81 of 82 people found the following review helpful
I have read a number of books in the last 6-9 months that deal specifically with the economic rise by China and correlating threat for the US ("China Shakes the World" comes to mind). "The World Is Flat" also is in the same vein.
In "The Elephant and the Dragon" (245 pages), Robyn Meredith, a Hong Kong-based journalist for Forbes magazine, does an excellent job setting the table of what is going on these days in China (some of it was a repeat for me) and also in India, which I am less familiar with, and hence that peaked my interest. Meredith makes the point that "It is easy to see why India has not yet attracted many new factories. India's developing-world infrastructure prevents companies from exporting their goods cheaply and quickly." The author also demonstrates how "Creating vast numbers of jobs for India's poor is critical, literally a matter of life and death". The environmental problems of China (but also India) are well documented. Observes the author: "China already has environmental regulations on its books. But it is less zealous about protecting its air and water than about protecting economic growth."
The real pay-off for this book, however, comes in the lsat chapter, "A Catalyst for Competitiveness", in which the author addresses the challenges for the US head-on, and then makes a number of suggestions. The author demonstrates in a clear fashion how disastrous it would be for China to reevaluate its currency by 20-40 percent (or for the US to slap an import duty on that magnitude on Chinese imports), and that even if it happened, it would have little impact on the US job market, and furthermore how Americans are directly benefitting from the cheaper Chinese currency. Meredith dryly observes that of course we wouldn't be dealing with this, if consumers simply stopped shopping at Walmart (which, incidentally, as a single company imports more from China than all of Canada COMBINED.) Here is the author's bottom line: "[W]hat the United States must do is clear: it must strengthen its educational and economic foundations and foster the innovation that will keep the United Staes ahead in the technology that underpins so many parts of the nation's culture and the global economy". The author then expands on that in the book's final pages. Must-read!
I can only hope our policy makers in Washington and elsewhere are reading this book, and start acting in the best economic interest of our country, rather than acting out of short term elections-driven positioning! Because of the impending impact all of this will have on today's youth, this book should be required reading for all high school seniors and for college kids. Highly recommended!
61 of 65 people found the following review helpful
"The Elephant and the Dragon" provides excellent information that allows readers to understand the impact of India and China's recent economic transformations. The bad news, however, is that its recommendations are the same old silly nostrums that have little, if any value. However, given the importance of simply helping Americans become more informed on the topic, the fact that the book exploded at least two popular myths, and the difficulty of correcting the problems India and China pose for the U.S., I still rate the book with 5 stars.
China's economic reforms began in 1978 when 18 rural families met in secret and decided to break up their collective farm (contradicting the communist system) and almost quadrupled their output. (Production had originally fallen 40% when the farms were collectivized.) The government then released most food price controls, and 80% of farmers then repaired and/or improved their homes. Deng (Mao's successor) then toured Singapore, was greatly impressed, and sent hundreds of others. "Special economic zones" suspended anti-business laws, taxes were lowered, and rules streamlined for factories making goods for export. In addition, local officials' promotions were pegged to the number of jobs created - thus, they were quick to build required roads and utilities. In addition, government officials insisted foreign companies use, and teach local workers their latest techniques.
A key dimension of our trade deficit with Asia (especially China) is the ESCALATING rate at which it is increasing. For example, in 2000, 30% of the world's toys came from China; only 5 years later it was 75%. It exported $1.3 billion in auto parts in 2001, and nearly $9 billion 4 years later. In 1996, $20 billion of computers and other technical products were exported from China, vs. $180 billion in 2004 - leading all other nations. China now exports more/day (over one 40 ft. container/second) than it sold abroad during all of 1978 - the year it began opening up its economy.
There's more. A McKinsey '05 survey of U.S. companies in China found they bought just 30% of what they could buy in China, and planned to increase that to 50% by '08. Finally, in '05, only 14% of Chinese companies designed their export products in China; by '08 half expect to do so. (Only about 10-20% of a product's U.S. retail value stays in China - the bulk goes to the designer - eg. Intels and Microsofts, and brand-name retailers; when these areas become subject to Chinese competition the sales of U.S. McMansions, BMWs, etc. will plummet.)
