 Good afternoon and happy New Year of the Worcester Chinese Zodiac and it's going to be a auspicious year as we start in a very calm world that may erupt at any time during this year in many many ways but right now we're very calm and we'll discuss many issues dealing with trade and transportation. I have on my left Russell Liu, my co-host. This is Asian review, Global Connectors and the focus is on China, Greater China and on how connections are made physically through transportation and trade and that's one of the topics we're going to delve into today. So Russell, tell us about this Silk Road historically and and how that really benefited China and its trade with the world and what does the Silk Road mean as we discuss trade today? Sure, first off to say Xin'en Kuala. It's happy New Year's the Year of the Worcester, Year of the Chicken with many good things looking ahead and today's topic is the transportation of the Silk Road. You know China's come up with a very ambitious project, One Belt One Road, that will go through the western part of China through Russia, Poland, all the way through Europe. In fact there was big news about a week ago or two weeks ago of the first Chinese train out of Zhiyang which is way out on the seaboard on the eastern part of China. It's going to go all the way to London so this is a suspicious start for the Chinese with their ambitious program, trying to recreate the Silk Road, recreate that trade that went through their centuries and it's a very ambitious project because China today has done such remarkable things building trains, infrastructure and they have a lot of capacity and a lot of skill so that's what they're doing now and it'll be very interesting because this One Belt One Road project, all this infrastructure, it won't be tied in, at least from one understand, there won't be treaties or agreements but more of an economic type of setting up an economic channel for countries to participate along this One Belt One Road. Well that sounds fantastic. When you look at the United States, trains began to emerge as a major transportation system in the 1830s, 40s into the 50s. Remember the first real transportation system was canals, eerie canal, how to get iron ore or resources from one place to the factories on the east coast of the United States and then in the 1860s of course we have the first war, the civil war, was conducted through trains when you think about it. Trains brought troops to one place and then took them to another place and then manifest destiny, trains continued going to the west coast so you had the transcontinental train and the golden spike that joined the east and west coasts of the United States and that began to flood the western United States with settlers and trying to get grain and beef and produce all kinds of things back to the east coast. When you look at China, of course, since the beginning of the People's Republic in 49, they must have focused on trains to connect this huge country, the sides of the United States. What's the priority of trains as transportation and commerce in the government of the PRC? How do they look at trains? Well, I think the train links the country together. First of all, it brings political stability because again, people were tied in. In the past, they were not tied together. If you didn't have any money, you can't travel. There was an airplane, but trains are unique because they can move a lot of people. In China, the biggest day the trains are used are the Chinese year, 800 million people, all going to the local train station at once. They're all working the cities and they're all going to go back home into their country side. So trains play an important role to link the country. I think the observation that you just pointed out with the transcontinental railway, how America was built because of the trains, similarly China has similar aspirations because in the US they moved from the eastern seaboard to the west because of trains. So the same thing with China, from the eastern seaboard, where all the wealth, all the cities, Beijing, Shanghai, and Guangzhou, with the trains now connected through the country, freight trains, high-speed trains, we're seeing a China that is developing in its own way. This is the domestic growth, the domestic market. So we're going to see a lot more trade, a lot more domestic consumption, a lot more domestic manufacturing because of the train moving across the country. Well it's interesting to point out also that countries that started out with trains and expansion of railroad networks like the United States, after World War II the United States went to trucks and automobiles, Route 66 and so forth. The last 20, 30 years the life stock of the United States has been Amtrak. It's not a good experience in a riding Amtrak from one city to another. There have been new projects for high-speed trains, as you know, within the United States from say San Francisco to Las Vegas or from San Francisco to down to LA Los Angeles and San Diego and so forth. But compared to Japan where it's a country the size of California and I could get a ticket from Tokyo station and get to Osaka in two and a half hours and it's so so efficient and the train ride, the train technology are all very very high-tech when you think about it. Now you pointed out a very interesting thing. There's two parts to trains in China, one for transporting commercial items like produce, raw materials, finished materials from place to place. The other one of course is to give a better experience and tell us about you know the last few years they've been better