This blog post should be read as an addendum to my previous post.

My wife and I have returned from China. It was a life-changing experience--underscored by the fact that my wife is hiring Mandarin tutors for our four children.  

Entrepreneurs worldwide should not underestimate the impact of China on the world economy and on their own business. Many if not most of the products you purchase already come from China, and China is now emerging as the world's largest consumer.

Entrepreneurs who embrace this phenomenon first will reap the greatest rewards.

During the past decade, China established itself as the world's foremost manufacturer-a significant percentage of the products you now purchase come from China. During the next decade, China will establish itself as the world's foremost consumer. As a result, leading companies will be economically forced to customize their products for the Chinese. This is because, as the Chinese consumption market matures, China will be setting the world's standards on products from automobiles to light bulbs, just as the United States set the world's standards on most consumer and industrial products since the 1950s.

China is now the 2^nd largest economy (PPP) in the world and is passing the U.S. in many areas. For example, 13 million new cars were sold in China last year while only 10 million new cars were sold in the U.S., and this disparity will further widen in 2010. Happily for the U.S., 20% of the automobiles sold in China come from U.S. manufacturers.

We have much to teach the Chinese, especially those of us who are entrepreneurs. The Chinese do not suffer from the "not invented here" syndrome that is so prevalent in the west. As they provide their citizens with everything from cars to washing machines, the Chinese prefer to learn from, and partner with, experienced providers outside China, rather than learn everything themselves from scratch.

Peking University (12/10/09)

Moreover, in the west we can learn the most about ourselves and how to improve our lives by studying this fascinating modern civilization. As I was advising the Chinese in my areas of core competency--education and healthcare--I learned much about what my own companies need to do to remain successful.

One simple example of this is the traffic signal light most of us drive under every day. In the U.S., traffic signals are red, yellow and green. In China, they are larger red and green numerical displays (no yellow) counting the number of seconds until the signal will change. There's no running to make a yellow light-you know exactly how much time you have before it changes. Like waiting for an elevator with a floor indicator, it's more relaxing to know exactly how much time you have left. Since returning from China, each time I wait at a red light I wonder if whoever purchases red/yellow/green traffic signals in my city knows how much better numerical displays would be for us.

I returned from China to watch the Senate pass their version of health care reform. As I write today, the personal staffs of Senator Harry Reid (Senate Majority Leader) and Representative Nancy Pelosi (Speaker of the House) are meeting in secrecy with White House officials to iron out the differences between the respective House and Senate bills. My views on the House version are outlined in my previous posts here and here, and I will writing more about what this means for all of as details emerge.

Since writing my last post on China, I received inquiries from readers wanting the agenda of my trip, and inquiries wanting to learn how they could bring their product of service to the Chinese market. I will answer the questions here on my agenda, and I plan on making "Developing your Business in China" a regular feature of The Entrepreneurial Challenge blog.

On December 7, my official public visit began with my speaking from the center podium in The Great Hall of the People. This magnificent building, built in 1959, is functionally equivalent to the U.S. Capitol. It sits amidst both thousand-year old historical structures and the world's most modern office buildings. My speaking topic was on the importance of wellness and why we, in the west, need a revolution from the tyranny of the food and medical industries which have caused most of the problems with our health.

On December 8, I delivered the keynote address at the Fourth Food & Nutrition Industry Forum in Beijing, opening the event. I spoke about The Wellness Revolution in the west, and the opportunities for the Chinese wellness industry inside and outside China. While China is not a significant player today outside China in wellness, China has much to contribute to the wellness industry worldwide. Chinese wellness and preventative medicine, often called Traditional Chinese Medicine or TCM, has been pervasive in China for centuries. I visited Chinese hospitals where western medicine and TCM doctors work together in the same office for the benefit of the mutual patients.

On December 10, I spoke at Peking University to 4000-students, selected (50 each) from many of China's other leading universities. My speech was on "Economic Alchemy" and my 1990 book "Unlimited Wealth."  The Chinese have embraced my economic theories about technology driving economic activity (W=PxT) more than any other nation since Japan.

The Great Hall of the People (12/7/09)

Between these major speeches, my wife and I met with Chinese federal officials, provincial governors, and business leaders at every meal. As an American, for the first time in my life, I found myself jealous of another nation. The Chinese federal officials we met had an enormous common interest for the greater good of all China. In the U.S., we are mostly a collection of special interests-each person or organization looks out for themselves and we expect this collective self-interest to efficiently support the common interest. The current state of U.S. healthcare reform, where our Congress has sold out to the special interests, illustrates that our self-interest model is flawed.

In China I met a new class of young billionaire entrepreneur-people like Xie Hong ("Sam") who founded a wellness baby formula manufacturer in 1992 called Beingmate, Sam's sales in 2009 exceeded $8 billion (US). Sam is one of hundreds of new billionaire entrepreneurs in China whose work is distinguished by the fact that they produce or distribute things that benefit all of China-unlike many of the billionaires in the west who mainly move around the balance sheets of other people's products or services.

At Peking University I was struck by how many of the students wanted to be social entrepreneurs--doing well by doing good-rather that work in areas like finance, which, in China, has a negative connotation.  I pointed out to them that back in 1976, when I worked in finance at Citibank under Jim Tozer, we thought of ourselves as social entrepreneurs--delivering to young people just beginning their lives the ability to purchase a new car or a new home. While defending the U.S. financial service industry in China I (sadly) realized how far the U.S. financial services industry had drifted from the common interest.

Click here for more information on my visit to China

Since September 2009, my working days have focused on U.S. Health Care Reform. My working nights have focused on Chinese wellness, sickness care, and economic growth. I now see these two issues coming together for Chinese and U.S. entrepreneurs and consumers.