Perhaps U.S. efforts will convince China to revalue its currency by about 40%, making U.S. products more attractive. Not likely - the author reports that Chinese leaders estimate an 8% annual GDP growth rate is required to absorb the frustrations of its increasingly discontented interior population (earn only one-fourth that of their coastal brethren) - as well as the slightly more than 50% still employed in state- or collective-owned enterprises. In addition, only 25% of Chinese have health insurance, 14% have pensions, parents must pay an increasing proportion (now 25%) of education costs, enormous pollution and safety costs must be funded, roads and utilities require massive expansion, and Chinese banks are estimated to have $911 billion in bad loans (6X the American S&L crisis). Chinese officials are also well aware that cheaper labor is available in other areas of S.E. Asia, India, Africa, and South America - they cannot afford to push their luck too far. Finally, the U.S. should be careful what it wishes for - revaluing China's currency would put ENORMOUS pressure on those holding large amounts of U.S. dollars, risking a run of inflation for us.
India began allowing foreign investment 13 years after China, and in a begrudging and erratic manner after a new government was confronted with the reality of near bankruptcy. It devalued the currency 20%, lifted restrictions on imports, raised interest rates to 11% to encourage deposits, and eliminated export subsidies. State-owned banking, airline, and oil entities were opened to private investors, and important antimonopoly limits were eliminated for most companies while red tape and corruption and taxes were reduced. In '96, a corruption scandal brought a return of the left-leaning leaders. Sending government leaders to China helped break the resulting impasse.
Offshoring computer programming to India began as a result of Y2K needs. Today, newspaper ads bring 250 applicants/call-center job. Manufacturing, however, suffers from India's lack of good roads, stable electricity sources, and infrequent sailings.
The two popular myths exploded by the book? 1)Democracy is key to success - China's progress (9.6% GDP growth/year) has greatly outpaced that of India's (5.7%/year, over a shorter period), and at least one Indian leader attributes that to China's ability to move more quickly through its authoritarian leadership. 2)China's small steps to economic improvement (eg. try improvements out on a limited basis before going nationwide) worked far better than the "total immersion" recommended by U.S. advisors and attempted by Russia.
Finally, "The Elephant and the Dragon" attempts to offer suggestions for Americans - improve our education system, and invest more in basic research. These suggestions, however, are superficial (at best) because the real problem is that Asians are smart (IQ tests generally show about a ten-point lead vs. Caucasions), more are college-educated than in the U.S., and WILLING TO WORK FOR ONE-TENTH THAT OF AMERICANS! Improving our education (been tried for over three decades, with little or nothing to show for it except vastly increased spending) will do nothing to address this fundamental overall problem. (There still remains another problem regarding the need for improved technical leadership - addressed in the final paragraph.) Focusing on services delivered on site (incapable of outsourcing) is another recommendation offered by some - however, this forgets that this opportunity has already been largely taken over by illegal Mexican immigrants.
I don't have a solid solution either. However, Meredith's material allows some preditions. Since at best only half the savings of Chinese manufacturing now goes to American consumers, and American firms plan to considerably expand their outsourcing of manufacturing and service jobs, it seems likely that the economic spread between American "winners" and "losers" will first increase and then hold steady; at the same time the stock market will continue to rise (18,000?). Eventually, however, fewer Americans will be able to afford current prices for Chinese goods while the Chinese move into design and branding (eg. Korea's Samsung, LG Group, Kia, and Hyundai) - then prices, profits, stock levels, and executive pay will all slide.
"American content" laws enacted under President Reagan to save the American auto industry offer a ray of hope for American workers. They haven't "saved" G.M., Ford, and Chrysler, but they have led to considerable foreign investment in the U.S. and thousands of high-paying jobs from Toyota, Honda, Nissan, Mercedes, BMW, etc.
Two final points. 1)China and India's thirst for raw materials and energy make both more willing to deal with countries verboten to the U.S. - Iran, Venezuela, Sudan, etc. Thus, the U.S. is going to find itself with less and less international influence in the coming years. 2)Top caliber Indians and Chinese are already finding the U.S. less attractive as opportunities quickly grow in their own nations. Many of their expatriates are choosing to return. Thus, the U.S. is going to increasingly need to rely on its own talent, and we sorely need to improve our education for this segment.
24 of 25 people found the following review helpful
I very much enjoyed the opening chapters as Meredith spewed out statistics and opinions and history of how China and India have come to be in their current economic situations. This was very well written and extremely easy to read as well as quite engaging. Reading these two chapters is worth the trip to the library for this book as they provide a fascinating expose of why socialistic ideals, while bred from trying to do well, provide the opposite in practice. Capitalism and democracy when put in place with the least amount of lawmaker interference will bring out the best in people and the land on which they are living.
