of the exhibit. the library of congress is at first and independence avenues in washington, dc. right from across from the nation's capitol. >> now you've seep the exhibit. if you would like to join a chatroom and talk with roberta sheafer about these backs and give your input on what books you think should be included, e-mail us at book of.org. [applause] thank you very much, dan, for your gracious introduction, thanks to the commonwealth club this the idea venue in california. thanks to my friends and family members members and other members of the

community who have come here. it's a delight to be back in my original home state of california. i'm from the southern part, which i know has cultural differences with the north, but still i feel as if i'm back home. let me -- i'm also delighted to have the opportunity to explain what i was trying to do in this book, china airborne. why it was an exciting enterprise for know undertake and what i was trying to explain about the ways to think about china itself, about american relationships with china, and other things that i over the last six years, while my wife was here and i have been mainly living in china, have learned about this fast-growing part of the world. the plan for the next 28 minutes or so which i'm going to be talking before our questions and conversation -- i have three main things i'm going to do. first i'm going to describe why i thought the most effective way to tell the stories about china i think are interesting was through this medium of looking at one aspect of its high-tech

amibitions. i found myself unexpectedly getting into world i hadn't been looking for when we got there, and i thought this was a way that it had surprising benefits in explaining what china ising too. there is a fact about writing books. how many people here by chance have written books? how many intend to? a larger number. there is one -- the main bit of advice about writing books, you should only do a certain book if you feel you simply have to do it. because otherwise, the process is so discouraging so soul eroding, so corrosive of all of the good things of life you will find other things to do your thinking why am i spending eight hours a day or more sitting in what my friends call the lonely agony of the writer's den cranking these things out. the answer to the question is not simply because you feel better having done it, and you

felt bad while doing it, but more that there is something where you feel if you can explain things to a readership to yourself, you'll feel satisfied. so i felt as if there was part of reality that nobody else had captured and i had chance to chronicle. so part one is the approach that led to this book with, as you'll see, the delightful propaganda poster cover, having these cultural revolution ear remark people looking ideaisticly at the sky. a very, very different china now from the time of the poster but something about the image i was trying to portray. the second thing i'm going to do is talk about some of the larger currents underway in china affecting its development, affecting the rest of us, that come together in this chronicle i'm telling in the book, and ones which are positive, some mixed and some bad. but why various suspected of

champion's high-tech amibitions are significant for the larger themes running through modern china. then, finally i'm going to talk about the big contemporary questions for china. recent items in the the news. the trend of u.s.-chinese religiouses relations and what we can expect after the presidential election and the change of power in china. so that's the man. first about the background of the book. second about the themes of china that i found myself self-discovering over the last six years, and then third, about china in the larger sense. how we should think about what is changing. what we know and don't know, the don't know being an part to make room for. that's the agenda. the reason i ended up writing this book is that when my wife and i first arrived in shanghai, just about six years ago, beginning what was three-plus year stint at that time and several return visits

and we're going back again in ten days -- is i want -- i found myself looking through magazine articles and other sorts of reports, on radio and other ways, trying to convey some of the things which were most different about being there on scene. compared with what i had read about china over the years. the main advantage, the main philosophy of a magazine like the atlantic, is to have our reporters go around the world and tell you things you're different if you're there from what you think just reading about it at a distance. i recognize there is a closed loop paradox to this because we also are writing things for people to read at a distance, but that's the -- what do you realize by being there, and some of the features i wanted to convey about china's scale and diversity, one was simply the energy of things. that every day you go in a car ride, you ride a bike, bus ride,

airplane, and you see something you simply hadn't managed the morning before. almost every evening around the dinner table in our apartments, my wife and i would say, you won't believe x that i saw today. and you won't believe part was constant each day. the x at a different value each day, too. but that was a kind of excitement i wanted to convey. i wanted to convey more generally a sense of two paradoxes about china for american readers in particular, which was how they could feel responsible for taking china seriously, and paying attention to what is going on there for good and bad, without being afraid of it. without thinking it was necessarily world-mastering and all conquering, it's truly absorbing and worth paying attention to even if you don't think it's the master of america or imposing its order on the

