It is a cold winter morning in Beijing. As I prepare to write this blog about energy efficiency in China, I wonder how efficient my own day will be. I enjoyed a quick shower with warm water from the solar tank on our roof, and prepared our breakfast with appliances that carry energy performance labels. All our lighting fixtures are energy efficient, and none of the electronic equipment is on standby.
Our apartment is heated by a coal-fired plant in the neighborhood, which belches thick smoke into the sky. Our heating bill doesn't reflect the energy we use but the size of our apartment, so we have no financial incentive to save energy. As on most mornings, the concentration of particulates in Beijing's air is an unhealthy 300 micrograms per cubic meter - a level that US cities only reach during wildfires. Our situation is quite typical for a middle class family in Beijing, and reflects the progress and challenges of China's energy policy.
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March 13, 2010
March 12, 2010
The Dalai Lama’s Message and Youth Who Enable it
International Campaign for Tibet summed up the Dalai Lama's March 10 address:
His Holiness the Dalai Lama today delivered his annual March 10 statement to the Tibetan people from Dharamsala, India, stressing openness, transparency and the free flow of information within China as the means for building greater understanding of the true situation in Tibet and greater trust between the Tibetan and Chinese peoples, and among Tibetans themselves.
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March 11, 2010
Chinese Media Warns of More Unrest in Xinjiang, But Analysts Not Convinced
China's state-owned Xinhua News Agency warned this week of a third summer of ethnic clashes in the Muslim Uyghur-dominated autonomous region of Xinjiang. But scholars say that recent deployments of thousands of Chinese police could quell a potential uprising.
Information from the remote region, situated on China's western frontier, is hard to come by after the Chinese government's ongoing restriction of Internet and telecommunications after riots last year. Still, international experts say that poverty and tension with ethnic Chinese continue to fuel discontent among Uyghurs.
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Information from the remote region, situated on China's western frontier, is hard to come by after the Chinese government's ongoing restriction of Internet and telecommunications after riots last year. Still, international experts say that poverty and tension with ethnic Chinese continue to fuel discontent among Uyghurs.
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Peaceful Revolution: EU: Don’t Force Women to Stay Home!
The European Union Commission has proposed a new directive, to be voted on in March, that would make maternity leave compulsory for the first six weeks after a woman gives birth. You read that correctly -- compulsory. As in, women would be forced to stay home, regardless of their own wishes, if they have children.
Beyond the obvious affront on personal free will, the problems with this proposal are so numerous and egregious it's making our heads spin. Firstly, Europe as a whole already suffers from low female labor participation rates; continent-wide, only six out of ten women work. This is a major problem for the region, as it turns out women have been the key factor driving economic growth worldwide in recent years ("women have contributed more to global GDP growth than have either new technology or the new giants, China and India," according to a pre-mancession article in The Economist). Stigmatizing women by telling employers outright that women will not, by law, be as committed to the workplace as men is a foolish and self-defeating move.
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Beyond the obvious affront on personal free will, the problems with this proposal are so numerous and egregious it's making our heads spin. Firstly, Europe as a whole already suffers from low female labor participation rates; continent-wide, only six out of ten women work. This is a major problem for the region, as it turns out women have been the key factor driving economic growth worldwide in recent years ("women have contributed more to global GDP growth than have either new technology or the new giants, China and India," according to a pre-mancession article in The Economist). Stigmatizing women by telling employers outright that women will not, by law, be as committed to the workplace as men is a foolish and self-defeating move.
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March 10, 2010
March 9, 2010
Beijing’s Balm for the T-Note Market
Most logical beings are wary of the unknown. This is particularly true of central bankers; a risk-adverse lot who prefer written agreements and guaranteed returns on any investment. China's financial stewards certainly exhibit these characteristics--in public. But there is good reason to suspect Beijing's bankers are not as conservative as recent press statements would lead us to believe.
Allow me to engage in a bit of reading between the lines so as to explain my suspicions. On 9 March 2010, Yi Gang--the director of China's State Administration of Foreign Exchange--told reporters "risk prevention and management is always our priority." Yi, who also serves as vice governor of the People's Bank of China, then went on to declare Beijing has established a diversified currency for it's $2.4 trillion foreign exchange reserves, including the U.S. dollar, the Euro, and currencies of unidentified emerging markets. So far nothing alarming here, any good central banker is going to seek to minimize risk by placing money in a variety of secure locations. But wait, there's more.
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Allow me to engage in a bit of reading between the lines so as to explain my suspicions. On 9 March 2010, Yi Gang--the director of China's State Administration of Foreign Exchange--told reporters "risk prevention and management is always our priority." Yi, who also serves as vice governor of the People's Bank of China, then went on to declare Beijing has established a diversified currency for it's $2.4 trillion foreign exchange reserves, including the U.S. dollar, the Euro, and currencies of unidentified emerging markets. So far nothing alarming here, any good central banker is going to seek to minimize risk by placing money in a variety of secure locations. But wait, there's more.
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March 8, 2010
China Lassoes Its Neighbors
With the Doha Round of negotiations of the World Trade Organization in limbo, the heavy hitters of international trade have been engaged in a race to sew up trade agreements with smaller partners. China has been among the most aggressive in this game, a fact underlined on January 1, 2010, when the China-ASEAN Free Trade Area (CAFTA) went into effect.
