 I like to begin my talks with a question, a quiz question, if you will. It breaks the ice and the question typically, I hope, sheds some light on how much we in the West don't know about East Asia. And that's not anybody's fault in this room, it's the fault of the international press, the Western press, particularly the English-speaking press. So some of my questions on these occasions are hard. On this occasion, I think the question is an easy one, but you be the judge. It's a multiple choice question, and it concerns America's foreign liabilities. These were already an issue as far back as the 1980s. Now let's consider this from the standpoint of 1989. That was the year of the Tiananmen Square Massacre. It was also more important, for my purposes, it was the peak year of juggernaut Japan. It was the year that the Japanese stock market hit its all-time peak. Since then, America's net foreign liabilities have increased. Most of us probably have a sense of that. But the question is how much they've increased. So the question precisely is, looking at today's figure, how much larger is it than the figure was in 1989? I give you three choices, six times, 13 times, or 15 times, the 1989 figure. So anyone has it to guess? Well, I'll put everybody out of the misery here by saying it's 15 and nearly 16 times. And rounding it would be 16 times. So my point, of course, is that our Western press is not covering these things. You don't read about this in the Economist. You don't read about this in the Wall Street Journal. You don't read about this in my former paper, The Financial Times. The fact is that the United States now, its net foreign liabilities, total $4 trillion. The other side of this is, of course, that the East Asian net foreign assets have risen. China's net has now hit $1.27 trillion. As for Japan, that supposed basket case of the world economy, its figure is just behind China's net foreign assets of $1.2 trillion. I would submit that we're looking at a historic turning point. We're looking at the rise of East Asia. We're looking at the fall of the West. China's rise, particularly America's fall, particularly. Both of these phenomena are proceeding at rates that are, as far as I can see, unprecedented in world history. Let's take a closer look at China. China has far more advantages than our Western press has any sense of, or at least gives you any sense of. Here I will focus on just one of these advantages. That's a phenomenon I call suppressed consumption. It's a concept that was pioneered by the Japanese in Manchuria in the 1930s, then was adapted to the Japanese economy after World War II, and it's now gone viral throughout East Asia. The concept behind suppressed consumption is that you systematically suppress consumption. That automatically raises the savings rate and raises it often very high. There are many ways of suppressing consumption. A traditional way, even in the West, is to control credit. In the old days in Ireland, in the UK, even in the United States, consumer credit was controlled. These days in East Asia you have lots of controls on credit cards and mortgages and all the rest of it. That suppresses consumption, it boosts the savings rate. There are many other ways. Another way would be to rig the markets. This is something that the Chinese do to perfection. They make sure that in China you can buy anything you want, so long as you have the money. So luxury goods, for instance, Rolls Royce and things like that, they're available. The bad news, however, is that they're available at a very, very high price. Typically luxury goods in China are priced at maybe three or four times the world price. The consumer has the chance to spend lots of money, but doesn't have the chance to consume very much. Money is profiting from all of this, and it's basically the Chinese economic system. So the money is not being wasted, it's being creamed off. The major corporations are making very, very large profits, which they then reinvest in ever more advanced production technology. It's a very powerful boost to the savings rate. By contrast, of course, the United States leaves all this to chance. The savings rate is simply a function of the decisions of millions of individual savers, whether they consume or whether they save. So it's happenstance versus policy. This is a truly enormous advantage for China, and it means that they can invest in the latest technology for their factories, and it's no secret. If you give your workmen better tools, they produce more. So let's give you some figures. Consumption in China is just 36% of GDP. That means that China has, after various adjustments, it can invest 46% of GDP in a new capital equipment. The United States, by contrast, it consumes 69% of GDP. That's twice the proportion of China. And its rate of investment is 15%, which is one-third of the Chinese rate. Basically, America these days has enough money to replace worn-out equipment, but virtually no money to expand. By contrast, the Chinese not only can replace their equipment in existing industries, but they can expand into more and more advanced new industries. They can give their workers in the existing industries state of the art equipment every five years or something, whereas in somewhere like America, the equipment has the last 10 years. So I would submit that suppressed consumption alone is the economic equivalent of rocket fuel. Now let's take a closer look at the United States. The key thing here is trade, whereas China has massive trade surpluses, the United States has massive trade deficits. The US current account deficit, the current account being the widest and most meaningful measure of trade, the US current account averaged 3.3% in the first four years of the current decade, so in other words from 2010 to 2013 inclusive. 3.3% of GDP. Now compare that with the 1980s. The figure then, which was considered a total disaster at the time, was 2.8% of GDP. In the 1980s, people thought, well, this is unsustainable, it'll have to be corrected, and in due course it will be corrected. That was the thought, the correction never came. It's interesting to look back to the Carter years, which of course are remembered in the United States as particularly economically dysfunctional years. The worst trade deficit in the Carter years was 0.7% of GDP, 0.7%. In other words, a little more than one-fifth of the average for the first four years of the current decade. It's worth remembering also that for the entire decade of the 1970s, the deficit averaged 0.1% of GDP. Again, the trend is surely alarming. The net effect of trade deficits, current account deficits, is that you have to borrow abroad on a net basis. Your foreign liabilities go up. You have to sell assets, you may sell shares and things like that, but the net effect is your net liabilities go up. Buy on a dollar-for-dollar basis. And of course, the countries mainly funding this have been China and Japan. The rather serious situation for the United States now is that it has no ability to close the gap. That's because there's virtually no serious manufacturing industry left and manufacturing industries are typically your source of exports. Service industries are very, very weak exporters in general. But there's worse. When American manufacturing companies these days come up with promising new product concepts or promising new production technologies, they don't invest in the United States anymore. They go almost immediately to production abroad. And they do this production mainly these days in East Asia, particularly of course China. And there's a reason for this and that reason is that if you produce in East Asia as an American corporation, Apple Computer for instance, if you produce in East Asia, you have access to East Asian markets. If you produce in China, you can sell into Japan. If you produce in Japan, you can sell into China. This is the way East Asia works. You also of course have access to the American market. However, if you keep your technology at home, it's a really good interesting, very productive technology. If you keep it at home, you'll be blocked and trying to sell into East Asia. You may sell some token amounts, but you will not have proper access. So there is no debate from an American corporate point of view, which place you should choose. If you choose East Asia, you will maximize your production runs. If you stay in America, you will be continually sort of truncated. You will be continually handicapped. So the best US ideas are now going to work to boost the productivity of Chinese workers, not American workers. And the worst part of all of this situation is that America is now so weak, it cannot strike back at East Asian mercantilism. It can't strike back at the Chinese when they steal American intellectual property. The reason of course is that America is so dependent, the US Treasury in particular is so dependent on East Asian finance, Chinese finance, that there is no ability to talk back. You don't talk back to your banker if you need a loan next week. So to sum up, whereas China sees open vistas on all sides, the United States is in a hole and can't get out of it. So with that, I'd like to open up to questions.