Friday, April 09, 2010

China confirmed

Yesterday's NYT first business page had an article with the title "Riding the 21st Century Rails" that reported on China's potential involvement in bringing their bullet train expertise and technology to the U.S. today. Chinese corporations have now signed a cooperation agreement with the State of California to build bullet train lines in that state. This is a bidding process, not a done deal. Maybe you saw the article.

Here it was a kind of watershed event in accepting the economic power that China has become. The comparison to Japan in the '50's and '60's is obvious to those of us who remember. At first, "made in Japan" meant almost a laughable piece of junk. Then it evolved into some adequate transistor radios and a few tinny looking very small cars. When in 1970 my father arrived home one day in a new canary yellow Toyota with a real wood grain steering wheel it was a "something is happening here" moment. Then came the deluge of high quality seemingly everlasting products. My Sansui receiver from 1975 still works fine while the accompanying Advent speakers and Dual turntable have long been replaced. The Toyota mentioned above was replaced in 1979 with another of the same brand, but a red hatchback, that was sold in 2006 for $1500 when it was no longer needed.

Getting back to China it's apparent that they can make any type of clothing, toy, small appliance, piece of furniture, and multitudes of other products at low prices and mostly reasonable quality, some high quality if, as was the impression, it was supervised and manufactured against high specifications like some Japanese branded cameras. There have been the notable glitches with toxic toys and drywall, and others that one might expect in an at times corrupt emerging economy. We accept too that China has created newly revamped Flash Gordon like cities with stunning skylines if they can be seen through the pollution. Most everyone sees China as an undeniable high growth story, but getting to the point of advanced technology to bid on rebuilding America's infrastructure was somewhat of a revelation.

According the the Times' report, Chinese engineering and construction expertise in building these bullet trains is superior to virtually any country in its environmentally friendly technology and its designs that allow for faster completion of projects. They are linking all of their major cities with these high speed rail lines over the next ten years and will complete a Beijing to Shanghai bullet train in 2011 that takes only four hours between the cities as opposed to 10 hours today. The article states that New York - Atlanta or New York - Chicago are roughly the same distance and both on Amtrak today take around 18 hours of travel time. So I'm just partially repeating the thoughts in the Times article but only because it is so stunning that China not only has this advanced engineering capability but also the capacity to export it at the same time that they have massive projects within their own borders.

China hands, if they were to see this post, would probably say that these observations are old hat, and obvious. Revelations get to all of us at different times so this is just the point in time here that confirms that China has arrived. And by the way they have offered not only to build but also finance California's project, taking a page from the playbook of the old and at one time formidable GE.


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