Robyn Meredith considers The Elephant and the Dragon: The Rise of India and China and What It Means for All of Us.
An urgent exploration of the earth-tilting emergence of India and China on the world stage, Robyn Meredith's new book is the essential guide to understanding how India and China are reshaping our world. In a compelling mix of history and on-the-ground reporting, veteran journalist Robyn Meredith cuts through the alarmist hype surrounding globalization, offshoring, and layoffs, untangling the complex web of business, politics, and culture that entwines India, China, and the West.
Meredith examines the looming shadows of Gandhi and Mao that help explain not just the past but also how the future is unfolding for these countries. It is one of hyper-connected world trade that, whether carried by container ships or fiber-optic cables, promises to reshape the world. She breaks new ground in outlining how Americans, business leaders, workers, politicians, even parents can understand the vast changes coming and thrive in the age of "The Elephant and the Dragon"- Cody's Books
Robyn Meredith is a foreign correspondent for Forbes who lives in Hong Kong and covers India and China. Formerly a correspondent for the New York Times, she was the recipient of the World Leadership Forum's best journalist of the year award in 2003.
Good evening everyone and welcome. As a courtesy if you please shut off you're pagersand cell phones that would be terrific. Well, we are pleased to have with us tonight RobynMeredith who is here to discuss her book, "The Elephant And The Dragon: The Rise ofIndia and China and What It Means to All of Us". This book examines the economies ofChina and India and their relationships with United States and what the future is going tohave for all of us. And without further adieu here is Miss Meredith.Good evening. Can everyone hear me in the back? Is that right. Thank you so much forcoming tonight, I really appreciate it. This is my first book, "The Elephant And TheDragon" so I am particularly pleased to see all of you. What I thought I would do is togive you a brief overview of the book itself and then yeah. I think the problem is I amtoo tall. Let's see.We are going to have to improvise.Oh there you go. Good idea.Perfect, Thank you. So, I am Robyn Meredith. I am based in Hong Kong for ForbesMagazine. I am a Foreign Correspondent for Forbes, and I've been there for five years.Before that I was with the New York Times in Detroit, before that, USA Today and someother news papers. I've written a book about India and China called the "The Elephantand the Dragon". And I am going to read from it tonight. First I'll give you an overviewof the book, then I'll read several passages from the book and then I'll take questionsfrom the audience. And by then, I hope you'll have lots. So, with out further adieu let metell you about my book."The Elephant and the Dragon" is the story of how the Indian and China are changingtheir destinies, and with that, changing the world's. Today I am going to tell you a littleabout India and China. But what I really want you to remember is that we mustunderstand what's going on in India and China or we risk being left behind. To me Indiais like an elephant, its trudging along slowly into the future. China is flying along, fastlike a dragon, but sometimes it scares us. As India and China move from the ranks ofdeveloping world countries towards super power status, India's slow but steady approachcontrast with China rocket like rise. India and China in so many other ways are asopposite as Gandhi and Mao. India is democratic, China is authoritarian. India iscapitalist, but often anti-business; while China, Communist, is often pro-business.India looks chaotic, but it has unseen strengths. India's invisible human infrastructure isthe nation's mighty resource now that it's reconnected to the global economy. India is ariot of bright colors, a cacophonous nation with 30 different languages, including English.At the same time its airports and its roads are unbelievably shabby. Its time zonemystifies. It's a half hour off from everyplace else in the world, so if its noon in SanFrancisco its 12:30 at night in Bombay.China is straight forward. The national language is Mandarin; clocks line up with the restof the world and not doubt about it, the Communist Party runs the country. China looksvery strong on the outside. It has new highways and new airports and they certainlycontrast with India's shoddy infrastructure. But China is not as strong as it appears. Youknow when China closed its colleges during the Cultural Revolution, India was nurturingits universities and a generation of professors and engineers and doctors and scientists.While China persecuted capitalists, Indian managers gained experience by battling it outin local markets. And today you see the effects of those historic differences becauseIndian businesses by and large are better run than Chinese today.What India and China have in common though is that their transformations are asstunning as any thing the world has seen since America itself first walked on the worldeconomic stage. This is tectonic economics. What we are seeing is a geo-political andeconomic shift of seismic proportions. The new found strength of India and China isdramatically altering geo-politics. Both nations are now able to modernize their militariesand the economic successes of India and China are straining environmental resources thathave already been stretched thin by developed countries like the United States. And theincreased demand for natural resources, from oil to copper. to iron ore, even now to foodhas lead to higher prices around the world, not just at your local gas station and grocery store.The rise of India and China has of course created many changes. But I would like to focustonight on just one aspect of the changes. The book goes into much more detail about allof them. We didn't use to have a global job market and now we do. The good news aboutthat is that in the just in the 1990's alone 200 million people have been lifted out ofabject poverty in India