Saturday, September 29, 2012

How Canadians Can Win in International Trade

Here is a well-informed article from the Winnipeg Free Press, with advice to Canadian companies:

It means running our businesses differently. You don't have to compete with call centres parked in Asian countries on cost if your business answers the phone and its employees are empowered to provide service on the spot. You don't have to compete with low-cost labour in other locations if you produce a product of such high quality and strong features that labour costs are a tiny fraction of its worth.
High service -- high quality products. These have a market in Canada (where the value of the Canadian dollar is a plus, if some components or tools must be imported), and as well as abroad because of their quality.
That is precisely the strategy that will prevail. Canadians competing on design, with goods made where there is excess production capacity selling into the USA market as well as Canada.  I've been teaching course on this  online to Canadians through Vancouver island University for several years.

Feel free to forward this by email to three of your friends.


Bo Xilai Gets the Boot

My political predictions are batting zero.  China announced Bo Xilai has been stripped of his offices and kicked out of the Communist Party.  I had bet he'd weather the storm.

Maybe it is not over.  Deng Xiaoping went down three times before taking the top slot.  Bo was more hard core communist, and anti-corruption, and it is not unheard of for politicians worldwide and in history to be hoisted on their own petard.

That there is a transition coming up in China sure makes it feel something like 1976.  That Bo was anti-corruption, conservative communist and very popular means his downfall is significant.  I was struck by  how the President of China and party leader was dressed when he launched China's first aircraft carrier. Sure looks like 1976.

Navy sails into new era
http://usa.chinadaily.com.cn/china/2012-09/26/content_15782904.htm

Feel free to forward this by email to three of your friends.


Friday, September 28, 2012

Exporting Agriculture to China

We can subsidize exports, which serves to maintain higher prices in USA, but at the same time we are less competitive in the export markets.  People manage their businesses based on market realities.  With no subsidies, a new set of market realities would manifest, and businesses would adjust accordingly.  USA's advantage in agriculture is buried under subsidies, regulations and market distortions.

Chinese agricultural exports began to surge after 1999, with shipments increasing in value from $10.3 billion in 1999 to an estimated $28 billion in 2010.  This $18 billion increase is impressive, but as global agricultural trade was also on the rise over this period, perhaps more important was the increase in market share.  Chinese exports accounted for 4.5 percent of global agricultural trade in 1999, but climbed to 5 percent in 2009.  Meanwhile, over the same period, U.S. export share fell from 22 percent to 18 percent.  Although other exporters, particularly Brazil and Argentina, played a larger role in the fall of U.S. share, the growth of Chinese exports likely contributed to the drop, particularly in certain markets for consumer-oriented HVPs.

https://www.uschina.org/public/exports/2000_2011/2000-11-us-exports-to-china.pdf

-40
Chinese Apple Exports to S.E. Asia Soar Past Competition
http://www.fas.usda.gov/info/IATR/China_Export_020311.asp

Feel free to forward this by email to three of your friends.


Kowloon City Anarchy

In my youth, travelling to Hong Kong, the word was Kowloon City was so lawless that even the police dare not go in there.  I was fascinated but too frightened to ever attempt it myself.

But why did it keep growing?  Why did people not want to leave?  And if it was so dangerous, how come Postmen had no trouble delivering the mail in there?  Maybe it was to keep people from escaping to anarchy.



Feel free to forward this by email to three of your friends.


Thursday, September 27, 2012

Kant on Lawyers

Kant pointed out a fatal flaw in the USA system that he was observing being formed in the 1780s..  We had a system of checks and balances, but officers of the court were allowed to serve in the other branches.  To have a lawyer acting as the executive, or in the legislative branches was to allow a conflict of interest.  Disaster would follow.

Today the lawyers and bankers create projects that cost unbelievable amounts, and finance them with bonds.  Credit is created with the bonds, and although credit buys the project (tunnels, stadiums, mass transit) it is actual money earned in the future by workers that is mulcted to pay for it.

The great accomplishment of capitalism was to get beyond the usury laws, and then to fractional reserve on money, then fractional reserve on credit.  Slavery was no longer necessary, since slaves died and their value ended, but "the people" and their children and grandchildren can be obliged to work to pay for what was built today.

The politicians and their consultants and the war profiteers who build the stadiums all get wealth and power today, drawn from our grandkids' potential.  What cannot go on will end eventually.  The crash is relative to the heights achieved.

In 1934, Bill Boeing, as the Government became enamored of Stalin and Hitler, and poiticians envious of his success, sold all but one share of Boeing and retired form the field.  World War Two saved Boeing, as it became in essence a State Owned Enterprise.

Get big or get out is the Federal Policy, and pension plans are obliged to buy into big business, what with rating agencies saying what is "investment grade" (as if they would know), the FED making policies that support the big business, subsidies, guaranteed sales and regulations all supporting these "winners."

