Tea leaves

May 28th, 2010 — Wordman

Some days, the Google News home page overflows with stories that tell you more about the future than you want to know. Today is one of them, though the stories seem, on the surface, innocuous.

First, a pair of stories out of China (one about a strike, one about a pay raise following some suicides) suggest that China’s standard of living is starting to rise. I’ve mentioned before that this will probably slow its growth a bit, as it will raise costs, making Chinese labor correspondingly less attractive to foreign businesses.

Next, I hope you’ve got your plans for a warmer world ready, as the warm seas look to make this hurricane season a doozy. An added wild card this year will be to see how these storms churn all that oil leaking into the gulf around.

More depressingly, the “global economic meltdown” is causing doctors in eight African countries to turn AIDS patients away. You will see “triage” like this a lot more often in the future. During battle, combat medics have to make choices about where to spend their limited resources and time to best effect. When things get bad, the first to get passed over for care are those who probably won’t make it even with care, the mortally wounded who have not yet died. It’s a crappy choice, but a moral one, because it means that care instead is given to someone with a fighting chance to survive. If you can treat them all, you will, but if you can’t, you pick to save as many as you can. It won’t be long before that happens on a global scale, and you can see it starting with this story in Africa. When health care is rationed, assume that those with incurable, terminal illnesses will get abandoned first. And, of course, Africa will get the shaft, as always.

On the more upbeat side of healthcare, a study shows a correlation between brushing your teeth and reduced heart disease. I bring this up because it points to something that I’m guessing will start happening a lot more often: connections being discovered between things that don’t seem like they are connected, but are. (In this particular story, the connection may be that inflammation anywhere does things to your blood.) One reason this will happen with more frequency is that people are now actually looking. That is, rather than looking for cause and effect for a particular ailment, research is now being based on the notion of “well, we have all these huge data sets from various places, let’s mash them together and see if they tell us anything”. One such project takes the human genome data, information about drug interactions, and data on connections between diseases and certain genes, and builds “neighborhoods” of related information. This might reveal that a drug that treats one disease, for example, might wind up treating something that seems totally unrelated. This kind of thing will totally change medicine in your lifetime.

Behold…

August 27th, 2009 — Wordman

The BBC World Service aired a 20 minute documentary recently called “Selling cheese to the Chinese”. The title makes it sound a bit like a puff piece, and it even starts a bit like one, but it isn’t. Bits of it have been rattling around in my head for the past few days. If you really want see the power if cheese or, more importantly, predict the future of China and the West, you should give this piece a serious listen to the end.

These five things stand out to me:

  1. Around five minutes in, a woman says “Even though we are in an economic crisis, we see an increase every single of week of Europeans landing here with their suitcases and a dream, and they want to make it.” Has the American dream moved to China already?
  2. “One seemingly innocuous comment surprises me… ‘Only very old people know about Chinese culture’, says one girl.” China has one of the longest lasting cultures on Earth, but the Communists more or less obliterated it from living memory. So the young now have no grounding in in the old ways. This is good and bad for the West, it seems to me. On the one hand, it means that making cultural in-roads into China will meet much less resistance from the youth of China, particularly the rising middle class. On the other hand, it also may mean that China’s historical insularity, which sometimes worked to its detriment on the world stage (and the West’s benefit), may be over. I suspect that the end result will be a much more intellectually agile China, and that will almost certainly mean a much more dominant China over the next century than I have been expecting.
  3. Around 15 minutes in: “The rise of McDonald’s in post-reform China was predicated on the demise of nation wide food rationing, but the consumption of cheese and wine will be more than that.” Instead, it will be the emergence of consumer choice driving a market, largely outside of government influence. In short: capitalism. Which means either Communism doesn’t have much longer in China or it will have to get even nastier.
  4. “People at my age spend all of their salary every month. People from my mom’s generation save as much as they could.” Not sure what to make of that. What do you think?
  5. “‘We trust foreign companies more than we trust local companies, because we have suffered a lot.’ It was a penny drop moment. Curious Jessie may have experimented with pricey Belgian chocolate, but the only European product this family buy regularly is a breakfast cereal…which they trust to be free from chemical additives.” This is probably a short term advantage for the West, but to compete against it, Chinese products will have to get safer, which will make them more expensive. It will also probably increase the standard of living in China, which will probably increase the cost of labor there. That is probably good for everyone, but will dampen China’s ascent slightly.

