Posts Tagged ‘education’

Latest thoughts on the Chinese economy / the ‘new normal’

December 16, 2014

China held its Central Economic Work Conference last week, chaired by president Xi Jinping, so here are a few thoughts on the current state of the Chinese economy and a few links to an article I have written, and talks I have given, recently about the Chinese economy.

First up, the slogan du jour is definitely ‘new normal’ (新常态). Xi Jinping has been using this for about six months, but now he is really using it. Xinhua’s short, official report on the conference has ‘new normal’ in the headline and ‘new normal’ six times in the text. See here for the English version.

What does it mean? It means that local politicians, state firms, and everybody else should dial back their expectations about credit and growth. The increase in both is slowing and that is the way it is going to be as China undertakes a deleveraging process in the banking and corporate sectors. There is not going to be the kind of collapse in growth that many have predicted. The government has plenty of room to fine tune the slow-down, Chinese exports remain competitive, and the global economic environment, while not great, is not a disaster from the perspective of China’s needs. Look out for reported GDP growth in 2015 between 6-7 percent.

Against this background reforms will continue to increase the extent to which the market prices credit in China’s economy. There has already been a big shift in favour of lending to the private sector since the global financial crisis (see my review of Nicholas Lardy’s new book, below), and this is one aspect of an ongoing financial liberalisation process. To my mind, this explains the recent strong performance of the Chinese stock market much better than claims it is down to an interest rate cut (which wasn’t really a cut at all given falling inflation). Previous run-ups in the Chinese market have coincided with periods of financial sector deregulation. The difference this time I suspect is that the bull market will last longer.

All in all the outlook is a not unattractive one: slower growth, better credit rationing hence higher quality growth, and a rising share for consumption in the economy at the expense of slowing investment. The main risk — as was the case during Zhu Rongji’s long period of ‘structural adjustment’ in the 1990s — is that the central government listens to local politicians who say they cannot maintain ‘social stability’ without more credit and growth. Zhu didn’t listen to such imprecations, and we have to hope Xi won’t either. As the slogan says, China needs and is getting a new normal. Otherwise the books really cannot be balanced and financial system risk will become unmanageable.

Later re. the new normal: Damian Ma has written an excellent piece for the new issue of Foreign Policy around the theme of the ‘new normal’. Well worth a read, with a lot more detail than I can offer here.

 

Links:

Below is a link to download the review of Nick Lardy’s latest book, Markets Over Mao, that I wrote for the latest China Economic Quarterly. The book makes an important contribution to the optimists’ case that China will overcome its current slough of non-performing loans in the banking system.

2014 CEQ Q4 final Markets Over Mao review

 

This next link is to a download of a synopsis of a talk I gave at the Madariaga College of Europe in Brussels (an EU think-tank) a couple of weeks ago. It is about how China’s development model is similar and dissimilar to those of Japan, Korea and Taiwan. The theme will be familiar to anyone who has read How Asia Works, but there are some additional, up-to-date thoughts about China as well as responses to questions raised by the Brussels nomenklatura. The precise topic I was asked to speak on is ‘What can east Asian countries learn from China’s economic policies?’

2014-Dec-01 – Madariaga – CN lessons to East Asia_final

 

The Youtube video below is a speech I gave at the National University of Singapore in October (blog entry about that trip here) on the subject of ‘When will governance matter to China’s growth?’ (governance here meaning institutions like a free and fair and prompt judiciary). Roger Cohen of the New York Times speaks first about the role of the US in east Asia. Then I speak at roughly the 25-minute mark. Then there is a joint Q&A.

 

 

And here is another Youtube video where I spoke separately about How Asia Works at the National University of Singapore. There is quite a long Q&A in which lots of questions about development from a more Singaporean perspective are addressed.

 

 

Damn and blast

November 5, 2014

A new study from the Centre for Research and Analysis of Migration at University College London shows that migrants from the European Union make a net contribution to the UK fiscal system — it looks to me, very roughly, like a cumulative 1 percent of GDP over the past 10 years.

I tell this to Camilla the Polish cleaner as she starts folding washing in the kitchen. She looks suspicious. I ask why. She says that the UK benefits system is outrageously generous and that fake ‘single mothers’ with husbands or fiancees ‘living’ at second addresses of convenience are driving around Cambridge in Audis while claiming benefits.

I ask her to unpack these assertions. First, she says, when she had cancer last year there were bleeding-heart liberals from the council coming round to her flat encouraging her to claim housing benefit because she was too ill to work. Naturally, she refused and sent them packing. ‘I have my savings,’ she says, and she never intended to let cancer keep her out of the labour market for more than a year. It did not.

