王关富《商务英语阅读》-Chapter1~8

Chapter1

TheLongMarch

“MadeinChina“lostitsnoveltylongago.Thelabelhasbecome

ubiquitousinmuchoftheworld,affixedtoshoes,toys,apparelandahostof

otheritemsproducedforglobalcompanies.Whatisanovelty,however,are

China-madegoodssoldunderChinesebrandnames.Onlyahandfulof

Chinesefirmssofarhavethemoneyandthemanagementexpertiseto

establishinternationalbrands;mostofthevastremainderarestrugglingto

attainevennationalrecognition.Butthepioneeringcompaniestestingthe

watersoverseascouldbeonthethresholdofsomethingbig.

Somebelievethatindividually,withthehelpofenterprisinglocal

managementoreagermultinationalpartnerswantingtoaddnewproductsto

theirstable,Chinesebrandscouldbecomeaglobalphenomenonwithina

decade,marketedonqualityandexoticappeal,aswellascompetitivepricing.

SaysVivecaChan,HongKongbasedmanagingdirectoratGreyChina,an

advertisingagency:"Ifthere'sonecountryintheworldthathasample

potentialfortakingbrandsglobal,it'sChina.^^

Intheshortterm,thestrongestpromiseisinChinesemedicine,herbsand

specialtyfood,aswellasgoodsthatplaytotheromanticforeignnessofChina

-whetherincosmetics,fashionormusic.SaysKevinTan,generalmanager

forChinaofmarket-researchfirmTaylorNelsonSofresinShanghai:"There's

stillalotofmystiqueassociatedwithChina.Ifyou'retakingsomethinglike

cosmetics,whichisimage-driven...suddenlyyou'vegotastrongplayer.^^Also

makingabidtogoglobalareafewtrendsettingChinesebeverageandbeer

brands.Furtherdowntheroadthereisbrand-potentialforproductssuchas

homeappliancesthatcanofferqualityatacompetitiveprice.

Someofthesebrandswilleventuallygoabroadviajointventuresof

mergersandacquisitions.Fortheirforeignowners,thebrandswillprovide

speedieraccesstoChina'sconsumermarketanddistributionchannels,while

atthesametimeservingtocomplementtheowners'premiumbrandsinglobal

markets.

TheconceptofChinesebrandshasbeenevolvingthroughthe1990s,but

ismowgettinggreaterattentionathome.Althoughthedomesticmarketisstill

robust,ahandfulofstate-ownedenterprises,orSOEs,includinglistedChinese

companies,arenowlookingtoestablishinternationalbrandsbecausethey

reckonthequalityofboththeirproductsandtheirmanagementhasimproved.

Chinesejointventuresthinktheirproductscancompeteonqualitywith

foreignbrandsanywhere,whileenjoyingtheadvantageofbeingperceivedas

exotic.

Besidesbringinginadditionalrevenue,aglobalbrandalsoburnishesa

company'simageinChina,stimulatingsalesamongstatus-consciousdomestic

consumers.Forexample,state-ownedsoft-drinksmakerJianlibaohas

developeditsoverseasmarketinpartto"establishagoodimage”,whichin

turnenhancesconsumptionathome,saysChiefExecutiveHanWeixian.

Butbuildingabrandtakestime,moneyandmarketingsavvy.Some

Chinesebrandshavenudgedintotheinternationalmarketonthebackof

competitivepricing,buthavealsoutilizedotherstrategies.Jianlibaohas

highlighteditsAsianappeal,presentingitselfastheprefen*edrehydrating

sports-drinkofChina'sathletes,whileMeidi,anair-conditionermaker,is

pushingforgreaterbrandrecognition.OtherslikeHaier,oneofChina's

leadinghome-applianceproducers,havepointedlysteeredawayfromprice,

competinginsteadonproductqualityandanefficientdistributionand

after-salesservice.Inanotherexample,theAmericandirectinvestmentfirm,

AsianStrategicInvestmentCorp.,orAsimco,haspositioneditsrecently

acquiredFiveStarbeerasapremiumbrand.

