In a column in the Economic Times today, I look back at SEBI's journey of the last 25 years. In success and in failure, SEBI was the laboratory where we learned how to do financial economic policy.
You may find it interesting to look at my note about RBI at age 75 (in 2010).
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In a market where consumers are on edge about what they are eating, there are going to be opportunities for firms with a brand supported by safe to enter the market. In China, this market has recently been filled by the importation of products that were easily transportable, and an explosion in the organics market, but few Western firms had been able to penetrate into a wider market.
Que up Chiquita, with their locally sourced, three times washed, chemical free, salad mixes…. which are sold at a very reasonable 17-22RMB (depending on store).
They are hitting the market in a big way, and over the last couple of months I have begun to see their penetration into new stores and product groups expand… and I expect this will only continue as consumers cont...more
A fascinating piece from Mothusi Turner (Think Africa Press) on how the Chinese (from China’s Fujian province) succeeded in Lesotho may hold for our own entrepreneurs:Rather than being in some way tied to Chinese state assistance to Lesotho then, migrants come to Lesotho under their own steam, lured by rumours of easy profits. But they do not arrive as hostages to fortune, without a plan and alone. Rather, given that kinship networks are the main pull factor behind Fujianese migration to Lesotho, new arrivals usually have links to one of the local Fujianese business associations before they even land. These commercial networks link Fujianese traders across Lesotho with wholesalers in neighbouring South Africa and suppliers in Mainland China, and help new arrivals in n...more
Martin Feldstein has some interesting reflections on China’s new strategic direction under leadership of President Xi Jinping , Premier Li Keqiang and Finance Minister Liu. He observers that recent appointments signals a shift that may be less favourite to slower growth which in turn would reduce demand for commodities :Taken together, these appointments demonstrate the new Chinese leadership’s emphasis on pro-market reforms and a shift from heavy industry to greater reliance on consumption and services. That shift is likely to mean a slower rate of GDP growth than the annual rate of nearly 10% that China achieved during the last three decades. But a slowdown to 7% annual growth would still double China’s GDP over the next decade.More consumption and less he...more
Shanghai Daily reports:
IN an underground mall just a stone's throw from the Chinese mainland's border with Macau, a row of 30 small shops with identical gold plaques do a brisk, though shadowy trade with mainland visitors, many of them bound for the gambling hub. "Good rates. Better than the banks," shout salespeople jostling to usher clients into shops where thick wads of notes change hands. Licensed as liquor and dry goods stores with stacked shelves of rice wine and cigarettes, many conduct their real business in back rooms - as underground bankers and remittance agents. "It's very simple," said one agent surnamed Choi. "You give me renminbi here. Then we deliver Hong Kong dollars to you in Macau. We can move tens of millions eac...more
Starting in September, I will teach a course in International Marketing in the Fudan-Boston University Program. The course is delivered through Fudan University's School of Social Development and Public Policy. This is a study abroad program delivered to students from Boston University's School of Management. - Brian...more
WSJ reports:
How high is inflation in China? Some suspect it is higher than is captured in the official consumer price index.A new measure developed by e-commerce giant Alibaba Group Holding Ltd. seems to give that idea some credibility. The official CPI puts inflation at 2.4% year-on-year in April. Alibaba’s Internet Shopping Price Index – based on transactions on the firm’s Taobao and Tmall websites – puts it at 6.9%.
After an article in The Wall Street Journal drew attention to the discrepancy, China’s National Bureau of Statistics went into action. They pored over the description of the Alibaba index (in Chinese), and dispatched researchers to Hangzhou to interview its creators.
Read more: http://blogs.wsj.com/chinarealtime/2013/05/20/inflation-defla...more
Was speaking to a friend the other day about how China is a place where you can, and should, reinvent yourself on a regular basis.
Something that the US Fed Chairman believes is something the future generation should grow used to as well.
“During your working lives, you will have to reinvent yourselves many times,” he said. “Success and satisfaction will not come from mastering a fixed body of knowledge but from constant adaptation and creativity in a rapidly changing world.”
I guess I found my transferable skill!
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The first step in the economics of business cycles is to establish `stylised facts' about the characteristics of business cycle fluctuations. Once these are know, alternative models can be judged on the extent they are able to predict these stylised facts. This is routine in mainstream macroeconomics, which is largely about the United States economy.
