In China it’s customary to broadcast text holiday blessings to your friends. Here is the blessing I sent to friends on New Years Eve:
今晚00年代会过去、这十年来大家的事业和生活方向定好了。在10年代、几乎每个朋友会结婚、生孩子。现在大家的自由很好、下一步的责任也好。享受生活循环的每一阶段。我希望有一天可以看到我的曾孙！按照现在的趋势很可能是混血、呵呵！欢迎到10年代来
「美国＞上海＞欧文」
Funny enough, Biáng is actually a word and yes, it’s written like below. You can check out the stroke order here.
Biáng biáng noodles are a type of noodle popular in China’s Shaanxi province. The noodles, touted as one of the “ten strange wonders of Shaanxi” (陝西十大怪), are described as being like a belt, due to their thickness and length. The “Noodle King” chain in Beijing (梆梆麵北京連鎖店) serves biáng biáng noodles.
Made up of 57 strokes, the Chinese character “biáng” is one of the most complex Chinese characters in contemporary usage, although the character is not found in modern dictionaries or even in the Kangxi dictionary.
Pinyin doesn’t actually include the sound “biáng”, so people often use substitutes like 棒棒麵 (bàng bàng miàn) or 梆梆麵 (bāng bāng miàn).
I’ve been using WordPress for my blog for 5 years, and it’s been working great. Over that time, I’ve encountered some issues and have some suggestions for you.
I used Ecto for offline editing for a long time. It’s picture uploading, especially for Thumbnails is still superior to MarsEdit, but Ecto has bugs that haven’t been fixed for ages and no update has been released for over a year.
I used re-CAPTCHA to overcome the army of web robots automatically submitting comments on my Blog, but this makes posting a comment for normal people irritating. I recently switched to Antispam Bee and haven’t gotten any new SPAM.
Occasionally an army of bots will start a distributed attack on your WordPress blog hoping for a blog that hasn’t been patched to prevent security issues. I’ve found removing the “WordPress HTTP Header” has stopped many of the bots from even looking at my blog.
Reported in the People’s Daily on Dec 8th: 85% of Chinese families can’t afford houses.
According to Chinese Academy of Social Sciences (CASS), 85 percent of Chinese families can not afford housing expenditure, and house prices are much higher than their incomes. The situation was pointed out in the Blue Paper on Analysis and Prediction of Chinese Economics in 2010 issued by CASS Dec. 7, 2009. The Blue Paper says that house prices are 3 to 6 times greater than people’s incomes; therefore it will be very difficult to buy a house for citizens. Furthermore, the average ratio of house prices to incomes in China, 2009 will be 8.3, well beyond the scope of reasonable affordability. In fact, it will be 22.08 for migrant workers and 29.44 for farmers in 2009. Because of this, 85 percent of Chinese families do not have the ability to buy their own future houses.
This is a very important fact. Chinese real-estate runs a big spectrum. Of the 15% of people that actually can afford a “house”, this means a 40 sqm condo in an hour commute from the city.
So, how many people can afford the huge inventory of 150-300 sqm luxury condos that are being stock piled like bricks of gold? Beyond the people that own them already, my guess is pretty close to nobody.
45 years ago, Ronald Regan gave a speech in support of Barry Goldwater’s 1964 presidential campaign.
And this idea that government is beholden to the people, that it has no other source of power except the sovereign people, is still the newest and the most unique idea in all the long history of man’s relation to man.
This is the issue of this election: whether we believe in our capacity for self-government or whether we abandon the American revolution and confess that a little intellectual elite in a far-distant capitol can plan our lives for us better than we can plan them ourselves.
… See Complete Transcript and corresponding audio recording.
Regan was a great actor and a great story teller. He understood that we’ve all got a bias. We tend to ignore information we disagree with, and only listen to what we agree with.
Key points from “Japan: From Kamikaze Capitalism to Smartpower Dynamism“.
