Customer Reviews

In China's Shadow: The Crisis of American Entrepreneurship (The Future of American Democracy Series)

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This book offers a much needed intelligent look at the impact that China's successful globalization may have on the United States. The book is data driven but is also entertaining and very well-written. It is an important read for anybody concerned about the U.S.'s potential rivalry with China and what U.S policy makers and leaders are doing about it (or not doing about it). If you wonder how China's rapidly increasing economic power might impact you or your children, you should start with this book.

First, the DLC medicine.

Hundt never says anything was wrong with the "free trade without requiring fair trade" Democratic Leadership Council stance of the 1990s. Nor does he, if we go with the theoretical statement of "free trade is good overall, but bad for certain individual Americans," ever address the issue of how much more the government should do for free-trade displaced American workers, especially when displaced by unfair trade.

Basically, this part of his book says: "Free trade works, China is working it in a different style than American capitalism, and to the degree China won't be changing from this and will have longer-term success, America needs to adapt." In other words, since he's saying nothing is wrong with NAFTA and then the WTO above all else, nothing needs to be addressed in this part of the U.S.-China relationship.

Beyond that, many of his comments about the economic future of how he thinks this relationship should play out are little more than platitudes.


Second, the Clinton on a pedestal part

Although Hundt does let the mask slip once or twice as to not blaming Bush for every economic problem of the current decade/century/millennium, he nonetheless paints with a pretty black-and-white palette.

For example, he never mentions that the dot-com bubble bursting, and the accompanying recession, were happening already in 2000, before Clinton left office. He never mentions that the housing bubble of the 2000s, the result of how Greenspan/the Fed addressed the recession, would have happened just as much under a President Gore as a President Clinton. He nowhere faults the Clinton-era Greenspan for letting the market get so exuberant as to letting the dot-com bubble inflate so much in the first place.


Third, the thin China analysis

Nowhere does Hundt discuss China's potential downsides along with its upsides. And those potential downsides are many.

For a starter, they include: lack of arable land, with more being lost all the time; water supply/quality issues; general environmental degradation; pollution; not a lot of resources outside of its coal (not always the best quality) and the hydroelectric power from its new dams; and whether the degree of state intervention in, and even partial ownership of, private businesses, won't turn out to be a big downside, especially given the amount of corruption/shakedowns this often involves.


In short, you can do far better than this book.

If you're a progressive, you will want a different analysis of international trade issues and how the issue has been handled domestically, including by Clinton. If you're an environmentalist, or otherwise familiar with things such as global warming, Peak Oil and Peak Heavy Metals, you might want a more sober analysis of China's natural resources.

This book is fascinating and a little terrifying -- when you see all the steps we should/could be taking as a country to meet the challenges of globalization and China, in particular. IN CHINA'S SHADOW lays out the current state of affairs and explains what the next decades could hold for the United States, given current or possible policy decisions.

The author works with McKinsey & Co, which oversees some of the biggest mergers and international deals of the corporate and financial elite. Hundt starts off name dropping and then delivers poor, uninteresting, uninsightful writing. Hundt is not a very bright man. Instead he comes across as a narcissist who got to where he is by being a brown noser and good little pencil pusher who made the right connections or rode on someone else's coat tails and now considers himself a big shot worthy of a book. There is very little substance or insight in this book, which is shocking considering this man secured a job at McKinsey. Would recommend James Kynge's China Shakes the World for a real understanding of China. Hundt just gives the perspective from his cubicle and power point presentations.

I was very disappointed in this book. I expected to learn more about China's economic threat to the United States and what America needs to do to remain competitive, presumably through innovation and entrepreneurship. Doesn't that sound like a reasonable expectation?

Mr. Hundt starts by rambling through a history of internet technologies that have brought us into the Information Age. He discusses the founding and rise of AOL, the invention of the browser, Andy Grove's "10x change" and a few other well-known trends of the past twenty years. If you are young person or a neophyte to this technological shift, you may find this interesting. However, having lived through it, I found very little new information.

The author continually heaps praise on the Clinton Administration and vilifies what followed in the G.W. Bush Administration. Although it is understandable that he would lean toward the Left, given he was part of the Clinton Administration, his bias is blatant and unbalanced. He repeated refers to "The Golden 90's" but never fully discusses the economic bubble that formed and the resulting dislocation and national disillusionment that followed. Remember the venture capitalists that were throwing money at poorly thought out business models with back-of-an-envelope business plans - hardly the bedrock of a sustainable economy?

When discussing the G.W. Bush administration Mr. Hundt makes statements such this:

He motivates his followers by resurrecting cold war militarism. His agenda does not acknowledge the tears in the fabric of the American society. It classifies Americans by groups and intensifies distrust among groups. The Bush presidency's system of liberty is state-directed and militarily supported, much like the America of the 1950s instead of the 1960s.

