A new era for China and a new era for the Internet

Photo credit: Jeff Gross/Getty Images

With the 2008 summer Olympics upon us, 8/8/2008 marks the dawn of a new era for China and for the Internet.  As one commentator said during the opening ceremony, this is probably the most important event to date in China’s 5000 year history on the world stage.  The budget for this opening ceremony was ten times greater than that of the Athens Greece opening ceremony and it blended state of the art technology with classic Chinese artistry with 15,000 human performers.

For the first time, I get to watch all of the Olympics events that I wanted to see because it’s available on demand from the Internet.  In past Olympics, I either missed the event on TV or TV didn’t have the event I wanted to watch.  This time, just about every single event is being streamed live or on demand on http://www.nbcolympics.com/.  While the quality of the video is slightly below standard definition TV broadcasts, it’s good enough and I suspect many people will be taking advantage of this once they hear about it.

Another great way for Windows Vista 32-bit Premium/Ultimate owners to watch the 2008 Olympics is with the TVTonic download service which delivers pseudo HD quality video.  While it’s not nearly as good as 15+ Mbps NTSC broadcast HD, it’s still good quality.  Be prepared to have at least tens of gigabytes of hard disk space available and be prepared to have your broadband connection filled.  While the TVTonic service doesn’t require you to act as a peer-to-peer server, it does add a service and process to your Windows startup.  You can undo that with my crapware removal guide.

For office IT managers and administrators, you may want to block these video services from the desktop if you don’t want your business Internet connection slowing to a crawl because just two of these NBCOlympics.com streamers will fully saturate a business-class T1 line.  What you might do is designate one computer in some common area hooked up to a projector could serve as the dedicated Olympics streaming computer.  If your bandwidth permits, you can even set up that one computer to pull the pseudo HD service from TVTonic.  That way you’re only streaming the video once and not 50 different times with 50 times the traffic load.  You can put refreshments there and let employees take routine breaks from their work schedule to socialize and catch the festivities in higher quality.  This is an excellent way to compromise between office productivity and a friendly work place.

Scott Wasson noted that while their heart may have been in the right place, the mask antics of the American athletes was silly and embarrassing and I would have to concur.  I have not been back in China since 1999 and 2000 but I remember the air being horrendous and there is no question that China needs to get its act together on many things like pollution, health care, and building safety.  Most of the high rise buildings for example only have one stair well entrance to the top and if it gets blocked by a fire or earth quake (assuming you’re not already buried under the building), you’re probably not going to get out alive.

This is unfortunately the state of a developing nation.  Our own San Francisco burned down to the ground twice in the mid 1800s and in the 1906 quake.  The same is true of labor conditions and we only need to look at the misery of American child/adult laborers at the turn of the 20th century.  China is going through that state right now and they’re trailing the west in large part because of Communist oppression, which I and my parents are unfortunately all too familiar with, but they will get there.

28 thoughts on “A new era for China and a new era for the Internet”

  1. While I enjoyed Sunday morning watching on-line U.S. v China Basketball ( http://www.dtschmitz.com/dts/2008/08/10/nbcolympics.html ), and do enjoy the benefits of shopping at Walmart, I feel strongly that China is a failure in humanitarian terms with their historical treatment of the oppressed Tibet. We continue to see evidence of their oppressive ways.

    Our trade deficit widens as we lose jobs and manufacture fewer goods for export. The so called ‘global economy’ is at work, but I see what has developed here in the U.S. as a by-product of rewarding Corporate America for off-shore labor practices and NAFTA and CAFTA all of which leaves Americans with fewer and fewer good paying jobs to come by.

    To turn that around would take broad protectionism, exacting tariffs on trade imports to bring prices back in line where the same finished goods could be made here in the U.S.A. at a competitive price and return jobs back to America where they belong.

    We Americans are slowly losing our ability to sustain and be an self-sufficient nation who take care of their own first.

