One of the unique aspects of the current economic crisis is that it began in rich countries (particularly in the U.S., U.K., Spain and Iceland property markets) and the result is many developing countries are nervously observing the developed countries run up massive public debts and nationalize companies that are near bankruptcy. Remember that just over ten years ago, developed countries were telling developing countries to enact structural reforms like reducing public debt and allowing companies to fail in order to end the ill effects of the Asian Financial Crisis.
Now China holds somewhere around $1.7 trillion in American debt. In other words, every American owes China about $5,000, which is well above the average annual income in China. China is telling the United States how to handle its economic affairs and is worried about escalating public debt. Chinese PM Wen Jiabao expressed concern about how America’s low savings and high debt will affect the value of China’s holdings in Treasury bills. “We have lent a huge amount of money to the U.S. Of course we are concerned about the safety of our assets. To be honest, I am definitely a little worried.”
Interest rates will certainly fall if (when) the U.S. issues billions (trillions) more in Treasury paper, and China cannot sell its holdings because selling such a large amount of bonds would cause their value to collapse.
Chinese officials are also searching for a new system for central banks to use to store currency reserves, instead of the situation today where reserves in central banks around the world consist almost entirely of U.S. dollars. Possible alternatives are a basket of currencies or by reviving the IMF’s Special Drawing Rights, which is a unit of accounting that was created in the 1970s to also serve as a central bank-only reserve currency.
The two country’s economies are now inextricably linked – the world’s largest consumer (the U.S. is about ¼ of the world economy, and 70% of it is consumer spending, so that’s a big chunk of the world economy) and the world’s largest lender, the largest holder of foreign reserves, and the second largest exporter (China just surpassed Japan in American debt holdings, has $2 trillion in foreign reserves, and is second behind Germany in total exports). The historian Niall Ferguson describes the new world order as a global economy dominated by “Chimerica,” which played a central role in the real estate bubble in the United States. (See Andy Xie on other ways the two economies are closely linked. Michael Meyer on China’s traditional urban planning around hutong’s is also worth checking out.)
Some of the vast differences between the two countries could also provide opportunities for cooperation in productive ways (other than the previous cooperation of selling cheap goods to the U.S. for U.S. dollars and then using the dollars to buy T-bills so that interest rates stayed low and Americans could buy more cheap goods, which gets recycled into more T-bills…)
Over 70% of U.S. carbon emissions come from consumer-related activities, whereas more than 70% of China’s carbon emissions come from industry. We can learn from their use of bikes, buses, trains, solar water heaters, and dense urban living, while China could adopt our cleaner power plants, more efficient industrial processes, and service-based economy. At the government level, cooperation between China and the United States is critical for the next international climate change talks in Copenhagen.
Tuesday, March 24, 2009
Sunday, March 22, 2009
Prepaid cell phones
It seems like prepaid cell phones are the most popular cell phone plan everywhere but in the United States. It is becoming more common in the U.S. now.
It's really simple and straightforward - after paying a little upfront for a SIM card, you can add money to your SIM card in a cell phone provider's store (some have ATM-like machines for after hours), by buying a ¥50 or ¥100 recharge card at a news stand or convenience store, or by adding money via online payment. You can also have multiple numbers by buying additional SIM cards and you can use your number and credit on another phone by swapping SIM cards (in case your battery dies or your phone breaks). Some phones here can hold two SIM cards, so people have two numbers on a single phone - one for their hometown and one for where they live and work most of the year (for cheaper local calls), or one personal number and one work number.
It's really simple and straightforward - after paying a little upfront for a SIM card, you can add money to your SIM card in a cell phone provider's store (some have ATM-like machines for after hours), by buying a ¥50 or ¥100 recharge card at a news stand or convenience store, or by adding money via online payment. You can also have multiple numbers by buying additional SIM cards and you can use your number and credit on another phone by swapping SIM cards (in case your battery dies or your phone breaks). Some phones here can hold two SIM cards, so people have two numbers on a single phone - one for their hometown and one for where they live and work most of the year (for cheaper local calls), or one personal number and one work number.
Tuesday, March 17, 2009
Recycling
An unexpected and fascinating consequence of the financial crisis that started in America’s cities and suburbs are the hard times the recycling business in China has run into, which deeply affects many low-income people who depend on it for their livelihoods. They can earn a few dollars a day by collecting and reselling trash, but the recent fall in commodity prices is making life much harder for them.
I always thought it was cool how every niche is filled in bustling Chinese cities. Although it’s not ideal to have so many underpaid and undereducated manual laborers, it does make sure everything little service is covered.
