Impressions

China and India are always lumped together as if they are the same and in many ways they are. Both economies are experiencing tremendous growth. This is immediately apparent when landing and seeing the amount of cranes present in both countries. Yet they are also shockingly different in many ways.

For me the differences left the most impression. China is very modern, clean, and orderly. The infrastructure is tremendous, exceeding that of the United States. I saw this first hand with a thrilling ride on the Maglev. During one of the free days, I went to the planning museum in Shanghai and the city had a twenty year plan for just about everything in the city. This included a plan for the building of information infrastructure for improved internet. This is largely a function of the type of government China has. China has an authoritarian government which allows for it to get things done at any cost. It can create infrastructure like the Yangshi Deep Water Port even if it requires moving a few thousand people. Authoritarianism has allowed it to create many incentives for business and drive development at break neck speed.

India, on the other hand is a democracy and as such is developing much slower. Additionally, the democratic form of government causes much more chaos than in China. From the second we got off the plane we were shocked by the lack of organization in driving. There were no lanes and no order yet everyone was moving towards a destination. This was a metaphor for India as a whole. Everything in India seemed like it wouldn’t work on the surface but at the same time it seemed like it was being driven by an unseen force. Another major difference between the two countries was that China’s flaws seemed hidden, but India’s flaws were out in the open. We saw shanty towns in front of the huge sprawling call center campuses of western companies. The infrastructure was lacking and a good road was hard to find. All of the differences between the two countries seem to be related to the type of government they had. Democracy is a messy and lengthy process but it often provides better results due to the inclusion of the opinions of many. Authoritarianism on the other hand is a short process but it doesn’t necessarily create the best results for all parties involved.

There were very many similarities between the two countries even if they were not apparent on the surface. I think the biggest similarity was best described by quoting the vice president at Genpact. He described Indians as being more “hungry” than Americans. I think by this he meant determined to do anything possible to carve out a better place in the world for oneself. This spirit is the driving force behind change. These changes have led to much nationalism in both countries and this was very apparent in every company we visited. Though this was even more transparent in India where each company visit included an introduction to the country.

The company visits taught me two very important lessons about practicing business, the strength of networking and the power of hospitality. Both countries placed a high value on networking. Business is more about relationships in each country. At our first company visit to Lenovo, our host talked about Guanxi which is a Chinese system where relationships are extremely important and often consist of gifting and favors. This concept highlights the importance of the relationship in doing business in China. The amount of hospitality we received at every company was unparalleled and far exceeded any hospitality I have received in the US. As visitors we were truly treated as guests. This is just part of business in China and India and while doing business there I think one needs to keep these two concepts in mind. I think these are the two lessons I will take with me most into the future.

Along the same lines, I feel that the type of person that is most suited for doing business in these countries is first and foremost someone with patience. Relationships and hospitality take time to be effective. The next most important characteristic would be an ability to be flexible and adapt to change. Things are very exciting and unpredictable in a rapidly changing place and this can cause difficulty when attempting to stick to plans.

International business excites me. Mentally I think I am very prepared for any travel my future company may have me do. At the same time, physically it is very hard on my body. First, my body has to adjust to time change followed by a need to adjust to different foods. While I found most of the food abroad to be delicious, it wreaked havoc on my system. This was very distracting for me at the meetings and proved to be quite trying at times.

While the breathtaking sights I saw in both China and India are images that will stay with me for a long time to come, the lessons I learned about how business can be done will be just as lasting. International business is exciting and quite challenging. I will never look at the international economy the same way after seeing China and India. I have learned many things from this trip that I can take with me wherever I go as an individual and business person.

River Town Review

River Town: Two Years on the Yangtze by Peter Hessler is one of the best books I have ever read. It is a captivating non-fiction that captures a personal journey of a Peace Corp member in the small town of Fuling on the Yangtze River in China. The book balances and seamlessly switches from moments of comedy and self reflection to commentary on politics and culture. Most of the political issues are explained through the writings of the students in Hessler's classes. These first-hand accounts paint a very vivid picture of China. At the same time, Hessler's own experiences tell the story of the differences between cultures and the situations this put him in.

