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April 30, 2006
Developing a Lower Cost Way to Attack Terminal Cancer in India
Red Herring reports on a lower-cost treatment for treating patients with diagnoses of terminal cancer:
Posted by John at 9:05 AM | Comments (1) | TrackBackParthasarthy Rengarajan, an ear, nose, and throat surgeon in Bangalore, walks out of his clinic after seeing over 30 patients, flashes a smile, and gets ready to drive back home. No one would guess that the 57-year-old doctor was diagnosed 18 months ago with a deadly form of cancer—an aggressive brain tumor called glioblastoma multiforme.
Having lost all hope with standard treatment, he decided to try a new, experimental treatment being tested locally—and it worked so well that Dr. Rengarajan was back to operating on others in no time.
"I am over 80 percent fit with no trace of any recurrence yet," he says. Dr. Rengarajan and scores of others with terminal cancer have survived far beyond the time physicians gave them, thanks to a new technology called Rotational Field Quantum Magnetic Resonance.
RFQMR is similar to conventional MRI (magnetic resonance imaging) but functions very differently in the way it attacks tumors. Since there was no control group in its Phase I trial, and therefore no measure of how RFQMR results compare to conventional therapy, hard comparative data won’t emerge until the Phase II trial. However, the new therapy surpasses what chemotherapy and radiation can do in curing sufferers, a proponent contends. What’s more, it costs only a quarter of what chemo costs, says Rajah Vijay Kumar, the chief scientific officer at Scalene Cybernetics’ Center for Advanced Research and Development. . . .
The Cytotron’s intellectual property is protected under a Patent Cooperation Treaty application and remains the only device in existence, according to Mr. Kumar, to use nuclear resonance for in-vivo tissue engineering. The multi-frequency beams that emanate from the device range from 400 hertz to 100 kilohertz. It works on the principle that each living and non-living structure has a certain natural frequency and when two objects with similar frequencies come near each other they can communicate without physical touch. Thus, the tumor cells can be given instructions to activate their normal cell cycle of apoptosis, or programmed cell death.
So far, 106 terminally ill cancer patients have been treated: 60 percent are still alive and 30 percent of them have gone back to work and normal lives. "Patients who died had severe complications from chemotherapy and radiation and did not have time to respond to our treatment," says Dr. Vasishta, the principal investigator in the study.
Chinese Doctors Using Ultrasound to Kill Cancer
Posted by John at 8:58 AM | Comments (0) | TrackBackBy the end of 2005, HIFU [high intensity focused ultrasound] had been used in China to treat more than 20,000 patients, including a number of non-Chinese patients for whom HIFU treatment is unavailable at home. China Medical, one of several Chinese manufacturers, reports impressive response rates: 80 percent of patients saw partial or total remission of tumors following a course of HIFU treatment. But . . . HIFU is nowhere near approval in the U.S. for cancer therapy. Thus far, only one company, Israel’s InSightec Image Guided Treatment, has received FDA approval, and that is limited to the treatment of uterine fibroids—non-cancerous but often painful growths affecting about 20 percent of women.
Fear of Immigration Raids Shutting Down Construction Sites in South Florida
Thousands of construction workers stayed away from job sites this week in fear of immigration raids, crippling hundreds of projects underway in Miami-Dade and Broward counties.
Feeling the strain: One of South Florida's key industries that is already short of workers in the middle of a building boom.
. . . since Tuesday, the [Associated General Contractors] estimates that as much as 75 percent of its local workforce hasn't shown up.
Posted by John at 8:13 AM | Comments (0) | TrackBack"It's not better today than it was yesterday," said Len Mills, the CEO and executive vice president of Associated General Contractors' Florida East Coast Chapter.
Although he would not identify the companies involved, Mills gave examples of several Miami-Dade job sites: At one, there were 450 workers on the job before Tuesday -- on Thursday just 112; at another, there were 114, and now there are none. He said the problem was also widespread in Broward.
Moss & Associates' Bruce Moldow said the company was experiencing "severely reduced" staffing on its projects, especially those in early stages working with pouring concrete and laying rebar.
"It's more, I think, because of rumor than fact," said Moldow, an executive vice president with the Fort Lauderdale-based company.
"The scuttlebutt in the industry is that there have been one or two actual raids, but it has impacted every job in Miami." . . .
Several construction companies say they believe that many of the workers may be documented, but are still afraid of being caught up in immigration raids.
"When you talk to the employees, the vast majority are legal, but they're Hispanic and they're scared they're going to be get dragged into something," said Moldow. "Nobody wants to get caught without their papers and taken in." . . .
What Nashville's Hispanics Want the Rest of Us to Know
The Nashville Tennessean offers the "Top 10 things Hispanic Nashville wants the rest of us to know." The list includes "We are not all Mexican" and "We do not want to change the United States of America."
Posted by John at 6:00 AM | Comments (0) | TrackBackThe Underlying U.S. Problem in Iraq: Failure in Reconstruction
I haven't passed along much on Iraq lately; I haven't seen too many unique viewpoints on the situation in Iraq lately, so I haven't passed along anything to you.
A Washington Post commentary by Joseph E. Robert, Jr., however, stood out as a part of the story worth highlighting. Robert is a businessman and the father of a Marine serving in Iraq:
Posted by John at 5:45 AM | Comments (0) | TrackBack. . . dangerous failures in Iraq's economic reconstruction are undermining progress on the security and political fronts. U.S. commanders are the first to admit that this war will not be won by the military alone. "You are not going to shoot yourself out of this problem," says Lt. Gen. Peter Chiarelli, commander of daily operations in Iraq. Of the estimated $300 billion spent by Washington so far in Iraq, just $21 billion has been allocated for reconstruction, and perhaps half this amount has been redirected to pressing security needs. U.S. funding, which runs out this year just as a new Iraqi government will need to show tangible economic progress, is a small fraction of the estimated $70 billion to $100 billion that Iraqi reconstruction may ultimately require.