“The impact on the real world, however, is very similar. Excessive financial leverage–whether simple or complex–forces mitsu no kajo–three excesses: excess debt, excess employment and excess capital stock,” Mr. Koll continued. “I recently visited China and there we have almost three and a half years of global demand of refrigerators sitting in inventory. So, I really urge you not to go into the refrigerator business, because the competition there is going to get very, very intense. It may not be quite as bad in the global car industry or the steel industry, but basically excess capacity–and with it excess employment–abounds. The great liquidation of many of these assets is still to come. During the boom, producers around the world prepared to supply for 4.5-5 percent global demand growth. In reality, we’ll be lucky to get 3 percent or 3.5 percent on a sustained basis over the next decade.”
This report was filed in May 2009, months into the “Expand Domestic Consumption” (扩大内需) policy. Sounds like China’s magic central planners are creating the mistakes central planners are known for. Just another reminder than short term numbers are not very meaningful. A friend from GE used to say “If you torture the numbers enough, you can get them to confess to anything”.
Japan has great strengths in R&D, Mr. Koll pointed out. “Throughout the 1990s, while the banks were bankrupt, while politics was a disaster, you see that corporate Japan continued to invest.” R&D spending amounted to 3.4 percent of GDP, “way above what you have in the U.S., way above what you have in Germany.”In the U.S., the private sector accounts for only half of R&D, with the balance carried out by the American military and military contractors. In Japan, the private sector share is 80 percent, so there’s more new technology getting out into the broader marketplace, from the Toyota hybrid to cellphones: “If you have an Apple iPhone, you find that about 62 percent of the components are made by Japanese companies and can only be made by Japanese companies.”
China R&D spending is extremely low. Nobody is willing to invest in R&D because your innovations will be copied. The gov’t talks about enforcement.
Of the 350,000 wholesalers in Japan, two-thirds buy from other wholesalers and sell to other wholesalers. “It’s a Byzantine, clustered, multilayer distribution system, and it is why Japan is not very profitable. Here, the good news is being unleashed by the current recession. We are seeing massive, unprecedented restructuring of the supply chain, of logistics, of merchandising.”Sony has pledged to cut its suppliers by half in the next 12 months; Toyota has said it will buy steel from a Korean company rather than a Japanese firm. Mergers in the last two years have reduced the number of department-store chains from eight to four.
SD is another area where China is also a mess. However, the Chinese economic system has a lack of trust. Ironically, the middle-men probably are making that situation worse. If import tariffs were lowered to reasonable level and smuggling was properly prevented on goods en-route from Hong Kong, Sales & Distribution in China is a huge field open for reform.
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Following is from “Take It From Japan: Bubbles Hurt” in the New York times back in December 2005, still a year and a half from the bubble peak in the US real-estate market. The history of events as they looked during the bubble, and what they look like afterward are critical to understand.
To be sure, there are several major differences between Japan in the 1980’s and the United States today. One is the fact that property prices rose much faster and more steeply in Japan, partly because speculators used paper profits from a booming stock market to invest in property, insupportably leveraging the prices of both higher and higher.
Another difference is that the biggest speculators in Japan’s frenzy were deep-pocketed corporations, and they pumped up the commercial property market at the same time that home prices were inflating.
The current Chinese real-estate bubble is also fueled by hot money and savings, though leverage on inflated real estate is accelerating the pace of expansion.
JAPAN suffered one of the biggest property market collapses in modern history. At the market’s peak in 1991, all the land in Japan, a country the size of California, was worth about $18 trillion, or almost four times the value of all property in the United States at the time.
I haven’t seen these numbers nation wide, but Shanghai and Los Angeles seem to be priced at similar levels.
Then came the crashes in both stocks and property, after the Japanese central bank moved too aggressively to raise interest rates. Both markets spiraled downward as investors sold stocks to cover losses in the land market, and vice versa, plunging prices into a 14-year trough, from which they are only now starting to recover.
This is exactly what China needs to worry about – when the debt is unwound, what will keep the brakes on the descent.
Now the land in Japan is worth less than half its 1991 peak, while property in the United States has more than tripled in value, to about $17 trillion.
Homeowners were among the biggest victims of the Japanese real estate bubble. In Japan’s six largest cities, residential prices dropped 64 percent from 1991 to last year. By most estimates, millions of homebuyers took substantial losses on the largest purchase of their lives.