The whole book is much more than a picture of China. It is an explanation of China. It is explanation of how the land has shaped the people and how the people are shaping the land. It is story of things that are constant and things that are defined by cycles. It is a narrative of the change in an individual and the change in a country. I think the book is summarized by Hessler's quote early on that "nothing was quite what it seemed".

Hessler uses the whole book to open up China as it opened up to him. These are the ideas that I found most poignant and took away from River Town:

History
Hessler says that "development has swallowed history". The sheer number of people and the need for housing he explains requires a huge of amount of housing units and this has left very little history in most Chinese cities. Very few historical buildings remain in some cities yet the Chinese do not seem concerned. Everything in China seems like a historic place to Americans but this is because we have such a recent history of our own. The town he is living is actually scheduled to be flooded by the Three Gorges Dam yet no one in the town seems very concerned. All down the Yangtze they are building new towns to replace those being flooded. The residents of these towns actually look forward to the new towns because they will have wider streets, bigger houses, and better infrastructure. To most outsiders however the destruction of the old river towns is seen as a huge loss of history. History is truly in the eye of the beholder.

Use of Literature
Hessler uses his English literature class to understand Chinese culture. Through having his students be critical of the English culture, he is able to have his students open up about their own culture. In a culture where free speech is discouraged, he is able to help his students on a journey of self analysis through their reaction to English stories. Hessler shows the great amount that can be learned in observing people's reactions. Literature helps him learn about his students and helps his students learn more about themselves.

Use of Language
Throughout the book, Hessler conveys the power of language. He learns the Chinese language through the town and the interaction with its people. Language works both with him and against him. He uses language to his advantage and often calls himself waiguoren which means foreign devil. This ability to poke fun at himself allows him to create a comfort zone with others. Other people use language to their advantage as well. Many of the people he encounters use phrases such as "your America" and this placed a burden on him for the actions of a whole nation. This sometimes led to defensiveness and negative reactions. Language was a huge tool and obstacle to Hessler's assimilation into Chinese culture. As he became assimilated he adapted a Chinese name, Ho Wei. The switch of names when referring to himself signified the switch between the two different identities he had in the two cultures. The development of different identities in different cultures showed the power that culture has the transform the behavior of the individual.

Man vs. Nature
Hessler uses the land to tell his story. His most powerful metaphors are those of the rivers. He uses metaphors to explain the fundamental difference between man and nature. The town of Fuling where he resides in the book straddles two rivers. The Yangtze and the Wu rivers define its two identities. To Hessler, the world like the Yangtze has two courses. One is the cyclic curving course of a river. The other is the straight canal of man. The town of Fuling sits on the wild Yangtze now but in a few years will sit on the lazy lake created by the Three Gorges Dam. Fuling is also on the convergence of the Wu and the Yangtze. For Hessler these rivers are polar opposites, the Yangtze represents people and their concern with destination and the Wu represents nature and the concern for origin. The rivers in a way represent the broader struggle of humanity between its origin and its destination.

Collectivism
The book taught me that collectivism breeds inaction. Collectivism is like a bunch of giant posses. While there are strong groups of people, there isn't necessarily a coherent community and this leads to inaction in crisis situations. In the book, there are many situations where people are only concerned with those within their group. Within these groups, they fall prey to groupthink. I found this very intriguing as I had always assumed that collectivism led to community. Hessler also talks about how collectivism arises as a result of need to be defensive. This led to some of his mishaps and sort of explains how mob mentality works. It seemed that need to defend one’s self, culture, or pride was the only thing that could bring people to action.

Seasons
The whole book is structured around the seasons. The seasons define the culture of Fuling due to the agriculture nature of the city. The seasons set the tone for each portion of the book and they are the structure which keeps the narrative connected and flowing. The seasons are also used to provide insight into the culture. For example, the Chinese use a lunar a calendar. During Hessler’s second year, bad weather is ruining crops and it is blamed on the fact that there is two fifth months in this one year. This shows the degree to which China is still a very superstitious country full of anecdotal beliefs.

