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Japan from the inside out

Archive for the ‘Business, finance and the economy’ Category

Ichigen koji (198)

Posted by ampontan on Monday, October 15, 2012

一言居士
– A person who has something to say about everything

I’ve read the Japanese editions of the South Korean media online for more than 10 years. I have no memory of even one article making a positive reference to the support Japan extended South Korea during the Asian economic crisis, much less an expression of thanks. The reason the Japanese government was reluctant to provide assistance at first was because the Kim Young-sam administration did not fully disclose the amount of its foreign currency holdings and liabilities.

– The Tweeter known as Aceface

Posted in Business, finance and the economy, International relations, South Korea | Tagged: , | Leave a Comment »

Java jive

Posted by ampontan on Monday, September 24, 2012

SOMETIMES it’s the observation of small matters that leads to the recognition of big differences. The contrast of those big differences sometimes leads to a recognition of the nature of that which is being contrasted.

As an example, here’s a post from the Beijing Shots website. Some people in China are seriously wrinkled over the presence of Starbucks in their country, and some people are cranking themselves into righteously indignant knots about a new Starbucks near a monastery:

The American giant Starbucks has caused heated discussion in China over whether it is appropriate for the world’s largest Western coffee shop to set up in the Lingyin Temple, a Buddhist monastery in Hangzhou, East China’s Zhejiang Province.

The Sina Weibo account of the company’s stores in Shanghai, Jiangsu and Zhejiang provinces announced Friday that it would open a shop in the monastery on Saturday. The news was reposted over 4,000 times with many biting comments about the odd combination of the modern commercial shops being set up in ancient temples.

Here’s the problem — particularly the parts after the comma:

A Weibo user said it creates an odd juxtaposition to drink coffee in a setting meant for meditation, as Starbucks symbolizes foreign culture and Lingyin represents traditional Chinese culture. Another user complained that even religious sites are not immune from the invasion of foreign culture.

Starbucks defends itself:

“The new coffee shop is located outside of the central scenic area requiring a 20-minute walk,” a staff member surnamed Wang with the management office of the temple told the Global Times, adding that Starbucks has met all the strict requirements the management office sets for commercial establishments.

But that’s not good enough for an on-call academic:

“The scenic spot’s management office should do its research before opening a foreign brand store at a cultural heritage site,” Zhang Yiwu, professor with the Department of Chinese Language and Literature at Peking University, told the Global Times, adding that finding a balance between Chinese culture and commercialism is critical.

They’ve also forced Starbucks out of the shop it opened in the Forbidden City seven years ago. The company removed their sign from the window two years ago, but that wasn’t enough for a CCTV news reader:

“The Chinese people did not have the taste or tradition for drinking coffee, but Starbucks has turned China into its second largest global market. This is an admirable commercial success. But there is something that is disappointing: there is a Starbucks inside the Forbidden City. I and numerous Chinese and foreign friends believe that it is incongruous to have a Starbucks inside the Forbidden City, because it is ‘obscene.’ I don’t know if Starbucks has any plans to be present at the Taj Mahal Palace in India, or the Pyramids of Egypt, the Buckingham Palace in England and other world cultural treasure and miracle sites, but I ask you to get out of the Forbidden City.”

– Rui Chenggang @ Yale CEO Summit Conference

Do you think this is starting to read as if it were a clinical case study of terminal ethnocentrism? Wait until you read what the Beijing Shots editor wrote:

Editor’s note: In addition to being a huge waste of money, Starbucks is seen by many traditional Chinese as being a culturally invasive. In case you were born yesterday, Chinese people have always drank tea, NOT coffee. It would be a shame for China’s beautiful tea culture to disappear and be replaced by a less sophisticated, coffee. Perhaps it wouldn’t be so bad if Starbucks coffee weren’t so darn expensive.

