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  • East Asia Forum

    Supreme Court of Japan rules against welfare for foreigners

    Author: Trevor Ryan, University of Canberra Last month, the Supreme Court of Japan ruled that persons without Japanese nationality (that is foreigners) have no legal claim to benefits under the Public Assistance Act. The case is an affront to the second and third generations of ethnic Chinese and Koreans in Japan who have chosen for practical and identity reasons not to renounce their nationality and naturalise as Japanese. For these and other tax-paying permanent residents, the case simply affirms the legality of a discriminatory statute. But, while it is a ‘stunning’ decision for some, a few points about the decision should be clarified. First, the case was limited to only one plank of Japan’s social security and welfare system — tax-funded public assistance ...more

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  • Ajay Shah's blog

    NPAs processed by asset reconstruction companies -- where did we go wrong?

    by Ajay Shah, Anjali Sharma, Susan Thomas. Background Asset reconstruction companies (ARCs) in India came about after the SARFAESI Act of 2002 empowered banks and some financial institutions to seize collateral in secured loans, without the intervention of courts. This is about the in-sourcing vs. out-sourcing choice of banks. Some banks could choose to build internal distressed assets teams. Others could choose to sell distressed assets to specialised firms that have skills in dealing with distressed assets. This is a good thing because: (a) In general, specialisation is a good thing and (b) Processing distressed assets requires a certain kind of toughness that PSU banks are often unable to muster. So far, this approach has not worked. Stressed assets at banks ...more

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  • China Matters

    China as an EEZ Outlaw in the South China Sea

    A think tank called CNA recently issued a 140 page report titled China versus Vietnam: An Analysis of the Competing Claims in the South China Sea authored by Raul (Pete) Pedrozo.  It provides a further legal rationale for growing US efforts to inject itself into South China Sea EEZ disputes on behalf of Vietnam and against the PRC.A few reasons why attention should be paid.First, the institution.CNA is described as a non-profit corporation.  A fuller description would be a “US Navy analytic division dating to 1942 that works exclusively for and is funded exclusively by the US government but was corporatized in the 1990s so it could dip its beak into non-DoD government work through a division called the Institute for Public Research”.You could say that “C...more

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  • East Asia Forum

    Cambodia breaks political deadlock, at last

    Author: Vannarith Chheang, CICP After a year of political deadlock the opposition Cambodia National Rescue Party (CNRP) and the ruling Cambodian People’s Party (CPP) have agreed to settle their differences. The CNRP, established in July 2012 by merging the Sam Rainsy Party and the Human Rights Party, challenged the predominant role of the ruling CPP in the July 2013 election. On 22 July, both parties reached a historical agreement and on 8 August, 55 CNRP members of parliament took their seats at the National Assembly to bring to an end a year-long boycott over alleged CPP vote-rigging. The recently concluded power-sharing arrangement between the two parties involves reform of the National Election Committee and the National Assembly. Each party will elect four membe...more

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  • East Asia Forum

    Rivers run through Modi’s regional agenda

    Author: Robert G. Wirsing, Georgetown University Narendra Modi’s two-day visit to Kathmandu in early August, the first visit to Nepal by an Indian premier in 17 years, was his third trip abroad since his inauguration on 26 May. In mid-June, only weeks after taking charge in New Delhi, he had made his first official foreign excursion — a two-day visit to nearby Bhutan. These upfront state visits to the two Himalayan countries were a clear indication that Modi was determined to put flesh on his campaign pledge to give priority in his foreign policy to bolstering relations with India’s South Asian neighbours. No doubt concern over China’s massive aid-driven inroads in the region (and the corresponding concern over how to reassert India’s dominance there) had a hu...more

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  • Health Intel Asia

    Aging2.0 Pitch Event

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  • Health Intel Asia

    A New Wrinkle For China’s Medical Device Market (Forbes)

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  • Health Intel Asia

    GSK China Bribery Case: Three Long-Term Problems Without Answers (Forbes China)

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  • North Korean Economy Watch

    4th Rason International Trade Fair (UPDATED)