Money
Capitalism was brought to China by Deng Xiaoping and thus he is a national hero. Throughout the book many speak of him and the great things he did. Since the reforms, the Chinese have embraced capitalism. In fact, Hessler explains that it is an unrestricted capitalism. This means that one's success truly is dependent on their intellect, willpower, and luck. I found it particularly interesting that if you want to get some jobs in China you have to provide a down payment as a sign of commitment. The love for capitalism also has created a love for money. Everyone is obsessed with money that Hessler encounters. Across town, even people Hessler is not acquainted with are aware of his salary. Financial information is truly public information. During the biggest Chinese holiday, the New Year, people even go as far as to share with everyone exactly how much they got that year.

Symbols and Nationalism
The Chinese have a very strong sense of cultural pride that is seen throughout the book. All of the symbols in China just have positive aspects and never flaws when the Chinese speak of them. For example, the Great Wall is celebrated as an engineering feet and marvel of humanity. It is never discussed in a negative light for it could be considered to be isolationism at its worst. The Chinese are very nationalistic and have great pride in their country. They believe in the government and leaders' power and ability. There is an extreme optimism in the government despite its past atrocities which I found very surprising. The national pride reaches an apex in the book when Hong Kong is returned for the British. The Chinese believe this has finally righted the wrongs of the Opium Wars.

Change
The Chinese can stomach change because they have seen far worse in their lives. They have gone through extreme food shortages and political oppression. Having observed the power of change drives their determination and optimism. A lot of the Chinese spirit that shines through the characters in Hessler's book is a result of overcoming these struggles. In a country that is changing so fast this tolerance is only increasing.

All of these themes work in conjunction to tell a story of country that is rapidly changing like the Yangtze and yet in a lot of ways is standing still as the Yangtze soon will be. It is a very honest look at the good and bad in one town. The book established such a sense of place that I felt I had lived there too. It brought a geography and people to life for me.

I don’t have any criticism of the book. The book was not a thesis but rather just a story. It was meant to tell the story of an American getting integrated into a foreign culture and it did a fine job of what it set out to do. While at times the flow of the story may seem to be interrupted, the back stories are important for understanding the people in the book and the place they inhabit. The writing style seems very natural. It gets across its points while simultaneously keeping you interested. Overall, it was tough to put down and is one of the best books I have ever read. I recommend it to anyone who wants to get to know what China is like at a personal level.

The World is Flat Review

Overview

Thomas Friedman ends The World is Flat with a discussion on imagination. He says that one can either use their imagination to dream or use their imagination to relive memories. For success, in a flat world he says one needs to live in a world of dreams not memories. The World is Flat discusses the effect globalization has had in flattening the world. By the flattening the world, Friedman means the leveling the playing field in the world of business and the removal of boundaries that create divisions and separated economies. The flat world is a unified world with one economy.

He divides globalization into three succinct stages. The first stage, from 1492 to 1800, was led by countries and utilized brawn and literal energy. The second stage, from 1800 to 2000, was led by multinational companies and their use of physical hardware. The third stage, from 2000 to the present, has been led by individuals who are using personal computers and fiber optic cable. The book focuses on this latest globalization and the forces that brought it about. Friedman believes there are ten flatteners that brought about this change. These are:

#1 - Fall of the Berlin Wall

On 11/9/89, the Berlin Wall fell. This was a shift from a world with two economic systems: capitalism and communism to a world with just capitalism. This created the first true world economy. Around this time the personal computer came into existence. This allowed for individuals to amass large quantities of information.

#2 - Day Netscape Went Public

Netscape was the first widely popular commercial web browser. This enabled people to share the large quantities of data they had been amassing on their computers. Netscape emerged with dominance of Windows 95 which was a standard to share across the internet with.

