Archive for the ‘Uploads / Downloads’ Category

Latest thoughts on the Chinese economy / the ‘new normal’

December 16, 2014

China held its Central Economic Work Conference last week, chaired by president Xi Jinping, so here are a few thoughts on the current state of the Chinese economy and a few links to an article I have written, and talks I have given, recently about the Chinese economy.

First up, the slogan du jour is definitely ‘new normal’ (???). Xi Jinping has been using this for about six months, but now he is really using it. Xinhua’s short, official report on the conference has ‘new normal’ in the headline and ‘new normal’ six times in the text. See here for the English version.

What does it mean? It means that local politicians, state firms, and everybody else should dial back their expectations about credit and growth. The increase in both is slowing and that is the way it is going to be as China undertakes a deleveraging process in the banking and corporate sectors. There is not going to be the kind of collapse in growth that many have predicted. The government has plenty of room to fine tune the slow-down, Chinese exports remain competitive, and the global economic environment, while not great, is not a disaster from the perspective of China’s needs. Look out for reported GDP growth in 2015 between 6-7 percent.

Against this background reforms will continue to increase the extent to which the market prices credit in China’s economy. There has already been a big shift in favour of lending to the private sector since the global financial crisis (see my review of Nicholas Lardy’s new book, below), and this is one aspect of an ongoing financial liberalisation process. To my mind, this explains the recent strong performance of the Chinese stock market much better than claims it is down to an interest rate cut (which wasn’t really a cut at all given falling inflation). Previous run-ups in the Chinese market have coincided with periods of financial sector deregulation. The difference this time I suspect is that the bull market will last longer.

All in all the outlook is a not unattractive one: slower growth, better credit rationing hence higher quality growth, and a rising share for consumption in the economy at the expense of slowing investment. The main risk — as was the case during Zhu Rongji’s long period of ‘structural adjustment’ in the 1990s — is that the central government listens to local politicians who say they cannot maintain ‘social stability’ without more credit and growth. Zhu didn’t listen to such imprecations, and we have to hope Xi won’t either. As the slogan says, China needs and is getting a new normal. Otherwise the books really cannot be balanced and financial system risk will become unmanageable.

Later re. the new normal: Damian Ma has written an excellent piece for the new issue of Foreign Policy around the theme of the ‘new normal’. Well worth a read, with a lot more detail than I can offer here.



Below is a link to download the review of Nick Lardy’s latest book, Markets Over Mao, that I wrote for the latest China Economic Quarterly. The book makes an important contribution to the optimists’ case that China will overcome its current slough of non-performing loans in the banking system.

2014 CEQ Q4 final Markets Over Mao review


This next link is to a download of a synopsis of a talk I gave at the Madariaga College of Europe in Brussels (an EU think-tank) a couple of weeks ago. It is about how China’s development model is similar and dissimilar to those of Japan, Korea and Taiwan. The theme will be familiar to anyone who has read How Asia Works, but there are some additional, up-to-date thoughts about China as well as responses to questions raised by the Brussels nomenklatura. The precise topic I was asked to speak on is ‘What can east Asian countries learn from China’s economic policies?’

2014-Dec-01 – Madariaga – CN lessons to East Asia_final


The Youtube video below is a speech I gave at the National University of Singapore in October (blog entry about that trip here) on the subject of ‘When will governance matter to China’s growth?’ (governance here meaning institutions like a free and fair and prompt judiciary). Roger Cohen of the New York Times speaks first about the role of the US in east Asia. Then I speak at roughly the 25-minute mark. Then there is a joint Q&A.



And here is another Youtube video where I spoke separately about How Asia Works at the National University of Singapore. There is quite a long Q&A in which lots of questions about development from a more Singaporean perspective are addressed.



On the road

June 17, 2013

The longest trip I ever made away from the family. Three-and-a-half weeks including Astana.

From there I arrived in Beijing. Domingo Cavallo sitting in the seat next door except I didn’t recognise him. We shared a cab into town and had a nice chat.