All of the privileges Boeing, Ford, Google, Gernal Foods, Gernal Mills, Gerenal Motors, General Electric and so on get are mostly in the area of domestic support in the form of crushing domestic competition.  Then susbidies to make their products attractive overseas.

What happens is these huge USA corporations spend ever more money on themselves and their employees, becoming ever more bloated.  Like a University, they swear their costs are going up, so their fees need to go up.  Yes, they spend more, but unnecessarily.  Good results do not cost more, these entities just spend more.  Because they can.  And as they spend more, they insist they must charge more, like a pharmaceutical company.  And since the above all live off government (taxpayer) largesse, there is no rational end, except for a crack-up bust.  We are on the cusp.

Given the patterns and practices of capitalism in USA, these state-owned enterprises share technology in an effort to avoid taxes and launder money.  Profits move around but technology tends to settle where it has been introduced.  As Drucker said, innovation once introduced becomes the standard.

The problem is not that as State-owend enterprises transfer technology to their competitors for short term gain, it is that they crush domestic competition with all of their state-provided assists.  So USA is failing on two fronts:  One, the lawyers who run this country have destroyed any hope of business start-up, the innovation we badly need to grow our way out of this problem.  So forget about domestic recovery.  At the same time, those countries to whom we have transferred technology now out compete us overseas, killing off the export markets.

Our hope is in the bust.  When the system crashes, we'll have a chance to revive the economy.  But a key change we can make right now is NEVER vote a lawyer into office.  it is a self-destructive act.

Feel free to forward this by email to three of your friends.


As Close As I'll Get to Being Right?

I've been predicting Hillary will be the next president, one way or another.  Is this as close as I will get to being right?




Feel free to forward this by email to three of your friends.


Wednesday, September 26, 2012

55% Would Not Start Businesses Today

And they blame Obama.  Folks, the stated economic policy of the Federal Government is get big or get out.  Obama has nothing to do with it.  McCain would have done the same.  Romney will make no difference.

There is no plan on either side to improve things.

There is business to be done.  The economic policy disasters are killing businesses too loaded up on debt but otherwise viable.  Starting up now means you are not burdened with the debt load to be serviced, which is a competitive advantage.  Get going!

Feel free to forward this by email to three of your friends.


How Come Your Free Speech Costs Me So Much?

Somebody financed, created, translated, and distributed an outrageous film on the Prophet. We have no idea who, but the patsy is in hiding, and beyond that, except to say it was a "Coptic Christian, not a Jew" we know nothing.  Coptics are Egyptians, so the idea that a serial felon on parole forbidden to touch the internet did all of the above, is unlikely.  It is also doubtful he is Coptic Christian.  Bonus: get some Christians killed too.

We can run the Cui Bono, who would create a smokescreen behind which a highly trained, highly motivated and coordinated hit team murdered a US Ambassador on 9-11? That is what the Egyptians are saying, and they would know, because they were there.  And no one from the USA was there.  But never mind.

My question is when a Pakistani official calls for the patsy's murder, everyone screams free speech.

I like free speech.  But especially the no cost part. I love listening to some nut in the park go on about the Zionist Occupied Government, or Global Warming or some other nutty idea.  Costs me nothing.

But when someone does something so outrageous that it might get him killed, then I don't want to pay for his protection.  Let the fellow exercising the free speech also foot the bill to protect himself against those who would disagree, with a bullet.

 Feel free to forward this by email to three of your friends.


Tuesday, September 25, 2012

Fraud In Chinese Business

HuffPost has an article on a fellow in China, hard on the heels of someone opening five fake Apple stores, who claimed to have bought a USA bank from "Jews" in Delaware. No such bank. That he claimed to have renamed it HSBC something should have been a tip off.   The article goes on to name other items commonly counterfeited in China.

This kind of counterfeiting is a problem for all Chinese, and now the Party. They made a Hero out of him for buying a USA bank, until they discovered the fraud.

China law is an evolving affair, and probably the best inroductory book on the topic is by the late China-watcher Laszlo LaDany.



The book provides and sound basis from which to understand the changes in law in China today.

As to fraud, it is much in the news in China and overseas. As I have said before, it is a problem for the Chinese more than for anyone outside of China.  Anyone buying from China who finds themselves with less than happy results, only have theselves to blame.  China has excellent suppliers in every field.  Checking references and spotting frauds is part of your business.

Earlier his year I spent probably 20 hours and about $400 to get to the point I realized a fellow was probably not who he claimed to be. He provided several bona fides, and I checked one that did not pan out.  It is just part of the job to assure everythingis on the up and up.

I've blogged on China and forgeries before.  In an art history class on China, the professor offered a hypothesis as to why the Chinese are such great forgers.  Certainly they invented paper, gunpowder, the compass and who knows what else, way back when, but his argument was when under 500 years of foreign domination, the Chinese retreated to the arts and gave up innovation.  Copying became more valuable than innovation when the fruits of your creativity would be stolen anyway by foreigners.

