Archive for Business and Finance

Opinion | Don’t Fall for Facebook’s ‘China Argument’ – by Tim Wu – The New York Times

America’s global dominance in technology requires fierce competition at home, not the coddling of monopolies.

Tim Wu

By Tim Wu

Mr. Wu is a law professor who specializes in antitrust.

 Image
CreditCreditAlex Merto

“Over the last year or so, Mark Zuckerberg of Facebook and other American tech leaders have issued a stark warning to those who want to see more competition in the industry. It goes something like this: “We understand that we’ve made mistakes. But don’t you realize that if you damage us, you’ll just be handing over the future to China? Unlike America, the Chinese government is standing behind its tech firms, because it knows that the competition is global, and it wants to win.”

This — Big Tech’s version of the “too big to fail” argument — has a superficial nationalistic appeal. It’s certainly true that the Chinese technology sector is growing and aggressively competitive, and that many of its companies are embraced and promoted by the Chinese state. By one count, eight of the world’s 20 largest tech firms are Chinese. That would seem to suggest a contest for global dominance, one in which the United States ought not be considering breakups or regulation, but instead be doing everything it can to protect and subsidize the home team.

But to accept this argument would be a mistake, for it betrays and ignores hard-won lessons about the folly of an industrial policy centered on “national champions,” especially in the tech sector. What Facebook is really asking for is to be embraced and protected as America’s very own social media monopolist, bravely doing battle overseas. But both history and basic economics suggest we do much better trusting that fierce competition at home yields stronger industries overall.

That’s the lesson from the history of Japanese-American tech competition. During the 1970s and into the ’80s, it was widely believed that Japan was threatening the United States for supremacy in technology markets. The Japanese giant NEC was a serious challenger to IBM in the mainframe market; Sony was running over consumer electronics, joined by powerful firms like Panasonic and Toshiba. These companies enjoyed the support of the Japanese state, through the Ministry of International Trade and Industry, which pursued a nationalistic industrial policy thought to be infallible.”

Source: Opinion | Don’t Fall for Facebook’s ‘China Argument’ – The New York Times

Posted in: Japan, Monopoly or Monopsony

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Vandana Shiva: There Is No Reason Why India Should Face Hunger and Farmers Should Commit Suicide – EcoWatch

Vandana Shiva: There Is No Reason Why India Should Face Hunger and Farmers Should Commit Suicide

There is no reason why India should face hunger and malnutrition and why our farmers should commit suicide. India is blessed with the most fertile soils in the world. Our climate is so generous we can, in places, grow four crops in a year—compared to the industrialized west where sometimes only one crop is possible per year. We have the richest biodiversity of the world, both because of our diverse climates and because of the brilliance of our farmers as breeders. Our farmers are among the most hardworking, productive people in the world. Yet India faces an emergency, in our food and agricultural system. This emergency is man-made.

Firstly, the poor and vulnerable are dying for lack of food. According to the Deccan Herald, Lalita S. Rangari, 36, a Dalit widow and mother of two children of the Gondiya tribal belt, allegedly died due to starvation. Justice Bhushan Gavai and Justice Indu Jain of the Nagpur Bench of the Bombay High Court have served notice to the government of Maharashtra seeking its reply to the starvation death of a Dalit widow.

Photo credit: Nourishing Revolution”Even as India gets richer, we have emerged as the capital of hunger and malnutrition. According to the National Family Health Survey (NFHS), 42.5 percent of children under five years old were underweight. This is more than double the African average of 21 percent, which until recently was the face of hunger.

The second tragedy is that our food producers, the small farmers who have provided food to more than a billion Indians and hold the potential to provide healthy food for all, are themselves dying because of agriculture and trade policies which put corporate profits above the rights and well being of our small farmers. More than 300,000 farmers have committed suicide in India since 1995, when the rules for the globalization of agriculture of the World Trade Organization (WTO) were implemented, transforming food into a commodity, agriculture into corporate business and shifting control over seeds and food from farmers to a handful of giant multinational corporations.

The third tragedy is that even those who get food are being denied their right to healthy and nourishing food. The explosion of junk food, of pesticides and toxics in our food, have created a disease epidemic that is a human tragedy and an economic burden. There is an epidemic of diseases related to our lifestyle and food, such as diabetes, cancer, hypertension, infertility and cardiovascular diseases.