When we think about India, however, there is the question of structural transformation of the economy. There was an old Indian macroeconomics which worried about different things. In recent decades, the economy has changed in fundamental ways: the economy has become mostly open, the role of agriculture has subsided, a financial system has come about and private decisions of firms that are shaped by financial markets...more
New, ongoing, and concluded opportunitiesAfrica App Quest is a search for Africa's top travel app in which developers will compete for a top prize $10,000 by building home-grown travel apps, specially designed for the tourism sector in Africa. It is sponsored by Visa and South African Tourism, the application rules are here, and the deadline (D/L) is 16 August. Airbus: Vote for the Team Aero Bamboo Engineering (Team A.B.E.) from the University of Nairobi, in the Fly Your Ideas contest where their project which engineers bamboo for aircraft cabin materials in competing against four other ideas shortlisted from 618 entries from 82 countries. Votes are open till June 3.Art Moves Africa: AMA support...more
I wrote an article in the Economic Times today about autonomy for bodies such as the CBI.
There are five areas where there is a role for autonomy. But this is a difficult puzzle in public administration and we should be wary of simplistic solutions. We know a bit about how to do autonomy correctly in three areas (monetary policy, financial regulation, infrastructure regulation). Comparable cogitation is required for the other two problems (criminal investigation, tax administration).
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Performance: Compared to last quarter and year ago, the portfolio is up 9% in value from February (excluding new investments), while the NSE 20 share index is up is up 7.5% since February 2013.The StableBarclays ↑Bralirwa (Rwanda) ↑Centum (ICDCI) ↑Diamond Trust ↑East African Portland Cement ↓Equity Bank ↑KCB ↑Kenol ↓Safaricom ↑Scangroup ↓Stanbic (Uganda) ↑Unga ↑ChangesIn: Centum, Portland Cement, TotalOut: Total, EABLIncrease: Equity, Kenol, SafaricomDecrease: NoneBest performer: Safaricom (up 30%), Equity, Stanbic Worst performer: Kenol (down 29%)Looking forward to:- Dividends from Equity, Barclays, KCB, Scangroup, Bralirwa and Safaricom.- Coldtusker writes about upcoming rights issues at the NSE in...more
Someone said that a matatu owner is the seventh or eighth person to get paid at the end of a busy day, only getting residual cash after the driver, turn boy, tout, tax man, council person, policeman, and sometimes the driver's girlfriend have taken their cut. But on Tuesday April 30, Google and Equity Bank unveiled BebaPay, a cashless way for commuters to pay for transport in buses in Kenya - and which propels owners right to the front of that queue.The transport sector has many challenges and is known for some unpleasant habits like reckless driving, price hikes when it rains, bribing traffic police, ill-treatment of passengers, having unroadworthy vehicles etc. - but some investors who purchase the vehicles than can cost an average of Kshs. 4 million ($47,000) be...more
I’ve made it a point not to link to the Hidden Harmonies blog, let alone use it in a post title. As a rule, I refuse to read it to avoid a heightening of blood pressure. But this is one article you all have to see, even if it’s four days old already. (Link via James Fallows, who is as surprised as I am.) It begins,
After living here for more than 9 months, I have come to a most repugnant conclusion. It pains me to even think about it for I am a Chinese person who has often defended the traditions, institutions, values and dignity of the Children of Heaven. But the truth is often painful at first. I realize now that much of the problems in Chinese society, and a plethora of problems there are, are not from the Chinese government (not a surprise to me since I ...more
Being recognized as having the world’s best airport, or one of, is something that countries take seriously. for years, and likely for years to come, the main fight has been between Singapore an Hong Kong. both of which have amazing airports. Easy access to city, fast immigration, good food, shopping, stable wireless, and on time arrival/ takeoff.
All things that I personally find to be of importance, and for me make for a great airport.
So, when I saw Beijing Capital airport rank in 5th place and Shanghai Hongqiao at 19, I was left wondering. Seriously… Beijing at #5? Only one slot below HK? Hongqiao 40 places above Pudong?
Perhaps I am simply looking at this the wrong way. Perhaps I am being too critical.
Feel free to review the full list for yo...more
Roger Ebert 1942-2013“In facing your own mortality, what final message would you leave for future generations?” That question is from the 11th Hour series from Colorado Public Television which records living testaments from distinguished individuals delivering their lasting message to the world. Roger Ebert delivered this in 1994. He passed away just a month ago on April 4th, 2013.
We spend a great deal of time in mostly trivial pursuits on the web. But the web has an enormous wealth of content that could be of value to us. However we have to invest time and concentration to take what we are given so freely. This talk by Roger Ebert is worth the time.