#3- Rise and Integration of Work Flow Software

Work flow software is protocols such as TCIP, STMP, XML, and SOAP. Work flow software allowed for computers to do more than just email and web pages over internet. It allowed for the computers to communicate not just within networks but between. These standards allowed for focus on value added software instead of just the backbone.

#4- Uploading

Uploading is the act of cutting out the middle man. Uploading is things such as blogging and Wikipedia as an example. Uploading is the ability to collaborate on a community level to get a better product quicker.

#5- Outsourcing

Outsourcing began as companies began to see that India and China could successfully make products for themselves and realized they could do so for us. The dot-com bubble allowed for the world to meet India through a demand to make Y2K software updates. The dot-com bubble burst required us to stay in India out of necessity for being cost competitive.

#6- Offshoring

Offshoring is the moving whole factories and supply chains offshore rather than just individual functions of a company. This was largely driven by China entering the WTO in 2001 and ensuring foreigners that it was safe to invest in.

#7- Supply-Chaining

Supply-chaining is the integration of the horizontal supply chain. It has been achieved by the creation of standards across corporations. In a world where innovations become commodities faster, the majority of business is in delivering commodities. Walmart pioneered the world of supply-chaining. They came to rule this world through being the hardest bargainer and quickest adapter.

# 8- Insourcing

Insourcing is having other companies manage ones whole supply chain. UPS is king in this world. They have the ability to do everything forma company to deliver, repair and manage one’s product. One does not even have to touch a product after designing it.

#9- Informing

Informing is the use of things like search engines to create a personal supply chain of information.

#10- Steroids

These are other things that exacerbate the other flatteners.

After discussing the ten flatteners affecting the world and driving Globalization 3.0, Friedman spends the rest of the book discussing how countries both developed and developing, companies, and individuals will be affected by a flat world and what they can do to thrive in such a world. It becomes sort of a diet book, it tells what the world diet is now and the recipes you need to succeed.

The Relevance

The World is Flat is a very relevant read not only for our trip to China and India but our program and all our lives. The world has changed a lot since when our parents entered the workforce. The World is Flat was very eye-opening for me. It made me more aware of the large amount of competition all of us face today in a world where globalization has leveled the playing field.

The whole book is devoted to directly or indirectly discussing the emerging economies of China and India. I thought one of the most interesting things that Friedman said concerning China and India was that most people believe China and India are in race with the rest of the world to the bottom when in fact they are in race with the rest of the world to the top. We think they want to be us but in reality they want to beat us.

While a multitude of similarities can be drawn between China and India. I think the part that was most revealing discussing the difference between China and India was the discussion about the differences in skyline. Friedman discusses how all the Chinese skylines have become towering skylines and India’s skylines still remain really flat for the most part. He explains that this is due to the lack of reliability of power in India. He extends it further to be a metaphor for the state of the two countries currently. This physical manifestation of the differences is really just the beginning of differences between these two countries.

Praises

I think the thing that was most well done about this book was the style in which it is written. It is written as a personal narrative and was very easy to follow. I think this an excellent approach to analyzing such a complex and emotionally charged subject. It also adds a human element to a subject that often seems to be about removing the human from it. This is further enhanced by the stories about individuals that serve to reinforce the author’s points.

Another praise that I can give is that Friedman seems to have developed hypothesis from observation. He discusses what his emotions were going into and our predispositions towards thinking about it. This adds validity to his method of research and helps us to get a more complete picture.

The book overall is very well done and a worthwhile read. It opened my eyes to a topic I had only known about marginally previously. It especially pertinent to read if one is about to enter the workforce or one is an industry that has been largely affected by globalization. It is well written and well researched. It will change your view of the world.

Criticisms

I feel that Friedman is a little over obsessed with the importance of the subject he has researched and often exaggerates the importance of things he is describing. For example, I feel that he way overestimates the importance to Y2K. He goes to the point of saying it should be considered the second most important day in India after Independence Day. I feel the statements such as this that he makes are a little outlandish.

