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January 31, 2007

India to Surpass China? Think Again . . .

Or so says Barbara Crossette, writing for Foreign Policy.  Among the reasons she cites, China’s adult literacy rate is over 90%, while in India it’s only 61 percent.  While one quarter of primary school age Indian children are not in school, in China that number is close to zero.te in China is above 90 percent. In India, it’s 61 percent. About one quarter of primary school-age Indian children are not in school. In China, the figure is practically zero.

Posted by John at 4:05 AM | Comments (0) | TrackBack

Exporting Cheerleading to China Generates Jobs in Memphis

Varsity Brands, a Memphis-based company that dominates the cheerleading business in the US, recently sent five instructors to China as part of a drive to drum up interest there. A delegation from China is visiting Varsity in early March to talk about training as many as 1m Chinese cheerleaders over the next five years.

"There has been a great fascination with all things American, and cheerleading is the epitome of that, "says Jeff Webb, Varsity's chief executive.

FT.com / Columnists / Global Village - Cheerleading aims to work up passions outside US.

Posted by John at 4:03 AM | Comments (0) | TrackBack

North Carolina's Hispanic Buying Power Soars

According to a new report from the University of Georgia’s Selig Center for Economic Growth, Hispanic buying power in North Carolina has increased more than tenfold from 1990 to 2006.  In dollars, Hispanic buying power in North Carolina is $9.6 billion, according to the Selig Center report, up from $836 million in 1990.

Measured by buying power, North Carolina is the fifteenth largest Hispanic market in the U.S.

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Quote of the Day for Wednesday, January 31, 2007

Today's quote is from Ernie Banks, born on this date in 1931: "The riches of the game are in the thrills, not the money."

Posted by John at 12:00 AM | Comments (0) | TrackBack

January 30, 2007

"Growth in Other Parts of the World Will Generate Jobs Here"

"Minnesota is now part of a global economy like everybody else," said the company's chief executive, John P. Wiehoff. "As long as Robinson is headquartered in Minnesota, growth in other parts of the world will generate jobs here." [U.S. Exporters Feel Favorable Trade Winds - washingtonpost.com.]

Robinson CEO Wiehoff is talking about his logistics firm, which is growing because of the export activity generated by other Minnesota firms.

The article highlights the role China is playing driving overall growth in U.S. exports:

China's industrialization has been so swift and its demand for products so intense that it has sparked sales of American-made goods all over the world. Caterpillar racked up exports of $9 billion in 2005, with particularly strong sales to China. American factories churn out oil-drilling gear bound for the Middle East, with much of the resulting crude landing in China. Mining equipment is shipped to India and Australia to extract iron ore bound for smelters in Japan and Korea, with the resulting steel headed to China to be turned into automobiles and skyscrapers.

Posted by John at 10:54 AM | Comments (0) | TrackBack

GDP of U.S. States Compared Globally

Carl Størmers highlights a fascinating map of the United States which compares each state to its comparably sized country, as measured by GDP (thanks to The Big Picture, via Pienso, for the link):

My first reaction is, as I scan this map, is that it truly highlights why the Middle East is in such upheaval.  Tennessee, a state with six million people, has a GDP comparable to Saudi Arabia, with 27 million people.  Iran seeks to keep 69 million people happy with an economy the size of Alabama’s, which has only 4.6 million residents.  Most striking, Pakistan is trying to appease its 165 million citizens using an economy the size of Arkansas, a state with only 2.8 million people.

Posted by John at 5:15 AM | Comments (2) | TrackBack

Kids Left Behind in Rural China

We recently reviewed Will the Boat Sink the Water?, which chronicles the travails of China's peasant class. The book didn't address another problem caused by migrant workers leaving rural areas for the cities; a sobering China Daily article does:

A survey in Chaohu, in Anhui last year showed that migrating parents had left behind 116,000 children. About 952,000 people, including 55,000 couples from the paddy cultivation area, have migrated from Chaohu, according to Yu Zupeng, an official of the provincial committee of the Chinese Peasants' and Workers' Democratic Party, which carried out the survey.

