The Growth of China
Posted: January 21, 2015 Filed under: Demographics | Tags: China, McKinsey & Company Leave a commentSometime I am taken aback when it hits me how narrow a world view many of us have from our vantage point in the Midwest. Case in point: recent reading about growth in China was a real eye-opener as to the sheer size of their population and density. See the McKinsey & Company article All you need to know about business in China, an except from The One Hour China Book by investor Jeffrey Towson and McKinsey’s Jonathan Woetzel.
Here are a few interesting facts from the article:
China has twice the number of Internet users than the United States at roughly 50% of the penetration.- China has 160 cities with populations more than 1 million and 14 with more than 5 million. The U.S. has 9 cities with population greater than 1 million, and New York is the only one with more than 5 million. To be fair, if you expand the comparison to include metro areas (Combined Statistical Areas), there are 54 greater than 1 million and 12 greater than 5 million. But these are BIG areas (see map).
- In the next 10-15 years, more Chinese will move into cities than the current U.S. population (currently around $316 million), with a total Chinese urban population approaching 1 billion people. You might wonder where all of these people will go. Rapid and high-rise construction is one answer. Can you imagine a 30-story building going up in 15 days? Watch it happen.
- In the last 25 years, 300 million Chinese have moved out of poverty.
Making Small Talk about the DJIA
Posted: January 19, 2015 Filed under: Business | Tags: Dow Jones Industrial Average Leave a comment
In late December, the Dow Jones Industrial Average hit its all time high. The ebb and flow of this stock market index is often cited in the media, but it’s not largely relevant to most in the financial markets.
At a holiday gathering a couple of weeks before this record rally, I commented to a fellow partygoer, “Wow, the Dow took a big hit today.” The person kindly responded with an innocuous comment that went something like, “Yeah, it does that occasionally.” Ouch.
While they are highly correlated, on any given day market indices can rise or fall at very different rates. Regardless, the performance of the Dow always seems to make news, even if it doesn’t change how or what we invest in. It’s become a handy shortcut for people to feel like they are keeping abreast of the financial markets. Even those who don’t participate in the markets or understand investing concepts are often familiar with the status of the Dow.
What my conversation partner left unsaid is that indices are relevant to such a small extent to the average person, it doesn’t even make sense to bring it up at a cocktail party. Lesson learned.
Additional resources:
- Dow Jones Industrial Average overview
- Comparison graph of three indices: the DJIA, Wilshire 5000 and S&P 500
Exploring Solutions Together
Posted: January 15, 2015 Filed under: Change Leave a commentDuring times of rapid change, exploring key questions allows us to learn together. Consider:
- What is happening here?
- Why is it happening?
- How is it different or similar than the past?
- Why does the past solution not work anymore?
- Are we clear on what we are really trying to accomplish?
When there is a need for a new solution to a new problem, we have to explore together. Picking up the old solution to a previously defined question may not even be close.
This takes time and patience—two very valuable commodities. Without it, however, we will remain stuck in the new world with old maps.
ZMAB15 