Another concern I had throughout the book was that Friedman was obsessed with technology to the point of disillusionment. However, he owns up to the level of technological optimism that he has. He is actually very good at acknowledging his critics and further elaborating on those points. Something he doesn’t address is the fact to which he is a social Darwinist. He has a firm belief in survival of the fittest. I felt that this might be another thing detracting from the book.

There were some more technical things in Friedman’s argument that I don’t think are necessarily valid. Since I have no training or knowledge in these fields though, I might just as well be wrong. For example, Friedman argues in his book that globalization will not affect mean wage in the United States. While this might very well be true, I felt that he should have delved into a discussion on the fact that it might affect median wage. By this I mean even if the United States maintains the same mean wage, the income gap between the rich and poor might widen. This would actually drive down the median wage. I would have preferred more discussion on this subject.

I think that one of the biggest things that Friedman overlooks is the environmental implications caused by globalization. He glosses over them by discussing the implications for spreading disease and how oil prevents economies from developing. He fails to go into the fact that producing products in distant locations like China and India is dependent upon the availability of cheap fossil fuels. This system causes the creation of large amounts of pollution and requires lots of spending on defense.

The relocation of factories overseas also enables companies to produce more pollution by locating to areas with less environmental regulation. Thus while it seems that the United States has curbed it’s pollution it has in fact it has merely outsourced it along with its factories. I felt that this was the area that could have most been developed further in the book.

Lastly, I do not like how Friedman chose to end the book on a negative note about how a flat world drives the forces of evil. He delves into the ways in which it reinforces extreme viewpoints and facilitates terrorism. While I thought this exploration of the flipside of globalization was crucial to the book, I just felt it should not have been one of the last points he left readers with.

My Takeaway and Closing Thoughts

A large theme in the book is how the creation of standards is good. They allow for the more talented and the more resourceful to do value added work instead of tedious work. He believes that this is one of the reasons outsourcing is good for America. It is a chance for us to just focus on value added work. One of his main points regarding standards was that they increase competition and this has implications. Globalization is a type of standardization. I thought one of his best points was his response to how we should adapt to globalization and increasing competition. He felt that we need to move from building a strong state to building strong individuals. I think that this was one of the strongest takeaways for me. Since the world is flat, we all need to try that much harder to be tall and stand out.

Guns, Germs, and Steel Review

Overview

Jared Diamond, attempts to explain the history of the world and why certain societies prevailed over others in Guns, Germs, and Steel. In the prologue of the book he describes the central thesis of Guns, Germs, and Steel as “history followed different courses for different people because of differences among peoples’ environments not because of biological differences among peoples themselves.” He goes on to say that geography has been dismissed in modern times but that the abundance of new science makes it a very plausible explanation. The framework through which he does this is self-described by him as seeking an ultimate cause rather than the proximate causes that or often used. The ultimate cause he is using as an overarching theme is geography and the variations which it naturally has. He feels that the proximate causes are all a result of this ultimate cause.

Geography caused one main variation between societies and this was differences in the time of when food production was adopted. Variations in the time of when a society adopted food production led to different proximate causes for explaining their speed of development. These include different speeds in getting germs, technology, political organizations, and writing. All of these causes explain why despite the fact that all societies were on a fairly level playing field in 11,000 BC, some came to dominate historically and contemporarily.

The adopting of food production over hunting and gathering is of the utmost importance to Diamond because it allows for larger population densities which allow for division of labor and creation of political organizations. Food production is dictated however by the accessibility of plants and animals for domestication. Food production worldwide is based on a few select species of plants and animals which were indigenous to Southeast Asia and the Fertile Crescent. The diffusion of food production was largely limited by the axes which the continents are on. Europe and Asia’s east-west orientation allows for a quick diffusion due to similar climates whereas the north-south orientation of the Americas and Africa proves much more difficult due to varying climates. Animals which were able to be domesticated furthered the usefulness of domesticated plants and this caused even greater population densities. The formation of higher population densities allowed populations to be exposed to the first proximate cause, germs. This allowed for the formation of diseases and subsequent immunities to them. These diseases were deadly when exposed to those not used to such diseases. Diamond says the possession of these germs is the true reason for Europe prevailing of the societies of the Americas.