This strategic failure is a direct result of something else I observed: Only one element of the U.S. government -- the military -- seems to be treating Iraq as "the vital national interest" that President Bush declares it to be. Across Iraq, military personnel are heroically managing local reconstruction and development projects for which they lack the proper training or tools. Meanwhile, back in the Green Zone, hundreds of civilian positions -- from the departments of State, Justice, Commerce and Agriculture -- go unfilled.
U.S. commanders expressed frustration that dozens of Justice Department billets sit empty despite Iraq's urgent need for help in developing a functioning judicial system. American troops like my son describe risking their lives to arrest suspected insurgents, testifying in Iraqi courts and then watching in frustration as the offenders are tossed back on the streets. In government, as in business, refusing to devote the resources and personnel to a strategic priority is a recipe for disaster. . . .
Quote of the Day for Sunday, April 30, 2006
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April 29, 2006
Cure for Cancer Worth $50 Trillion to the United States
Naturally, a cure for cancer is worth more to all of us than the pure dollars and cents. A study from two University of Chicago researchers, however, finds that the impact of even modest advances in the fight against cancer, much less a cure, will have an enormous economic benefit:
A new study, to be published in a forthcoming issue of the Journal of Political Economy, calculates the prospective gains that could be obtained from further progress against major diseases. Kevin M. Murphy and Robert H. Topel, two University of Chicago researchers, estimate that even modest advancements against major diseases would have a significant impact – a 1 percent reduction in mortality from cancer has a value to Americans of nearly $500 billion. A cure for cancer would be worth about $50 trillion.
"We distinguish two types of health improvements – those that extend life and those that raise the quality of life," explain the authors. "As the population grows, as incomes grow, and as the baby-boom generation approaches the primary ages of disease-related death, the social value of improvements in health will continue to rise."
Many critiques of rising medical expenditures focus on life-extending procedures for persons near death. By breaking down net gains by age and gender, Murphy and Topel show that the value of increased longevity far exceeds rising medical expenditures overall. Gains in life expectancy over the last century were worth about $1.2 million per person to the current population, with the largest gains at birth and young age.
"An analysis of the value of health improvements is a first step toward evaluating the social returns to medical research and health-augmenting innovations," write the authors. "Improvements in life expectancy raise willingness to pay for further health improvements by increasing the value of remaining life."
Murphy and Topel also chart individual values resulting from the permanent reduction in mortality in several major diseases – including heart disease, cancer, and diabetes. Overall, reductions in mortality from 1970 to 2000 had an economic value to the U.S. population of $3.2 trillion per year.
Please remember Golfers Against Cancer. All of the money we raise goes directly to cancer research without passing through a bureaucratic sieve. As this article implies, even small contributions can have a major impact.
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Country Music Singers, Entrepreneurs, Failure, and Success
Jeff Cornwall, whose blog The Entrepreneurial Mind we've pointed you toward before, penned a beautiful post on the "highway to success" which is invariably littered with failure:
Posted by John at 5:44 AM | Comments (0) | TrackBackI wanna thank everyone who ever told me no, Pack it up and get back home, It kept me going knowin' I would prove them wrong. Yea I knew it all along, Without 'm I might have given up a long time ago, and so, I wanna thank everyone who ever told me no. [Buddy Jewell]
Because we live in Nashville, I am often reminded of how much failure goes into creating success. From the outside, it seems that music stars just suddenly appear on the scene. The truth is that for most of them it took years of hard work and many, many failures to finally find success.
The same is true for entrepreneurs. Most highly successful entrepreneurs will tell you that along the road to success in their businesses they were often on the brink of failure. But they persevered. They found a way to make payroll. They found a way to make that critical sale. They found a way to keep the wolves away from the door just long enough to make it through the tough times. They found a way to pick themselves up from a business that did not succeed and move on to the next one that might. As Thomas Edison once said, "Many of life's failures are people who did not realize how close they were to success when they gave up." . . .
Rushing Into Emerging Markets
Inflows to emerging market funds surpassed the record £20bn total [roughly $36.5 billion] for the whole of 2005 in the first 13 weeks of 2006. [Source: Financial Times]
Posted by John at 5:15 AM | Comments (0) | TrackBackPromoting Cremation in China
The fact that cremation is promoted in China is just one signpost illustrating how valuable both arable and developmental land is in the country, in spite of its large overall size.
Posted by John at 4:53 AM | Comments (0) | TrackBackQuote of the Day for Saturday, April 29, 2006
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April 28, 2006
China Retail Market "Saturated", India Most Attractive
A study of emerging retail markets suggests China is becoming "saturated" and losing attractiveness for international retailers. India is deemed the number one place to be, and Vietnam's potential continues to grow:
Posted by John at 4:40 AM | Comments (0) | TrackBackThe window of opportunity for international retailers in China is continuing to close, as the market becomes saturated, according to an annual study of emerging retail markets by consultants AT Kearney.
China dropped from fourth to fifth place in AT Kearney's 2006 Global Retail Development Index, while India retained its position as potentially the most attractive developing market for retailers seeking international expansion.
Fadi Farra, lead author of the report, said it underlined the importance to retailers of timing their entrance into an emerging market, estimating there was a five-10 year window of opportunity. "China was number one five years ago. Now China isn't the place to be: India is."
