Admiral Prueher: Well, thank you for that question and, and the attribution of being a big wheel which i guess the answer to that is "nali nali" but the, the real reason i invested in life365 is my, my confidence in the people that are running it, in Tom and in Joe, the .. which is the foremost reason, i mean there are many things in which one can invest.. I think the most important aspect of an investment to me is the quality of the leadership once there's a basic good idea for, for an investment and i think life365 has great potential in the chinese market; I think it has the potential to do a lot of good for a lot of people and i think that what Tom and Joe do to run it and the way they proceeded carefully to make it a good value and effective communications medium in china make it a good investment. The other thing for me is I care about US-China relationship and I want to have something where I have, not just my interest but also some of my assets in China as well... And I'm looking forward that and I'm having a very interesting time, watching the progress, watching it move ahead and very optimistic about it and I hope it works for you too.
Admiral Prueher: The.. i, i really am going to stretch your answer to two and I answered it partly in the first question but is it a, is it an area, is the investment largely in a, in a notion that understand some of, and understand it fairly well and given that if I have a range of choices, the choices I will pick are the ones that have the, the quality of the leadership, the quality of the management, the people that are running it and I look at it... in my view their, both their, their personal integrity is important, their savy for the business is important and they have what seems to me to be a workable plan.. and so that's sort of where I try to put my resources.
Admiral Prueher: I think on, on any investment there the.. there is always risk and i have come to understand better in the last few years since I've been involved with financial markets that the risk-reward.. ratio is, is a very important thing to consider and.. and in a.. in most investments one should not.. invest more than they can afford to lose.. I've.. You know, i have considered the.. The fact that this investment like any other is one in which you could, you could readily lose everything that you have invested and I've.., I've invested accordingly, I've... For my means I've invested a...,a fair amount in this.. I have great confidence that it will work but..I also.. I don't want to life365 because i have very much optimism for it but i think with, what any investment,just answering your question in general,your answer, what you can afford to lose and have an alternative to keep going otherwise.. there are some things that mean so much to you that you'll..., you'll invest more. In the case of life365, I think it will turn out to be a good investment.. It's not something I think that.. necessarily will give a great return in the immediate future but I think in the long hall it will turn out to be a sound investment for all those who invested in it.
Admiral Prueher: In responding to this question.. most of my information and most of my knowledge comes from Tom Rosenthal in discussing this, though i've talked to some others about it as well and i.. first is a preference.. the notion of ownership... versus just borrowing, leasing or renting a product i think gives people a much greater interest and.., and much more participation and caring about the, about the products. In fact there is an example in our neighbourhood now where so much construction is going on and there's a.. a company where the.. the workers own a share of the company, they're all invested in the company to one degree or another and the care with which they treat their machinery and the way they work is manifestly different from another company that's also on the same job, where the workers are just hired and they don't have any particular investment in the profits or the outcome of the company where you watch how they treat machinery or their work disciplines which are.. are less.. And so the idea of having ownership i think, if.. if you use that... if you extrapolate that example is, is a very good notion.. Now, in the web 2.0 in something like a website, it's a.. it, it takes creativity to figure out how to get the participants in a website to have ownership and to have that sense of this is my website to use.. I think what is going on with the 2.0 financing, that Tom and Joe have.. I don't necessarily want to say created, but have advanced to a great extent in life365 is a very good way of doing it... And in China there is not an opportunity for ownership or as much opportunity for ownership as there are some other places.. And the opportunity to own part of this website, i think will aid to its long term success. I'm impressed with the notion and i think it's a good idea.
