Why China may come roaring back

James Fallows, as usual, offers a clear and compelling description of what's going on in China:

The small-business culture of China is one of the few parts of the world where Americans are considered sluggish and hyper-deliberative. As small companies scramble against each other to cut pennies from costs and minutes from schedules, they have become more nimble as subcontractors. But they still don’t keep much of the final rewards for themselves. Thus today’s shock is more than such companies can offset just by cutting costs.


In Beijing, in Shanghai, in Shenzhen, and elsewhere, I’ve recently visited companies that are trying to use the disruption of this moment to enter wholly new markets and do what so few Chinese firms have yet done: make high-tech, high-value products that bring high rewards.

The rest of this excellent article from this month's Atlantic is well-worth a careful read.

Our experience confirms Fallows' description. We are seeing keen interest from Chinese professional service companies as well as product manufacturers looking to ramp up their U.S. presence. In fact, I'll be in Shanghai and Hangzhou for a good two weeks meeting with some of these companies.