Ofcourse,globalsalesdon'tmeanglobalbrands,asGreyChina'sChan

pointsout.Andit'sstillearlydaysofChinesecompanies.Forastart,

investmentfundsforbrandpromotionarehardtocomeby,saysChuLiangjin,

theQingdao-baseddirectoroftheoverseasdivisionofChina'sTsingtao

brewery."Nomorethan5%ofourtotalexportsalescanbereinvestedin

promotingourbrandoverseas,explainsChu,addingthatTsingtaoistryingto

persuadetheforeign-currencyauthoritiestochangethisstandardpracticefor

SOEs.Withthegovernment'semphasisonpreventingtheoutflowofforeign

currency,thechancesoftherestrictionsbeingliftedareslim.

AlthoughtargetedatSOEs-privatecompanieshavegreaterspending

freedom-the5%limitisboundtohamperChinesebrands.Jianlibao,for

example,hasinvestedabout$10milliontosellitsbrandintheU.S.market,

butLiJingwei,thecompany'sgeneralmanager,knowsthat'sjustadropinthe

bucket.SittinginhisofficeatJianlibao'sindustrialcomplexinSanshui,a40-

minutedrivefromGuangzhou,Lireckonsthattosuccessfullygeneratebrand

recognitionamongAmericans,thecompanyneedstospendatleast$50

million-100milliononmarketing.Hehasnodoubtthatconsumerswilllike

Jianlibao'srangeofsportsandsoftdrinks(whichtasteremarkablylike

Coca-Cola^Coke,SpriteandOrangeFanta),butexplainsthat“weneed

moneytoinvestinpromotingourselves.^^

SaysB.C.Lo,HongKong-basedvice-presidentanddirectorofexternal

affairsatCoca-ColaChina:'Tmnotsurewhethertheycanreallypenetratethe

U.S.marketorbecomeaninternationalbrand,butcertainlytheyareastrong

competitorinChina.^^

Indeed,Jianlibao,whichexportstomorethan20countries,willneeda

greatdealmoremoneyandyearsbeforeitcanbeconsideredaseriousplayer

abroad.LastyeartheChinesecompanysoldjust200000casesofdrinks

(thereare24bottlesorcansinacase)intheUnitedStates.Althoughthe

companyhasfundedahostofpromotionalevents-donating$100000for

U.S.floodreliefin1997,advertisingatMissAmericapageants,sponsoring

the$20000JianlibaoCupGolfTournamentin1997-itsmarketingefforts

paleincomparisonwiththoseofthelikesofCoca-Cola.

OnepromisingareaforChinesebrandsintheglobalmarketplaceiswhite

goodsoflow-tomid-technology.Bysomeestimates,Chinesebrandshave

roughly90%ofthedomesticmarketforrefrigeratorsandwashingmachines,

70%—80%ofthemarketforair-conditionersand60%forcolortelevisions.

“Inmanyareasthequalityofproductshasimprovedtothepointwherethey

arequitemarketable,saysPhilipDay,avice-presidentatconsultingfirm

A.T.KearneyinHongKong."Whatwe'renowseeingisChinesecompanies

gettingtheiracttogetherintermsofmarketing.^^

Haierisamongthebest-knownwhite-goodsbrandsinChina.Under

theguidanceofitsdynamicpresident,ZhangRuimin,thecompanyhasturned

frombeingaloss-makerintoanexporter.Itclaimsthatmorethan60%of

theimportedwashingmachinesinJapanaremadebyHaier,andthatinthe

U.S.,itholdsa20%marketsharefor36-literto180-literrefrigerators.In

thefirst11monthsoflastyear,Haier-brandrefrigeratorexportstotheU.S.

reached$15.6million,upfrom$12.6millionforthewholeof1997.

MarioZhu,ananalystatABNAmroSecuritiesinShanghai,saysHaier's

marketingteamhashelpedbuildthecompany'sreputationinEuropeandnow

intheU.S."Theyhaveresearchcentersthatgivethemupdatedinformationon

marketdemand,“sheadds."Theydoaggressiveadvertisingandthey'vegot

goodR&D."Haier'sZhangsaysthecompany'sstrengthsarehighqualityand

gooddistributionwithgoodnetworksforsalesandservice.

