China trade
I know from this post and my last one, it might seem like I just hate everything right now, but it's not really true. I'm just having fun analyzing stuff and ranting lately. Also having discussions here with fellow Americans about the subject is triggering some weird thought processes. Lots and lots of tangents in this one.
I'm planning to completely cut myself off from all news and ADD-style entertainment though, so I should be back to more introspective type stuff soon.
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China's current position in the global economy strikes me as similar to their position in the mid-17th century. It's largely one sided; goods flow out of China, and money flows in.
This applies more so to the Western world, and less so to the current third world, since China's investment in Africa has been staggering -- almost as if they're cultivating an economic successor. After all, as the Chinese middle class grows, they're going to need somewhere to make cheap products to buy too. With Chinese labor costs going up, that's certainly not going to be in the factory down the road.
A little bit of history first, I guess. In the mid 1700s, the British empire was going bankrupt because of its subjects' insatiable demand for Chinese tea, silk, and porcelain. The problem was that the British made nothing the Chinese wanted (except nice guns, cannons, and ships, which the British naturally wouldn't sell). So the only thing Britain could pay with was silver. And since they were on a gold standard, they were really paying with borrowed silver.
And so goods flowed from China to Britain, and money flowed from Britain to China, and Britain gradually sunk into greater and greater debt.
Sound familiar?
Britain's solution to the problem was simple, elegant, and well… kind of evil: opium. They grew copious amounts of opium in India, started importing it to China, and with an instant repeat customer base of addicted Chinese, the flow of silver reversed.
This of course was unacceptable to the Qing dynasty -- better known as the very last one -- and so to put it shortly, many people died, and China has had a bigass chip on its shoulder ever since.
The fundamental issue is this:
If you're competing in a global economy, you have between 1/5 and 1/6 of the world's population, you are largely in direct and authoritative control of their access to information and goods, and your economy is generally self-sufficient, congratulations: you are now playing on God mode.
Your population doesn't need, want, or even know about anything the outside world is producing (even if they're busily doing so in the factory across the street). On the other hand, you have the ability to make or buy whatever you or anyone else needs or wants, at a lower price than anyone else can.
Once you've been doing that for a while, you now have all the money, and can do pretty much whatever you want on the economic front.
This is what China was doing in the mid-1700s, and this is pretty much what we're seeing now. Back then, the short-term solution for Britain was opium. The slightly longer term solution was to blast the hell out of anything within reach of their cannons, sail a little farther along the coast and do it a few more times… then force China to sign a series of humiliating treaties that put things on a more even keel.
Now, there's really no alternative.
So what's to be done?
Well, looking around at the people here in China, the only thing that they're really hell-bent on importing (aside from iPhones) is Western culture (and I guess iPhones kind of count for that too). Movies, music, video games, software, and brands.
The problem is, nobody but the rich pays for any of it. Any movie is instantly available on DVD out on the street a day or so after it's released in theaters, or for streaming on any of several free services. Any music is available for download or streaming, complete with karaoke-style subtitles. Video games and software are of course downloadable, or you can buy them on disc for at any computer market for basically the cost of the disc. Anything copiable is copied and sold for vastly lower prices, and/or with more Chinese-centric features.
And brands? A pair of Levi's jeans will cost you about $200-250 in a high end shopping mall. Next door or in the basement, you can buy a pair of knockoffs for $10. And I'm told that even in the name brand stores, a good portion (estimates vary, but I've heard anywhere from 50 to 100%) of the inventory are knockoffs, purchased by the branch/city/regional managers to resell and pad their own bottom line.
Google showed up; and Baidu appeared in 2000. Now Google's pulled out of China, and everyone uses Baidu. Does that website on the right look a little familiar?
America's biggest export to China is creativity and lifestyle. Trouble is, those things are easily duplicated, and nobody has the nerve to go to the Chinese government and say "hey, you know… if you paid us something for all this stuff, or enforced some laws here and there, we would all be a little bit richer for the exchange." In truth, everyone in the U.S. is probably too busy ripping MP3s and downloading movies to bother anyway.
Economists are forever complaining that the Chinese don't consume enough compared to their Western counterparts, who are forever running up credit card debt to buy that new gadget or handbag.
I'm pretty sure they're wrong.
Chinese consume plenty; the money just never ends up leaving China.
In a way, it's common sense; one could buy an iPhone for full retail price, or walk down to the local black market and buy a knockoff with the exact same look, and more or less the same functionality, for an eighth of the price.
It's a well-known trick for factories here:
- Obtain a lucrative contract for a foreign product for, say, 100,000 units.
