Tuesday, September 22, 2009

Sino-Japanese War - Paine

The Sino-Japanese War of 1894-1895: Perceptions, Power, and Primacy by S.C.M. Paine - 5/5

Paine's history of the Sino-Japanese war is a well argued, clearly written account of what she terms "a seminal event in world history." Paine is able to put this event into the context of its time and shows the clear impact this conflict had on subsequent events and perceptions in the world. Her detailed descriptions of the events are largely derived from daily newspapers that were reporting on events as they unfolded. The book is heavily footnoted showing Paine's commendable effort in developing an objective and accurate narrative.

The book is separated into three clear sections. The first section covers the pre-war period and looks at events China, Korea, Japan and Russia that led to the conflict. Paine draws a distinction between the former two and the latter two arguing that while Japan and Russia were modernizers, China and Korea were corrupt, ineffectively run states that were generally antagonistic towards foreign influence and modernization in general. Paine shows clearly that Manchu's at the time feared the rise in strength of any Han dominated military force as they feared the Han Chinese would want to overthrow them and therefore never developed a strong national defensive structure. This, along with the general level of corruption and disorganization contributed to Chinese weakness in the face of a modern Japanese military. Paine also spends time describing the politics and the intrigues of in Korea and the difficulties the Japanese had in encouraging Korea to modernize against the wishes of China, their "protector".

Paine also explores the modernization in Japan (Meiji Restoration) at the time and also looks at Russia and the collective expansionist goals both countries had. Paine argues that the Sino-Japanese war was instigated by the Japanese to prevent growing Russian influence in East Asia. The announcement of the development of the trans-Siberian railway line was in fact the catalyst for the war. Paine shows without doubt the Japanese were the aggressors and argues successfully that they were increasingly interested in empire building too.

The second section goes into some detail on the four major battles (and some minor ones) of the Sino-Japanese war: The Battle for Pyonyang, the Battle of Yalu River, the Battle of Port Arthur and the Battle of Weihaiwei. Paine looks at the reasons for the rapid Japanese success and argues the best strategy for the Chinese to have employed was to attack the Japanese troop carriers at seas. Manchu military orders also prevented the Chinese from destroying military supplies and thereby, when they retreated, left supplies for the Japanese to consume. Paine argues the Japanese logistic lines were severely stretched and if the Chinese had not been so generous the Japanese would have had more difficulties in resupplying their front line forces. Throughout the progress of the battles Paine is careful to follow the diplomatic discourse in each country and also notes the rising strength of the Japanese military over their diplomatic corp. Paine is also quick to show how Japan wanted to show their best to the foreign powers and were quick to assimilate criticisms of their behavior.

The final section focuses on the consequences of the war (both long term and short term). Of course the Treaty of Shimoneski and the triple intervention by France, Russia and Germany gets significant coverage, but Paine also makes a concerted effort to show the effect the war had on events in the 20th century. Paine's main contention is that the war altered the balance of power in the east and the perception of both foreigners, China and Japan. For example Paine argues that Japan did not win her wars against Japan and Russia, rather, Paine argues, Japan and Russia lost their respective wars. Paine argues this created the wrong perceptions in Japan and gave them self-belief to attack America in 1941. Paine also notes that this war was the beginning of Korea's "20th century nightmare" and marks the rise of Japan as the first successful developing nation.

Paine makes a concerted (and much appreciated) effort to understanding the cultural underpinnings of the main protagonists. She dedicates a whole chapter at the end to the underlying culture of both the Chinese and the Japanese and contrasts this with Western culture to try to help readers understand why foreigners at the time simply did not grasp the cultural undercurrents that were being played out. Not only that, she explores the distinctions between Japanese and Chinese culture, which although have some similarities, are worlds apart in other ways. Throughout the book Paine constantly refers to the shadow games of keeping and losing "face" and takes the time to explain why the foreigners did not fully perceive what was going on.

There is much too commend this book. The detail and depth of Paine's understanding is commendable as is her compassion for some of the main protagonists such as China's military leader in the war Li Hong Zhang (who is heavily criticized despite being the only one in China to understand the need of the Chinese to modernize). Paine's book is a good starting point for any study of 20th century East Asian history. The Sino-Japanese war led to the rise of Japan, the fall of Manchu dynasty, conflict between Russia and Japan, the eventual second Sino-Japanese war and the split of Korea and the Taiwan question. The massacre of Port Arthur was also a tragic harbinger of what was to come four decades later in Nanking. As someone who has lived in Taiwan and East Asia for more than a decade, I really enjoyed and appreciated this book as it sheds light on many of today's pressing questions.

