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I DA U N I V E R S A L N ove m b e r - D e ce m b e r 2 0 1 6 13 TRENDS AND TIDBITS Trends continued on page 15 Continued on page 15 On a lecture tour in China last month, I spotted plenty of Bentleys, Audis, BMWs and Maseratis – even a Tesla or two. But I never saw a single person laugh out loud for joy. On the busy streets of Beijing, Guang- zhou, Shenzhen and Hong Kong, I saw no homeless people, no graffi ti or potholes, but few smiles. In conversations with managers, academics, and grad students at two of China's leading universities, I began to sense that this heads down, industrious, smartphone-obsessed nation of 1.4 billion people is in a state of rapid transition. As readers of this newsletter know, I research and speak on the best practices of the world's most innovative companies. China, it turns out, has a growing number of them. And thanks to my hosts, Professor Jin Chen of Tsinghua University in Beijing and Dr. Baohua Song (who was kind enough to guide me around throughout the trip), I was able to visit some of these companies and interview their people. Here are fi ve windows on where China may be headed next: 1. Despite recent setbacks, China is not on the brink of collapse. e slowdown in China's GDP growth (from 10 percent to around six percent) has been well publicized. So has the ballooning debt burden of some Chinese companies, especially those in commodities industries and real estate, which are suff ering from overcapacity and falling profi ts. Add to this the reports of polluted ground water and toxic air (which the World Health Organiza- tion estimates that 97 percent of Chinese breathe). Combine this with a still-growing govern- ment crackdown on journalists and publications and a missing Hong Kong bookseller. Tack on the pullout of Google, the banning of Facebook and the censorship of a growing list of foreign publications, and you have a less open, more controlled environment that stifl es informa- tion fl ow and cultural exchange, and may be responsible for the lack of smiles I witnessed. Mix in a less-welcoming business environment for foreign fi rms doing business in China. And don't forget those video images of China's "ghost cities," row upon row of vacant buildings, the result of government over- investment and corruption. en, last year, when China's stock market plunged 30 percent, what I've come to call the "brink of collapse" narrative really took off . China's wealthy were seen buying up "safe haven" properties in New York and San Francisco. Surveys showed high intention of wealthy Chinese to leave the country. Morgan Stanley's chief global strategist may have put a Five Windows on Where China is Headed Next by Mr. R. Tucker, Alibaba Headquarters