world. i also wanted to convey to american readers that the fact that contradictory things of every sort are true simultaneously in some part of china. the way in which somebody asks you, is it controlled? you say yes, is it up controlled? yes, is it good? yes, is it bad? yes, and finding ways to allow mental room for in of the range that is such a vivid factor of modern china. it was also one of my amibitions. i'll give you one little an next dote about -- anecdote. we were there before the olympics and we saw the way the country was fearful about showing itself off in the two belongs the games the foreign

ministry authorized a series of protest zones around beijing where these would be authorized and people could come and air their grievances and the world's press would see, oh, yes, china is becoming tolerant in this way so the foreign ministry is doing this. multily the chinese security authorities are denying all requests for authorized protests and arresting most of the people who apply. so both those things are true. people trying to open up, trying to close down, and to the challenges, how to capture that. i ended up thinking that for people in the communications business it was important to have a simultaneously multitrack policy on trying to convey this reality. one track is the view from above, the macro big picture, where you say, here's an article 0 or a book of tv series about pollution in china or china's financial might or the future of chinese industry or women in china or whatever.

that's important. i've done some of those. you've all read those. the other thing which is valuable in my experience, is the microview, because there are so many particular stories, people, provinces, successes, failures in china, that tell the world about what is going on there. and they also can be very valuable. for example, a family plug here. my wife, who is a linguistics person did a wonderful book last year called "dreamingdreaming in chinese" and it was to say if you immerse yourself in the chinese language you learn about chine more generally by the things that are sim splash different from other languages. there's a book i love called "foreign babes in beijing "by a young american who became a famous soap opera veil lap on a very popular chinese tv drama and what she learned about becoming a pop star in beijing, and our library is partly big picture, partly precise picture.

i thought, as the months went by, that i had a very vivid microcosm tale to relate because these are people who nobody else in the outside -- in the western press had ever met or written about, and cumulatively their stories did tell you something about where their entire country was going. i'll give you a couple of illustrations of the characters i met month after month after month that pop late this book and the landscape they seem to -- they inhabit of what is going on in the country. for example, one of the characters earlier in my book is a man whose family name is xu. he grew up in shanghai. he left china not exactly as a political emigree but something looking for opportunities after the tianimen upheaval.

he got to new york. had a student role there he was appalled on landing at kennedy airport in new york, not for reasons you would normally be appalled there but for recognizing the taxi fare to his dormitory exhausted almost all the cash he had, his entire assets. so he got a job that night. got another job the next morning. he continued studies over 20 years and became very rich and decided after a while, about five years ago, to return to china, where he now in addition to being a coal baron, run something called the western return to scholars association. i'm going to see him again next week. the rope i introduce him is a vivid, vivid memory for him of his time in america when he was on his fishing trip, commercial day fishing boat in long island sound, and the people all around him were casting lines into the water, and on a back cast somebody leaned back and a giant three pronged hook got into somebody else's eye.

on the boat. and this was panic, and despair and moening moaning and everythe but mr. xu noticed the captain said, do not panic. do not be afraid. in less than eight minutes the coast guard helicopter will be here so mr. xu watched his time meeseses and 7:45 the helicopter arrives. they lift the man out and learn later not only has his eye been saved but he is in entirely good health. mr. xu thought to himself in my country this man would die. and so as he amassed his fortunate and prepared to go back to china, his dream was some day i will bring to my country rescue helicopters. if people are injured the traffic crashes or have their highs gouge bid fishing hooks they can be saved and you find across the territory of china, people with this half lunatic but half ambitious and serious dreams they are applying in arenas beyond aero space and

aviation but in this one, too. so mr. xu, in addition being ahead of the world return scholars association, he has a big helicopter company and trying to get helicopters -- selling them to police and businessmen. i met a man in a city that we all know for theater cota warriors and it's also the sight of the arrow space industry. the thrown are quarter million aow space workers in this city, chairman mao but the aero space industry there because in the 19 50e's dedecideed this this point farthest from the closest foreign border and therefore hardest to bomb by the russians and americans or japanese or anything else. so in the middle country you have this quarter million person encampment of aerospace technology, make parts or boeing

