The Return of Technological Innovation to China

June 30, 2015

Last year, a friend from China who works in China’s investment banking industry in Shanghai came for a visit. She earned her MBA in the UK, and speaks fluent English. While in California, she decided to see how efficient America’s was compared to China’s Alibaba, and when it took more than a week for the average order to arrive from Amazon, she declared Alibaba the winner, because when she ordered a product in Shanghai through Alibaba in the morning, it was delivered to her front door that same afternoon and without the use of drones.

The rest of this post is mostly about Zhongguancun, China’s Silicon Valley, which is located in Beijing’s Haidian District and was first developed in the late 1990s.

Here are a few pictures of the concrete, glass and steel canyons of Zhongguancun taken by Steve Hsu, a professor of physics at the University of Oregon.

Recently I have read several times on Blogs and in Op-Ed pieces in the Western media that China doesn’t have a chance to match California’s Silicon Valley, because China lacks freedom.

This is simplistic and flawed thinking.

The Chinese have every economic freedom that many Americans have and the few that they don’t have are not economic in nature—for instance, freedom of religion and limited political expression. It isn’t as if these few limits to freedom are a secret since they are part of China’s Constitution, which is taught in the public schools. In China, the people are free to follow five officially sanctioned religions: Catholicism, Christianity, Buddhism, Taoism and Islam. In comparison the U.S. has about 313 religions and denominations to choose from.

Other than that, since money and freedom are linked, the growing Chinese middle class has as much freedom to live the same consumer lifestyle as many Americans do, but in the United States poverty is on the rise and with poverty comes less freedom unless you include hunger and being homeless as an example of freedom.

For instance, in 1985, the poverty rate in the U.S was 14% (33.3 million of 237.9 million people), and today (2015) reports that the mean poverty rate in the U.S. is 15.13% (48.5 million of 321 million people). How does that compare to China? In 1985, the poverty headcount rate in China was 30.7% (317 million of 1 billion people).  Today, the CIA reports it’s 6.1% (about 79.3 million of 1.3 billion people).

In addition, if democracy is so precious, why do so many Americans not vote? A 2010 survey by the California Voter Foundation found that 51 percent of nonvoters (in the U.S.) grew up in families that did not often discuss political issues and candidates. Does that mean in the U.S., we are also free to give our freedom away?

Where is the evidence that total freedom of religion and/or political expression is necessary for entrepreneurial innovation? Good luck, because you won’t find that evidence, but in the next few paragraphs you will find evidence that shows that total freedom of religious choice and political expression are not necessary to prosper and innovate.

“Shenzhen has never hidden its ambition to be China’s answer to Silicon Valley. Last year (2014), the city saw more than 64 billion yuan (HK$80.46 billion) invested in research and development, accounting for 4 per cent of GDP, only matched by South Korea and Israel.” – South China Morning Post

This 2008 video takes us to a lab in Tsinghua University in Beijing where students are discussing solar technology.

Ye Yuming, an award-winning student at Tsinghua University said, “China lags behind other countries in the solar power industry. The solar PV will help us improve and break the monopoly held by foreign businesses. The solar PV has great market potential, especially in China. The market size is huge.”

What Ye Yuming said in 2008 was true, but two years later, China became the world’s largest solar power manufacturer.

Bloomberg Business reports, “Along with the new companies, China is also experiencing a surge in technological innovation. The country had more than 660,000 effective invention patents last year, up 12 percent from a year earlier …”

And The Wall Street Journal says, “Increasingly, China’s own technology companies are challenging market leaders and setting trends in telecommunications, mobile devices and online services.”

In conclusion, British scientist, historian and sinologist Joseph Needham proved with his Science and Civilisation in China Series that China led the world in technological innovations for about 1,500 years until the 16th century. Then the West led the world in innovation. Is that about to change again?


Lloyd Lofthouse is the award-winning author of My Splendid Concubine [3rd edition]. When you love a Chinese woman, you marry her family and culture too. This is the lusty love story Sir Robert Hart did not want the world to discover.

IMAGE with Blurbs and Awards to use on Twitter

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China’s curious link between Opium, Christians, Cults and Cannon balls

January 27, 2015

Organized religions and cults such as the Falun Gong have been in China for centuries, but have never played a major role in the culture until the 19th century when Christianity and opium was forced on China.