About 1 percent, that is, more than 1,000, of these children have no guardians. Such children have little communication with their parents: most Chaohu migrants talk to their children over the phone just once or twice a month, and return home only during Spring Festival. Some don't even do that, the survey said.

Migrant workers 'have 20m' kids back home.

Posted by John at 4:39 AM | Comments (0) | TrackBack

Obesity Rising in China's Youth

We’ve focused quite a bit in “Tidbits” on the rise in chronic disease throughout in China.  As you travel around the country, you don’t have to look far to see that a solid underpinning for this problem is being stitched together, unfortunately, right now:

—As we drove past a two story Kentucky Fried Chicken in Tianjin, we asked our host whether he liked the food there.  “Not at all,” he immediately replied, adding that only kids liked the food.  That’s an overstatement, of course, but China’s “little emperors” are pulling their parents and grandparents into KFC and their other Western-oriented fast food favorites.

—Several media reports published while we were in the country indicate concern among authorities over rising obesity among China’s youth.  According to Shanghai Daily, the Shanghai Education Commission surveyed the health of 3,000 elementary and high school students last year.  The survey showed that just under 12% of Shanghai’s youth are obese, about four percentage points higher than the national average.

Consequently, the Commission has decided that elementary and high school students should have three physical education courses a week, along with daily morning exercise.  Further, starting in 2008, physical education will be included in senior middle school entrance exams, and PE scores will be taken into account for admission.  Shanghai city officials also plan to expand the number of public sports sites significantly over the next four years, from about 130 to 300, in obvious hopes that these facilities will be used by area youth.

—A prediction:  it’s only a matter of time before Chinese cities like Shanghai and Beijing follow New York City’s lead in regulating use of ingredients like trans fat.  If an American city like New York can do it, why not cities with even higher government control and influence?  Further, I’d expect such regulations, if they occur, might be applied more strictly to Western-style restaurants.

Posted by John at 4:24 AM | Comments (0) | TrackBack

Quote of the Day for Tuesday, January 30, 2007

Today's quote is from Franklin Delano Roosevelt, born on this date in 1882: "[O]ur present civilization rests on the basis of an international exchange of commodities. Every nation of the world has felt the evil effects of recent efforts to erect trade barriers of every known kind. Every individual citizen has suffered from them. It is no accident that the nations which have carried this process farthest are those which proclaim most loudly that they require war as an instrument of their policy. ... It is no accident that, because of these suicidal policies and the suffering attending them, many of their people have come to believe with despair that the price of war seems less than the price of peace."

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January 29, 2007

A Comment on Delta's Bid for a Shanghai-Atlanta Route

While on this trip, we were greeted by the news that Delta will apply for an Atlanta-Shanghai direct route for 2008.  My personal opinion is that this route is a much better route for Southeastern travelers than the Atlanta-Beijing flight which Delta applied for previously.  Shanghai is arguably the first destination for business in China, with Beijing a close second, and there are plenty of flights to get you on to Beijing if that’s where you need to go.  I’ve only had one trip to China in which I wasn’t both in Shanghai and Beijing, and on that trip, I was in Shanghai.

If you’re in the Southeast doing business in China, regardless of whether you’re a Georgia resident, you should be lobbying your elected representative in Washington on behalf of Delta’s bid.  Getting this flight is as important to South Carolina, North Carolina, Florida, and Tennessee as it is to Georgia.  (Unless, of course, you think changing planes in O’Hare or New York City is a better bet on making your connection home after a 13 or 14 hour return trip from China.  And if you do, good luck.)

A region with over one-third of the country’s population needs its own route to China.  Let your elected representatives know that.

Posted by John at 4:38 PM | Comments (0) | TrackBack

Home From China

You’ve been treated exclusively to daily quotes for a couple of weeks because I’ve been in China.  My day to day work there has taken priority over “Tidbits”, but I’m back and will be sharing some of my observations on my latest travel through the country.

