Fortune Global Forum 2005

[Starseeker]

I am surprised that Welsh didn't pick up on this, since he is usually up for money debates.

http://www.fortune.com/fortune/globalforum

It was held in Beijing this year.

There are a lot of interesting debates and discussions through out the forum and after it.

What's even more interesting?

They are going to bring 6 nobel winning economists to Beijing to discuss the current and future economy in China.

Hu Jintao actually addressed the Global forum in its first day.

FORTUNE GLOBAL FORUM
Hu Jintao's Goal: Build a 'Moderately Prosperous Society'
China's president talks about foreign investment, deregulation, and his country's foreign exchange reserves, but he doesn't mention Mao.
By Justin Fox

A student of Chinese history might think a lot happened in the country between 1949 and 1978: the Hundred Flowers Campaign; the Great Leap Forward; and the Cultural Revolution. But in his opening speech at the FORTUNE Global Forum in Beijing today, President Hu Jintao rather pointedly declared that those days don’t matter anymore.

In a quick survey of 5,000 years of Chinese history, Hu skipped straight from 1949, when the Communists gained full control and “the new China was proclaimed,” to 1978, when Deng Xiaoping began his “reform and opening-up program.” Mao Zedong’s portrait may still loom over Tiananmen Square, but he doesn’t even rate a mention now when his successor addresses foreign businesspeople in the Great Hall of the People on the square’s west side. “In a sense, what an admission,” said Anthony Saich, director of Harvard University's John F. Kennedy School of Government's China Public Policy Program, who sat behind me in the bus on the way back to the hotel after the speech. “It’s almost like saying, ‘We wasted 30 years.’”

Hu’s speech was also remarkable for its brevity (it lasted a mere 14 minutes); his repeated citing of detailed economic figures (China’s foreign exchange reserves now total $609.9 billion); and his use of the phrase “FORTUNE 500” (as in, “over 400 firms out of the FORTUNE 500 have invested in China.") That China has changed a lot lately is so obvious as to be almost not worth mentioning. But there’s still something really strange about hearing the nominally Communist country’s leader wax poetic about foreign direct investment and deregulation. I guess we’d better get used to it.

As befits a regime committed to keeping multinational corporations happy, China’s government is making a really big deal of this conference. The expressway from Beijing Capital International Airport into town is lined with FORTUNE Global Forum banners. Today’s edition of the China Daily, the government’s English-language mouthpiece, is largely devoted to the event. To quote from the lead article in the ever-enthusiastic Daily: “More than 800 participants—CEOs, chairpersons and presidents of Global 500 firms and domestic enterprises; top government officials; and renowned scholars—will be brainstorming on various issues.”

But there’s really just one issue that will dominate the conference, which runs through Wednesday afternoon: China. The country’s big and growing consumer market, plus its huge and cheap workforce, have made it an obsession among the world’s CEOs. As a result, the sort-of-annual CEO powwow that is FORTUNE Global Forum has become a largely China-centric event: Three of the last five forums have been held here (the previous two being Shanghai in 1999 and Hong Kong in 2001).

Because it’s being held in the capital, though, this year’s event is characterized by a heavy involvement of Chinese officialdom. While that has its downsides—the bureaucratic hassles and recitations of fulsome platitudes and 10-point plans have already begun—it’s certainly not all bad. For one thing, the event venues are swell places like the Great Hall of the People, the Temple of Heaven, and the Diaoyutai State Guest House (the in-town Chinese answer to Camp David)—and we can count on regular police escorts. For another, it’s worth being reminded of just how great the challenges facing China really are.

To corporate executives, politicians, and workers around the world, China may look like a fearsome economic juggernaut. But the people responsible for running the place know the real score: However amazing it is that a couple hundred million Chinese have risen to affluence in the past couple of decades, that still leaves a billion people stuck in poverty. The government’s goal over the next 20 years, Hu said in his speech, is to “seize the important window of strategic opportunities to build a moderately prosperous society.” By “moderately prosperous,” Hu said he meant about $3,000 a year in per capita GDP—about one-thirteenth of current U.S. per capita GDP.

