my latest article.
Quote: The World Bank is STILL fretting about China. Brad Setser is always fretting about China. It is as if he were sitting in my burning truck hauling shit that is barreling downhill with flames shooting out, and he notices the Dragonmobile racing past us. ‘Hey, they don’t have enough chrome trim!’ he yells. ‘We have to explain to them how to drive their truck. We are experts!’ Unquote.
It really amuses me that any American economics professor or pundit still has the daring to point out what ails China. It is beyond absurd. But then, the US is always unable to see how foolish we look to the rest of the world. Our main export product seems to be naked emperors.
You know, i actually don’t think i offered china any advice in my post (tis pretty clear that the Chinese policy makers don’t take my advice in any case). I did offer china watchers some advice — namely to look not at the rmb/ $ but at the rmb v a broader set of currencies. but that was about it.
I though would interpret my fixation with (and the gulf too, if you haven’t noticed) as an indication of respect. China and the big oil exporters matter. And I treat them — I hope — as players that matter for the global equilibrium.
DC: The self-interests of the Washington Elites keeps the US global hegemony project going. It certainly isn’t in the economic interest of the American people to see their tax dollars wasted in Iraq or a China containment policy based on weapons aid to Taiwan.
But it is, since the US taxpayer gets cheap oil, and low,, low interest rates to fund their McMansions, credit cards, and Humvees. Global hegemony has a lot of benefits for the American taxpayer. US consumers can spend, spend, spend as a result of US military and economic dominance.
DC: Whether you agree or not, a new multi-polar world order is being established today among the BRIC nations of the world led by China. US global hegemony is coming to a rapid end.
Whether *you* agree or not, the new multi-polar world economic order has the US remaining a major player if not *the* major player in the world system. BRIC nations are investing large amounts of money in Wall Street, and that *increases* US financial dominance rather that decreases it. It was a Wall Street investment bank that invented the term BRIC.
China has no interest in conflict with the United States. As long as the US doesn’t try to destabilize the Communist Party or support Taiwan independence, China has no interest in challenging US world hegemony and will continue to support US military and political dominance so that it gets access to raw materials.
China really doesn’t *want* to lead the world. Which is fine, since I doubt India and Russia wants China to lead the world.
It’s not a bad thing that so many people are worried about China, and it’s probably a good thing. One reason so many people talk about China is that it actually makes a difference. The Chinese political leadership is quite open to foreign ideas and constructive criticism, much more so than the US political leadership.
I think much of it is because rather large fractions of the Chinese political and economic leadership were trained in the United States, and the fact that everyone from China is trying to get into US graduate schools so that they can advance their careers gives the US a huge amount of influence. Having some of the best schools in the world is as important (and perhaps more important) in mantaining US global hegemony as having 12 aircraft carriers.
Rather than make “suggestions” about what China should do, it would be more sensible to suggest that the US take the steps it could take. Namely to cut back drastically the money wasted on funding the Pentagon and our pointless external wars. The US needs more savings. If the public won’t save then the government should. Redeploying the funds wasted on militarism into reducing the debt would be an important first step and it could begin as soon as the US government got its head cleared out and some sense put in. Of course, Washington is so rotten and brainless it is much easier to tell the Chinese how to solve our problems for us and that is most likely what we will continue to do.
DC still suffers from the acute humiliation the Chinese have suffered at the hands of the West (and the Japanese). But what has China done to deserve the world’s respect? Copied what others have already done, and poorly (although cheaply) at that?
Guest: Rather than make “suggestions” about what China should do, it would be more sensible to suggest that the US take the steps it could take.
Personally, I don’t mind that much when the World Bank, the IMF, and Western economists make suggestions about what China should do. One reason for this is that they are only suggestions. China is capable of totally ignoring the World Bank and IMF, and the nice thing about having so many people giving suggestions is that it turns out that everyone has a different idea about what China should do.
Guest: Namely to cut back drastically the money wasted on funding the Pentagon and our pointless external wars.
The trouble with that suggestion is that, to put it bluntly, the US public benefits from US world hegemony (or at least it thinks it does). People don’t like to admit that they are willing to spend “blood for oil” or that they frankly like their nation to have world dominance but when you look at voting patterns it seems perfectly clear that this is the case.
Guest: But what has China done to deserve the world’s respect? Copied what others have already done, and poorly (although cheaply) at that?
At some point, you just have to care about what you think about yourself, and not care so much about what other people think about you.
Right, the Chinese people woke up one day, after the Cultural Revolution, and collectively looked in the proverbial mirror and didn’t like what they saw. So they did something about it. All fine and good. All I’m saying is what funhouse mirror are they looking at now, because what the rest of the world sees isn’t what’s being reflected back at the Chinese. Pointing out someones’ delusions (of grandeur) might not be pleasant, but it does help one preserve their sanity.
@ elaine
You are delightfully creative in your blog, and you do
have a point. Our democratic system is so hostage to special interests that we have not been PRACTICAL, OPEN TO NEW IDEAS, AND DO NOT HAVE ENOUGH INVESTMENT IN THE RESEARCH AND DEVELOPMENT that will bring us to technological ascendancy. All cultures have been successful when PRAGMATISM AND MERITOCRACY RULE THE LAND! The best recommendation I can give for a summation of these thoughts is a book by John Kao called “Innovation Nation”. His recommendations are
in line with what Elaine suggests. In it he states that Deng Xiaoping went to Singapore, saw a better
way of doing things and instituted such. Maybe we should be humble and analyze all the right things that
Singapore, Norway, Denmark are doing and make changes.
However, the key is MERITOCRACY. If our system is so
infested with special interest money that we “elect” the mentally challenged to lead our nation, we have real problems. LET US BE HUMBLE, PRAGMATIC, AND RESPECT MERIT IN ORGANIZING OUR SOCIETY. WE CAN DO THIS! THIS IS A MEME WE CAN SPREAD! IT IS COMMON SENSE, WHICH ARISTOTLE SAID IS NOT VERY COMMMON. IF WE ALL DECIDE TO SPREAD THE MEME IT WILL SUCEED!!!
Same old refrain!! No substantive discussion except that this time it appears that the WB report findings are not quite to the liking!. Still the ‘Beat China” Blog despite all pretensions to contrary.