Rating: 
Summary: Forecasts
Review: Thurow says China is not going to be an economic power of any importance except perhaps in the "distant" future. I beg to differ.In the International Energy Outlook 2003 published by the Energy Information Administration of the US Department of Energy, China's GDP is projected to be $5,085 billion in 2025 - the third largest in the world after the US and Japan, and considerably larger than Germany's $3,811 billion, France ($2,781 billion), Britain ($2,528 billion), or India ($1,775 billio). And these figures are in nominal GDP in constant 1997 dollars and assume the exchange rates to be unchanged. Will the world's third largest economy not be considered an economic powerhouse except perhaps in the "distant" future, as Thurow asserts? To put it in perspective, Germany is the world's third largest economy today, and yet its nominal GDP is only 25% America's (about $2.5 trillion). Few people would dispute that Germany is an economic powerhouse, small as it is. To be sure, America will still be much bigger than everyone else (except for the EU): $19,285 billion. Japan in 2025 will only be worth $6,680 billion - a bit bigger than China and still far behind the US. (Japan will be one third the size of America, but then Japan's population will likely be only one third as large as America's - or less.) China's $5 trillion will be just over one-quarter America's GDP. But this assumes China's renminbi to remain the same and not to rise - an unlikely prospect. Also, in purchasing power parity, China's $5 trillion can easily balloon to $20 trillion (based on today's PPP calculations) in 2025, thus making China's real gross GDP to be slightly larger than America's by the end of the first quarter-century of the 21st century. How Thurow can claim that China will not matter economically from now to the end of this century is beyond me. It is absurd. To repeat, by 2025 China will have the third largest economy in the world in GDP based on exchange rates, and the largest economy in the world in GDP based on PPP. In 2025! Now, if this is "distant future," wait till you see China's share of world GDP continues to grow after 2025, even at a lowering rate. It is almost certain that China will take the lead from the US both in nominal GDP and in PPP before this century is out, if not in per capita income. Thurow argues that only the per capita income counts. I have trouble accepting this. If you're the biggest guy on the block, you start making the rules, even if you don't wear fancy clothes like the smaller guys. In the real world, absolute size matters as much as per capita income; otherwise Luxembourg instead of the US should be considered the superpower. Books written by Professor Gregory Chow of Princeton and Professor Angus Maddison of the OECD draw the same conclusion about China's future PPP figures. The US Department of Energy and Professor Richard Cooper of Harvard base their projections on nominal GDP. All four predicts China's growth rate to be twice that of the US for the next two decades. The first two decide that China's PPP will equal America's by 2020. The latter two decide that China's nominal GDP will be the world's THIRD largest by 2020 (not 2025), as long as components of the EU are counted as separate economies. (Otherwise the EU will be #1, America #2, Japan #3, China #4, Brazil/India #5, etc. in nominal GDP, and the EU will be #1, China #2, America #3, Japan #4, etc. etc. in PPP.) In each case, the implication is the same: China is going to be a BIG deal soon enough for most of us if not for Thurow. This is what Margaret Thatcher means when she writes that China is "undoubtedly on course to become an economic superpower" ("Statecraft"). This is what Paul Wolfowitz meant when he told the Washington Times that China is going to become a superpower in the next quarter-century to half-century, adding "and that's pretty fast by historical standards." This is what Jack Welch of GE means when he writes that China is going to wield enormous influence in this century, and warns managers "doing pie charts" to "leave half the pie open for the Chinese" ("Jack: Straight from the Gut"). And this is also what Lee Kuan Yew of Singapore, Ora Namir (former Israeli Minister of Labor), and Jeffrey Garten, Dean of Yale School of Management, mean when they proclaim today's China to be "the second most important country in the world." (Various news sources)
Rating: 
Summary: Fortune Favors the Bold : What We Must Do to Build a New and
Review: Thurow's premise is that globalization will proceed at a rapid pace whether or not firms and nations choose to participate, that this process has created great challenges, and that the economic future of the world is at stake. Thurow (Massachusetts Institute of Technology, and author of numerous books, e.g., Building Wealth, CH, Mar'00; Head to Head, CH, Sep'92; The Future of Capitalism, 1996) contends that the world is experiencing three simultaneous revolutions: new technologies producing the third industrial revolution; emerging communications technologies that make possible a global economy; and a worldwide movement toward capitalism. He compellingly argues that, although no firm or country is forced to participate in globalization, firms that choose not to will be driven out of business and nations will opt out of the development process. Thurow also analyzes threats to the globalization process, including a collapse of the dollar, the lack of international guarantees of intellectual property rights to stimulate technology development, and the lack of life-saving drugs necessary for development of the poorest nations. To be successful in the global economy, nations, like firms, need a technology strategy. Although no revolutionary ideas are presented, the analysis is thorough and the ideas thought-provoking.
Rating: 
Summary: Sense & nonsense
Review: When Thurow questions the wisdom of the Chinese buying hundreds of millions of dollars of US Treasuries ("poor Chinese are making loans to rich Americans" - "it doesn't make any sense"), perhaps he should ask a better question: Does it make more sense then that rich Americans are racking up out-of-control budget deficits whose interest payments we will not be able to meet in the future; or that American consumers save less than the average Chinese farmers and spend most of their income away instead? We are a rich country living beyond our means, while the Chinese are poor folks saving as hard as they work. Tell me which makes sense and which makes nonsense.
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