Instead of a municipal recycling service supported by taxes in every city, recylcing is largely private and the many people involved make it pretty convenient. Recylcers ride tricycles around residential areas while banging on a pot or chanting to solicit glass, paper, wires, old appliances, or anything else of value.
I often just hold onto an empty bottle when I’m on the street until I find someone carrying a big sack of recyclables and offer it to them. They collect them from trash cans, pedestrians, and pick them off the ground (lots of people litter) and sell it to a recycling center. Around the corner from my house in Changzhou was a store with stacks of cardboard and newspapers that reached the ceiling next to huge containers for plastic, aluminum and glass bottles. After a number of empy bottles accumulated in our house, I’d take them down there and receive some spare change in return (0.25 yuan for a glass bottle, less for plastic). Even if you don’t sell it back or give it to a collector on the street, simply by tossing it in a trash can (recyclable or non-recyclable bins) someone will always come along and fish it out to resell it for a few pennies.
I always thought it was cool how every niche is filled in bustling Chinese cities. Although it’s not ideal to have so many underpaid and undereducated manual laborers, it does make sure everything little service is covered.
Instead of a municipal recycling service supported by taxes in every city, recylcing is largely private and the many people involved make it pretty convenient. Recylcers ride tricycles around residential areas while banging on a pot or chanting to solicit glass, paper, wires, old appliances, or anything else of value.
I often just hold onto an empty bottle when I’m on the street until I find someone carrying a big sack of recyclables and offer it to them. They collect them from trash cans, pedestrians, and pick them off the ground (lots of people litter) and sell it to a recycling center. Around the corner from my house in Changzhou was a store with stacks of cardboard and newspapers that reached the ceiling next to huge containers for plastic, aluminum and glass bottles. After a number of empy bottles accumulated in our house, I’d take them down there and receive some spare change in return (0.25 yuan for a glass bottle, less for plastic). Even if you don’t sell it back or give it to a collector on the street, simply by tossing it in a trash can (recyclable or non-recyclable bins) someone will always come along and fish it out to resell it for a few pennies.
Monday, March 16, 2009
Grass-mud horses and river crabs
The Chinese sense of humor is pretty interesting. Other than lots of potty jokes just like in English, another common source of humor are puns and jokes that use homophones (two words that sound the same but are written differently); they only work in Chinese and are hard for Chinese beginners like me to follow. These kinds of jokes are often performed by two people doing "cross-talk" where one uses plays on words and homophones to say funny or offensive things and the other person plays dumb and makes a fool of himself by interpreting everything literally.
Someone pulled off a similar cross-talk joke on the internet through a video about "grass-mud horses." This time the person who's being duped is the government internet censor(s).
When I sounded out the words "grass" and "mud" ("cao ni") I figured out it's the same pronunciation as the words "f•ck" and "you." I had a good laugh and was pleased that I understood the joke. Why the vulgar name for a fictional animal in a Chinese web cartoon? It appears that someone simply wanted to make a point about the absurdity of censoring dirty or controversial topics and tell a story with some subliminal messages.
The grass-mud horses' habitat is invaded by pestilent river crabs. River and crab ("he" and "xie") sounds the same as the word for harmony "hexie," which is a dig at the governments goal of creating a "harmonious society" which entails scrubbing the internet clean.
Someone pulled off a similar cross-talk joke on the internet through a video about "grass-mud horses." This time the person who's being duped is the government internet censor(s).
When I sounded out the words "grass" and "mud" ("cao ni") I figured out it's the same pronunciation as the words "f•ck" and "you." I had a good laugh and was pleased that I understood the joke. Why the vulgar name for a fictional animal in a Chinese web cartoon? It appears that someone simply wanted to make a point about the absurdity of censoring dirty or controversial topics and tell a story with some subliminal messages.
The grass-mud horses' habitat is invaded by pestilent river crabs. River and crab ("he" and "xie") sounds the same as the word for harmony "hexie," which is a dig at the governments goal of creating a "harmonious society" which entails scrubbing the internet clean.
Monday, March 09, 2009
A tough job market
Last week, the U.S. Labor Department released the latest numbers the nation’s unemployment rate, and at 8.1% it is the highest ever in my lifetime.
Many talent recruiters in Silicon Valley, who only recently were flooded with work, now find themselves doing the resume polishing and job searching that they used to do for others.
Shanghai’s Korea town, a cool neighborhood on the far west side where I spent a Saturday last spring with my Korean students, has been decimated in recent months as Korean companies layoff Chinese workers and Korean pull their staff out of China.