The recent Maggi noodle scandal highlights the rapid invasion of junk food in the Indian diet. We are what we eat. When we eat food full of toxic chemicals, we pay the price with our health. India has emerged as the epicenter of diabetes.

In 2004, 8.2 lac Indians were diagnosed with diabetes and 2.6 lac succumbed to the disease. In 2012, the diabetes numbers jumped to 180 lac diagnosed and 7 lac dead. In 2010 alone, India spent 32 billion dollars on diabetes care. Cancer has also seen an increase by 30 percent in the last 5 years, with 180 million people affected in India. At 10 lac treatment per cancer victim this multiplies to 300 billion dollars, or 18 lac crores in rupees.

In extensive studies reported in “Poisons In Our Food” by Navdanya, elevated levels of PCBs, DDE and DDT have been found in the blood of women suffering from breast cancer. Studies show that 51 percent of all food commodities are contaminated by pesticides.”

Source: Vandana Shiva: There Is No Reason Why India Should Face Hunger and Farmers Should Commit Suicide – EcoWatch

Posted in: Agriculture, Climate Change, India

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How China Took Over Your TV – By QUOCTRUNG BUI and SUI-LEE WEET – The New York Times

“It’s not just about powering growth. It’s also about national security and self-sufficiency.

China wants to build homegrown champions in cutting-edge industries that rival Western giants like Apple and Qualcomm. While China has a long way to go, the Communist Party is bringing the full financial weight of the state and forcing other countries to play defense.

In doing so, China is staking out a new manufacturing model.

Economic textbooks lay out a common trajectory for developing nations. First they make shoes, then steel. Next they move into cars, computers and cellphones. Eventually the most advanced economies tackle semiconductors and automation. As they climb up the manufacturing ladder, they abandon some cheaper goods along the way.

That’s what the United States, Japan and South Korea did. But China is defying the economic odds by trying to do all of them.

Look at the evolution of what China sells to the rest of the world. As it ramped up its manufacturing engine in 2000, China was pretty good at making basic products like toys and umbrellas.”

Source: How China Took Over Your TV – The New York Times

Posted in: Business and Finance, China

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Opinion | China and Trump- Listen Up! – by Thomas Friedman – The New York Times

“HONG KONG — I’ve been in Tokyo and Hong Kong this week, and if I were to distill what echoed in all my conversations, it would sound something like this:

From Chinese business and government types, some real anxiety — “Can you please tell me what is President Trump’s bottom line in this trade war? Is this about rebalancing trade or containing China’s rise?” — combined with some real bravado — “You realize that you Americans are too late? We’re too big to be pushed around anymore. You should have done this a decade ago.”

From the Japanese it was gratitude — “Thank God for Donald Trump. Finally we have a U.S. president who understands what a threat China is!” — combined with real anxiety — “Please, please be careful. Don’t go too far with Beijing and break the global trading system.”

And from a smart European consultant it was bewilderment — “Boy did the Chinese have a failure of intelligence. They had no clue just how much both Democrats and Republicans, and Europeans, all want to see Trump hammer China in these trade talks. But please, please don’t start a cold war with China that will force us to choose sides.”

And from me to both my Chinese and Japanese interlocutors: I’m glad Trump is confronting China on its market access barriers. Those are the real issue — not the bilateral trade imbalance. This is long overdue. But trade is not a zero-sum game. China can thrive and rise, and we can, too, at the same time. That’s what’s been happening for the past 40 years. But we’d be even better off if China offered the kind of easy access to its market for U.S. manufacturers that it enjoys in America. It’s time to recalibrate U.S.-China economic ties before it really is too late.”

 

Thank you Thomas Friedman. Here is a comment I support.

Edward
Philadelphia
Times Pick

In this situation it seems time to cut off access rather than beg for it over and over. If the US and the EU both installed a policy that all policies regarding access are a mirror of the country in question, then the ball is moved into China’s court. Open up and keep access to those markets or stay closed and stay home. Back that up with huge trade and military agreement with the rest of Asia.

Source: Opinion | China and Trump, Listen Up! – The New York Times

Posted in: Thomas Friedman, Trade and Trade Policy

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China’s Taste for Soybeans Is a Weak Spot in the Trade War With Trump – By Raymond Zhong – NYT

XIAOWUSILI, China — For all its economic might, China hasn’t been able to solve a crucial problem.

Soybeans. It just can’t grow enough of them.

 

That could blunt the impact of one of the biggest weapons the country wields in a trade fight with the United States.