The study suggests Asia as a whole has overtaken eastern Europe as the most attractive region for potential retail expansion, as membership of the European Union speeded market saturation in the former communist states. Asia's prospects were supported by regulatory changes in India, and the gradual opening of Vietnam, which jumped from eighth to third place in the index this year. "Vietnam today is similar to India five years ago," said Mr Farra. . .
The Link between Economic Freedom and Oil Prices
Researchers at the Dallas Federal Reserve Bank see a correlation between lack of economic freedom in many oil producing countries and high energy prices.
Their study uses survey data compiled by the Heritage Foundation, which annually rates nations by their level of economic freedom. For Heritage, a country’s economic freedom is related to its willingness to allow free enterprise and markets, its policies governing labor, finance, investment, and property rights, among other qualities:
. . . more than half the world's oil lies in countries that exercise excessive state control. . . Governments dominate Middle East oil production, with countries fully owning the industry or allowing only minority partners from the private sector.
Two-thirds of the oil reserves are in nations Heritage rates as mostly unfree or worse on government intervention. Adding Iraq, a nation with a history of state control, the proportion climbs above three-quarters.
Although today's prices give private companies incentives to drill for oil, government ministries don't always take full advantage of market opportunities. They may be mired in red tape. They may treat the oil industry as a cash cow, choosing to rake in revenue without incurring the costs of investing in new capacity. They may prefer to reap the gains of monopoly prices. . . .Saudi Arabia, for instance, maintained a relatively constant capacity to produce oil from 1994 to 2001. It has increased its capacity only a little over the past five years. Mexico has considered inviting foreign investment into its energy sector, but government- owned Pemex retains control and has done little to expand capacity. . . .
A large part of the world's oil reserves are outside the easy reach of free markets, with their incentives and disciplines. Oil prices are rising—not because the world is running out of oil but because the bulk of reserves are in countries where market incentives cannot work fully or in the hands of monopolists who may be exercising their power by restraining investment.
Because of the mismatch between reserves and economic systems, today's oil prices are higher than they would be in a world of free markets. Tomorrow's oil prices are likely to be higher, too, because producers, divorced from market incentives or with an incentive to restrain production, are likely to underinvest in new capacity.
Venezuela is one vivid example of where state control is worsening.
Posted by John at 4:39 AM
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U.S. Sugar Growers to Their Customers: Drop Dead
The U.S. sugar industry, in my view, bears a distinct resemblance to a cartel, yet it continues to enjoy preferential treatment from Washington in the form of import restrictions and subsidiaries.
These policies are destroying the domestic confectionary industry; the Houston Chronicle points to one example in Texas:
Posted by John at 4:19 AM | Comments (0) | TrackBackAtkinson Candy Co. has stayed true to its Texas roots for nearly 75 years, but soaring U.S. prices for sugar, its main ingredient, have the sweets maker rethinking its 1991 decision not to move to Mexico.
"I've got to tell you, right now that seems like a poor decision," said Atkinson Candy President Eric Atkinson, who runs the business with his father, two sisters and 280 employees. "You see weaknesses and you see vulnerabilities and things you wouldn't be experiencing
The Lufkin candy maker, with annual sales of nearly $100 million, uses between 30,000 and 40,000 pounds of sugar a day to produce peanut brittle and peppermint sticks. Prices for the sweetener have soared 30 percent during the last year, said Atkinson. In some cases, the company has had difficulty getting enough sugar from domestic suppliers.
Trying to preserve market share, Atkinson said the company has passed only half the sugar price increase along to customers. Sugar costs have boosted the price of its signature product, a 3 1/2 pound peppermint stick the company touts as the world's largest, to $5.25, up 25 percent from 2005.
Atkinson and other candy makers have criticized the federal support loans, tariff-rate quotas and domestic supply restrictions that prop up U.S. sugar prices to protect domestic producers. Critics complain that the sugar program hurts companies by restricting access to less expensive, foreign-grown sugar.
The Commerce Department released a study in February showing that the confectionary industry lost nearly three jobs between 1997 and 2002 for each sugar growing and harvesting job saved through high U.S. sugar prices. [emphasis mine]
The report said chocolate, candy, breakfast cereal and other sugar users paid 23.5 cents for a pound of refined sugar in 2004, more than twice the world price of 10.9 cents. This placed U.S. companies "at a competitive disadvantage to foreign competitors" and lead many to move their operations to Canada or Mexico.
Atkinson said the company is looking again at moving. . . .
What Albert Einstein, Andy Grove, and Sergey Brin Have in Common
A very good editorial on our absurd immigration policy toward highly skilled immigrants by TechNet’s Lezlee Westine and Sun Microsystem’s Scott McNealy, published in USA Today:
Posted by John at 4:07 AM | Comments (0) | TrackBackWhat do the founders of Intel, Sun Microsystems and Google — Andy Grove, Andy Bechtolsheim, Vinod Khosla and Sergey Brin — have in common with Albert Einstein and Wernher von Braun? All are part of America's tradition of welcoming talented immigrants who have made significant contributions to our industry.
Einstein changed the way we look at science and energy; von Braun was the father of the U.S. space program; and Grove, Bechtolsheim, Khosla and Brin are among the many giants who have changed the high-tech industry.
The innovative companies they built created thousands of jobs and have a combined market cap of $250 billion. But our longstanding tradition of being an open door for innovation is at risk.
Today's broken immigration system closes the door on foreign-born innovators. With arbitrary visa limits and clogged processing, opportunity is knocking at our door and we're fumbling with the keys. . . .