More opinion and bias is shown in the following:

...relative canniness of the Republican campaign and the failure to count all the votes in Florida, denied the presidency to Al Gore...

Given this lack of balance and objectivity, the author loses credibility. He also strays off topic. Isn't this a book about China and U.S. competitiveness?

To be fair, the author writes well and has a rich vocabulary. He covers numerous topics and, to his credit, references his sources in the notes section in the back of the book. I only picked out a couple of passages and, admittedly, may be a bit unfair by doing this. However, that doesn't excuse his lack of focus and unbalanced viewpoints.

If you are left-leaning in politics and can overlook the lack of focus, you may enjoy this book. However, if you are looking for a well thought out discussion on the growing economic threat that China presents to the U.S. and what the U.S can do to counter it through entrepreneurship, you will be probably be disappointed.

I finished reading "In China's Shadow" today, by Reed Hundt. He makes
an interesting argument about the economic competition between the
United States and China. His premise is that American success is
dependent on an abundance of entrepreneurship, and that the current
landscape is having a snowfall effect to deteriorate the
entrepreneurial spirit, and effectively give China a chance to usurp
America.

For instance, the American economy is leaning toward a recession,
which forces many Americans to grasp tighter to their safety nets.
This means less Americans will leave their current jobs and start new
companies. Less Americans will uproot families and begin a new
adventure because they're clinging to their current health care
packages.

Another example is the American immigration process. The best minds
from across the globe want to work in the United States, including
many Chinese, but these individuals need a proper visa.
Coincidentally, the government is limiting the available number of
these visas and many of the most talented engineers and scientists are
making their breakthroughs outside of the United States. In fact, due
to recent legislation, such as the halt on stem-cell research, many of
the smartest Americans are leaving for more opportunity in other
countries (and may not return).

I suppose the biggest call to action in this book is that America
can't win the global challenge by hanging onto our current successes.
We need another version of the exciting 1990s, where the Internet
revolutionized consumerism, and start-ups increased exponentially. The
1990s were incredibly exciting - we saw online dominance with
Microsoft, eBay, Amazon, Google, Yahoo!, and more many of the mega-
sites.

Since 2000, the trend has shifted toward consolidation rather than the
real merits of risk and entrepreneurship. One of the companies above
bought Facebook, YouTube, MySpace, and many other start-ups. Instead
of start-ups shaking up the control of power, as they are meant to do,
the biggest players are simply buying the little guys in order to stay
on top.

Since we can't merely re-create the golden 1990s of entrepreneurship,
we can suggest some alternative ways to fuel the American risk-taking
spirit. In this mold, America can again shape the global future of
communication and collaboration by leading the drive toward
sustainable energy. In a separate article, I remember reading that if
we find a way to harness one hour of the sun's energy, it would be
enough to power everything on the globe for 10 years. This could
eradicate the need for burning coal, mining tar sands, and various
other forms of dirty energy, but will require the full commitment of
American entrepreneurship.

Hundt does America a service by pointing out that China challenges the American economy more than any nation has ever done (remember the great "Japan scare" of the early '90s?), and that the American dream of ever increasing wealth for everyone who works hard is at risk. He also points out that its huge domestic market (and low labor costs) offer economies of scale hard to match anywhere else - in fact, it even offers the Chinese the opportunity to set technological standards in the future and thus dominate even the high-end of product development.

Where will help come from? "In China's Shadow" goes on to aver that "by the time the now-thriving upper class suffers serious impact from China, the opportunity for serious national response probably will have passed." Don't expect help from large multi-national firms either - while they used to keep their best jobs in America, they now must become global to survive and will no longer find their interests coinciding with those of the U.S. Finally, the large numbers of Asian students coming to the U.S. and then remaining to contribute to the American economy are likely to quickly shrink because quality Asian universities are rapidly growing, and its faster-growing economies offer greater opportunity to new graduates.

Hundt's prescriptions? Encouraging entrepreneurship (aka Steve Case and Steve Jobs), increased investment in high-speed Internet access, and more education for Americans. Unfortunately, they are overly simplistic and miss the elephant in the room - labor costs about one-eighth those of the U.S. Not everyone can be a eg. bioscience researcher (nor could the economy absorb such), highly-educated Americans are already suffering from Chinese and Indian competition (eg. electrical engineers and computer programmers), and it seems the main U.S. demands for increased Internet speed come from those downloading movies and/or outsourcing business to Asia.

The really bad news, as Hundt points out, is that most of our political leaders are ignoring the issue, instead focusing on "important" topics such as gay marriage, abortion, school prayer, and decreasing taxes; the "good news" is that they soon will focus on Iraq, and hopefully the economy thereafter.

OMG, I'm sitting in front of the guy and he's so cool. Buy the book now!