If China’s several millennia of beautiful tea culture were to be supplanted by the invasion of that crude and barbaric beverage because there are now more than 570 Starbucks outlets in a country of 1.3 billion, it might be because more people wanted to drink coffee than tea. It also might be because Starbucks saw the opportunity to create a new market and took advantage of it. Odd how little confidence the editor has in China’s cultural resilience, despite the confidence he has in its superiority.

And the price of Starbucks products is a matter between the company and its customers. If they’re too expensive or culturally insensitive, drink all the tea in China instead. That’s how free markets work.

There’s more. The editor quotes a foreigner writing on another site who praises something else Mr. Rui wrote: “An essay about Japan that every Chinese person ought to read”. Said the unidentified foreigner:

(It) should indeed be required reading by every Chinese for its poignant and critical analysis of Nationalistic pride and misguided views about Japan. It should also be read by foreigners to de-jade them of the opinion that all Chinese think using a sliver of the perspective that the world at large holds.

Here’s the de-jader:

That bitter part of Sino-Japanese history is just one shadow cast in the two-thousand-year history of Sino-Japanese relationship. It is not everything. The future will be even longer.

We cannot keep repeating that the Chinese language is the ancestor of the Japanese language, wanting the Japanese people to be the descendants of the 3,000 boys and girls that could not find the magical eternal-life potion for the First Emperor of Qin, or forgetting (or even being totally ignorant) of the contributions that Japan has made towards China.

Admitting someone else’s good points does not mean that you are deprecating yourself. On the contrary, it is an expression of self-confidence.

That sets the editor off about the foreigner, not the Chinese news reader:

The attitude from the western multinational corporate mouthpiece reminds us all that Starbucks must in fact be boycotted, otherwise this kind of arrogance, and hostility will continue, as these writers cannot survive without funding from western multinationals. If you consider yourself a person with honor, you ought to also boycott websites such as danwei, and imagethief. and inform others of their malicious agenda….Maybe the time has come to stop whoring out our land, and put heavy restrictions on western multinationals. If we want to protect our culture, then Mcdonalds, KFC, Carefour, Jack Jones, Uni Qlo, all must be limited, not only Starbucks. If the corporate mouth pieces insist on slandering the Chinese people, Chinese culture, and the Chinese government, then it is certainly fair game to turn up the heat on western multinational corporations. What goes around, comes around.

Why yes, they do want to exact revenge on everyone who mistreated them for the past 150 years. Didn’t you know?

What they don’t know is the concept expressed by the economist Tyler Cowan in his book Creative Destruction, and quoted by Don Boudreaux at Café Hayek:

Trade, even when it supports choice and diverse achievement, homogenizes culture in the following sense: it gives individuals, regardless of their country, a similarly rich set of consumption opportunities. It makes countries or societies “commonly diverse,” as opposed to making them different from each other….

Cross-cultural trade does not eliminate differences altogether, but, rather, it liberates differences from the constraints of place.

To which commenter Yevdokiya Zagumenova added:

….and gives the natives who don’t appreciate the loss of illusory control in a world they no longer understand something to rail against with charges of “American Cultural Imperialism” (for example).

The editor at this site isn’t an outlier, if that’s what you’re wondering. The Chinese expressing views such as these in English have become a presence on the Internet.

Now for the contrast. Here’s what I wrote about a new Starbucks that opened in Japan last December:

Starbucks Japan announced they will open a shop on the sando, or approach path, to the Dazaifu Tenman-gu Shinto shrine on the 16th. It will be the first Starbucks shop at a shrine or Buddhist temple.

The Tenman-gu shrine is a large facility with gardens containing 6,000 plum trees in addition to the buildings. A Shinto shrine was first built there in 905, and the current building, registered as an important cultural property, dates from 1591. It was built on the grave of Tenjin, the deification name of Sugawara no Michizane, renowned for his erudition and learning. They’re opening the Starbucks at just the right time, too, as tens of thousands of people will visit the shrine for New Year’s. The visits will continue into January as students make the pilgrimage to ask the deity for a blessing to pass their high school or university entrance examination. Another attraction, the Kyushu National Museum, is within walking distance nearby.

