China Black Swans & Integrating The Black Swan

ATCA Briefings

London, UK - 14 June 2007, 09:26 GMT - We are grateful to our distinguished and long standing ATCA contributors:

. Andrew Leung based in London, UK, and frequent visitor to China, for "The China Black Swans"; and
. Prof Jean-Pierre Lehmann based in Ouchy and IMD Lausanne, Switzerland, for "Integrating The Black Swan in Corporate Global Trends Analysis"

in response to the ATCA presentation, "Low Probability High Impact and Black Swan Events -- Considerations for Future Scenarios -- The Opportunity and Risk of Asymmetric Globalisation."

Dear ATCA Colleagues

[Please note that the views presented by individual contributors are not necessarily representative of the views of ATCA, which is neutral. ATCA conducts collective Socratic dialogue on global opportunities and threats.]

Andrew Leung has over 40 years of experience in a number of senior positions working closely with mainland China, including Hong Kong, with a focus on commerce, industry, finance, banking, transport, social welfare and diplomatic representation. He has addressed numerous local and international business and strategic fora, groups and organisations on China, including making regular television appearances. He has written many key commentaries on China for various organisations including ATCA. His target audience includes finance and investment houses, institutional investors, large businesses, think tanks, senior officials and business schools. Andrew was twice sponsored personally by the US Government on briefing visits to the United States, including a month-long visit to brief Chairmen and CEOs of multi-nationals in regard to China, post-Tiananmen Square. He was also sponsored by the Economist as a speaker at the China conference in Berlin with the German Foreign Affairs Institute. He was invited to brief personally the Duke of York and the Lord Mayor of London prior to their China visits.

Andrew is on the Governing Council of King's College London; the Advisory Board of Nottingham University's China Policy Institute; and the Executive Committee of the 48 Group Club with historical and working links with the Chinese leadership. He has been appointed as a Global Representative for Changsha City, China. He chairs the China Interest Group of the Institute of Directors' City Branch. He is a Visiting Professor of the International MBA Programmes of China's Sun Yat-Sen and Lingnan Universities. He will shortly begin lecturing as a Visiting Professor at NIMBAS University, Utrecht, Holland. Andrew is a Fellow of the Royal Society of Arts (FRSA). He was awarded the Silver Bauhinia Star (SBS) in the 2005 Hong Kong's Honours List. He has qualifications from the University of London, Cambridge University, The Law Society and Harvard Business School. He speaks Cantonese and Mandarin and practices Chinese calligraphy as well as fine art. He writes:

Dear DK and Colleagues

Re: The China Black Swans

As the summer 'silly season' is about to start, world markets are gripped by an underlying fear of a new and increasingly uncertain round of sell-offs in the US and European bond markets as the US Treasury yields breached their technical benchmark of 5.25%. World interest rates are rising. Is the era of cheap capital and stock market bonanza coming to an end? Is investor confidence again beginning to fray in how long the global imbalance will last between too much indebted consumption in the US and too much saving in China? [ATCA: 'China: Watch this Space', March, 2007]. Above all, with rising Western protectionism and a host of geopolitical, social, and environmental challenges, is China, a key driver of the global cheap capital, poised to unwind, if not unravel?

[CONTINUES] [ATCA Membership]

There may of course be Black Swans or Unknown Unknowns. Indeed, Mother Nature and human nature are full of imponderables. In any case, if all that remain were Known Knowns, life would be less colourful, not least for the world's commentariat!

Best wishes

Andrew K P Leung, SBS, FRSA

Jean-Pierre Lehmann is Professor of International Political Economy at IMD International -- Institute for Management Development -- in Lausanne, Switzerland, since January 1997. His main areas of expertise are the socio-economic and business dynamics of East Asia, the impact of globalisation on developing countries and the government -- business interface, especially in respect to the global trade and investment policy process. In 1994 he launched the Evian Group, which consists of high ranking officials, business executives, independent experts and opinion leaders from Europe, Asia and the Americas. The Evian Group's focus is on the international economic order in the global era, specifically the reciprocal impact and influence of international business and the WTO agenda. Jean-Pierre Lehmann acts in various leading capacities in several public policy institutes and organisations. He obtained his undergraduate degree from Georgetown University, Washington DC, and his doctorate from St Antony's College, Oxford University. He is the author of several books and numerous articles and papers primarily dealing with modern East Asian history and East Asia and the international political economy.

