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catallaxy in technical exile

Is China worth the hassle?

with 38 comments

Joe Sternberg of the Wall Street Journal Asia asks the question.

Google is just the highest-profile and latest case of a company asking whether China is really worth all that trouble. But it’s not alone. Many companies have floundered in China, and others have just stayed out.

Government officials sitting in Beijing may not care about any of this in the short run. The Chinese economy is booming along very nicely despite, and in some cases because of, rampant copying of foreign companies’ business models or intellectual property. One could argue the fact that Google’s China business struggled so badly shows that China doesn’t need Google.

But is that really true over the long run? Put another way, can China develop into a mature economy if the Googles and Cybersitters of the world can’t rise or fall there solely on their commercial merits? At China’s current level of development we may be a generation away from a definitive answer, though economic history suggests Beijing is on the wrong track. Meanwhile, foreign investors will continue questioning exactly how much they’re willing to put up with for a shot at 1.3 billion customers.

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Written by Sinclair Davidson

January 14, 2010 at 5:06 pm

Posted in Uncategorized

38 Responses

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  1. I have a friend from China who was telling me about China’s habit of inviting business in, ripping off their ideas and then doing without them. He was very proud of this. Didn’t seem to understand that eventually it’ll backfire on ’em.
    .
    In fact it’s really interesting what people who’re raised in the PRC just don’t get. They know about technique but they don’t understand anything contextual. I imagine when they come to the downside of capitalism that this epistemological shortfall will exacerbate their troubles.
    .
    What good does it do you if you can copy a PC/Mac motherboard or software but have no understanding as to the thinking that created it in the first place? Eventually we’ll stop letting them rip us off and they’ll be stuck backwards. Again.

    Adrien

    January 14, 2010 at 6:18 pm

  2. What good does it do you if you can copy a PC/Mac motherboard or software but have no understanding as to the thinking that created it in the first place? Eventually we’ll stop letting them rip us off and they’ll be stuck backwards. Again.

    Your argument only applies to dummies. Chinese are anything but that. You don’t just copy, you know how it works and can expand on that. Do not under- estimate the intellectual potential of the Chinese, they are already becoming world leaders in biomedicine and I imagine in other areas as well. The speed of this is astounding.

    It is also worthwhile noting that copyright law is much abused. I am sick to death of search strings coming up with multiple patent pendings of compounds and therapies that arefanciful but obviously serve the purpose of preventing other researchers actively exploring the potential of these.

    John H.

    January 14, 2010 at 6:25 pm

  3. John I’m not saying they’re dummies. My example might be a little to simplistic. I’ll give another one from real life.
    .
    Someone else I know from China is an excellent draughtswoman. I asked her about her art education at it’s pretty much the standard European Academic training they used to give at art schools in the West before they taught people how to can their own shit. You start with three dimensional geometric shapes, move on to to still life and then life drawing etc.
    .
    Thing is she was visually illiterate. I mean really really slow. Trying to get her to recognize certain elementary visual riffs took forever. For example she couldn’t understand Rene Magritte’s This Is Not A Pipe. Of course it’s a pipe, she says. I say think about it. She does and it’s still: Of course it’s a pipe.
    .
    This happened again and again. She thought Ingres couldn’t draw properly because he distorted his figures. She had absolutely no understanding of anything except technique. I encounter this a lot. And it’s a massive deficiency.
    .
    To get back to computing, considering this deficiency, ya reckon that they’ll ever produce a Steve Jobs. I think not. Nothing lateral.

    Adrien

    January 14, 2010 at 6:40 pm

  4. To get back to computing, considering this deficiency, ya reckon that they’ll ever produce a Steve Jobs.

    Of course they will, every culture breeds assholes. Perhaps her problem was with the education she received. China has its own tradition of beautiful art.

    John H.

    January 14, 2010 at 6:44 pm

  5. “They know about technique but they don’t understand anything contextual.”