The location demands that this shop not resemble the typical shopping mall Starbucks. It was designed by University of Tokyo architect Kuma Kengo, known for his work on the Suntory Museum of Art and the Nezu Museum. That design combines the traditional and the modern with natural materials, primary among which is 2,000 pieces of Japanese cedar obtained by thinning out forests. It will also have two gardens, one in front facing the sando and one inside with more plum trees. There will be 46 seats in the interior and 10 on the terrace.

The post includes a photo of the interior and a 10-minute YouTube video of the street where the shop is located and the grounds of the shrine itself.

The Dazaifu shop opening was a news item on the day it was announced, but people have since forgotten about it. If anyone complained, it escaped my notice. Starbucks Japan has 955 shops in Japan, according to their website. Yet Japan’s beautiful tea culture is still thriving. Even young people, mostly women, practice the tea ceremony. They have clubs in high schools and colleges. And when they open a Starbucks near a Shinto shrine, they make sure it harmonizes with the neighborhood.

Some people are adaptable and are the stronger for it. Some people are rigid and are the weaker for it.

Some people in the West get all warm and fuzzy and why-can’t-we-get-along about the Chinese. Some, such as the New York Times’ Thomas Friedman, are openly envious of their political and social systems.

Which part of those systems, exactly?

As their own name for themselves indicates, these folks believe they’re the flower in the center of the world.

You know what that makes us.

*****
The website says there are 200 Starbucks outlets in China. There were 570 as of May. Mr. Rui said China was the second largest global market. There are more than 955 outlets in Japan.

There’s no need for me to make pithy comments when I know you’re thinking plenty of pithy thoughts on your own.

*****
Whoops Mr. Moto, I’m a coffee pot.

Posted in Business, finance and the economy, China, Popular culture, Shrines and Temples, Social trends, Traditions | Tagged: , , | 8 Comments »

Ichigen koji (181)

Posted by ampontan on Monday, September 24, 2012

一言居士
– A person who has something to say about everything

I would obviously single out Japan, which has been extremely supportive of IMF action from two perspectives: technical assistance, where Japan is a great contributor, probably the single largest contributor financing technical assistance elsewhere in the world. And financially―Tokyo has always been the first one to pick up the phone and say we are contributing, we will be there, whether it was the quota increase, whether it was the New Arrangements to Borrow, and whether it was the bilateral loans most lately when we decided to build an IMF firewall, Japan was the first.

– IMF Managing Director Christine Lagarde

Posted in Business, finance and the economy, International relations, Quotations | Tagged: | 2 Comments »

Ichigen koji (176)

Posted by ampontan on Wednesday, September 19, 2012

一言居士
– A person who has something to say about everything

The Japanese are deficient in their thinking in regard to the global standard for the attitude toward work: If the pay is low, I’ll do just enough to get by.

– The Tweeter known as t-lav

Posted in Business, finance and the economy, Quotations | Tagged: | Leave a Comment »

Ichigen koji (171)

Posted by ampontan on Friday, September 14, 2012

一言居士
– A person who has something to say about everything

The general budget requests for next year’s budget have already exceeded JPY 100 trillion. That’s an abnormal situation: A facile tax increase and a facile increase in expenditures. This has now become a trend that was easily predicted. Who will be able to stop this?

– Takenaka Heizo, former jack-of-all-ministers in the Koizumi administratoin

Posted in Business, finance and the economy, Quotations | Tagged: , | 2 Comments »

Ichigen koji (170)

Posted by ampontan on Thursday, September 13, 2012

一言居士
– A person who has something to say about everything

(After the Tohoku Disaster), there arose again the awareness that we are of one culture. This awareness has been felt again in regard to the Senkaku islets.

