Monday, November 1, 2010

Business: Government Infrastructure Investment China vs USA

The following articles are all related to government investment in R & D, infrastructure, innovation, technology, and education.

There is 1 article which is a commentary from the USA. There are 3 articles which are actual action plans which China announced as part of it's newly released 12 year strategic plan. 

The difference is clear. While the USA puts our energy behind our "democratic" process, the 1 party Chinese are able to get sh*! done! It makes you wonder....

My editorial on the subject

Here's my take on how the US is doing in the planning and 'Investing in the future' vs China. (Warning: I'm feeling a tad cynical today).

I'm very impressed by the long range business plan approach to strategic planning that China is able to accomplish. Granted, it is possible because they are a 1 party system, however, as the mid-term elections approach, and my choices are between the enemy I know and the enemy I don't know, I'm thinking maybe this 1 party system might be a refreshing change if they can actually get infrastructure investments accomplished! 

We are so quick to criticize the short term, quarter to quarter planning of Wall Street, and blame it for the demise of the banking industry, but isn't that exactly what our political system is? We elect politicians based on little knowledge, then they spend their entire tenure in office crafting a voting resume that they can successfully run on in their next election cycle. The result is a congress filled with legislations that are created in committees we are lucky (see my previous post regarding committee design), and more often than not, stalemate.

Now, I am not a fan of the manner in which China uses eminent domain in order to move forward with its bold infrastructure plans which have been highly criticized for human rights violations. But, without that totalitarian power, China would not be able to accomplish their ambitious plans. If the US Congress was presented a 12 year plan similar to Chinas, it would take the entire 12 years to discuss, negotiate, rewrite, and come to consensus on only small portions of the plan. Clearly there needs to be a compromise between the bulldoze at all costs Chinese approach and the kick the can down the road American approach. 

Enough of that... are the Articles:

New-energy auto’ China's top priority in next five years
October 29, 2010 from People's Daily Online via their RSS business feed.

According to the recently-issued "State Council's Decision to Accelerate the Development of Strategic Emerging Industries," the total added-value of know-how-intensive, resource-efficient strategic emerging industries should account for 8 percent of China's GDP. The new-energy automobile industry and other new strategic industries will play a leading role in the country's economy in 10 years. (long term planning!!!)...China will invest more than 100 billion yuan over the next 10 years to support new-energy automobile production in order to make China the world’s largest new-energy automobile production country.>>Continue Reading

Heilongjiang production healthy
November 01, 2010 from People's Daily Online, Via their RSS feed.

"...Some 4 billion yuan has been poured into irrigation projects over the past five years, benefiting more than 6,000 sq km of farm fields. ....
....Technological innovation, is crucial to producing safe food on clean lands...HARZ [Heilongjiang Agriculture Reclamation Zone] has established strategic partnerships with the Chinese Academy of Agricultural Sciences and China Agricultural University. It has begun construction on research and development centers to promote industrialization of agricultural technologies. Some 57 percent of HARZ's total farmlands are now organically cultivated. And that figure is expected to surpass 70 percent in 2015, ...
....efforts to create a widespread market system including online trade and logistics"Our goal is to build a greater modern agricultural system," said Sui . >> Continue Reading

China to lead global innovation
October 12, 2010 from People's Daily Online, Via their RSS feed.

China is expected to lead in global patent activities by 2011, with significant rises in both the quality and quantity of patents, a Thomson Reuters analysis on intellectual property showed....China's patent applications by volume rose by 26.1 percent annually from 2003 to 2009, compared with its closest rival, the U.S., which showed a 5.5 percent growth rate, noted the report....Further, according to the report, China's acceleration in innovation is government-driven, as the Chinese government has pledged to make the nation an innovation-centered economy through several incentives such as R&D tax deductions.

October 31, 2010 by Fareed Zakaria, CNN. via Njuice Blog

"One of the things I'm struck by in talking to corporate CEOs -- these are all real free-market types -- but they all agree that the key to getting growth and middle-class jobs back is that we make massive investments, investments in technology, investments in research and development, investments in infrastructure. That is in a sense, investing in the middle class, because that is investing in the industries of the future, the industries that will create middle-class jobs.

"...CNN: Should they be government investments?

Zakaria: That's  what's produced the semiconductor industry, it was government investment. That's what created the internet. Al Gore may not have created the internet, but DARPA certainly did. That's the Defense Department venture capital group. And GPS, the technology that's now fueling the next internet revolution, the mobile revolution, that was also a U.S. Defense Department project. Those are now producing hundreds of billions of dollars for the private sectorall started by government funding.

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