Beijing placed a 25 percent tariff on American soybeans last week in retaliation for the Trump administration’s levies on Chinese-made goods. Last year, soy growers in the United States sold nearly one-third of their harvest to China. In dollar terms, only airplanes are a more significant American export to China, the world’s second-largest economy.

Source: China’s Taste for Soybeans Is a Weak Spot in the Trade War With Trump – The New York TimesMay

 

David Lindsay:  Maybe. Here are the three most recommended comments, that doubt some of what this article says:

Kathy Chenault
Rockville, Maryland

Although you say U.S. soybean producers “could take a hit,” you fail to realize they already have been hurt deeply and they suffer more each day this ruinous trade manipulation continues. Farmers need to be selling significant percentages of expected production throughout the growing season on futures contracts. This usually begins even before they have planted their crops in the spring. I grew up on a family farm in Nebraska and still am involved in its operations. (Each year, about half of our acres are planted in soybeans.) Commodity prices already were trapped in a low cycle before Trump’s disastrous trade moves. Farmers know how to deal with the usual ebb and flow that comes with such a long-range economic pursuit like farming. But then came the trade war that Trump says he wanted. Farmers now face these perilous conditions: Rising interest rates, decreasing land values because of falling commodity prices, and higher equipment costs and operating expenses because of other non-farm tariff threats by Trump. Our foreign grain markets, including but not limited to China, have taken decades to develop. All that work is being undone daily by Trump. The short-sighted focus of your story fails to take that into account — just as it appears the Trump administration has failed to truly understand the very nature of our farm economy or how rural America is affected by his actions. Shame.

donald.richards commented July 9

donald.richards
Terre Haute

Monsanto grows plenty of soybeans in Brazil, Argentina and Paraguay. I’m sure they won’t have any problem wiping out more of the rain forest to meet Chinese demand.

And when they do more American farmers can apply for food stamps. They might want to reconsider that work requirement for eligibility though.

Ruralist commented July 9

Ruralist
Upstate

The article seems to assume that the rest of the world produces no soybeans, but that is far from true. The biggest of the other exporters in Brazil. In fact, Brazilian farmers saw this coming and started expanding their plantings earlier this year.
They are also buying US soybeans at the great discount the trade war creates ($7.80), and selling them to other customers at the Brazil price ($10).

The competition is smart and well-informed.

 

 

 

Posted in: Agriculture, China, Trade and Trade Policy

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S.E.C. Blocks Chinese Takeover of Chicago Stock Exchange – The New York Times

“Supporters of the Chicago Stock Exchange proposal said it could help bring more Chinese companies to United States financial markets. And it would also have helped revive a marketplace where activity was dwindling. The Chicago Stock Exchange handles only a small fraction of the stock trades that take place every day.”

Source: S.E.C. Blocks Chinese Takeover of Chicago Stock Exchange – The New York Times

DL: This deal was approved by the SEC under Barak Obama. It was approved by the staff of the SEC. The new Trump head of the SEC has terminated against the advice of the SEC staff. Make America Great Again continues to hold us back. These are the same idiots who cancelled the US participation in the TPP, the Trans Pacific Partnership.

Posted in: Business and Finance, China

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Trial Over Theft of Wind Technology Spotlights U.S.-China Tensions – WSJ

By Erin Ailworth Jan. 6, 2018 7:00 a.m. ET 21 COMMENTS

“A dispute over the alleged theft of wind-turbine technology is slated to go to trial in Wisconsin on Monday in a test case for intellectual-property battles between the U.S. and China. Federal prosecutors accuse Chinese wind-turbine maker Sinovel Wind Group Co. Ltd. of stealing the source code for software that controls wind turbines from American Superconductor Corp. AMSC 6.64% , a Massachusetts-based engineering company that once counted Sinovel as its biggest customer.

The trial in U.S. District Court for the Western District of Wisconsin could result in billions of dollars in fines for Sinovel, which has previously denied wrongdoing.

Prosecutors in 2013 indicted the company, along with two of its executives and an American Superconductor employee, on criminal charges of stealing trade secrets.

John W. Vaudreuil, then U.S. Attorney for the Western District of Wisconsin, called it “nothing short of attempted corporate homicide.” ”

Source: Trial Over Theft of Wind Technology Spotlights U.S.-China Tensions – WSJ

Ouch. Here is the top WSJ comment, which I endorsed, even though its tone is harsh.

Posted in: Business and Finance, China, Intellectual Property Rights

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