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December 31, 2006
Quote of the Day for Sunday, December 31, 2006
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December 30, 2006
Quote of the Day for Saturday, December 30, 2006
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December 29, 2006
Quote of the Day for Friday, December 29, 2006
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December 28, 2006
On Average, Five Chinese Die Every Minute from Chronic Disease
According to Hu Dayi, head of the Medical School of Shanghai's Tongji University and an expert in heart disease in China, about 2.6 million Chinese die of chronic diseases like myocardial infarction and stroke each year. This death rate translates into an average of about five per minute.
Posted by John at 6:50 AM | Comments (0) | TrackBackMassive Telecommunications Disruptions in Asia During to Taiwan Earthquake
If you're wondering why Internet sites you may be trying to access in Asia seem so slow or down, here's the reason:
Telecommunications across Asia were disrupted on Wednesday after an earthquake off Taiwan damaged undersea cables, jamming Internet services as voice and data traffic vied for space on smaller cables and slower satellite links.
The quake disrupted services in Taiwan, Singapore, Hong Kong, South Korea and Japan, but a ripple effect was felt in other parts of the world. Many phone subscribers could not get through to Europe, regional telecommunications operators reported, as they raced to reroute their traffic to alternative lanes.
Posted by John at 6:39 AM | Comments (0) | TrackBack"We are seeing really massive outages in a spread of countries in East and Southeast Asia," said Todd Underwood, chief operations and security officer at the Internet monitoring firm Renesys. "This is a much broader effect than you see in most natural disasters." . . .
The earthquake, which Taiwan authorities said registered a magnitude of 6.7, struck off the island’s southern tip Tuesday evening. Several major cables were cut, according to telecommunications executives, including the Asia Pacific Cable Network, which links North and Southeast Asia, and the SEA-ME-WE-2 link, which stretches from South Korea around the Eurasian land mass to the Netherlands.
Chunghwa Telecom, Taiwan’s largest phone company, said that the quake had damaged two undersea cables off the Taiwan coast. The lines route calls and process Internet traffic for several Asian countries. China Telecom, China’s biggest fixed-line telephone operator, said that the earthquake had affected lines "from the Chinese mainland to places including the Taiwan area, the United States and Europe, and many have been cut." It also reported serious damage to Internet connections. . . .
A Political Symbol of the Country's Shifting Demographics
Based on projections from the latest Census figures, New York may lose two Congressional seats when Congress gets reapportioned after the 2010 Census, according to Polidata. Florida is now likely to gain two seats, which would mean both states have an equal number of House seats.
The National Journal observes that during the decade of the 1940s, the New York delegation had 45 members, while the Florida delegation had six.
In the 1940s, the New York delegation was a 45-member congressional powerhouse while Florida was a puny 6-seat weakling. But between 1942 and 2002, Florida gained 19 seats while New York lost 16.
Overall, Polidata sees 13 seats shifting among 19 states, with all of the gainers in the South and West and all of the losers, save Louisiana, in the East and Midwest. Besides Florida, Texas (+4), Arizona (+2), Georgia (+1), Utah (+1), Nevada (+1), Oregon (+1), and Washington (+1) would all gain seats. Losing states in addition to New York include Ohio (-2), Massachusetts (-1), Pennsylvania (-1), Michigan (-1), Illinois (-1), Minnesota (-1), Iowa (-1), Missouri (-1), New Jersey (-1), and Louisiana (-1).
I'll leave it to the political pundits to spill their gallons of ink on the implications of all these changes politically, but these projections cast the country's demographic shifts to the Sunbelt in very sharp relief.
Posted by John at 6:07 AM | Comments (0) | TrackBackQuote of the Day for Thursday, December 28, 2006
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December 27, 2006
A Fine Model Indeed
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So spoke Gerald Ford in a short speech he gave after being sworn in as Vice President. This modesty never seemed to leave Ford after he became President, which makes him unique, particularly given our recent experiences.
Maybe "only" a Ford, but a very fine model indeed.
Posted by John at 11:21 PM | Comments (0) | TrackBackShrinking Cities
An interesting USA Today article on shrinking U.S. cities notes that
--More than half of the 100 most populous cities in 1950 have fewer residents today.
--About 6 million fewer people live in 16 of the 20 cities that were largest in 1950.
--Eleven of the 100 largest cities 50 years ago have fewer than 100,000 people today.
The article holds up the efforts of cities such as Richmond, Virginia and Youngstown, Ohio, both of which have developed plans which embrace their population declines.