This afternoon my wife and I depart for Beijing, where we will be honored guests of the People's Republic of China. On December 7-8, I will be delivering televised keynote addresses on Wellness, Nutrition, and Preventative Medicine from The Great Hall of the People. On December 10, I will be speaking on Economic Alchemy, The World Economy, and Entrepreneurship at Peking University.

Interested readers may google "Pilzer" and "China" to follow my trip, or use www.Baidu.com (the Chinese search engine) to see the local reaction -- set your Web browser to translate into English.

Recently, much of my time during the night (due to the time zone difference) has been spent in video calls researching and preparing for this trip to China.

Much of my time during the day has been spent in meetings with business leaders, opinion leaders, and politicians on pending U.S. health care reform.

U.S. health care reform started out with a noble purpose: (1) Obtain or offer health insurance to the millions of Americans falling through the cracks of private insurance, Medicaid, and Medicare; and (2) Institute reforms to reverse rapidly-escalating medical costs that now threaten the U.S. economy and way of life.

Unfortunately, as noted in more detail in my article below, the American people have been sold out by Congress on this noble purpose. The proposals still being debated in Congress do very little to control costs and will, in fact, increase medical costs more than $10,000/year for tens of millions of American families. Moreover, these proposals protect the incomes of lawyers, doctors, pharmaceutical companies, and insurance companies at the expense of all consumers. Most importantly, the proposals completely ignore the need for transparency which would allow the American people to openly see what Congress is supposedly trying to reform.

Mr. Smith, we need you more than ever in Washington today. (Mr. Smith Goes to Washington, 1939, directed by Frank Capra and starring Jimmy Stewart.)

As an American, a parent, and a former public servant, I have never been more upset with Congress than I am over the current version of health care reform. Both sides of the aisle have sold us out - the Democrats to the lobbyists, and the Republicans to the gadflies - rather than offering realistic, logical alternatives to the healthcare crisis. If this type of health care reform is passed by Congress, I hope that, come Election Day in 2010, we will all remember who voted for the bill.

Each evening, after I finish putting our four children to bed and answering critical emails on U.S. health care reform, I turn my attention to China. I am completely amazed and impressed with what is taking place there. I expect to write more about China after my return later this month. For now, let me share some preliminary observations.

China is no longer an emerging, developing nation. It is developed. There is no end in sight to Chinese economic growth and the improving Chinese lifestyle. This year the Chinese people will purchase 13 million new vehicles, including almost 2 million GM cars. Compare this to annual U.S. sales of 10 million new vehicles. By 2020 Chinese auto sales are expected to be double U.S. auto sales, and that expectation will probably be far exceeded.

Today, however, about 130 million people in China, 10% of the Chinese population, are not purchasing these new vehicles. This is because approximately 10% of the Chinese people live below the poverty line as defined by the World Bank ($1.25/day). These people mostly live in rural areas with few paved roads or gasoline stations. Before anyone despairs over this figure, such extreme poverty was as high as 64% of the population, 800 million people, only two decades ago. The Chinese government is committed to sharing the Chinese economic miracle with all of the country's 1.3 billion people, a goal I believe they will accomplish. China has already done more in the past 20 years to eliminate or reduce poverty than all other nations of the world combined.

Hundreds of millions of mostly-urban Chinese consumers receive excellent sickness medical care, care which rivals that of any western nation. And, hundreds of millions of rural Chinese consumers receive subsistence sickness care. When analyzing the Chinese economy, it is important to throw out all forms of analysis that use average numbers.

The mostly-urban Chinese consumers who receive western-type medical care pay directly for their coverage. They pay in cash, at the time of each service. Numerous hospitals and medical providers compete vigorously for each consumer's medical pocketbook, competitively offering western-style medical procedures and products (like MRIs and pharmaceuticals) for a fraction of what these items cost in the U.S.

Once the U.S. focuses on lowering the cost of existing medical procedures and products, there will be an opportunity for U.S. entrepreneurs to bring thousands of such procedures and products from China to the U.S. In 2007, I wrote this chapter about how Dr. Geoff Tabin, a U.S. social entrepreneur and philanthropist, figured out how to bring the most popular operation in the world-a cataract lens replacement which cost $3,500 per eye the U.S-affordably to the third-world for less than $20 per eye. This month Dr. Tabin is featured on the cover of National Geographic in a compelling story written by David Oliver Relin, the author of the worldwide #1 bestseller Three Cups of Tea.

Side-by-side with western-style medical care, Chinese providers offer Traditional Chinese Medicine (TCM), from acupuncture to weight loss to wellness-oriented supplements and vitamins. Most Chinese consumers embrace the best of both western medicine and TCM sickness and wellness/preventative care. In China, people are much less skeptical than people are in the West that wellness works. Wellness care and preventative medicine has been part of the Chinese medical culture for millenniums.

However, just as in the U.S., the number of Chinese consumers in need of wellness care is growing much faster than the number of people receiving wellness care. This is primarily due to the western diet being introduced to more affluent Chinese, particularly in the major cities. China currently has the largest and fastest growing populations of both overweight and obese people in the world-there are 195 million overweight and 97 million obese people in China, especially among the urbanized and younger populations.

One U.S. company is already in China addressing this problem. According to this compelling article in Forbes Magazine, Amway China has more than 250,000 distributors and stores with sales in China exceeding $2.5 billion, making China Amway's biggest market. Similar success stories await many more American wellness suppliers, as well as entrepreneurs offering Chinese individuals the opportunity to own their own business.

In summary, great sickness care, wellness care, and entrepreneurial opportunities await:

(1) Entrepreneurs ready to bring proven Chinese wellness and sickness solutions to the U.S; and

(2) Enrepreneurs ready to bring proven U.S. wellness and sickness solutions to China.

Stay tuned.