C.M. Cipolla, in Guns, Sales and Empires, wrote, “While Buddha came to China on white elephants, Christ was born on cannon balls” paid for by the profits to be made from opium. Cipolla obtained his first teaching post in economic history in Catania at the age of 27. In 1953, Cipolla left for the United States as a Fulbright fellow and in 1957 became a visiting professor at the University of California, Berkeley. Two years later he obtained a full professorship.

The treaties that ended the two Opium Wars—first Opium war (1839-1842) and second Opium War (1856-1860)—required that China’s emperor allow Christian missionaries free access to all of China to convert the heathens. The treaty also opened all of China to the opium trade. Christianity and Opium might seem a strange partnership but that’s the way it was.

Then there was the Taiping Rebellion led by Hong Xiuquan, God’s Chinese son and a Christian convert, who was responsible for 20 – 100 million deaths over a period of 14 years (1850 – 1864). Hong claimed to be the younger brother of Jesus Christ, and millions of Chinese believed him, but the Taipings were against the opium trade and that led the Christian countries to support China’s emperor against the Christian Taipings proving that profits come before God.

Then in the early months of 1900, thousands of Boxers, officially known as Fists of Righteous Harmony, roamed the countryside attacking Christian missions, slaughtering foreign missionaries and Chinese converts.

Confucius and Lao-Tse have influenced the foundation of Chinese culture and morality, and these two along with Buddha offer more of a blended influence on Chinese culture than Christianity or Islam.

Thanks to Confucius, China’s mainstream culture understands the importance of people within the family and society more so than many other countries and cultures. This may explain why China is a powerhouse of industry today.


Lloyd Lofthouse is the award-winning author of My Splendid Concubine [3rd edition]. When you love a Chinese woman, you marry her family and culture too. This is the lusty love story Sir Robert Hart did not want the world to discover.

Honorable Mentions in General Fiction
2012 San Francisco Book Festival
2012 New York Book Festival
2012 London Book Festival
2009 Los Angeles Book Festival
2009 Hollywood Book Festival

Finalist in Fiction & Literature – Historical Fiction
The National “Best Books 2010″ Awards


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Let’s take a close look at how many deadbeats there are in the United States living off welfare

October 13, 2014

If you live in China and you think the streets in America are paved in gold, take a close look at how many deadbeats there are in the United States living off welfare, and you might be surprised who the real welfare queens are.

First, a few numbers to get started: there are more than 316 million Americans and 150.8 million are between the ages of 18 to 65—the primary working years for adults. In 2013, 47.1 million Americans lived below the poverty level; 73.6 million were under the age of 18, and 44.6 million were age 65 or older.

Wow, and in September 2014, there were 146.6 million Americans who were working at paid jobs.

But, a few, far-right billionaire oligarchs—for instance, the Walton family and the Koch brothers, and the fools who swallow their propaganda—think that more people in the United States are on welfare and are deadbeats than those who are working and supporting them.

I think it is arguable and safe to say that it would be a misleading lie that the majority of the Americans who are not working are deadbeats on welfare. Only a fool could think that. Is it possible that there are only 4.2 million Americans—who could be deadbeats—between 18 and 65 who do not have a paying job—that’s only 1.328% of the total population? I bet most of those 4.2 million are probably disabled and can’t work or are a stay at home parent.

Did you know ABC reported that Americans work more than anyone in the industrialized world—more than the English, the French, the Germans or Norwegians and even, recently, more than the Japanese?

In addition, according to the OECD, in the United States 67% [that is almost 70%] of people aged 15 to 64 [the working class years] have a paid job. … And having a good education is an important requisite for finding a job. In the United States, 89% of adults aged 25-64 have earned the equivalent of a high-school degree, higher than the OECD average of 75%—and yet some billionaires, including Bill Gates [worth almost $80 billion], the Koch brothers and the Walton family, would have you believe that the public education system in the United States is failing and must be reformed.