and airbus. but the man in charge of this took me into this office and showed me these two statues that are by his desk that he draws inspiration one. one is dong xiaoping. he said if it were about to for him i would be in a rice paddy today. the other one was of george washington. and he said, well, george washington could have been king and decided not to, and this is an example of china and more people should take this seriously. i met a man who grew up in rural -- in the midwest of the united states and worked for boeing as a safety inspector around the world. a european specialist. and he was on some assignment in europe about 25 years ago when they said, how you like to go to china? the said, not very much. he didn't speak chinese and was middle ached. they said if you want to be protected against layoffs the

part of the world where the work flow is likely to be strongest is in china. so he decided to go to china. he became first a boeing representative, then an faa representative in china. now he spends most of his time in a chinese office building, speaking in chinese, with people he is trying to train to have air traffic systems that are safer than the ones in the past in china. that bring -- he has been part of the movement that's been entirely unpublicized of mainly american and also international figures who have imbedded themselves in the fabric of china's transportation infrastructure saying if you want to bring this to international standards here's the way to do it. a whole list of other people. i'll just give you two other brief mentions of the, whichs that i was describing. one was a very seedy seeming salesman of business jets.

maybe business jet salemen or of this category but he seemed like sidney greenstreet would have played him and this is he hong kong air shore a year and a half ago he was selling business jets to ambitious chinese millionaires, mainly from southern china. at the time there was no place they could fly them because the air space in china was still very tightly controlled. at the time they didn't really know what they were going to do with them but it was baseline of their magnificence and i saw one transaction conducted in cash, with a lock areful of money. there are parts of the world where a lockerful of money would suggest trafficking. we know there are corrupt aspects to the chinese business boom but the sign of the scale and excitement and all the rest, i have -- i open the book with a description of one other person who decided from -- as an outer

to make his way into the wild west frontier, a linguistic wiz, and his role was to sell a kind of airplane called sirus. it's now the most popular small airplane in the world, the kind back in 2000 i bought one of them myself, a little plane with four seats, single engine and a pair -- parachute for the entire plane. if things go wrong, you pull it out and many people have been saved so peter was selling these to people in china who couldn't use them, and one man who wanted to park it in the lobby of his business so people could sit in and it be impressed and i took a flight with peter and it was a

sign of both the ambitious of things happening in china and the limitations of what they -- the level they are now at. my point just to bring this first part to a close, is that in our lives of traveling around china, my wife and i had quite a different impression from where we were living in japan in the 1980s in japan you marveled at the system, the organization of the corporations and the schools and the training and the way individuals were part of a larger system. in china, from my perspective your mainly marvel at the individuals and the sort of centrifugal forces and people trying to create aero-topias in the middle of nowhere. now let me go to the second par of what i'm going to discussion,

which is some of the larger tensions and developments within champion you see in the microcosm in this aspect of their high-tech amibition, and the plotlines you can see in almost any other part of what it ambitious and what is frustrated and what is promising and not is not developing in china. one of them, of course, is the nature of the all-out push for modernization in china. people often say, how can the chinese public put up with some of the cop straints and limitations and -- constraintses and limitations and oppressive life in china, and the main answer is over the past 30 years, as people look back, five years in the past, ten years, they recognize that their life is much better. their family's life, better than before, and this is thanks to this all-out push the government has been directing and its individual entrepreneurs have been the main engine for.

the part of the push underway is the famous 12th five year plan. how many if you have stuffed yesterday that? in the united states, the entire idea of five-year plan sounds preposterous. they're taken serious any china and this one in particular because of the change in the curve is it proposing for the chinese economy. it says basically, looking backwards, china's successes have almost all been in low-tech, low-wage factories, building roads and railroads and all the rest inch the future, under this plan, they want to have more high-tech. they want info tech industry, biotech industry, a clean tech energy and they want an aerospace industry. so the idea the country can move from its current level of technology to the next is being played out in this industry and a lot of others. another major theme that you see about china in this field and

others, is the style of what i think of as the real estate centric theory of modernization. if you look for an explanation of almost anything happening in china now and sigh why is this sea port going there or this ancient building be removed, why is x, y, or z happening. real estate deal maize not be the only answer but they're usually the first answer and it's the case in the huge boom in aerospace construction underway in china. i don't know if anyone here knows the actual up in of airports being built in the united states now. i've heard two. i heard one. i've heard zero. i've heard four. but it's a small number in china there are 100 airports under construction. which is from a low base they had many fewer than thetas begin with, but this is a sign both of the idea of building up the infrastructure with the idea that things will follow, and also all the intermediate people who are making money if this goes on. land for the airport.