Quote of the Day for Friday, April 28, 2006
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April 27, 2006
On the Media, Energy Prices, Whale Oil and "Bloviating Senators"
If you understand economic history you can better under the economic present. If you want to better understand the economic history of the United States, you can’t do much better than to start with John Steele Gordon, who writes for American Heritage and whose book, An Empire of Wealth: The Epic History of American Economic Power, is a classic.
Regarding the current round of high energy prices, Gordon writes that the media is entirely predictable when it covers gas prices. You’ve seen it: the "man in the street" interviews on how the economy must be going to hell because gas prices are $3 a gallon. What the media never gets to—-and politicians fawning for votes don’t explain—-are straightforward laws of supply and demand. A history lesson would help as well:
. . . I would truly love it if just once a reporter confronted with a politician making the claim of oil-company collusion (which, of course, would be illegal) would say, "Senator, could you please explain why it is that while oil companies can conspire to push up prices, as you say they are doing now, they can’t seem to conspire to keep them up? For several years in the 1990s gas prices fell consistently until they reached levels not seen in real terms since the 1950s. What prevented the oil companies then from conspiring to raise prices and make obscene profits?"
The fact of the matter is that crude-oil prices have been volatile since Edwin Drake brought in the first oil well in 1859, and the cost of crude oil is about 55 percent of the cost of gasoline.
Production in the first decade of the oil industry soared more or less steadily upwards, from 2,000 barrels in 1859 to 4.5 million barrels 10 years later. But prices were all over the map, falling as low as 10 cents a barrel (well below the cost of the barrel) and reaching as high as $13.25. The Standard Oil Trust, which in its heyday controlled about 90 percent of the American oil industry, was able to reduce but not eliminate the volatility, but oil prices fell on average throughout the Standard Oil era.
The reason the price of this vital commodity is volatile is strictly Economics 101, a course no political reporter seems ever to have taken. Demand for oil has been rising more or less steadily over the last 150 years as industrialization has steadily increased. American consumption of petroleum, 4.5 million barrels in 1870, increased to 60 million barrels by 1900. Today we use that much petroleum every three days.
But supply rises only in fits and starts. Oil exploration is very expensive. Bringing discoveries on line is very expensive. New refineries to turn oil into gasoline are very expensive. In fact oil is one of the most capital-intensive businesses on the planet, and that capital must be committed years in advance of any return. That, naturally, makes people wary of investing until prices reach a high level. High price levels also spur conservation (leave the Hummer in the driveway, take the Volkswagen) and investment in alternative fuels and alternative sources. Serious money is already being put into developing the necessary technology to turn garbage into petroleum, which would be a win-win situation, with a 500-barrel-a-day plant already in operation in Missouri. (See http://www.discover.com/issues/may-03/features/featoil/ and http://www.discover.com/issues/apr-06/features/anything-oil/.)
Indeed that’s exactly how the oil business got started. Rising demand for whale oil for light was fast depleting the world’s whales, sending prices through the roof. Self-interested entrepreneurs sought other illuminants, including kerosene from "rock oil," as petroleum was then called (petroleum just means rock oil in Latin anyway). Edwin Drake proved that drilling could vastly increase the supply. One of the great industries of the modern world was born, and the whales got a much-needed reprieve, another win-win.
Capitalism will solve the problem of high oil prices a lot faster than bloviating senators.
If this piece inspires you, I encourage you to regular visit Gordon’s blog. He’s a master at looking at the past and making it relevant today.
Posted by John at 9:23 AM | Comments (0) | TrackBackThe Investor Class in Search of a Political Home
BusinessWeek has an interesting look at the influential "investor class" of voters, which spans ethic, income, religious, and age segments. They are disenchanted with Republicans and afraid of Democrats, and how they could be a deciding factor in this year's elections.
Posted by John at 8:30 AM | Comments (0) | TrackBackTough U.S. Visa Rules Affect U.S. Air Carriers' Plans for China
If those of you in Georgia who want to better understand the obstacles Delta faces in getting approval for a direct flight to Beijing, consider this report from the Financial Times:
Posted by John at 7:07 AM | Comments (0) | TrackBackTough US visa requirements have emerged as the biggest stumbling block in efforts to ease restrictions on flights to China.
During bilateral talks in Beijing, the Chinese delegation highlighted the impact of US immigration law and claimed the visa issue explained why Chinese carriers were using just half of the capacity agreed during the landmark 2004 deal which led to a five-fold increase in available flights.
US carriers are already using their full entitlement and lobbying for more. While US-China traffic doubled from 2003-05, most of the increase has been from US-based passengers, with Chinese carriers relying mostly on their own citizens to drive traffic.
The Chinese concerns echo broader calls from across the US business community for immigration policy to be reassessed because of the impact on trade and research. Washington lawmakers remain cool to any such change.
Larry Kellner, chief executive of Continental Airlines, yesterday said the visa issue continued to affect the carrier's strategy of carrying passengers to and from Latin America through its Houston hub.
"We're concerned about the difficulty in obtaining visas," Mr Kellner told the FT, adding that he remained "baffled" by the US government's insistence that passengers need visas to transit through US airports to and from international destinations. Mr Kellner said the industry continued to lobby for change, "but we don't seem to be making much progress". . . .