20 Something Finance even says “The U.S. is the Most Overworked Developed Nation in the World.” And Business Insider says the average person spends 90,000 hours at work over their lifetime—based on a 5 day 8 hour workweek with a two week vacation annually, that equals 45 years. I worked 45 years, starting at 15 and I retired at 60.  My retirement check comes from CalSTRS, and I paid 8% of my gross income into CalSTRS for the 30 years I was a classroom teacher.

But a Houston based billionaire, according to the Democratic Underground, is attacking public pensions with a goal to kill the guaranteed-benefit plans that are run by teacher retirement systems in every state. This billionaire’s name is John Arnold, who is worth $2.9 billion dollars. Arnold runs a Houston-based hedge fund, and before that he worked for Enron, and it is said that he earned $750 million for Enron the year it went out of business. Huh, how do you earn $750 million for a company that goes out of business the same year?

Contrary to the popular thinking of fools, Social Security is not a form of welfare because workers and employers pay into that program for their entire working life, and in 2013, there were 38 million retired workers—nine out of ten individuals age 65 or older—who collected an average monthly benefit of $1,294. There were 4.9 million dependents; 8.8 million disabled workers, who were paid an average of $1,145 a month, and 6.2 million survivors—survivors are young children and a surviving spouse who cares for the children.

What about food stamps—a real welfare program?

From Media we learn that nearly half (47% or 23 million), who get food stamps, were under the age of 18, and another 8 percent (3.9 million) were 60 or older; 41% (more than 20 million) lived in a household with earnings from a job. These workers are known as the “working poor”, and the average household on food stamps received a monthly benefit of $287.

And, these so-called deadbeats—that a few billionaires and a lot of fools think outnumber working Americans—are allegedly robbing us blind while they sit around drinking beer, eating popcorn and watching TV or having sex 18-hours a day to make more babies so they can collect more food stamps. If you believe that, then you might want to look in a mirror to see a fool.

If these billionaires succeed, what will replace progressive era plans like CalSTRS, Social Security, Medicare, unemployment and food stamps?

If we look back at history, we might discover the answer to that question. In 1900, before Presidents Theodore Roosevelt, Taft, Wilson, FDR, Kennedy and LBJ, ushered in the progressive era, 40-percent of Americans lived in poverty with only a 5% unemployment rate, and up until 1938, in some states, children could be sold as young as five to factories, coal mines and whorehouses. Imagine your five-year old child working as a prostitute, because boys and girls were sold into prostitution back then when the U.S. was ruled by capitalist Robber Barons.

Is this the America a few billionaires, with help from some fools, are fighting to get back?

By the way, did you watch the video that comes with this post? It really is an educational eye opener.


Lloyd Lofthouse is a former U.S. Marine and Vietnam Veteran,
who taught in the public schools for thirty years (1975 – 2005).

His third book is Crazy is Normal, a classroom exposé, a memoir. “Lofthouse presents us with grungy classrooms, kids who don’t want to be in school, and the consequences of growing up in a hardscrabble world. While some parents support his efforts, many sabotage them—and isolated administrators make the work of Lofthouse and his peers even more difficult.” – Bruce Reeves


Lofthouse’s first novel was the award winning historical fiction My Splendid Concubine [3rd edition]. His second novel was the award winning thriller Running with the Enemy. His short story A Night at the “Well of Purity” was named a finalist of the 2007 Chicago Literary Awards. His wife is Anchee Min, the international, best-selling, award winning author of Red Azalea, a New York Times Notable Book of the Year (1992).

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Steel—NOT steal—from China

October 7, 2014

I read a post on So Far From (a blog) about U.S. dependence on China for steel.

As usual, when I read a claim and/or complaint about China, I often research the issue to see if the complaint is valid.

What I discovered in this case was another lie—the type often generated and spread by Sinophobes, who fear or dislike China, its people, or its culture. Then again, these critics could be McCarthyites, who will publicize accusations of political disloyalty or subversion with insufficient regard to evidence and/or the use of unfair investigatory or accusatory methods in order to suppress opposition.

So Far From Heaven’s post complained that the poor quality of tools in the United States was because of Chinese steel, which, I discovered, probably has nothing to do with steel produced in China, but more to do with capitalism/consumerism and planned obsolescence. says of planned obsolescence that “This term was supposedly coined after World War II by American industrial designers and writers to indicate industry’s desire to produce consumer items that would be replaced.”