    I agree. China’s educational system is seriously deficient. It is a degree mill.

    Here’s the thing. I’ve seen Chinese exchange students know all of the standard Econ 101 graphs. They have been passed as “literate in English” but can’t answer the question and so their explanation is limited. Sometimes they can’t read English and draw the wrong graphs. Sometimes they can read and write English perfectly well but their explanations have got absolutely nothing to do with the (relevant) graphs they have drawn.

    I don’t know if it is institutionalised cheating or what though.

    Semi Regular Libertarian

    January 14, 2010 at 6:50 pm

  6. …is due to institutionalised cheating etc…

    Other foreign exchange students seem to fare better besides the really diligent Chinese students, who again, are conceptually and creatively weak.

    Semi Regular Libertarian

    January 14, 2010 at 6:51 pm

  7. Chinese students, who again, are conceptually and creatively weak.

    And yet they are increasingly prominent in the scientific literature. I could say the same about Australian education. An old school friend is an academic and stated that there has been an ongoing decline in Australia since 1985. Maybe, but it appears a similiar trend is happening in the USA. BTW, Chinese do better on iq tests than whites. Give them time, they are rushing things and so creating clones for industry. In time though I expect the Chinese to be world leaders in various academic fields.

    John H.

    January 14, 2010 at 6:58 pm

  8. China has its own tradition of beautiful art.
    .
    Of which my friend knew very little. Apparently it’s a tiny specialist field their and those that study it can only get jobs teaching it to others. I’ve been making a study of Asian art for some time. Some of my favourite artists are guys like Hokusai and Yoshitoshi from Japan. I tried explaining their way of seeing to her – nada.
    .
    Of course they will, every culture breeds assholes. Perhaps her problem was with the education she received.
    .
    Exactly. I’d say it’s also the Confucian culture. To do what Jobs did you need to reak apart from the group and go it alone. To follow your own inclinations even if they run counter to conventional wisdom. Confucian culture makes this almost impossible.
    .
    And yet they are increasingly prominent in the scientific literature.
    .
    Doing what? Anything lateral? They are taking over in science and we’re slipping. This is all true. But if they can’t think for themselves they’ll only go so far. Our problem is that increasingly we can’t think at all.

    Adrien

    January 14, 2010 at 7:15 pm

  9. I wonder if the Chinese economy will soon reach a stage of growth resistance until it substantially liberalizes its governance?

    Peter Patton

    January 14, 2010 at 7:26 pm

  10. But if they can’t think for themselves they’ll only go so far. Our problem is that increasingly we can’t think at all.

    Anything lateral in science? Don’t know but I suggest you are hoping for something that is all too often absent in science these days. In “The Trouble with Physics” Lee Smolin goes on at some length how modern academia is creating its own version of Confucian Culture which is prohibiting the going alone approach. He states that there was a period where if you weren’t studying String Theory you were on the outer, then it all changed to vice versa. It does seem that many important theoretical breakthroughs happen with individuals not groups, the common sense psychology of that is obvious but it raises an interesting quandary because so much science these days is done in groups. In terms of my own interests long ago I came to the conclusion that there is something fundamentally wrong about our understanding of molecular biology. Tried to approach this problem, got the best pot I could and spent days sitting still. No help but at least I was happy and managed to conquer the Master of Orion for the zillionth time. For me problems like that are a pain in the ass because when I am confronted with something like that it seems pointless to just keep reading all this shit unless I can solve that problem. But I can’t.

    To look at this from another angle – Chinese now have very small families. If you look at the work of Frank Sulloway and others, there is the suggestion that creative thinking is in part created by sibling rivalry towards an older sibling or rivalry with parents. So with small families and a highly conformist culture there are strong forces precluding the lateral thinking you so much desire. So do I but it is hard to find Adrien. I have only one friend who demonstrates that quality at any length. I see him about once a week, we get stoned and babble for hours about anything from physics to comic books. And yes, long ago I did read a study how marijuana can facilitate the much desired lateral thinking but this best occurs have a long hard and sober investigation of the subject at hand. But I just like to babble and know most of the time I speaking shite. Don’t care.