It's hard for me to see how stagnation can be turned into a long term positive for a city. In fact, if you read the entire article, future prospects outlined for Richmond all involve growth initiatives.
Posted by John at 10:46 PM | Comments (0) | TrackBackNashville's Hispanic Students Proliferates
Metropolitan Nashville Board of Education Chairwoman Marsha Warden, in a Nashville Tennessean editorial, observes that the Hispanic student population comprises 13% of all Metro Nashville public school students. In 1995, Hispanic students represented essentially zero percent of the total. Six of Metro Nashville's 133 schools is majority Hispanic. [Thanks to Hispanic Nashville Notebook for the pointer.]
Posted by John at 9:19 PM | Comments (0) | TrackBackQuote of the Day for Wednesday, December 27, 2006
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December 26, 2006
If It Can Happen to Him, It Can Happen to You . . .
You rent a car, get pulled over, and the police seize your property based solely on the evidence presented by a dog. Such occurs in spite of the fact that you have no criminal history, there is no other evidence of a crime, and that you are driving a car which could have been rented by literally hundreds of people doing who knows what in the vehicle.
The problem with most Americans is that they don't believe it could happen to them, but a federal court has ruled that it can, and if it does, it is lawful:
A federal appeals court ruled yesterday that if a motorist is carrying large sums of money, it is automatically subject to confiscation. In the case entitled, "United States of America v. $124,700 in U.S. Currency," the U.S. Court of Appeals for the Eighth Circuit took that amount of cash away from Emiliano Gomez Gonzolez, a man with a "lack of significant criminal history" neither accused nor convicted of any crime.
On May 28, 2003, a Nebraska state trooper signaled Gonzolez to pull over his rented Ford Taurus on Interstate 80. The trooper intended to issue a speeding ticket, but noticed the Gonzolez's name was not on the rental contract. The trooper then proceeded to question Gonzolez -- who did not speak English well -- and search the car. The trooper found a cooler containing $124,700 in cash, which he confiscated. A trained drug sniffing dog barked at the rental car and the cash. For the police, this was all the evidence needed to establish a drug crime that allows the force to keep the seized money.
Associates of Gonzolez testified in court that they had pooled their life savings to purchase a refrigerated truck to start a produce business. Gonzolez flew on a one-way ticket to Chicago to buy a truck, but it had sold by the time he had arrived. Without a credit card of his own, he had a third-party rent one for him. Gonzolez hid the money in a cooler to keep it from being noticed and stolen. He was scared when the troopers began questioning him about it. There was no evidence disputing Gonzolez's story . . .
Thanks to Cattalarchy for the pointer.
Posted by John at 4:28 AM
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Poor Business, Not Bad Connections, Doomed eBay in China
Shaun Rein of the China Market Research Group offers a great explanation of why eBay failed in China:
Political connections cannot help a poorly run business suddenly become profitable. . . . companies that rely too much on them to ensure success will ultimately fail because China’s market is increasingly becoming consumer-driven.
Consumers don’t buy a Motorola (MOT) mobile phone, Estee Lauder (EL) lipstick or a Coach (COH) bag because of the political connections the MD of China has – they buy because of the style, price, and distribution. The same reasons consumers in the US buy products. When was the last time you heard someone say that they will buy a flashlight at Target (TGT) because the owner knows the grandson of General Patton? . . .
eBay's problems in China had more to do with a lack of understanding their customers than in not having political connections. . . .
Read Rein's excellent commentary in full here; it's worth your time.
Posted by John at 4:09 AM | Comments (0) | TrackBackGM Counts on China
According to this report, this year General Motors will sell more Buicks in China than in the United States.
Posted by John at 4:05 AM | Comments (0) | TrackBackQuote of the Day for Tuesday, December 26, 2006
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December 25, 2006
Quote of the Day for Monday, December 25, 2006
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December 24, 2006
Thank Dickens for Christmas
The mental_floss blog has the story:
Back in the day — the 16th and 17th centuries, that is — Christmas was less about goodwill towards men, and more about letting off steam. While there were certainly carols sung, gifts given and feasts consumed, there was also lots of drinking, gambling and promiscuity. Disapproving Puritans pointed to the traditional (and traditionally bawdy) pagan winter celebrations of Saturnalia and Yule, and accused modern revelers of carrying over pagan bad habits. . . .
Read the rest of the story here, and have a great Christmas.