Quote of the Day for Thursday, April 27, 2006
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April 26, 2006
The Golden Anniversary of the Shipping Container
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The Ideal-X went to its rusty grave in the mid-1960s. But 3,250 container ships now travel the seas in its wake, carrying over 350 million "TEUs" from port to port each year. (A "TEU" is a single metal box 20 feet long, 8 feet wide, and 8.5 feet high; a simple one costs about $2,500 and holds up to 25,000 kilos of cargo. A more common forty-foot container is two TEUs.) The cost of shipping TV sets, clothes, auto parts, and the like has consequently dropped like a stone. Precise figures are hard to find, but container export Marc Levinson says that in the late 1950s freight costs were about 12 percent of the value of total American imports and much higher for manufactures; the 2005 edition of UNCTAD's "Review of Maritime Transport" notes that America's freight costs in 2004 were 3.9 percent of import value. The effect -- together of course with trade agreements, computers and global telecommunications, the end of the Cold War, reform in China, etc. -- has been to radically change commerce. Trade has quadrupled relative to the world economy, and manufactured goods have replaced bulk commodities and natural resources at the center of commerce. By 2000, natural resources were only 13 percent of American imports -- though the oil price spike of the last three years has driven the import figure back up to 20 percent -- and imports made up about 13 percent of GDP. [Courtesy of the Progressive Policy Institute]
McLean's innovation truly transformed the world, and the way he did has to be part of the story. With only a high school education and one pickup truck, McLean started his trucking company in the middle of the Great Depression. It ultimately became the country's second largest trucking company.
McLean sold his company for $25 million to pursue the idea of a shipping enterprise using containers. He obtained a bank loan for $42 million, retrofitted two World War II tankers, one of which became the Ideal-X.
His shipping company, which ultimately became Sea-Land, was eventually sold to R.J. Reynolds for $530 million in cash and stock. McLean's share was $160 million.
McLean's story is immensely fascinating; it and the development of the container shipping industry in general receive well-told treatment in two different books: Box Boats: How Container Ships Changed the World and The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger.
Posted by John at 6:20 PM | Comments (0) | TrackBackStanding Room Only on Your Next Flight?
Posted by John at 3:24 PM | Comments (0) | TrackBackThe airlines have come up with a new answer to an old question: How many passengers can be squeezed into economy class?
A lot more, it turns out, especially if an idea still in the early stage should catch on: standing-room-only "seats."
Airbus has been quietly pitching the standing-room-only option to Asian carriers, though none have agreed to it yet. Passengers in the standing section would be propped against a padded backboard, held in place with a harness, according to experts who have seen a proposal. . . .
Quote of the Day for Wednesday, April 26, 2006
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April 25, 2006
A Successful Chinese Entrepreneur Seeks a Home in Atlanta
We were fortunate to welcome our friend Mr. Chen, Wusheng to Atlanta last week. He is Chairman of General Protecht Group and Zhejiang Dongzheng Electrical Co. in Wenzhou, China. Both Sam and I have visited with Mr. Chen on numerous occasions both in Atlanta and in China.
Mr. Chen, who we’ve found to be quite a forward thinking entrepreneur, is considering a major investment in Atlanta, as the Atlanta Business Chronicle reports:
"I have a dream," Chen said. "My dream is to have an American-Chinese industrial city in the city of Atlanta."
Chen, who was named one of China's top 10 entrepreneurs in 2004 by Chinese Central Television, China's largest government-owned TV station, first wants to build a multimillion-dollar plant in metro Atlanta that would employ 200 to 300 people and earn about $100 million annually making electrical plugs . . .
. . . local officials--betting Chen's vision would be a boon for Atlanta--rolled out the red carpet for him.
He had private meetings with Georgia Economic Development Commissioner Craig Lesser, Atlanta Mayor Shirley Franklin, Lt. Gov. Mark Taylor, and a vice president of The Home Depot Inc. Also scheduled was a 45-minute helicopter tour of metro Atlanta to scout for the 20 to 30 acres of land he would need for his warehousing and manufacturing operations.
"We're dealing with a new kind of Chinese entrepreneur," said state Sen. Sam Zamarripa, who is also a principal in Heritage Capital, the company that offered the high-level introductions, and may eventually invest in Chen's projects.
"They're self-made, global in their thinking, and they see us [in Atlanta] as a strategic advantage."
Metro Atlanta Chamber of Commerce President Sam Williams said, "It speaks volumes for the state and city that a significant Chinese company wants to do business here.
"They understand our pro-business attitude," Williams stressed. When asked about the red carpet treatment, he added, "We'll do handstands for them if necessary."
And Chen seems to understand exactly why he would choose Atlanta--over other cities--to build his empire.
"He rattled off all the reasons to come here," Williams said. "Access to the airport, Fortune 1000 companies he wants to do business with, and a nice place to live. I kidded him he ought to work for the chamber". . .
Chen, 54, and dressed in a pinstriped, brown wool suit, alligator leather shoes and a textured silk tie, hails from Zhejiang Province, on China's east coast, just south of Shanghai Province.
The province is known for its entrepreneurial spirit. And, said John Ray with Heritage Capital, who visited the area when Chen opened his most recent plant, the area doesn't have a single government-owned company. . . .
I'll have further commentary on the trend of Chinese entrepreneurs coming to the United States in a few days.
By the way, to set the record straight, Zhejiang Province, like the rest of China, does have government-owned businesses. My point was that Zhejiang Province, to my knowledge, has the lowest proportion of state-owned enterprises and is renowned in China and around the world for its entrepreneurism.