    BTW, do you find that Latte Leftists are very predictable in their thinking?

    John H.

    January 14, 2010 at 7:33 pm

  11. By my count, we have assessments of the abilities of five Chinese so far. A small sample I think.

    I began going to China in the mid 80s and tried then to make predictions about where China would go. Dead wrong.
    Then after Tien An Men I thought it would all fall in a heap. Not even close.

    And around that time we all thought Japan would rule the world and read lots of books explaining the Japanese way of doing business.

    Ken Nielsen

    January 14, 2010 at 7:35 pm

  12. The speed of this is astounding.
    .
    To what extent has the speed of their development been due to IP theft? I’ve heard this issue raised before about the Chinese, so this is a genuine question. It may be central, or it may be an odious trait that has, so far, not played much of a role.
    .
    some other observations/factors.
    1. The chinese stimulus spending; what are the ramifications down the road? at least one consequence is that they’ve propped up unproductive parts of the economy and increased debt.
    .
    2.The demographic time bomb. However I’ve heard the argument that it won’t affect China economically since they don’t have an aged pension or other welfare perks.
    .
    3. The Chinese policy of mercantilism. When the consequences catch up with them, how severe will they be?
    .
    4. plus, we hear other things about unrest in provinces and so on, but I wonder if all that is a storm in a teacup.

    daddy dave

    January 14, 2010 at 7:52 pm

  13. He states that there was a period where if you weren’t studying String Theory you were on the outer, then it all changed to vice versa.
    .
    Isn’t that the other way ’round?
    .
    So with small families and a highly conformist culture there are strong forces precluding the lateral thinking you so much desire. So do I but it is hard to find Adrien
    .
    I’m not sure I’d take this family romance notion of lateral thought too seriously. Lateral thinking isn’t really that hard. You simply introduce randomness or nonsense into the standard taxonomy and seek out the patterns in the bizarre associations that brings up.
    .
    BTW, do you find that Latte Leftists are very predictable in their thinking?
    .
    Yes. If you’re implying that that’s what I am, I’m only that here. In the latte-left world I’m often called a fascist, a capitalist pig etc.
    .
    Can’t win. 😦

    Adrien

    January 14, 2010 at 7:58 pm

  14. Lateral thinking isn’t really that hard.

    Maybe not for you but I find it damn hard work. Creative thinking doesn’t come out of thin air, there must be antecedents. Interestingly I read about a week ago N. Andreasen stating that in her studies of creativity the iq was circa 120. Not that hot.

    Latte Leftists regard me with loathing. I have never conceived of you in those terms. You’re too fucking weird for that.

    John H.

    January 14, 2010 at 8:15 pm

  15. “In “The Trouble with Physics” Lee Smolin goes on at some length how modern academia is creating its own version of Confucian Culture which is prohibiting the going alone approach.”

    It is actually actively punished. “Strangely”, the seminal works are often studies that have “gone alone”.

    Semi Regular Libertarian

    January 14, 2010 at 8:16 pm

  16. Off topic, has anyone been following the Haiti earthquake story? It’s a fuckin’ catastrophe. Tens or hundreds of thousands of bodies piling up all over the streets, with most government buildings reduced to rubble. Those poor people have to be the unluckiest buggers in the world.

    PORT-AU-PRINCE, Haiti (AP)–Haitians piled bodies along the devastated streets of their capital Wednesday after a powerful earthquake flattened the president’s palace, the cathedral, hospitals, schools, the main prison and whole neighborhoods. Officials feared hundreds of thousands may have perished but there was no firm count.

    Death was everywhere in Port-au-Prince. Bodies of tiny children were piled next to schools. Corpses of women lay on the street with stunned expressions frozen on their faces as flies began to gather. Bodies of men were covered with plastic tarps or cotton sheets.