tractors, navigation equipment. chinese people and foreigners are making this. so, this is -- you see in this field, anything you have read about ghost cities in china or the land boom, the land bubble. that same plot and that same pressure is underway in their aeropace amibitions. you see in this field once something came to view as very important to making sense of china, which is the way that everything is multily true. i mentioned before the way the contradictions exist but when you think of economic elm this, people ask in the maine about the balance between high-speed rail and aviation, the balance between more water track and more land-born traffic. the-and-more of all of them there just is this pressure, that china is build mortgage high-speed rails, railroad and airports. there's something i'll just allude to as a major point.

it's a large theme in my book. the existence of a semi sovereign power in u.s.-china relations that is hardly ever discusses and that's not the sovereign nation of the united states or the sovereign nation of the peoples republican of china but, rather, the unacknowledged sovereign of the boeing corporation, that many of the crucial turning points in china's decisions about what to do, have been enter mediated usually in a beneficial way by boeing. here's one illustration. about 15 years ago -- i described this a major chinese airline got its first contract to have regular flights to california. they were very excited about this. a huge opening and also a great mark of supremes. when the first plain landed at laxity was surrounded be safety inspectors from the faa who impounded it and said, no, you're not going to land here with this kind of maintenance record anymore. the airline was aghast and shocked. they lost face. they got in touch with boeing and said, how can we keep buying

your fine products if we can't fly them in the united states? boeing then very subtly and very effectively mid-wifed an arrangement between the u.s. faa, between flight school thursday the united states, people who would do training and their chinese counterparts and says here is the way you run safety systems you. don't have check pilots doing inspections for their brother-in-law or next door neighbor. so, even today, many things that matter in chinese aviation are being sort sofa tri-par tied negotiation of chinese, united states, and boeing are working these things out. one other -- just mention one of two other points that come together in this narrative. you all -- one of the environment -- any of you who have been in china know first hand what the rest of you know theoretically, that environmental challenges are in my mind, the worst problem for china, and the worst challenge a nation faces in its drive to

modernize. this of course affects aviation because while flights are in some ways resource savings, it's more efficient to have flights to remote western china than to build railroads there. of course, emissions from aviation are an important climate issue because they come out at such high altitude. so therefore, mass other environmental areas, there's a balance in china between how terrible things are and how part government and private industries are trying to improve them in aviation this shows up in good ways. a huge research project run by boeing and the provincial university on fuel and also in a very unexpected way where one of the most important environmental barriers to better environmental management in china, turns out to be the chinese military. almost all of the air space in china is controlled by the military, and airlines have to take very indirect contorted and

inefficient routes through this. many of you know that airlines in the u.s., if you listen to the pilot their flying at 35,000 feet. often in parts of the chinese flight they're flying at 10,000 feet, which is much, much less efficient way for airlines to operate because of military regulations and many people alleged to me that chinese airlines could double their traffic with no increase in emissions if simply that get to rid of the military control of the air space, allow them to fly efficient routing. so there's the environmental issue. the military issue, and there's one of ooh point i'll mention here which is the surprising parallel between the openness and the closedness of chinese life to outsiders. something i liked very much about living in china is the way it permeable and accessible if if you had a friend or new friend, you could find ways to

