What is the most urgent thing China should do?

First, let’s meet a Chinese-Japanese American: Koo Chao-Ming!

He is the nephew of the late Koo Chen-Fu, the former chairman of Taiwan’s SEF, and comes from a distinguished family.

In 1954, when Koo was born in Kobe, the United States had just ended its occupation of Japan, and Japan’s industrial output was about the same as it was before World War II, with a GDP of $21.6 billion, close to that of Belgium, a small European country, and only 2/3 of that of China, which was not even in the top 10 in the world.

In 1967, Koo Chao-Ming went to study in the United States, Japan’s economic development, already recognized as a miracle by the world, grew at a rate of more than 10% for many years in a row, and its GDP in dollar terms was equivalent to six times that of 1954, continuously surpassing India, Italy, Canada, mainland China, Argentina, France, and the United Kingdom, jumping to the third place in the world, and the new Tokyo Tower was taller than the Eiffel Tower of France. The Shinkansen, on the other hand, was the fastest railroad in the world at that time……

In 1976, Koo graduated from the University of California, Berkeley, and in 1981, he completed his master’s degree in economics at Johns Hopkins University and in 1981, he joined the Federal Reserve Bank of New York.

At this time, the Japanese economy, withstanding the impact of the two oil crises, continued to maintain high growth, Japanese automotive and semiconductor industries in the United States, the impact of “Japanese goods” in the U.S. companies have shrunk profits or even bankruptcy, the Great Lakes industrial area is a depression, and Japanese college students have not yet graduated from the company to sign people, monthly salary Hundreds of thousands of not to mention, but also comes with luxury goods and travel vouchers; Japan’s per capita GDP is close to the United States, the average employee on vacation, either to Hawaii and Europe, or to Hong Kong shopping ……

The American Fu Ago Yi wrote a book “Japan First”, and almost all the world at that time believed that Japan was the future center of the world economy, because the Japanese style economic system was superior to that of European and American countries.

At that time, including Japanese people and European and American people believed that the future of the world belonged to Japan, and learning Japanese became a global craze from China to Korea, from the United States to Europe, and Japanese would become the high-tech language of the future.

However, in the midst of all the enthusiasm, the world did not realize that the world was quietly changing.

From 1974, from the Carter administration to the Reagan administration, the U.S. pressured Japan to impose “voluntary export restrictions” on textiles, steel, TVs, and machine tools, using an act of Congress as leverage. China and Southeast Asia

The U.S. also launched several Section 301 investigations into Japanese exports, and Toshiba, a famous Japanese semiconductor company, was issued a $15 billion fine and forced to close its factories in the United States.

By 1985, the United States pulled Japan, the Federal Republic of Germany, the United Kingdom, France, etc., signed the “Plaza Agreement”, the yen entered a period of continuous appreciation.

In just two years, the yen to the dollar exchange rate, from 250 to 120, which means that the yen appreciated more than 1 times. Because of the rapid and violent appreciation of the yen, Japanese goods became extremely expensive in the international arena. Japanese exporters’ profits began to fall or even to lose money, and some of them had to choose to lay off employees and lower wages……

Faced with the difficulties of enterprises, the Bank of Japan hurriedly lowered the interest rate from 5% to 2%, and not only lowered the interest rate, but also gave tax cuts to enterprises to encourage them to maintain production, but because sales in the international market were hampered and Japan had a large amount of excess capacity, the “smart” Japanese businessmen did not take the government’s money to pay workers, or engage in scientific research or expand production, but A brain into the stock, foreign exchange, property market.

The yen continued to appreciate, and the stock market and property market also soared as the Japanese government continued to print money and release water. In the streets of Tokyo, everyone from business owners to white-collar workers was intoxicated, spending a lot of money on luxury goods and entertainment venues.

Because of the sweet taste in investment, Japanese companies of all sizes started to take out crazy loans to invest in foreign exchange, stock and real estate markets, and young people also chose to take out loans to invest in stocks and real estate, and the stock market and housing prices started to spiral upward.

However, at that time, Japan was still the engine of the world economy, not only the total GDP was the second in the world, but also the level of GDP per capita, because of the effect of the appreciation of the yen, Japan surpassed West Germany in 1981, Britain in 1983, and the United States, which once occupied Japan, in 1987.

Because of the comparison with other countries, Japanese people generally believed that housing prices would always rise, stocks would always rise, salaries would always rise, and companies would always make big money, so they consumed and took out loans according to this expectation and prospect, taking out loans for 30 years to buy houses and investing heavily in their children’s education.

By 1989, the market value of Japanese stocks reached 1.5 times that of the United States and accounted for 45% of the global stock market value. The market value of NTT, a Japanese telecommunications company, was higher than several companies combined, including AT&T, IBM, Exxon, General Electric (GE), and General Motors (GM). Nomura Securities has a higher stock market capitalization than all U.S. securities firms combined.

In real estate, land in Tokyo is priced one month at a time, setting new world records several times. A piece of land in Ginza was sold for $700,000 per square meter, which cannot be surpassed until today. Selling Tokyo to buy the United States has become a living reality.

While asset prices in the yen have soared, the level of indebtedness has increased simultaneously in both the household and corporate sectors.



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