Putting China in Perspective
Lotus – OTCBB: LTUS – Stock Guru Profile
Lotus Pharmaceuticals provides both traditional Chinese medicines and modern western medicines in their ten drugstores in Beijing. Being in China has intrinsic benefits. China’s growth rate continues as its middle class expands exponentially. Understanding this growth is difficult in the United States. The Elephant and the Dragon: The Rise of India and China, and What It Means for All of Us, by Robyn Meredith puts it in perspective.
The booming economies of India and China–the Elephant and the Dragon–have lifted 200 million people out of abject poverty in the 1990s as globalization took off, the International Monetary Fund says. Tens of millions more have catapulted themselves far ahead into the middle class.
It is estimated that in the next eight years almost 1 billion people across Asia will take a Great Leap Forward into a new middle class. In China middle-class incomes are set to rise threefold, to $5,000, predicts Dominic Barton, a Shanghai managing partner for McKinsey & Co.
As the China-India revolution spreads, the ranks of the poor get smaller, not larger. China unleashed its economy in 1978, seeding capitalism first among farmers newly freed to sell the fruits of their fields instead of handing the produce over to Communist Party collectives. Other reforms let the Chinese create 22 million new businesses that now employ 135 million people who otherwise would have remained peasants like the generations before them.
Foreign direct investment has helped drive China’s gross domestic product to a more than tenfold increase since 1978. Since the reforms started, $600 billion has flooded into the country, $70 billion of it in the past year. Foreigners built hundreds of thousands of new factories as the Chinese government built the coal mines, power grid, airports and highways to supply them and China has plans to build 600 new power stations.
As China built infrastructure, it created Special Economic Zones where foreign companies willing to build modern factories could hire cheap labor, go years without paying any taxes and leave it to government to build the roads and other infrastructure they needed. All of that, in turn, drove China’s exports from $970 million to $974 billion in three decades. Those container loads make Americans better off, too. You can get a Chinese DVD at Wal-Mart for $28, and after you do you will buy some $15 movies made in the U.S.A.
Per-person income in China has climbed from $16 a year in 1978 to $2,000 now. Wages in factory boomtowns in southern China can run $4 a day–scandalously low in the eyes of the protesters, yet up from pennies a day a generation ago and far ahead of increases in living costs.
Middle-class Chinese families now own TVs, live in new apartments and send their children to private schools. Millions of Chinese have traded in their bicycles for motorcycles or cars. McDonald’s has signed a deal with Sinopec, the huge Chinese gasoline retailer, to build drive-through restaurants attached to gas stations on China’s new roads.
Today 254 Starbucks stores serve coffee in the land of tea, including one at the Great Wall and another at the Forbidden Palace. In Beijing 54 Starbucks shops thrive, peddling luxury lattes that cost up to $2.85 a cup and paying servers $6 for an 8-hour day. That looks exploitative until you peek inside a nearby Chinese-owned teahouse where the staff works a 12-hour day for $3.75.
There may be no better place in the world to own ten drugstores that dispense traditional and modern medicines than Beijing, China.
Source: Lotus Pharmaceuticals, Dow Jones, and The Elephant and the Dragon: The Rise of India and China, and What It Means for All of Us, by Robyn Meredith. To be published in July by W.W. Norton & Co.
Lotus Pharmaceuticals, Inc.
7900 Glades Road, Suite 420
Boca Raton, Florida 33434
Phone: (877) 801-0344
Fax: (954) 337-2204
Email: info@lotuseast.com
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Forward-Looking Statements Statements contained herein that are not historical facts are forward-looking statements within the meaning of the Securities Act of 1933, as amended. Those statements include statements regarding the intent, belief or current expectations of the company and its management. Such statements reflect management’s current views, are based on certain assumptions and involve risks and uncertainties. Actual results, events, or performance may differ materially from the above forward-looking statements due to a number of important factors, and will be dependent upon a variety of factors, including, but not limited to, the Company’s ability to obtain additional financing and the demand for the Company’s products. The Company undertakes no obligation to publicly update these forward-looking statements to reflect events or circumstances that occur after the date hereof or to reflect any change in the Company’s expectations with regard to these forward-look ing statements or the occurrence of unanticipated events. Factors that may impact the Company’s success are more fully disclosed in the Company’s most recent public filings with the U.S. Securities and Exchange Commission (“SEC”).
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