Transcript Doggett Keynote Part II

Could China Pass the US?
• Goldman Sachs says that China can become
the largest economy in the world by 2035 by
growing by 5% a year.
• What does the world look like when China’s
economy is 9x bigger than it is today?
• What opportunities does this represent for
entrepreneurs?
India is Rising
• Goldman Sachs says that India can challenge
the US for #2 by 2040 by growing by 6% a
year.
• What does the world look like when the Indian
economy is 12x bigger than it is today?
• What opportunities does this represent for
entrepreneurs?
Here
Comes
BRIC
Class
• Goldman
SachsThe
predicts
the Middle
BRIC Middle
Class
could grow from 250 million to 1 billion in the
next decade
• McKinsey says the Chinese middle class will
grow from 80 million in 2007 to 700 million in
2020.
• Goldman says that the BRIC Middle Class
could grow from 250 million in 2005 to 3.5
billion by 2050*
Jim O'Neill, Managing Director & Head of Global Economic Research, Goldman Sachs, 5/06
McKinsey & Company, Inc.
How Far The BRICs Have Come
• In 2006 the G7 (the US, Japan, Germany, France, Britain,
Italy & Canada) held $1,253,900,000,000 in FOREX
• By the end of 2007 China’s FOREX reserves had passed
$1,500,000,000,000
• China spent $65 billion for the Olympics. 5x the cost of the
Athens Olympics.
• China then invested $300 billion to create the China
Investment Corporation
• Today, China has $2,640,000,000,000 in FOREX reserves.
• America’s debt, on the other hand, will increase by
$1,000,000,000,000+ in 2011.
A Warning From The Future?
• The Chinese Professor
• http://www.youtube.com/watch?v=OTSQozW
P-rM
Just The Facts, Jack (Billion US$)
• May 2008
• Aug 2010
– China = $506.8
– Japan= $575.3
– Caribbean Banking Centers
= $104.5
– Oil Exporters = $164.2
– UK = $271.2
– Brazil = $151.4
– Russia = $63.7
– Luxembourg = $75.2
– Hong Kong = $61.4
– Taiwan = $38.9
–
–
–
–
–
–
–
–
–
–
•
China = $868.4
Japan = $836.6
UK = $448.4
Oil Exporters = $226.6
Brazil = $165.0
Caribbean Banking Centers
= $159.1
Hong Kong = $137.8
Taiwan = $130.2
Russia = $129.0
Switzerland = $106.6
http://www.treas.gov/tic/mfh.txt
• China
–
–
–
–
Cell Phone Penetration
15 million users in 1997
410 million users in 2006 • India
– 340,000 users in 1997
703 million users in 2009
– 525 million users in 2009
845 million users by end of
2010
– 766 million users by end
of 2010
– 1.2 billion by 2014
– 1 billion+ users by 2012
– Added 9.4 million new
users in May
– Added 19 million new
users each month in the
– 303,226 per day!
first four months of 2010
– 633,333 per day!
GDP Predictions
Houston, We Have A Problem!
CHINA COULD PASS US BY 2012!
Source: The Conference Board Report issued on November 10, 2010 using
Purchasing Power Parity (PPP)
Exploding Energy Consumption
Energy, China and India
A Swarm of Inflection Points
China - Total Trade
$300
$350
$250
$300
$250
$ Billions
$200
$150
1964-70
$100
$200
$150
1989-94
$100
$50
$50
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
1982
1980
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1977
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1975
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1971
1970
1969
1968
1967
1966
1965
1964
1963
India - Total Trade
2000-2005
$100
$90
$80
$70
Billions
1962
1961
1981
$0
$0
1960
$ Billions
Japan - Total Trade
$60
$50
$40
$30
$20
$10
$0
1990
1991
1992 1993
1994
1995
1996 1997
1998
Dr. P. Konana, McCombs Business School, University of Texas at Austin
1999 2000
2001
2002
12
This is a Brazilian Super Tanker
An Orange Juice Super Tanker
This is a Brazilian Jet
Inside Air Canada’s Embraer 190
Add A Large Dash of Oil . . .
Competing With M&A
• Mittal Steel acquires Arcelor
– ArcelorMittal is the #1 Steel Company in the
World with 310,000 employees in 60 Countries