There are too many articles to quote from, so I'll stop here. The interesting thing is that Mr. Hu has actually hinted at democratic reforms in his speech.

There are a lot of warm sentiments being thrown around. You make money, help me make money, everybody happy. Of course, China still need foreign investment and technology to survive. The up side is that it has a huge domestic market to fall back on should its globalization efforts get a false start. The funny thing is that I didn't hear any protest or any peep from anybody about Japanese business men(or economical advisors) attending the forum.

Another amusing thing that nobody mentions is that not very many foreign businesses are making a profit in China until recently. A lot of companies(big or small) came with the soda dream - if only 5-10% of the people in China buy my soda at $3 dollars each, I'll be the richest man in the world. Of course, many do not understand and could not have known that unlike the monolithic gigantic that they thought was China, China is actually extremely diverse and complicated market to operate in.

Meanwhile, the Chinese technology is catching up, Tsinghua University in Beijing has already build a chip that is equal to Pentium 3 in 2000 using only domestic know how. As for the area I am familiar in, bio tech is the hottest business right now. A lot of reagents being used now are made in China.

And surprisingly, China is becoming one of the leading pursurer of alternative energy development. 1.3 billion people all need power, and all the economical development demands even more from it. Coal, wind, tide, thermal, dam, nuclear and other ideas are all being tested. China's do it now and we'll do the environmental impact assessment later attitude is getting a warm welcome by western companies who are used to jump through hoops.

2008 is fast approaching, and Beijing is gearing up to put on one last spurt through the finish line. There are constructions everywhere, and a lot of the world heritage site is being renovated. There are a lot of talks of security in the press. But I believe all the security hoopla is a cover for Beijing to ready itself for the massive world wide attention. Would people choose that time to protest? To talk about social/human rights issue? To talk about democracy reforms? I am curious to see if Beijing/China's one last leap into the world stage would be glorious or shameful? Would reporters and spies use this chance to dig up dirt on Beijing?

May we live in interesting times indeed.

 

[welsh]

I would guess that 2008 will go off without much fuss. Any hint at fuss will be repressed.

But what worries me is China's long-term future.

The last 50 years have generally shown that, in the developing world, authoritarians often do better than democracies at economic growth. But I doubt economic growth can be sustained unless it undertakes some democratic reform simply because the state needs to be constrained in its power to take.

That China's economy has soared so fast while mllions are left behind emphasizes a major point. States do many things- public order, national defense- etc. But one thing that all states do inherently is redistribute wealth.

Now wealth redistribution occurs because the state is both a participant and manager of economic relations. That said, economic wealth can be transferred either down to the society in order to improve the quality of life of general society, or it can go up to make the rich richer and the powerful wealthy.

The trick requires that there be some balancing. To much redistribtuion to the poor would reduce incentives to invest and develop among the rich. Too much redistribution to the rich makes the rich increasingly insulated and reduces opportunities for the poor to socially climb. That most of my students that are Chinese come from politically influential family suggests that the economic distribution is going from the bottom up, rather than the top down.

Mao, in his most idealistic, would turn in his grave.

The question is how long this can be sustained. Your thoughts on this Starseeker?

Edit-
@starseeker- this article addresses the problem if inequality in China-
http://www.apsanet.org/imgtest/TaskForceDiffIneqDevBlecher.pdf

You might also be interested in this companion piece, in which the author argues that globalization has led to increased inequality, but in this sense- the case of China is especially important.
http://www.apsanet.org/imgtest/TaskForceDiffIneqDevWade.pdf

 

[Starseeker]

Sorry for the late reply, but I've been too busy to try to fit my time around watching this:

http://www.cctv.com/financial/special/C14039/01/index.shtml

6 nobel prize winning economists, dozen of the the best mathematical and economical minds on the planet to talk about the current situation in China.

Even Nash made it, I was very suprised to see him show.

I wanted to go in person, but regular sitting tickets are 3500RMB and it's already sold out before I found out about it.

And if I want to join in on the discussion group, it's 300,000RMB a head.

lol

Economy isn't cheap.



Have you read any of these papers in your studies? Do you know where I might find a copy?

EDIT: correction 8 Nobel prize winning economists.