Posted by John at 4:44 AM | Comments (0) | TrackBackQuote of the Day for Sunday, December 24, 2006
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December 23, 2006
A New Silk Road
George Magnus and Peter Burnett, in a Financial Times editorial, see both opportunity and challenges in a "new Silk Road" running between Asia, specifically China, and the Gulf States:
Posted by John at 9:25 AM | Comments (0) | TrackBackTrade between the Gulf states and Asia has more than doubled since 2000 to about $240bn (£122bn). China is the largest exporter to the Gulf and the only big country to have maintained broad balance in its trade with the region. In 2005-06, investment projects financed by Gulf states in Asia worth nearly $160bn have been announced, but this is the tip of the iceberg. Capital projects between China and Saudi Arabia have been proposed or agreed covering hydrocarbon and power exploration and development, and China's strategic petroleum reserve. Moreover, China has been active in doing trade and investment deals with Iran, covering pipelines, long-term gas supplies and infrastructure development in Iran.
Petrodollar flows into financial markets and property from Pakistan to Indonesia are likely to represent a growing proportion of the asset portfolios of Middle Eastern investors. Islamic bond (or sukuk) issuance has soared since first being introduced in 2002 to over $40bn, a rising proportion aimed at Middle Eastern investors. With Asia home to about half the world's Muslim population and Gulf infrastructure projects ideally suited to this kind of financing, financial and investment links are liable to strengthen further.
Trade Surpluses Were a Feature of the Great Depression
Cafe Hayek's Don Boudreaux observes that during the 1930s, the decade of the Great Depression, the U.S. ran a trade surplus for 102 out of 120 months. The point, says Boudreaux, is not necessarily that trade surpluses are bad, but that
Posted by John at 4:38 AM | Comments (0) | TrackBack. . . Economies are far too complex to justify drawing simplistic conclusions such as "The 1930s was a decade of U.S. trade surpluses; the 1930s was also marked by one long economic depression; therefore, trade surpluses are bad for economies." But the above data do show that all the fashionable fretting about trade deficits (which the U.S. economy has run for most of its history) is itself simplistic and uninformed.
Quote of the Day for Saturday, December 23, 2006
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December 22, 2006
The U.S. Sunbelt Continues to Draw Newcomers
"Even within the South you see slower migration into Virginia, Florida — both pricey urbanized areas — and bigger gains for Georgia, North Carolina, South Carolina and Tennessee," Dr. Frey said. "Texas is also doing quite well, as its housing costs have remained low as its economy picked up. In the West, the flight toward affordability is hitting Idaho, Montana and Utah."
Demographer William Frey provides a good summary of the latest Census Bureau figures in a New York Times story.
Other interesting facts:
Posted by John at 5:02 AM | Comments (0) | TrackBack--Arizona is the country's fastest growing state, edging out Nevada, which had held that spot for two decades.
--Of the country's ten fastest growth states, only three, Utah, Idaho and Colorado, are not in the Sunbelt.
--North Carolina is now the country's tenth most populous state, displacing New Jersey. This is the first time since the 1920 Census that New Jersey has not be among the ten largest states in the U.S.
--Texas grew by roughly 580,000 people over the last year, the rough equivalent of the entire Wichita, Kansas MSA.
--The total amount by which the top ten numeric gainers grew, about 2.2 million, is slightly more than the entire Cleveland MSA.
--The South now makes up 36% of the U.S. population; the South and West combined make up almost 60% of the population.
--The Northeast gained only 62,000 people over the last year. Note that over the same period, New York gained 820,000 immigrants.
--It's clearly just a matter of time before Florida, with 18.1 million people, passes New York (19.3 million) as the nation's third most populous state.
--Louisiana lost roughly 220,000 people over the last year, roughly equal to losing the entire city of Baton Rouge.
Laws of Economics Outweigh Immigration Regulations
Former Mexican President Ernesto Zedillo, writing in Forbes, on how the laws of economics overwhelm immigration regulations (or the lack thereof, as the case may be):
Posted by John at 4:48 AM | Comments (0) | TrackBackFortunately the real dilemma is not between compromising the rule of law and sacrificing the economic benefits produced by illegal immigration. Rather, it lies in how best to structure a policy that allows for proper enforcement of immigration laws while letting immigration continue as a positive force for economic strength and prosperity. When the market forces driving this prosperity are disregarded, immigration laws and policies become impossible to enforce. Not one of the malign effects of illegal immigration mentioned is inherent to immigration itself. The malign effects exist because there's a gap between the demand for and the supply of unskilled labor and that gap cannot be filled legally under existing immigration laws. This is just another instance of how regulations that oppose strong market forces are ineffective and cause worse ills than those they're trying to cure. Bad regulations are always at the root of black markets and the criminality they spawn.