Posted by John at 3:40 PM | Comments (0) | TrackBack

Quote of the Day for Monday, January 29, 2007

Today's quote is from Oprah Winfrey, born on this date in 1954: "Before you agree to do anything that might add even the smallest amount of stress to your life, ask yourself: What is my truest intention? Give yourself time to let a yes resound within you. When it's right, I guarantee that your entire body will feel it."

Posted by John at 12:00 AM | Comments (0) | TrackBack

January 28, 2007

Quote of the Day for Sunday, January 28, 2007

Today's quote is from Artur Rubinstein, born on this date in 1887: "Of course there is no formula for success except perhaps an unconditional acceptance of life and what it brings."

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January 27, 2007

Quote of the Day for Saturday, January 27, 2007

Today's quote is from Mikhail Baryshnikov, born on this date in 1948: "I do not try to dance better than anyone else. I only try to dance better than myself."

Posted by John at 12:00 AM | Comments (0) | TrackBack

January 26, 2007

Quote of the Day for Friday, January 26, 2007

Today's quote is from Wayne Gretzky, born on this date in 1961: "I skate to where the puck is going to be, not where it has been."

Posted by John at 12:00 AM | Comments (0) | TrackBack

January 25, 2007

Quote of the Day for Thursday, January 25, 2007

Today's quote is from W. Somerset Maugham, born on this date in 1874: "Imagination grows by exercise, and contrary to common belief, is more powerful in the mature than in the young."

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January 24, 2007

Quote of the Day for Wednesday, January 24, 2007

Today's quote is from Frederick the Great, born on this date in 1712: "The greatest and noblest pleasure which men can have in this world is to discover new truths; and the next is to shake off old prejudices."

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January 23, 2007

Quote of the Day for Tuesday, January 23, 2007

Today's quote is from Julie Foudy, born on this date in 1971: "I don't care how talented a team is, unless you believe in one another, you're weak."

Posted by John at 12:00 AM | Comments (0) | TrackBack

January 22, 2007

Quote of the Day for Monday, January 22, 2007

Today's quote is from Sir Francis Bacon, born on this date in 1561: "If a man will begin with certainties, he shall end in doubts; but if he will be content to begin with doubts he shall end in certainties."

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January 21, 2007

Quote of the Day Sunday, January 21, 2007

Today's quote is from Jack Nicklaus, born on this date in 1940: "Resolve never to quit, never to give up, no matter what the situation."

Posted by John at 12:00 AM | Comments (0) | TrackBack

January 20, 2007

Quote of the Day for Saturday, January 20, 2007

Today's quote is from George Burns, born on this date in 1896: "Too bad all the people who know how to run this country are busy running taxicabs or cutting hair."

Posted by John at 12:00 AM | Comments (0) | TrackBack

January 19, 2007

Quote of the Day for Friday, January 19, 2007

Today's quote is from Peter Lynch, born on this date in 1944: "It isn't the head but the stomach that determines the fate of the stock-picker."

Posted by John at 12:00 AM | Comments (0) | TrackBack

January 18, 2007

Quote of the Day for Thursday, January 18, 2007

Today's quote is from Charles Baron de Montesquieu, born on this date in 1689: "We receive three educations, one from our parents, one from our schoolmasters, and one from the world. The third contradicts all that the first two teach us."

Posted by John at 12:00 AM | Comments (0) | TrackBack

January 17, 2007

Quote of the Day for Wednesday, January 17, 2007

Today's quote is from Benjamin Franklin, born on this date in 1706: "Your net worth to the world is usually determined by what remains after your bad habits are subtracted from your good ones."

Posted by John at 12:00 AM | Comments (0) | TrackBack

January 16, 2007

Quote of the Day for Tuesday, January 16, 2007

Today's quote is from Norman Podhoretz, born on this date in 1930: "Creativity represents a miraculous coming together of the uninhibited energy of the child with its apparent opposite and enemy, the sense of order imposed on the disciplined adult intelligence."