Fair enough. But does she actually know any fake single mothers whose partners are living at separate addresses so that they can claim benefits? It costs at least £80 a week in Cambridge to rent a room. Would the benefits you could get by this ruse be substantially more than the £80 cost? She doesn’t know because she doesn’t claim benefits. And, no, she doesn’t have any actual cases of fake single mothers with Audis to present. But there are definitely Polish people who drive Audis.

Camilla goes back to earning her £10-an-hour, telling me how much she likes our house and her job. ‘People ask me why I do cleaning,’ she says, ‘but just now I am happy to have less pressure and spend more time with my kids.’ She used to be the Operations Manager of a chain of hotels in and around Cambridge. The last cleaner, a Hungarian, was a Research Chemist and left last year after being offered a too-good-to-refuse job in a research laboratory. She apologised that we poor English people would have to do our own cleaning for a couple of weeks, until Camilla showed up.

So this is all rather bad news for UKIP and Theresa May. How to loathe those who pay in more than they take out? The Brits, of course, are substantial net drainers of the welfare system at present. But self-loathing is hardly a viable election strategy.

Britain’s Essex-born Tory Immigration Minister was quick, when the report was published, to suggest that the Tories have never claimed EU migrants are net benefit scroungers (ho, ho, ho — this chump trained as a lawyer). Instead the problem is all about putting too much pressure on public infrastructure [which the Tories have failed to invest in for several decades]. If you have a sub to the FT, you can read his weaselly drivel here.

The serious point about the study is that it highlights the brain drain from continental Europe to the UK, as over-regulated labour markets in southern Europe, and eastern European countries with a dearth of professional jobs, force hard-working young people onto planes to the UK, with its highly deregulated labour market. Once there, all they have to do is to compete with poorly educated, monolingual Brits who drink during the day…

 

Farage with beer

 

 

 

 

 

 

 

The point is well made by David Green of centre-right think-tank Civitas in The Guardian.

Anyhow, all this leads us to the blog post I need to write about Italy.

This guy is my prime minister

September 30, 2014

Give me strength.

This from Brave Dave Cameroon:

 

David Cameron: schools should teach mainly in imperial measurements

PM says he would ‘still go for pounds and ounces’ over metric system in Newsnight interview

David Cameron's kind of ruler.
Conservative rule: David Cameron favours imperial measures. Photograph: Alamy

Schools should teach pupils mainly in imperial and not metric measurements,David Cameron has said.

Four decades since metres and litres replaced yards and pints on the curriculum, the prime minister suggested he would prefer to see a return to the old system.

“I think I’d still go for pounds and ounces, yes I do,” Cameron told BBC2’s Newsnight when asked which should be taught predominantly.

The present curriculum, which Tory ministers have said they will skew towards imperial measures, requires only that pupils “understand and use approximate equivalences between metric units and common imperial units such as inches, pounds and pints”.

It was one of three questions posed to the PM by the programme to try to define his wider stance.

In a more modern response Cameron, who personally spearheaded the legalisation of same-sex marriage, said he had no problem with seeing two men kissing in a park.

“I can kiss my wife in public, I don’t see why you can’t kiss your husband,” he said.

But he was less definitive in his answer to a third posed dilemma: whether a pharmaceutical firm should recruit a British candidate over a better-qualified foreign one.

“I want to make sure that the pharmaceutical company has good British people to employ. In the end, they have to choose,” he said.

…………..

I suppose that at least you can now be gay so long as you notch your conquests in dozens. But I am trying to get some work done, and this really does not help. Could it be that Britain’s appalling recent record on productivity is down not to our alcohol consumption but to the mental torpor induced by David Cameron’s ‘ideas’?

Parenting-mare

September 2, 2014

So here is the last blog post of the holiday season. Turn away now if you cannot cope with the f-word. 

What follows is a verbatim rendering of a conversation that took place last week in the car, driving down to the Isle of Wight. Me driving. Wife in the front. Three kids, 11, 9, 7, in the back.

9 year-old boy: ‘What does fuck mean?’

[pause]

Wife: ‘It’s very rude and you must never say it.’

9 year-old boy: ‘I know that. But what does it mean?’

[pause]

Me: ‘You’ll find out in Year 6 sex education.’

9 year-old boy: ‘But I don’t want to wait for Year 6. Tell me what it means now.’

Wife: ‘Look, I’ll talk to you about it later. We can’t do it now — daddy is driving and I have to do the directions.’

9 year-old boy: ‘Why can’t you just tell me what it means?’