Lou Dobbs Threatens Santa Claus
Santa Claus, as an undocumented worker from the North Pole, is taking jobs away from toy delivery workers in this country, says Lou Dobbs. Morever, he's bringing toys made in China, adding to this country's "already burgeoning trade deficit". Newsweek's Andy Borowitz has the whole story here.
Posted by John at 4:22 AM | Comments (0) | TrackBackEmbrace the Trade Deficit
In a Wall Street Journal editorial, Bear Stearns chief economist David Malpass suggests we embrace the trade deficit:
Since the 2001 recession, the U.S. economy has created 9.3 million new jobs, compared with 360,000 in Japan and 1.1 million in the euro zone excluding Spain. This despite our trade deficit and their trade surpluses. Like the U.S., Spain (3.6 million new jobs) and the U.K. (1.3 million new jobs) ran trade deficits and created jobs rapidly in this five-year period. Wages are rising solidly in these three. The economics is clear (for once) that a liberal trading environment allows more jobs with higher wages as people specialize. . . .
The recent surge in the U.S. trade deficit reflects, in part, the unprecedented shift in the demographics of the world's large economies. The under-60 U.S. population is expected to grow for at least 50 years while the under-60 populations in Japan and Europe are already declining and in China will turn down within a decade. They need bonds while Americans need capital. They want to save more than they invest in their own economies, and are eager to help us invest more heavily (through their purchase of bonds.) This makes good demographic sense. Older investors (concentrated abroad) need steady returns, lending to younger generations through bank deposits, bond purchases and life insurance premiums (which are reinvested in growth). Younger people (concentrated in the U.S.) need cash and debt for college degrees, houses and business startups. This creates a healthy synergy across generations and across borders.
Like young households, many companies also spend more than they produce, using bonds and bank loans, some from foreigners, to make up the difference. They add employees, machines, supplies and advertising before they produce. Growing corporations are expected to be cash hungry. This leverage is treated as a positive for companies but a negative for countries, a key inconsistency in popular economics. Rather than paying the debt back, the growing company rolls the debt over and adds more, just as the U.S. has been doing throughout most of its prosperous economic history. Part of each additional bond offering puts the company and the U.S. in the position of investing more than we save, drawing in foreign investment and contributing to the trade deficit. . .
While the net foreign debt of the U.S. is growing (the result of capital inflows), household net worth is growing faster, meaning foreigners are investing in the U.S. too slowly and conservatively to keep up with our growth. . . .
Malpass goes on to remind us that the last time the U.S. had a trade surplus was in the recession years of 1990-1991.
Posted by John at 3:57 AM | Comments (0) | TrackBackQuote of the Day for Friday, December 22, 2006
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December 21, 2006
Great Job, Commissioner Craig Lesser
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It's strenuous because any head of economic development, whether state or local, is in constant sales mode. Anybody who's sold anything understands as how hard this job can be. There's no time off, in this particular job, to relax and let someone else cater to you for a change. (As there often can be, quite frankly, with elected officials.) In Lesser's case, he's been selling Georgia constantly ever since he got his chair in Midtown Atlanta warm. Such a job is very mentally taxing.
Further, Lesser, to his credit, did a terrific job at turning his job description into one with international requirements. He led the organization of 42 international trips officially conducted by the state last year, four times the number conducted in 2005. Lesser personally visited 15 countries this year and 11 in 2005. The state welcomed 32 trips by foreign dignitaries to Georgia, three times as many incoming missions to the state over the previous year, and countless delegations of business and civic leaders. Lesser and his office had some hand in the vast majority of these visits. Additionally, Lesser opened offices for the state in Brazil and Chile, and has worked tirelessly attempting to secure the headquarters of the Free Trade of the Americas for Atlanta, as well as a new Chinese consular office.
In my opinion, the average Georgian who doesn't work for a foreign company with a location in the state doesn't grasp the importance of an international outreach for the state. Georgia, as attractive as it is, must count on international companies locating here in order to maintain a robust economy. As I mentioned in this post on Savannah and Macon, one-third of the $5.7 billion in investment in Georgia during fiscal 2006 was from foreign companies. The shine on Georgia's current prosperity would be much dingier without this injection of capital and the almost 5,000 new jobs created by this investment.
Lesser's successors will find it hard not to equal the effort he put into spreading Georgia's name internationally. Part of his legacy is making the job a more taxing one than it has ever been.