However, in the chapters explaining the outsourcing of service jobs to India and factory jobs to China, I began to look at the footnotes. Many footnotes reference the same work over and over and over again. This isn't necessarily bad, but the viewpoint from the author is somewhat simplified and with only a limited number of sources, there isn't the in depth look at the statistics or the line of reasoning. For instance, on page 85, the author mentions that economists are locked in arguments about how vast the changes will be due to "offshoring". However, Meredith only quotes one source and therefore one side of the argument and the source is one that has been quoted previously in the same debate. This is common throughout the book.
The chapter on "disassembly lines" was very good as a beginning look at Supply Chain economics. But again, it didn't go far enough with comparisons on how long things take to manufacture from start to finish as compared to before China and after China. Maybe I'm too tough on comparisons, but in telling this type of information, I like to see more of both sides of the equation.
The last chapter is interesting and brings up some discussion points, but some of it is pretty far out there. Going on and on about how China affects our housing pricing due to their holding of dollars is quite a stretch. After all, they were still holding dollars as interest rates went up and then down. There are many external factors that are closer to the United States and have a more immediate impact. And again, she is rambling in opinion without any reference points. Complaining that China is over-polluting and should be using Ethanol while pointing out that China has a water/irrigation problem and is gobbling up farmland for manufacturing just doesn't make any sense - going to Ethanol will only make the food supply more scarce.
I could go on chapter by chapter, but you get my point. There isn't enough of the thoughtful interplay that I would expect in this type of book. Where are both sides of the story? Where is the depth? In Chapter Three about China financing its growth of infrastructure, Meredith begins to scratch the surface about the banking problems that might arise from the demands of the Chinese government to hand out loans to whomever they (the government) see fit. This would have been a wonderful place to explore the differences of how various governments finance infrastructure and to do a compare and contrast with China, India and maybe the U.S. or Great Britain.
I guess I'm looking for the next step. This book is a very good start of this topic, but it doesn't go far enough for me. I wanted more of the details. Maybe that isn't what the author was attempting. I did notice that much of the reference material was on-line website information or magazine articles. Some were direct interviews and that always leaves me wondering. Meredith is a good magazine article writer and wrote this book in a similar manner. The subject material is such a current interest; I hope that someone writes something with more substance. If it's out there, I'd appreciate a comment with some other readings that have more depth.
29 of 32 people found the following review helpful
on August 9, 2007
Format: HardcoverVerified Purchase
Anyone who has been following the exciting growth stories of China and India will find this book an excellent update on these rising global superpowers. A perfect complement to other books such as "The World is Flat" and "China Inc," "The Elephant and the Dragon" takes a fresh look at the current trends shaping the outcome of globalization.
Unlike other books focusing purely on business trends, Robyn Meredith does an excellent job explaining the cultural and psychological factors allowing these countries to excel at certain trades, but yet fall short of becoming a USA clone. She explains how the impact of British colonization instilled a resistance of capitalism in India, and how China has transformed itself through a series of gradual economic policy reforms.
With so many other books on the topic of these two countries, this one stands out by discussing the issues that will hinder their long term development if not fixed shortly. It explained the "why's" behind India's corruption and infrastructure problem. It pointed out the potential explosive political standoff brewing between American values and China's Communistic tendencies. Some other issues include social/culture mindsets, insufficient infrastructure, pollution, overregulation by governments, and political conflicts. All of these issues will play key roles affecting the fragile interdependence of the United States, India, and China over the upcoming years.
The thing I liked most about this book is that on a topic already well publicized, "The Elephant and the Dragon" was able to deliver a new angle. It particularly had good coverage on India, which tends to get less media attention than China.
8 of 8 people found the following review helpful
on July 26, 2007
Robyn was held a book signing at the IIT-alumni event in the Bay Area. That's where I saw the book and had a chance to talk to Robyn. I was skeptic as I thought this subject has been more that covered last few years, what is she going to tell me different. Few years ago in a similar way I had opportunity to hear Tom introduce his book "Earth is Flat" and argue why offshoring is so compelling and will bring about the huge change.
Actually, I asked her directly why I should read this book, I wanted to know what she has done different, who she had interviewed and how she got her story and materials. I was impressed with her response (and some peer pressure of line of people waiting to buy). She is based in Hong Kong and covered the market for Forbes. So she has witnessed it firsthand and written about it extensively. She has also done lot of background research and had access to several of the key players shaping this.
