China in the Shadows

[GRG55]

Re: China in the Shadows

If Buffett wanted to load up on government cheese, he could have invested in things that I'm assuming he would have an easier time understanding: Lockheed Martin, Raytheon, General Dynamics. Or if he wanted pure bodyshopping, SAIC. To the best of my knowledge, prior to his current stake in IBM, Buffett has never owned shares in IBM going back to its heydey in the 1950s and 1960s when Thomas Watson Jr. did an excellent job of running the company.

On Apple and Google, I think there is a risk that Apple stumbles due to the kind of company it is. However, I feel Google is different. Its restructuring as a holding company, Alphabet, suggests to me that it is looking to make inroads into many different verticals in an effort to diversify and grow the company beyond its relative on-trick pony status. Larry Page is still young and his vision for the company (pursue huge business opportunities that dramatically change things) makes me believe that Google will likely hit at least one more home run. The self-driving car and the work Google is doing in health care are examples of the kind of risk Google is taking that may pay off big in the future.

I don't see any of that kind of big thinking at IBM. I believe one of the big pushes at IBM is cloud computing. That idea is actually quite old and Amazon, Microsoft, and Google have a very substantial head start and substantial amounts of IP developed over many years by thousands of developers. IBM only has its somewhat tarnished brand as a selling point for its cloud services, in my opinion. Why would I choose an IBM cloud over Amazon's, Microsoft's, or Google's? That's the same question other corporation customers will likely ask.

Perhaps IBM's ultimate value might be found in data security. "The Cloud" doesn't seem so secure to me, nor do widely networked PCs. As time passes could be the mainframe in the glass house proves to be the most secure way to store corporate and government data?

What goes around, comes around...

[Milton Kuo]

Re: China in the Shadows

Perhaps IBM's ultimate value might be found in data security. "The Cloud" doesn't seem so secure to me, nor do widely networked PCs. As time passes could be the mainframe in the glass house proves to be the most secure way to store corporate and government data?

What goes around, comes around...

Absolutely. And wouldn't it be a trivial matter for Amazon, Microsoft, and Google to offer a turnkey solution of their cloud offerings on private networks?

IBM needs to come up with something far, far better than they've shown so far.

[touchring]

Re: China in the Shadows

Absolutely. And wouldn't it be a trivial matter for Amazon, Microsoft, and Google to offer a turnkey solution of their cloud offerings on private networks?


IBM needs to come up with something far, far better than they've shown so far.

Cloud is a new marketing term for old technology. For as long as there is Internet, there are web hosting companies that allow you to setup a website on a shared server, not quite unlike the Cloud concept today. The web hosting company makes money by reselling MB or GB on the server.

Today, there are database clouds, messaging clouds, ERP clouds, all of them are using shared resources, selling the same resources to multiple customers, hoping that they too don't overload the servers at the same time. The concept of cloud is about using shared resources.

I think the danger with cloud is that the hacker only needs to focus on a single cloud provider to bring down thousands or tens of thousands of critical services. The hacker could come from within - a large cloud company has thousands of employees and probably a thousand contractors with access to backbone networks that run the virtual machines, databases and power systems that provide the cloud service.

[don]

Re: China in the Shadows

Welcome to the trade deal wars

BY PEPE ESCOBAR on AUGUST 28, 2015

BANGKOK — China continues to grow at a not too shabby 7%. And yet, because of the yuan devaluation and the sharp drop in the stock market, in most Western capitals the narrative switched to Armageddon descended over an economic model that generated, over the years, six-fold growth in Chinese GDP.

Few are aware that Beijing, simultaneously, is engaged in a thrice titanic task; to shift its growth vector from exports and massive investment to services; to tackle the negative and/or self-satisfied role of state-owned enterprises; and to deflate at least three bubbles — debt, real estate speculation and the stock market — in the context of a virtual global economic stagnation.

All this while there is virtually no Western coverage of the China-led Eurasian trade integration push, which will help to eventually consolidate the Middle Kingdom as the largest economy in the world.

And that brings us to a crucial subplot in the Big Picture: Southeast Asia.

Four months from now, the 10-member Association of Southeast Asian Nations (ASEAN) is bound to become integrated, via the ASEAN Economic Community (AEC).
AEC is no mean feat. We’re talking about the economic integration of a combined market of 620 million people and a collective GDP of $2.5 billion.

Of course, this is still a quite divided ASEAN. Roughly, mainland Southeast Asia is closer to China while maritime-border Southeast Asia is more confrontational – not least because of US interference stoking the confrontation. It will be a long haul before there is a South China Sea rules-based code of conduct signed by all participants.