Posted by John at 5:30 PM | Comments (0) | TrackBackQuote of the Day for Tuesday, April 25, 2006
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April 24, 2006
Quote of the Day for Monday, April 24, 2006
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April 23, 2006
What Latin America Should Learn from Hu's U.S. Itinerary
The Miami Herald’s Andres Oppenheimer observes that the striking difference between the itinerary of Chinese President Hu Jintao, who visited both Microsoft and Boeing while in the United States, and that of Latin American leaders:
Posted by John at 11:14 PM | Comments (0) | TrackBackHardly a day goes by when Venezuelan President Hugo Chávez or Bolivian President Evo Morales don't criticize foreign companies, in many cases without solid reasons. And Argentina's President Néstor Kirchner made headlines two years ago when he left former Hewlett-Packard CEO Carly Fiorina waiting for 45 minutes at the presidential palace, until the visiting executive decided to leave.
According to a study by the U.N. Conference on Trade and Development, while Latin America and the Caribbean attracted an average of $83 billion in foreign investments in the late '90s, the figure has gone down to $72 billion today. Meantime, China has seen its foreign investments go up from $43 billion to $60 billion, the rest of Asia from $110 billion to $172 billion and the former Eastern Europe from $10 billion to $50 billion, the study says.
But what is more troubling, and may help explain why many foreign investments in Latin America in the late 1990s failed to generate the economic boom that many expected, is that few of these funds have gone to knowledge economy industries, such as Internet or pharmaceutical research and development, which produce by far the biggest economic impact. Most foreign investment to Latin America goes to extraction of raw materials, or to sell such products as cellphones or cars in the region's local markets.
Between 1994 and 2002, U.S. multinational corporations increased their share of research and development in developing countries from 7.6 percent to 13.5 percent, much of it in India and China. But their research and development investments in Latin America over that same period dropped from 4 percent to 3.2 percent, the U.N. Conference on Trade and Development study shows. . . .
Signs of the Times: Toyota, Detroit, Starbucks, and Emerging Markets
Toyota now has a a market value of over $200 billion, roughly the same as Wal-Mart. The Japanese automaker ranks eighth in the world in market capitalization.
The combined market values of General Motors ($12.5 billion) and Ford ($15.4 billion) are less than 15% of the market value of Toyota ($199 billion).
The market capitalization of Starbucks is greater than that of GM and Ford combined.
Many emerging markets have higher debt ratings than either General Motors or Ford.
Posted by John at 9:24 PM | Comments (0) | TrackBackHonoring a Free Market Champion: Estonia's Mart Laar
Mart Laar, the former Prime Minister of Estonia, is the 2006 winner of the Milton Friedman Prize for Advancing Liberty. He became Prime Minister when he was 32 years old in the wake of the disintegration of the previously controlling Soviet Union and served two distinct terms.
Laar’s government engineered a sweeping set of macroeconomic reforms, including a flat tax, introduction of the kroon, extensive privatization of state-controlled industries, the reduction of corporate taxes on reinvested profits to zero, unilateral liberalization of trade through the elimination of all tariffs, and reduced government regulation, including the elimination of all price controls. He also negotiated the withdrawal of Russian troops from Estonia.
The results, as the Cato Institute’s Marian Tupy writes, were phenonomal:
Though Estonia experienced a sharp but short recession that was shared by all transitional economies, by 1995 the economy was roaring again. According to the World Bank, between 1995 and 2004, Estonia's per capita gross domestic product (GDP) grew at a compounded average annual rate of 6.6 percent. During that decade, Estonia's GDP per capita adjusted for purchasing power parity rose from $6,847 to $12,773 in constant 2000 dollars, an increase of 86.5 percent. Estonia's sustained, high growth rate was among the region's highest and set the country on course to join the rest of the developed world. . . .
Mart Laar's impact was felt beyond the influence he had on the lives of his fellow countrymen. Other post-communist countries learned from Estonia's reforms and imitated them. Estonia's successful adoption of the flat tax led the way for Russia, Slovakia, Ukraine, and others. Estonia's unilateral trade liberalization is a continued inspiration for other countries; including, most recently, Georgia. There are also those who feel that the presence of a market-liberal Estonia in the European Union will lead the EU away from her socialist policies. Though I am not convinced that Estonia's market-liberalism is safe in the EU, let alone that Estonia will be able to change the policy debate in Brussels, I certainly hope that Mart Laar's optimism about the EU's future evolution will be justified.
Little Estonia is what the "BRIC" countries (China, India, Russia and Brazil) could be with greater liberalization of their economies.
Posted by John at 11:30 AM | Comments (0) | TrackBackQuote of the Day for Sunday, April 23, 2006
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April 22, 2006
The Risks and Reward of Home Depot's Expansion into China
BusinessWeek examines the risks and rewards of Home Depot's expansion into China:
Posted by John at 9:56 AM | Comments (0) | TrackBackIn China, purchasers of newly constructed homes don't have bathrooms to tile. They don't have bedrooms or kitchens. Or even interior walls. Chinese contractors just build concrete shells: They do no finishing work. "Imagine in the U.S. if you bought a home with just interior framing studs and cement floors," says Elias. "You have no doorways, or even wiring or pipes."
So Chinese homeowners fix up these shells themselves. They have to hire handymen to install everything. The home improvement stores already operating in China provide those workers. When first-time home buyer Angeline Xu took possession of her new Shanghai apartment last July, she found herself staring at a shell without plumbing, flooring, doors, or windows. Travel agent Xu headed over to B&Q, a British home improvement chain. B&Q staffers helped her design a floor plan and choose materials, and then performed all the installation work. The retailer offers a complete package, with installation included, which is aimed at entry-level property buyers and priced at around $6,000 for a two-bedroom, 900-square-foot apartment. "I bought everything here," says Xu.
If Home Depot decides to take the plunge, it would have to train thousands of its staffers to do such floor-to-ceiling installation, something it doesn't do in the U.S. . . .
