Ruchir Sharma: “China is now a middle-income country, a stage when many economies naturally start to slow given the higher base. Its per capita income is currently $12,500, one-fifth that of the US. There are 38 advanced economies today, and all of them grew past the $12,500 income level in the decades after the second world war — most quite gradually. Only 19 grew at 2.5 per cent or faster for the next 10 years, and did so with a boost from more workers; on average the working age population grew at 1.2 per cent a year. Only two (Lithuania and Latvia) had a shrinking workforce. China is an outlier. It would be the first large middle-income country to sustain 2.5 per cent gross domestic product growth despite working-age population decline, which began in 2015. And in China this decline is precipitous, on track to contract at an annual rate of nearly 0.5 per cent in the coming decades. Then there’s the debt. In the 19 countries that sustained 2.5 per cent growth after reaching China’s current income level, debt (including government, households and businesses) averaged 170 per cent of GDP. None had debts nearly as high as China’s…China at 2.5 per cent growth has major implications for its ambitions as an economic, diplomatic and military superpower. A lesser China is more likely than the world yet realises.”
Joerg Wuttke: “Xi always says what he thinks. He has always done that, but for a long time it was not noticed in the Western world. The collapse of the Soviet Union had a fundamental impact on him, and he described the three Russian traumas early in his term in office: First, Khrushchev’s criticism of Stalin was the original sin for him. Xi would never do such a thing with Mao, and he did so consistently. The old formula of «70% good, 30% bad» set up by Deng with regard to Mao was never heard of again under Xi. Secondly, Perestroika and Glasnost were, in Xi’s view, the catastrophe that led to the failure of the Communist Party of the Soviet Union. The third Russian trauma for Xi were the oligarchs who became filthy rich under Boris Yeltsin and became a countervailing power to the state. That scenario was out of the question for Xi, which he consistently demonstrated, especially with Jack Ma, the founder of Alibaba. Xi is extremely consistent, you have to admire that, and at the same time he is also driven by history. He has studied the fall of the Soviet Union, and he has drawn the conclusion that this will not happen under his rule in China. On the contrary, he wants to show that communism will become a counter-model to capitalism.”
Mint: “McKinsey’s research across more than 1,000 companies identified four key reasons why culture matters to companies. One, culture correlates with performance. Those with top quartile cultures (as measured by McKinsey’s Organizational Health Index) posted a return to shareholders 60 percent higher than median companies and 200 percent higher than those in the bottom quartile. Two, culture is inherently difficult to copy. The ultimate competitive advantage, they found, is a healthy culture that adapts automatically to changing conditions to find new ways to succeed. Three, conversely, unhealthy cultures do not respond well to change. And last but not least, they found that over time, unhealthy cultures lead to underperformance, or worse, failure. These are the crucial old-economy lessons that start-up CEOs need to internalise.”
Ryan Holiday: “One of the interesting lines in Meditations, Marcus Aurelius talks about using the reins of his horse with his non-dominant hand. He says, ‘You get better from the practice of doing it differently.’ And so, I would argue that part of the reason that book one through book five, there is an evolution there, it’s not just that I did that same thing five times, but I also was working on extracurricular activities that made me a better writer.”