When I first visited China back in the 1970s, the Chinese were quite open in sharing their secrets regarding imitating antiques.  Washing carpets in tea, or soaking bronze in urine, and other tricks were so widely known that it was no big deal.

Few Chinese are fooled. On the other hand, where we have strict laws against it, very many people are fooled.  The problem is not that the Chinese are so good at imitating antiques, the problem is westerners are so unschooled in spotting fakes.  There is plenty of the same going on in USA, just in a different way.  GMO foods, for instance.  They call Velveeta "cheese" and poor people eat it.  

I also noted copiers are finding more money in repairing the real thing than in copying now, more money for less work.

When I buy a Kelvin Klein shirt in Hong kong, I am not fooled.  When the country bumpkin in Hong Kong thinks it is Calvin Klein, he is still comparing that shirt to the others at the $3 price point.  He is getting his money's worth, if of dubious provenance.  How often in USA are we disappointed with our purchases?

Chinese law was designed to make people sort out their differences at a low level.  The emperor is high up and far away.  if you actually took it all the way to the Yamen, you could expect very harsh treatment whether defendant or plaintiff.  Sometimes plaintiffs got tortured too.  We in USA are not unlike  the China of old, inasmuch as our system is harsh on litigants and seeks to settle almost all cases out of court.

The differences are not so great.

 Feel free to forward this by email to three of your friends.


Monday, September 24, 2012

Patent Assault Starts Thursday

Patents attorneys have a chance to pick up some easy bucks before their evil regime ends.  Google and others have pushed through a rule that allows 3rd parties to shoot down established "frivolous patents" which in practice is one and the same thing.

If you are unemployed, or otherwise free to pile on, join up, get busy and bring help bring down this evil intellectual property regime that is one of the main reasons you are unemployed.  This is truly a nonviolent response to a constant threat of violence that by dint of effort of patent attorneys has grown ever more evil over the years.

Rarely do we get chances like this.  Get busy!  Spread this around.

Feel free to forward this by email to three of your friends.


Afghanistan Looks to China

After bleeding our economy dry for ten years and the death of thousands of US soldiers, pursuing an optional war against a people who never threatened us, only to yield their soldiers fragging ours quite often, the Chinese fly in and set up a peace and security agreement.

"It is in line with the fundamental interests of the two peoples for China and Afghanistan to strengthen a strategic and cooperative partnership, which is also conducive to regional peace, stability and development," Zhou was quoted as saying in a written statement released by the Chinese delegation upon his arrival.

This war was a Bush gig, and Obama was elected to end it. We knew this would happen ten years ago.  We already knew that your geographical neighbors are always your biggest trading partners, and China and Afghanistan share a common border.  After losing the war, the Chinese simply walk in and make friends.  This was inevitable.

Feel free to forward this by email to three of your friends.


Sunday, September 23, 2012

All Hail Free Honduras!

It sure sounds like they want to make a Hong Kong in Honduras.  Well, three of them.

"The cities involve the creation of a state within the state, a commercial entity with state powers outside the jurisdiction of the government," Cruz said.

Right on! And they outsourced their legal structure to Mauritius!

OK, so it is another sort of capitalist-relatively-free market, but people want it. And how come? Because too much government in Honduras made for chaos, and now people are escaping to anarchy.  We need such a district in USA.  Now.

Feel free to forward this by email to three of your friends.


Tunisian Wine

Moslem wine?
Why are Tunisian wineries coming to Hong Kong? Few people know we produce wine, because people assume that Tunisia, being a Muslim country, does not consume, much less produce, wines. But the fact is that Tunisia has preserved its wine-making tradition and produces excellent wine. As I’ve mentioned, we trade mainly with Europe, which has the best three or four of the world’s fine-wine producers – namely France, Italy, Spain and Greece. That means competition is tough in that part of the world, so there’s little room to export Tunisian wine in Europe. This is why we are exploring opportunities to sell our wine elsewhere.
We know Hong Kong is the best place to introduce our product into the Chinese mainland, Japan and South Korea, because Hong Kong has the expertise in promoting quality products from around the world. Our wine producers understand that if they want to go overseas, they have to invest in it, which includes participating in Hong Kong trade events because Hong Kong is a hub for the global marketplace. If you succeed in promoting your product through Hong Kong, and later through the online marketplace, you will let the world know about your product.
What’s unique about Tunisian wine? Tunisia enjoys a Mediterranean climate, and we still use our traditional way of producing wine. It’s not industrial, it’s natural. We produce organic and bio wine, which means we don’t add any chemical products. This is also true of our other food products.

Well, seems like something that should be tested in the USA by an existing wine importer.  There are so many undesirable chemicals in USA wine a true, raw, organic wine might be welcome, if exotic.

Feel free to forward this by email to three of your friends.