Yet even if mainland and maritime Southeast Asia present a quite contrasted outlook, and their integration might imply more rhetoric than reality – at least short-term – Beijing does not seem to mind the long game. After all, China is inextricably linked with mainland Southeast Asia.

Take Cambodia, Laos, Myanmar and Thailand. That’s a collective market of 150 million people and a GDP of over $500 billion. Include these four in the context of the Greater Mekong sub region, which encompasses the southern Chinese provinces of Guangxi and Yunnan, and we have a market of 350 million people with a GDP of over $1 trillion. The conclusion, as seen from Beijing, is inevitable; mainland Southeast Asia is southern China’s backyard.

TPP vs. RCEP

The US-led Trans-Pacific Partnership (TPP) is widely acknowledged across multiple ASEAN latitudes as a key component of the “pivoting to Asia.”

If ASEAN itself is divided, TPP adds to the division. Only four ASEAN nations – Brunei, Malaysia, Singapore and Vietnam — are involved in TPP negotiations. The other six prefer the Regional Comprehensive Economic Partnership (RCEP).

RCEP is an ambitious idea aiming at becoming the world’s biggest free trade agreement; 46% of global population, with a combined GDP of $17 trillion, and 40% of world trade. RCEP includes the 10 ASEAN nations plus China, Japan, South Korea, India, Australia and New Zealand. Unlike TPP, led by the US, RCEP is led by China.

Even if there is a substantial degree of political will, it will be impossible for these 16 nations to finalize their negotiations in the next four months – and thus announce RCEP simultaneously to the start of AEC. That would be a huge boost to the shared notion of the “centrality” of ASEAN.

Problems, problems everywhere. For starters, the serious China-Japan dispute over the Diaoyu/Senkaku islands. And the ever-evolving China/Vietnam/Philippines tussle in the South China Sea. Competition and distrust is the norm. Many of these nations see Australia as a Trojan horse. So it’s unlikely consensus will be reached before 2017.

The RCEP idea was born in November 2012 at an ASEAN summit in Cambodia. There have been nine rounds of negotiations so far. Curiously, the initial idea came from Japan — as a mechanism to combine the plethora of bilateral deals ASEAN has struck with its partners. But now China is in the lead.

And if the TPP vs. RCEP competition was not enough, there’s still the Free Trade Area of the Asia-Pacific (FTAAP). That was introduced at the APEC meeting in Beijing late last year by – of course – China, to seduce nations whose top trade partner is China anyway from entertaining TPP notions.

Joseph Purigannan of Foreign Policy in Focus has aptly summarized all this frenzy; “If we connect all these developments of ‘mega-FTAs’, what we are seeing is actually the intensification of what we can call a turf war among the big players.” So, once again, this is a China vs. US proxy war.

Big Pharma rules

TPP is spun in the US as aiming at setting common standards for nearly half of the word economy.

And yet TPP – negotiated in utmost secret by hefty corporate lobbies with absolutely no public scrutiny – is essentially NATO on trade (and a close companion of the EU-targeted TTIP). TPP has been developed as the economic/trade arm of the “pivoting to Asia” — with two inbuilt wet dreams; excluding China and diluting the influence of Japan.

And most of all, TPP aims at preventing most of Asia – and inside it, ASEAN nations – from reaching any agreement that does not include the US.

China’s reaction is subtle, not frontal. Beijing is betting in fact on multiplying agreements – from RCEP to FTAA. The ultimate objective is to reduce the hegemony of the US dollar (don’t forget: TPP is dollar-based).

Even after securing US Congress approval last month for a fast track leading to a deal, President Obama and the all-powerful TPP business lobby is having a very hard time convincing the 12 TPP – very unequal – partners.

On next generation biological drugs, for instance, TPP privileges Big Pharma such as Pfizer and Japan’s Takeda. TPP goes against state-owned enterprises – very important in economies such as Singapore, Malaysia and Vietnam – to the benefit of foreign competitors fighting for government contracts.

TPP wants to get rid of Malaysia’s preferential treatment to ethnic Malays on business, housing, education and government contracts – a staple of Malaysia’s development model.

Under the pretext of cutting tariffs on “sensitive” clothing, big US textile corporations such as Unifil aim to stop Vietnam from selling cheap clothing made in China in the US market.

And the US and Japan remain at serious odds on agriculture and the automobile industry, still debating, for instance, when a vehicle has enough local content to qualify for duty-free.

General Prime Minister Prayut Chan-ocha is convinced that TPP can make or break Thailand – with an emphasis on “break.” That’s what he told an imposing visiting group of the US-ASEAN Business Council.

Bangkok is terrified that its laws on patent medicine – as in the right to produce generic medicine — will be replaced by mega-restrictive patent laws dictated by the usual suspects: Big Pharma.

