Return to the Future? China and India’s 50% of world economy!
We hear a lot about the growth of China and India and many ask can it last? Well according to a recent paper by Professor Jean-Pierre Lehmann (IMD Business School in Switzerland) and Josef Mueller* (President of Nestle) we need to look at history in considering the future.
“The historical dynamics are especially important to understand. Because of their past relations with the West over two centuries of exploitation and humiliation – the Chinese and Indian combined GDPs plunged from some 50% of global GDP in 1820 to 8 per cent in 1950.”
The reduction in China and India’s role in the world economy was largely caused by the advent of the industrial revolution in the early 1800s and subsequent impacts. Prior to 1800s China’s share of the world’s economy was running around 25 – 30% for centuries, according to a presentation I&I attended in Sydney recently.
The concluding comments in Lehmann and Mueller’s paper were:
“In assessing these economies, bear in mind that they have come a very long way in a very short amount of time. China in particular has broken all records. Both are expected to continuing growing at about 8% for India and 10% for China. This will mean, obviously, more change. If you get stuck into present stereotypes, you will be quickly surpassed.
In respect to China, beware of focusing just on cheap goods. This is rapidly becoming history. We are moving well beyond China as the factory of the world. Think next dimension. Think innovation. Research. Renovation.
Finally: beware. Ignorance and arrogance will be your downfall. Globalization for the last several centuries has been a Western script set to a Western tune. This is no longer the case. Complacency will leave you trailing. So get in the know. Understand. Take action. Get on board. The train is leaving.”
So it looks like it is back to the future!
For the full article by Lehmann and Mueller go to http://www.imd.ch/news/webletter/2008/feb.htm
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UN rep questions industry and biofuels on water use
Industry has been forced to rethink its water consumption patterns as nuclear power plants in the US and Europe face shutdown due to water shortages and demand for biofuels drives up water consumption, the UN said recently.
Kaveh Zahedi from the UN Environment Programme (UNEP) outlined water challenges faced by industry at the European Parliament Climate Change Committee. He said at least 24 nuclear plants in the south-eastern US region currently face shutdown or drastically limited operations because severe drought conditions have lowered the levels of lakes and rivers that supply cooling water – that's 23 per cent of the nation's 104 nuclear power plants.
US demand for electricity is expected to grow by about 40 per cent by 2030. This means power plants across the US will be using about 7.3 billion gallons (27.6 GL) a day by 2030 – equal to all US water consumption a decade ago, according to a US Department of Energy report released last year.
Zahedi also discussed the large amounts of water used to produce biofuels, saying "biofuels urgently need sustainability criteria". He noted that it can take 1,000 litres of water to make a litre of biofuel.
He said that biofuels should not be banned but "we should have full information on the implications of our decisions". A full life-cycle assessment of biofuels will be one of the first tasks of the recently established International Panel for Sustainable Resource Management.
I&I wonders if all “environmental” initiatives planned for the future are taking into account total potential impacts.
Want to learn more about China?
As indicated in the lead article of this column, China will have an increasing impact on the World and Australian economies. As a result, Ausinnovation (sponsored by a number of organisations including Austrade, Australia China Business Council and the Australian Business Council) is running its third Leaders of Innovation Series featuring China.
The speakers at the Sydney event are:
• Qiu Shaofang, Chinese Consul General, Sydney
• Lorna Wong, Director, Hong Kong Economic & Trade Office
• Professor Bill McGaw, PVC International, Macquarie University
• Dr Jim Peacock, CSIRO Fellow and Chief Scientist of Australia
• Kevin Hobgood-Brown, Partner, Deacons & Chair, Australia China Business Council
Event details: 12th March 2008, Deloitte, Grosvenor Place, Level 9, 225 George Street, Sydney 12 noon – 2pm.
For further details: Ph: (03) 9662 1916; Fax (03) 9662 1917 www.ausinnovation.org
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