For example, if a U.S. company wants its tools to wear out within a specific time frame, the company’s designers and engineers are told to come up with products that will need to be replaced, which helps boosts profits when customers have to buy a replacement—that is called capitalism 101.

In addition, since most products manufactured in China for the U.S. market are ordered by American companies such as Wal-Mart, Apple, Home Depot and Lowe’s, the contracts often specify exactly how the product is to be manufactured, and the American side of the manufacturing equation decides the quality and life span of the product. If you want to learn more about this business practice, I suggest visiting the China Law Blog to discover how it works.

To discover if the U.S. depends on Chinese produced steel for manufacturing products sold to U.S. consumers, I spent some time Googling (another term is research) for facts—something Sinophobes and/or McCarthyites should do before spreading opinions that are false.

What I discovered about Chinese steel may surprise you.

From, I learned the U.S. produced about half of the world’s steel in 1945.

“After World War II,” said, “the U.S. steel industry faced increased competition from Japanese and European producers, who rebuilt and modernized their industries. Later, many Third World countries, such as Brazil, built their own steel industries, and large U.S. steelmakers faced increased competition from smaller, nonunion mills (“mini-mills”) that recycle scrap steel.” Did you notice that China or Communism wasn’t mentioned once in this paragraph?

CRS Report for the US Congress said, “China’s steel industry has grown significantly since the mid-1990s. China is now the world’s largest steelmaker and steel consumer. In 2009, China produced over 567 million tons of crude steel, nearly half of the world’s steel. That was 10 times the U.S. production.”

However, CRS reported, “The majority of Chinese steel has been used to meet domestic demand in China.”

Today, the United States is in third place for steel production while Japan is the second largest producer of steel. Source: Index

Here’s the surprise—the United States steel industry exports steel to China. For example, in 2004, the U.S. exported 8 million tons of steel to China up from 5 million tons in 2000 and by 2010, China was buying $34.5 billion in steel from countries such as the U.S., Australia, and Brazil to meet its domestic needs.

I wonder what the Chinese were doing with the U.S. steel being exported to China. Is it possible that products made in China to be sold in the U.S. were being produced using steel made in the U.S.?

In fact, John Surma, president and CEO of US Steel Corp, said, “China generally has been good for our industry.”

Meanwhile, we learn from Qingfeng Zhang writing for Perspectives that the United States produces approximately 80% of its domestic steel demand.

In addition, the US imports finished steel products from a large number of countries. The EU has been the biggest exporter with about five-million tons shipped to the United States in 2001. Canada is the second largest exporter shipping four-million tons, followed by South Korea (2 million tons), Japan (1.8 million tons) and Mexico (1.5 million tons).

China does import steel to the U.S.  The US Department of Commerce reported, “U.S. imports from China represent a total of 4.9 percent of all U.S. steel imports.” In 2010, steel imports to the U.S. totaled 23.9 million tons while America produced nearly 88.5 million tons of steel between January and December 2010. China’s share of steel imports to the U.S. would have been 1.17 million tons, or about 1 percent of that 112.4 million tons of domestic plus imported steel.

You tell me, does the U.S. depend on China for steel to meet domestic demand?


Lloyd Lofthouse is the award-winning author of My Splendid Concubine [3rd edition]. When you love a Chinese woman, you marry her family and culture too. This is the love story Sir Robert Hart did not want the world to discover.


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Spilling oil is something China may have in common with other countries, but who spills the most?

September 16, 2014

MSNBC reported on BP’s April 20, 2010 oil spill disaster. After an explosion that killed 11 workers and injured 17, more than 200 million gallons of crude oil flowed into the Gulf of Mexico.

Fishing industries and tourism was devastated while oil washed ashore turning beaches black with goo.

A few months later in July 2010, the BBC reported on China struggling to recover from their worst oil spill disaster ever—about 18 to 28 million gallons of crude oil spilled.

China was new to this type of disaster and yet, they quickly mobilized an army of volunteers and anglers to help clean the pollution from the area around the port of Dalian, one of China’s most important strategic oil reserves.