Certainly,Haierdoesn'tspendmuchonmarketing,comparedwiththe

amountearmarkedbymostinternationalcompanies.IntheU.S.,Haier's

promotionbudgetaccountsforonlyapartly1%ofitsAmericansales.The

companyhasopenedaspecialtyshoponNewYork'sFifthAvenueandin

MarchhiredadesigncompanyinLosAngelestodeterminewhatAmerican

consumerslikedbestinarefrigerator.ZhangadmitsHaierhasn't"developeda

realbrandnameyet“amongaverageAmericanconsumers,butpointsoutthat

it'sstartingtogetsomerecognitionamongrefrigeratormakers,distributors

andspecialtyshops.

AnotherChinesebrandintheU.S.marketisMeidi.Acollective

enterprisethatchurnsoutair-conditionersinGuangzhou,Meidiin1997

achieved$386.5millioninsales,ofwhich$70millionstemmedfromexports.

In1998thecompanystressedoverseasmarkets,andasaresultexpects

exportsfortheyeartoreach$80millionoutoftotalsalesof$604million,

accordingtoPengQiang,directorofthecompany'soverseasdivision.He

believesthe“timeismature^^todeveloptheoverseasmarketforMeidi,which

competesonbothpriceandbrandrecognition."Weareattendingmore

overseasexhibitionstofurtherimprovebrandrecognitionandhavespent

moreonadvertisements,especiallyinHongKongJPengnotes.

Chinesebrandsunderthewingsofforeigncompaniesusuallyhavethe

advantageofplumpermarketingbudgetsandbetteraccesstomanagement

expertise.Butalthoughoverseascompaniestypicallybuythesebrandstogain

accesstoChina'sconsumersanddistributionchannels,theyalsocanhave

largeplansfortheiracquisitions."Themultinationalsthatarebuyingthese

brandsupChinesebrandsarenotgoingtorestricttheirbusinesstothe

domesticmarket,nsaysDayofA.T.Kearney."Someofthesebrandsaren't

necessarilygoingtobepitchedagainstpremiumbrandsabroadimmediately,

buttheymightbepitchedinothersegmentsofthemarket.TdlookatChinain

thelong-termasbeingthesourceofsignificantcompetitionfor

multinationalbrandsglobally.”

TakethecaseofUnilever,oneoftheworld'slargestconsumer-goods

companies,withannualsalesofabout$50billion.ThismammothAnglo-

DutchgroupinJulyboughtLaocai,aChinesepickled-vegetableandsoy-

saucebrandthatitplanstotakeglobalwithinthenextfiveyears.Unilever

wouldn'tspecifyexactlyhowmuchithasearmarkedforbuildingrecognition

ofLaocaiamongconsumers.

Foritspart,Asimcoin1995boughtacontrollingstakeinFiveStar,then

an80-year-oldstate-ownedbreweryinBeijing.JackPerkowski,

Asimco'sBeijing-basedchairman,believesthebrand-overhauled,

repackagedandresoldatapremium-cangiveTsingtaoarunforitsmoneyin

overseasmarkets.

Tsingtao,whichhasbeenexportingbeertoNorthAmericasince1978,

hashadsalesthereofabout$7millionannuallyoverthepastthreeyears.Five

Star,ontheotherhand,could“becomeoneofthesmallerimportedbeersin

theU.S.,^^saysabeer-industryanalystataBritishbrokerageinHongKong.

OnereasonisthatAsimcohaschosenanefficientdistributor,Florida-based

NorthlandBeverageCorp.InSeptember,thefirstfourcontainersofFiveStar

wereshippedtotheU.S.,andifallgoeswell,PerkowskireckonsAsimcowill

beselling3millioncasesannuallyinabouttwotothreeyears.Thatwould

helpthebeertocrackthelistof25best-sellingforeignbrandsintheU.S.16

-nowtoppedbyMexico'sCoronabeer.