Is the Cost of Political Parties to Our Democracy Too High?
Historian and Forbes columnist Paul Johnson asks whether the moral cost to a democracy of political parties is too high; it’s a great question, particularly as we push such a system upon the Afghans and the Iraqis:
Posted by John at 9:36 AM | Comments (0) | TrackBackRunning and promoting political parties in the 21st century is very expensive. Raising sufficient funds by appealing to the idealism of the party faithful is no longer possible, if it ever was. Baser motives have to be tapped, which means corruption in one form or another. And the evidence seems to suggest that in nearly all the Western democracies party fundraising is now the biggest single area of corruption . . .
George Washington addressed the problem of political parties 200 years ago in his Farewell Address. He conceded, grudgingly, that it is "probably true" that, "within certain limits" political "parties in free countries are useful checks upon the administration of the government and serve to keep alive the spirit of liberty." But he added that party spirit was "not to be encouraged." He thought "there will always be enough of [it] for every salutary purpose." As there was "constant danger of excess, the effort ought to be by force of public opinion to mitigate and assuage it."
He compared the competition of parties to inflammation: "A fire not to be quenched, it demands a uniform vigilance to prevent its bursting into a flame, lest, instead of warming, it should consume."
What we in the West should be considering is to what extent we can get along without highly organized and all-powerful political parties or, at the least, how we can reduce their influence. Why shouldn't we encourage more independent individuals to run for election? What role do independents have to play in parliaments and congresses in the 21st century? For the last two centuries political parties have increasingly dominated our legislatures, formed our governments and shaped our societies. But if they are such successful and indispensable institutions, why are they so corrupt? Is it wise to seek to export this party tradition to the fledgling democracies we're trying to set up in Iraq, Afghanistan and elsewhere? After all, in Israel--which is a genuine democracy--the overfragmented party system is an obstacle to good and stable government. . . .
Quote of the Day for Saturday, April 22, 2006
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April 21, 2006
Wal-Mart and the "Little Guy"
My partner Sam Zamarripa has joined a steering committee led by Andrew Young on Wal-Mart; here’s the Atlanta Journal-Constitution’s take on it:
To some it seemed an odd choice when Andrew Young, former mayor of Atlanta and a civil rights icon, recently decided to champion Wal-Mart and lead a company-backed group designed to counter bad publicity and the massive retailer's image as bully and oppressor.
On Thursday, the situation got a little more strange. At an Atlanta press conference, Young unveiled the regional steering committee for Working Families for Wal-Mart, and it included yet another somewhat odd choice: Sam Zamarripa. The Democratic state senator, while pro-business, tends to more often speak out for the little guy — the sort of guy who believes Wal-Mart underpays and under-insures workers and crushes community businesses. . . .
If the "little guy" the AJC is so seemingly worried about is truly worried about thinks Wal-Mart underpays and under-insures, why, when Wal-Mart opens a store in the inner city, do people line up for jobs?
Want some examples? How about the Evergreen Park store right outside the Chicago city limits, opened after the Chicago City Council, with a flourish of job-killing grandstanding, refused to allow a zoning change request for a Wal-Mart Supercenter in the South Side’s Chatham neighborhood? When Wal-Mart finally started hiring for the Evergreen Park store, 25,000 people applied.
What about the first Wal-Mart store opened in economically challenged Oakland, California last year? More than 11,000 people applied for 400 positions, the most for any store ever opened in Northern California, according to the company.
If Wal-Mart were truly such an horrendous place for the "little guy" to work, why are thousands of little guys lined up to get jobs?
Posted by John at 9:00 PM | Comments (0) | TrackBackGeorgia-China Alliance Mentioned by the Boston Globe
The Georgia-China Alliance, of which Heritage is a founding member, was mentioned in a Boston Globe article on the efforts of the Chinese government and its businesses to bolster its image and network within the United States:
Posted by John at 7:53 AM | Comments (0) | TrackBackIn addition to lobbying, China has beefed up outreach in other areas, sending its ambassador for informal talks with members of Congress on Capitol Hill that were once considered rare, and bolstering relations with local governments to improve business ties.
China's efforts are paying off. In November, Minnesota's governor accepted an invitation to lead the largest-ever state delegation to China.
In Atlanta last month, a China trade delegation pledged to open Chinese markets to Georgia chicken farmers. The Georgia-China Alliance, formed by a state senator to increase business, has hosted Chinese businessmen and senior members of China's Communist Party.
Quote of the Day for Friday, April 21, 2006
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April 20, 2006
Pandering to Special Interests While Squandering Chances for Reform
The Interational Monetary Fund's latest report on global economy is scathing, yet appropriate:
Posted by John at 5:05 AM | Comments (0) | TrackBackThe world's economic policymakers are squandering the golden opportunity provided by strong growth to make much-needed reforms and instead are flirting with the kind of dangerous nationalism that marked the 1930s, the International Monetary Fund warned yesterday. . . .
[IMF's chief economist Raghuram] Rajan was scathing about the lack of urgency shown by policymakers, saying his greatest concern was that they failed to match their words with action. With the IMF due to debate the state of the global economy this weekend, Mr Rajan said: "This period of strong growth is the perfect time to address the medium-term problems that every economy faces, including the problems of adjusting to a more competitive, integrated world.
"Unfortunately, far too little is being done in far too many places ... politicians everywhere are aiming at soft targets like the foreigner who supposedly competes unfairly, or the immigrant who works too hard and for too little." . . .