Posted by John at 12:00 AM | Comments (0) | TrackBack

January 15, 2007

A Portrait of Rural China

If you want a better appreciation for just how complicated the process of reform in China really is, you must read Chen Guidi and Wu Chuntao’s Will The Boat Sink the Water?. Subtitled "The Life of China’s Peasants", this book takes you beyond the glitter of Shanghai and the bustle of Beijing into rural China, in this case, Anhui Province. In this part of China, the tremendous economic strides China has made over the past three decades trickle down in the form of the money husbands, sons, daughters and other family members, working in those cities, are able to send back home. In fact, the authors note that, officially, about 1.25 million migrants working in Shanghai are from Anhui Province alone; the actual number may be close to 2 million.

There are about 900 million Chinese peasants, and the average peasant, according to the book, has just over 1.5 acres of land per head. There are 660 counties in China where this figure is less than 1, too little, according to the United Nations, to sustain life. According to government figures, the average income of Chinese peasants is about 300 yuan, or about less than $40 a month. The World Bank, by the way, defines extreme poverty as less than $1 a day in income, and moderate poverty as less than $2 a day.

As the reforms of the 1980s were implemented in agricultural areas, some 56,000 people’s communes were transformed into 92,000 townships. This had the effect of creating five levels of government, national, provincial, municipal, county, and township. China is unique in having this many levels of government. Even with economic reform, government employment has grown substantially. In 1979, 2.3 million people were government employees; over the next ten years, over, 3.2 million people were added to the government payroll. By 1997, eight million Chinese worked for the government.

One senior official in the finance ministry quoted in the book puts it all in context: "In the Han Dynasty, eight thousand people supported one official; in the Tang Dynasty three thousand people supported one official; in the Qin Dynasty one thousand people supported one official; right now we have forty people supporting one public servant." (Incidentally, the United States has roughly 21 million government employees at all levels, implying one government employee for every fourteen people. Make of it what you will.)

All of these townships are responsible for raising their own revenue, yet with so many rural areas occupied by peasants in desperate poverty, the "tax base", as we call it here in the U.S., is meager. Since rural government officials don’t seem to receive much close oversight, corruption is rampant, and taxes to support that corruption are often based entirely on the whim or fiscal needs of a local official. National government officials depicted in the book seem sympathetic, but the scope of the problem defies short-term remedies.

I’ve given a very high level description of the problem; the book itself is a series of stories of how this dynamic has played out in real life, tragic stories. The headlines regarding China’s income inequality have mushroomed in recent months; in fact, a study by the Chinese Academy of Social Sciences finds that China’s income inequality is as severe as that of Latin America. For the Western reader, Chen and Wu offer a book with rich detail and color behind all those headlines.

Posted by John at 6:02 AM | Comments (0) | TrackBack

Quote of the Day for Monday, January 15, 2007

Today's quote is from Edward Teller, born on this date in 1908: "Two paradoxes are better than one; they may even suggest a solution."

Posted by John at 12:00 AM | Comments (0) | TrackBack

January 14, 2007

Where's the Return on Investment in Fighting Chronic Disease?

BusinessWeek's Michael Mandel asks a terrific question: why has the like expectancy for a 50 year old gone up only six years (from just over 74 to slightly more than 80) since 1950? We've spent billions on heart disease, cancer, diabetes, and other chronic diseases over the last half century.

Could the answer be that there are too many vested interests in the business of disease?

Posted by John at 9:23 PM | Comments (0) | TrackBack

China's Biggest Export in a Decade Could Single Men

If present trends continue, by 2020 some 30 million Chinese men could be unable to find a bride, according to a recent report. While over 118 boys were born for every 100 girls in China during 2005, this ratio is as much as 130 to 100 in some parts of the country.

The report references the "instability" this imbalance could cause, but the global implications could be equally significant. Imagine a young Chinese man, a decade from now, who has the opportunity to go abroad for work or an education. A motivation to find a marriage partner could also be a consideration, and once married with roots in another country, such a man might find it hard to come back. Only a small portion of 30 million who make such a choice could represent a significant demographic trend in some countries, including the United States.