The next proximate cause was then the development of technologies. Larger populations have more inventors and people whose sole focus isn’t just sustenance. Technologies that developed in Eurasia that provided significant advantage were metallurgy, various military technologies, technologies that provided power for operating larger machines, and technologies which enable quicker and more reliable movement over land and sea. Larger populations also had larger political organizations which created order and could raise armies. Lastly, they often more quickly adopted writing which allowed for enhanced communication and political organization.

Food production was entirely determined by geography. By geography, Diamond, specifically means the geographical differences in plants and animals which were able to be domesticated. This is what enabled societies to be able to develop guns, germs, and steel. Guns, germs, and steel enable the Eurasian societies to conquer the rest of the world. China was able to conquer all of Southeast Asia and the Pacific Islands. Europe, on the other hand conquered the Americas. This is Jared’s explanation for the distribution of power in the world today.

The Relevance

Guns, Germs, and Steel is particularly relevant to the China portion of our trip. It for the most part omits India and thus is not relevant to that potential portion of our trip. It goes into a lot of detail about China in the Epilogue and Afterword. For the majority of the book, it is describing the dominance of Eurasia which includes China. The central ideas of this portion of the book are explained above.

In the epilogue, Diamond asks why China who had just as much of a lead from food production as Fertile Crescent did not reach the same level of development as Europe. His explanation is that China was too politically unified. China has been unified since 221 BC. He says that this has been the largest unified area through time worldwide. He explains that this led China to have early dominance of the world. This was seen in the Treasure Fleets of the 14^th century which were a huge armada of enormous ships. This fleet of ships even dwarfed the Spanish Armada. He explains that this huge fleet of ships was disbanded and seagoing trade made illegal as an act of retaliation when those that created the fleets were kicked out of power. Another example he gives is the Chinese dominance of clock-making in the 14^th century. Despite being the leader in making mechanical clocks, one emperor didn’t like technology and the whole country shied away from the technology until the late 15^th century.

Diamond explains that political unity causes a great number of people to be under one decision-maker. If this person has a certain preference, a tradition of innovation in a certain technology can be completely abandoned. Another example, Diamond gave of this is when the powers at be of the cultural revolution shut down all schools for five years after taking power. The centralized power of a single government in China is in contrast to Europe where there has always been a multitude of different rulers with different power systems. Diamond believes these dueling power centers were the drive behind lots of competition. If one ruler didn’t adopt a certain technology other rules still could. These rulers could then take over other technologically inferior rulers and technology would spread. The ability to make different decisions across the continent kept innovation moving along more continuously.

Diamond believes this unity, however, can be explained within his ultimate cause of geography. He explains that Europe has always been committed to disunity. He believe this caused by all the coastlines and natural divisions caused by mountains. He explains that historically China had always been split between only the two population centers of the Yangzi and Yellow Rivers. These rivers created unified areas east to west, and were connected by a short amount of coastline. This division was later overcome relatively early by the Grand Canal in the 7^th century. The fact that this connection was made early allowed trade to spread and a unified China to be easily created.

Praises and Criticisms

I think the greatest strength of Guns, Germs, and Steel is probably also one of its greatest weaknesses. The book strives to accomplish a very lofty goal of creating one synthesis of human history. I think it is able to accomplish this while remaining coherent. I think that analyzing world history through a very specific lens provides a new insight into a subject that has been written about many times. I think this is what makes the book worth reading.

Diamond’s use of geography as the ultimate explanation also has its downsides. He seems to disregard any evidence to the contrary. Diamond turns down these alternate explanations without fully refuting them. He does not go further than to say that they aren’t sufficient. I understand that he is trying to make a succinct explanation of a very complex subject from one perspective and that this is difficult to do without thousands of pages but I still felt that he could have discussed and explored alternative explanations further. The inclusion of these would have only served to strengthen his point and I felt this was one of the things he could have improved most.