It became apparent with the manner in which we received the public donations that the Tokyo Metro District requested to purchase the Senkakus. It came lapping in like gentle waves. It was nothing like the fanaticism shown, for example, by the South Korean president when he visited Takeshima, or those people who rip up the Japanese flag. I sensed a quiet passion.

The Metro District determined an appropriate price through surveys and the advice of the Asset Price Council. A resolution was passed in the assembly. We followed the rules of democracy and tried to purchase them fairly.

In contrast, the national government has no idea when it will pass the special legislation authorizing bond issues, and it still can’t distribute the JPY four trillion in grants to be sent to local governments. They shouldn’t have any money, but they bought the islets for JPY 2.05 billion. We do not know the basis for the purchase price, and they have not fulfilled their responsibility to explain to the taxpayers.

– Inose Naoki, Vice-Governor of the Tokyo Metro District and a non-fiction author

Posted in Business, finance and the economy, Government, Quotations, Social trends | Tagged: , , , | Leave a Comment »

No cigar

Posted by ampontan on Saturday, September 1, 2012

TAKENAKA Heizo, the man responsible for cleaning up the post-bubble banking problem and launching the privatization of Japan Post, and Nakada Hiroshi, former Diet member and Yokohama mayor, serve as advisors to the most important politician in Japan today: Osaka Mayor Hashimoto Toru.

The two men published a collection of dialogues last fall called Nippon on Daimondai 30 (The 30 Major Issues Facing Japan). Here’s Mr. Nakada speaking about one aspect of the post-earthquake/tsunami Tohoku restoration:

The land that was covered in water and thoroughly ruined as a result of the earthquake and tsunami will require an enormous amount of money to be restored for agricultural use. I helped clean up the land at Rikuzentakata (Iwate) recently. At a glance, it looks like all the rubble has been cleared away, but that’s because all the large debris, such as collapsed houses, cars, and logs, have been removed. But up to 20-30 centimeters below the surface of the farmland, there’s an enormous amount of glass and plastic shards and other material buried there. It was also covered in salt (from the seawater), so the soil needs to be improved. The radioactivity has to be removed in some places too. The state of the land means that it isn’t possible for individual farmers to clean up their fields, even if they spent the rest of their lives doing it. It would be the height of stupidity to tell the small farmers, who are aging, to stick with agriculture.

At any rate, it would take an immense amount of money to provide assistance to the individual farmers, so the state should look after their interests, sovereignty should be restricted, and the land should be nationalized. Then, large agribusiness companies should be created to conduct agriculture on a large scale. They could employ the older farmers, who would earn more money than they do now. They also wouldn’t have to worry about who would take over the family farm. This is a major opportunity.

He’s right. It is a major opportunity, and all of his observations and ideas are excellent, with one exception: the first sentence of the second paragraph. Everything he thinks should be done can be done and done better without nationalizing the land and the government getting in the way.

The time for the conversion to large agribusinesses is long overdue, and some large companies are starting to get involved in the sector already. (The railroad company JR Kyushu grows six different crops on leased land.)

The same objectives could be accomplished by facilitating the formation of agribusinesses and letting them purchase the land.

It’s curious that Mr. Nakada would suggest this, because he is seen as an advocate of small government (as is Mr. Takenaka). He also understands the critical importance of limiting the power of the national bureaucracy at Kasumigaseki. Nationalizing the farmland would increase that power rather than reduce it.

Very close, but no cigar.

Afterwords:

* Rumor has it that both of these men will join the new political party that Mr. Hashimoto and One Osaka are about to create. There are also rumors that Mr. Nakada will run for a Diet seat in the election expected by the end of the year, but he denied it on Twitter yesterday.

*One plank in the One Osaka platform is to make the appointment of deputy ministers (usually bureaucrats) and ministry bureau heads the responsibility of politicians. That might sound geeky to people unfamiliar with the issues, but it is an essential first step in resolving all 30 of the major problems.