[long pause] 

Worldly-wise 11 year-old sister, feeling very pleased with herself: ‘Look, It’s like a hug.’

[pause]

9 year-old boy, turning to 11 year-old sister: ‘Can I fuck you?’

7 year-old girl, turning to 11-year old sister: ‘I want to fuck you too.’

………………………………

More:

Here is a funny video I saw this summer, on how to assess the marriageability of women. It is funnier for me because my wife is called Tiffany. It is probably funnier for anyone when you have had a couple of drinks.

Here is a funny song about learning Chinese (in Chinese, so skip it if you don’t speak any). In case you are wondering, it was done in Taipei. Can’t imagine something like this being done on the mainland.

 

Addendum:

Just now in the car…

9 year-old boy: ‘I know what fuck means.’

Me: ‘Oh yes?’

9 year-old boy: ‘It means sex.’

Wife: ‘How do you know that?’

9 year-old boy: ‘X and Y [friends at school] told me.’

[pause]

9 year-old boy: ‘But why can’t you say: “What fuck are you?”.’

 

FT Longlist

August 8, 2013

The Financial Times published its longlist for the FT/Goldman Sachs Book of the Year today and I am honoured that How Asia Works is on it. Below is the full list of 14 titles.

 

After the Music Stopped: The Financial Crisis, the Response, and the Work Ahead, Alan Blinder, The Penguin Press

The Alchemists: Inside the Secret World of Central Bankers (UK subtitle); Three Central Bankers and a World on Fire (US subtitle), Neil Irwin, Headline Business Plus; The Penguin Press

Big Data: A Revolution That Will Transform How We Live, Work, and Think, Viktor Mayer-Schönberger and Kenneth Cukier, John Murray; Eamon Dolan Books/Houghton Mifflin Harcourt

The Billionaire’s Apprentice: The Rise of The Indian-American Elite and The Fall of The Galleon Hedge Fund, Anita Raghavan, Hachette Book Group/Business Plus

The End of Competitive Advantage: How to keep your strategy moving as fast as your business, Rita Gunther McGrath, Harvard Business Review Press

The End of Power: From Boardrooms to Battlefields and Churches to States, Why Being In Charge Isn’t What It Used to Be, Moisés Naím, Basic Books

The Everything Store: Jeff Bezos and the Age of Amazon, Brad Stone,Transworld/ Bantam Press; Little, Brown

Give and Take: A Revolutionary Approach to Success, Adam Grant, Weidenfeld & Nicolson; Viking (Penguin)

The Great Escape: Health, Wealth, and the Origins of Inequality, Angus Deaton, Princeton University Press

How Asia Works: Success and Failure in the World’s Most Dynamic Region, Joe Studwell, Profile Books; Grove Press

Lean In: Women, Work, and the Will to Lead, Sheryl Sandberg, WH Allen/Random House Group; Knopf

Making it Happen: Fred Goodwin, RBS and the Men Who Blew Up the British Economy, Iain Martin, Simon and Schuster

The Org: The Underlying Logic of the Office, Tim Sullivan and Ray Fisman, Twelve

Scarcity: Why Having Too Little Means So Much, Sendhil Mullainathan and Eldar Shafir, Allen Lane; Times Books/Henry Holt

Holiday reading and viewing: booze, race, nationalism

July 23, 2013

English beach

 

Since I am sort of on holiday this week, I have decided that everybody else should be too. So here is weekend reading re-dressed as holiday reading.

 

1. First up, to get us started, a great discussion of the role of alcohol, and of alcohol addiction, in writing.

Next, the serious stuff.

Here are three articles on questions of race and nationalism.

2a. Orville Schell and John Delury offer a thoughtful piece about China’s need to move on from the narrative of national humiliation that the country’s schools and politicians have fed the population ever since 1949 (and indeed longer in the case of early converts to the communist party’s cause).

2b. In the United States, Barak Obama can no longer avoid speaking out about the Trayvon Martin case.

2c. Philip Stephens in the FT (sub needed) reflects on the mindless racism of Italian politics, but ends with his ideas that just maybe Gianni Letta represents change. Would that it were so!

3. Third, a near miss. Gideon Rachman in the FT (sub needed) has a thoughtful piece on Putin’s Russia but fails to nuance it with what Putin’s government is doing to put Russia back on an economic development path — in essence, reining in the oligarchs and bringing cash flows from national mineral assets back under public control. Putin may be a revolting man, and yet may also be a revolting man whose time has come.

4. Finally, a heartening curiosity. Teach First seems to be working. It is now Britain’s single biggest recruiter. So it turns out that smart people often do care, and don’t reflexively sell their souls to a law firm or investment bank.