One Belt, One Road, one bank

In the end, it all comes back to Chinese President Xi Jinping’s by now legendary I Tai I Lu (“One Belt, One Road”); a.k.a. the New Silk Road(s) strategy, where one of the key components is the export of all manner of Chinese connectivity technology to other ASEAN nations.

That starts with the $40 billion Silk Road Fund announced late last year. But other investment avenues for infrastructure networks — roads, railways, ports — should come via the Asian Infrastructure Investment Bank (AIIB).

So AIIB may also be interpreted as an extension of China’s export model. The difference is that instead of exporting goods and services China will be exporting infrastructure expertise, as well as its excessive domestic production capacity.

One of these projects is a railway from Yunnan province through Laos and Thailand to Malaysia and Singapore – with Indonesia just a short trip away (where China is already battling Japan for the contract to build Indonesia’s first 160 km high-speed rail between Jakarta and Bandung). China has built no less than 17,000 km of high-speed railway – 55% of the world’s total — in only 12 years.

Washington is not exactly beaming at closer and closer Beijing-Bangkok relations. China, for its part, would like its ties with Thailand to be the prototype for relations with other ASEAN nations.

Thus, the eagerness of Chinese businesses to invest in ASEAN using Thailand as their regional investment hub. That’s all about investing in nations with excellent potential to become Chinese production bases.

In the immediate future real economic integration is inevitable in mainland Southeast Asia. It is already possible to hit the road from Myanmar to Vietnam. And soon by rail from southern China through Laos to the Gulf of Thailand and through Myanmar to the Indian Ocean.

The labor market is increasingly integrated. There are five million people from Myanmar, Cambodia and Laos already working in Thailand – most of them legally. Border trade is booming – as institutionalized “borders” don’t mean much in mainland Southeast Asia (as they don’t mean much between Afghanistan and Pakistan, for example).

It’s still a very open game though. It’s about connectivity. It’s about global production chains. It’s about harmonized rules of trade. But most of all it’s a tremendously high-stakes power play; who – the US or China – will eventually set the global rules on trade and investment.

[jk]

Re: China in the Shadows

[quoteWe’re talking about the economic integration of a combined market of 620 million people and a collective GDP of $2.5 billion.[/quote]
$4 per capita = not impressive. i think he means trillion.

[jk]

Re: China in the Shadows

We’re talking about the economic integration of a combined market of 620 million people and a collective GDP of $2.5 billion.

$4 per capita = not impressive. i think he means trillion.

[vt]

Re: China in the Shadows

https://www.washingtonpost.com/world...0d4_story.html

[touchring]

Re: China in the Shadows

We’re talking about the economic integration of a combined market of 620 million people and a collective GDP of $2.5 billion.
$4 per capita = not impressive. i think he means trillion.

It's already too late. In the 5 years that the bankers controlled USA is busy in Ukraine and Iran, the entire South East Asia is already lost to China. China did what the Japanese couldn't 70 years ago and the best thing it is done without sending a single troop.

Sun Tzu

The supreme art of war is to subdue the enemy without fighting.

[GRG55]

Re: China in the Shadows

This is one of most complete photo of the blast site that I've seen. It's amazing to see so many apartments just next to the blast site and occupied with residents when it is 30 miles from Tianjin city and in the middle of an industrial zone.

Is there no better place to live in? What about those ghost cities?

This is starting to sound familiar...


Enormous new factory blast rocks Chinese industrial region - reports

Published time: 31 Aug, 2015 19:25Edited time: 31 Aug, 2015 19:58

Another huge blast at a chemical facility has reportedly occurred in the Chinese province of Shandong. The explosion, located in an industrial zone in Lijin, Dongying City, happened late on Monday, China's People's Daily reported.
The blast was so massive it could be seen and heard from a great distance. A chemical factory is believed to have been in the area. According to People's Daily, the blast happened at around 11:30pm local time (3:30pm GMT).

China has been hit by a wave of massive blasts at its chemical facilities this month. Earlier in August, nearly 160 people were killed and around 700 injured in explosions at a warehouse storing hazardous chemicals in Tianjin port. Fifiteen people still remain missing following the tragedy, authorities said on Monday. Cleanup crews are still struggling with cyanide contamination in the area.

[Chris Coles]

Re: China in the Shadows

This is starting to sound familiar...


Enormous new factory blast rocks Chinese industrial region - reports

Published time: 31 Aug, 2015 19:25Edited time: 31 Aug, 2015 19:58

Another huge blast at a chemical facility has reportedly occurred in the Chinese province of Shandong. The explosion, located in an industrial zone in Lijin, Dongying City, happened late on Monday, China's People's Daily reported.
The blast was so massive it could be seen and heard from a great distance. A chemical factory is believed to have been in the area. According to People's Daily, the blast happened at around 11:30pm local time (3:30pm GMT).