In response to a sharp fall in exports, Japanese companies have been forced to cut costs by eliminating jobs, lowering wages, and replacing much of their work force with temporary workers who have no job security and fewer benefits. Nontraditional workers now make up more than a third of Japan’s labor force. It’s causing a generational shift in attitudes towards employment, consumption, and savings.
A lot of comparisons are being made between the current situation in the United States and that of Japan in the 1990s. The government response in both countries differs – and hopefully has a different outcome – but it does seem that Americans are beginning to gradually shift towards Japan’s frugality and higher savings.
In just the last several months in China, 2,400 factories in the Guangzhou area, the manufacturing heart of southern China, have closed and over 20 million migrants workers have lost their jobs (some commentator pointed out that that number is roughly equivalent to the population of Australia). The bulk of layoffs coincided with the Chinese New Year, so many who returned home for the holiday will simply stay and resume farming or take up lower paying jobs in inland areas and not go back to the coastal cities.
Another notable region that has hit a particularly rough patch is Eastern Europe, including some parts which experienced a real estate boom and others that are now are constrained by the euro and no longer have central banks capable of lowering interest rates.
Finally, one of my favorite economics writer, Michael Lewis, chronicled Iceland’s dramatic boom and bust. It’s a bizarre story of a small, sparsely populated (just over 300,000 people), very homogenous (99% urban, 84% Lutheran) country that went overboard in building a financial industry that was way out of proportion with it’s size, while a real estate and asset bubble made it one of the wealthiest countries in the world. When its currency and asset prices crashed, it brought down the government, caused public debt to skyrocket (to 850 percent of the GDP!) and bankrupted several of its largest banks. Far and away the country with the hardest fall in the current financial crisis.
Many talent recruiters in Silicon Valley, who only recently were flooded with work, now find themselves doing the resume polishing and job searching that they used to do for others.
Shanghai’s Korea town, a cool neighborhood on the far west side where I spent a Saturday last spring with my Korean students, has been decimated in recent months as Korean companies layoff Chinese workers and Korean pull their staff out of China.
In response to a sharp fall in exports, Japanese companies have been forced to cut costs by eliminating jobs, lowering wages, and replacing much of their work force with temporary workers who have no job security and fewer benefits. Nontraditional workers now make up more than a third of Japan’s labor force. It’s causing a generational shift in attitudes towards employment, consumption, and savings.
“Younger people are feeling the brunt of that shift. Some 48 percent of workers age 24 or younger are temps. These workers, who came of age during a tough job market, tend to shun conspicuous consumption….
Economists blame this slow spending on widespread distrust of Japan’s pension system, which is buckling under the weight of one of the world’s most rapidly aging societies. That could serve as a warning for the United States, where workers’ 401(k)’s have been ravaged by declining stocks, pensions are disappearing, and the long-term solvency of the Social Security system is in question.”
A lot of comparisons are being made between the current situation in the United States and that of Japan in the 1990s. The government response in both countries differs – and hopefully has a different outcome – but it does seem that Americans are beginning to gradually shift towards Japan’s frugality and higher savings.
In just the last several months in China, 2,400 factories in the Guangzhou area, the manufacturing heart of southern China, have closed and over 20 million migrants workers have lost their jobs (some commentator pointed out that that number is roughly equivalent to the population of Australia). The bulk of layoffs coincided with the Chinese New Year, so many who returned home for the holiday will simply stay and resume farming or take up lower paying jobs in inland areas and not go back to the coastal cities.
Another notable region that has hit a particularly rough patch is Eastern Europe, including some parts which experienced a real estate boom and others that are now are constrained by the euro and no longer have central banks capable of lowering interest rates.
Finally, one of my favorite economics writer, Michael Lewis, chronicled Iceland’s dramatic boom and bust. It’s a bizarre story of a small, sparsely populated (just over 300,000 people), very homogenous (99% urban, 84% Lutheran) country that went overboard in building a financial industry that was way out of proportion with it’s size, while a real estate and asset bubble made it one of the wealthiest countries in the world. When its currency and asset prices crashed, it brought down the government, caused public debt to skyrocket (to 850 percent of the GDP!) and bankrupted several of its largest banks. Far and away the country with the hardest fall in the current financial crisis.
Saturday, March 07, 2009
Chinese characters
If you want to learn more about how the written Chinese language works, online I found an interesting attempt at doing just that by imagining what English would be like with a character based writing system.
It shows how there is more or less an organized system to the thousands of Chinese characters. Very few characters are pictographs that actually look like the word they represent. Instead, the vast majority of characters consist of several parts, including a radical that places it in a semantic category. Another part in most characters provides phonetic information that tells you how it’s pronounced, although pronunciation has changed over thousands of years so sometimes it’s similar and sometimes it’s way off.
