Welcome to The Middle Road! This podcast is positioned as the final episode of 2024 and also the first episode of 2025. A special podcast – herein I discuss both economics and a bit of history of two of the largest economies in the world the United States of America and China. I will reference and recommend two books – one from the American history and the other from the Chinese history. This podcast celebrates the intersections of economics, history, entrepreneurship and a major development actor, offering glimpses into the remarkable contributions of key figures, civilizations and development capital.
Stay tuned for more insightful episodes from The Middle Road.
Let’s continue to explore, learn, and make an impact together.
I’m Nishant Malhotra, your host and founder of The Middle Road—a thought leadership platform dedicated to upskilling and knowledge sharing. My startups focus spans social impact, development economics, macro and microeconomics, ESG, investment and sustainable finance, sustainable development and quantitative disciplines like statistics and impact evaluation. Discover more at www.themiddleroad.org, where you can subscribe, explore standalone online courses, and advertise. Let’s journey together toward meaningful insights and impactful change!
For any queries or purchases kindly write to me at nishant@themiddleroad.org or what’sapp me at +91-9923266222.
Today I look at two of the largest economies in the world – through their economic and historical lens – The United States of America and China.
A Tale of Two Cities takes a creative approach in analysing how the United States and China are addressing some of their economic challenges. A brief read, this is a snapshot of supply and demand driven economics.
The U.S. needs a supply-driven impetus. It has an excellent demand thrust that has remained resilient despite higher interest rates so far. However, the U.S. must maintain a consistent push toward building world-class infrastructure through its infrastructure stimulus initiatives. This would create jobs for less-skilled workers, increase productivity, and help reduce inflation. The best remedy for America lies in boosting supply-side economics. China, on the other hand, requires the opposite approach. China needs to stimulate demand to combat deflation. The country is planning a record $411 billion stimulus next year, with plans to tap capital markets for special long-term bonds, possibly 30- or even 50-year bonds. One excellent option according to The middle Road could be zero-coupon bonds, a concept coined by me as “debt till perpetuity.” By issuing long dated zero coupon bonds for example 50-year zero coupon bond, countries can issue debt till perpetuity by issuing similar bonds when the bond matures.
The rollover of debt is described by Nishant as “debt till perpetuity” provided conditions apply. Since zero-coupon bonds are issued at a discount and do not require interest payments until maturity, they mitigate the immediate burden of interest costs. The middle Road anticipates a mix of plain vanilla treasury bonds and zero-coupon treasury bonds in their issuance.
To know more about fixed income securities, there is a free online course on this subject on The middle Road. Feel free to enrol.
According to the SIFMA Capital Markets Outlook 2024, the U.S. holds 39.9 percent of the global $128 trillion bond market, followed by the EU (18.4 percent) and China (16.6 percent). As a nation, China boasts the second-largest bond market in the world. The stimulus will focus on boosting consumption and fostering growth in high-tech industries.
Deflation is a dreaded economic condition; it is better to address it at its onset.
Now I discuss a bit about American and Chinese History.
A Peek at a couple of Founding Fathers of America
Under this section I look at Alexander Hamilton, and Benjamin Franklin two of the founding fathers of America.
If you want to read an excellent book on American history, consider one about the life of Alexander Hamilton, the rodeo cowboy moniker for one of the founding fathers of America. Alexander Hamilton by Ron Chernow. Alexander is the source of inspiration for the Broadway musical musical Hamilton!
“Nobody has captured Hamilton better than Chernow…” —The New York Times Book Review.
I’ve read a bit of this book, which highlights Hamilton’s journey from humble beginnings to becoming a driving force behind America’s naval power and the establishment of Wall Street. Inspired by the British, Hamilton understood the importance of well-functioning capital markets, which motivated him to focus on building a robust financial system. A must read for people who would like to have a comprehensive overview of the life of one of the most captivating founding fathers of America.
The other byte I will be discussing is on Benjamin Franklin.