and China. This is a huge accomplishment. We've tried all kindsof aid programs for decades and haven't got anywhere near as far. This is a vast vastachievement and I want you to remember it when we talk about job loses later on. Butthat new global job market is worrying the West and it should. Because with both Indiaand China open for business, a billion new workers have been added to the global labormarket. One of every four in the world, most of whom earn dramatically less than westerners.The Chairman of Intel, Craig Barrett puts it best. He says, "I don't think most peopleappreciate the magnitude of the change in the world's work force. This is a tsunamicoming our way." he says. "Over the next 10 years, you are going to see major, majordislocation", Barrett says. And he is not just talking about blue collar jobs moving toChina. He is talking about white collar jobs moving both to China and to India. Let megive you an example of the potential for shake up. As you know, India and China eachhave more than a billion people; the United States has less than third of that. Every year,1.3 million Americans graduate from college. India has more than double that amountevery year and China has more than triple that amount graduating each year. So, each ofthese Asian giants produce more college graduates each year than the U.S. and Europecombined. That is a huge change.Remember during the Cultural Revolution an education could get you killed in China.Because technology connects that well educated workforce to the West, westerners canno longer expect to earn 10 times more than every one else for the same job. Americancompanies are taking advantage of this new development. IBM, GE and Microsoft haveeach hired tens of thousands of workers in India in the last few years. Accenture is a greatexample. They had 800 employees in India five years ago. Today there are 35,000, in justfive years, and that's more than the 31,000 Accenture employees in the United States. Thethree biggest Indian Outsourcing Companies have a combined 220,000 workers; most aredoing work in India on behalf of US or other foreign companies and most were hired inthe last decade. Infosys alone hired 25,000 people last year and is scrambling to hire fastenough. At the same time Indian companies are worrying about how to find enoughpeople to hire, American companies and their workers are worrying about lay-offs.You know in India college graduates are happy to land a job answering 800 number calls,to listen to Americans complain, even though that job pays just $250 a month. In Chinaengineers answers emails asking for tech support. But that's not all. Indians and Chineseare now writing computer codes that powers our computers. Many are preparing our taxreturns. They even animate Hollywood movies. And in one of the newest trends Indianproduct engineers design consumer products for multinational companies. Guess wherethose products are built, China. That's tectonic economics. What troubles me is this, inthe 19th century farmers were displaced by the industrial revolution, in the 20th centurysweatshop workers lost their jobs to assembly lines and just a generation ago factories inAmerica closed and moved to Mexico. And that is the terrifying dark side ofglobalization. History is about to repeat itself.That's an overview of issues that are discussed in the elephant and dragon and I hope it isconveyed to you why it's so important that we understand what's going on there. And bythe way for business executives today, an understanding of India and China is as essentialas the basic grasp of accounting was just a few years ago. So many companies, Americancompanies, small, medium and large have operations already in India and China that therequirements have really changed. What I would like to do now is read passages from thebook, about three different countries and how they are changing, China, India and theUnited States. First let's go to China.You never know where you find Jesus, I found him in a toy factory in southern China,standing on a shelf of talking toys. This Barbie doll size Jesus spoke in a gentlyreassuring electronic voice, "no one can see the kingdom of God unless he is born again",said the little Jesus. The Chinese toy factory that made these Jesus dolls was nondenominational. Jesus, Mary and Moses mingled with Mickey Mouse, Barney andWinnie the Pooh. And the 2000 Chinese workers in the toy factory turn out millions oftoys each year, most of them headed to United States. What struck me so interestingabout this particular factory was that when it was built 12 years ago, all of the countryside around it was surrounded by fields. Today all the farmland for an hour's drive inevery direction is factories. Meanwhile the Chinese province, where they make the Jesusand the Winnie the Pooh dolls has become the center of the global toy industry. It has5000 other toy factories, one of which by the way makes only eyes, just eyes for toys, alldifferent colors and shapes and sizes, but just eyes. Any way those 5000 other toyfactories there, all of them are newly built and they give millions of Chinese peasant'sjobs they wouldn't have had, a decade ago. They give millions of Americans lower prices for toys.China's metamorphosis from farmland to factories was fast. In the year 2000, 30 percentof the world's toys came from China. But just 5 years later 75 percent, three out of everyfour toys where made in China. And as it goes for toys so it goes for shoes and clothingand auto parts, computer components and all kinds of other products. Isn't that alarming?But as I told you before China is not strong as it looks. The majority of those toys andauto parts and shoes and clothing and computers are made by American companies orEuropean companies or on behalf of them for other foreign companies. So for now, themajority of China's exporting muscle belongs to foreigners. Just four out of the top 24exporters from China are Chinese companies. Nonetheless change from the land of farmsto a land of factories was astounding. China now exports in a single day more than itexported in the entire year