Two pieces of news grabbed my attention this week. First, carmaker Toyota has now suspended car production in Turkey, Poland, France, the UK and the USA as the knock on effect of the Japan earthquake continues to disrupt the finely tuned supply chains that have been one of the hallmarks of Toyota’s global efficiency.
Second, the number of Chinese millionaires is now close to a million. The Huran Wealth Report for 2011 records 960,000 Chinese in China with personal wealth in excess of RMB10 million (£1million). Given the continued growth of the Chinese economy this year, the million mark is likely to be reached quite soon. Add in the Chinese super-wealthy diaspora and they are no doubt already there. The average age of these new millionaires is 39 and their automobile of choice is, of course, the Ferrari.
So we have one group of auto-workers in Northern Italy working around the clock to meet the insatiable demand from Shanghai yuppies to sit for hours in the city’s traffic jams in their sleek, red symbols of new wealth. And we have Toyota workers elsewhere in Europe and North America in forced idleness due to a shortage of parts for Toyota’s new range of carbon-friendly, hybrid compacts.
Here is one of those bizarre twists of the new economy: young professionals in the workers paradise of communist China waiting impatiently for their expensive sports cars while workers in the capitalist, free-market west are unable to produce sensible, community-friendly cars for Americans whose national debt is funded by China buying US Treasury bonds.
These two stories are a timely reminder of our inter-connectivity. A few years ago terrorist activity in Sri Lanka caused a shortage of boxer shorts in Oxford Street in central London. In the rarefied circles of supply chain analysis there was much ribald talk of the bottom falling out of the market.
Since then the world has become even more globalised and susceptible to the kind of geo-political and natural disaster disruption we have seen recently. And we are busy helping many of our clients figure out how to plan around the kind of turbulence that has been caused by both the earthquake and recent events in the Middle East and North Africa.
No doubt there will be a few bumps along the road for the Ferrari drivers of Shanghai, particularly for those whose wealth – like in the boom of 1980s Tokyo – is based excessively on over-inflated property prices. But equally we can only hope that this new powerhouse of growth will help keep us all afloat.
In the Cold War there was a sense that nuclear war was averted through mutually assured destruction. It might be that this remarkable global economic co-dependency that China’s rise has created will usher in a new age of mutually assured prosperity. If so, let us hope that the car workers of Maranello paid particular attention to the suspension.
All of this is also a personal reminder that my dreams of owning a Ferrari are well and truly behind me. I am on the wrong side of the world, the wrong side of 39 and the wrong side of economic destiny to think it is ever going to happen. And from certain angles, in the right light, the Prius is quite an elegant car.