Around the World In

45 MinutesApril 2011

Globalization

Manufacturers Experiencing Rising Exports

Export’s Contribution to GDP

IGER.csuci.edu

Why IGER?

Bridge to Pacific Rim

Prepare Our Students

Areas Today

Asia

China

Japan

Budget Deficits

Inflation

Asia

Asia’s Contribution to Global GDP Growth

Soaring Industrial Production in Asia

Investments in Asia

Higher labor Costs in Asia ex Japan

Asia Consumption Accelerating

Asia Inflation

Supply Shortages

Demand Pull

Not Much Slack

Asia Place to

Produce

Invest

Sell

Future

China’s Economy

Share of Global GDP

U.S. Treasury Securities

8% of all

25% of foreign owned

RMB•Liberalized

•Trades Settled

•World Currency

China

Big Consumer

China’s Love Affair with Cars

Buy a Car and Buy a Flat

China’s Shrinking Trade Surplus

House Prices for Asian Cities

Gov’t Policies

Purchase Restrictions

Property Taxes

Higher Interest Rates

Five-year Plan

Happy China

China Inflation

Social/ Political

Conclusion

Growth Cool Down

Inflation Ease

Control Property Prices

Gradual Yuan Appr.

Japan Unemployment Rate

Japan Exports by Region

Japan: Consumer Price Index

http://www.businessweek.com/magazine/toc/11_13/B4221japan-crisis.htm?chan=magazine+channel_top+stories

Global Impact•Supply Chain

•Financial Market

• Repatriate

• Yen Appreciation

• Interest Rates

Supply-chain Impact

Supply Chain•35% Boeing 787

•20% Semiconductors

•40% Electronic Comp

•10% Laptop Batteries

•25% NAND Flash chip

Ships Contaminated by Radiation

Sig Turning Point•1855 Tokukawa

•1923 Nationalism

•1945 Superpower

•2011 ?

Small Global Impact

JapanVideo

Risk for Us

Not in Asia

Locally

Businesses: Asia

Labor Force: Train

Who Benefits?

•Commodities Producers

•High End Consumer Goods

•Machineries

Big Ten in 2030

•China

•U.S.A

•Japan

•Germany

•U.K.

• Brazil• Mexico• France• Canada• Korea

Republican Proposal

Interest Costs

What to Do?

Adult Conversation

•Serious Debate

•Political Climate

•Grand Bargain

Entitlement Spending

U.S. Defense Spending

Higher Taxes

Food Inflation

Up 80% y/y

Protests in N. Africa

China 25% of U.S. Soy

Ethanol 40% of Corn

Inflation Risks

Inflation Expectations

Wage Increases

Inflation Expectations

Why No DeflationInflation Expectations

Wage RigiditiesImport Prices

Monetary Policy

No DeflationInflation Eventually

Cost Push Excess Cap. Diminishes

TaxesFees

Ventura CountyApril 2011

IGER.csuci.edu

DrSohn.com

(not Dr.Sohn.com)