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Touted as the world's biggest Free Trade Area, CAFTA will bring together 1.7 million consumers with a combined gross domestic product of $5.9 trillion and total trade of $1.3 trillion. Under the agreement, trade between China and Brunei, Indonesia, Malaysia, the Philippines, Thailand, and Singapore has become duty-free for more than seven thousand products. By 2015, the newer members of the Association of Southeast Asian Nations (ASEAN) — Vietnam, Laos, Cambodia, and Myanmar — will join the zero-tariff arrangement.
The propaganda mills, especially in Beijing, have been trumpeting the FTA as bringing "mutual benefits" to China and ASEAN. In contrast, there has been an absence of triumphal rhetoric from ASEAN. In 2002, the year the agreement was signed, Philippine President Gloria Macapagal-Arroyo hailed the emergence of a "formidable regional grouping" that would rival the United States and the European Union. ASEAN's leaders, it seems, have probably begun to realize the consequences of what they agreed to: that in this FTA, most of the advantages will probably flow to China.
At first glance, it seems like the China-ASEAN relationship has been positive. After all, demand from a Chinese economy growing at a breakneck pace was a key factor in the Southeast Asian growth that began around 2003 after the low growth following the Asian financial crisis of 1997 and 1998. For Asia as a whole, in 2003 and the beginning of 2004, "China was a major engine of growth for most of the economies in the region," according to a UN report. "The country's imports accelerated even more than its exports, with a large proportion of them coming from the rest of Asia." During the current international recession ASEAN governments, much like the United States, are counting on China — which registered an annualized growth rate of 10.7 percent in the last quarter of 2010 — to pull them out of the doldrums.
A More Complex Picture
But is the Chinese locomotive really pulling the rest of East Asia along with it, on the fast track to economic nirvana? In fact, China's growth has in part taken place at Southeast Asia's expense. Low wages have encouraged local and foreign manufacturers to phase out their operations in relatively high-wage Southeast Asia and move them to China. China's devaluation of the yuan in 1994 had the effect of diverting some foreign direct investment away from Southeast Asia. The trend of ASEAN losing ground to China accelerated after the financial crisis of 1997. In 2000, foreign direct investment in ASEAN shrank to 10 percent of all foreign direct investment in developing Asia, down from 30 percent in the mid-nineties.
The decline continued in the rest of the decade, with the UN World Investment Report attributing the trend partly to "increased competition from China." Since the Japanese have been the most dynamic foreign investors in the region, much apprehension in the ASEAN capitals greeted a Japanese government survey that revealed that 57 percent of Japanese manufacturing transnational corporations found China to be more attractive than the ASEAN-4 (Thailand, Malaysia, Indonesia, and the Philippines).
Snags in a Trade Relationship
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Cell Phones — Read the Fine Print
Last week the technology world stood on notice as a fiercely independent state legislator, Democrat Andrea Boland, bucked the Maine political establishment and proposed to place visible warning labels directly on cell phones. "Cell phones emit electromagnetic radiation, exposure to which may increase the risk of brain cancer. Users, especially pregnant women and children, should reduce their exposure."
In the nineteenth century, the outcome of September's state-wide elections in Maine regularly predicted November's national results, giving rise to the statement, "As goes Maine, so goes the nation." Whether this remarkable modern effort in Maine presages a national turn of events remains to be determined, but in fact, it is consistent with similar efforts around the world, including a recent resolution of the European Parliament and national advisories issued in Finland, France, Israel, England, Russia, and China.
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In the nineteenth century, the outcome of September's state-wide elections in Maine regularly predicted November's national results, giving rise to the statement, "As goes Maine, so goes the nation." Whether this remarkable modern effort in Maine presages a national turn of events remains to be determined, but in fact, it is consistent with similar efforts around the world, including a recent resolution of the European Parliament and national advisories issued in Finland, France, Israel, England, Russia, and China.
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Winds of Trade Wars
President Obama argues that the Chinese Yuan is undervalued, contributing to the large trade deficit with China and depriving Americans of jobs. Further, he argues this creates a dangerous imbalance and that the government should intervene to fix the situation, possibly by engaging in trade war.
This asseverates the suspicion that the Obama administration is misguided on basic economic issues.
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This asseverates the suspicion that the Obama administration is misguided on basic economic issues.
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March 2, 2010
Will Global Natural Disasters Compound Global Financial Disasters?
Every enduring agrarian society learned to store surplus harvests for infertile times. Conversely, during the last global credit bubble, most countries followed an unwise philosophy of simply spending more.
As the global economy has somewhat stabilized for the moment, the global environment has not. Recent large-scale tragedies include earthquakes and tsunamis in Haiti, Chile, China/Russia/North Korea, Hawaii, and Japan. All of these damaged regions require aid from those more fortunate.
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As the global economy has somewhat stabilized for the moment, the global environment has not. Recent large-scale tragedies include earthquakes and tsunamis in Haiti, Chile, China/Russia/North Korea, Hawaii, and Japan. All of these damaged regions require aid from those more fortunate.
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