What is really refreshing is her style. She makes the points quite convincingly and yet effortlessly. And most of all she does not sugarcoat. She tackles the emotional issues of offshoring quite directly, how it threatens good jobs and far beyond the leaders of companies had them sold on. But in the end how offshoring has benefited people on both sides.
She makes it clear that multinationals are in it to save and make bucks, any benefits to the lot of local Chinese and Indians is a pleasant side-effect. e.g. only a fraction (lot less than 10%) of $700 laptop goes to the local market came as a surprise to me. But unless something changes, the American middle-class will feel the pinch. Its their jobs and income that is at stake as it is so far not clear where their next jobs are going to come from.
She draws good contrast between China and India. Chinese progress is government driven, planned and owned; while that of India is people driven (the govt is trying to catch-up). Also how IT sector jobs were filled by foreigners (Indians mostly) anyway--so offshoring was more like B2B, Back to Bangalore, for many Indians returning. She pieces together lot of steps that I believe others skipped.
The areas I believe she could have done better is to demystify some of the thinking of senior leaders in China and India. How some of their policies shaped or changed shape over their span.
She makes a great case for what she calls "tectonic shift" and why Americans should pay attention and what it means to the middle-class. I found her interview (musings) from Rubin and other economists (Steven Roach, Morgan Stanley) quite informative. Why as Americans we must shape our poilicies and priorities in changing global geopolitics.
There is good perspective on China and India which is interesting from a westerner's viewpoint. She deals with the stark realities of culture and changes brought about by this. I have recently read a few other books/ articles in this area and feel that her style will make most people "get-it". I recommend this book--you will actually be able to read the entire book and get the key points.
Addendum: The book discusses "infrastructure", a topic is in news as lot of US infrastructure, built in 50s, is now aging (Minnesota bridge tragedy and NYC floods).
11 of 12 people found the following review helpful
on October 1, 2007
This book is interesting as a surface overview, but reveals nothing new.
Real insights into regional supply chain and logistics might have helped the reader understand what is really happening in China and India. Financial transparency and commercial honesty are significant issues, which are largely overlooked. The author needs to dig deeper, and "peel away the onion" more to offer any meaningful value to the reader.
In some ways, China is the ultimate capitalist state. Fewer than a thousand families in China own nearly everything. The often sited prediction that China's per capita income will match the EU is unlikely anytime soon. A worker making $6 per week can barely afford a scooter, let alone a computer, or a car.
I think this author has talent, but I felt while reading this that she was "cashing in" on the herd-think about China, and failed (this time) to get the real meat of the story. Save your $30, and save up for a visit to judge for yourself. The Chinese know that Westerners are unlikely to understand, and they trade on our naïve beliefs that the world is just like the West was a few decades ago. It is truly different, and that make an interesting book worthy of the reader's time.
6 of 6 people found the following review helpful
on August 4, 2007
I just finished reading The Elephant and the Dragon by Robyn Meredith. I could not recommend it more highly. In this book, Meredith compares and contrasts the growing economies of China and India, beginning with their isolationist driven withdrawal politically and economically that drove both nations deeply into poverty. She then looks at how both nations are following different paths to reclaiming their place on the international stage and the significant challenges (economic, political, and ecological) each nation faces in this effort. The book concludes by considering what response the US should have to the changing global economy: a call to resist isolationism and instead embrace a new focus on improving education, reducing personal and federal debt, and accepting the challenge to gain advantage through innovation. The book is incredibly well written and is a fascinating read both from an economic and historical perspective.
18 of 23 people found the following review helpful
on April 11, 2010
Format: PaperbackVerified Purchase
Disclaim: I am from China. I am going to college in the US.
I don't know much about India but I can tell you the book is often inaccurate about China...
1. The book makes it seem as if things are cheap in China. Yes, education, healthcare, and rental housing are cheap; but many consumer products are not. A shirt that sells for $10 in the USA may sell for $30-50 in China. Cars are 50-100% more expensive.
The book mentioned a woman in Shanghai who saved $160 a year and was able to buy a condo. That is ridiculous. Nowadays you can find NO property in Shanghai for less than $100,000. A half-decent, 800-sq ft condo costs at least $400,000.
2. Freedom and human rights. If you live in China you'd feel it is the freest country, :) No one seems to follow any kind of rule or law. No topic is off limited except direct criticisms against the Communist Party.
3. The admiration for the West isn't really that strong, especially after the financial crisis. Today most Chinese are aware that most Americans and the US government have to borrow money to make ends meet.