    UPDATE 3 (2014-8-21): KCNA reports on investment forum at the trade fair: Investment Forum Held in Rason of DPRK Pyongyang, August 21 (KCNA) — A forum on investment in the Rason economic and trade zone of the DPRK took place on the spot on Aug. 19. It draws companies from Russia, China, Italy, Thailand and other countries taking part in the 4th Rason International Trade Exhibition. The participants in the forum viewed a video on the natural and geographical conditions of the zone and its development situation and long-term plan. They were also briefed on the legal guarantee for the zone development, business establishment and management regulations for foreign investors, the situation of foreign companies which have already invested in the zone, the vitalization ...more

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  • China Matters

    “Paramilitarizing” the SCS: A Bad Idea Whose Time Has Come?

    In this piece I misidentified Carlyle Thayer as "Carleton Thayer".  I regret the error. CH 8/18/14 Usually, my predictions don’t pan out so quickly.On August 11, I looked at the implications of a statement by US Senator Sheldon Whitehouse in Vietnam that used a striking reinterpretation of the global stake in maritime EEZs or Exclusive Economic Zones to justify escalated US activity in the South China Sea.The Senator’s gambit apparently drew on the US conclusion that efforts to deter PRC salami slicing in the SCS have failed and it is time for a more aggressive and, I might add, extremely novel doctrine to justify a more forward US posture:Quote:At yesterday’s press briefing, Tuoi Tre (Youth) newspaper asked Senator Sheldon Whitehouse for comments about the U...more

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  • North Korean Economy Watch

    DPRK replaces 5,000 won note

    According to the Daily NK: Daily NK has learned that the recent 5000 KPW note exchange has prompted an overall apathetic response from residents in North Korea. As Daily NK first reported here on July 31st the North Korean authorities informed residents that the largest denomination monetary unit would be replaced with a new bill. US Dollars and Chinese Yuan being the currencies of choice in the markets, the recent collection and exchange of the highest denomination bill “doesn’t really affect people’s lives.” A source in the capital reported to Daily NK on August 14, “A new [5000 KPW] note has been issued, but the exchange of old to new notes hasn’t made much headway.” This is hardly a nuisance to most residents, who are used to adapting, she went on to ...more

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  • North Korean Economy Watch

    KCTV updates news introduction

    Click above to watch the news introduction (Youtube) On August 14 North Korea’s KCTV launched a new video introduction for its evening news broadcast. The introduction begins with a global map that zooms in on the Korean peninsula followed by scrolling news clips and ending with “보도” (News). The appearance of the evening news was last changed in 2012. Thanks to Martyn Williams for technical help with this post! ...more

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  • Michael Pettis' CHINA FINANCIAL MARKETS

    Can Pedro Sanchez save the PSOE?

    Last month Pedro Sánchez Castejón was chosen to be the new leader of Spain’s center-left Socialist Party (PSOE).  El Pais called his appointment a “renewal” of the PSOE, although Sánchez seems to have been chosen mainly because he is too young and unknown to suffer from the revulsion most Spaniards feel towards the political establishment. But as the PSOE’s new leader, and without much of the baggage carried around by the older generation of leaders, Sánchez has an important choice facing him. If he expects to lead Spain and his party out of its current crisis, he must recognize that the crisis is fundamentally a conflict between the interests of Europe’s bankers and of Europe’s workers, and he must reengineer PSOE’s policies in favor of the Spain’s...more

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  • China Matters

    ISIS Tentacles Reach Toward China

    It’s been reported on the always-reliable Twitter by a Pakistan journalist, Ali Kamran Chishti, that Abdul Maulana Aziz has declared his support for the “Caliphate of Abu Bakar Baghdadi” i.e. ISIS.  “Video to be uploaded soon”.If confirmed, this is potentially big and bad news for the People’s Republic of China.Abdul Maulana Aziz was the radical spiritual leader of Lal Masjid, the Red Mosque, in downtown Islamabad.In 2007, after a prolonged and desultory siege, Pakistan armed forces stormed the mosque, signaling a partial fracture of the de facto alliance between the Pakistan deep state and radical Islam.The confrontation was little noted in the West, but it was big news in the People’s Republic of China.Followers of the Red Mosque had targeted Chine...more

