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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (19857)	6/16/2002 1:28:11 AM
From: Snowshoe	Read Replies (1) \| Respond to of 74559

Asia Pacific: Learning to Play Andy Xie (from Singapore) morganstanley.com The World Cup is raging on in Japan and South Korea. It feels festive across the region. Asian fans are picking up from their European counterparts and wearing jungle makeup to get into the mood. The police were fully prepared for the invasion of the European football hooligans. They only found occasions to apply their skills on the local fans. It turns out that Asians also want to be hooligans. People are venting their nationalism by cheering on their teams rather than chopping each other down. Progress has come to Asia. The mood to vent may not be just a World Cup phenomenon. Five years after the Asian Financial Crisis the region is yet to return to its full glory. People now salivate over 4% growth rate. Twice as much was considered normal before. Property prices are not going up except in parts of China and Korea. Stock markets seesaw and tend to collapse as soon as retail investors pile in. Working hard to increase wealth has always been the only fun around in East Asia. You can understand why the people here are a bit down. The problem is that it appears making more money isn’t going to be as much fun for many, many years to come, not when 1.3 billion hungry souls in China want to do what you are doing. There are so many of them that what you can do is becoming worth less and less by the day. You have heard the "high value added and low valued" self-defense. But take a hard look at yourself in the mirror. Can you believe that there aren’t 1 million people in China who can do what you are doing soon? If you still view moneymaking as the main sport, you’d feel like running on a treadmill for quite a while. Bring a Walkman, as I do. It’s less boring that way. Once in Singapore someone asked me how Singapore should deal with the challenge from China's joining the WTO. "How about retirement?" I said. It may sound ridiculous that a country may go into retirement. But that is what seems to have happened to Europe; a whole continent seems to have gone into the sunset. Yes, there is GDP. But it is mostly "You cut my hair and I make a coffee for you." It’s not about saving to put up another building or factory anymore. Are you still bullish on the euro? Don’t complain. It’s all fate. When industrialization came to Asia, Chinese hadn’t figured what to be and tried all sorts of alternative lifestyles like the Cultural Revolution. Japan ran ahead first in the Fifties and Sixties, and the Tiger economies followed in the Seventies and Eighties. Then, suddenly, Chinese decided to be like you. The workers in China offer to work for you for $3 a day. But tons of people around are already making 10 or 20 times as much. What happens to those chaps? If you own a factory, you should put the machines on a boat and sail toward China. If you don’t, you are likely to find that the price of your product is always falling. It just becomes a nightmare to keep your factory in the money. If the factory does go, where should the workers go? Starting a nail shop is one idea coming to mind. The good way out is to take the Chinese offer and make the best out of it. Instead of working at factories and raking up 7% growth, which isn’t possible in the future anyway, people can make good coffee and cook French meals for each other and grow at 2%. Wait for 20 years for the Chinese to catch up. The whole place can then rise together. If you turn down the offer, your salary is likely to drift lower and lower. If the whole economy is competing against China, its currency is likely trending down and down, until everyone has a Chinese living standard. The whole region would have bouts of devaluation and price wars. That is not good. Twenty years is a long wait. But that is perhaps how long it would take to employ everyone in China. Then, what’s wrong with having fun for 20 years? When everyone has a flush toilet, economic growth can’t be that important. Working hard for your second one may not be productive, especially if your numerous neighbors are fighting for their first ones. Australians have pioneered living with diminished expectations. When wool lost out to polyester, Australians devalued their currency and went to the beach. Things have worked out quite well for them since. The only drawback is that Australians always get sticker shock when they try to buy things somewhere else. Korea is moving toward a five-day workweek. Three cheers for Korea. Granted, there aren’t many good beaches around and weather can be terrible for months in one stretch. But there is TV. After all, life after growth is "Seinfeld" — it is about getting something out of nothing. If you are still unhappy, how about becoming a football hooligan?