Friday, September 18, 2009

Innovator's Dilemma - Christiansen


The Innovator's Dilemma: The Revolutionary Book that Will Change the Way You Do Business by Clayton M. Christensen - 4/5

The Innovator's Dilemma is a unique approach to understanding corporate failure. Christiansen's thesis is that well managed companies with all the best processes in place do fail. The failure is not due to inefficiency, bad management or bad processes but due to companies being responsible in terms of listening to their customers, investing in technologies that their customers' demand and rationally allocating resources to high-margin products. Christiansen argues that these investments are made on sustaining technologies as opposed to disruptive technologies. He reason's established sector leaders do this because the initial market for disruptive technologies is too small to justify the investment and sustain corporate growth. This provides new entrants with time and space to establish themselves in the emerging market and that when the performance of the disruptive technology intersects the needs placed on the traditional technologies in an industry, these disruptive technologies will start to take over from the traditional sector leaders.

Christiansen's thesis is that disruptive technologies exist in value networks with lower cost structures and lower margins than the value networks occupied by market leaders that focus on sustaining technologies and incremental technological developments. Christiansen argues that there are obviously more tangible benefits for competitors in value networks with lower costs structures (and margins) to attack value networks with higher margins. On the contrary, there is very little incentive for companies embedded in high-margin value networks to target sectors in the parallel network. And this then is the dilemma: how do current market leaders grow and develop substitute products that will make their current catalog redundant when the substitutes offer very little margin and won't contribute to the overall growth of the company.

Christiansen does suggest a few ways in which managers can facilitate the development of disruptive technologies. He first says managers should not grow disruptive technologies in established companies. Rather he argues they should create separate business units or companies with organizational sizes that match the market size. He also suggests that no one can really forecast the potential of market for disruptive technologies since the market doesn't exist. He suggests that instead of acting that forecasts are accurate, companies should learn and grow together about needed features and applications for their new products.

Even though the book was first published in 1997 the ideas are still valid. We have recently seen the rise of netbook computers and while Taiwanese companies are leading the way in the development and innovation of these products, traditional notebook and PC heavyweights like Dell are arguing against entering this market. Responding to Acer's recent rise to the second largest PC company by volume (Q3 09) in the world, Dell suggested they are more concerned with revenue and margin as opposed to volume. Another example closely aligned to the rise of netbooks are ARM processors. ARM processors are low cost processors licensed by a UK company. While they do not have the performance parameters of any of Intel's PC processors and chipsets, ARM processors (low performance, cost, power etc.) have been growing in the mobile phone space and are now entering the computer space through netbook computers on a different business model to Intel's or AMD. Of course Intel crushed AMD through a brutal price war since they both had similar business models. Even though I won't bet against Intel, it will be harder for them to disrupt ARMs growth.

Christiansen's book is well argued, clear and concise. His extensive use of case studies from a variety of industries including the hard disk sector, steel mills, discount retailing, and the excavator industries are enlightening and educational. He does reemphasize his points time and time again using different examples but he is merely honing in on his ideas and supporting them from a wide array of industries. It's a good read and essential for managers and executives who have the power to influence investment strategies for firms and resource allocation. However, for most of us who work in the trenches it is interesting and educational and I do recommend it to managers and other's that hope to develop new technologies and applications.

Tuesday, September 15, 2009

On a Chinese Screen - Maugham

On a Chinese Screen by Somerset Maugham - 5/5

In "On a Chinese Screen" Maugham has written 58 beautiful yet astute caricatures of people he met and places he visited during his journey up the Yangtze River in 1919/20. Each small tale is a perceptive observation about a time of day, a person's character, a place or an event. Maugham's writing is eloquent and beautiful. He doesn't waste words. "For", according to Maugham, "in writing the important thing is less richness of material than richness of personality." The richness and perceptiveness of Maugham shines in each story. Each sketch holds you to the end.

Maugham's most astute observations in "On a Chinese Screen" are reserved for the people he meets. For example, when talking about consular employees and their indifference to their surroundings he observes "it made little difference to them in what capital they found themselves, for they did precisely the same thing in Constantinople, Berne, Stockholm, and Peking." And after speaking to a Chinese official who was lamenting the loss of China and traditional values in the youth, and the disrepair of the temples, Maugham notes that he (Maugham) "knew all the time that he [the official] was a rascal." And of an Italian missionary who had been in China for 50 years he writes "the passion of his eyes bespoke the battles long fought out in the uttermost depths of his heart, and his soul cried out in them, vanquished and bleeding, yet triumphant, and he exulted in the unclosed wound which he offered in willing sacrifice to Almighty God." Brilliant!