    We should be concerned about the effects China has on our way of life.

    Watch Out America.

  2. Protectionism sounds like a great idea until it’s aimed back at you. We had trade surpluses and very high tariffs during the great depression and it prolonged the depression. The problem with protectionism is that what you do to other countries they do to you. Throughout the history of the civilized world, trade has benefited mankind by cross pollinating cultures. The whole world, including the USA, has benefited from free trade. If you want to double or triple US unemployment rates and wreck the world economy, all you need to do is close off trade with high tariffs.

    Here’s a nice summary of the Smoot-Hawley Tariff Act of June 1930.

    "The Smoot-Hawley Tariff was more a consequence of the onset of the Great Depression than an initial cause. But while the tariff might not have caused the Depression, it certainly did not make it any better. It provoked a storm of foreign retaliatory measures and came to stand as a symbol of the "beggar-thy-neighbor" policies (policies designed to improve one’s own lot at the expense of that of others) of the 1930s. Such policies contributed to a drastic decline in international trade. For example, U.S. imports from Europe declined from a 1929 high of $1,334 million to just $390 million in 1932, while U.S. exports to Europe fell from $2,341 million in 1929 to $784 million in 1932. Overall, world trade declined by some 66% between 1929 and 1934. More generally, Smoot-Hawley did nothing to foster trust and cooperation among nations in either the political or economic realm during a perilous era in international relations."

  3. Protectionism–It’s the only way you can bring jobs back to America and make taking care of our own backyard priority one–level the playing field.

    Get Smart America!

  4. How do you help American workers by making them pay MUCH more for the products they buy?

    How do you make American companies globally competitive by making the individual ingredients in their product recipe cost more due to protection of American products?

    How do you make American security better by saying, sorry, but we don’t give a damn if we are starving your children. We won’t buy from you, as we are too scared to adjust to the new global reality for products? It’s worth noting that poverity is not a great foundation for democracy.

    Take computers. We wouldn’t be having this conversation if we took a strong protectionist stance in that market segment, as most computers would cost over $10,000. Think about how many jobs would be lost in such a scenario. Manufacturing, shipping, sales, and support would be a tenth (if that) in size.

    America’s economy is holding up quite well even under the assault of a global credit crunch (ignited in no small part by perplexing tax policies that encourage extreme debt). We have the best universities, the most sources of investment capital, and an entrepreneurial culture that is second to none in the world. I think you exaggerate our weakness, Dietrich, which in isolation isn’t a problem, but if enough agree with you, jeopardizes America’s long term economic future.

  5. Even in this weakened economy, our unemployment is still below 6% and it’s been this low or lower for the last 25 years. Despite losing all those manufacturing jobs, the American economy has shifted towards an information economy. It’s the natural progression of advanced nations and we see a similar trend with South Korea.

    The fact of the matter is that American is a huge beneficiary of off shoring because the Japanese auto makers like Honda and Toyota are the biggest employers in states like Ohio. The irony of all this is that many politicians will play up the off shoring issue to incite anger in Ohio.

    India for example is going to a strong information economy where they started off by picking off our low fruit in call centers but more recently they’ve stopped excepting those types of jobs and they’re starting to go after higher end jobs. Pretty soon the Indians will no longer be a viable off shoring destination because their income will be too high to make it economically feasible and they’ll have their own strong economy. It’s already happening to a certain extent with our biggest Hollywood people merging with the powerhouses in Bollywood.

    Trade is the most efficient and fairest form of exporting wealth and prosperity to the world and it is a good thing while life is still very good in America and anyone who’s lived in other countries will recognize this. I find it ironic that those who espouse the concept of "spread the wealth" often want to close it off with protectionism.

  6. I’m only writing this because you take others that state serious figure errors to task (which is why I followed you from your last job to this site).