If you want to read more, one book which examines the global implications of this trend is Peter Schwartz's Inevitable Surprises, a book I highly recommend.

Posted by John at 9:00 AM | Comments (0) | TrackBack

Quote of the Day for Sunday, January 14, 2007

Today's quote is from John Dos Passos, born on this date in 1896: "Individuality is freedom lived."

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January 13, 2007

Up, Down, and All Around: Accounting for Public Company Earnings in China

As of the beginning of this year, China's Ministry of Finance requires all companies listed on the Shenzhen and Shanghai stockmarkets to comply, with some important exceptions, to International Financial Reporting Standards issued by the International Accounting Standards Board.

The Economist reports that these new standards will take a while to get some traction:

To gauge accountants' understanding of the changes to financial reporting in China, a manager at a large investment-fund company has asked a string of accounting firms whether earnings will rise or fall or at least better reflect businesses' performance. It is hard to imagine a simpler test. No one had an answer.

Posted by John at 8:45 PM | Comments (0) | TrackBack

Quote of the Day for Saturday, January 13, 2007

Today's quote is an Irish Proverb: "You've got to do your own growing, no matter how tall your grandfather was."

Posted by John at 12:00 AM | Comments (0) | TrackBack

January 12, 2007

Quote of the Day for Friday, January 12, 2007

Today's quote is from Jeff Bezos, born on this date in 1964: "We all get to decide how we're going to go about making our own living and so on and so on. That happens to also be a very effective way of deploying an economy so that you get an economy which mostly makes sense. You know, things mysteriously -- because of that invisible hand -- tend to work out. I remember there was a time -- I may have these statistics slightly wrong -- a few years ago there was a heat wave in the South that killed three percent of chickens, and I think egg prices doubled because there were three percent fewer chickens. Well, that means that the number of chickens is roughly right, even though there's nobody deciding how many chickens there should be. All right. So that is a very interesting fact, I think, that a free market economy -- which by necessity involves a lot of liberty -- just happens to work well in terms of allocating resources. But imagine a different world. Imagine a world where some incredibly artificially intelligent computer could actually do a better job than the invisible hand of allocating resources, and were to say, "There shouldn't be this many chickens, there should be this many chickens." Just a few more or a few less. Well, that might even lead to more aggregate wealth. So it might be a society that if you give up liberty, everybody could be a little wealthier. Now the question that I would pose is, if that turned out to be the world, "Is that a good trade?" Personally, I don't think so. Personally I think it would be a terrible trade. And I sometimes worry about that, because I don't think it's a coincidence that liberty tends to do such a good job of creating an economy that functions well."

Posted by John at 12:00 AM | Comments (0) | TrackBack

January 11, 2007

Take Me Home, China Roads

Country music is trying to crack the China market a little wider, as this Tennessean article reports. When country music gets a Chinese audience, it's softer, according to Cathy Chen, producer of "Sound of Country", the first country music television show produced in China. Alison Krauss and John Denver top the show's request list.

I laughed out loud when I read John Denver's name. When I was Wenzhou last year, I met a young man, whose English name is William, who may be the biggest John Denver fan in China. Somehow the subject of music came up, and he told me about how he plays his guitar to relax, and that his favorite song is "Take Me Home, Country Roads". As if inspired just by the thought, he launched into the song, a cappella, and sang almost all of it. The memory of it still warms me.

Posted by John at 4:08 AM | Comments (0) | TrackBack

The South's Surging Market Share in Auto Assembly Plants

From an IndustryWeek look at the economic impact of automobile assembly plants: in 1975, the South had only five auto assembly plants out of 55 total in the United States, less than 10% of the country's total. By 2006, the South boasted 15 of the country's 48 assembly plants, or about one-third of the total.

The South's "market share" of auto plants is set to increase further as the Kia plant in West Point, Georgia and the soon-to-be announced Toyota plant come online.