Victims in China will be the same. See “Wo Ju”.
Their experiences contain many warnings. One is to shun the sort of temptations that appear in red-hot real estate markets, particularly the use of risky or exotic loans to borrow beyond one’s means. Another is to avoid property that may be hard to unload when the market cools.
Most of all, economists say, Japan’s experience teaches the need to be skeptical of that fundamental myth behind all asset bubbles: that prices will keep rising forever. Like their United States counterparts today, too many Japanese homebuyers overextended their debt, buying property that cost more than they could rationally afford because they assumed that values would only rise. When prices dropped, many buyers were financially battered or even wiped out.
“The biggest lesson from Japan is not to fall into the same state of denial that existed here,” said Yukio Noguchi, a finance professor at Waseda University in Tokyo who is perhaps the leading authority on the Japanese bubble.
“During a bubble, people don’t believe that prices will fall,” he said. “This has been proven wrong so many times in the past. But there’s something in human nature that makes us unable to learn from history.”
Bubbles. Purchases are based on expectations about future prices being even higher. Basically, average folks purchase out of fear.
Since 1991, Japan has spent 11 years sliding in and out of recession. It is only now showing meaningful signs of recovering, with the World Bank forecasting that Japan’s economy will grow by a solid 2.2 percent this year
“It was déjà vu,” Professor Noguchi said. “People were in a rush to buy, and at extraordinary prices. I saw this same haste psychology in Japan” in the 1980’s. “The classic definition of a bubble,” he added, “is people buying on false expectations about future prices, and buying with the hope of selling in the future.”
A similar pattern is found today in the United States, where the methods include interest-only mortgages, which allow homebuyers to repay no principal for a few years. Japan had its own versions of these loans, including the so-called three-generation loan, a 90- or even 100-year mortgage that permitted buyers to spread payments out over their lifetimes and those of their children and grandchildren.
When you hear about exotic new loan types being created to enable buyers to pay higher prices, you should be aware you’re in a bubble. Most economics are not a zero-sum-game, the economic pie can get bigger. However, real-estate is a zero-sum-game.
Even many of those who avoided financial collapse found themselves marooned in homes that they never intended as lifelong residences. For many Japanese homebuyers in the 1980’s, land prices had risen so high that the only places they could afford were far from central Tokyo. Many went deep into debt to buy tiny or shoddily built homes that were two hours away from their offices.
Mr. Nakajima said he had barely missed being stuck out there himself. In 1991, he was looking at a 100-square-meter apartment (1,080 square feet) for about $600,000 about two hours outside Tokyo. He said his wife stopped him. Six years later, he spent the same amount to buy a more spacious house in a downtown neighborhood.
For years after the real estate bubble burst, the Japanese government tried to resuscitate the market and other parts of the economy with expensive public works projects, but they were so poorly planned that they succeeded only in inflating the national debt.
The 2009 “Expand Domestic Consumption” (扩大内需) policy of China has been a newspaper success around the world, however, I’m inclined to think the result will be exactly what was experienced in Japan: “succeeded only in inflating the national debt”.
NOT until the late 1990’s did the government try a new tack: deregulation. To kick-start the economy, Tokyo started loosening restrictions on the financial industry. While most of this effort was aimed at reviving the banking industry, it also allowed investors to create real estate investment trusts, essentially mutual funds that invest in commercial property. A few years later, the government also eased building codes, such as height limits, and cut approval times for building permits.
There’s a strong bias in this one though – not sure bank de-regulation is the best answer if we’re going to bail them out. There’s a classic case of public risk, private reward in 21st century finance.
“Japan shows the importance of avoiding a hard landing,” Professor Makabe said. “Avoid big shocks. That is the biggest lesson of Japan’s bubble.”
Nobody wants a hard landing, but remember when the “experts” were talking about the “Goldilocks Economy“? It’s never different.
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The Technium: Better Than Free talks about business in the “Long Tail” world.
In the Internet Economy, transaction costs drop toward zero.
