Asia's Rise - Go East, Young Man

As usual, I had found myself incredibly lost in China.  It's quite easy to do so, something I proved to myself on numerous occasions.

Of the nearly 100 countries I have visited in my travels, the top three most difficult countries to get around as an English speaking foreigner were China, Russia and, this one may surprise you, Mexico.

Considering its proximity to the US I was quite surprised to find how many people in Mexico don't so much as speak a word of English.

But, at least the alphabet is basically the same and, in fact, most of the words can be figured out pretty easily as they come from the same origins.  I didn't tend to get too lost in Mexico when I could read signs like, "Farmacia", "Restaurante" and "Policia".

The same isn't the case for Russia and China.  The communist-built Moscow subway is probably nearly indecipherable even to people who speak and read Russian.  It's a giant labyrinth of criss-crossing trails.

This one particular time, in Shenzhen, China, I was looking to get to Guangzhou by train.  I must've asked 20 taxi drivers, shop owners and other pedestrians.  "Train?"

Forget about it, no one understood.  I even had resorted to pumping my fist up and down like a child does when a train goes by, trying to get the conductor to blow his horn.

To my frenzied fist pumping I added in the obligatory, "Choo, Choo?"... "Choo, Choo??"

It probably didn't help that Choo Choo, or Chiu Chiu, at least, was probably the name of a person or place of no relevance to this particular situation.

If only Apple's iPhone and the "Word Lens" app (Check it out, it's very cool!) that enables you to use the iPhone's camera to read and translate foreign-language signs existed in 2006, I maybe would have found the train station.

But, I eventually found a bus headed to Guangzhou and hopped aboard.

Sitting beside me was a very pretty, polite and proper lady.  "Haw-llo, Haw ar yoo?" she asked.  She told me she learned some English in school and was delighted to be able to practice it with me.

We exchanged pleasantries and the very next thing she said, without me asking about it, was, "I save $250 per month!"

A bit confused, I replied, "Excuse me?"

"I save $250 per month.  I make $450 per month and I save $250 of it each month.  How much do you save?"

I was at a bit of a loss for words.  First, I was on an extended vacation where I wasn't really earning anything and was spending quite a bit - but I had never had anyone ask me how much money I save before.

But that is the mindset of the average Chinese person.  You would never hear an American proudly tell you how much they save each month.  They may boast about how much they spend, but never how much they save.

But, do the math, one billion Chinese people... if they are each saving $25 per month, that is $300 billion per year in savings inside of China.  China's current account surplus in 2009 was $296.2 billion.

That is a big part of the reason for the rise of Asia.  The West has lost its way.  Thanks to decades of central banking and monetary inflation everything has been corrupted and distorted.  How can saving be a popular thing to do when the people centrally planning the economy manipulate interest rates down to 0% and the government creates every possible incentive to spend (Cash for Clunkers!) and every possible disincentive not to save.

I recently came across this speech, given by Hans Rosling in India, entitled Asia's Rise.  The speech has some very interesting information and data and it is one of the best presentations I have ever seen.  It is well worth 15 minutes and 51 seconds of your time.

The rise, or re-birth, of Asia is and will be one of the most important trends in the coming years.  For those living in the Submerging Economies, such as the US, UK, Spain, France, Greece and Italy, now may be an excellent time to go East, young man.

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Comments

[Richard Stooker]

A good book to read is FUTURESCAPE by Robert Schiller, which takes a very nosed and informative look at the world's major economies and their prospects through about 2020.

The good news is that the United States should adapt and remain competitive. The smartest Americans will do well. People who don't bother to get educated will do a lot less well. Europe and Japan are in a decline caused both by demographics and their refusal to adapt to globalization.

China and India are growing, but China is far ahead and likely to remain that way.

However, both of those countries face major problems not usually mentioned. They've created a lot of wealth, but still have major infrastructure problems - not just highways and bridges, but banking, health delivery and so on.

Plus, India is politically very divided. China's leadership maintains an outwardly unified front, but they're afraid of social unrest getting out of hand.

income investor