By the way, the IndustryWeek article notes that while assembly plants get the big press, the even bigger impact comes from associated parts plants:

Beyond assembly plants, parts plants are an even bigger story for economic development. They produce 60% of final vehicle value-added, and employ 3.5 times as many workers as assembly plants. There are many more of them: only about eight assembly plants per decade are built, whereas parts plants number in the hundreds. Parts companies are playing a growing role in subassemblies, research and development, and efficiency (through just-in-time manufacturing). Despite all this, an assembly plant has much larger indirect and induced effect, and is therefore highly sought after by economic development organizations.

Posted by John at 4:07 AM | Comments (0) | TrackBack

Quote of the Day for Thursday, January 11, 2007

Today's quote is from William James, born on this date in 1842: "To change one's life: Start immediately. Do it flamboyantly. No exceptions."

Posted by John at 12:00 AM | Comments (0) | TrackBack

January 10, 2007

China Set to Pass Japan in Number of Wealthy

From the Financial Times:

China's population is so large and its economy growing so quickly that it is set to displace Japan as the country with the world's second largest number of rich people after the US.

Research published this week showed that the Chinese, one fifth of the world's population, accounted for less than one-in-100 of the world's richest 10 per cent of adults.

But such is the pace of Chinese development, argues Professor Anthony Shorrocks of the United Nations University (UNU), the country will soon have more people in this group than Japan. The Japanese currently account for a fifth of the world's richest 10 per cent. In 2000, an adult needed to own $61,000 (€46,000, £31,000) of net assets to be in this group.

"It won't take very much for China to displace Japan as the second placed country," said Mr Shorrocks. . . .

Posted by John at 5:35 AM | Comments (0) | TrackBack

Quote of the Day for Wednesday, January 10, 2007

Today's quote is from Stephen Ambrose, born on this date in 1936: "The past is a source of knowledge, and the future is a source of hope. Love of the past implies faith in the future."

Posted by John at 12:00 AM | Comments (0) | TrackBack

January 9, 2007

Spanish Language Ad Spending Continues to Outperform

According to TNS Media Intelligence, Spanish language media spending is slated to rise 5.4% in 2007, twice as fast as overall ad expenditure growth of 2.6%.

Posted by John at 5:04 AM | Comments (0) | TrackBack

Indian and Chinese Millionaires Drive London Real Estate Prices

Thirty years ago, who would have forecast a headline like this one: "Millionaires from India, China drive London property prices".

Posted by John at 4:30 AM | Comments (0) | TrackBack

Massachusetts: Successful and Shrinking

The Christian Science Monitor reports on the dilemma confronting Massachusetts: incomes are high, but housing prices and high living costs are causing the labor force to shrink:

Massachusetts is the only state to suffer from a shrinking labor force in recent years, according to a recent study. The reasons: Housing has become unaffordable for young people, and many workers don't have the skills needed by employers, particularly in the trades.

It's a cautionary tale for other states scrambling to become "new economy" hubs. The Bay State now faces serious challenges in building more affordable housing and training those without college educations to do more than basic service jobs, say experts.

"We have to have a balanced workforce," say Peter Francese, director of demographic forecasts for the New England Economic Partnership. "It's a fiction that you can just attract high-paying jobs and have only high-priced housing. It can't be done, it doesn't compute."

Posted by John at 3:57 AM | Comments (0) | TrackBack

Shanghai or Chengdu?

AmCham Shanghai's Insight magazine features a cover story (pdf) on the pros and cons of investing in better established, yet increasingly expensive Shanghai vs. cheaper and full-of promise Chengdu. Chengdu was the top second tier Chinese city cited for investment this year in an AmCham Shanghai poll of its member companies.

Posted by John at 3:48 AM | Comments (0) | TrackBack

Quote of the Day for Tuesday, January 9, 2007

Today's quote is from Karel Capek, born on this date in 1890: "It is far more delightful to be fond of the world because it has thousands of aspects and is different everywhere . . . for every divergence deserves to be cherished, simply because it widens the bonds of life."