train experience of sleeper trains and so forth from Beijing to Shanghai. How is that for the consumers? Sure, that's a good question. About 10 years ago, 13 years ago, when I first rode the trains, old green trains and they had four separate classes. One was a room where everybody sat at the hard seat, then they had other smaller rooms, the hard sleeper and then you had the soft sleeper and a foreigner that wanted to ride that train, you could actually get a room with the two beds. So compartment, and I always rode the trains that there were four bucks and it was a very interesting experience, but I love those trains because you'd leave at seven at night out of Beijing and you get an eight in the morning, next morning in Shanghai. But now with today's trains, which I ride a lot, taking the train from Beijing to Shanghai is a high-speed train. I'm there in four and a half hours and considering if you were catching a plane, you'd have to go to early airport, you'd have security check, you'd have to wait, you'd have to get on. When you arrive at your destination, you get to wait for your luggage, that's about the same time. And on the new high-speed trains, it is a wonderful experience. There's no noise, it's quick, it's fast. The interesting thing about it is you get to see the countryside in Shanghai. You get to see all these other cities along the way, you see Nanjing, Shanghai and it's very impressive. And I think it gives a lot of pride to the Chinese that they have the high-speed train and the US really doesn't have it. So what you're saying is that from the end of the war to now the United States really didn't have a priority in developing the most high-tech trains. I mean, the focus when you look at computing, when you look at semiconductors, when you look at cars, a lot of attention to R&D went into those categories of goods, of systems and products, but trains stopped, just stopped as a product or focus for the United States. In Japan, it's continued to develop in many, many areas. Germany is Europe, of course, you're aware of very high-speed trains in France, TVG, of course, you could go from Lyon all the way across the channel into London. There are trains that are high-speed throughout Western Europe. And what you're saying is that the train technology is a priority for the Chinese government. Yes. And I think what went up also, the train technology, the train strategy, that's what China is doing, not only China, but exerting its influence in South America, Latin America. There's planned a major project to build a mega line, Brazil, Peru. And I was up at a meeting with some Chinese from Peru. They're three-generation Chinese in Peru. And the big talk is about the Chinese, the Chinese from mainly China is coming to change Peru and South America. So I think that this whole idea of the train, it's helping develop other countries. And that's what China's political clout is part of one of their strategies. Well, you have a very good point, because if I wanted to ride a train from San Diego to the southern tip of Chile, I can't. But you're right. Why isn't there a train, or train system that could carry me like in the past? The long haul trains were from, I believe, Vienna to Belodostok. Remember the old Russian Trans-Siberian Express that ran all the way out there. But now we're looking at an expression of projection of soft power by China to really help other countries. In Latin America, what other countries that really would need that type of train infrastructure? Well, I think first of all, the China's main emphasis is countries like Brazil, Peru. For one thing is the Panama Canal, which is the route everybody relies on. The cost has risen tremendously to get goods through there back to China. So now with the railway, it's easier to take it from over that route, from the Eastern, from the Atlantic Ocean side to the Pacific Coast. And that's what the Chinese are looking at, to bring products, bring supplies, raw materials back to China through the Pacific Coast and not having to go to the Panama Canal. Well, we're going to get back into that whole world of commerce after this break from Asia and Review. Aloha, my name is Danilia, D-A-N-E-L-I-A. And I'm the other half of the duo, John Newman. Welcome. We are co-hosts of a show called Keys to Success, which is live on the ThinkTech Live Network series weekly on Thursdays at 11 a.m. We're looking forward to seeing you then. Aloha. My name is Mark Shklav and I'm the host of Law Across the Sea. And Law Across the Sea is a program that brings attorneys who have traveled across the sea and live in Hawaii or are staying in Hawaii for a time to talk about their travels, where they're from, where they're going, and bring it all together because really we're all connected some way, although we travel across the sea. So I hope that you'll tune in and watch our program. Thank you very much. We are back in the world of ThinkTech Asia in the new year 2017, the year of the rooster. We are very calmly discussing commerce through networks of trains, which really is a really a crucial part of societies trying to really raise their economies through transportation. And transportation is a key to really developing economies. You're absolutely right. So just before our break, Russell, you were discussing how this transportation system's efficiency and carrying goods from place to place, manufacturing goods and of course raw materials to factories is really a key to development for economies, especially for a whole continent like Latin America. And you pointed out large areas like Brazil, Peru, some