A couple of months ago one of my graduating Econ students
was heading into finals (and presumably because he was such a good student had
free time) and was asking me if I had any good books on China. I didn’t and it
made me think, damn I should get some books on China! The problem; there are so
many lame books about China that say the same thing. Either people claim
“China, the new frontier!” or “China, growth forever!” or sometimes, “China,
how they will fail!”. So a few weeks after that when I saw China Airborne in
the book store I grabbed it as I was familiar with Fallows other work and liked
it.
Having lived in Shanghai for a couple years I could relate
to a lot of what Fallows was saying, and more or less I didn’t learn too much
new information about China, but a lot about the aviation industry. Its very
readable, engaging, funny, and informative and if that student was still with
me I would thrust that into his hands. Maybe not the most comprehensive book,
but a “fun” read for economics.
Chinese are wonderful at soft skills, not so much at hard
skills. This has also followed my personal experience in China. The Chinese
population, as recently as 30 years ago was largely unskilled, closed and
burdened with the heavy hand of state control and has slowly shed those
characteristics. However, China is reaching the end of its labor dividend. There
are still about 7 years until it reaches the peak. From that point forward the
vast labor pool that has helped drive China’s growth strategy will begin to
shrink. That gives a bit of breathing room to figure this out, but soon a new
strategy will have to be found.
Its always been a
question in my mind if the Chinese would perhaps turn to domestic consumption
during that time rather than the export driven market it has relied on. Then
again, those who are consuming their goods aren't really changing their
behavior, so why should the Chinese? The real answer may be not to turn away
from exporting, but to change what is being exported to jump that middle income
gap. Hence the idea of up-scaling what you are producing. Aviation is a good
industry to focus on to determine the level of hard skills that the Chinese
have the ability to conform industry standards to that level which is demanded
in most of the rest of the world. Watching the news on the Asiana air crash
last week I was reminded again of how safe this industry has become, but that
is because of the procedures that go with it and the level of precision that
goes into each craft and operation. If the Chinese can achieve not only air
service that is at international standards (getting pretty close) and a
domestic industry for the construction of planes then they will certainly have
proven themselves yet again.