NewYork-basedcosmeticsmakerCotyalsohasgrandambitions.In

1996,itforgedaventureinChinawithYue-SaiKanCosmetics,launched

fouryearsearlierbyglamorousChina-bornAmerican,Yue-SaiKan,a

householdnameandfaceinthecountryofherbirth.Technicallyawholly

ownedAmericancompany,Yue-SaiKanCosmeticsisconsideredoneof

China'sleadingbrandsofcolorcosmetics.ThealliancehaspropelledCoty

almostovernighttotheNo.lspotinChina'smarket,andinOctoberthejoint

ventureopeneda$20millionfactoryinShanghai,completewithanR&D

centre.

44WewanttotaketheYue-SaibrandandmakeitthefirstChinese

internationalbrand,saysJean-AndreRougeot,Coty'sexecutivevice-

president."Chinaasaneconomicpowerwillcontinuetothriveinthenext

fivetotenyears.Aspartofthatgrowth,you'regoingtoseemoreandmore

Chinesebrands."Rougeot'stheoryisthatWesternwomenwithsensitiveskin

willbeattractedbycosmeticsthathaveAsianherbsaskeyingredients.Adds

Yue-SaiKan:"WetrytoincorporatethebestAsianconcoctionswith

Westerntechnology.Forinstance,wehaveorangeblossomandgreentea

lipsticks/9

ThisblendofEastandWestmaynotcaptivateallconsumers,butalotof

smartpeoplearebettingitwillbeenoughtohelplaunchChinesebrandsinto

globalmarkets.

Chapter2

TheNewEconomy

HowRealIsIt?

DoestheNewEconomyexist?Notlongago,withgrowthstrongand

marketsbooming,theanswerseemedanobviousyes.Butthencamethebust.

Inthefirsthalfofthisyear,outputgrewatanannualrateofjust1%—and

there'sstillachanceofanoutrightrecession.ManypunditshavelefttheNew

Economyfordead.Nowthey5retalkingaboutthe“BubbleEconomy”.

Notsofast.WethinkthattherereallyisaNewEconomy,properly

defined,andthatit'sheretostay.Inourview,thewildexcessesofthelate

1990sandthestockmarketplungeof2000-2001combinedtoobscurea

fundamentalchangeinthestructureoftheU.S.economy.TheNewEconomy

wasneverabouttheendofthebusinesscycle.Recessionscanstilloccur.Nor

wasitaboutprice-earningsmultiplesrisingtotheionosphere.Itwas-andis

-aboutaneconomycapableofgrowingmorerapidlywithoutinflationthanit

didduringthelongslumpof1973to1995,becauseoftechnology-driven

increasesinproductivity,theworld'sbestfinancialsystem,andtheunleashing

ofentrepreneurialenergiesthroughderegulation.

Lookingahead,we'recautiousabouttheimmediatefuture.Butwe

remainoptimisticaboutthetwo-to-three-yearoutlook.Sincethemiddle

ofthe1990s,laborproductivity-theoutputperhourofwork-hasgrownata

rateof2.4%annually,evenafterthelatestdownwardrevisions.Thesegains

arelikelytocontinue,thoughprobablyalightlyslowerpace.Atthesametime,

immigrationishelpingtoexpandthelaborforce.Putthosetogether,andthe

U.S.canmostlikelysustainannualgross-domestic-productgrowthof

around3.5%,That'sahealthycontrastwiththeperiodof1973to1995,when

GDPgrowthaveraged2.8%.Moreover,it'ssafelybelowtheoverheated4%--

plusgrowthofthelate1990s-andrightinlinewiththeaverageforthe20th

centuryasawhole,whenAmericaexperiencedthegreatestincreaseofwealth

intheworldhistory.Othernationsseemtoagree.They'rebettingonthelong

-termstrengthoftheU.S.economybyinvestinginAmericanassetsranging

fromTreasurybillstonewautoplants.