Posted by John at 12:00 AM | Comments (0) | TrackBack

January 8, 2007

Marketing Luxury Properties in Whistler to the Chinese

According to the Vancouver Sun, realtors in the Whistler area are marketing high end single family lots and income properties to Chinese investors. [Thanks to Cascadia Report for the pointer.]

Posted by John at 9:59 PM | Comments (0) | TrackBack

Previews in a "Snap"

We've installed a widget in Tidbits called Snap, which gives you a preview of any link; just roll your cursor across any link on the page and you'll see a small preview of that destination page appear.

We'd love to hear whether you like this addition or not.

Posted by John at 8:33 PM | Comments (0) | TrackBack

The "You Don't Say" Headline of the Day

Front page article in the Wall Street Journal: "Speculators Helped Fuel Florida's Housing Boom".

Posted by John at 4:37 PM | Comments (0) | TrackBack

Quote of the Day for Monday, January 8, 2007

Today's quote is from Elvis Presley, born on this date in 1935: "When I was a child, ladies and gentlemen, I was a dreamer. I read comic books, and I was the hero of the comic book. I saw movies, and I was the hero in the movie. So every dream I ever dreamed has come true a hundred times...I learned very early in life that: ‘Without a song, the day would never end; without a song, a man ain’t got a friend; without a song, the road would never bend - without a song.' So I keep singing a song. . . ."

Posted by John at 12:00 AM | Comments (0) | TrackBack

January 7, 2007

Increasing Chinese Inroads at the Detroit Auto Show . . . and the U.S. Market

The annual Detroit Auto Show, the year's biggest coming out party for the latest in automobile innovation and fashion, cranks up in earnest this week, and Chinese automakers are making their presence felt:

Chery Automobile has signed a letter of intent with Chrysler, which calls for Chery to manufacturer compact vehicles that Chrysler will market in the United States, Europe, and elsewhere.

Changfeng Motors will showcase five different vehicles at this year's Detroit show, apparently a first for a Chinese automaker.

As this Detroit News editorial observes, Chinese automakers are following the Japanese and South Korean playbook: learn the U.S. market, perfect the product, find a niche, and sell cheaper than the competition. These companies operate with the added advantage of having an ample supply of former Big Three engineers and executives, buoyed by early retirement buyout packages, to work with them. It's just a matter of time before Chinese automotive brand names are as well known in this country as other foreign automakers.

As Nissan's Carlos Ghosn recently remarked in comments on the state of the industry: "There's no room for complacency . . . More than 50-million vehicles are sold worldwide every year. Any automaker could disappear and nobody would notice."

Posted by John at 1:10 PM | Comments (0) | TrackBack

Elites, Politics, and Markets

Arnold Kling offers quite thoughtful commentary on on elites, politics, and markets:

One of my strongly-held beliefs, for which I tend to attract supporting evidence and repel contrary arguments, is that markets process information more effectively than does the political process. Perhaps it as an exaggeration to refer to the market as the "world of truth," as Tim Harford does in The Undercover Economist. However, it strikes me that it is easier for market forces to drive a bad firm out of business than it is for political forces to extinguish a policy that fails to meet the objectives that purportedly drive its enactment.

Those who believe in the wisdom of the political process might argue that the competition between political elites--between Democrats and Republicans or between Krugman and Limbaugh--promotes reasonable outcomes. However, I suspect that the net result of this competition is to lead to greater accretion of government power, giving the elites more to fight over. Politics ultimately becomes a competition to promise the undeliverable, whether it be better public education, inexpensive health care, or government suppression of drug abuse or sexual immorality.

I believe in democracy because I distrust the elites. I distrust the elites because I believe that self-deception is widespread, and the elites are particularly skilled at it. Accordingly, I believe that it is important for those in power to have the humility of knowing that they may be voted out of office.

Others believe in democracy because they are hoping to see the triumph of a particular elite. Many liberals want to see sympathetic technocrats manipulating the levers of government, nominally for the greater good. I see government technocrats as inevitably embedded in a political system that inefficiently processes information. The more they attempt, the more damage they are likely to do. Many conservatives want to see government used for "conservative ends." However, I believe that the more that government tries to correct the flaws of families, the more flawed families will become.