    President Rene Preval said he believes thousands were killed in Tuesday afternoon’s magnitude-7.0 quake, and the scope of the destruction prompted other officials to give even higher estimates. Leading Sen. Youri Latortue told The Associated Press that 500,000 could be dead, although he acknowledged that nobody really knows.

    “Parliament has collapsed. The tax office has collapsed. Schools have collapsed. Hospitals have collapsed,” Preval told the Miami Herald. “There are a lot of schools that have a lot of dead people in them.”

    Even the main prison in the capital fell down, “and there are reports of escaped inmates,” U.N. humanitarian spokeswoman Elisabeth Byrs said in Geneva.

    Michael Fisk

    January 14, 2010 at 8:18 pm

  17. Latte Leftists regard me with loathing. I have never conceived of you in those terms. You’re too fucking weird for that.

    .
    🙂 At last someone who understands.
    .
    N. Andreasen stating that in her studies of creativity the iq was circa 120. Not that hot.
    .
    I think it was Malcolm Gladwell I got this from but anyway…
    .
    IQ doesn’t test creative thinking. There is a test for creative thinking. You have 5 minutes, write down all the uses you can think of for a brick. Gladwell cited some dude with an IQ of 200 who could only come up with two.
    .
    Edward de Bono has some good techniques for lateral thinking.

    Adrien

    January 14, 2010 at 8:24 pm

  18. Haiti’s history is just upsetting. A country of slaves frees themselves in the Napoleonic Wars against all of Europe and nature and dictators have beset them with tragedy.

    Semi Regular Libertarian

    January 14, 2010 at 8:25 pm

  19. Fisk, I have as well. It is a catastrophe. The footage I’ve seen is awful and yet probably doesn’t do the sheer horror of it justice.

    dover_beach

    January 14, 2010 at 8:26 pm

  20. IQ doesn’t test creative thinking. There is a test for creative thinking. You have 5 minutes, write down all the uses you can think of for a brick. Gladwell cited some dude with an IQ of 200 who could only come up with two.

    Long ago Liam Hudson came up with the theme that iq measures intelligence, not creativity.

    Here’s the best use for a brick: throw it at a coffee shop window.

    John H.

    January 14, 2010 at 8:28 pm

  21. Adrien, actually the WAIS- V and Raven’s Progressive Matrices IQ test do tap into a lot of creative thinking.

    Peter Patton

    January 14, 2010 at 8:45 pm

  22. I am surprised so little is made of the domestic and gepolitical implications of a generation of gynocide (my word) in China. Since the one-child policy, a great many baby girls are killed at birth and female fetuses aborted. Now, given Chinese population, even that if only admits to a tiny fraction of all babies born over the past generation, it still amounts to a surplus of young Chinese men to women of tens of millions.

    Now tens of millions of sexually frustrated, emasculated social outcast males must have huge implications. Where will they channel that frustration and testosterone?

    Perhaps the Chinese authorities might beef up their military personnel massively, or the sexual untouchables turn to anti-social behavior including terrorism, or perhaps they’ll turn gay.

    Peter Patton

    January 14, 2010 at 8:51 pm

  23. Peter, that’s a theme I’ve been pushing for some time. Expect a bloodbath.

    Michael Fisk

    January 14, 2010 at 8:55 pm

  24. , a great many baby girls are killed at birth and female fetuses aborted.

    At least that explains why they are rapidly becoming world leaders in stem cell technology.

    Now tens of millions of sexually frustrated, emasculated social outcast males must have huge implications. Where will they channel that frustration and testosterone?

    I can’t remember who but someone once stated that the most dangerous demographic is young unattached males. Just as well they don’t have our Net Nanny, there is always porn … .

    John H.

    January 14, 2010 at 9:00 pm

  25. Haiti’s history is just upsetting. A country of slaves frees themselves in the Napoleonic Wars against all of Europe and nature and dictators have beset them with tragedy.