Incontrast,theshorttermisn'tsopretty.ThosewhothoughttheNew

Economymeantgoodtimesforeverhavebeenmuggedbyreality.Alongwith

beingfaster-growing,theNewEconomyismoreexposedtotheforcesof

volatility.Thetechinvestmentcyclehasextremeupsanddowns.Innovations,

oncefundedbyfairlystablecorporateresearch-and-developmentbudgets

andgovernmentgrants,iswhipsawedbyfluctuationsinfinancingfrom

venturecapitalistsandinitialpublicofferings.Andderegulationexposesonce

-insulatedbusinesseslikephoneandelectriccompaniestotheunpredictable

forcesofcompetition.Evenglobalizationmayaddtovolatility,ifitmeans

techinvestmentgoescoldallovertheworldinsteadofindifferentcountriesat

differenttimes,asbefore.

Overall,thegoodnewsoutweighsthebad.Sofar,itlookslikelythatthe

U.S.economywillmanagetoskirtarecessionthisyear,ifjustbarely.The

outrightbusthasbeenconfinedtoafewsectors,suchasInternetcompanies

andtelecom-equipmentmakers.Eventhoughtheslumpincapitalspending

substractedalmost2percentagepointsfromeconomicgrowthinthesecond

quarterof2001,theoveralleconomystillmanagedtogrewabit.Arapid

seriesofinterest-ratecutsbytheFederalReservehasbuoyedconsumer

spendingandhousing,andthereislikelytobeatlestonemore.Lowerrates

haveoffsetthehittoconsumersfromthetech-induceddeclineintheirstock

marketwealth.Inshort,thenewsourcesofvolatilityhaven'tbeensevere

enoughtodragtheentireeconomyintorecession.

Thetimingofafullreboundboilsdowntowhenbusinessesresume

seriousinvestinginnewplantsandequipment.Rightnow,they'rereluctantto

buynewgearbecausetheyhaveplentyonhandfromthelastcapital-

spendingbinge.Industryisusingjust77%ofitscapacity,thelowestratesince

1983.Companiesarefillingordersoutofinventoryinsteadofnewproduction.

DavidA.Wyss,chiefeconomistatStandard&Poor's,whichlikeBusiness

WeekisaunitofTheMcGraw-HillCompanies,saysthisbusinesscycleis

similartothoseofthe1950s:Capitalspendingwasthefirstcomponentof

GDPtoslumpandwillbethelasttorecover.

WaveofInnovation

Thebestbet:Capitalspendingwillfinallycomebackstrongsometime

nextyear.Withinventoriesrunninglow,companieswillneednewequipment

andsoftware.Plus,someofthegeartheyalreadyhavewillbeoutmoded.In

thecutthroatbusinessworld,companiescan'taffordtokeepusingout-of-

dateequipmentevenifitstillhasyearsofserviceablelife.Equipmentthat

lowerscostswillbeindemand.Withcapitalspendingbacktotrack,the

economyshouldreachfullstrengthayearfromnow,ifnotsooner.Thelatest

surveyof50economistsbyBlueChipEconomicIndicatorspegsGDPgrowth

at1.8%thisyearand3%nextyear,withtheannualizegrowthratereaching

3.5%bythesecondhalfof2002.

Thenextexpansionmaywelllookdifferentfromthelastone,withanew

complementofcompaniesleadingthecharge.Pharmaceuticalandbiotech

companiesarelikelytoexpandrapidly,ridingthewaveofinnovationthat

resultsfromtheunravelingofthehumangenome.Asforinfotech,expecta

mixedbag.It'shardtoseewho'sgoingtosizzlebymakingslightlyfaster

routersorstringingyetmoreopticalfibersacrossprairiesandoceans.What

consumersandbusinesseswantnowaresystemsthatproduceimmediate,

concretebenefits.Computingondemand,forinstance,issupposedtomake

computingaseasyasturningonawatertap.Insteadofrunningitsown

complicatedinfo-techshop,abusinesspaysbythemonthtousehardware

andsoftwaremaintainedbyanoutsidespecialist.Apromisingnewgeneration

ofcollaborativesoftwarefromcompaniessuchasMatrixOne,AgileSoftware,

andeliminatesbottlenecksinsupplychainsthroughinformation

sharing.Andwirelessstillholdspromise:Prettysoon,expertssay,cellphones

andtheInternetwillgotogetherlikepeanutbutterandjelly.