For many years I have enjoyed Ebert’s movie reviews on public television. Although I sometimes disag...more
I’m back home and never experienced jet lag like this, getting up at three in the afternoon. The total trip home, with layovers, was nearly 21 hours.
My last days in China were spent in Beijing, and for all it’s flaws (air, traffic, the usual headaches) it remains my favorite place to be even though Shanghai wins in the aesthetic category, with its gorgeous, winding tree-lined streets and colonial architecture, at least in the French Concession area. I can see why so many people I know swear by Shanghai and say its their favorite place to live, even though they are totally wrong.
There’s a new Sinica podcast out in which I’m interviewed. Please check it out.
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The 3rd president of Pakistan, General Yahya Khan, must be the original “My Name is Khan.” In 1971 he instructed his army to “Kill 3 million of them and the rest will eat out of our hands.” He was talking about his compatriots in the eastern half of Pakistan, present day Bangladesh. Not just the borders, Pakistani innards are bloody as well. Anyway, the Pakistani army proceeded with the job of killing three million and by some estimates, achieved that target. India helped in bringing the killing spree to a close but at an enormous price. Staggering humanitarian costs: The Indian army suffered thousands of casualties; around 10 million refugees flooded into India (most of whom never returned). I don’t know if anyone can reliably estimate th...more
I had originally planned to go to Chengdu but the plan was changed after the earthquake. I was in Nanjing for three days before arriving here, and it would have been great if there hadn’t been icy rain and raw weather for three days in a row. What can you do?
For whatever reasons, I feel more relaxed in Hangzhou than any other place in China. It’s just so beautiful, a perfect place for drinking tea and just sitting back and enjoying the scenery. I was in Beijing and Shanghai for a week, and it was anything but relaxing, just one interview after another. (If you’d like to see my interview with Xinhua News in Beijing from a few days ago, go here. That’s part one, with the second part to follow next week.)
This was a business trip, not recreation....more
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
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
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
The natural reaction of a farmer to an increase in the price of a crop is to plant more of it for the following year. Supply and demand.
The difficulty comes in realising that you are not the only one thinking the same thing - the result is price bubbles leading to price crashes.
The role of the "middle man" or "supply chain" is particularly interesting in this story. Is this merely a lack of information on behlaf of the farmer? The introduction of widespread mobile phone technologies should help.
But what about the road tolls? There are some interesting economics to dig into here.
The Diplomat covers the story:
China’s Unhappy, Uneven Growth [The Diplomat]
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But one incident stands out for me as representing an issue the government should be particularly...more
China is a thirsty country that needs a lot of water. To this end it is using a lot of dams in some very sensitive areas. There are a whole lot of "externalities" involved with dam production for those upstream, downstream and round about.
When those people live in different countries things can get messy quickly especially if two of those countries and China and India.
I like the concluding statement:
"Scarcity in a zero sum situation can lead to conflict but it can also goad countries into more cooperative behavior. It's a bleak picture, but I'm not without hope."
The author of the quote has more hope than I do - I can only guess that he is not an economist.
Water wars? Thirsty, energy-short China stirs fear [Yahoo]
BAHIR JONAI, India – The wall of water rac...more
The University of Birmingham's Director of the Business School, Professor David Dickinson reports on how he views recent developments in China's economy.
A sensible comment that touches on a number of issues that this blog has talked about in recent posts.
The Birmingham Brief
Is China’s economy a cause for concern?
Questioning China’s remarkable economic performance over the last 30 years seems to fly in the face of wisdom honed by decades of double digit growth. However, it is perfectly possible to explain China in the context of standard models of economic growth. Immigration of low-wage labour into the Eastern seaboard along with transfers of capital from Chinese Diaspora in Hong Kong, Taiwan and further afield, created the conditions for the ‘miracle’.
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Edward is a macro economist, who specializes in growth and productivity theory, demographic processes and their impact on macro performance, and the underlying dynamics of migration flows.
Edward is based in Barcelona, and is currently engaged in research on aging, longevity, fertility and migration, and the impact of all of these on economic growth. He is currently working on a book "Population, The Ultimate Non-renewable Resource?" He is a regular contributor to a number of economics weblogs, including India Economy Blog, A Fistful of Euros, Global Economy Matters and Demography Matters. He was, in fact, a founding member of all these weblogs.
Edward follows in detail the Indian, Italian, Spanish, German and Japanese economies. He has a more than a passing interest in the economies of Turkey and Brazil and in the emerging economies of Eastern Europe.
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