Maugham writes compassionately about the plight of the locals. He describes the bearers' burdens and notes that admiration for their strength and perseverance is not allowed. He writes compassionately about the foreigners who find themselves out of place and struggling to adapt. He writes with tragic sadness about the tower from which mothers throw their unwanted babies. Yes, with sadness, deep sadness. Without doubt Maugham is an astute observer of the world, of the people around him, of circumstance, of his time.

I am glad this book is available again. I first saw it in a bookstore in Taipei in 1999. At that time I didn't have money on me to buy and thought I could buy it the next day. Alas when I went back it had already been sold. I looked for it on Amazon but no copies were available and from that day forward, every time I went into a bookstore I asked them if they had a copy. In 2002 I remember asking a store in Hong Kong if they had it in stock. The assistant laughed at me saying they last had it in stock more than five years ago. I eventually found it at another store in 2004 on a brief visit to Hong Kong. It was worth the wait and I have not been disappointed. Needless to say, it never gets lent out.

If you are a lover of literature and a lover of travel then this is a must read. Very seldom are such deep perceptions captured by travel writers and very seldom do travel writers write with such depth, clarity and beauty. It's a small book, can be read in a day and can be re-read countless times. One never gets bored of the prose, of the ideas, of the thoughts, of the descriptions. One of the stories, "The Old Timer," describes the colorful life and travails of a 76 year old English Captain who had been in China for most of his life. At the end of the story Maugham writes: "The dying of the day made him think, he (the Captain) knew not why, of his long past and of his great age. He regretted nothing. `By George,' he muttered, `I've had a fine life.'" I'm sure Maugham could have said the same.

Monday, September 14, 2009

Why Globalization Works - Wolf

Why Globalization Works by Martin Wolf - 4/5

Why Globalization Works (WGW) presents clear and concise arguments as to the benefits of globalization and the need for a more integrated global economy. "Globalization," says Wolf "is no fanatical ideology, but a name for the process of integration, across frontiers, of liberalizing market economies at a time of rapidly falling costs of transport and communication." Wolf is clearly aware of the pros and cons of both sides of the argument and while he is not shy to agree with criticism of current globalization methodologies, he is also not afraid to reject anti-globalization claims on the negative impact of economic integration.

Wolf's main thesis is that liberalization of the global economy has lifted more people out of poverty in the past few decades than ever before in history. To support these views Wolf relies strongly on evidence from South and East Asia (China and India) to support his claims that globalization works. He also draws a lot on South American economies when explaining failures in different economies. It would have been interesting to see some deeper analysis of economies in Eastern Europe and specifically Russia that, layman such as myself, understand to have purportedly had a market economy for nearly two decades now.

The most powerful chapters in WGW are those where Wolf defends globalization against the criticism of the myriad of interest groups that are opposed to an integrated economy. Some of these criticisms include claims that globalization has a negative impact on the environment (at the local level he shows it actually improves the environment) and that localization is better (which Wolf argues is actually more dangerous than globalization since being able to purchase food anywhere in the world provides states with more security than if they were relying their own crops at home).

For me his most eye opening defense was against critics of child labor and the so called sweatshops that transnational companies use in the developing world. Wolf argues that to prevent child labour in these countries would border on the criminal and suggests critics in rich countries compare the plight of the poor to the alternatives they have in their own countries rather than the alternatives in the countries where victims suffer extreme poverty. Wolf suggests that child labour in multi-national companies enhances the livelihoods of these countries and suggests that if they were not employed in these companies with comparatively high working standards (when compared to local companies) these children would work find work in more dangerous, local factories, starve or become child prostitutes.

The same is said of the working conditions in labor intensive industries where companies have been accused of employing people in sweatshops. Wolf argues that many of those employed are women and this provides them with status and independence in patriarchal societies and provides them with freedoms they never previously had. He also argues these types of practices are pulling these people out of the grip of extreme poverty.

Although Wolf clearly advocates globalization, he is not averse to challenging some of the assumptions, pitfalls and difficulties in the way globalization has been implemented. For example, even though he argues that liberalization of capital accounts is probably a good thing, he acknowledges that done incorrectly and without proper consideration, the system can tank and lead to both economic and fiscal crisis. Wolf also finds it disgraceful that rich countries levy disproportionate costs on poor countries who wish to export goods and services into developed markets. He argues that rich countries do not impose such high costs on each other and argues these actions inhibit economic growth in the poorest nations on earth.

Why Globalization Works is a great introductory book on the topic. It is well structured, well argued, covers all the bases and answers many of the critics' questions. Wolf has compiled an impressive array of data to support his views and the critics would need to counter with equally compelling evidence. Added to this the book is well written and fairly accessible. WGW just may be, to quote the Economist, "the definitive treatment of the subject."

Buy from Amazon @ Why Globalization Works (Yale Nota Bene)