Admiral Prueher: The short answer is i think there are some big differences, there are also some similarities. But the.. in the ebb and flow of the overall US-China relationship over the last 30 years, there's an... China has been a big factor and has been a what i'll describe as a flywheel, that may have a translational problem.. it, it, it dampens the curve of the.. of the volatility in the relationship, and that there is an underlined business relationship between Chinese business and US business that has been very good.. Having said that.. it is a mistake to think that either in China or in the US that the business community can dictate what the.., the government will do. It influences it, but it does not dictate what it will do.. And there.. In the US a business influences largely through jobs and votes in regions where businessmen have business maybe in many states or in one area where there'll jobs and votes and they will influence the representatives who are in the national government from that state.. On the other hand, people that are in business and i'll give a few examples. One of them is Hank Paulson who is now the Secretary of the Treasury well known in China and.. and quite fine man.. He has to set.. put behind him his business interests when he goes into a public job. Another example would be Bill Frist who as majority leader of the Senate and he had to put behind his family interests and set them aside while he was working in government. There are many other examples i could name.. like that.. In China, maybe if the leaders who are not directly involved with business have their children or their brothers and sisters involved in business and this relationship with the people in government is seen to be a great business asset as well. And so, whereas China addresses this issue and tries to keep the business interest out of government to a large extent, will vary a great deal from locality to locality, province to province and.. and also how it is administered within the central government as well so business has an influence, it does not have control of government. In the United States the free press that we have looks and scrutinises this aspect of things all the time.. will get into our Court system where if something is found to be amiss a.. a suit is brought forward and it can get adjudicated in the court system. It is different than that in China because the media investigation is.. is different than it is in the United States and also the court system, whereas the laws are quite good, the court system and the means of adjudication are not yet fully developed and i'm not trying to imply that China might wanna develop their court system exactly along the lines of the United States and our legal system but.. something like that will keep the business and government issues in their correct spot. that's a long winded answer. I think the short answer if i can just repeat it, is the businesses have a lot of influence but do not have control over what the government does.
I think that the.. My gut feel is less because though the Chinese government.. is getting increasingly pluralistic.. they have to, it is not a.. there's not pure central control of the Chinese economy.. but i think there is.. more direction from the centre in China than there is in the United States and therefore the businesses have a little less influence. Also as the.. the transition of state owned enterprises as a security system.. devolves, if, if they go completely to a profit motive for businesses then i think businesses will have more influence but as long as the SOE's are as strong as they continue to be, they can't transition quickly, too quickly, then there will be a little less government influence on.., i mean less business influence on government.
Admiral Prueher: This is a big question.. And.. we.. we.. we think about this a lot. If i can take the opportunity to expand and then try to get back to.., to answer the question is the relationship between China and the United States and is at least four characteristics..which one is more economic that has been broached in the question.. The political relationship, the military relationship and also the cultural one.. i think the... and i don't know if the questioner has had a chance to be in the United States but the... between the Chinese people, individuals and the people of America, i think there is a great deal of rapport, there's a.. a.. where we live in Virginia beach our neighbours are Chinese and they've been in the United States for about 60 years but they're still Chinese and very proud of it.. But the individuals get along very well and have a lot of similar characteristics.. they.. have a good sense of humour and enjoy being together and caring about families.. and a reverence of authority and entrepreneurial it's, it's.. it's really quite a great relationship and that's what i found when we lived in China,i got no people where we were not put in a house by our official positions.. It was a great relationship.. The appreciation of Chinese culture, the five, six thousand years of Chinese culture, in the United States is something that is... it's a treasure and increasingly influential in the US.. where we're working to try and develop it is in the political, military, economic realms and the question about where do i think it will go is a.. first i do not know the answer to that question. I've got an opinion about it and i think the really right way to ask that question is where would we like it to go and what actions should we take to try to get it to where we'd like it go.. and.. in the economic sense, China clearly has a large influence on the United States, i think.. China's economy right now is driven a great deal by almost a mercantile.. view and the idea of a very.. trying to phrase this well.. a very economical labour source which will not always be that way as China's population ages, the one child policy kicks in, the labour will pool in China will diminish in fifteen or twenty years and so it will be.. they'll have a different situation than they do now. So, the economy.. will likely change. China's developing a very strong economy.. they have a great number of challenges in the environmental realm with.. pollution, with.. with water, both quantity and distribution of water within china, that can be a real problem, if we get into global climate change that will impact China's economy as well as that of the United States.. So, these things are to try and extrapolate in a, in a straight line way from where we are now. I think is a little bit of a treacherous path. This is a.. a bit of a long winded answer, but i believe that our economies will continue to be intertwined in a global economy. I think our economies are neither as completely dependent on.. each other as someone said.. i think the.. the American consumer is not necessarily driving the Chinese economy.. If u look at the latest figures from most of the economic analysts, consumers in asia and europe are also sustaining the Chinese economy, it's just not.. it's not just the US consumer. Likewise i think the.. if, if we look at the world markets and each of our places in there, the US is not completely dependent on the Chinese production as.. as one might think.. And it is past that way that people would have a.. an interest in either bringing cooperation or conflict into the US-China relationship. I'm an optimist, i think that the political and the military and the economic part could work out over time and i think it takes our leaders to want it to work out and people like us to have a dialogue and come up with solutions where we try to get the win win answers for both our nations and for both our economies and ultimately for the people. So, if this is the penultimate question then i'll.. i can.. i can stop here. There's more to say on this topic but i'll.. i'll stop. I've talked a long time about this.