parts are not connected. The highways are not really developed very efficiently. So looking at other parts of the world, do you see aside from Latin America, like Africa, will be an area for transportation, for trains and rail? I think eventually Africa, all the experts say, the economists say that in 20 years Africa will be the hottest spot. And I think that's going to happen. But in the meantime, I think the present situation, I think that Latin America, South America, Central America is really hiding the priority list for the Chinese. Why? Because in the last couple of years, we have the TPP. Now with the President like Trump announcing he's going to change the trade game with China. So China has been quietly building its supply trains, supply things, markets in South America. And it's interesting because many Chinese companies, I envision, will actually go to South America, Central America, make investments there, become companies, local companies, ship them across the board to the U.S., tariff fees through CAFTA or NAFTA. So I see a lot of dynamics here. And so the urge necessary to develop the infrastructure is very important for the Chinese, as well as when the Chinese mine, a lot of the mining comes from Peru. Rather than going through the Panama Canal, the new train routes would take it to looking to the Pacific Coast. And it would save a tremendous amount of money in transportation costs. And as you see in South America, in Latin America, the roads are not built for a lot of this infrastructure. So this is a faster way to leap ahead and use that technology. Use all the technology China has been developing over the years to building railways, high-speed trains. So the background or how the Chinese really developed their technology for the rail systems and networks came after years of domestic development to address the transmission of bottlenecks. You can't have millions suddenly boarding planes. You have to have a series or options like rail, like buses, you can't have everybody in a car. That's essentially what happened in the U.S. And so that also led to large freeway expansion in the U.S. I think you're right because I think in the U.S. it's a different culture, a different mindset. We're an individual culture, an individual society. We want to have our cars. Now the Chinese are getting there. They want to have their cars. But again, the big thing is that when you're dealing with a lot of people, a lot of people, the systems will work. And they've had experience moving people around. This is saying this is when you move people, capital moves with people also. So that's good because people travel, people, the businesses, going to Western part of China. They've been troubled because it's been through the different groups of Uyghurs and the different minorities there. Again, this will be something that will bring opportunities for them as a train now, the new routes to one belt, the Silk Road, the new train that they just had kicked off that left from Zhejiang all the way to London. It's going to pass through this area. So we're going to see a lot of changes, you know, positive stages for China. Well, China has a continental power. You know, through geography, like we were discussing before the show, there are bottlenecks when China tries to project outside through the ocean, through maritime, through ships and so forth. China did expand through its naval admiral back in the 15th and 16th centuries. They did go all the way to India and Eastern Africa. They still find Chinese pottery on the shores near Zanzibar. It's amazing when you think about it. So they did go out. But when the Qing dynasty started in the middle of the 17th century, China became very isolated, became very focused inward, like Japan also at the same time, and really didn't go out. And there was some trade that continued, and that's through the Silk Road, through Samarkand, Tashkent, you know, that area through Kazakhstan, and then going through Iran and going through to Europe, you know. I think the reality is that to this world, as we see potential issues of China going to the south, China's sea around the Cape, you know, it's a long journey to haul things to Europe. And because of the political dynamics that's ongoing, having a river that goes all the way through Europe will shortcut it, it will shortcut the cost, and it will bring economic opportunities much sooner than having to deal with the issues that are confronting China today, especially navigating through the waterways, through the southern part of Southeast Asia. Well, and again, if you have trains, you know, moving in the western direction, they have to go through areas that the tracks must be high standard. So again, that's, I think, an area where China has to talk and discuss and negotiate how to assist those countries to really maintain those railroad lines, because it has to be a consistent, you know, high grade line all the way going to, well, when you enter Europe, it's okay, you know, probably from Belarus or Poland and so forth, it's going to be okay. But before that, who knows? Well, that's why that's big, China's big opportunity, a diplomatic opportunity to trade, to help all these other countries increase their trade with China. And I know that that's part of their effort on the infrastructure to work with these European nations. Same thing what they're doing in South America. Again, same things to bring that technology and build that infrastructure there. Now, South America is one of those places that really, you know, Brazil, I'll point out, is a country where expectations were high. But