NewEconomyskepticshaveamorepessimisticviewofthefuture

becausetheyhaveagloomierreadingofthepast.Theysaymuchofthe

equipmentandsoftwareboughtinthelate1990swenttowaste.Andthey

arguethatrecentdownwardrevisionsofhistoricalGDPdatasolidifytheircase

thattheprofitandproductivitysurgeoftheperiodwasnotasstrongasfirst

believed.Whenthehistorybooksarewritten,theysay,theboomwillturnout

tohavebeenlargelyabubble.

CriticalMass

Nodenying,therewasplentyoffroth.Buttheboomwasfoundedon

somethingreal.In1990s,corporateinvestmentininformationtechnology

finallyhitcriticalmass.Computersbecameabigenoughshareofthenation's

capitalstocktoraiseoverallproductivityandgrowthsignificantly.Astudylast

yearbyFederalReserveeconomistsStephenOlinerandDanielSichel

concludedthathalfoftheaccelerationinlaborproductivityimprovementof

thelate1990scamefromequipmentworkersbetter-"capitaldeepening”,as

it'scalled.

Notonlyistheremorecomputingpowerthaneverbefore,it'salso

improvingatafasterrate.HarvardUniversityeconomistDaleW.Jorgenson

datestheaccelerationtoNovember,1995,whenIntelCorp/sproductcycle

foritsmicroprocessorsshrankfromthreeyearstotwowiththeearly

introductionofthePentiumPro.Intelhaskeptupthepacesince,most

recentlywithitsItaniumprocessorsforserversandworkstations-itsfirstthat

chewon64bitsofdataatonce.

Builditandtheywilleventuallycome.BillMartin,chiefeconomistof

UBSAssetManagement'sLondon-basedBrinsonPartners,pointsoutthat

fallingpricesforinfotechnologyhavepredictablyledtorisingvolumessince

atleastasfarbackas1971.PaulA.David,aneconomistonthefacultiesof

OxfordandStanforduniversities,thinkstherearestillgiantopportunitiesfor

gainsinproductivityandconsumerwelfarefromelectroniccommerce

betweenbusinesses,fromcheaperandbetterinformationappliances,andfrom

telecommuting.“Ifthecurrenttechnologicalwavedoesrepresentathird

IndustrialRevolution,theupturninproductivitygrowthcouldlastforacouple

ofdecadesormore,“writeLondon-basedeconomistsDarrenWilliamsand

RichardReidofSchroderSalmonBarneyintheirnewreport,Backtothe

Future.

Computersandtelecommunicationsaregeneral-purposetools.That

meansthey511continuetogrowinimportance,becausethey'llbeputtouses

thatnobodytodaycanimagine.J.BradfordDeLong,aneconomichistorianat

theUniversityofCaliforniaatBerkeley,pointsoutthatelectricpowergave

U.S.industryanannualhorsepowerincreasefrom1880to1930oflessthan

10%ayear.Evenifyouassumethatalotofthecomputingpowerwasn't

harnessed,that'sasonic-boomrateofincrease.Andperformanceis

continuingtoimproveevenduringthelump.Atemporaryexcessofcheapand

excellenttechnologyisnottheworstkindofproblemasocietycouldhave.

True,long-termoptimismhastobetemperedbyconcernaboutthe

currentslump.IntheNewEconomy,theupsanddownsofthetechcycle

affecttheoveralleconomymuchmorethaninthepast.Inthelate1990s,info

-techinvestmentgrewlikewildfire-ataninflation-adjustedannualrateof

20%from1995through2000.Businessandconsumerspendingon

informationtechnologyaccountedforone-quartertoone-thirdofeconomic

growthduringmostoftheperiod.Nowit'ssubtractingfromgrowth.Inthe

firsthalfofthisyear,ITinvestmentfellatanannualrateof6%.Andthetech

downturnisn'tover.FromApriltoJune,newordersfornondefencetelecom

equipmentfellbymorethan25%.