do most things even as authorized protest zones were in fact leading to people being arrested and all the other problems we know about the closedness of chinese life that happens in this aeropace world where are you find some ways the foreign presence is very, very tightly integrated in chinese life and others it's on its own. so just to bring the second part to an end before a very brief third. almost all the dramas underway now in china, about whether it can modernize, save the economy, the balance between central direction and local boosterism, which is so powerful in this field as and as in others, the ways in which it's connected to outside standards and not. these tensions are also being reflected in the aeropace world. let me move to talking about china itself. and i'll confine myself to a

point about china. a question about champion. and pint about china and the united states. i think a fascinating question, a crucial question for china, one that really is the one that lies behind this book but even beyond the importance of this book, it's important for china, too, which is whether china is ever going to be something different from what it is. here's what mean. if you look back over 30 years in china, you see a place that is unrecognize blue different in countless ways. i was first there the mid-1980s in circumstances i'll tell you about if you ask. it was very different. we were followed. our room were surveilled. you get contrived visas to get in there very five lights at night. now it's different but different in way that some chinese and foreign people think is reaching a limit. that a development model based

on these low-wage factories where they make the ipad i hold in my hand, if this cost $500, only $50 stays in china. is that a formula for them to get rich? it's one thing to assemble products for apple, a different thing to have your own apple you're developing. so, it's on low-wage manufacturing, it's on this infrastructure investment, it's on construction of new cities and things all around the world, and that may be nearing its limit. even in china there's only so many airports you can build, only so many 10 million person cities to build. only so many new seaports and there's a fear of china entering what's called the lower income trap. becoming a bigger and more intense version of itself but never really becoming rich. and that under active debate by everyone in the chinese leadership saying, if we look ahead 30 years, do we imagine ourselves more like germany,

japan, the united states or imagine ourselves more like mexico, or another middle power that developed in certain ways but hasn't become rich thoroughly. and that is one huge question that runs through it, economic tensions and the political problems. see in --...

>> the question about the united states involves how we use the chinese example. something that i believe very strongly is that the things that are right about america and wrong about america have almost nothing to do with china. the main connection, in my view, is what is most right about america is its ability to attract and exploit an outside share of talent from around the world. many of these people are chinese. i am glad to have them here and even trained here, because that has long-term beneficial influence. what is good about america is not directly related to china. what is bad about america is not, in my view, china's fault at all.

it is our own responsibility with our income is distributed, political system works, and the rest. but the challenge for us with china is to see for another 20 or 30 years, but we can manage. we must welcome support and have tolerance for this country as they move up in diplomatic influence around the world. without feeling threatened about that, we disagree on strategic issues and political value issues and all the rest. there has been significant success, managing this relationship so that it has not blown up. so that this huge shift in world power has not caused a lot of conflict. the challenge is possible for the next 30 years or further on. there is more i can say on these

points, but for now but i will say that that is my opening pitch. i wrote this book finally, there are intentions between us and china. i hope that this sheds some light on it. thank you for listening to my presentation. i'm happy to listen to her former boss, onathan, where are you? my editor of industry standard come he is going to join the appear. thank you for listening, i look forward to your questions.

[applause] [applause] >> thank you, jim. and thank you for presenting this forum. it was a great privilege to have jim work of worked in the industry standard. what i appreciated was that when i managed to convince them to come on board with microsoft, one of my hopes was that he would be a bit of able model for the very young staff that we have there. i have always been greatly appreciative of that. >> it was a great time. jonathan was a great editor and the magazine went from being the fattest magazine in the history of the world to not being around a cheerleader. [applause] [applause] >> we were not around a year

later, a rapid rise and fall. i thought i would start out by asking what i think is one of the core questions relating to the american relationship to china and especially business relationships to china. certainly, a core part of the book. that has to do with how american companies, and especially high-tech companies can and should relate to their chinese counterparts. you talk a lot about boeing's enormous role and the role of individuals in building up the aerospace industry. very close industry with boeing and other companies to their chinese counterparts. a cynic would say that that is idiotic and they are essentially giving away their competitive edge. fifteen years from now, chinese companies will put them out of business. how do you think about that? >> consistent with my past policies, i think all attitudes are correct. they are correct about this