- Run off your 100,000 units and deliver them, with a few thousand extra for possible manufacturing defects.
- Switch to lower grade materials, run off another 50,000 to sell on the black market.
- Pocket the proceeds.
A lot of people point to the undervalued Yuan as the reason; personally I think that's a little simplistic. I think I have it pretty well figured out; China's keeping the RMB undervalued while it develops Africa to service its coming consumer economy; once Africa starts producing, boom… RMB appreciates, imports are cheaper, and say hello to "Made in by China in Ethiopia" labels on everything you buy.
And after Ethiopia gets rich and starts looking around for people to make their iPhone 9Gs, maybe we'll be in a position to fire up our manufacturing industries again. Who knows… are global economies cyclical? There was always some "new world" out there before to give economic growth a new bump, or a global disaster/war to kill off a huge part of the population to effectively do the same thing. Could MRSA be the solution to our collective economic crises?
Anyway, It's a fundamentally different attitude. My girlfriend is usually puzzled when I show her the little doodads I buy from REI, or the other little things I bring back from the States with me. She steadfastly maintains that I'm a dumbass: Since I could buy essentially the same thing for a tenth of the price at the street market down the block, why would I even bother? She's absolutely amazed by the 100% guarantee REI offers; if it was here in China, she contends, the reaction would be swift and universal:
First, people would be skeptical and think whoever was in charge was a little crazy.
Second, once word got out, the store would be robbed blind and go out of business almost immediately.
There are a few things that either haven't made it to market here yet, or are simply out of reach for the majority of Chinese. Things like my Circulon Infinite omelet pan, with some fancy nonstick coating. The fact that I can fry an egg in this skillet without any oil is mind-blowing to JJ, whose impression of fried eggs has been cultivated by the technique commonly used in Wuhan restaurants: scramble them in a deep-fryer them until they just start to firm up, then scoop them out and throw them on a plate.
These pans would sell like mad over here… if a) people knew about them, and b) Chinese import taxes and price gouging didn't make them a $300 investment for a local. I paid $25 for this thing on Amazon. And I'm pretty sure if I looked hard enough, I'd find a "Made in China" stamp on it.
Another would be things like my Vibram FiveFingers. I get long stares from people on the street while wearing them, and everyone asks me about them; where I got them, how much they cost, and so on.
Just last week I found a photo of a factory in China churning out copies of these by the thousand.
The only reason they're still practically unheard of in China? The duplicators are making a killing off of eBay, selling to Americans looking for a deal on the hard-to-find shoes.
I think this will make it very, very difficult for anyone to do business with China in the coming years. What we have to offer them are soft and creative skills, where duplicating the results are a matter of more or less pushing a button. Meanwhile, China's education system is getting better, and its students are becoming more aware, analytical, and ever more ambitious.
Despite the tone of my previous post, I still believe in the States; as easy as it is to dismiss us as a collection of Krispy Kreme-sucking lard beasts, there is a certain flexibility of attitude, thought, and empathy that comes with being a nation built from without rather than exclusively from within, and it is difficult to adjust for that when you have about 30 centuries' worth of shared language, tradition, and history, and a more recent history -- several hundred years' worth -- of extreme isolationism.
And you know what? There's plenty of room for high quality American made products in a Chinese market; we just need labor unions to do the job they're supposed to do -- prevent abuse -- rather than try to milk every last dollar out of any organization silly enough to employ their members under the current arrangements.
There is a small but rapidly growing segment of the population here that is increasingly interested in conservation. This is something that has been lost in the recent breakneck race for capitalist profits, and doesn't show in the general population yet -- litter and pollution is omnipresent, and everything is disposable -- but people are starting to learn the value of (among other things) buying a high quality product once, rather than buying a cheap alternative that you have to replace every few months. So there's a small window of opportunity here, where U.S. products can insert themselves as premium, long-lasting brands in contrast to the local, more disposable products. As long as they're remotely affordabe, at any rate.
Though to be perfectly fair… Americans haven't really learned this lesson yet either, and we've had a hell of a lot longer with the reality. So maybe I'm just full of it and we just need to keep a tighter grip on our fricking money.
Facebook comment -> post: Politics
This was actually supposed to be a reply to a Facebook comment thread. I ended up deciding to make it my writing assignment o' the day, partly because I like how it sounds, and also because I'm working on this project that is such a time sink as to preclude me from writing any more today.