The simplest way I can put it is thus:
- When copies are super abundant, they become worthless.
- When copies are super abundant, stuff which can’t be copied becomes scarce and valuable.
- When copies are free, you need to sell things which can not be copied.
There are a number of qualities that can’t be copied. Consider “trust.” Trust cannot be copied. You can’t purchase it. Trust must be earned, over time. It cannot be downloaded. Or faked. Or counterfeited (at least for long). If everything else is equal, you’ll always prefer to deal with someone you can trust. So trust is an intangible that has increasing value in a copy saturated world.
There are a number of other qualities similar to trust that are difficult to copy, and thus become valuable in this network economy. I think the best way to examine them is not from the eye of the producer, manufacturer, or creator, but from the eye of the user. We can start with a simple user question: why would we ever pay for anything that we could get for free? When anyone buys a version of something they could get for free, what are they purchasing?
Immediacy — Sooner or later you can find a free copy of whatever you want, but getting a copy delivered to your inbox the moment it is released — or even better, produced — by its creators is a generative asset. Many people go to movie theaters to see films on the opening night
Personalization — A generic version of a concert recording may be free, but if you want a copy that has been tweaked to sound perfect in your particular living room — as if it were preformed in your room — you may be willing to pay a lot.
Interpretation — As the old joke goes: software, free. The manual, $10,000. The copy of code, being mere bits, is free — and becomes valuable to you only through the support and guidance.
Authenticity — You might be able to grab a key software application for free, but even if you don’t need a manual, you might like to be sure it is bug free, reliable, and warranted. You’ll pay for authenticity.
Accessibility — Ownership often sucks. You have to keep your things tidy, up-to-date, and in the case of digital material, backed up. And in this mobile world, you have to carry it along with you.
Embodiment — And nothing gets embodied as much as music in a live performance, with real bodies. The music is free; the bodily performance expensive. This formula is quickly becoming a common one for not only musicians, but even authors. The book is free; the bodily talk is expensive.
Patronage — It is my belief that audiences WANT to pay creators. Fans like to reward artists, musicians, authors and the like with the tokens of their appreciation, because it allows them to connect. But they will only pay if it is very easy to do, a reasonable amount, and they feel certain the money will directly benefit the creators.
In short, the money in this networked economy does not follow the path of the copies. Rather it follows the path of attention, and attention has its own circuits.
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In “Tongue Twisters” The Economist searches for the worlds most difficult language.
Yet much more exotic vowels exist, for example that carry tones: pitch that rises, falls, dips, stays low or high, and so on. Mandarin, the biggest language in the Chinese family, has four tones, so that what sounds just like “ma” in English has four distinct sounds, and meanings. That is relatively simple compared with other Chinese varieties. Cantonese has six tones, and Min Chinese dialects seven or eight. One tone can also affect neighbouring tones’ pronunciation through a series of complex rules.
Tonal languages are very difficult for speakers of non-tonal languages. Chinese is filled with homonyms as it is, making proper intonation very important. For Chinese, the sounds of tāng táng tǎng tàng tang are just as different as the sounds of foo boo hoo sue and do to english speakers.
In case you forgot what a homonym is:
Perhaps the most exotic sounds are clicks—technically “non-pulmonic” consonants that do not use the airstream from the lungs for their articulation. The best-known click languages are in southern Africa. Xhosa, widely spoken in South Africa, is known for its clicks. The first sound of the language’s name is similar to the click that English-speakers use to urge on a horse.
For sound complexity, one language stands out. !Xóõ, spoken by just a few thousand, mostly in Botswana, has a blistering array of unusual sounds. Its vowels include plain, pharyngealised, strident and breathy, and they carry four tones. It has five basic clicks and 17 accompanying ones. The leading expert on the !Xóõ, Tony Traill, developed a lump on his larynx from learning to make their sounds. Further research showed that adult !Xóõ-speakers had the same lump (children had not developed it yet).
Remember. The best-known click languages along with !Xóõ are all available in Southern Africa. Want a lump in your larynx, go for it.
