Demos Vardiabasis

Dr. Demos Vardiabasis is currently a professor of international business and economics at Pepperdine University. He has well over 25 years of experience as a professor, entrepreneur, executive, and consultant. He has founded several companies such as the IQ Now Corp, served as a consultant for companies and industries such as Northwest Airlines, Edison Utilities and Northgate Supermarkets, and has also served as a advisor/board member for several startup companies. He is an expert in Chinese economic affairs, and has been heavily involved with Asia since 1978.
Why does China need the U.S. and vice versa?

Dr. Vardiabasis begins by explaining how, “The United States is the largest debtor nation in the world”, with a government debt of over 14 trillion dollars,” and how “the main financiers of the enormous international debt in the United states, are currently Chinese”. He then gives some ominous statistics, saying that the U.S. is over 100% in debt compared to its total income, and that the PIGS European countries and Japan are doing worse, with their debt to income ratio sitting at 150% and 300% respectively. He then explains that this will cause a global increase of interest rates, which can bankrupt not only the U.S., but also other ‘mega countries’ such as England and Japan within a short period of time. “Can we avoid it?” He asks, and then answers “always there is a solution.” Dr. Vardiabasis then declares that “China could and should play a critical role.” He gives information on China, how China doubled its GDP in 30 years 8 times, compared to U.S. doubling only once in 50 years, and how China’s general work ethic, entrepreneurial nature, and overall economic model led to their success today. He then contrasts China’s success with its shortcomings, citing issues with “ the well known income distribution problem” and a “regional unevenness problem,” where “all the growth in China is coming from the East coast” and not Western China. “Both problems are issues that can be resolved in China in my mind through the continuous high economic growth” Dr. Vardiabasis says, but “given that China is the top exporter in the world, its economic growth depends upon the economic conditions of all other countries in the world, since they’re all China’s clients.” Here we can see why the U.S.-China relationship is so important. The U.S. is in a situation where is needs financial assistance soon or face bankruptcy and China needs continued economic growth in order to solve its internal issues, which means that China’s main client (the U.S.) must survive from a financial point of view, since China makes much of its income through exporting products. With a specific focus of economic cooperation with each other, the U.S. and China can create a synergy which has the potential to alleviate and potentially eliminate major issues within both countries.

Are there any common grounds between both countries, and where does China and U.S. go from here?

Dr. Vardiabasis gave details on how the differences of governments within the U.S. and China has an interesting effect on the markets of the countries. He says how “normally if you ask anyone, they would say “I would rather work in the American economy or a British economy” because of the capitalistic economy while China is communist,” but how “In reality, China in my mind, is more capitalistic than the US or anyone.” His statement shows how both countries are largely capitalistic, indicating a similarity in marketing operation principles, yet China has become more capitalistic due to the U.S. having “so much bureaucracy, lack of long term planning, lack of proactive strategies.”

For the current direction that the countries should take, Dr. Vardibasis says that “China being the leader, with some support of other Asian economies that are also growing fast, the south East Asian countries Thailand, Malaysia or Singapore, and with some help from the other 3 growing economies, Russia, Brazil, India, hoping that with their activities, will help the US economy to grow out of the recession ... So, China and U.S. right now, have to work together, not only because that will save the global economy, but also because it would save each one’s own economy, and promotes political stability.”