Environmental Regulation: Can China Afford Caution?

October 30, 2014

[T]o forestall more serious, systemic environmental issues, Beijing will have to be preemptive rather than reactive with regulation. In everything from modernizing its recycling industry to improving regulations on rare earth mining, the costs of waiting and testing out new ideas are high. Especially in terms of human health, delays from experimenting with environmental reforms are almost guaranteed to be more harmful in the long run than the initial errors from launching untested policies.

via Taking the Leap on China’s Pollution Problem | The Diplomat

Quite a thought-provoking point here. The preferred method of rolling out new policy in China is to use caution and often involves pilot projects that are examined in great detail before launching nationwide.

This has served China quite well in areas like foreign investment, financial services, SOE reform and privatization, where slow and steady arguably avoided both a repeat of some of mistakes made by Russia in the 90s and minimized the boom-and-bust/stagnate cycles that have plagued Asia from the late 90s. (Folks from Morgan Stanley, Goldman, etc. would probably disagree, but that’s to be expected.)

But just because this approach to reform has been largely successful since the late 70s, should it be an ironclad rule? Are there exceptions, and if so, is pollution one of them?

I’m a big fan of the cautious approach (in-house lawyer, remember?), but it all comes down to timing. If caution with respect to environmental policy means that the air in Beijing will not be significantly cleaner until 2025, then I’d say the government needs to start taking a few more risks. If, however, we are looking at a 3-5 year cycle to settle on the best policies and ensure that things are done correctly, that doesn’t seem unreasonable.

One year would be better, I realize. Any delay is going to be bad news for folks with respiratory diseases, or that guy on the bus last weekend who sounded like he was hacking up his spleen. But too quick could lead not only to failure, but wasted time and economic downsides.

Best to get this right the first time around.

Et Tu Western Banks?

October 28, 2014

When Chinese property developer Agile Property Holdings Ltd. said this month that its chairman had been taken into custody by authorities, the disclosure was a shock to Western banks that had lent the company money.

[ . . .]

The spate of suspected fraud cases and growing fears that loans won’t be repaid has raised questions about the effectiveness of scrutiny applied by banks to borrowers.

via Troubles in China Rattle Western Banks – Wall Street Journal 

Do I have much sympathy for Western banks who, with dollar signs in their eyes, lend to Chinese borrowers and end up losing their shirts? No, I do not.

Sure, it’s possible that some of these lenders have done their homework and yet have still been burned by fraudsters. I feel for those guys.

The others? The ones that fail to do sufficient due diligence or, even worse, the ones who uncover red flags and plow ahead anyway because of anticipated profits? Uh uh. You took the risk, now you have to deal with the downside.

It goes without saying that any lender out there whose reaction to the latest corruption scandal is shock and surprise is either unconscionably ignorant or a liar.

But hey, there’s a sucker born every minute, and for some reason a large number of ‘em naturally find their way to China.

Wise Words on Apple Pay

October 28, 2014

cult-of-macI think we all need to take a deep breath and think carefully before entrusting our financial information to any large company. That’s not luddism, that’s wisdom. The recent series of security breaches at major retailers alone should give us pause, and Apple is no exception: a company that has shown itself incapable of protecting Jennifer Lawrence’s photo album has to prove to us that it can be trusted with our wallets.

via The Apple Pay Early Adopter Problem. (David Wolf, Silicon Hutong)

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Obsolete Topic: Which Language Will Dominate the 21st Century?

October 27, 2014

Despite the technological advances attributable to China and Russia, English is still the de facto language of science and business. As far back as 2008, Research Trends magazine noted that English is the first language of about 400 million people in 53 countries, and the second language of as many as 1.4 billion more. English, the magazine contended, is “well positioned to become the default language of science.”

via Language and the Interconnectedness of Things | WIRED.

This question/topic is always popular in certain crowds, including expats and nationalists. For hundreds of years, ever since global exploration began I suppose, the question has been valid. Just which language will dominate, and why?

Although I enjoy, now and again, reading nationalist screeds from one side or another about how English dominance is now set in stone internationally or how everyone will be speaking Chinese 50 years from now, I think we are moving towards a day in the not so distant future where the whole conversation will be meaningless for the average person.

Why? Technology (obviously).

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