The thread so far:
G.G.G.: Thought I'd have some fun on america speaks out.com....here goes my first loony submission and its tortured logic ........The government regulating oil industries is ineffective, they have no expertise in the field, plus the free market is the ultimate regulator here. If anything the government should give the oil comp...anies further tax cuts to make the deep water oil extraction less
Jeff Yen: Well, looks like you're on track to be a Senator soon.
G.G.G.: I think Jack Nicholson said it best in as good as it gets, take away reason and accountability
Jeff Yen: You're on track to becoming a woman?
G.G.G.: a senator, given their reluctance to take a principled stand..on anything other campaign donations
And my response:
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I actually disagree. I think their stand is in fact very principled, just principles of logic and economy as opposed to subjective values of morality and/or ethics. Simply put, they side with whomever benefits them the most.
The fact that they tend to line up with the lobbies and corporations is pretty logical; anyone who says they're going with "the people" are either a) lying, or b) operating on sentiment, which is equally dangerous. A political system shouldn't have to rely on pervasive dopamine imbalances in order to work the way it was meant to.
Take a look at Bhutan, which I see as a fascinating political experiment in progress. All of their current development and gains in what they call GNH are really down to one man, the previous king. Now that he's switched them over to a constitutional monarchy and abdicated, I'm pretty eager to see how that develops. It's not like they're all earthly saints or anything, but they're small and pretty self-contained, so I'm really looking forward to seeing how they're doing after they've been in charge of their own economy for a while.
I think the flaw in our republic, just as with the flaw in any form of communism, is that it is a system springing from the (sentimental) assumption that people operate in a certain way, or should, when everything we've ever done has shown that we do not.
The communist error was assuming people would be willing to work hard for the same money they'd get sleeping at home. I believe any democracy's error is assuming that given a choice between bettering society as a whole and benefiting ourselves -- or alternatively, punishing someone we dislike (which I would actually argue is the same thing) -- we will reliably choose the former.
It's taken longer for the U.S. system to be openly subverted than, say, the USSR, but it remains to be seen whether we'll last longer than the Roman republic (only 248 more years… come on guys, we can do it!). At any rate, I believe the underlying flaw remains: neither ideology sufficiently accounts for human venality. It's just a game to see who can keep a lid on it the longest.
In fact, we might actually owe our longevity as a political entity to the fact that Congressmen spend so much of their time campaigning and molesting their pages instead of working, which keeps them from fucking up the country quite as much.
Ultimately, there's no sufficient metric against which to objectively rate things like ethics or morality, so we can't say with any measure of authority: "Senator, we have observed with some concern that your behaviour is now comprised of 73% douchebaggery, so we're going to take you out back and Taser your genitals for a while."
Some of the more rabidly conservative Republicans would probably quite enjoy that, actually.
But without a system of regulation, and therefore correction, the only other option is to simply frontload the issue: make it more beneficial, on an individual level, for people to behave the way we want them to, rather than less beneficial for people to behave badly, but only if they're caught.
This would require a pretty sweeping set of changes, and our republic is set up partly to stonewall changes as much as possible, so systematic overhauls like that are unlikely to ever happen within the system. This is especially the case given that the general populace are largely non-participants, and the most active participants are exactly the kind you don't want anywhere near the system.
It might be easier if we, say, levied charges of treason against and actually prosecuted Congressmen who subverted our political system for personal gain, but... they themselves would have to pass the law first, and they'd be the ones sitting in judgment of each other.
So much for that.
So really, just like everyone else, I think we'll just get to choose one:
a) Civil war
b) Coup (military, political, or otherwise)
c) Slow peaceful decline, leading to breakup of the union
d) Revolution
e) All of the above
Not that I think this is necessarily a bad thing. The world will change as we know it, and there will be lots of suffering, but the race should learn as a whole, and maybe the next global superpower will be that much better.
Personally I'm kind of hoping for (c).... I think it'd be nice to be a citizen of the Californivegashingtoloradoregonewyorkawaiian empire.
We could even invite Texas along for the ride, if they promised to use our books.
A couple of Italians kid hacked the Space Race… this is officially the coolest thing I’ve read in a long time
http://www.forteantimes.com/features/articles/1302/lost_in_space.html
Then, on 28 November 1960, the Bochum space observatory in West Germany said it had intercepted radio signals which it thought might have been a satellite. No official announcement had been made of any launch.
“Our reaction was to immediately switch on the receivers and listen,†said Achille. After almost an hour of tuning in to static, the boys were about to give up when suddenly a tapping sound emerged from the hiss and crackle.
“It was a signal we recognised immediately as Morse code – SOS,†said Gian. But something about this signal was strange. It was moving slowly, as if the craft was not orbiting but was at a single point and slowly moving away from the Earth. The SOS faded into distant space.
