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more companies come onto the exchange
the market will stabilize."
It is a mistake, Chim said, to extrapo-
late what happens on the Shanghai Stock
Exchange. What happens on the exchange
isn't indicative of what is happening in
the wider Chinese economy and mostly
just reflects how a limited market behaves
when inexperienced investors learn how
to deal with an open market. The media,
he said, presents "images and headlines
that give these events greater significance
and drama than they might deserve."
Finally, I asked Chim about one of
China's most obvious challenges. We are all
familiar with images of Chinese cities blan-
keted by thick clouds of pollution. I asked
Chim to comment on the issue. He said
that much of the pollution is generated by
steel making and other heavy industries it
developed so rapidly. It is a side effect of
very fast economic growth.
Chim reminds us that China is an emerg-
ing economy much like North America in
the early twentieth century; the Chinese
are buying cars, building office towers and
making steel to meet the needs of consum-
ers with increased spending power. Chim
said "controls tend not to be so astringent
in emerging economies. But, the issue is
obvious; it's not something you can hide.
The country's leaders breathe the same air
as anyone else."
Again, China's big numbers play a role.
It is not that China's steel making technol-
ogy is outdated. China's technology was, in
fact, adopted from international steel mak-
ing technology. Chim said that, "where the
US has a 100 million tonne capacity today,
China has a 1 billion tonne capacity." That
translates into smoggy cities. However, he
said, "There is a national will to reduce
pollution." It will take a monumental
effort, but China is used to big numbers
and big projects.
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