    It should be remembered that both the US and French governments contributed significantly to Haiti’s woe in recent years, under the guise of ‘humanitarian intervention’. Also, plenty of people have benefited from Haiti being kept down. Disney, for instance, receives slave labour from impoverished Haitians who make its cheesy wares for 11 cents an hour.

    THR

    January 14, 2010 at 9:07 pm

  26. The book Factory Girls is worth a read, not because of the characters depicted but because it illustrates just how much churn there is in the unregulated world of education and work in China.

    rog

    January 15, 2010 at 5:32 am

  27. THR,

    That equates to one sixth of Haitian per capita GDP. I’ve think you’ve been sold a pup.

    Semi Regular Libertarian

    January 15, 2010 at 9:09 am

  28. The noble “international community” which is currently scrambling to send its “humanitarian aid” to Haiti is largely responsible for the extent of the suffering it now aims to reduce. Ever since the US invaded and occupied the country in 1915, every serious political attempt to allow Haiti’s people to move (in former president Jean-Bertrand Aristide’s phrase) “from absolute misery to a dignified poverty” has been violently and deliberately blocked by the US government and some of its allies.

    Aristide’s own government (elected by some 75% of the electorate) was the latest victim of such interference, when it was overthrown by an internationally sponsored coup in 2004 that killed several thousand people and left much of the population smouldering in resentment. The UN has subsequently maintained a large and enormously expensive stabilisation and pacification force in the country.

    Haiti is now a country where, according to the best available study, around 75% of the population “lives on less than $2 per day, and 56% – four and a half million people – live on less than $1 per day”. Decades of neoliberal “adjustment” and neo-imperial intervention have robbed its government of any significant capacity to invest in its people or to regulate its economy. Punitive international trade and financial arrangements ensure that such destitution and impotence will remain a structural fact of Haitian life for the foreseeable future.

    http://www.guardian.co.uk/commentisfree/2010/jan/13/our-role-in-haitis-plight

    THR

    January 15, 2010 at 9:55 am

  29. Workers stitching clothing emblazoned with feel-good Disney characters are not even paid enough to feed themselves, let alone their families, charges the New York-based National Labor Committee Education Fund in Support of Worker and Human Rights in Central America (NLC). Haitian contractors producing Mickey Mouse and Pocahontas pajamas for U.S. companies under license with the Walt Disney Corporation are in some cases paying workers as little as 15 gourdes (US$1) per day — 12 cents an hour — in clear violation of Haitian law, said the NLC. Along with starvation wages, Haitian workers making clothes for U.S. corporate giants face sexual harassment and exceedingly long hours of work. Haiti does need economic development and Haitian workers do need jobs, but not at the price of violating workers’ fundamental rights. Paying 11 cents an hour to sew dresses for Kmart is not development. It is crime, charged the NLC.

    Over the past two decades, U.S. State Department officials have consistently prescribed development of the transformation industry as the antidote to Haitian poverty. In the early 1980s, about 250 factories employed over 60,000 Haitian workers in Port- au-Prince. The minimum wage then was US$2.64 a day. But many sweat-shops fled Haiti after the fall of the dictator Jean-Claude Duvalier in 1986. Others left shortly after the election of Jean- Bertrand Aristide in 1990, who campaigned with nationalist rhetoric, and still more left after the 1991 coup d’etat.

    But Haiti’s miserable condition today makes it an ideal competitor in the world labor market, say U.S. State Department officials, and the assembly zones are again at the heart of the Structural Adjustment Program (SAP) for Haiti now being peddled by the U.S. Agency for International Development (USAID), the World Bank, and the International Monetary Fund (IMF).

    http://www.hartford-hwp.com/archives/43a/294.html

    THR

    January 15, 2010 at 10:03 am

  30. Jared Diamond attributed many of Haiti’s issues to the environmental degredation – near complete deforestation – as witnessed by these photo’s of the border of Haiti (gdp per capita 1,317) with the relatively wealthy Dominican republic (gdp per capita 8,619) on the other side of the island.

    http://therogersinhaiti.wordpress.com/2009/12/10/haiti-and-the-environment/

    This means they get burried in landslides and have had much greater soil degredation etc.