For example, characters for many geographical words have the radical for mountain 山。And additional characters are made using mountain as a radical, so they are all found in a dictionary (the kinds of dictionaries organized by radicals) under the 山 “shan” section, which is in the section of radicals with three strokes (山 is written with three strokes I + L + I). Some examples of characters with radical and phonetic parts are 峰 : 山 “shan” + 丰 “feng” = 峰 “feng” which means a peak or summit and can also be used to represent an apex or a camel’s hump. 夹 “jia”, which means wedged or placed in between, together with the mountain radical becomes 峡 “xia”, which means a gorge. The semantic meaning makes sense from the two parts and 夹 “jia” also serves as a phoneme (it’s similar to “xia”, an example of how its often close but not exactly the same).
Other characters put two together to make a logical new word. For example, a bird 鸟 “niao” on top of a mountain 山 becomes 岛 “dao”, which means island and is similar in pronunciation to “niao”. The meaning makes sense as islands are small mountains with birds flying overhead. 山 can also be used as a phonetic part in other characters, as in the character 仙, which is the radical for person 人 with 山 to become 仙 “xian” (some characters like 人 are altered slightly when they are written as a radical). 仙 means immortal and is similar to “shan” in pronunciation (close again, but not perfect).
There are plenty of more examples at online dictionaries such as http://www.zhongwen.com/ (click on radical under the dictionary section) and don’t miss this site about Chinese characters found on tattoos and in western advertisements, often with unintended mistakes and mistranslations.
Learning to read and write is a lot of work at first because you have to start from scratch and learn many symbols that are more complicated than the letters in the English alphabet. But once you know a few hundred, which really isn’t too difficult, you begin to see many connections between them, while many new words are simply combinations of two or three characters, e.g. vehicle is 车, car is 汽车(steam + vehicle), train is 火车 (fire + vehicle), bicycle is 自行车 (self + travel + vehicle), garage is 车库 (vehicle + warehouse), etc. Notice how the English spellings of those words have no connection whatsoever. Each character is a unit that can have several meanings and often many more when used in compound words. At that point, your grasp of the written language really accelerates and it becomes a lot more interesting and rewarding to study.
It shows how there is more or less an organized system to the thousands of Chinese characters. Very few characters are pictographs that actually look like the word they represent. Instead, the vast majority of characters consist of several parts, including a radical that places it in a semantic category. Another part in most characters provides phonetic information that tells you how it’s pronounced, although pronunciation has changed over thousands of years so sometimes it’s similar and sometimes it’s way off.
For example, characters for many geographical words have the radical for mountain 山。And additional characters are made using mountain as a radical, so they are all found in a dictionary (the kinds of dictionaries organized by radicals) under the 山 “shan” section, which is in the section of radicals with three strokes (山 is written with three strokes I + L + I). Some examples of characters with radical and phonetic parts are 峰 : 山 “shan” + 丰 “feng” = 峰 “feng” which means a peak or summit and can also be used to represent an apex or a camel’s hump. 夹 “jia”, which means wedged or placed in between, together with the mountain radical becomes 峡 “xia”, which means a gorge. The semantic meaning makes sense from the two parts and 夹 “jia” also serves as a phoneme (it’s similar to “xia”, an example of how its often close but not exactly the same).
Other characters put two together to make a logical new word. For example, a bird 鸟 “niao” on top of a mountain 山 becomes 岛 “dao”, which means island and is similar in pronunciation to “niao”. The meaning makes sense as islands are small mountains with birds flying overhead. 山 can also be used as a phonetic part in other characters, as in the character 仙, which is the radical for person 人 with 山 to become 仙 “xian” (some characters like 人 are altered slightly when they are written as a radical). 仙 means immortal and is similar to “shan” in pronunciation (close again, but not perfect).
There are plenty of more examples at online dictionaries such as http://www.zhongwen.com/ (click on radical under the dictionary section) and don’t miss this site about Chinese characters found on tattoos and in western advertisements, often with unintended mistakes and mistranslations.
Learning to read and write is a lot of work at first because you have to start from scratch and learn many symbols that are more complicated than the letters in the English alphabet. But once you know a few hundred, which really isn’t too difficult, you begin to see many connections between them, while many new words are simply combinations of two or three characters, e.g. vehicle is 车, car is 汽车(steam + vehicle), train is 火车 (fire + vehicle), bicycle is 自行车 (self + travel + vehicle), garage is 车库 (vehicle + warehouse), etc. Notice how the English spellings of those words have no connection whatsoever. Each character is a unit that can have several meanings and often many more when used in compound words. At that point, your grasp of the written language really accelerates and it becomes a lot more interesting and rewarding to study.