China’s oil spill came from an explosion in an oil pipeline. Witnesses report that China may have responded faster than the US did for the BP spill in the Gulf of Mexico. The pipeline that exploded belonged to China National Petroleum Corporation.

Using this list published by Foreign Policy Magazine of the world’s largest oil spills, let’s see how China’s oil spill compares? I mean, who spilled more oil?

In January 1991, As Iraqi forces withdrew from their position in Kuwait, they sabotaged hundreds of wells, oil terminals, and tankers. Between 160 million and 410 million gallons poured into the Persian Gulf.

In June 1979, the IXTOC 1 Oil Well exploded spilling 138 million gallons into the Gulf of Mexico.

In July 1979, 90 million gallons of oil spilled into the ocean 10 miles off the coast of Trinidad and Tobago.

In February 1983, 80 million gallons of oil spilled into the Persian Gulf during the height of the Iran-Iraq war when an oil tanker hit the Nowrux Field Platform causing a leak that couldn’t be capped for months because the platform was under constant attack by Iraqi planes.

In May of 1991, 80 million gallons spilled into the ocean 900 miles off the coast of Angola when a tanker holding 260,000 tons of crude exploded.

Foreign Policy Magazine didn’t list the Exxon Valdez oil spill of March 1989 where about 11 million U.S. gallons of oil spilled into Prince William Sound. For a more complete list of global oil spills, check this list on Wikipedia. Make sure to scroll all the way to the bottom of the page so you don’t miss anything. You may notice that only 3 are listed for China versus the 62, I counted for the U.S.

Is this the price we must pay for a world that depends on oil/coal for electricity and transportation while the oil and coal industries all but ignore alternative sources of power, and people like the Koch brothers often succeed at pressuring the U.S. government to do little to nothing?


Lloyd Lofthouse is the award-winning author of My Splendid Concubine [3rd edition]. When you love a Chinese woman, you marry her family and culture too. This is the love story Sir Robert Hart did not want the world to discover.


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Walking the path of Ugg Boots from sheepskin to foot

May 21, 2014

I bought a pair of Ugg boots a few years back at Big 5 for less than $30 to keep my feet warm.

I didn’t consider where the boots were made, and I never intended wearing them to go shopping or outside. Since I work at home and save money by leaving the heat off on cold days, my feet get cold so it made sense to wear a pair.

Uggs don’t appear designed for outdoors, yet I see many young American women looking sharp shopping in Ugg boots. It seems to be a fad that isn’t going away, and I wanted to know where Ugg boots came from and what it cost to make a pair.

I discovered the previous video on YouTube of a factory in China where the material and labor come together to make Uggs. The conclusion of the description below the video says, “These boots are the most cheap and excellent quality boots in the world.”

The New York Times recently reported “The salaries of factory workers in China are still low compared to those in the United States and Europe: the hourly wage in southern China is only about $1.19 (15.2 RMB) per hour.” Chinese factory workers often work overtime as long as sixteen hours a day six days a week—and many Chinese are not complaining because they work long hours. Why? They want those extra hours to earn more.

For a comparison, the US federal minimum hourly wage is $7.25, which pays about $15,000 a year for a full time job not counting overtime or hidden benefits if there are any.

By the way, reports that consumer prices in the United States are more than 46% higher than in China. In fact, restaurant prices in the US are more than 75% higher than in China.

In China, the Ugg factory workers in that video are probably earning less than $3,700 (US) annually and working twice the hours to keep those Ugg prices down so American women and men could buy a cheap pair to look stylish while shopping.

This is a video explaining how to detect fake Ugg boots

After I watched this video, I checked the Ugg boots I bought from Big 5, and discovered they were fake. Does that mean they weren’t made in China?

Who makes a profit from the real Ugg boots? Deckers Outdoor Corporation holds the Ugg trademark in more than 100 countries worldwide and reported sales of $689 million US dollars under the Ugg brand in 2008 and sales were up in 2009. Source: Source: Wiki.Ugg Boots

How many Americans would be willing to pay four or five times the price for a pair of Ugg boots so those low paying minimum wage jobs could come to the US?

Then, how many Americans are willing to work for the federal minimum wage without benefits? Not many since there are more than eleven million illegal aliens in the US working those jobs.