Various talks in Beijing, but also desperately trying not to stop to smell the rose(s) and get on with my research. The revelation of this trip was Line 6, newly opened, of the Beijing Underground. What a line. It connects, on a straight, east-west route, the greedy gweilos of Chaoyang district and the paranoid, pipe-hitting, nationalistic politicians and bureaucrats in the Beihai North and Chegongzhuang areas. Plus it ends up in IT-land Haidian. It’s the golden line of money and power, with the fastest trains to match. Well built.

Beijing subway

Tianjin was easy on the 300kmh train. Back in the day I was pulled over on the expressway doing 160kmh. You are the fastest today, said the policeman. ??, I replied. He popped the fine in a briefcase, heaving with cash. Still took 2 hours door to door. The train is 30 mins. Then an interesting factory manager. Minimum wage in Tianjin this year is Rmb1,800. Ouch.

Then 5 hours on the high-speed to Shanghai. I never liked the place, but this time, for the first time, they charmed me. The urban planning is just better than Beijing. The people are calmer, less bullshitty than they were. Beautiful dinner with friends. Small dogs. I am still obsessed with where all the dog shit goes. They say no owner cleans up after the pooches. It’s the waidi ren, the peasant slave labour, that just picks up the shit early in the morning while Shanghai is dozing.

No high-speed to Guangdong yet, so took the sleeper. Beers in the dining carriage with a businessman who told a story you just could not make up. It’s like they just want to write the next book for you, take the weight… We trade numbers. A Burmese-Chinese returnee who can’t speak Chinese and a Shanghainese too.

In Guangdong I have to go to Zhongshan, near Zhuhai, to see a rather smart company. Seems to me a lovely place, not visited in 15 years. Taxi driver says street crime is on the rise. But I think the people are great, open, smiling at the gweilo.

Then across the border for a weekend on Coloane, at Pousada de Coloane. Sunday lunch at Fernando’s, my favourite anywhere. You never could book. However they have introduced a piece of paper on which you write your name after 12.30, when restaurant already full, and they use this to determine who at the bar is next. Even Portugal is making progress. I lament the changed shape of the Vinho Verde bottle.

Hong Kong is a whirr of money pigs and talks. In the midst I am drinking ??in the FCC when a svelte young colonial strides in. It is Hemlock. I hardly know him. Convex chest, unhunched shoulders, a smile… He tells me, apologetically, that he has ‘a girlfriend, almost half my age…’ Wonders will never frickin’ cease. Of course he still shoves a plate of noodles in his face at 11am. But Thus Spake Zarathustra just came to a movie theatre near you.

All in all, a lovely trip. Problem is that in the whole month only Bowring tries to really nail me, with a question at the FCC. God bless. It is one of the points that Charlie Munger lists in his guide to gentle informational murder. They just don’t challenge you. And yet without the struggle, we cannot progress.

Finally, I get home. And the wife tells me to stop swearing so much. Gravity, at last.


Some media stuff:

Pilling on Indian IT after a chat

Marginal Revolution likes the book. And is probably right that neither beach reader nor academic reader will be happy.

Tom Holland on the book.

Jake Van der Kamp responds to Tom Holland in the SCMP, except without reading the book. This is staggeringly lazy. File under Howard Davies. And I have often quite liked Van der Kamp’s stuff. But this thin, indolent drivel is a pretty good guide to why so many millions remain poor. How can anyone serious pass judgement on something they have not read? It is a book about stages, that takes in your view, Mr Van der Kamp, and the other one. Separately, and somewhat pedantically, ‘fulsome’ does not mean ‘full of’. It means ‘insincere’.

And now Holland responds. His main point is valid. I said at the beginning (and end) of How Asia Works that this is a book about economic development. Real development is also about social and political development. But I was not willing or capable to try to put the other parts of the equation in the same book. It would be too complex. And people would not absorb the basic message about economics. The next book will deal with the institutional stuff.

RTHK on the book. I had to download a plug-in to run this, but assume the average reader is more tech savvy than I. Trick is to do all this and then hit the play button to start the show. But first go to ‘Select segr’ and choose the 11.05 slot. With Phil Whelan. That is where the interview is. Very clunky stuff. But listenable if you get there. ACTUALLY… just did this again a slightly different way. Went here. Then just scrolled down the page and hit the button next to ‘Joe Studwell — How Asia Works’. Took a couple of secs to load up, but then fine.