* The government of Abe Shinzo backed measures to promote agribusiness, but Ozawa Ichiro saw that as a major opportunity too — to promise the farmers individual government subsidies, roll back the Abe measures, and thereby contribute to a DPJ election victory. Such a farsighted statesman he was.

*****
It’s the weekend, and that means it’s time for some fun. Offbeat Thai rapper Joey Boy knows all about fun. Well, that and how to put pretty girls into his videos. This one is triple fun.

Posted in Agriculture, Business, finance and the economy, Government, Politics | Tagged: , , , , | 1 Comment »

Ichigen koji (146)

Posted by ampontan on Tuesday, August 21, 2012

一言居士
– A person who has something to say about everything

As we learned from the failure of socialism as an economic system, Europe’s policies of extreme redistribution sapped it of its competitiveness. Considering that the market principles of Reaganomics and Thatcherism and the principles of financial capitalism saved the U.S. and Great Britain, the path that we should take reveals itself.

– The Tweeter known as Mitsuzawa Neo

Posted in Business, finance and the economy, Government, Quotations | Tagged: | Leave a Comment »

Ichigen koji (144)

Posted by ampontan on Sunday, August 19, 2012

一言居士
– A person who has something to say about everything

Japan is strong in automobiles and electronic parts, so all we have to do in those sectors is continue to work hard. Growth in IT and the financial sector won’t have a negative impact on the manufacturing industry, and in fact, the opposite is true. Also, national borders have little to do with IT and the financial industry, so there’s no need to give any of it up to other countries. Nothing bad will come of having the monied class of Asia come to Tokyo. All we have to do is lower the highest tax rates.

– Fujisawa Kazuki, financial analyst

Posted in Business, finance and the economy, Quotations | Tagged: | 2 Comments »

Edano the economist

Posted by ampontan on Wednesday, August 15, 2012

THE Fukushima nuclear accident, the consequent idling of Japan’s nuclear power plants, and the controversial resumption of generation at the Oi plants in Fukui have spurred a debate about the country’s use of nuclear power in the future.

The zero option has been criticized by business and financial circles as unrealistic. During a news conference last week, Minister of Economy, Trade, and Industry Edano Yukio responded to that criticism:

“The sooner we develop and spread the use of renewable energy and energy conservation technology, the sooner we can require this be linked to the expansion of domestic demand. I do not think that the zero nuclear option will be a negative for the economy as a whole. Rather, if we do it properly, it will be a plus.”

To paraphrase the late Adlai Stevenson, in a democracy anyone can get elected. That’s the chance you have to take.

Then again, maybe he didn’t really mean it. He is a politician (and a lawyer) after all, so he quickly switched to the other side of his mouth. When asked to what extent public opinion would be incorporated in energy policy, he answered:

“It can’t be done mechanically. A comprehensive evaluation is our only choice.”

The reason a comprehensive evaluation is important is to prevent one segment of public opinion, based only on emotion, from swaying the determination of final policy. Elected officials with access to expert opinion should make those decisions by incorporating such considerations as technology, safety, and the economic impact.

Oh, wait…

Posted in Business, finance and the economy, Science and technology | Tagged: , | 1 Comment »

Ichigen koji (134)

Posted by ampontan on Thursday, August 9, 2012

一言居士
– A person who has something to say about everything

Eight plans to rebuild Yubari’s finances were formulated immediately after the city declared bankruptcy, and another eight plans were developed after that, for a total of 16. You often hear the expression, “The national government’s agreement is required just to buy a pencil”. Every time those plans were modified, it was discussed with the national government, with (the government of) Hokkaido as an intermediary. It is difficult to convey the conditions in Yubari through this vertical structure, and it takes a lot of time. One of the objectives of the new three-party council is to have the national government and the prefecture see what is needed now in Yubari.

– Yubari Mayor Suzuki Naomichi. The 31-year-old mayor is the center of national attention for his efforts to save a city devasted by municipal mismanagement and population decline. A former employee of the Tokyo Metro District, he was sent to Yubari for a year to help with the municipal reorganization. Mr. Suzuki’s efforts were so appreciated by the people in Yubari that they asked him to return and run for mayor.