. . . in all of our intellectual pursuits we tend to follow strategies for avoiding truth. The more knowledgable we are, the more we follow a high-investment strategy of selectively accepting evidence that favors our outlook while discounting contrary information. In science, this process ultimately is checked by the methods of experimentation, prediction, and falsification. In markets, it is checked by the process of profit and loss. In politics, the checks are less powerful. Our political beliefs are likely to be especially unreliable, regardless of which strategy we use to avoid truth.

Posted by John at 12:32 PM | Comments (0) | TrackBack

Quote of the Day for Sunday, January 7, 2007

Today's quote is from Zora Neale Hurston, born on this date in 1891: "No matter how far a person can go the horizon is still way beyond you."

Posted by John at 12:00 AM | Comments (0) | TrackBack

January 6, 2007

The Market Tames Microsoft

Wired's Lawrence Lessig admits he "blew it on Microsoft"; he's referring to the U.S. government's antitrust case against the company:

. . .As the evidence of Microsoft's practices became clear, I remember well thinking, "Of course the government needs to do something." And I remember very well the universal impatience with the notion that the market would solve the problem. How could it, when any other company was likely to behave just as Microsoft did?

We pro-regulators were making an assumption that history has shown to be completely false: That something as complex as an OS has to be built by a commercial entity. Only crazies imagined that volunteers outside the control of a corporation could successfully create a system over which no one had exclusive command. We knew those crazies. They worked on something called Linux.

I wanted to believe that Linux would prevail. But I'm a lawyer, and lawyers aren't programmed to see how profitable innovation might happen without commercial control. I didn't like the idea of regulation; I just didn't see any alternative. The suits would always beat the rebels. Isn't that why they were so rich?

The market does not venerate the largest companies. Indeed, the market, as Lessing implies, has forced changes on Microsoft's business model and operating practices much more effectively than a U.S. federal judge ever could. Posted by John at 3:55 PM | Comments (0) | TrackBack

Fat Dogs

Slentrol, a drug developed by Pfizer for overweight dogs, has been approved for use by the Food and Drug Administration. According to this report, about 20% to 30% of the country's 62 million dogs are overweight, and about 5% are considered obese (20% over its ideal weight.

These figures imply that, taken together, the number of overweight and obese dogs would rival New York as the third largest state in the country.

Posted by John at 3:13 PM | Comments (0) | TrackBack

Nuclear Power on the Ascent Worldwide

The Washington Post notes that 29 nuclear power plants are currently under construction worldwide, and more than 100 are on government drawing boards worldwide. Even Persian Gulf oil states have announced plans for nuclear reactors.

This story particularly draws my attention as I am now reading Dr. James Canton's The Extreme Future. Early in the book, Canton discusses the planet's energy future:

. . . Based on current production and consumption technologies and trends, we as a civilization---not just as a nation--do not have the existing or projected energy resources and production means that we will need to sustain growth, security, quality of life, and productivity by 2040--and possibly sooner. This includes all current energy resources and production sources, from oil to solar to nuclear. If the future of democracy, both in the West and in the developing nations of the world, can be linked to energy access, we are in deep trouble.

. . . even if we were to start feverishly building nuclear reactors, solar and wind farms, hydroelectric plants, and other renewable energy sources, we still would not be able to meet the rapidly expanding energy demands in thirty years. . . .

Despite this pessimistic scenario, Canton is still an optimist, based on innovative breakthroughs he sees in coming years. I'll have more on Canton's interesting book in coming days.

Posted by John at 12:24 PM | Comments (0) | TrackBack

Quote of the Day for Saturday, January 6, 2007

Today's quote is from Alan Watts, born on this date in 1915: "The only way to make sense out of change is to plunge into it, move with it, and join the dance."

Posted by John at 12:00 AM | Comments (0) | TrackBack

January 5, 2007

"Designed by Apple in California, Assembled in China"