I heard Brian Reynolds, second secretary/vice consul at the U.S. Embassy in New Delhi, India, speak at BYU Wednesday about the rising economies of India and China.
He wanted to emphasize his title (the end of American economic supremacy) is a question, not a statement. His disclaimer is that his opinions are his own, not representing the department he works for.

But he has worked extensively with the state department in both China and India. It was a great presentation, but I won’t duplicate all my notes here. I’ll just point out a couple of interesting things about each area.


13 trillion gross domestic product (GDP) – USA

10 trillion GDP – China

4 trillion GDP – India


India has labor resources that have remained untapped. India focuses primarily on education – families and extended families sacrificing a ton to get children to receive an education. The goal is to put the child in a position to receive a job that makes them competitive in the global market, but there are not enough jobs for them to have in India – so there is a lot of frustration and underhanded things. Corruption is a big thing.

In India, the high-paying jobs are not in the manufacturing as much as in the service industry (similar to the US). Lots of managing off-shore site call centers. Very transitory work environment – lots of turnover, not a lot of job loyalty.

Work visas are frequently given in the US for Indians who qualify for jobs that have been advertised but not filled. They come with expectation of earning great wealth – then they are surprised to see the cost of living is so much higher. Still, they see the jobs more and more as entitlements for their hard work and education. Americans may not feel the same way.

These people are very smart, intelligent, competent at jobs. If not hired here, American companies will often go there to hire them. This is a hot button with Globalization.

India has a bureaucracy that is incredibly difficult to navigate- payoffs, bribes, old laws.


First off, the scale of things in is huge!

Thee are no “summarizable, identifiable characteristics of China” – as the scale and complexity and change is so great. There are only very loose generalizations. Many business people come to China and are amazed at the opportunity and at the same time overwhelmed by the bureaucratic mass.

There are more people speaking English in China than in the US (430 million speaking English or taking it right now).

Already China is losing some advantage – in certain areas there is a labor exhaustion so companies need to bring more labor in. Other countries (Viet Nam, Indonesia, other SA countries) benefit from difficulty of costing and keeping labor. Cost of labor goes up every day in China. An offer for 10cents a day more will cause you to switch jobs.

Do we exaggerate the rise of China – when they still have out-of-date technology, and other issues?

Are there better uses for China’s boon than spending a lot on the military?

Information technology is changing attitudes in China. People can more easily share opinion, find better work, and all this alters feelings about situation. It is interesting that there is no concept of communism in the strictest sense from the average Chinese worker – they feel they deserve more if they work longer, are more educated, have more experience, etc.

Another interesting example: there was a television program similar to “American Idol” called “Pretty Singing Girl” where people could text in their vote of who they thought was best. After about three episodes, the government shut down the program, because supposedly they did not want to send the message that the mass of people should be deciding what was best.

Unfortunately, China has passed up the US as the largest polluter in the world.

30 million people fall below the poverty level – they look for work and find low-paying labor jobs in cities, and still live beneath the poverty level.

Early days – economic decisions were a lot more limited in China. Now there are a lot more choices.

In China, 30-40% of income is saved by the average family. In the US – it is more like 0%. Their ideas for social entitlement are much different than ours. The 1 child policy is a big thing, with a lot of spin-off issues – much pressure on whether that child be able to support parents… The average Chinese worker in their 40s will be supporting 4-6 people in their retirement years. Does this cause an influence on things like female infanticide (because you want your one child to be a male – in order to support you and carry on family name, etc.)? Now there is a surplus of 40 million young men – who can not find a woman to marry – is this associated with crime, prostitution, etc?

There is a lot of concern over trade deficit. There is a lot of concern over work visa (and zenophobic reactions).

Statesman, CEOs, other VIPs go to China and try to help come up with policy.

The exchange rate has been 8.41 for RMB. People argue that it is way to high – that it has doubled its value. One of the things that moves the Chinese economy along is that things are so cheap. Lots of involvement in trade – difficult market for the US.

IPR (Intellectual Property Rights) violations – pirated dvds, etc. Perhaps this is the biggest economic concern from Congressional VIPs. Software manufacturers, Hollywood, books, etc – all are violated if they have any economic value in Chinese economy – they will be copied. There is now the 500 law – if you don’t have more than 500 illegal copies of the software, etc…you will not be prosecuted. Very difficult to enforce. When they do enforce, there is a lot of hype about it for the cameras, but not much happening beyond cameras.

A big goal of Chinese govt. is to sustain growth.

There is a disparity in countryside vs rural areas in China.

Industrial growth, service sectors are growing.


So that was what he talked about.

I personally find both countries, India and China, to be so much more than sources for labor or exportation/importation – but what are the best ways to minimize the dark sides and encourage each to further develop as places of incredible human potential and vibrant thought, places where valuable innovations will come from, and places where if developed, supported and trusted can contribute in many ways to help make the world a safer, better place?

Maybe it is naive of me, but I’m not as concerned with economic supremacy as I am with other things. I adhere to the abundance mindset (that there is enough and to spare) and try to steer away from the scarcity mindset (that only certain people or groups can have, and that they have at the expense of others). It is true that many Americans seem pretty complacent – thinking that just because we have been in a certain position for all of our living memory, then that means we always will be. Well, it looks very likely that America will not be in the same position, and I do not think that is all bad. I do think we are in a great position to take the best parts of America (of which there are many), and contribute those with the best parts of the rest of the world (including India and China) to create a new future that is a lot more synergistic than protectionistic.

Anyone agree or disagree?