Going Global

Freakonomics points to a study which researched why the Chinese save so much. Of all the more obvious answers that subsequent commenters on the post came up with (like economic prosperity, social values of thrift etc) they link it it to China's one child policy;

Apparently

China’s “one child” policy, which created a huge surplus of men in the country, has driven up the cost of getting married, as more and more men compete for fewer and fewer women. To keep up, families with sons have been holding off on spending to save up wealth that boosts their children’s marriage prospects.

This leads one to wonder why there are fewer women in China in the first place, and research studies have attributed this to hepatitis B (but later dispoved by the same author), sex relative wage rates and sex selective abortion as a practice.

Also as it turns out, or as i just found out, Ben Bernanke has been saying the increasing rates of saving in other countries caused the US housing collapse. He claims that increasing savings in other nations along with liberalization and the removal of capital flow barriers created a disconnect between US long term lending rates and Fed Monetary policy.

A credible argument, but it still doesn't explain how they could just let it happen, and the myriad other inconsistencies in the actions of the fed over the few years leading to the crisis.

From China's savings to Missing women to the Global Financial crisis; This is why i like Freakonomics.

GM has been on the verge of selling their Hummer brand to the Chinese Sichuan Tengzhong Heavy Industrial Machinery company. Thats quite a mouthful. I wonder why Chinese companies have such weird names. But i digress.

But GM's plans of downsizing and rightsizing itself while it shelters itself under a Chapter 11 bankruptcy may suffer a setback because it seems like the Chinese government is about to block the deal.

China has about 100 car manufaturers and the government does not want yet another one entering the market at a time when they are trying to aim for stability and cut competition in order to try and build a global giant capable of taking on the big ones.

Also, it seems the strategy is to focus on building a robust market based on fuel efficient and environmentally friendly vehicles, something a Hummer definitely is not (Hummers on average do a bout 15 miles per gallon, thats around 5 or so km's per litre).

China has also got a lot of stick in recent years about its pollution. And mass producing a brand like Hummer won't exactly help them in cleaning up this aspect of their image.

Hummer is estimated to be worth around $500million. GM is eager to unload its lossmaking units and have cleared the sale of Hummer, being in debt of about $172 Billion. Thats roughly twice the GDP of Sri Lanka.

The Chinese however have not completely overruled the deal. So we might yet see an iconic former US military vehicle being owned and manufactured by one of its key global rivals.

read more here and here.

So now the hullaballoo has died, the issue of Tibet has slipped down the list of international hot spots for the worlds attention to be drawn to. I had many friends on Facebook who even dedicated their status messages to it; talking about Tianamen square branded defiance and the like. The Olympics at one point looked to be slowed to a crawl when protests broke out all over the world against Chinese oppression in Tibet.

The Economist runs a story on Tibet, on how the attention of the world has slipped away from it. On how the Chinese are super miffed that the British have somwhat carelessly (?) accepeted Chinese sovereignity over the region. The Chinese however are still strongly focussed on the region. Security is intense, foreigners are not allowed in, and they still refuse to talk to the Dalai Lama.

And meanwhile, "Hillary Clinton recently stopped in Beijing to beseech China’s co-operation in fixing the world economy and stopping the planet from frying. In the apparent belief that China, oddly, will not pursue such aims out of its own self-interest, she forbore from harping on issues such as human rights and Tibet". In other words, the world's (read; the US) got more important things to worry about, like the economy and the damage to trade, rather than worry about an opressed people right now. Tibet may emerge again whenever any political leverage is needed though. At least its nice to see that Global Warming made the cut.

The Economist story links back to a story published in 1959 when the Dalai Lama (then 15 years old i believe) escaped military China to Indian territory. A myth emerged then that the Lama had conjured up a cloud to hide himself and his supporters from the Chinese air force. The Economist had its own ideas as to what that cloud really was though, and I'm inclined to agree with them.