    Steve Edney

    January 15, 2010 at 10:23 am

  31. THR,

    Are you really going to work for less than what you can feed yourself for? It’s not physically possible after a while. You or your kids will start popping their clogs. Something else is going on. There is an international aid presence or some kind of subsistence lifestyle. In this instance you can hardly blame the foreign companies. The wage rate is related to local productivity and their presence will raise wages in that industry, and have significant positive spillover effects. I don’t know Haiti that well but it could also be some kind of State run labour camp/”factory” – much like those in China, North Korea or Burma. This would explain the intentional breaking of Haitian law.

    Now, if democratic market economies see that wages/salaries become the largest component of GDP, and this guy keeps on rejecting austerity measures and democracy, and keeps on getting a feudal/klepto dictator sort of wealth distribution, are you seriously going to blame austerity?

    “Haiti is now a country where, according to the best available study, around 75% of the population “lives on less than $2 per day, and 56% – four and a half million people – live on less than $1 per day”. Decades of neoliberal “adjustment” and neo-imperial intervention have robbed its government of any significant capacity to invest in its people or to regulate its economy. Punitive international trade and financial arrangements ensure that such destitution and impotence will remain a structural fact of Haitian life for the foreseeable future.”

    Again, something else is going on. Hong Kong was the most laissez faire place on earth. Sure only the Brits had a say, but it didn’t reduce the Hong Kong people to poverty. What that author wrote is extrapolated gibber.

    Let’s just say your sources are particularly rose coloured in their view of Aristade (and his overwhelming “electoral majority”). He is just one of many unsavoury elements in Haitian politics. The author fogot to mention that in 1993-1994, the evil US with it’s “IMF backers” restored Aristade to power.

    “Cuba has escaped the worst effects of neoliberal “reform”, and its government retains a capacity to defend its people from disaster.”

    Like another commenter said, the rest of what this BMW driving prat wrote isn’t worth commenting about.

    Seriously, the articles at Strange Times are less biased (and far better researched) than that Guardianista drivel.

    Semi Regular Libertarian

    January 15, 2010 at 10:32 am

  32. How foreign operators really operate in Haiti:

    http://www.webster.edu/~corbetre/haiti-archive/msg01842.html

    “In pre-1986 Haiti the Haitian minimum wage in our sector
    (electronics) was 15.60 gourdes per (8 hour) day. At 5
    gdes per US$1, the daily minimum wage was US$3.12. By
    Duvalier’s departure that year, there was already a black
    market rate (maybe 10%) on the dollar, meaning that the
    effective wage expressed in dollars was a bit under that.

    Upon the election of President Aristide the rate was raised
    to 36 gourdes per 8 hour day, and there has been no change
    since then. Whether this was done legislatively, or simply
    by decree I am really not sure, but with the current
    exchange rate of 18.25 gourdes per US$, the minimum wage in
    Haiti when expressed in U.S. dollars has actually declined
    to just under US$ 2.00 per day. Keep in mind that all
    Haitian companies have to pay an annual bonus (a 13th
    month) every year, which is NOT included in these minimum
    wage figures.

    It would be interesting to compare the above data with the
    inflation rate (in gourdes) over the past 20 years, but
    that I do not have. Does such data exist?