Posted in Business, finance and the economy, Government, Quotations, Social trends | Tagged: , , | 1 Comment »

All you have to do is look (10)

Posted by ampontan on Tuesday, August 7, 2012

This chart of death tax rates was created for the edification of Americans, but it is also educational for Japanese and South Koreans. They have the highest death tax rates in the developed world.

Most interesting is the tax rate for several countries of the former Soviet bloc, including Russia. It is 0%. Many of those countries, also including Russia, have flat income tax rates.

Who would have thought they would have developed a better understanding of these matters than the countries with the longer tradition of “free” markets so quickly? It would seem that they learned from experience.

Posted in Business, finance and the economy, Government, South Korea | Tagged: , | 3 Comments »

Ichigen koji (132)

Posted by ampontan on Tuesday, August 7, 2012

一言居士
– A person who has something to say about everything

The people who look at the shuttered shops near the station and declare that the regional economy is in decline, and that regional cities are devasted, have only a superficial understanding. They do not understand the structual changes in regional economies. Using this idea alone to review films such as Saudade, which is based solely (on the above idea), shows that film critics in Japan know little of the world.

– Fujiwara Toshi

He is perhaps talking about reviews such as this:

I saw Saudade at Eurospace in Shibuya (a self-described “art house cinema”). It is a drama of a group of Japanese and foreigners that takes place on the stage of a declining regional city. The film is set in Kofu, but for me, who was born and reared in Otaru, a regional city that is truly in decline, the film was quite moving.

Or this.

Posted in Business, finance and the economy, Films, Popular culture, Quotations | Tagged: , , | Leave a Comment »

China’s government: White collar criminals?

Posted by ampontan on Thursday, August 2, 2012

IF Russia was a riddle wrapped in a mystery inside an enigma, as Winston Churchill had it in 1939, imagine how the world’s financial analysts, not to mention governing establishments, must view China and its finances. They’re examining the economic tea leaves in the same way Kremlinologists used to pore over photographs of the Soviet leadership during national functions. Japanese financial journalist Tamura Hideo thinks the growing crisis in China is more serious than that in Europe, and explained why in a recent article. The government’s malfeasance that he calmly describes is startling. Here it is in English.

*****
This writer’s studies show that the amount of bubble-related debt in China, where the real estate bubble is starting to collapse, exceeds that of the non-performing debt for governments in the Eurozone.

After the economic downturn of 2008, local governments in China received instructions from the Communist Party’s Central Committee in Beijing to establish investment companies that would operate outside the framework of normal lending regulations. They borrowed money from state-owned commercial banks, seized property in urban districts, farmland, and even cemeteries, and invested the funds in real estate development.

The members of party leadership, which holds the real power in local government, enrich themselves by developing publicly owned land and receiving the revenue from the concession agreements. The aggregate debt held by local governments nationwide is CNY 10.7 trillion ($US 1.692 trillion) as of the end of 2010, based on official announcements from Beijing. That is on a scale of Japan’s financial bubble in the latter half of the 1980s, and is equivalent to one-quarter of China’s GDP. The repayment period for more than half of it falls due within three years.

In addition, local governments have not stopped working with state-owned companies to develop real estate, and they continue to receive financing from state-run commercial banks. According to Western financial analysts, the final amount of local government debt will soar from CNY 15.4 trillion ($2.436 trillion) to CNY 20.1 trillion ($US 3.18 trillion). Added to the national government debt and converted to dollars that equals more than $US 3.8 trillion.

In contrast, according to this writer’s calculations, the five countries that are the source of the Euro problems (Greece, Italy, Spain, Portugal, and Ireland) had aggregate government external debt of EUR 1.3147 trillion ($US 1.616 trillion) as of the end of 2011.