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  • Ajay Shah's blog

    What you can't infer from a regression

    We are inundated by results of research papers such as: Companies which have women directors do better; hedge funds which have female GPs do better [link]. Parents who have children graduating from college tend to live longer [link]. These correlations are facts. Almost everyone who reads about the result jumps to the conclusion that these have consequences for decisions that we can make. E.g.: Since companies which have woman directors do better, let's add women directors to our company and it will fare better. Since hedge funds with female GPs do better, let's add women GPs to our hedge fund and it will fare better. Since parents that have kids that graduate from college tend to live longer, if we take extra trouble to put our kids through college, then we will...more

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  • Atanu Dey On India's Development

    Whose money is it anyway?

    Milton Friedman used to elegantly distinguish between four ways of spending money. First, when you spend your own money on yourself, you are very careful to get the most benefit for your buck. After all, it is your money and you know what you want for yourself. Second, when you spend your own money on someone else. Here too you carefully economize to meet your objective but since you don’t know the other person’s needs as well as you do your own needs, your spending may not be as optimal for the other person. Third, you spend other people’s money on yourself. In this case, your incentive to economize is certainly blunted. You are much more concerned with getting the best and less with what it will cost. Finally, when you spend other people’s mone...more

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  • Ajay Shah's blog

    Concerns about individual investors on the Indian equity derivatives market

    by Nidhi Aggarwal, Rohini Grover, Susan Thomas. A recent article in the Business Standard by Praveen Chakravarty and T. V. Somanathan questions the quality of the Indian equity derivatives market. India is ranked next only to South Korea in terms of both the intensity of derivatives to spot traded volumes and the dominance of retail participation in derivatives trading. It is argued that complex financial instruments are better suited to the requirements of sophisticated institutional investors. Korea has tried to reduce the large fraction of retail participation in their derivatives markets by increasing the minimum contract size twice between 2012 and 2014. The authors suggest that India consider taking similar acti...more

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  • The Peking Duck

    Is Falung Gong a dangerous cult? Is it a cult at all?

    I’ll admit it right at the beginning: I’ve always found there to be something creepy about the Falun Gong. I remember seeing practitioners in Taipei sitting with their eyes closed meditating endlessly. I remember their anti-CCP literature. I remember meeting a group of practitioners at the local annual China celebration day in Phoenix and finding them generally icky. But just because I find them creepy doesn’t mean they are a cult, let alone a dangerous one. This excellent article presents the argument of one of the best informed China Hands I’ve ever read, Ian Johnson, who argues that the FG is not a cult. In “Wild Grass: Three Portraits of Change in Modern China,” Ian Johnson writes that the “cult” label was designed to “[cl...more

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  • Atanu Dey On India's Development

    Mises on Bureaucracy

    “The characteristic feature of present-day policies is the trend toward a substitution of government control for free enterprise. Powerful political parties and pressure groups are fervently asking for public control of all economic activities, for thorough government planning, and for the nationalization of business. They aim at full government control of education and at the socialization of the medical profession. There is no sphere of human activity that they would not be prepared to subordinate to regimentation by the authorities. In their eyes, state control is the panacea for all ills.” Ludwig von Mises. “Bureaucracy”. Page 4. Yale University Press. New Haven. 1944. ...more

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  • Michael Pettis' CHINA FINANCIAL MARKETS

    Bad debt cannot simply be “socialized”

    Once again I am going to discuss debt, and my discussion will be mainly conceptual. I suspect that many of my regular readers might wonder why I keep returning to this subject – and, often enough, keep saying the same things. The reason is because while debt plays a key role in understanding the recent evolution of the Chinese economy and the timing and process of its upcoming adjustment (as it also does for all if not most major economies), there seems to be a remarkable amount of confusion as to why debt matters. In much classical economics debt, or more generally the structure of the liability side of an economic entity, doesn’t even fundamentally matter to the growth of that entity. The liability side of the balance sheet is treated mainly as the way in whi...more