    List members should be aware that most Haitian factories of
    any reasonable size pay MORE than the minimum wage, in the
    hope of attracting and keeping the very best workers. In
    our plant, our Haitian sub-contractor pays our employees a
    base salary of 40 gourdes per day, but we have an incentive
    system that increases that substantially for most (but not
    all) workers. All employees must be at least 18 years of
    age and be able to fill in an employment application which
    is in French. Why French, you ask? Because there are
    enough candidates for every single opening so that we can
    afford to be very picky. We prefer that our sub-contractor
    hires young people who have struggled to get themselves
    educated to make themselves more employable. We feel that
    this is a good indication of some personal initiative.

    Manutech is an open-books, profit-sharing U.S. corporation
    with no employees physically in the U.S. Our Haitian
    sub-contractor’s employees typically receive a special
    profit-sharing bonus in March and September. We also have
    a school loan program whereby employees can borrow money
    each September to put their children in school. They must
    then repay us 150% of the loan over the next 12 months,
    with the extra 50% going into a special in-house savings
    account in their name. The following September, they can
    either take another similar type loan, OR close out their
    in-house savings account by means of one big withdrawal.
    Can’t do both. The intent and effect is to help employees
    finance the education of their children.

    Finally, I would point out that the electronics sector in
    Haiti has shrunk considerably in recent years. Most of our
    U.S. customers have moved their own manufacturing
    operations to the the Far East in recent years, and we have
    had considerable difficulty competing with their local (Far
    East) sources. Any potential investor in manufacturing in
    Haiti looks for 4 things, and in order of importance they
    are:
    1. Political Stability (democracy helps)
    2. Infrastructure (communication, electricity, ease of
    entry at customs, etc.)
    3. Work Ethic/Education (Employees who want to work
    and have a minimum basic education)
    4. Low labor costs

    Considering that our direct labor costs in Haiti are but
    15% of our total costs and given the plethora of low labor
    options in the world, I can tell you that item 4 is really
    not a big determinant. If I were 25 years younger and
    starting a labor-intensive manufacturing plant today, I
    would probably learn Spanish and move to Honduras, an
    impressive country that seems to know where it is going.

    Regards,
    Lance Durban
    MANUTECH ASSEMBLY, INC.”

    Semi Regular Libertarian

    January 15, 2010 at 10:38 am

  33. Cuba is vastly better off than Haiti. Cuba doesn’t perform well on a number of measures when compared to the US (except for health and education), but compared to a neighbour like Haiti, it is safe and prosperous. Cuba’s infamous lack of free speech is still not as extreme as in Haiti, where recent history has shown that police are more than willing to crack a few heads. From what I know of the author of the Guardian piece, he is hardly a ‘BMW driving prat’.

    n this instance you can hardly blame the foreign companies.

    No, I think we can blame the foreign companies, at least in part. In any other country, these companies would be accused of slave labour and the most brazen exploitation.

    As for ‘austerity measures’ – Aristide attempted to restore the minimum wage to its former levels. Hardly kleptocratic behaviour. And every government of every developed country in the world would forego ‘austerity’ if it meant assisting its people – apparently, the Haitians are not permitted the privilege of what is standard practice everywhere else.

    One important difference between HK and Haiti, of course, is a history of military coups in the latter. However, the coups and Western-led occupations of Haiti have been aimed at restoring ‘stability’ for those charming foreign investors you’re seeking to lionise.

    THR

    January 15, 2010 at 10:44 am

  34. “Cuba is vastly better off than Haiti.”

    I would choose Cuba. You realise though this is a lifeboat situation. I really don’t buy into this dumb conservative idea that you should pick and choose “friendly” dictators. They should all be kicked to the kerb and then some.

    The quote was…

    ““Cuba has escaped the worst effects of neoliberal “reform”, and its government retains a capacity to defend its people from disaster.””

    The worst effects of “neoliberal reform” are that special interests get shafted after years of fleecing their workers, the customers or their bosses. Castro Inc having been ripping off their citizens in full klepto mode for years. So yep they’ve “avoided the worst effects”.

    “No, I think we can blame the foreign companies, at least in part. In any other country, these companies would be accused of slave labour and the most brazen exploitation.”