every year something happens. And unfortunately, economists call Brazil the country of the future and always will be. And it has really, has not really stepped up in many ways economically. And you're correct. But on the Pacific coast, like Peru, it's now a multi-ethnic society. It's growing in immigrants and business and so forth. So I see Peru as a kind of a bridge to the rest of Latin America. I think Peru's already been that. I've dealt with Peru and Chinese who have been there from the 1850s. And there are 600,000 Chinese there that are local Chinese that have, that are like third or fourth generation in Peru. So I think it's always had that international, it had the Chinese culture. But I think the key what's happening is that countries like Brazil, they're seeing it's happening Peru. They're seeing the Chinese going to Ecuador, Costa Rica, to all these other countries. So it is actually letting a fire for everyone to make this play with China. Well, I think the, that's the good news, I think, for Latin America. Because for so long, as you know, the economies really were stagnant and really were not developing in a way. And I think one of the crucial parts of the puzzle that never really progressed were transportation networks. Yes. You're right. Yes. And I think you brought an interesting point, Ray, earlier. Why isn't there a train from the U.S. that goes all the way down to the Latin America? With the technology and all of that. You know why? Think of the Great Wall, President Trump. President-elect Trump was put. I think there is a thinking, at least, that America that we have is we will keep people out. And so therefore, if we run the trains through that, that means people would be coming on that train. And you don't want that to happen. So it may be a very myopic view. I mean, if South America, since America were for the long being developed through U.S. aid, I think then it may be a different story today, but it's not. And the United States is the last place for high-speed train networks. I mean, Canada has a very nice network that goes from west to east and vice versa. But in the United States, you would have expect high-speed networks by now. But they really never developed in a way like Japan or Germany or France and so forth. But that's because I think the truck networks were so much developed in the freeways. And there was a major infrastructure project since the war. So I think Latin America should not look at the United States as a model for trained networks. It would be too expensive to set up a network of nice roads and highways. It's cheaper to do a train. Right, right. Exactly. Much more efficient. So I think that's the model that's going to be changing South America, Latin America. Well, it's an interesting thought, too, that like there were trains in Hawaii for transportation. They're all gone. They're sugar trains and so forth. My father rode one every day from Kahalui to Hamakopoko or Maui for high school. But after the war, it all got torn apart. So when you put in something and you take it out, it'll never come back. It's really hard to come back. But this is in Latin America, version territory. It's like starting from zero. So you have right-of-ways and so forth that you can develop really quickly. I think the key is their leapfrogging technology. They're not going to Amtrak. They're going to the state-of-the-art technology high-speed trains. I think a very different type of approach. So they'll be the beneficiaries of a more developed train system. There was another thing that developed in the United States that we forget is that the right-of-way for trains in the United States are freight trains over passenger. In Japan, it's the other way around. That passenger trains took precedence over freight trains and therefore that whole system of passengers, especially for moving people from the suburbs into Tokyo and moving them out at the evenings, really developed the urban system in Japan. So again, and you're correct that if we follow the Japanese model, like in China, that's emerging, there is the opportunity for commercial mix-use development at the train stations. So that's how Tokyo and Odakyu and Keio, all these conglomerates developed shopping centers and housing around the train stations and then they could feed into the inner city and go back and forth. So I think that's an opportunity also in China that, like you say, it brings economic development, business and plants, but also for the train stations themselves to become like centers for housing, commercial development, all kinds of things. Like in Japan, there was one English language school system that says NOVA that said we have an English school at every train station. So you can move from place to place. Any final thoughts on the next, if you see China and trains in the next 10 to 20 years, what will happen? Well, I think that'll be very fascinating. I think that the train will develop China as a whole now. Major part of China is not developed, it's the western part of China. And what I've seen is that that part of China will develop and with increased trade with Europe, there may be less reliance on the U.S. for one. The Chinese working in Latin America, South America, they're helping them develop the trade there. I think it's going to change again. Those changes are fantastic. And I think one year from now at the end of this year, let's look at this topic again and see how trains are changing the world in commerce and also for passengers. Thank you for this first show for Think Tech Asia, and we'll see you again in 2017. Happy New Year.