I felt that one of the other biggest strengths of the book was that Diamond was aware of and addressed many of the weaknesses. He addressed most of the major things that others had felt warranted further explanation in the Afterword of the new edition. In the Afterword, he elaborated on why within Eurasia Europe became more developed than China. He went on to explain that in fact his explanation was oversimplified and it wasn’t really that Europe’s divisions made it more divided, but rather that China’s lack of divisions made it more conquerable. He also goes onto to say that there is a thing as too much division. He talks shortly about how India was even more divided than Europe and this proved debilitating to its development. He also addresses the fact that many have inquired about how his book would apply to businesses. He goes onto to briefly discuss how businesses in the same industry are different across different geographies. The fact that he was willing to add in the discussion his book has created kept his book contemporary and relevant.

I felt that one of the other glaring weaknesses of this book is that it doesn’t much touch upon development in more recent times. I kept wondering what the explanation was for China being behind the United States developmentally today. It mostly just goes into explaining the world up until the conquering of the Americas by Europe. No explanation is given for why Diamond stops his explanation of history at this point. It may be because geography no longer played much of a role after the Eurasian culture had overtaken the world. Nonetheless, I would have liked for him to have clarified why he chose his ending point.

Overall, the writing style was clear and easy to understand. This is worth noting because it is not often accomplished when writing on such a scholarly subject. It was engaging and kept my attention throughout its hundreds of pages. My only criticism on the writing style was that it seemed to try and drive some points home a little too hard and this made it come across as repetitive. It does seem to be very well researched and has an exhaustive list of citations.

Closing Thoughts

Guns, Germs, and Steel retells world history through the unique lens of strictly geographic factors. This makes it a refreshing read to better understand how the world came to be in its current distribution of power. I think it teaches on a broader level how different opportunities dictate different outcomes for different groups of people. I would recommend it to anyone reaching to understand the broader implications of why some cultures appear more advanced than others. Overall, Guns, Germs, and Steel shows the power that the insight of viewing a situation through a particular lens can provide and also the downsides to such an approach.

Health Care System in China

I just read an interesting article in The Economist titled, “Missing the Barefoot Doctors”.

This article was interesting to me because it highlighted the fact that China is also facing a health care crisis like the rest of the world.

In the United States currently “47 million Americans, or 16 percent of the population, were without health insurance in 2005.” (Source: National Coalition on Health Care) . It appears that currently neither the free-market system employed by the United States nor the universal government programs employed by the likes of countries like Canada are working. The free market system moves health care out of the reach for many and the universal system is plagued by inefficiency and long wait times.

In this article, it appears that China has developed a novel approach. This is a system of public insurance, whereby health care is not free but paid for but insurance is sold through the government. This system would seem to be a way of creating a synergy of the two dominant systems. It encourages efficiency like the free market system by creating a system of deductibles and co-pays. This encourages people to use the system only when the necessary and this reduces unnecessary visits. This keeps waiting time and costs down. The Chinese system also features the advantages of a universal health care system. It maximizes consumer surplus because the government sells to consumers at cost. It also takes advantage of economies of scale. These two things drive down cost and make it available for more. I think this is an interesting solution to the health care crisis.

I do realize that the article, in fact, highlights why such a system is not working in rural China. First of all, the insurance is too expensive. It is the equivalent of 11 days pay. Second, the co-pays are too high. People in rural areas are forced to pay 40% of such treatments. This is equivalent to four months’ income. These prices make the insurance too cost-prohibitive to be used and do not allow the government to take advantage of the economies of scale that could be realized. Still if such a system was tweaked it could provide a novel approach to a global problem.

In addition, I think another issue highlighted in the article is quite disturbing. This is the fact that China follows the “One Country, Two Systems” policy not just in an economic sense, but also a social sense. The health care system directly discriminates against people based on their birth location. It does not allow people born in rural areas to have access to the urban health care systems even if they relocate to a city. This is a direct discrimination against people from rural areas. This is disappointing to see as much of China’s continued growth relies on the migration of people from the rural to urban areas.

Link to this post on Cal Poly MBA Trip Main Blog

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