The citizens of Georgia should be grateful for that, because they're the ultimate beneficiaries.
Posted by John at 4:35 AM | Comments (0) | TrackBackEntrepreneurs: The True Agents of Social Progress
In a beautifully written piece which deserves your attention, Lew Rockwell asserts that entrepreneurs are the true agents of social progress:
. . .Capitalistic entrepreneurs are blessed with a special power of discernment that enables them to make prescient judgments concerning the future, to understand that a different and better use of scare resources would reduce waste and serve consumers better. They see what others do not see, that a particular product or service would improve our lives but does not yet exist.
Entrepreneurs are also blessed with a special courage to risk their own resources. If they are successful, they can reap great rewards. If they are not, they risk the loss of everything. And they are intensely aware that costs, such as wages and capital expenditures, are part of the data of the past that cannot be regained. This is true whether or not there are profits in the future.
Contrary to the propaganda, money is for them not so much a motivating force as a sign and seal of their success. It is a ratifying symbol of a job well done. In the market economy, a job well done means serving the public. Profits, as Mises emphasized, accrue to individuals who serve others through enormous personal sacrifice.
Of course, whether the gift that entrepreneurs carry is used in socially beneficial ways is really up to the individual. We can think of the Parable of the Talents: here we find three people who received gifts, but one did nothing with his, while the other two used their gifts in productive ways.
Unlike capitalism, hardly anyone today is prepared to argue against philanthropy. We all understand that it is crucial to creating a better world. But how often do we think of the source of the funds? They come from the store of wealth generated by capitalism, and that wealth would not exist without entrepreneurship.
Philanthropy and entrepreneurship, then, do not stem from opposite impulses, as is commonly thought. They originate from the same source: the intellectual and even spiritual commitment to serve others and make a difference in the world for the good. They are different means of doing the same thing, distinguished from each other only in the method we use to account for them. . . .
But these days, what are kids taught in school about heroes? Who are they told is responsible for making the world a better place to live? Almost always, politicians are heralded, people whose work mostly consists in erecting barriers to human progress, and otherwise shuffling around private wealth by force.
Generation after generation has been told that all idealists go into politics and government, whereas greedy people go into business. It is not only untrue; the truth is the opposite. The marketplace is not the only place that permits idealists to serve society, but it provides a test to make sure their ideals conform to reality. . . .
Read this excellent essay in full.
Posted by John at 3:41 AM
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Japan's Population to Fall 30% by 2055
Fifty years from now, Japan's 65 and over population will exceed 41% of the total, while those age 14 or under will comprise only 8% of the population, says the county's Ministry of Health, Labor and Welfare. The country's total population will be less than 90 million in 2055, down from 127 million currently. Japan Times reports here.
Posted by John at 3:31 AM | Comments (0) | TrackBackQuote of the Day for Thursday, December 21, 2006
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December 20, 2006
For the Remainder of the Decade, Spanish Language TV and Radio Will Outperform
Marketing y Medios reports on a forthcoming report from media industry research firm Kagan Research, which finds that advertising revenue will flow into Spanish-language stations at a faster rate than general-market stations not just next year, but throughout the remainder of the decade:
Posted by John at 9:02 AM | Comments (0) | TrackBack. . . Kagan is forecasting ad revenue on TV stations targeting Latinos will grow 6.5 percent on a compounded annual basis through 2010. Revenue is expected to increase 5 percent in 2007, 8 percent in 2008, 4 percent in 2009 and 9 percent in 2010, when expenditures will surpass $1.9 billion. . . .
Radio ad revenue is projected to grow an average 5.3 each year through 2010. Ad spending on Spanish-language stations is expected to grow 6 percent next year, far outpacing the forecasted 2 percent to 3 percent for the overall radio industry, and then 5 percent each year through the end of the decade.
Meanwhile, other analysts have recently speculated that the Spanish-language ad market will cool down in coming years as second- and third-generation Hispanics adopt English as their primary language. [Kagan senior analyst Deana] Myers factored this trend into her projections but also notes that a continuing influx of immigrants, coupled with bilingualism, ensures increased ad spending.
"On one hand, there is a movement toward English," she says. "But there is still a lot of growth in first-generation Hispanics. And even though there are second- and third-generation Hispanics speaking English in their everyday lives, a lot of times they speak Spanish at home and watch Spanish-language TV." . . .