A fierce debate exists in linguistics between those, such as Noam Chomsky, who think that all languages function roughly the same way in the brain and those who do not. The latter view was propounded by Benjamin Lee Whorf, an American linguist of the early 20th century, who argued that different languages condition or constrain the mind’s habits of thought.
Whorfianism has been criticised for years, but it has been making a comeback. Lera Boroditsky of Stanford University, for example, points to the Kuuk Thaayorre, aboriginals of northern Australia who have no words for “left” or “right”, using instead absolute directions such as “north” and “south-east” (as in “You have an ant on your south-west leg”). Ms Boroditsky says that any Kuuk Thaayorre child knows which way is south-east at any given time, whereas a roomful of Stanford professors, if asked to point south-east quickly, do little better than chance. The standard Kuuk Thayoorre greeting is “where are you going?”, with an answer being something like “north-north-east, in the middle distance.” Not knowing which direction is which, Ms Boroditsky notes, a Westerner could not get past “hello”. Universalists retort that such neo-Whorfians are finding trivial surface features of language: the claim that language truly constricts thinking is still not proven.
Considering that Noam Chomsky is a mono-lingual linguist, I would be less inclined to trust his linguistic theories. Ever wonder why he’s in the linguistics department rather than the political science department?
The experience of learning Chinese and integrating into Chinese culture has taught me that the presence and absence of words affects thought. The word here is affect, not control. Anyone can think anything, but certain thoughts are more natural depending on your linguistic and cultural background.
With all that in mind, which is the hardest language? On balance The Economist would go for Tuyuca, of the eastern Amazon. It has a sound system with simple consonants and a few nasal vowels, so is not as hard to speak as Ubykh or !Xóõ. Like Turkish, it is heavily agglutinating, so that one word, hóabãsiriga means “I do not know how to write.” Like Kwaio, it has two words for “we”, inclusive and exclusive. The noun classes (genders) in Tuyuca’s language family (including close relatives) have been estimated at between 50 and 140. Some are rare, such as “bark that does not cling closely to a tree”, which can be extended to things such as baggy trousers, or wet plywood that has begun to peel apart.
Anyone ready to sing up with me for Lingua-Traveling? Let’s go learn Tuyuca!
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This morning the Shanghai Daily reported: “Somali pirates: Ransom is ours“
A HELICOPTER dropped a US$4 million ransom payment yesterday onto the deck of a Chinese coal ship hijacked by Somali pirates in mid-October, a pirate source on board the vessel said.
The ship was owned by Chinese State Owned Enterprise China Ocean Shipping – COSCO (中国远洋). The Shanghai Daily doesn’t state whether the ransom was funded by COSCO or directly from gov’t funds. Regardless, this is a state owned enterprise – this is gov’t money. Democracies have a rule: Do Not Negotiate with Terrorists.
The argument against negotiating with terrorists is simple: Democracies must never give in to violence, and terrorists must never be rewarded for using it. Negotiations give legitimacy to terrorists and their methods and undermine actors who have pursued political change through peaceful means. Talks can destabilize the negotiating governments’ political systems, undercut international efforts to outlaw terrorism, and set a dangerous precedent.
Worse, the somali pirates aren’t ideological revolutionaries seeking the resolution to a conflict of values. These guys are thugs. Street gangs that have taken to the ocean. Paying the $4MM USD to these guys just advertises: “Open Season on Chinese Shipping”.
Weren’t you guys watching when the US handled a similar incident? We negotiated with bullets. And the result, the next hostage was Chinese. Keep this up and there are going to be a lot of Chinese hostages around the world.
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Niall Ferguson, Professor of History at Harvard wrote in the Financial Times “The decade the world tilted east“
I’am trying to remember now where it was, and when it was, that it hit me. Was it during my first walk along the Bund in Shanghai in 2005? Was it amid the smog and dust of Chonqing, listening to a local Communist party official describe a vast mound of rubble as the future financial centre of south-west China? That was last year, and somehow it impressed me more than all the synchronised razzamatazz of the Olympic opening ceremony in Beijing. Or was it at Carnegie Hall only last month, as I sat mesmerised by the music of Angel Lam, the dazzlingly gifted young Chinese composer who personifies the Orientalisation of classical music? I think maybe it was only then that I really got the point about this decade, just as it was drawing to a close: that we are living through the end of 500 years of western ascendancy.