He warned that protectionism was a real danger at a time when governments were "pandering to vociferous interest groups by obstructing change, rather than educating citizens to accept it". The fund was concerned that failure to meet next week's deadline for progress in the Doha round of global trade talks would give an added twist to anti-globalisation sentiment.
"Economic patriotism is protectionist old wine in a mislabelled new bottle", Mr Rajan said, "but it is all the more dangerous in an interconnected world. The beggar-my-neighbour policies being contemplated by some countries ... shielding large portions of their economy from corporate takeovers while encouraging their own companies to take advantage of the continued openness of others, deserves to be roundly condemned."
It was a mistake to treat such policies as of little importance, as mere sand in the wheels of the globalisation juggernaut. "History suggests the distance from economic patriotism to unbridled nationalism is a short one."
Quote of the Day for Thursday, April 20, 2006
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April 19, 2006
The Inexorably Rising Cost of Government
Now that you’ve filed your taxes, here’s something to think about. John Stossel writes that in 1904, federal, state, and local government in the United States cost every citizen $20 per year. By 1999, that figure had risen to $10,000 per year, more than housing and health care combined.
Posted by John at 7:13 PM | Comments (0) | TrackBackBreaking Down America's Imports
The Progressive Policy Institute breaks down the figures on U.S. imports, with some interesting conclusions:
Loyally responding to the president's call -- go shopping to support the economy -- Americans pumped up the national import bill from $1.45 trillion to $2.0 trillion, or by 38 percent, between 2000 and 2005. By historic standards, this figure is less remarkable than it seems. For example, imports grew by 44 percent between 1990 and 1995. Import growth was 42 percent in the first half of the 1980s, 37 percent in the first half of the sixties and 32 percent in the first half of the fifties. Why, then, have American trade accounts gone so far into the red? And why does competition seem so tough? Two observations:
Posted by John at 6:56 PM | Comments (0) | TrackBack---Trade balances: In the early 1990s, the 44 percent import growth was outmatched by 48 percent export growth. Likewise, the 37 percent import growth of the early 1960s was barely above the 36 percent export growth. Export growth between 2000 and 2005, by contrast, was an historically feeble 19 percent. Trade imbalances have therefore widened out more because of weak exports than import booms.
---Competition: However, East Asia has reshaped itself into a much stronger competitor. Despite the very visible wave of Chinese goods, the Asian share of imports hasn't changed much. (In fact, even excluding oil, Asia's share is below the peak it reached 15 years ago.) Instead the merger of the low costs of mainland China with the capital and technology of Japan, Korea, Taiwan, Hong Kong, and Singapore are making Asian products cheaper and Asian industry more efficient. Relatively low dollar growth in imports may disguise the fact that Americans are buying more TVs, T-shirts, and camcorders for less money.
---And also note: The largest single chunk of America's import growth is neither China, nor Asia generally, nor services delivered via the Internet; rather, it is energy. U.S. imports from Asia are up $140 billion since 2000. Energy imports have jumped $160 billion. Here the bigger dollar figures disguise the opposite phenomenon: Americans aren't buying many more barrels of petroleum or tons of liquefied gas than in 2000, but are paying much more for it.
Medical Tourism Expected to Be a Multi-Billion Industry in Asia
According to a leading Singapore-based travel firm, Asia's medical tourism is expected to generate over $4.4 billion a year in six years, with India comprising roughly half that total.
Thanks to my partner Dr. Dwight Clark for the pointer.
Posted by John at 5:40 PM | Comments (0) | TrackBackQuote of the Day for Wednesday, April 19, 2006
Today's quote is a Hindu Proverb: "There is nothing noble about being superior to some other man. The true nobility lies in being superior to your previous self."
Posted by John at 12:00 AM | Comments (0) | TrackBackApril 18, 2006
Taking Charge of the Future in Rural Southern Ohio
"The steel mill's gone and it's not coming back," said Greg Lyons, an assistant professor who was teaching students to create digital humanoid characters and how to make them move. "I think the only future we have is something like this."
USA Today reports on Shawnee State University’s drive to revitalize its southern Ohio environs through enticing high school students to attend college with an emphasis on digital edcuation, including gaming technology:
Posted by John at 10:43 PM | Comments (0) | TrackBackThe 19-year-old university, where enrollment increased 17.5% to 3,800 over the last 10 years, expects to grow within years to 5,300. Plans are underway to create a "motion-capture" studio, where 3-D digital characters and models will be computer-generated, like the star of King Kong. The school is also helping local high-tech businesses, such as Yost Engineering, a downtown software company started by a Shawnee State graduate and teacher, so graduates can stay and work in their home region.
"The world really is flat now," said Gerard Givan, an Army reservist from Wheelersburg who served a year in Iraq and now studies game development. "You don't have to be in the city to do this kind of work. I like the country."
Shawnee State President Rita Morris two years ago parachuted from a plane here in a stunt meant to encourage Appalachians to "face their fears" about higher education. Two-thirds of the school's freshmen students are first-generation collegians; more than 80% are natives of Appalachia.
"I look at the whole world and see the information-based economy," she said. "It's very important for this community to get in charge of where it would like to go — either we're in charge of our future, or someone else will be."
Congratulations to the Jun He Law Firm: "PRC National Law Firm of the Year"
Warm congratulations to our friends at the Jun He law firm in China, which was named by the International Financial Law Review as the "PRC National Law Firm of the Year" for 2006. The firm was also received nominations for "Regional Law Firm of the Year", "M&A Deal of the Year", and "Project Finance Deal of the Year".
Based on our dealings with the firm, this award is well deserved. Congratulations again!
Posted by John at 10:25 PM | Comments (0) | TrackBack