Expensive Edible
A businessman from Hong Kong business recently won an auction for one Italian white truffle weighing about 3 1/3 pounds; he paid £85,000 (about $167,000). [HT: Marginal Revolution]
Posted by John at 8:51 AM | Comments (0) | TrackBackImmigrants Don't Necessarily Cluster
In a paper published by Urban Geography, researchers find that immigrants who marry or partner outside their native group are more likely to live in a cluster of their fellow immigrants. This finding, while logical, is driving another trend: immigrants are becoming dispersed throughout American society faster than expected:
Posted by John at 8:27 AM | Comments (0) | TrackBackThe study focused on the eight largest immigrant groups in the Los Angeles area - Mexicans, Chinese, Salvadorans, Guatemalans, Koreans, Vietnamese, Filipinos and Iranians.
Mexicans comprised the largest immigrant group with nearly 1.7 million individuals in 1990, more than six times the size of the next largest group, Filipinos. The researchers looked at how immigrants 18 years of age or older clustered together in neighborhoods, dividing residential patterns into highly clustered, moderate clustered and low or non-clustered. The study's main finding is that immigrants who partner within their group are much more clustered geographically than those who partner outside their group.
Other findings of the study showed:
* Mexicans were the least likely to live in highly clustered neighborhoods with their countrymen.
* Chinese, Vietnamese and Iranians were the groups mostly like to live in highly clustered tracts.
* Guatemalans had the highest rate of marrying or partnering outside their group, 36 percent, while Koreans had the lowest rate, 13 percent.
* Nearly a quarter of Mexicans, by far the largest immigrant group, partnered outside their group.
* Across all groups those with more English-language ability and higher levels of education were less likely to live in an immigrant cluster. . . .
Quote of the Day for Wednesday, December 20, 2006
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December 19, 2006
Nueva Vida for Strip Shopping Centers
The Washington Post looks at how immigrant communities in the U.S., particularly Hispanics, are breathing new life into aging strip shopping centers:
Posted by John at 5:14 AM | Comments (0) | TrackBack"The suburbs where most immigrants go today are scattered, and the shopping center is where most social interaction occurs," said University of Southern Maine geographer Joseph S. Wood, who has studied Northern Virginia's Asian immigrant communities. "It's the automobile-era version of Delancey Street on the Lower East Side. In the age of suburbs, you have to cluster someplace, and that strip mall is the place to do it."
Wood said older shopping plazas that have drifted into decline are especially accessible to immigrant entrepreneurs, who then inject nueva vida, or new life, into the aging strips. "The spaces are cheap," he said. "They become opportunities for family-owned businesses that cater to certain communities rather than the larger public."
Why Chinese Firms Excel at Price Wars
From Knowledge@Wharton, Wharton Professor Z. John Zhang and China Europe International Business School professor of marketing Dongsheng Zhou answer why Chinese firms excel at price wars:
"Our study has convinced us that luck has nothing to do with being a victor in a price war," write the researchers. "Good planning and execution are the keys to winning. In other words, Chinese companies do seem to know something about price wars that executives in the West do not, or have forgotten. . . ."
Posted by John at 4:15 AM | Comments (0) | TrackBack"Chinese companies do have a lot more experience with price wars, which are widely reported business events," says Zhang. "They are good at it. In the past 10 years, what triggered (the price wars) is the fact that the markets in China are growing. This business environment provides many profitable opportunities for [companies] to engage in price wars and to hone their skills. In a growing market, there are all different companies competing -- some good, some bad -- and the industry finds a way to consolidate. The only way to do that is a price war, where you bring down the prices and squeeze out the inefficient [companies]."
But the Western market is a more mature market, offering what Zhang calls "oligopolistic competition among mostly equals." In lieu of price wars, this so-called mature market "encourages more finesse in devising marketing strategies" which may help explain why price wars are so frowned upon.
When it comes to customers' price sensitivity in a price war, the Holy Grail would be customers who are extremely price sensitive -- and therefore more likely to respond quickly to dropping prices. "Chinese consumers are very price sensitive," says Zhang. "When you lower a price, you make more sales, a lot more sales. In China, anytime you lower the price a little bit, you do draw a larger buying audience."
Consumers in U.S. markets, however, are not as price sensitive, he says. "I think the U.S. market is more layered. When you lower the price, you gain some sales" but not on the scale triggered by the price-sensitive Chinese consumers.
Understanding the price war mentality is important not only for Western companies who compete with Chinese companies and products on their own turf, but for companies who do business in China. "One must understand how Chinese companies use price wars as a strategic weapon to be able to see them coming, to fight price wars effectively or to avoid them altogether," the researchers write.