HighSensitiveness

Thetechcycleisbeingexacerbatedbytherelianceoftechoutfitson

fundingfromventurecapital,initialpublicofferings,andjunkbonds.Allthree

arehighlysensitivetotheoverallmoodofthefinancialmarkets.Intheboom

years,thatwasalltothegood:Theamountofventurecapitalrosefrom$3.5

billionin1990to$104billionlastyear,accordingtoThomsonFinancial

SecuritiesData'sVentureEconomicsunit.Beyondbeingsourcesofmoney,

VCssitonstart-ups'boards,helpthemfindsuppliersandcustomers,and

redotheirbusinessplanswhencircumstanceschange.EconomistsSamuelS.

KortumandJoshLernerofHarvardBusinessSchoolestimatethatadollarof

venturecapitalproducesthreetofivetimesmorepatentsthanadollarof

corporateR&Dspending.

Butnow,techcompaniesthatneedmoney,especiallystartups,aregetting

thedoorslammedintheirfaces.SaysGeofferyY.Yang,apartnerinRedpoint

Ventures,aventure-capitalfirminMenloPark,Calif:"Wewentfroma

periodwherethecostofcapitalwasbasicallyzerotoaperiodnowwherethe

costofcapitalforthemostground-breakingideasisnearlyinfinite.^^Yangis

proudtohaveputseedmoneyintoTiVoInc.,anow-strugglingcompanythat

makesiteasyforbusypeoplelikeYanghimselftosaveTVprogramsona

digitalrecorder.thinkofTiVbuptherewiththemicrowaveintermsofhow

it'schangedmylife,“saysYang."ButIdoubtwewouldinvestinacompany

likethattodayasastartup.Itisapity."Yangfearsthat"normalconditions^^

won'treturninthetechsectoruntillatenextyearorearly2003.

NowonderpeoplearemopinginSiliconValley.ButeachtimetheU.S.

techsectorfallsintoatrough,newtechnologiesandcompaniesemergetolead

itforwardagain.Anditcouldhappensoonerthanthepessimistsfear.Thetwo

keystorecoverywillbeinnovationandcost-effectiveness.AlanGreenspan,

tonameoneinfluentialobserver,remainsoptimistic.44Byalloftheevaluations

wecanmake,“hetoldtheSenateBankingCommitteeinJuly,“weareonly

partwaythroughatechnologicalexpansion.^^

ItmaytakesometimeforWallStreettoovercomeitsfearandshare

Greenspan'sgoodmood.SaysHenryKaufman,aNewYork-based

investmentmanagerandeconomicforecaster:"Peopletooksuchabeating.

You'vegotwipeoutthosememorybanks.”

Butinvestmentwillsnapback.Withmoremodemsoftwareand

equipment,Americanworkerswillbeabletoproducemoregoodsand

serviceswithlesseffort-theverydefinitionofhigherproductivity.Evennow

theeconomycontinuestogrow,keepingthelongestexpansioninU.S.history

intact.TheNewEconomylives.It'sagoodbetthatsometimenextyear,the

U.S.willonceagainenjoysustainable,noninflationary,andbriskeconomic

growth.

Chapter3

BordersandBarriers

DoestheEuroReallyMaketheEUaSingleMarketfor

Business?

Forallthatithasclearlyhadprofoundeffectsalready,andwillhaveeven

deeperonesafterJanuary1,theeurobyitselfcanonlydosomuch.Itisbest

seenasone,albeitcentral,elementofabiggerproject:tocreateatruesingle

marketinEurope.Thisviewissupportedbyplentyofacademicresearchon

theeffectsofsinglecurrenciesoneconomiesandbusinesses.Oneuseful

strandofresearchledbyAndrewRose,aneconomistatheUniversityof

CaliforniaatBerkeley,suggeststhatthankstothesinglecurrency,

intra-Europeantradeshouldfairlyquicklydoubleoreventrebleinvolume.If

thatturnsouttobecorrect,thenEuropewillgreatlysurprisethenumerous

pessimistswhohavebemoaneditsinabilitytopickupwhereAmerica's

decadeofextraordinaryeconomicgrowthhasleftoff.

However,anotherimportantstrainofresearchexplainswhyone-factor

changes,suchastheintroductionofasinglecurrency,havelessofanimpact

thatmightatfirstbeexpected.SubramanianRangan,ane