Podcast interview by the Economist Intelligence Unit in Hong Kong. It was the end of the day. I am more tired than at RTHK, but still a decent chat.

Amcham in Beijing. The podcast should be here.

More to come when I remember what it was.

Spare Ball

May 26, 2013

Astana1 Astana2 Astana3 Astana4 Astana5 Astana6

An interesting couple of days in Astana in Kazakhstan at what I initially dubbed ‘Davos in the desert’.

Except that the steppe around Astana is surprisingly fertile, and the new capital that has been constructed there sits on a large river. They spent a lot of money.

I wasn’t sure about coming. A ‘World Anti-Crisis Conference’ run by a low-population petro-state with a developing onshore financial centre structure didn’t seem the obvious place to address the world’s problems.

Kazakhstan’s global image is largely defined by the Borat movie, Prince Andrew selling his home to a Kazakh politician for what was reported to be a lot more than the asking price (he is also patron of the British-Kazakh society), the loucheness of Astana’s nightclubs, and the generally hedonistic behaviour that goes on.

In the end it took a fee to get me there, although less than I get from multinationals, brokerages and industry associations (so that’s ok, then). I don’t know what the assorted economics Nobel laureates and politicians were being paid, but I had a pretty good turnout for a talk organised by UNCTAD on the theme of ’50 years of development: what have we learned?’ This next link should connect you to my official statement to the conference based on what I said.

Joe Studwell Astana Statement final

I thrust copies of the statement into the hands of Romano Prodi, Dominique Strauss-Kahn, the Saudi development minister, the Chinese Under-Secretary General of the UN, Domingo Cavallo and Edward Prescott. Well, what’s the point in going, otherwise? Mr Prescott, I am afraid, moved swiftly into poll position as the single most historically illiterate Nobel laureate in economics I have met. Note that the sample size is only 4. In his remarks about Japan’s 20-year economic hiatus, Prescott ‘explained’ that Japan developed through policies of free trade and then, from the early 1990s, ‘started to subsidise everything’ (my italics). I kid you not.

Finally, a bit of cultural fun. Standing in line at an event at this conference, someone started telling me about the very popular Kazakh game of kokpar. It is a kind of polo, played with a dead goat as the ball. This guy claimed the animal is decapitated before play commences although I didn’t have time to check. Two teams wrestle this dead goat, drop it, lean out of the saddle to pick it up, ram each other’s horses and so on, all in an effort to dunk the goat into a pile of tyres at either end of the field that is the goal. But what really took me is that sometimes the goat carcass gets eviscerated or otherwise damaged beyond a limit acceptable for play. The teams therefore have a spare ball, in the form of a live goat shackled at the side of the pitch. That must be one very unhappy spectator.


Apparently I am among the world’s greatest minds.

The trip to the Kazakh embassy in London made me think about where comedians get their ideas from. I went to the Kazakh embassy in South Kensington, but unfortunately they had moved it to Pall Mall. They just forgot to change the web site. That was half a day gone, so I didn’t feel so bad about the fee. (I see that now, 26 May, they have changed the site.)

Filling out the form, I read that:

‘Wrong filling of application form can become a cause of refuse in issue of entry visa.’

Thank gog my submission accurate was.

Still, the thing was a lot more worthwhile than I expected and if it keeps getting better it could even be important.

Data behind How Asia Works / Getting signed copies in restricted markets

April 24, 2013

Here are two pages that exist on the site under separate menu buttons. I am replicating them on this site as a posting and filing it under Uploads / Downloads

One page provides a Paypal link for people who want to obtain the first chunk of data behind How Asia Works.

The second page is for anyone attending one of my talks in China or another country that makes it hard to import books who wants to be sure of obtaining a signed copy.

Any event I speak at which is open to the public will continue to be listed on the Events calendar in the right-hand bar.



Get the data behind How Asia Works

During the research for How Asia Works I accumulated large amounts of data to support the arguments I make. The first batch of data, concerning agriculture, have been put together (by an impecunious graduate student) into Excel and Numbers spreadsheets and around 30 useful charts and graphs.If you would like these data, you are invited to support the continued organisation of the rest of the data by paying a minimum of British Pounds6 (more if you are able and think my research worthwhile) via the link below. The money will only be used to pay poor graduate students.