Private Equity Trends in Latin America for 2007
Latin America is well positioned to experience the most important venture capital cycle since Christopher Columbus raised capital for his start-up. . .
So writes Matthew Cole, a Managing Director with North Bay Equity Partners, in a post worthy of your attention.
Posted by John at 4:00 AM | Comments (0) | TrackBackQuote of the Day for Tuesday, December 19, 2006
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December 18, 2006
New Jersey's Economic Development Plan Includes a Welcome to Skilled Immigrants
Applicants for skilled positions in New Jersey are more likely to be immigrants, as the state continues to attract foreign born talent. This phenomenon, reports NorthJersey.com,
. . . has already reshaped New Jersey's highly educated workforce, which gives the state its innovative and competitive edge.
The view emerged at a recent Princeton University conference titled "Movement of Global Talent: The impact of high-skill labor flows from India and China." Speakers said highly educated workers from the two countries are now commonplace in some New Jersey industries.
Though Indian and Chinese workers account for just 3 percent of New Jersey's workforce, they account for 5 percent of the state's college-educated workers, said Rachel Friedberg, a Brown University economist.
One in eight holders of doctorates in New Jersey is from China or India, she said. And Indians are twice as likely as New Jersey workers to have a college degree or higher education, she said, and Chinese are about 1½ times as likely.
Moreover, one in four medical scientists in the state comes from the two countries, as do just under one in four software engineers, Friedman said.
So what does that mean for New Jersey?
The consensus at the conference was that skilled Asian workers are so important that the state should take steps to ensure that the flow of arrivals continues – such as lobbying the federal government to increase the number of temporary work visas, which are vastly oversubscribed. . . .
A welcome mat for skilled immigrants should be a component of
Posted by John at 4:41 AM
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Politics and Latin American Free Trade Agreements
The Washington Post's Marcela Sanchez on politics and free trade agreements with Latin America:
Trade integration in the Americas is quickly approaching a major milestone. If agreements with Colombia, Peru and Panama are ratified in the coming year, more than half of Latin America will have free trade accords with the United States. . . .
Whether trade becomes freer or fairer, wilder or tempered, it has already had a "stabilizing influence" in Latin America, suggests Robert Zoellick, former U.S. trade representative and deputy secretary of state. In Peru, benefits stemming from trade preferences with the United States allowed Alan Garcia to campaign for the presidency as a pro-trade leftist candidate, shaking his reckless image from his first turn in power. The Dominican Republic-Central American Trade Agreement in turn may very well "put a constraint on how far (re-elected Nicaraguan President Daniel) Ortega can go," Zoellick adds.
Those are important considerations to keep in mind as trade is reshaped in the months to come. Particularly ironic would be if Democrats end up working against, rather than with, left-of-center leaders who see trade with the United States as their best chance to generate jobs and opportunity for their people.
Ironic to say the very least.
Posted by John at 4:24 AM
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Quote of the Day for Monday, December 18, 2006
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December 17, 2006
Rising Demand for "Luxury" Healthcare in China
Demand for boutique healthcare in China is climbing rapidly, if the response to a new "five star" post-natal hospital in Shanghai is any indication. The Xiyue Postnatal Hospital, set to open on Christmas Day, has already received bookings for half its rooms. The top end luxury suite in this hospital charges $1,250 per day.
Posted by John at 4:45 PM | Comments (0) | TrackBackChina's Selfish "Generation Mao"
This is China! offers a fascinating commentary on generational conflict in China; here's a snippet but read the entire post:
. . . I realize that China has no real pension system, and that seniors have for thousands of years expected their offspring to support them. However, there is a distinct sense I have that the seniors are exerting an undo pressure on the youngin’s for reasons social status: witness the dozens of grandparents in Chinese neighborhoods showing their grandtoddlers off like young bucks sport their race cars at the local drag strip. There seems to me an element of Face involved, of belonging to the group of seniors that says, “see, my son/daughter has the social and economic wherewithal to give us a grandchild AND take care of us at the same time.” And for those seniors I’ve seen that do not have a toddler to show off, it is plain they simply do not fit into the predominant critieria of social acceptance in China. Pity the child who has to endure such pressure.
I'd love to get knowledgeable comments on this perspective.
Posted by John at 4:43 AM | Comments (0) | TrackBackFence Irony
A company hired by the federal government to build fences along the border between the United States and Mexico is under investigation for hiring undocumented workers. [Thanks to Out of Control for the pointer.]