Prior to joining IMD, Jean-Pierre Lehmann has had both an academic and a business career which over the years has encompassed activities in virtually all East Asian and Western European countries, as well as North America. He was (from 1992) the founding director of the European Institute of Japanese Studies (EIJS) at the Stockholm School of Economics and Professor of East Asian Political Economy and Business. From 1986 to 1992 he established and directed the East Asian operations of InterMatrix, a London based business strategy research and consulting organisation. During that time he was operating primarily from Tokyo, with offices in Seoul, Taipei, Bangkok and Jakarta and was concurrently Affiliated Professor of International Business at the London Business School. Other previous positions include: Associate Professor of International Business at INSEAD (European Institute of Business Administration) in Fontainebleau, France; Visiting Professor at the Bologna Center (Italy) of the Johns Hopkins University School of Advanced International Studies; twice in the 70s Visiting Professor and Japan Foundation Fellow at the University of Tohoku, Sendai (Japan); and Founding Director of the Center for Japanese Studies at the University of Stirling (Scotland), where he also taught East Asian history in the University's History Department. From 1981 to 1986 he directed the EC-ASEAN 'Transfer of Technology and Socio-Economic Development Programmes' held in Singapore, Bangkok, Jakarta, Kuala-Lumpur and Manila. He writes:

Dear DK and Colleagues

Re: Integrating The Black Swan in Corporate Global Trends Analysis

"International finance is now so interdependent and tied to trade and industry, that political and military power can in reality do nothing."

Who said that? Bill Gates? Warren Buffett? Thomas Friedman? Keep guessing. Actually it was Sir Norman Angell. Who? Norman Angell was a highly travelled, experienced, widely known and respected writer, journalist and lecturer in the early 20th century. That sentence is taken from a best-seller he wrote in 1910, entitled The Great Illusion, which was translated into twenty-five languages and sold over two million copies. And that sentence well reflects how the world seemed to the European middle and chattering classes in the early 20th century. My grand-parents left their Paris apartment quite blithely with their children, my father and aunt, in early August 1914 to spend a two-week summer holiday in Montreux, Switzerland. It ended up being a stay of over four years and not much of a holiday.

[CONTINUES] [ATCA Membership]

Even though it is impossible for a company to predict where, when and how The Black Swan will arrive, it is a very useful exercise to imagine various possibilities. Not only can this foster "out-of-the-box" thinking, but indeed it will soon show that in this complex global era in which we live, there is no box, though there may be plenty of boxes! Just as one must exercise if one wants to compete successfully in an athletic activity, so must one exercise by stretching the brain, the imagination, and one's powers of analysis, if one wants to compete successfully in the highly challenging, but extremely exciting, global market place of the 21st century!

Kind regards

Jean-Pierre Lehmann


Prof Jean-Pierre Lehmann's ATCA submission will feature in a publication for IMD later in the year and should not be copied or circulated beyond ATCA members.

We look forward to your further thoughts, observations and views. Thank you.

Best wishes

For and on behalf of DK Matai, Chairman, Asymmetric Threats Contingency Alliance (ATCA)

ATCA: The Asymmetric Threats Contingency Alliance is a philanthropic expert initiative founded in 2001 to resolve complex global challenges through collective Socratic dialogue and joint executive action to build a wisdom based global economy. Adhering to the doctrine of non-violence, ATCA addresses asymmetric threats and social opportunities arising from climate chaos and the environment; radical poverty and microfinance; geo-politics and energy; organised crime & extremism; advanced technologies -- bio, info, nano, robo & AI; demographic skews and resource shortages; pandemics; financial systems and systemic risk; as well as transhumanism and ethics. Present membership of ATCA is by invitation only and has over 5,000 distinguished members from over 100 countries: including several from the House of Lords, House of Commons, EU Parliament, US Congress & Senate, G10's Senior Government officials and over 1,500 CEOs from financial institutions, scientific corporates and voluntary organisations as well as over 750 Professors from academic centres of excellence worldwide.

The views presented by individual contributors are not necessarily representative of the views of ATCA, which is neutral. Please do not forward or use the material circulated without permission and full attribution.

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