Merry economic war

December 20th, 2007 — Wordman

You don’t have to look very far to find dire warnings about Chinese goods these days. For several months, the focus has been on toys with lead paint in them. Before that, however, there were beads containing GHB, toothpaste containing diethylene glycol, and poisonous petfood. If you think back to this same time last year, I don’t remember any such thing being so prevalently in the news, even though it is difficult to imagine that these goods went from being perfectly safe to the deadly poisons the news harps about in twelve months. It’s possible that these stories have reached the mass consciousness organically, feeding on each other to dominate mind space. Maybe they are sort of a fad, where the U.S. media (ever hungry for stories to scare the crap out of you) finds they consistently sell better when China is trying to kill everyone. Yet, when you think about the fairly rapid rise of these stories, the broad range of their repetition, and the staying power they seem to have, I wonder if there isn’t something a bit more to it. I’m wondering if it’s an American attack in an economic war between China and the United States.

Honestly, I hope it is. It should be. In the first place, there is some reason to believe that China has been conducting large scale industrial espionage against the U.S. for some time. More troubling, China has been accumulating a vast reserve of U.S. dollars for years. The quantity of this horde seems far in excess of Chinas needs, and opens the possibility of China using this reserve to intentionally manipulate American economic policy for its own benefit, largely through a kind of economic blackmail. In August, coincidentally close to when the poison goods stories kicked into high gear, a number of Chinese officials began hinting they they would do exactly that if negotiations didn’t go their way. As early as 2002, China was also the second largest holder of U.S. bonds, which likewise frightened people, although some called China a scapegoat (Communism was just a Red herring).

This year saw another new development as well. Long content to let others come to it, China began seriously reaching out into the world. They recently bought a large chunk of Morgan Stanley, have a large and growing influence in Africa, and will be hosting the Olympic Games in less than a year. A few months ago, an author being interviewed on NPR (I can’t remember who, sorry) made the observation that, when you look at most of written history, the economic dominance of China has been the “natural state of the world”, with recent centuries being the fluke.

In October, both Japan and China started selling U.S. bonds for the first time. This is troubling because it can have cascading effects, since, in economics, perception of reality often causes a belief in that reality, which can easily cause that reality to occur. Laurence Kotlikoff, in his book The Coming Generational Storm, warns that the logical conclusion of present US economic policy is an inevitable collapse which, most likely, will be forced on us by just such an event, where the collective market suddenly stops believing in U.S. creditworthiness.

So, many punches come at America, but few were going the other direction, at least until the “China is trying to kill us” furor began. As a weapon, I’m not sure how effective it is, though. There have been some costly recalls, but these tend to hurt American companies as well (just ask Mattel). Other than an object lesson to companies to (unrealisticly) seek other partners, that doesn’t seem to do much good. As propaganda designed to rouse “don’t buy China” sentiment, catered to mess with Christmas sales as much as possible, it succeeds a bit better, but to what end? As a negotiation ploy? If that’s the plan, it doesn’t seem to be working.

Talks with China recently failed to accomplish much. According to that story, chief negotiator Henry Paulson thinks that:

The biggest issue we have with China right now is economic nationalism, the problem of its domestic industries welcoming competition. In China, what you find is that you’ve got an increasingly powerful domestic industry that is a strong lobby.

Trying to penetrate the Chinese market is an extremely old tale. So far, there seems to be little the U.S. can do to accomplish it. Here’s hoping we’re actually trying.

Update: not surprising.