The Power of Benjamin
Benjamin Franklin, one of the Founding Fathers of the United States, is celebrated as a versatile leader whose diplomacy played a pivotal role in securing a crucial alliance with France during the American Revolution. An autodidact, Franklin achieved numerous scientific breakthroughs despite lacking formal education. Like Abraham Lincoln, his insatiable thirst for knowledge, inventiveness and true grit propelled him to excel across diverse fields. Among Franklin’s notable inventions are the Franklin Stove, which revolutionized heating in American households, and the lightning rod, which saved lives by protecting buildings from lightning strikes. Known for his wit and charm, Franklin was admired for his engaging personality and was notably popular among women. He also played a transformative role in founding the University of Pennsylvania, an Ivy League institution known for innovation and high-end learning. Qualities such as excellence in education, scientific progress, innovation, entrepreneurship, and a robust legal system reflect the enduring influence of America’s Founding Fathers, including Franklin, in shaping global development and #culture.
This is part of a series on history about different countries and civilizations.
In my second historical read, I discuss one excellent attributes of Chinese civilization citing the example of Ven Xuanzang and Emperor Taizong of Tang dynasty. Although Ven Xuanzang was a monk par excellence and a Buddhist scholar, this concise read is more about his role as a writer and author and the role played by Emperor Taizong of Tang dynasty. This read emphasis his role not only in the Chinese and Indian context but also on a global arena as a top notch thought leader. In this instalment, contributions of Ven. Xuanzang and Emperor Taizong of Tang’s are discussed with respect to the Indian history. A long-awaited read, this piece focuses more on Xuanzang’s contributions to art and culture as an author, made possible by Taizong’s patronage of art and culture. The Tang dynasty is often regarded as the most cosmopolitan dynasty among all Chinese civilizations, a fact that later partly contributed to some challenges keeping other factors constant. Ven. Xuanzang travelled to India to deepen his understanding of Buddhism. In an unmatched and timeless feat, he travelled on most of the journey on foot through the Silk Road both ways, enduring the harsh conditions of deserts and mountains.
A few key aspects stand out.
Despite the scorching heat and arduous conditions, Xuanzang made a lasting impression wherever he travelled. Known for his cordial demeanour, he was a true “people’s person,” always smiling and a favorite among both commoners and royalty. He excelled not only as a monk and scholar but also as a beloved public figure. However, this piece is not about his time in India but more of his work when he returned to China. Upon his return to China, Emperor Taizong of Tang, alongside the Chinese people, welcomed Xuanzang with great admiration. Emperor Taizong, widely regarded as one of China’s greatest emperors, encouraged Xuanzang’s enthusiasm for documenting his travels and learnings. Under Taizong’s patronage, Xuanzang meticulously recorded his experiences in India, resulting in his renowned book, The Great Tang Dynasty Record of the Western Regions. Taizong even built a monastery for Xuanzang to support his scholarly pursuits. To this day, the book remains one of the most authentic historical accounts offering a detailed record of life in the 7th century in India. The book is authentic in its coverage of the socio economic and political climate in India, a fabulous powerhouse of Indian history. This emphasis on meticulous record-keeping is a hallmark of Chinese civilization. Globally, China stands out as one of the few civilizations that has consistently maintained detailed historical records, often verified with precision through astronomical events. I read this fact in John Keay’s book, China: A History. Read a bit of sample chapter on Kindle. An excellent book from what I know from my research and highly recommended looking at various reviews. This timely and detailed documentation allows historians to verify the timelines of various Chinese dynasties with remarkable accuracy. Xuanzang’s contributions as an author and inventive scholar in tabulating historical facts, art, and culture are unparalleled. Xuanzang’s writings reflect not only his scholarly brilliance but also the historical emphasis Chinese civilization has placed on documenting and honouring its history and culture. This dedication to preserving history is similar to that seen in Western civilizations and underscores the importance China has placed on cultural and historical compilation.
I conclude with a final note on the IFC Startup Catalyst, that that connects the final dots of this podcast. The International Finance Corporation (IFC) is the largest development financial institution, playing a pivotal role in attracting private capital to the development sector. Its Catalyst Fund bridges the gap between entrepreneurship and the development sector. The IFC Startup Catalyst invests in accelerators, incubators, and seed funds in emerging markets, with a particular focus on low-income and fragile countries where startups face significant funding deficits. These investments help startups scale and grow, fostering innovation and economic development.
To learn more about the startup ecosystem, check out the free online course on “Levers for Social Good.”
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