Monday, March 02, 2009
Google and the web
Lately I’ve been reading the book The Google Story by David Vise. Meanwhile, I came across several news stories about the company, and they show how out-of-date the book, which was published in 2005, has already become.
The book is an entertaining and fast-paced read that traces the company from it’s humble roots in 1998, when two young computer science grad students took the fall semester off to work on improving their search engine, google.stanford.edu, driven by a complex algorithm that ranked websites based on dozens of factors. They rented a house for $1,700 a month and wired together servers from used computers in their garage, hired their first employee, and finally got around to incorporating Google only because they needed to cash a $100,000 check that they had received from an angel investor.
Now people worry that with 63 percent of all web searches, and over 70 of the US market share in search, they are too dominant. Others worry about threats to privacy when Google now possesses so much data on searches, email, and other web apps, and can use that data to customize advertisements to closely match whatever subjects users are searching or emailing about.
According to the book, in 2000, when Google was celebrating the signing of a major deal with Yahoo to provide Yahoo’s site with Google-generated search results, they also announced that they had surpassed one billion web pages in their index of websites to become the largest search engine in the world.
“Now you can search the equivalent of a stack of paper more than 70 million miles high in less than half a second. We think that’s pretty cool,” co-founder Sergey Brin said at the time.
But by 2008, according to a recent New York Times article, their website archive had already surpassed the next large rounded number. “One day last summer, Google’s search engine trundled quietly past a milestone. It added the one trillionth address to the list of Web pages it knows about. But as impossibly big as that number may seem, it represents only a fraction of the entire Web.”
So it’s time to modify Brin’s statement, “Now you can search the equivalent of a stack of paper more than 70 billion miles high in less than half a second.”
The rapidly expanding number websites, the growth in the non-English parts of the internet, the creation of digital libraries, and the large pools of data discussed in the above article found in databases that are now accessible on the internet show that there is a lot more to come. It’s hard to imagine what we’ll be able to do on the internet ten years from now. And the rapid growth and new functions of the internet provide a lot of new opportunities for Google and other web companies.
“The great thing about search is that we are not going to solve it anytime soon. There are so many problems and failings,” co-founder Larry Page said in 2000. “I see no end to what we need to do.”
The book is an entertaining and fast-paced read that traces the company from it’s humble roots in 1998, when two young computer science grad students took the fall semester off to work on improving their search engine, google.stanford.edu, driven by a complex algorithm that ranked websites based on dozens of factors. They rented a house for $1,700 a month and wired together servers from used computers in their garage, hired their first employee, and finally got around to incorporating Google only because they needed to cash a $100,000 check that they had received from an angel investor.
Now people worry that with 63 percent of all web searches, and over 70 of the US market share in search, they are too dominant. Others worry about threats to privacy when Google now possesses so much data on searches, email, and other web apps, and can use that data to customize advertisements to closely match whatever subjects users are searching or emailing about.
According to the book, in 2000, when Google was celebrating the signing of a major deal with Yahoo to provide Yahoo’s site with Google-generated search results, they also announced that they had surpassed one billion web pages in their index of websites to become the largest search engine in the world.
“Now you can search the equivalent of a stack of paper more than 70 million miles high in less than half a second. We think that’s pretty cool,” co-founder Sergey Brin said at the time.
But by 2008, according to a recent New York Times article, their website archive had already surpassed the next large rounded number. “One day last summer, Google’s search engine trundled quietly past a milestone. It added the one trillionth address to the list of Web pages it knows about. But as impossibly big as that number may seem, it represents only a fraction of the entire Web.”
So it’s time to modify Brin’s statement, “Now you can search the equivalent of a stack of paper more than 70 billion miles high in less than half a second.”
The rapidly expanding number websites, the growth in the non-English parts of the internet, the creation of digital libraries, and the large pools of data discussed in the above article found in databases that are now accessible on the internet show that there is a lot more to come. It’s hard to imagine what we’ll be able to do on the internet ten years from now. And the rapid growth and new functions of the internet provide a lot of new opportunities for Google and other web companies.
“The great thing about search is that we are not going to solve it anytime soon. There are so many problems and failings,” co-founder Larry Page said in 2000. “I see no end to what we need to do.”
Sunday, March 01, 2009
Commerce Secretary nominee
Gary Locke, the first Chinese American governor, was recently nominated for the cabinet post of Commerce Secretary. If nominated, he would join Steven Chu, the Secretary of Energy, who is also of Chinese descent.
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