problem. let me talk bursts in general terms and then in the boeing ge specific situation. the chinese economy over last 30 years, like the japanese economy after world war ii, and like the u.s. economy from about 1840 until about 1890, took significant advantage of other people's developments and piggyback on them. if you read diaries of charles dickens, he was just furious about all these versions of this book. he saw the united states very much like the pirate videos they see in china now. this is an unfortunate but familiar trade up a ketchup economy. the second point as it is a legitimate role of u.s. governmental policy and also something for corporate strategy to put pressure on the chinese to change these practices. for example, two weeks ago, during the big strategic and economic dialogue between the u.s. and china and beijing,

which was over shadow, it had to do with more enforcement, property regime, in regards to the chinese officials, this is where the outside world needs keep pushing. this is a sign of progress or not depending on how you feel. a difference between hong kong and mainland china is, in hong kong, the hawkers have to say, take fake rolex. at least there is transparency and labeling. i think that corporations must be hyper vigilant about this and i will get to an aviation illustration in a second. we must also recognize that china is going to be trapped itself that it cannot solve this

problem for its own corporation. it won't have its own pharmaceutical companies, its own corporations of any sort with an international brand value if they can be protected against their own people. that is why the solution of this issue is so interesting. if china was to solve it with its own business, that will explain a lot of how they do business. that is an important point. the crown jewels are actually the engines. ge and rolls-royce and others are thinking all the time about doing work in china, but also to keep their most important work safe, much as intel has tried to do, but not its very front-line

plants. >> have they been properly vigilant in your view? >> as they say, time will tell, but i think they are certainly hyperaware of this and right at this moment, i think that aerospace analysts think that the chinese aviation industry is extremely weak in engine technology. whether they think that 20 years from now, that's a different matter. but ge, rolex, platinum wedding, if china succeeds in this, it will suggest a lot of other things will have changed. >> on that point about other things -- a lot of good examples and ideas they talked about earlier, in order for china to become a wealthy country, it has to be more western in a way, for lack of a better word. do you think about is, in fact, happening, or do you think it's

true and do you think is happening? >> the way that i put -- the way the version i think of is true, in the west, we are used to thinking of democracy and liberalization is being part of one package. there is a liberal democracy and we think that is how things are. i think china's emergence suggest suggests how they can be analytically and practically separated. china is really the only major country where people have no vote in the national leadership. and it has become much more liberal than it was a generation ago. they can travel more, they can be more things, i think that these liberal values, it is interesting if you look at the countries that are not rich. they differ in lots of ways. but they all have a certain number of social traits and a respective role of free press and independent research and intellectual property protection

and that kind of thing. so that bundle of traits, the cultural basis of capitalism, i think that is something to become rich, china will need to manifest more about and we will see whether that is possible. >> in terms of recent trends over the last couple of years and with the current leadership change and the somewhat bumpy, i guess you could say, leadership change, do you think it is headed in that direction or is there a chance it is essentially going to reverse? >> people talk about a left right split, there being a comeback, is that a possibility? >> well -- >> will we see a tightening of a control as opposed to liberalization. >> yes, i think almost the caucasus of any kind is possible. in my book i wrote about a plea

for why it is so difficult to be sure what is going to happen here. one of the most recent indicators of uncertainty, if you look back over 30 years, you can see that there are variations up and down and all the things you've been talking about. liberties within china, more predictable government, variations up and down. but the trend has been over two or three year. max arbitrary rules. in the last three years or so, i think they have gone in reverse. there has been -- i describe in my book -- the condition of emergency where there is always a special circumstance that requires a cracking down, the arab spring, etc., and what nobody knows is whether this is a three-year blood in the -- i

hope it is not a turn. i think most people hope it's not a term. but it could be a turn. part of attention you see them leadership struggle people with different views about what is most wrong with china. some people say that what is most wrong with china is you have all these millionaires, like a guy that i saw in a golden family in beijing, and he was pulling an ox car with his shoulders. people say there are too many billionaires and people being left behind. other people say what is most wrong with china is the stuff i am talking about. but it still is too arbitrary and not becoming rich and modern in a deep sense. these things come as we speak, are being played out and contended over. >> would be fair to think about that is sort of a left and right split? mean, is that a useful analogy?

