Part 10 - Ten-thousand fold profit in six years- the legend of Taiwan stock market

I think, I would had be aware of America’s struggle if I was paying attention on the global trends. As well as its usual problems, I would have noticed how American solved them, and the agreement of “Plaza Accord". I would also understand what Wan-Lin Tsai, the founder of Cathay Life Insurance, said “everyone shall understand the investment knowledge" Surely, it would be reasonable why Mr. Tasi bought the land beside China airline with 30% of price above the stock market.

Therefore, I think the freedom given by the government allow people to think freely is very important to the investors. For most traditional rulers of China (including Chiang’s family in Taiwan), appreciated the order of Martial Law. For them, it would be the best to go back the emperor period- “It is legal because I wish it. Everyone shall under my control. I said what I mean; I have what I want." Isn’t that a perfect world? As it turns out, this is the killer of the people’s energetic. A French political philosopher, Montesquieu said that Democracy is unsuitable for Chinese with their “slavery" character. In the present society, large quantities of basic commodity provided by few people is normal. If there isn’t creative thinking to develop the variety and depth of industries, the majority of people will go hungry while only few who hold manufacturing resources could live well. An absolute monarchy shuts down “creative" elements of one’s mind. For no one would know when to be arrested by his “renewal" ideas. Still remember a quote my parents emphasized me when I was a child, they always said “children should be seen and not heard." Under this circumstance who dared to be “renewal" ?

From this direction we assume that though economy of China is good and has reached the “Lewis Turning Point" ( a point at which surplus rural labor reaches a financial zero. This in turn typically causes urban wages to rise dramatically. Upon reaching the Lewis turning point, a country usually experiences a food shortages which leads to a rise in agricultural and unskilled industrial real wage.), however, this “labor" economy was caused by the hard work of 13 billion population. While China’s GDP is close to 4,000 US dollars, China’s future nether toward “democracy “, allow people to communicate their opinions and ideas with the open mind to develop new industries. Or the economy of China will gradually slowing down. Nowadays, many countries such as Bengal, Sri Lanka and and India’s average GDP is around 1,000 US dollars. In the future, the orders of MTO (made-to-order ) will gradually turn to these countries. Therefore, the opposite speeding force will reverse China’s direction. This will cause surplus rural labor flow back to the urban in 5 years. On the occasion, less working opportunity of manufacturing and service will not sufficient this unemployment trend. In my option, Communist wants to have its absolute government control while China’s economic growth become stronger. However, this idea would probably be challenged in the following 10 to 15 years.

To be continued...