of 1978. That is huge. 1978 of course is when China began toopen its economy. So what we have seen is China has just gone through an industrialrevolution. That has returned China to a global power and it has reshaped the life ofworkers in China and around the world and that's also tectonic economics.Now I would like to turn to India. If you visit the Bangalore headquarters of Infosys, youwill drive there on pot-holed, grid-locked streets. You will see barefoot children walkingto school, you will see women dressed in bright saris, some of them are carrying heavyloads on their heads and you will see the occasional cow, sacred cow, gracing by the sideof the road. But when you are inside the guarded gates of a place like Infosys you will seewhat looks like a well groomed American college campus. Inside those gates you see thenewly emerging India and you will see the entire global economy on the move, becausealmost all of those young Infosys workers are doing work on behalf of American orEuropean companies. You know back when the Infosys campus was built 13 years agomost workers rode buses or motorcycles to work. Just a decade later they are yuppies whofill an entire parking deck with their cars. They carry the latest cell phones, they own theirown homes. Their children are not bare foot, they go to private schools. These 20 and 30some things' are completely different from their parents. Their parents by and large couldnot afford cars or houses until they were in their 40s and usually 50s. So for the youngand educated India has been reincarnated as land of opportunities. Again tectonic economics.Now let me turn to the United States. Are Indians and Chinese our friends or our foes? Isthe rise of India and China good for America or bad? Well for consumers, India and Chinaare good friends; prices in the US are lower as a result of our connections to India andChina. China's rise even helps hold down interest rates in the United States. Sobecause of China the average American pays about $100 on their mortgage every month.The lower prices and the lower mortgage rates give Americans more spending money.But for American workers India and China are enemies. Indians and Chinese are nowcompeting with Americans for jobs. Some Americans stand to lose their jobs and forthem and their families the threat is grave. What it boils down to is that India and Chinaare both friends and foes. Some individual Americans are feeling the squeeze from therise of India and China. But collectively we Americans are benefiting. You know if all ofus in the room save $100 dollars every month on our mortgage, we are happy. But wemay not give the credit to China and it won't change our lives dramatically. But if few ofus lose our jobs we feel such pain and I think that's why it's so difficult to debateglobalization and explain that there really are collective benefits from it. It's just that thesharp pain of those who are hurt by it is so much stronger than the feeling of gain we allexperience, some times not noticing it.My point is that, well collectively we Americans are benefiting. And now that weunderstand what's happening we must adjust because changes are inevitable. One of thepeople I spoke to for in writing this book was Robert Rubin, the former US TreasurySecretary. And he says that the rise of India and China is the greatest challenge since theemergence of the United States more than a 100 years ago. To meet these historicchallenges the United States cannot afford complacency. So what should Americans do?Should we turn to protectionism, should we just left the free market ride? I don't think so.I think we need to choose a third way, some thing in between. "The Elephant and theDragon" talks about this in much greater detail, but let me summarize the two mostimportant things that I think America needs to do to turn this threat into a real opportunity.First we must recognize as a nation that more job losses are inevitable. People will needhelp finding new jobs. We are entering an era of increased job turnover and job turn andgovernments at the local state and federal level need to focus on creating jobs. We cantalk more about that in a few minutes. At the same time governments and companies needto do a better job of weaving a stronger safety net under the increasing number of workersthat will inevitably be displaced as globalization continues its pace. We can do that with ajob loss insurance plan that is not particularly costly and with better programs forretraining workers. Second, statistic show clearly that when it comes to educationAmericans are falling behind, particularly in the K through 12 levels. That is not goodenough today. We just can't have it any more. Both individuals and governments must beredouble their efforts to improve education in this country. And by the way AmericanUniversities are the best in the world, but we have been going the wrong way onaffordability. Since that early 1990's for the average American, college has become muchless affordable, rather than more affordable just at the very time we need to make aneducation. We need to put an education with in reach for more of our population.You know we face a big challenge but we shouldn't give up. The United States does nothave a billion people. But when it comes to competing in the global economy even whenin the midst of enormous changes, America has a lot of advantages. We have the world'slargest economy; we have the best trained and best flexible work force. Americancompanies own the leading edge technology in many, many fields. But most importantlyAmericans have a track record of remarkable innovations and creativity and flexibility.These are the cultural traits that helped America sent a man to the moon when PresidentKennedy called on us to concentrate on efforts. I think we should let the rise of India andChina be the catalyst we need to reestablish America's competitiveness. Let it be thisgeneration's space race, because if inward facing India and Communist China cantransform themselves so dramatically and face the world so can the United States of America.Thank you very much.