>> you could think of it that way. that probably misleads americans more than it correctly leads them. the joke by a lot of my friends in beijing was the only communists in china was the person who wrote the letters, accusing them of revisionism, and how could the lamborghini dealership be involved with the teachings of marx et cetera. when you call it left right, but the kinds of left and right are so at odds with what we have in mind that i have tried to avoid that. we. >> you think americans and america should fear china, and in particular, you know, a wave of fear in japan, and someone else had asked this question,

there was great fear of japan. .turn out to be misplaced. now there is fear of china. how does that compare -- how does that compare now, and secondly, is the fear and worry a good response? >> thing about japan, let me say something about that and i think two of the most interesting countries i have been in a japan and china. there are obviously some similarities in terms of their look and feel and operations. being in japan was like living inside a watch where everything is so tightly machine, you admire the precision. there is not a lot of extra room for you. where is china is living in a giant rugby scrum.

i still think that the japanese were actually more threatening to the united states and china. you have these head-to-head national champions. yet toshiba and toyota and there are no counterparts for those in china. japan is still a rich country. it has had political catastrophes of its own. japan and china, i think there was reason to be more fearful of japan. on the phenomenon of fear itself, i didn't article about two years ago after moving back from china, trying to ask seriously, are we going to hell? is america falling apart. one of the interesting things for me is that america has always craved the specter of imminent collapse as a way of doing business. the first sermon on the climb of

america delivered on u.s. soil was in 1630. in 1620, things were great. but now, kids today have lost their values. [laughter] it is part of how we are. it may mean that we are actually going to decline. it is part of our propulsive nature. if foreign challenges can be made to be used in a constructive way, if the chinese can build this energy plan, why can't we, too, or if it is in a menacing way, that is not useful. china has so many more problems than the usb wouldn't know where to start. i think that for people who have spent a lot of time in the interior of china, the idea that the u.s. should be afraid of a country which has more poor peasants and we have people, which has environmental problems that you can't imagine, and

someone told me something that stayed in my mind. you americans think of everything in china, multiply by 1.3 billion. we think of everything divided by 1.3 billion. i think we should not be afraid of china to take it seriously. >> okay, so the book is honestly about aviation and there is a lot of special characteristics about the aviation industry that are unique. and i wonder if you think of the way in which other industries have evolved in china is comparable or different and if so, different in what way? >> i was using aerospace and aviation as an example of a category i describe as apex industries. i will explain why i call him that and how the difference has

impacted us. lots of investors in china, if you look at japan during its industrialization, it was very hard for outside corporations to invest in if you go to china and all the big factories there, american, german, some are japanese. there has been this externally financed factory boom, and as i said construction boom, which has gotten us to a certain point. the significance of the kind of industries and corporations that china does not have are ones like pharmaceuticals were like world popular -- certain kind of internet applications and aerospace. in order to succeed in those industries, there is a whole substructure of successes that you have to have worked out. certain kinds of research institutions, certain kinds of quality standards, political military relations and all the

rest. aerospace, clean energy, pharmaceuticals, high and dental tech, these are things that they want to develop and have not yet. i think that the reason i was using this industry as a specimen, i think it is a representative specimen for all of this kind of thing, these on trades of the target, the 13th and 14th beyond not having view. >> so when you look at the way, the specifics of how aerospace is developing a new top this, how does that compare with the early development of the aerospace industry in the united states? around, say, los angeles two the origins of aerospace could not be more different. every factor in the u.s., created to this diverse ecology,

where of course, in wichita and new york and also in the dallas, ft. worth area, in the u.s. we had the simultaneous emergence of lots of entrepreneurs in the early 20th century, the wright brothers and everything, those who follow them. we had a multiplicity of funding sources. the army air force was the first big purchase purchaser for the wright brothers, and also the postal service. the airmail prop jet pilots. we had individual barnstormers, we had a very rich, rich structure. in china, this has been military from day one. airspace was controlled and was militarily stupid. it is amazing if you go to big chinese cities. they are noisy, but not noisy from overhead. not helicopters, not airliners,