Of course, not all of this (in China) is non-performing debt, but in Japan, more than 80% of the JPY 130 trillion real estate-collateralized debt in the 1980s went sour ($US 1.663 trillion at today’s rates). The increase in the local Chinese governments unable to repay their loans continues, and most of the repayment amounts required for 2011 were deferred for another year or more.

In China’s case, financial engineering under central government guidance is a standard tactic for cleaning up after bubbles. The debt will be converted to bonds, thus extending the repayment period. If they end both the lending and the investment, the entire Chinese economy will collapse like some giant motorcycle.

The collapse of the Japanese bubble in the early 90s did not rattle the world’s financial markets. Japan’s financial institutions held the bad debt, so there was almost no exposure in overseas markets. China’s case is similar in structure to Japan’s, but the source of most of the funds from institutional investors is the hidden assets of the party’s privileged class located in Hong Kong and other places outside the country. If those funds were to flee en masse, Chinese stocks would collapse, and the tsunami would hit the markets in New York, Tokyo, and other parts of the world.

The circumstance leading to the downfall of former Chongqing party head and Politburo member Bo Xilai was the arrest of his wife Gu Kailai on the charge of murdering an Englishman after she had transferred about CNY 8 billion ($US 1.2657 billion) overseas. But the case of Gu Kailai is just the merest tip of the immense illegal asset accumulation and capital flight (of the Chinese oligarchy).

There is a growing sense of crisis in the West that the collapse of the Chinese bubble will dwarf the crisis with the Euro.

*****
The following chart accompanied his article. It shows the governments’ external debt in the Eurozone, and the liabilities of local governments in China. The scale on the left is in trillions of yen, the blue bars from left to right represent the debt of Spain, Italy, Greece, Portugal, and Ireland, and the red bar represents the debt of Chinese local governments.

Some of this information is starting to emerge in English. Here’s a Bloomberg article from the end of June:

The finances of China’s county-level governments are unstable and unsustainable as the majority of their fiscal income comes from sources other than taxation, the nation’s top auditor said…

China shelved a plan earlier this week to allow local governments to sell bonds directly amid concern that the companies they set up to borrow money will default on some loans. Debt racked up by local governments and their entities stood at about 10.7 trillion yuan at the end of 2010, with 17 percent maturing this year and 11 percent next year, according to an audit office report released last year.

And a Chinese analyst thinks they’ve taken two and a half of the three steps to recession. Note the following:

We are a only a half-step away from a Hong Kong style recession, because of the three mistakes made by Hong Kong, we have already made two-and-a-half.

First, the government monopoly on land development rights, intentional creation of a property market volcano, public finances critically reliant on land, makes real estate into an economic pillar.

Property rights were always government owned and leases were the main source of government income. The higher the property prices, the bigger the government revenue. People today realize, the pre-handover British run Hong Kong government stoked the property bubble for short-sighted gains, just as these past few years local governments have been falling all over themselves to pillage land profits.

Is the Chinese oligarchy treating the business of government and their intervention into the economy as the world’s largest casino skimming operation? That’s a serious question, and it no longer should be limited to the financial pages or websites.

*****
If the Chinese economy heads south, how long it be before all of us wind up shaking all over.

Posted in Business, finance and the economy, China | 2 Comments »

Ichigen koji (124)

Posted by ampontan on Monday, July 30, 2012

一言居士
– A person who has something to say about everything

Whenever I say nuclear waste should be exported to Mongolia, I am hit with a barrage of criticism. I wonder why that would be. Mongolia, a poor country, would assume the expenses for disposal, and they have plenty of places to dispose of it. Japan and the United States could remove nuclear wastes from their countries, and it would be cheaper than spending the trillions of yen on disposal facilities. It would be profitable for both sides. Why do people have such an aversion to the market?

– Ikeda Nobuo, professor, non-fiction author, blogger

Posted in Business, finance and the economy, Quotations, Science and technology | Tagged: | Leave a Comment »