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  • All Roads Lead to China

    Foxconn Moving Direct to Consumer

    I remember having conversations years ago about what Foxconn would do going forward, and whether or not they would be happy as the manufacturer to brands.   The WSJ article, Amid Margin Squeeze, Foxconn Designs Its Own Fate, puts this question to rest. Recently, the $130-billion-a-year in revenue company has ventured into handset accessories under its own brand, and sales and distribution of mobile phones. It also plans to offer telecommunications services in Taiwan. For me, this has always been a bit of a no brainer.  Foxconn has an amazing amount of talent in the firm that is not just managing the supply chain and assembling gadgets for their customer, but have for years also been bringing designs to the brands that they feel would sell well in the market. Partner ...more

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  • Atanu Dey On India's Development

    PM Modi’s Letter on Completion of 1 Month in Office

    Prime Minister Narendra Modi wrote “A few thoughts as we complete a month in office.” I came across it in QUARTZ. QZ requested annotations. Someone named Vincent Lee did a fine job of summarizing the letter. Here are the annotations: I’m your pal. I love that people love me. My job is hard. But I have confidence in myself. I like my new colleagues, here’s hoping we’ll get on. Here’s also hoping the state heads will get along with me. Did I mention my job is hard? I can use some slack… Let’s remember how bad the previous dynasty was. I’ll be using that memory as a mandate. Thanks again for loving me, you won’t be disappointed. If the first month sets the tone for the remaining, I am afraid that significant need...more

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  • Michael Pettis' CHINA FINANCIAL MARKETS

    The four stages of Chinese growth

    From the early 1980s until now China has grown at a pace not matched since the four decades Argentina enjoyed before the First World War. In spite of some fairly goofy attempts a few years ago, however, to characterize China during this period as having followed a set of policies called the “Beijing Consensus”, these decades did not involve a unified set of policies, or a set of related polices, that Beijing implemented consistently. It is far more useful, I would argue, to think about the past 3-4 decades as consisting of four very different periods, the last of which we are, with great difficulty, just starting. The idea of a Beijing Consensus has probably help to prevent or postpone an understanding of the vulnerabilities in the current growth model and the steps...more

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  • All Roads Lead to China

    Bites of China. Finally a Show Worth Watching!

    A couple of weeks back, while riding the G train back from Nanjing, something caught my eye.  An advertisement by CCTV for what I believe could be one of the best produced shows China has put together.  At first, I had no idea what the advertisement for, but what was clear was that it was celebrating the various food flavors of China, and those who are tilling the fields and preparing the dishes. The show is called Bite of China, and I cannot recommend it enough. Sure, China is known for its fair share of food failures, including recycled oil, but watching this show has restored a bit of my love for the flavors here.  Flavors that were actually the basis for one of my earliest posts, and have provided a never ending hunt for me and my wife as we look to try new thin...more

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  • The Peking Duck

    Twenty-five years later

    I never before saw all the raw video footage of “Tank Man’s” defiance against a column of army tanks until today. It is remarkable, how one nameless man entered all of our living rooms for just a moment and is remembered so vividly a quarter of a century later. And for good reason. Let’s keep the hundreds of murdered innocents in our thoughts today, and keep alive the fight to let the Chinese people know all who died during the crackdown. Let’s remember the Tiananmen Mothers, and let’s even hope for the day when the CCP admits the demonstrations were not an act of “counterrevolutionary” treachery inspired by foreign subversives, but an expression of the Chinese people’s yearning for a say in their government, for t...more

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  • The Peking Duck

    Return of Liu Di, the “Stainless Steel Mouse”

    Those of you who have been reading this blog for ten years or more (if any such reader exists) might remember an array of posts I wrote in 2004 regarding a “cyberdissident221; Liu Di, who posted pro-democracy essays on the Internet under the moniker Stainless Steel Mouse. Posts like this or this, and several more. She also participated in study groups that discussed freedom and government reform, and saw herself and her colleagues arrested. I remember how angry I felt when another cyberdissident who lobbied for her release was himself arrested. Still, she has never been silenced. Even as recently as last month she was taken into custody for participating in a seminar about June 4th. A reader brought to my attention the availability of three of Liu Di’s n...more

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  • All Roads Lead to China

    What Do China’s Millennials Want ?

