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Tuesday, February 7th 2012

Investing in sustainable growth in China and America

Eva Lerner-Lam's Weblog

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How Americans Benefit from China’s Economic Growth

August 24th, 2011

When it comes to global market shifts, everyone’s paying close attention to China. It’s important for us to have an accurate picture of the impact that China’s economic growth has on the U.S. economy.

Americans are aware that buying goods manufactured in China helps the Chinese, but some may be unaware that it helps us as well. According to a recent study released by the Federal Reserve Bank of San Francisco, for every dollar spent on such a product, about 45 cents goes to China while the remaining 55 goes to the U.S. to cover services including “transportation, wholesale, and retail activities.”

Naturally, we also pocket a percentage of the profits for goods produced by other foreign countries, but on average we receive about 36 cents for each of those dollars.

In many ways, China’s economic development is directly benefiting Americans, and we should continue to seek ways to work positively with each other.

The US EB-5 Immigrant Investor Pilot Program: Its Time Has Come

March 16th, 2011

America needs jobs, but the financial crisis has robbed the nation of the liquidity it needs to create them. China has cash, and is willing to invest in America. That’s why the Federal program EB-5 Immigrant Investor Pilot Program, which requires each foreign investor seeking a U.S. green card to invest at least $500,000 in a U.S. project and create 10 jobs, is getting more attention as of late (http://www.uscis.gov/USCIS/Resources/Resources%20for%20Congress/Congressional%20Reports/EB-5%20Investor%20Pilot%20Program.pdf).

The program, which has been around for about twenty years, saw a nearly two-fold increase in applicants between last year and the year before (http://online.wsj.com/article/SB10001424052748704124504576118500940803720.html).

Considering how much money from other countries could potentially be invested here, the EB-5 program should be the first of many such programs that America should initiate and promote. Let’s keep finding more ways for both countries to work together use their resources to achieve their respective objectives.

High-Speed Rail for the USA: Technology Transfer from China to Build the “Next Gen” HSR

February 15th, 2011

Fifteen years ago, China began an ambitious program to improve the state of its railway infrastructure. Today, China has leapfrogged over other nations and is now aiming to build a 25,000 km (16,000 mi.) high speed rail (HSR) network—the world’s largest and fastest—by 2020. How did China go from having one of the world’s most backward rail systems to the world’s largest and fastest in such a short time?

China invested in educating and training its young people by sending them abroad to study and understand the world’s best highspeed rail systems. China then purchased two key components from each of the foreign systems: (1) 60-car train sets and (2) the rights to use and adapt the underlying technologies to develop its own, state of the art, advanced HSR technology. The “technology transfer” approach was based on the way American companies purchase technology transfer rights from American universities and other research and development companies and institutions. Now, as America contemplates building its own HSR system, we may do well to consider educating and training our young engineers by sending them abroad to study and understand the world’s best high speed rail systems, and then buying train sets and technology transfer rights from each of them. Then, we can use and adapt state of the art HSR technologies to build the world’s “next generation” of advanced HSR.

President Hu’s Visit with President Obama Is Not This Week’s Biggest News…

January 23rd, 2011

…nor is the acrimonious debate about the exchange rate between the two currencies, or even the $45 billion in trade deals that the U.S. just signed with China. It’s China’s new pilot policy to allow foreign asset purchases in RMB. Chinese money is now available for buying into projects that we’ve shelved for decades while waiting for funding. This is bigger than currency manipulation and exports—this is investment in America, using money that China earned domestically, but mostly from abroad.

The rules are still being written for this recent trial—not only in terms of the logistics of purchases of foreign assets with the yuan, but in terms of how to structure the deals themselves—but it is undoubtedly the beginning of a seismic shift in investment trends between the East and the West. We are looking at a new global investment landscape for the next couple of decades.

Looking at the huge volume of cash in China that can be invested in U.S. projects, we anticipate strong potential to improve U.S. public infrastructure in exchange for land use development rights and tax incentives for job creation, among other negotiable incentives. These are the kinds of major collaborations that we’ve been hoping for and working toward.

Palisades is currently vetting projects from American public agencies as well as private enterprises. We’re happy to see Americans responding so positively to this new situation and are hopeful that these future collaborations will result in great success for the people in both countries.

Entrepreneurship in China and America: Key to Our Global Economic Recovery

March 14th, 2010

Most savvy China watchers know that in today’s China, the top-down governance system depends on entrepreneurship within its state-owned enterprises (SOEs) to grow its economy. As the United States struggles to turn its flagging economy around, it, too, is looking to entrepreneurs to lead the way.

What makes a successful entrepreneur? In his July 7, 2009 article, “Anatomy of an Entrepreneur: Family Background and Motivation,” published by the Kauffman Foundation Small Research Projects Research, Vivek Wadhwa concludes that most new company founders in America came from middle-class or upper-lower-class backgrounds, are well-educated and married with children. The strongest motivation for starting a company was to “build wealth”. Other popular motivators included capitalizing on a business idea; the appeal of a startup culture; a desire to own a company; and a lack of interest in working for someone else. From what we see in today’s China, these are the very same motivators for young Chinese all over the nation.

That’s what makes these times so extraordinary and so exciting for venture capital investors. With the prospect of Yuan convertibility around the corner, the opportunities for bilateral investment in start-up enterprises in both countries will be a much-needed shot in the arm for global economic recovery. Watch for it…it’s coming.

“Where there is a challenge, there is a market opportunity.”

February 1st, 2010

My father said these words to me more than 35 years ago, and they ring in my ears today.

Both China and America now face enormous challenges in economic recovery and sustainable development.  Yet, from these daunting challenges spring a multitude of market opportunities for innovators and investors.

In America, “green tech,” education services and health care are providing entrepreneurs and investors with many ways to innovate and grow new markets, while in China, high speed rail, “3-screen convergence” (mobile phones, televisions and computers) and consumer markets are leading the way.

The market opportunities are everywhere in the heartlands of both countries; at universities and research institutes, on factory floors and construction sites, in music studios and movie soundstages.

The key to success is understanding the challenges and assembling the human and physical resources to address them in a financially justifiable and meaningful way.

Beyond that, nothing but the limits of our imaginations and willingness to work hard stands in the way between where we are today and where we want to be.

Welcome to the Economic Powerhouses of the Future: The Heartlands of China and America

November 25th, 2009

As we enter the second decade of the 21st Century, it is evident that the heartlands of China and America are inextricably connected by their economic futures.  The people in both heartlands also share a ‘hard work ethic’ and a ‘can-do’ spirit that bode well for joint venture collaborations and free enterprise across rapidly diminishing political and cultural boundaries. Read the rest of this entry »

Eva Lerner-Lam

Eva Lerner-Lam

President and CEO

Palisades Consulting Group, Inc.
Palisades China Group, LLC
Palisades China Group Press, LLC

General Partner

Palisades China Fund, LP

Phone

China: +86-136-7109-8750
America: +1-201-906-0129

Fax

China: +86-10-6518-3876
America: +1-201-586-0307

Email

elernerlam@palisadeschinagroup.com

Websites

palisadesgroup.com
palisadeschinagroup.com
pcgpress.com