    The cost was ten times as much as Athens? No way. The numbers out there for the Beijing ceremonies are between $100M and $300M depending on the source. Which would put it at par or up to 3x as much as Athens. (Although china.org.cn is pegging the cost of all 4 ceremonies (Opening/Closing, Olympics/Paralympics) at less than the Athens opener.

    The problem with Ceremonies costs are three fold:
    1) The public (or publicly perceived) budgets include both the opening and closing ceremonies and sometimes other things like medal ceremonies and possibly even the Paralympic opening and closing ceremonies.
    2) There is no easy way to assign a cost to just one ceremony, like opening. Many of the big ticket costs: lighting, audio, pyro setup, rehearsal space outfitting, certain staff, etc are shared for both ceremonies.
    3) Because ceremonies cost so much, the price tag can become a PR issue. Therefore many costs become indirect costs: expenditures funneled through different divisions, services or labor (like the military performers) provided at the direction of the government, value in kind swaps, and other donations.

    Now… if you want another number to debate, lets talk about the claimed TV viewers. It’s always "3 billion".

  7. Oly, I said the commentator claimed it was 10x Athens. With 15,000 performers, I wouldn’t doubt that number but thanks for your point of view.

    With that said, I absolutely loved the Athens opening and the artistry. I don’t want to turn this in to a who’s better match so lets just all enjoy the games shall we.

  8. I think you may be missing somethings that deserve consideration in the debate.

    1. Unemployment isn’t the best stat in the world. It only measures people getting unemployment, which means the unemployment rate is always higher (by how much is not known).

    2. moving to an information based economy is all well and good, but what we lose are good paying jobs for those that lack those skills. It’s increasingly hard to find a high paying job without a degree (or 2).

    3. in inflation adjusted dollars, most people are earning less money today than they were 10 years ago.

    And no, I’m not endorsing a shift towards protectionism, but I do think the above are all more important than unemployment figures, and they certainly temper my enthusiasm for free trade.

  9. 1. Unemployment stats aren’t perfect, but it is a good metric and it can be used as a basis for historical comparison. On that note, we’re doing relatively well in the context of the last 100 years so I don’t see the need for alarmism on trade policies.
    2. See above response. We could be doing better but we’re not in dire straits.

    3. People aren’t making less than they were 10 years ago and if you count additional health costs companies are covering for their employees, it’s even higher than that.

    Free trade (just like technology and progress) has its rough edges but the benefits for everyone outweigh by far outweigh the negatives. Protectionism and closed trade on the other hand might make a few specific industries happy but it has never brought anything other than misery for the global masses.

  10. Protect our own through tariffs? Why don’t we build a wall around the US and cut ourselves off from the rest of the world? The matter of the fact happens to be that the US economy managed to get to the size and power that it is because of offering cheap labor in the past. Because it could adapt to changing economic conditions. When the world managed to move manufacturing elsewhere, we started the information technology revolution and re-centered our economy. Currently we are doing the same with our pharmacy industry. We just don’t bother to look at the brands of medicines as our primary source of income. Who wants to be the world’s drug dealer?

    I personally thing we have become a gluttonous nation that needs to slim down and work harder. While some of us may gripe about other nations that have mandatory 4 week vacations and max 48 hour work weeks. http://www.etuc.org/a/504 I on the other hand have a girlfriend who I only managed to convince that I should stay home so I could see a doctor. Otherwise, she sees that I should be working.
    I planned a vacation in the middle of the week a while back and she didn’t think I was to take the day off because my company depended on me. This kind of mentality is what the US needs to succeed on the global economy.

    The Mentality that worries me is the following…

    1. If some one comes to this nation they should speak our language.
    2. Why should I settle for less wages?
    and the list goes on, but I need to go become a productive member of society.

  11. Dietrich, you haven’t really addressed my question. What flaw do you see in my statements and John’s statements? We’re not doing all that bad now while protectionism will pretty much put us all in the poor house.