China has been hit by a wave of massive blasts at its chemical facilities this month. Earlier in August, nearly 160 people were killed and around 700 injured in explosions at a warehouse storing hazardous chemicals in Tianjin port. Fifiteen people still remain missing following the tragedy, authorities said on Monday. Cleanup crews are still struggling with cyanide contamination in the area.

While I do agree with the sentiment of some of the comments on the "other" sites reporting this news; that this seems like the work of people in the business of "unsettling" another nation; I can only take everyone back to my partly misspent youth; where for a relatively short time, I was employed as a forklift driver in a large warehouse. In such employment speed becomes the aiming point and as you speed up; you start to make mistakes and your aim, (of the two steel blades which lift the pallet to move whatever the product is being moved around), occasionally deteriorates; resulting in your piercing the packaging; spilling the contents all over the floor. Indeed, later, when I went into the business of repairing freight containers and trailers, we often came across such damage; a good example being tinned Nickel Oxide, where the small drums would be regularly pierced, spilling the contents all over the container floors.

So in my past life, if I had been working with dangerous chemicals, instead of food; I too might have precipitated a disaster.

Accidents happen and as my mother always used to say; everything comes in threes.

[touchring]

Re: China in the Shadows

While I do agree with the sentiment of some of the comments on the "other" sites reporting this news; that this seems like the work of people in the business of "unsettling" another nation;

I think criticism is constructive, without criticism, there will be no improvement.


From an economic point of view, the business of improving safety is good for GDP and the service industry.


Poor quality and safety standards only saves money in the short term but will occur greater costs in the long term, e.g. disaster recovery cost, third party damages, cost of repairs, damage to reputation, etc.

[thriftyandboringinohio]

Re: China in the Shadows

Poor quality and safety standards only saves money in the short term but will occur greater costs in the long term, e.g. disaster recovery cost, third party damages, cost of repairs, damage to reputation, etc.

Aye but there's the rub.
When poor quality and safety save money in the short term, the owner of the business keeps it foreverer.
When disaster recovery cost pop up later, larger society pays them.

[don]

Re: China in the Shadows

While I do agree with the sentiment of some of the comments on the "other" sites reporting this news; that this seems like the work of people in the business of "unsettling" another nation; I can only take everyone back to my partly misspent youth; where for a relatively short time, I was employed as a forklift driver in a large warehouse. In such employment speed becomes the aiming point and as you speed up; you start to make mistakes and your aim, (of the two steel blades which lift the pallet to move whatever the product is being moved around), occasionally deteriorates; resulting in your piercing the packaging; spilling the contents all over the floor. Indeed, later, when I went into the business of repairing freight containers and trailers, we often came across such damage; a good example being tinned Nickel Oxide, where the small drums would be regularly pierced, spilling the contents all over the container floors.

So in my past life, if I had been working with dangerous chemicals, instead of food; I too might have precipitated a disaster.

Accidents happen and as my mother always used to say; everything comes in threes.

let the market decide . . .

"Within two years, Rui Hai International Logistics had built a reputation as the go-to place for businesses looking to ship hazardous materials to customers abroad, a niche market that had been dominated by sluggish state enterprises.

Rui Hai offered lower prices, a no-hassle approach to paperwork and quick government approvals. Business was brisk. It seemed like another success story for the Binhai New Area, a thriving economic development zone established here by the ruling Communist Party around one of China’s busiest seaports."

[Chris Coles]

Re: China in the Shadows

let the market decide . . .

"Within two years, Rui Hai International Logistics had built a reputation as the go-to place for businesses looking to ship hazardous materials to customers abroad, a niche market that had been dominated by sluggish state enterprises.

Rui Hai offered lower prices, a no-hassle approach to paperwork and quick government approvals. Business was brisk. It seemed like another success story for the Binhai New Area, a thriving economic development zone established here by the ruling Communist Party around one of China’s busiest seaports."

And there is the rub, an apparently thriving new business probably brought to its knees by a simple accident caused by an over eager forklift driver.

[Milton Kuo]

Re: China in the Shadows

And there is the rub, an apparently thriving new business probably brought to its knees by a simple accident caused by an over eager forklift driver.

You give the Chinese far, far too much credit. The explosions, while possibly triggered by some sort of accident, were enabled by an environment that exists due to corners being cut to line the pockets of certain people. You need look no further than the diethylene glycol-laced cough syrup, the melamine-laced baby formula, and the "gutter" oil. What kind of accidents could have caused such peculiar ingredients to be used in the making of those consumables?