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By Michael Backman (auth.)

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Extra info for Asia Future Shock: Business Crisis and Opportunity in the Coming Years

Sample text

These increases are in excess of GDP growth but not wildly so. Even with these increases, China’s declared spending on its military is relatively low compared with what the US spends. China says that it spent US$30 billion in 2005. But the US spent US$400 billion and Japan spent around US$47 billion. Currently, China does not even have an aircraft carrier in service. The US, the UK, Russia, Italy, Brazil, and even Thailand are among the countries that do. In fact, China doesn’t have a lot of things when it comes to military hardware.

This has certainly helped to revitalize companies that needed new management practices and new markets. And so by 2007, the Japanese economy did seem to have revived. Growth returned after a very long slumber. Legislators, investors, and analysts were jubilant. But was the jubilance justified? Quite simply, the answer is no. Confidence in an economy tends to be self-fulfilling. But confidence is not an economic fundamental. No doubt the renewed vigor was also due to the seemingly impervious buoyancy of the world economy.

Blackouts are commonplace. Oil shortages have become severe too. Reportedly, the North has even tried to burn tires in its power plants to generate electricity. The capital Pyongyang has electricity for much of the day but most of the rest of the country does not. One of the better known signs of North Korea’s profound economic backwardness relates to nighttime satellite imaging of the Korean peninsular: the South is ablaze with light – from street lights, factories, offices and housing – out to sea Japan is also ablaze, and the North is one large black hole.

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