it is the effort almost like the russian soviet economy of going from a military run the system, trying to wheel it into the civilian world. trying to liberalize something by central government fiat, it's a trick, but something that the chinese government has learned and this is a really interesting test case for them. >> do you think some of the things that have been done, you talked of all these airports. giant airports in the middle of nowhere. do you think that those are going to be real airports, or do you think 20 years from now, they will look like silly white elephants? >> the wycliff in category in china is a very heavily populated one, as you all know. you have seen slideshows of cities that can hold 2 million people, it is worth recognizing that even by their mere existence, they serve an important role for china in that

people have been at work building these things. it is also the case that infrastructure in china has been under build so far, so the overbuilding, they are assuming, will be caught up sooner or later. the united states has about 5000 airports across the way and must to check it out. china is trying to wrap raptors up. a lot of these things look like wacky local booster project. i describe one of them, where people they are going to attract the concurrence of silicon valley, disney world, and universal studios, and seattle boeing factories in one place. they are probably not going to do that.

the idea is there is so much pent-up demand promotion of people, that there will be some take-up of the slack. in the meantime, they are creating jobs. it is some kind of a keynesianism. >> grassroots enthusiasm exists for a lot of this. you talk about the general enthusiasm in china and the joy of the prospects. is that really extends probably and specifically about aviation? so if you talk to a peasant, do they say we are going to have airplanes or do they not really care? >> i describe a man i met in hong kong airshow a year and a half ago. the same place i saw a business but with a suitcase full of cash. this was a guy only in his late 50s, he had suffered during the cultural revolution and said he always dreamed of being a pilot when he was a little boy, but he failed the bar exam. i did not asked him what that

meant. he became a chinese welder in an industry and ended up making up a ton of money selling structural steel for floral exhibitions around china. there are enough of these that he could become very rich. he is now building his own airplanes himself in his machine shop and flying them around northeast china. he was buying his own airplane, which is a couple hundred thousand dollar airplane. and he was saying that his childhood dream has come true. i would say that in a variety of a country of the billion plus people, there is a whole lot of cynicism and jadedness and what the chinese call bitterness. they are putting up with hardship. the cockeyed optimism that was often described about america, in the early 20th century, you see up more now in china than

you do here, maybe not here in silicon valley, but america as a whole. people saying that my dream is, and however the sentence ends may vary. but there is my dream is this feeling among this people. >> it is fun to be part of. >> okay. so one very good question that came from the audience. when you read the book and read about these things, and you talk about the entrepreneurs and these guys who have created things from nothing, but it is, in fact, almost all guys. what is the role and prospects for female entrepreneurs in china? >> anybody who has spent time in china recognizes that chinese women are the dumb metaphors in chinese society. not structurally, but in terms

of a force of will and force of personality and all the rest. many times you will find chinese businesses, not big corporations but small and ambitious ones where women have representation, there is, of course, discrimination against girl babies versus boy babies and the rest. i describe china's most famous e-mail pilot, who is a real piece of work. i will say one thing about her. she's probably in her mid- 40s and pictured in sort of kim kardashian poses. she travels with her son. that way she can only say this is my son and most people think this is my sibling. >> the kid just rolls his eyes.

[laughter] i think the texture of chinese society is very importantly female in its strength and ingenuity and charm. >> do you think we will see the emergence of prominent female entrepreneurs in china? >> yes, it was the case a couple years ago that the richest person in china was a woman who had a big recycling business. there is one who has probably appeared here, yes, i think we will see more and more prominent women playing roles of all sorts in china. including as entrepreneurs. >> okay, last question. without purpose, what you think is the most important thing for today's american high school students to understand about china?

>> let me think about how to answer that. i think that they should learn to feel comfortable with it. by that i do not mean learn to deal with that, i mean learn to revere it. to feel at ease rather than threatened by a world in which china plays a large part. i think one of the best things for china is that so many of its people have studied in the united states. either they stay here which is good for us or they go back to china, which is good both for china and the united states, because they are cultured in certain ways. if american high school students could find ways, including spending time in their teens or 20s, spending months or a year, they are comfortable with it and recognize it is a factor. not one that has to bee