Jun 09
2
And The Winner Is……. China
People keep comparing the current global recession to the one in the 1930's. And in some respects that is quite reasonable. But there is one absolutely mind-boggling difference.
This time anyone in the world can find out in seconds news that can shape his or her ability to avoid the storm. We do this as a result of the Internet. A lot of what is written in blogs is written as commentary on stories published first in traditional media that also happens to be online. But then a lot of what is written in the newspapers (physical and online) first appears in TV news.
One of the things that is fascinating in the current global financial crisis is the amount of information, that has NOT been published previously, that comments on the economy. Most of it is about the US economy, but that is fair enough too. After all the US has been the global engine of manufacturing for years and then consumption, as the Chinese became the manufacturing giant that it is.
Along the line the Chinese became major holders of US treasury paper. That is they became the lenders to the US, figuring quite reasonably, that the more the US had money to spend, the more it would purchase goods made in China, and that would drive growth. It worked for a long time. Of course now the Chinese are wondering what to do with a bunch of paper that may turn out to be worthless. Chinese economists are apparently saying that this strategy is “risky”.
Commerce, and Tian Yun, a scholar at the China Macro Economics Institute,
expressed concerns over the risks, saying that the United States may export its
deepening crisis to China “by printing U.S. dollar notes uncontrollably.”
But five other experts, including Yi Xianrong, a
researcher at the financial research center of the Chinese Academy of Social
Sciences (CASS), and Mei Jun, deputy director of the Finance and Securities
Institute at Renmin University of China, said they don't believe U.S. equities
pose “great risks” to the country's economy.
Meanwhile in the West, we have Time Warner joining the clamour started by Rupert Murdoch, to charge for access to online content. They apparently don't get it. The more they move to institute charges, the faster people online will move to share the content freely. You don't need to pay to get anything online. That is the whole google model. The advertiser pays for getting a qualified lead that is superior to the kind of shotgun approach to advertising that old media delivered.
And what does this have to do with China?
China has a different view to copyright than that which exists in the west. The west may have gotten the Chinese to agree to some things that relate to respecting intellectual property. But just as with macro economics, the Chinese do things their own way.
We would do well to understand the rules that they have set for the game, rather than trying to instruct them with a set of rules that favour a corporate structure that dates from the 19th century. As western content companies struggle to deal with the way that information leaks and flows (including movies, trade secrets, music, documents etc) they would do well to consider that the only way that they can actually survive is to become a lot more Chinese in the way that they think…