3 of 3 people found the following review helpful
on December 23, 2008
Robyn Meredith's book, The Elephant and the Dragon, describes and compares the recent political and economic developments in India and China and purports to state the meaning of these changes. Meredith is a foreign correspondent for Forbes magazine. Accordingly, her book is filled with facts and figures, but it is largely a superficial account written by someone on the outside looking in. By comparison, James Kynge's book, China Shakes the World, also by a financial writer, is an insiders account in that Kynge has lived in China since 1982, speaks the language fluently and has an understanding of the country that only someone with a long standing experience in it can have. Meredith lacks that background and thus that understanding. Her book is a useful, but limited account. She largely gets the main points accurately, but does not provide the kind of insights necessary for a solid understanding of these two countries. The book is worth reading, but to truly understand the meaning of India and China you should look beyond it.
For example, I lived and worked in India (New Delhi) for one year. My apartment was in Defense Colony, a middle class neighborhood. Every morning I would sit on the balcony of my second floor apartment having breakfast. A woman, a servant in the house across the street, would come out and sweep the trash from in front of her house to the front of the house next door--and leave it there. This example epitomizes the problem with India. Problems are not solved, but merely shifted from one place to another. People with some degree of wealth and success do not see the need to share that success with their neighbors. There are so many poor and needy people that a sense of hopelessness (or selfishness) pervades most of those who are relatively well off. The government is so hopelessly enmeshed in bureaucratic rules and regulations that it cannot act or acts too slowly. In sum, it takes someone who has lived in India for an extended period to really understand the nature of the country. Meredith lacks that kind of understanding and thus sees the potential upside without fully realizing the downside. She does discuss some of these problems--the slums in Mumbai, the bad roads and generally poor infrastructure, the illiteracy, etc. but in the end she seems mesmerized by the glitter of Bangladore.
One problem is that the topic is huge and cannot be adequately covered in a book limited to some 200 pages. Another is that her writing style is stilted, filled with repetitions and is stereotypically what one might expect from a financial writer. One particular irritant to me is her repetition of the word "tectonic." Admittedly, after a dull beginning, Meredith does make the book more interesting by relating personal stories and examples. For the most part, the book alternates chapters between the two countries on such topics as the kind of businesses being developed in each country, culture and politics.
The main ideas of the book are (1) both countries have begun to take off economically; India later (starting in 1991) and slower (6% or so growth per year) than China (starting in 1978 and 9-10% growth annually.) (2) India, given its large English speaking population and poor infrastructure, has focused on service jobs, while China, given its good level of basic education and strong infrastructure, has emphasized manufacturing. (3) India's growth has been hampered by its changing political system and the demands of its people for immediate improvements, while China has benefited from an authoritarian political system that can impose its will on a largely compliant population. (4) Both countries face enormous problems such as pollution and potential political strife (India with Pakistan and China over Taiwan).
Finally, I cannot agree with Meredith's conclusion that India and China will join the United States in the future as the three great superpowers. In my view the European Union, which Meredith largely ignores or denigrates, China and the U.S will form this group and that India will, at best, be a part of a second group (including a reviving Russia and an emerging Brazil) of economic powerhouses.
In the end I give the book 4 stars because I think it is worth reading and Meredith does get it right for the most part. But you have to go beyond her book to really understand what is happening is these countries.
5 of 6 people found the following review helpful
on January 30, 2008
Some of the earlier reviews have explained well the strength of this book. That strength is an excellent portrayal of the structure and performance both of the Indian and Chinese economies, and how they got there. For that the book is worth a read. I have a daughter who worked in Mumbai for a couple of years and her picture of India coincides with Meredith's.
I would fault the book in its last chapters. Meredith ignores and omits the arguments in favor of a Chinese currency devaluation (which in practice has actually happened to some degree) as if they were not advanced by highly qualified observers. (As an aside, the fall of the dollar versus other currencies has cut the trade deficit by 100 billion dollars over the last year as exports boom.) Furthermore, in the last chapters Meredith sprinkles her personal political estimates into the text without offering discussion. Some if not most of these estimates are already outdated. Finally, her "proposals" for the American economy are nothing of the kind. They are no more than platitudes. We should improve our educational system. Has anyone heard that before? Meredith offers not a single suggestion as to how this might be done. The same pretty much goes for capitalizing on our technological expertise. All in all, over the last forty years the last chapter has been said again and again and again.