There are 5B+ people on the planet. The 1B in Africa are still lost.
The 1B in South America and the 2B in India and China are trying to find their way. The 1.5B in No America, Western Europe and Japan have had it figured out for a while.
Do you think Japan’s success has been a bad thing for North America? But we were scared in the 1980s. Has North America been bad for Europe? Having been to all of these places, it doesn’t seem like there is significant resentment between the group.
When China’s sovereign wealth funds start buying up prime commercial real estate in the United States, there will surely be some upset Americans, but remember that after similar Japanese funds purchased Rockefeller Center, they eventually sold it back to US holders for half price.
The world is all out of balance. For anything resembling and “average citizen” Western Europe, Japan and North America will continue to have much higher standards of living than anywhere else for the foreseeable future – think 100 years.
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Following comments are from Professor Pettis at Guanghua Univ, Beijing’s article: “China: The Pace of Change“.
The so-called “Anglo-Saxon” model would involve a rapid liquidation of loans, the seizing and selling of collateral, and bankruptcies. The advantage of this model is that assets are quickly re-priced and allocated to their most profitable or efficient uses.
Pure creative destruction. Socially painful, but the imbalance is quickly corrected.
The second way, broadly speaking, that the break in the housing bubble might occur, and without the brutal social adjustments, is what has sometimes been called the “Japanese” model. Rather than force bankruptcies and rapid liquidation, borrowers would be permitted easily to roll over their loans, financing costs would be kept low (at savers’ expense of course), and excess inventory taken off the market.
Preservation of the status quo. Competitively painful, because imbalances are slowly corrected and continue to create distortions in the economy.
China´s financial sector issues are different [than the US]. China´s systematic misallocation of capital is its biggest financial problem. China needs serious governance reform and interest rate liberalization so that capital can flow to the most dynamic parts of the economy and be made available to risk-taking entrepreneurs in a way the fosters productivity growth. It needs capital to be correctly valued so that it is not wasted on creating overcapacity, asset market bubbles, and trophy projects, all of which detract from future consumption growth.
Agreed 100%. It’s important to remember that the politicians aren’t the source of the growth, they are the providers of infrastructure. The platform. The framework. The politicians give us the roads, the bridges, the electricity, and the law that ties everything together. China’s success so far has been in removing the restrictions that prevented entrepreneurship.
Real estate prices have risen dramatically in recent years – especially in the major centers of Beijing and Shanghai. But is there an asset bubble forming? Today we’ll ask the experts.
Summary of points discussed, as documented by Professor Chovanec.
The main driver of mounting housing prices in China isn’t short-term speculation (“flipping”) but longer-term stockpiling of empty apartments as a “store of value,” like gold.
Check out the complete interview (1st hour) online at: CRIenglish.com
Original post on Professor Chovanec’s blog.
A bubble is when assets are screaming to new highs everyday, everyone is talking about them, and everyone owns them. Right now, virtually no one owns commodities. So for Mr. Roubini to talk about a bubble in commodities defies comprehension. It proves he does not understand markets.I am flabbergasted at Mr. Roubini’s comment about bubbles because there is not a single market in the world making all-time highs except Gold, US Government Bonds, Cocoa, and the Sri Lankan stock market. That’s hardly reason to call for a bubble. So, I am most perplexed about this alleged bubble which is out there.
If an asset rises 100% in one year, that’s a great year, but not necessarily a bubble. Look at oil. It’s up huge off the bottom but nowhere near it’s old highs. Look at Citigroup. The stock is up 3 or so times off the bottom …
-Jim Rogers (2009, Wall Street Cheat Sheet)
Click on the picture below to view an interactive photo of the Hong Kong sunset. To change the time of day, drag your mouse from the top (start of sunset) toward the bottom (end of sunset).
The interesting thing is that this isn’t really a timelapse photograph. There are only two photos here. Day and Night. The revolution in still image processing and video image processing is just beginning.
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