17 hours
I watched with a rather perverse fascination as the liquid yellow tentacles felt their way along the aisle towards my feet.
I should probably do something, I thought.
Fortunately, the train leaned over as we started down a sweeping left turn, and the stream of urine abruptly tracked right. It disappeared under a row of seats, promptly reappearing between the feet of the man across the aisle from me. He gazed at it bemusedly for a moment before jumping up with a startled oath and plucking his briefcase off the floor.
The wellspring's mother, meanwhile, bounced her giggling child a few times on her knee to get the last drops onto the floor.
That was hour three of seventeen.
The Shanghai World Expo is in full swing, which makes things like getting to and from Shanghai -- even if you're just passing through -- a little more difficult than normal. Hotels are mostly booked solid, so overnight layovers are tough to arrange. Tickets for planes and trains are unusually expensive, if they can be had at all.
And so it came to be that Jing Jing and I had to buy tickets from Shanghai to Wuhan, normally not too difficult, a few days in advance.
We first tried the normal lower middle class preferred level of train travel, an overnight hard sleeper (ying wo / 硬å§). These are 3-tier bunk beds, essentially a thin futon mattress slapped on top of a sheet metal plank and bolted to the side of a train carriage. Not terribly uncomfortable, and you get to save money on a night's accommodation.
No go. All sold out, even for the goober train that made all 16 stops between the two cities, leaving Shanghai at 1pm and arriving in Wuhan the next day at 5am.
So we looked at the middle class preferred level of travel, a soft sleeper (ruan wo / 软å§). These are rather thicker futon mattresses folded onto sheet metal planks bolted in two tiers to the side of individual compartments, and as a final luxurious touch they usually put a rose in a little plastic vase on the compartment's table. Posh.
But also no go; they were just too pricey. To be fair, they were only 400RMB per bunk, which works out to a little under $60. But seeing as we were both without steady income, it made sense to save money where we can.
So we opted for the only other available option, seventeen hours of hard seat ( ying zuo / 硬座 ) goodness on the goober train.
Hard seats are the working class berths, cloth-covered benches that fill a train car end to end; 3-person and 2-person benches across an aisle, with tiny tables between them. Also common in these cars are "standing tickets" (zhan piao / 站票), which are exactly what they sound like; standing room only. You get to take a break in someone's seat when they get up to go to the bathroom, but otherwise you're pretty much on your own.
These rides are usually hot, sweaty, noisy, and crowded. The babies and toddlers in these cars, unlike those of richer parents on planes or the soft sleeper cars, wear pants with slits cut in them rather than diapers, and they generally just whiz on the floor whenever they feel like it. Shoes with waterproof soles are a good idea, and keep anything you even remotely care about off the floor.
Likewise, many people in this economic bracket tend to be fairly blase about littering and spitting, and you'll get a fairly rich mixture of mucus, chicken bones, ramen wrappers, and other assorted treats under and around the seats, so heading to the bathroom can quickly become a game of "let's not step on the slime."
Once you actually get to the bathroom, that's where you learn to really appreciate the value of the saying "it's about the journey, not the destination." The bathrooms on these rides are notoriously filthy; the cars generally run out of water before the final stop, so you can usually expect a fair amount of piss and shit to welcome you upon your arrival.
After one or two visits to these restrooms, I started the practice of fasting for about eight hours before any long haul train ride.
At any rate, if you're not one of those lucky individuals who can sleep anywhere at any time, you quickly learn to adopt that half-conscious doze which, if not exactly restful, at least fends off possible small talk from your neighbours.
Anyway. No point to this post, I'm just killing a little time while I wait for Portugal to finish sending North Korea home from the world cup.
Awesome speech
http://tinyurl.com/36q6rpn
A commencement speech given to Stanford School of Medicine's graduating class last week by Atul Gawande. One good bit:
You come into medicine and science at a time of radical transition. You have met the older doctors and scientists who tell the pollsters that they wouldn’t choose their profession if they were given the choice all over again. But you are the generation that was wise enough to ignore them: for what you are hearing is the pain of people experiencing an utter transformation of their world.
Doctors and scientists are now being asked to accept a new understanding of what great medicine requires. It is not just the focus of an individual artisan-specialist, however skilled and caring. And it is not just the discovery of a new drug or operation, however effective it may seem in an isolated trial.
Great medicine requires the innovation of entire packages of care—with medicines and technologies and clinicians designed to fit together seamlessly, monitored carefully, adjusted perpetually, and shown to produce ever better service and results for people at the lowest possible cost for society.