 

China comes to my home

July 9, 2013

We are having a Chinese primary school teacher to stay. She and a bunch of other Chinese teachers are supervising 40 Shanghainese kids on an English language immersion trip to Cambridge. Since our teacher (the senior one) doesn’t speak much English, I figured it would be good for our kids to have a week practising their Chinese.

It turns out that our kids also get a cultural lesson thrown in for free.

The Chinese teachers and schoolchildren have been billeted with Cambridge families around town. So far so good. But in order to consolidate them in the morning  so as to get everyone to school, they are not using one of the regular Cambridge taxi firms. Instead they are using a Chinese taxi firm I have never seen before. It’s a guanxi thing, you see.

Sure enough the driver gets to our house already half an hour late having gotten lost. Being Chinese, he doubtless also left half an hour spare in case of mistakes, so the group has likely already wasted an hour this morning going to wrong places. Plus, of course, the actual origin to destination driving time.

Finally the car pulls up outside our house and disgorges two panic-stricken occupants, both teachers. Spotting Senior Teacher Zhang, who is staying with us, they head for our front door. ‘We need the toilet!’ they exclaim, pushing into the house and straight past me in the corridor. ‘Hello!’ says one, as he locates the downstairs toilet under the stairs and heads in. A female teacher, beaten to the downstairs toilet, scoots straight off upstairs in search of another one, quickly locating it.

I wander into the street with my espresso to take in the scene.

After a couple of minutes the toilet-seeking teachers reappear becalmed and join Senior Teacher Zhang and the others in the taxi.

‘Sank you!’ says one.

And with that the people who are taking over the world are off.

UKIP if you want to / Weekend reading & viewing

May 5, 2013

So UKIP (full name ‘UKIP if you want to, we are going to set this cross on fire’)  has won 100+ council seats.

To me it is a symptom of a less inclusive, more unequal society fomenting a brew of angry old and ignorant people (and old and ignorant people) that the Conservative Party can no longer accommodate because they have become too angry and prejudiced even for the Tories.

In America they call this sociological phenomenon the Tea Party and I am surprised the press is not going for more of an ‘ooh, we’ve now got one too’ angle. Indeed UK leader Nigel Farage (unfortunate foreign-sounding name, no?) says UKIP is indeed the Tea Party wrapped in a different flag.

The bigger issue at stake here is whether UKIP is more of a problem for the Tories or for Labour. Hopeful Tories say that since they got a quarter of this week’s local election vote, and so did UKIP, together the right has half the vote if it can just, like Humpty, be put back together again. This sounds superficially tremendous, but the US experience suggests it is not, because when the far right of the right-wing becomes so nutty that your mother-in-law starts to seem reasonable, it really benefits the left. If the Labour Party can generate a few sensible policies (a la Obama), and get rid of Ed Balls and other remaining Blair-Brown detritus, it may be set fair for the 2015 general election. A single term of opposition for what Blair and Brown did to their country would be an extraordinarily low price to have to pay…

 

Weekend reading & viewing:

Why it is very dangerous to give police any new powers (in cartoon format).

This repeated, just in case anybody has not seen it. Give Obama a tv show, now.

Amanda Knox’s interview with ABC‘s Diane Sawyer to coincide with the release of her book. Part 1 (only about 8 mins)

This is very funny and goes out to all my friends planning to ghettoise their children in expensive British boarding schools.

Here’s more in the same vein.

Boycotting Google. I own shares in Google, but they are tax evading bastards and they promised not to be evil, so they are also hypocrites. Here is how you can substitute their services. I am trying out the duckduckgo search engine, so far without problems.

Tory, Tory, Tory

February 16, 2013

Like a Kamikaze pilot swooping to certain death, Brave Dave Cameroon’s lard-fed, neighbour-from-hell candidate in the UK’s mid-term byelection signals her commitment to the cause of right-wing ignorance with a shrill affirmation of her deepest prejudice. Given the parlous condition of the Lib-Dem incumbent party, I am reminded of my (right-wing) undergraduate professor’s observation that British politics is essentially about waiting for the Conservatives to shoot themselves in the foot.

Thought food

January 31, 2013

Here is a rather powerful piece of writing – particularly the historical analysis in the first half — encouraged by The Guardian’s George Monbiot having turned 50.

It connects up to this article about Nick Clegg who, I think, fails to recognise that if the Liberal Democrat party cannot be more principled than the Labour party, then there really is no reason whatsoever for its existence.

 

Completely separately

Have I entered a parallel universe, or did I just give a speech to a large conference in the US at which these were the newspapers people were reading?

Image


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