    For what – a general population that is so uneducated and of such a low productivity that will benefit from technology spillovers and capital investment? This is just how it happens. Foreign investment is good. The jobs, capital and on the job learning wouldn’t exist. If there was no benefit to a host nation with FDI, then outward FDI wouldn’t be contentious then, would it?

    If on the other hand there is some fishy forced labour thing then it is totally unsavoury. However, what do you do? Leave them without a benign or positive foreign influence and take their jobs away? Things like this, Total (Total being more dubious given the involvement of the French Government) in Burma or google/manufacturing in China don’t have easy answers. It is up to Western consumers and foreign investors to make judgment calls.

    The guy who actually owns a factory in Haiti reckoned that in real terms the Haitian MW dropped and wages were above the mandatory rate. Also note they could turn away employees as they chose given very poor standards in education and high unemployment. But you want to turn away potential employers that offer education schemes etc.

    “One important difference between HK and Haiti, of course, is a history of military coups in the latter.”

    Yes precisely. It is idiotic to blame austerity. No country, commie, capitalist or whatever is going to do particularly well like this when there is continual war, rebellion or political violence.

    “However, the coups and Western-led occupations of Haiti have been aimed at restoring ’stability’ for those charming foreign investors you’re seeking to lionise.”

    I’m not lionising them, I’m telling you how it is. Clinton put Aristade back in power (then he proceeded to mutilate his opponents and rig elections with laughably phoney results). This conspiracy theory about Western Governments and the IMF is silly. Unless they’re as cunning as Chopper, shooting Nev and driving him to hospital.

    Semi Regular Libertarian

    January 15, 2010 at 11:00 am

  35. The article raises some good points.

    For some countries it is not worth going to China. For others it is. VW is the largest car seller. It is presumably worth it for them.

    Google’s decision was almost certainly affected by the fact that China isn’t worth it for them. They must have factored in the PR gain in other places as well.

    But does ripping off IP really cause that much damage? Wasn’t the US one of the worst in the world at doing just that in C18 when their economy took off? Then when they came to have IP they changed the rules. If Baidu was already preferred 2:1 by Chinese it doesn’t seem like they were losing a whole lot.

    Does anyone know how effective the great Chinese firewall actually is? Press people seem to largely assume that it works but there are people who suggest that it fails dismally.

    Pedro X

    January 15, 2010 at 11:13 am

  36. Does anyone know how effective the great Chinese firewall actually is?

    It’s pretty effective at a very basic level. Large numbers of blogs and media sites are blocked, and the whole internet itself feels slow and clunky. I never tried logging onto proxy servers over there, though conceivably the government could block some of them. Blocking all of them all the time would require a vast army of censors, which isn’t to say China couldn’t pull it off. There are dissident blogs operating out of China, suggesting that it can’t be totally effective. All this, of course, is merely anecdotal evidence.

    THR

    January 15, 2010 at 11:19 am

  37. “But does ripping off IP really cause that much damage?”

    Nah,

    http://en.wikipedia.org/wiki/Eric_Maskin#Software_patents

    “Maskin suggested that software patents inhibit innovation rather than stimulate progress. Software, semiconductor, and computer industries have been innovative despite historically weak patent protection, he argued. Innovation in those industries has been sequential and complementary, so competition can increase firms’ future profits. In such a dynamic industry, “patent protection may reduce overall innovation and social welfare.” A natural experiment occurred in the 1980s when patent protection was extended to software,” wrote Maskin. “Standard arguments would predict that R&D intensity and productivity should have increased among patenting firms. Consistent with our model, however, these increases did not occur.” Other evidence supporting this model includes a distinctive pattern of cross-licensing and a positive relationship between rates of innovation and firm entry.”

    Semi Regular Libertarian

    January 15, 2010 at 11:24 am

  38. China’s empty city.
    Is China faking GDP growth figures by doing things like this?

    daddy dave

    January 15, 2010 at 1:55 pm


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