So, if you live in the US, next time you hear political ads or someone bashing China for stealing jobs from Americans, look in a mirror.

The Walking Company sent me an e-mail advertising “Zealand” slippers (another “Ugg” style product) on sale at 70% off.  Instead of paying almost $65 a pair (not counting the sales tax), I paid less than $20, bought four pair and discovered when the shipment arrived that the “Zealand” product line was made in China instead of New Zealand.  But that shouldn’t surprise anyone because even most Ugg shoes are produced in China.


Lloyd Lofthouseis the award-winning author of My Splendid Concubine [3rd edition]. When you love a Chinese woman, you marry her family and culture too. This is the love story Sir Robert Hart did not want the world to discover.

His latest novel is the multiple-award winning Running with the Enemy.

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Comparing Economic Growth: China versus India

May 13, 2014

Chris Devonshire-Ellis wrote a convincing piece at China Briefing back in October 2010 that India‘s economic growth would speed past China in the near future.  It seems that many in the West are convinced that democracies are superior to countries ruled by authoritarian governments.

Chris said, “It (India’s) growth rate could overtake China’s by 2013… Some economists think India will grow faster than any other large country over the next 25 years.”

However, several years later, we discover that Chris was wrong. In February 2014, the BBC reported, “India’s economy growth slower than expected.” During the four years starting with 2010 through 2013, China’s GDP grew from $4.99 Trillion to $8.23 Trillion compared to India’s growth from $1.365 Trillion in 2010 to $1.8417 Trillion by the end of 2013.

The foundation of this prediction was based on India being a democracy “where entrepreneurs are all furiously doing their own thing” while China is a culture of secrecy and censorship. Chris mentions a few of China’s other flaws too, which China is working to overcome.

What Chris doesn’t mention is the fact that economic development in India follows socialist policies including state-ownership of many sectors—something China learned long ago doesn’t work, and then there’s the difference in poverty and illiteracy between India and China.

India and China both became independent about the same time—China in 1949 and India in 1947 and due to Chairman Mao’s policies, China suffered horribly from 1949 to 1976 and progress was slow. Than Mao died and China changed dramatically.

India, on the other hand, has had more than 60 years to solve its problems and hasn’t made much progress primarily because it is a democracy often mired in political partisanship and corruption. India is actually rated more corrupt than China but we don’t hear much about that.

Let’s see what each has accomplished in reducing illiteracy and poverty.

The World Bank says, “That China’s record of poverty reduction and growth is enviable. Between 1981 and 2004 the fraction of the population consuming less than a dollar-a-day fell from 65% to 10% and more than half a billion people were lifted out of poverty.”

For India, the World Bank reports: “poverty remains a major challenge. According to the revised official poverty line, 37.2% of the population (about 410 million people remains poor, making India home to one-third of the World’s poor people.” UNICEF shows the poverty in India to be 42%.

World Bank studies also established the direct and functional relationship between literacy and productivity on the one hand and literacy and the overall quality of human life on the other.

India’s literacy rate was about 12% when the British left in 1947. Today, literacy is 68%.

When Mao died in 1976 after a decade of suffering through twenty-seven years of mostly wrong-headed reforms ending with the Cultural Revolution, less than 20% of the people were literate, but today literacy is more than 93% with a goal to reach 99% soon.

As for India succeeding, says, “At a time when we (India) are poised on the threshold of becoming a superpower, the rampant malnutrition and prevalence of anemic children and women to the extent of 48 per cent of the population is a definitive indicator that we have failed as a democracy in ensuring the fundamental requirements of our citizens.”

It appears that China—with censorship, secrecy and its one party government with a capitalist, market, consumer driven economy—has done a much better job of taking care of its people. India, on the other hand, has six national political parties and 54 political parties at the state level. Considering that America has two national political parties that can’t agree on much of anything, it’s a wonder that India gets anything accomplished.


Lloyd Lofthouse is the award-winning author of My Splendid Concubine [3rd edition]. When you love a Chinese woman, you marry her family and culture too. This is the love story Sir Robert Hart did not want the world to discover.

His latest novel is the multiple-award winning Running with the Enemy.

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