In chapter three of the book it goes back to discussing China. I find the chapters about China more interesting because of its history and its rapid expansion. Although China has expanded rapidly over the years, its rural areas has been slower to this change, but is still a huge improvement. Poor urban families have seen an increase in lights in the average home go from zero to three since china opened its economy. China’s modernization drive has combined with its developing-world, low-cost labor with nearly state-of-the-art technology and an export-friendly infrastructure has allowed China to get way ahead of India and other developing countries. Cheap Chinese manufacturing has saved the U.S. $70 billion dollars with additional $100 billion saving passed on U.S. consumers. I never realized how beneficial it was not only for companies to build factories overseas, but also for the consumer. I doubt we would have such cheap laptops and other product for sale if we didn’t produce them in these countries. China’s five-year plan makes it extremely easy for western companies to know what new policies China will make. This has benefited companies like Philips which has taken advantage of this. When China sets a new five-year plan in motion, whether it be selling asphalt for new highways, airplanes for the opening of new airports, or light bulbs. Phillips restructures it self to meet those needs by investing in R&D in those areas. This has been hugely beneficial for Phillips. In 2005 they sold $195 million worth of streetlights alone, one out every three streetlights in China. This was surprising to me, but very smart for the company to see this opportunity. When China wanted to update its medical facilities, Phillips reversed its business strategy for some of its products to meet Chinas new demands. Chinese hospitals bought $1.25 billion worth of imaging equipment alone. This just show how massive Chinas market demand can be. There have been some issues with doing business in China, such as protection of intellectual property. China makes ninety percent of the world’s DVD players, but for a decade they refused to pay Philips in royalties for their DVD technology. Recently they finally one this battle, but only when China joined the World Trade Organization. This is still in on-going issue with many other products. There is a province in china that sell imitation clothing of popular brands. This clothing was also being sold overseas where was being sold fraudulently as the real thing. In other provinces the same issues are happening with people selling imitation Apple phones. I was surprised to know that a large portion of Chinas trade deficit can be traced to goods made by western companies in China. Four of China’s top twenty-five exporters are Chinese companies. China’s bank loans have created a problem also for its economy. China’s banks are broke thanks to an estimated $911 billion in bad loans in 2006. Corruption as one of the main culprits here and its been hard for China to move away from this habit. I found this chapter to be interesting to see that China although its doing good has been hitting some snags along the way.