    For a number of years, I had it pretty good.  I had a number of teams that were under me, were stable, and were producing.  It was at a time when a lot of questions were being asked about the post 80s generation in China, but for whatever reason I was immune. But, those days are over, and just yesterday I had another millennial go AWOL on me.  So, it was perhaps interesting timing that CNBC put up the article Millennials may be more like boomers than we realize highlighting how several studies point to a generation that is looking for meaning in their job, in their company, and for balance: A new study from Deloitte also found differences in workplace attitudes between millennials and older generations, saying that the former “want to work for organizations tha...more

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  • China Rises: Notes from the Middle Kingdom

    Postcards from the National People's Congress

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  • Patrick Chovanec

    Twins!

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  • ChinaBizGov

    China's Green Car Sales in 2012

    Just a few years ago, pretty much everyone (except Chinese auto industry insiders whom I interviewed) thought China was about to take ownership of the global green car market. (Here's just one example from the excitable Tom Friedman of the New York Times.)In 2009 China's industrial planners announced plans to have 500,000 green cars ("New Energy Vehicles" or "新能源汽车" -- a combination of electrics and hybrids) on Chinese roads by the end of 2011. That obviously didn't happen, so last year, that same target of 500,000 was pushed out to 2015.So how did green car sales fare in 2012? Overall, hybrids plus electrics grew a respectable 52 percent.So while sales grew pretty well in percentage terms, it is clear that overall numbers are still inconsequential when you co...more

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  • Patrick Chovanec

    What Causes Revolutions?

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  • Patrick Chovanec

    Enter the New Year

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  • China Rises: Notes from the Middle Kingdom

    China, school violence and official reaction

    I wrote yesterday about growing questions in China about the differences between the U.S. reaction to the tragedy in Newtown and that of the tragedy in Henan Province, where, on the same say as the shooting in Connecticut, a man stabbed and slashed 23 students at a primary school. (All survived in Henan, where the weapon was a knife, not an AR-15.) As a commentary piece in the state-controlled Global Times noted: “The Chinese public has focused on the slow official response and the level of social reflection. Many are furious that while the Americans have started mourning nationwide, the Chinese appear insensitive to the Henan case.” Another story today, carried by China Daily, caught my attention. It describes an example of how profoundly off-key propaganda can ...more

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  • China Rises: Notes from the Middle Kingdom

    Postcard from a snowy Beijing

    The smell of roasting sweet potatoes in a city covered with snow put me in the mood to take a detour on my walk to work today  ...

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  • ChinaBizGov

    Comparing Corruption in China and the US

    Today's WSJ China Realtime reports on a study by a George Mason University economist who attempts to compare corruption in the US and China.  His conclusion is that corruption in America's Gilded Age (1877-1893)* was worse than corruption in China today.Perhaps the conclusion is correct, but the methodology used by this professor is flawed.  US corruption is measured by mentions of corruption in US newspapers 1870-1930.  China corruption is measured by mentions of corruption in US (not Chinese!) newspapers 1990-2011.So he is measuring corruption in two countries by the number of times the newspapers of only one of the countries mentions the word.  Even if the researcher had used Chinese newspapers, the study still would have been flawed due to Commun...more

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  • ChinaBizGov

    GM and SAIC: Trouble in Paradise?

    General Motors (GM) and Shanghai Auto (SAIC) announced in December of 2009 that they were deepening their partnership beyond their joint venture in China.  Together they created a 50:50 joint venture, registered in Hong Kong, for expansion outside of China.  Now that partnership appears to be coming apart.Initially, the plan for the HK JV was for the two sides to work together in India and possibly elsewhere in the future.  (For further insight into this particular deal, please see Chapter 4 of Designated Drivers.) As for the India venture, GM would contribute two existing factories in India, along with its Chevrolet brand, and SAIC would contribute cash -- something that GM had been seriously lacking as it had emerged from bankruptcy earlier that same ye...more

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