Admiral Prueher: Another big question.And i, i, again, I am optimistic, i don't..i would rather not get in the position of, of predicting, but rather saying it is dependent on our leaders and the people of our conntries, do they want to get along which i think it is very much in our interests to do, and also can improve our laws to do that and so what do we need to do to get along. The.. the story i would like to tell here is one that had to do with when Jiang Zimen came to.. on his first visit to the United States and he stopped in Hawaii first.. and at that time I was the Admiral.. head of the military forces in the Pacific for the United States and it was after we had had a.., it was in 1997, it was after we had had a, a minor crisis in 1996 over missiles in the Taiwan straights and a military response to that. And.. Jiang Zimen asked me what i was trying to do with the PLA and i responded I was trying to build up a, a bit of trust, so that we would avoid miscalculation and avoid unnecessary conflicts. He then responded to me.. Admiral before there could be trust there must be understanding, and before there could be understanding there must be communication. And he further added that right now our countries are just trying to build communication. I think this is a very good way to think about it, is that there is a hierarchy of communication, understanding, and trust. And i think we are further along on the communication than we were, I think our nations don't fully understand each other yet, but i think it's better than it was. And, but we, i would say in general we do not trust each other unless we have personal relationships, where we have.. with individuals we have trust, but as nations we don't, we don't see that as something that goes on between our countries, and we need to build that. So I think, I am optimistic that we can build this trust, we continue to have communication, we have more people in the United States now, very many schools are starting to teach mandarin at an early age,where.. where we see that to be an important thing to do in addition to knowing english and spanish and other languages for US is notably deficient. China has done a great job on teaching english skills to so many of their population, over 300 millions people speak english. So that gets into the communications part of it. What we are doing right now is part of the communication and hopefully a little biting on the understanding piece. So, I am optimistic that we can, that our path does not bring us to, necessarily to conflict. We will have conflicts, we will have cooperation, we will work together the future. I think there are big problems in the world: environmental issues, the issue of global climate change, world help organisations, financial organisation that will not succeed and will not prosper without both China and the United States working together and make them succeed. So I think those motives will help us work together and that's pretty much the way I see it and i like to think i spend a good amount of my time on these issues. So for the questioner, I think it's a great question it's one that is on a lot of people's minds, one of the parts that is a, makes it more difficult, and I think is something with which the chinese leadership is grappling is China has a great amount of prosperity, has made just tremendous strides economically, opening up economically to the rest of the world, they've enabled them to bring 400 million people out of poverty and had the tremendous progress that they've had and which is just wonderful. But in the political sets there is not the same openness, and I think there is an internal conflict in China between the.. relative lack of political openness and the economical openness that I think is a dilemma in China that needs.. is an internal thing that needs to get resolved as we move forward in this relationship between the US and China. And.. i hasten to add.. i'm not one of those who thinks that the United States has all of their problems solved either. We're slowly working on those but we need to do that, work our own issues and then work together. Ok ,that's another long answer...