Posted by John at 4:30 AM | Comments (0) | TrackBackA Clash, Not of Civilizations, But Emotions
So contends Dominique Moïsi in a thoughtful commentary:
Thirteen years ago, Samuel Huntington argued that a "clash of civilizations" was about to dominate world politics. Events since then have proved Huntington's vision more right than wrong. It would be more correct, however, to speak of a "clash of emotions." The Western world displays a culture of fear, the Arab and Muslim worlds are trapped in a culture of humiliation, and much of Asia displays a culture of hope. . . .
Read it in full here.
Posted by John at 4:09 AM | Comments (0) | TrackBackQuote of the Day for Sunday, December 17, 2006
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December 16, 2006
Savannah and Macon Embrace the Global Economy
I was in Savannah and Macon earlier this week, and you can't spend much time in either without realizing how much the continued growth and prosperity of these cities is dependent on their active embrace of a globalized economy.
Savannah, of course, is home to one of the fastest growing ports in the country. Most of this growth is related to trade with China; in fact, the Port of Savannah's China-related trade is four times larger than the neighboring Port of Charleston. Numerous retailers, manufacturers, and other companies have located sizeable facilities in the area. For example, Target just opened the largest "tilt-slab" warehouse in North America near Savannah's port. At more than 2 million square feet, it can hold 153,000 minivans, and one lap around this building equals 1.4 miles. The three hundred or so employees expected to be employed in this facility by the end of next year are betting their futures on growing, uninterrupted global trade.
Including Target, all these companies seem to have one thing in common: they are international companies or domestic companies, like Target, with a substantial stake in international trade and commerce.
Macon is in the fortuitous position of being the largest city between the Port of Savannah and Atlanta's extensive logistics infrastructure. Beyond just geography, however, Macon has some very active, forward-looking economic development officials, some of whom I visited with earlier this week.
These assets have help attract significant investment in recent years, much of which is international trade related. For example, Japan's Nichiha Corporation is currently building a $78 million facility near the Macon airport which will produce fiber cement panels.
Savannah and Macon's growth attributable to foreign trade is also reflected in overall statistics for investment in Georgia. In the most recent fiscal year, roughly one-third of the $5.7 billion in investment Georgia welcomed was from foreign companies. This figure doesn't take into account investment from U.S. companies whose expansion is directly related to international trade. Further, in my recent conversations with economic development officials around the state, they indicate that, on average, 30% to 40% of the new projects they are working on are foreign companies. Again, this estimate doesn't take into account U.S. companies whose expansion in Georgia, whether to take advantage of Savannah's port, Macon's distribution infrastructure, or Atlanta's superior logistics capabilities, is in fact related to import and export activity.
On the margin, Georgia's growth, and the jobs of its citizens, are heavily tied to free and open foreign trade. Macon and Savannah have made this bet, and their investment of time and resources in this effort will continue to create growth opportunities for its residents.
Posted by John at 7:51 AM | Comments (0) | TrackBackItalians Recognize the Economic Growth Provided by Immigrants
From Italy Magazine [thanks to Italian Economy Watch for the pointer]:
Posted by John at 4:41 AM | Comments (0) | TrackBackItaly’s 3.6 foreign residents are an added asset to the country’s economy and their labours account for 6.1% of its GDP, some 86.7 billion euros in 2005, according to a new report.
Published Monday in the authoritative financial daily Il Sole 24 Ore, the report pointed out how Italy’s immigrants were responsible for "keeping the nation from suffering two heavy recessions in recent years".
Without their contribution, Il Sole explained, “Italy’s GDP would have fallen by 0.1% in 2002, 0.6% in 2003 and 0.9% in 2005.
Almost 2.1 million immigrants hold regular jobs and they totally dominate the domestic services sector, accounting for 80% of the sector’s contribution to the country’s GDP to the tune of 9.6 billion euros.
Immigrants play an even bigger role in the services sector contributing 37 billion euros to the nation’s wealth, equal to 4.3% of the sector’s GDP.
According to the report, the contribution immigrants make to the economy has been growing constantly. . . .
Quote of the Day for Saturday, December 16, 2006
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December 15, 2006
Lobbyists Aren't the Problem--Big Government Is
Earlier this week we highlighted the milk lobby's effort, aided by a bipartisan Congressional cabal, to stop the activities of an independent dairy farmer whose innovations were undercutting prices.
Michael Barone, commenting on the situation, doesn't see the problem as being with lobbyists; the people, even organized through lobbying organizations, have the free speech right to petition their government. The problem, says Barone, is with big government itself:
The problem here is not free people;