    Protectionists somehow seem to believe that we can kick our neighbor in the face without them kicking us back. The FACT is that US exports fell an astounding 66% in just 3 years during the Great Depression after protectionism was implemented. Sure we reduced imports greatly but we slashed our own throats in the process. What kind of unemployment do you think we’d face if we lost 66% of our export business today? We’ll be looking at double digit employment with the world’s economy in shambles.

  12. George,

    Read Buffet’s Squanderville: http://www.berkshirehathaway.com/letters/growing.pdf

    We ARE losing our export business–hence the looming trade deficit, in a so called ‘Free Trade’ economy.

    This isn’t ‘Chicken Little’ the sky is falling.

    We are in a recession, with record home foreclosures, a teetering Banking system, record unemployment, rising fuel costs, a huge Federal budget deficit–just shy of going into another depression.

    America is hemorrhaging as its net worth leaves the country ‘for good’.
    To stem the flow, protectionism is essential.

    Wake up!

    >What kind of unemployment do you think we’d face if we lost 66% of our export business today?

  13. I read it and I’ve read what you’ve said, but you’re painting a sensationalized picture and the protectionism that you’re advocating will send the world in to an all out depression. We’re having some economic struggles right now but GDP growth is slightly positive and we’re in the 5% unemployment range which is considered by any historical measure healthy. If you think exports are bad now, what do you think will happen when they’re cut 2/3rds? Are you so naive as to believe protectionism will somehow increase exports?

    Protectionism decreases both imports and exports proportionally and it puts everyone out of work globally.

    As for Buffet’s import certificates idea, he himself admits it would raise prices for both imports and domestic products. That paper was written before the dollar drop and the dollar has already dropped and it’s obviously had some affect on reducing imports. That effect for the most part has not been felt because foreign companies are continuing to sell products at the same prices that Americans are use to paying and they’re taking the hit. Take a look at those German auto imports and tell me if the prices have gone up in the last 2-3 years. They really haven’t gone up because they don’t want Americans to stop importing. China has mostly locked their currency to the US currency although recently they’ve eased up a big allowing the Yuan to rise slightly against the dollar.

  14. It’s very simple: assume we do nothing and the economic keeps going down until: we cannot afford any import. United states becomes the world manufactories.

    If we do go to protectionism, we won’t import immediately + we wont export anything either.

  15. Lino,

    The economic trend over the last few decades has been consistently steady and healthy despite the huge trade imbalance. The trade imbalance simply means other nations are willing to sell us goods and services cheaper than we’re willing to sell them goods and services. When other nations like China become wealthier, the cost of their goods and services will rise and they will have more money to buy their own goods as well as imported goods and then we’ll see a leveling off in the trade imbalance. As labor costs increase in places like India and China, it will make it economically infeasible to offshore jobs to them. Japan has gotten so wealthy that they offshore many jobs to the USA and Honda and Toyota are some of the biggest employers in this country.

    If we do protectionism, you’re quite right that we’ll stop importing and stop exporting which means death to the global economy. That seems like a very drastic and foolish decision to make.

  16. Dietrich, I think you’re mistaken in your characterization that I’m at 180 degrees from my employer.

    I think you’re mistaken because I’m for free trade on ALL sides of the ocean. Rob is advocating MORE free trade and not LESS free trade which isn’t protectionism. What Rob is saying is that countries like China and India are violating WTO free trade agreements and that we need to do something about it and I completely agree with him. That’s NOT advocating that the USA switch to being equally protectionist; that’s saying that China and India or any other country within the WTO need to honor their end of the bargain.

    For me, if that means implementing the temporary nuclear option of imposing tariffs on our end which hurts them more a LOT more than it hurts us, then I’m all for it. I really doubt we’ll even need to implement the nuclear option of temporary protectionism because the other nations will flinch long before we pull the trigger. So the ultimate goal here is NOT to implement protectionism; the ultimate goal is to have universal free trade going both directions.

    That does NOT mean that we must have equal trade with equal results, just that we need a level playing field for American exports as other countries have a level playing ground in the USA (for the most part). So long as China and India are living on much lower wages (which is rapidly improving) and they’re willing to give us their services and goods for less money, there will be a trade imbalance and that’s ok. What is NOT ok is China and India violating their end of the WTO bargain with protectionism on their end. Once we enforce free trade on both ends, then it’s certain that we’ll see the trade deficit narrow.

    So we may be talking past each other a bit considering the fact that you seem to be supportive Rob’s position http://www.theglobalist.com/StoryId.aspx?StoryId=7026.

  17. I get an error from the mailer-daemon when emailing you George with verbiage:

    "Technical details of permanent failure:
    Google tried to deliver your message, but it was rejected by the recipient domain. We recommend contacting the other email provider for further information about the cause of this error. The error that the other server returned was: 554 554 The message was rejected because it contains prohibited virus or spam content (state 18)."

    Set up a gmail account and try again.

  18. Our trade deficit has a lot to do with the price of oil (which has a lot to do with certain fast growing regions of the world needing more of the black stuff), but the biggest reason it is as high as it is is the fact that our savings rate is all but negative. That’s a result of a series of policy decisions that have encouarged Americans to load themselves up with huge amounts of debt (though we can’t completely absolve ourselves, either, as people do have a responsibility to say no, I won’t accept that tax subsidy to buy that gigantic beast of a house).

    China, in contrast, has a 30-40% savings rate. That means they buy a lot less, and that makes a lot more excess capital available to fund our negative savings rate. If more of that money went to consumption, China’s export surplus would be a lot smaller, if not negative, given the sheer amount of stuff the Chinese simply do not have yet.

    Rich nations tend to have lower savings rates (though they don’t usually have negative levels, which is something WE need to fix, not China). Imagine a country the size of china with a much lower savings rate, and you will see what the opportunities are from a richer and more prosperous china.

    Changing that will be hard, but I know one way that is sure not to work: starving Chinese children and thinking America’s economy wouldn’t get walloped by extreme price inflation.

    Simple example: Steel tariffs helped 3% of the economy (the steel producers), and hurt 14% (companies that use steel). Move to something as fundamental as computer software, and the temporary benefits would be quickly overrun by the costs associated with such a move, thus reducing demand for software and replacing those temporary benefits with extreme negatives.

    Be thankful for the lower-value dollar, though: http://afp.google.com/article/ALeqM5i2sQ7YUEJV2XGJ3p2alEh63LpDJA

    Bottom line: we need to deal with the reality of a global supply chain. Hiding from it certainly isn’t going to do American business any favors.

  19. …in spite of your fears of hotel employment, Dietrich, I don’t see how the economics change very much. We live in a nation that has 300 million people out of a global population of 6 billion+. Most of the growth, the stuff that will fill our pockets with filthy luchre, will come from OUTSIDE our borders. There’s no way around that. It’s simple demographics.

    We are a big piece of the pie today, but we won’t remain globally competitive if we hide behind our borders. Not only that, but the benefits from any protection will be minor and short-term, replaced faster than you think by the dragging effect which necessarily comes from making every American pay a lot more for every product they buy.

    50 years ago, the point of origins of the parts put into a typical product were overwhelmingly from one country. Communications and transportation improvements has destroyed that, with the benefit that prices are lower and all of us have more, in real terms, than we ever had before. It does mean that the nature of employment in America has moved around, but that’s how economies evolve.

    We must do what we comparatively do best if we hope to remain a wealthy and healthy part of the world economy. Hiding from that economy is like trying to hold out a feared infection by locking yourself in an airtight bubble. Things might feel fine for awhile, but eventually, the air stops supporting life.

  20. Descendant labor and shortage are inevitably confined together and if you remain to exercise the labor of children as the treatment on the social malady of want, you pleasure have both penury and youth labor to the end of time.

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