Click on the tiger’s head to pay via a Paypal account or a credit or debit card. If you are generously paying more than Pounds6, please use multiples of 6 to avoid confusion with payments for signed books.

You will then be sent the files. Please do not undermine our work by giving the files to other people. Many thanks.

How Asia Works tigers head

Pay for a signed copy before an event

When I speak at events, copies of How Asia Works are usually available for purchase at the event and I will sign them.

It is difficult, however, to get books to some events, particularly in China. If you want to be certain of receiving a signed book at an event in China — or in any other state that heavily restricts freedom of information — you can pay British Pounds15 via Paypal and one way or another we will get you the book.

Click on the tiger’s head to pay via a Paypal account or a credit or debit card. Pay multiples of Pounds15 depending on how many books you want (don’t worry that the quantity button is fixed at 1). In the course of paying, you will see a link labelled ‘Add special instructions to the seller’. Use this to indicate which event you will be attending.

You need to pay at least one week before an event to be sure of getting a book. Any problems, use the Comments function to send me a message (it will not be posted; I have to hit a button for that to happen).

How Asia Works tigers head

When Britain was like Italy

April 21, 2013

A day in London allows for a few minutes talking about How Asia Works on CNBC here, and a longer discussion on the UK’s Monocle Radio ‘Globalist’ programme, (beginning at the 16 minute mark).

In between I decide to spend a couple of hours wandering the corridors of the Royal Courts of Justice, as the large building that contains the High Court of Justice and the Court of Appeal on The Strand is confusingly called. The place is of interest to anyone who wants to understand the need to constantly reform institutions. In particular, Italians should visit this building. It was constructed in the late 19th century to stop the British justice system being what Italy’s is today.

Law Royal Courts panorama

Before anyone enters, the essential book to read is Charles Dickens’ Bleak House, probably his greatest, which centres on a legal case that has multiplied and gone on for so long that no one can really remember exactly what the case is about, or quite why it started. People just attend hearings because the case(s) has(ve) taken on life(ves) of its(their) own. All that is clearly remembered is that the whole, huge, expensive, draining, painful affair concerns the Jarndyce family, which is enshrined in the case name, Jarndyce v Jarndyce. The different sides of the Jarndyce family just do what the lawyers tell them, and the case does not end until it has consumed all the family’s money, and caused the death of a sympathetic character, because the system makes it possible for cases never to end.

Things were so bad in the British legal system by the 1860s — students of development should note that this had not stopped the British economy growing and becoming the world’s most powerful — that there was eventually a cross-party consensus that radical reform was necessary. A royal commission (essentially an independent review) was set up to consolidate a morass of different legal institutions under one roof, streamline procedures and simplify judicial processes so that the system worked. The Royal Courts of Justice, which opened with their 18 (now 88) courts in 1882, shunted Britain on from the world of Bleak House. Opening the court, Queen Victoria’s speech stated the aim was to ‘conduce to the more speedy and efficient administration of justice’.

Almost always, you can just wander in to a court here and sit down and listen to what is going on. I spent half an hour observing the goings on in each of two randomly selected courtrooms. In Italy, I haven’t seen courtrooms beyond the provincial level (except on television). But some very loose points of comparison can be offered. Here in London there is no chatting during court proceedings, no playing around with mobile phones, no lawyers saying hello to their friends and colleagues in court while ignoring their clients, no male lawyers dedicating their working day to trying to flirt with any woman in sight. And everything is taped. When I once asked to tape record proceedings in an Italian court the judge grudgingly acceded, but with a look that suggested I was proposing a coup d’etat.

Unlike Italian courts, the Royal Courts give a sense of being places where stuff gets done. This is not to say that there isn’t plenty wrong with the justice system in the UK. However, compared with Italy, this is the modern world. The Royal Courts are a living museum of institutional development that is well worth a visit. For the kids, there is a room displaying all the silly outfits that judges and lawyers have worn over the years — and thankfully wear less of these days. The grown-up exhibit is the institutional progress captured in quite a beautiful building with its varied, interesting and business-like courtrooms.

Could Italy have the same thing in the foreseeable future? One way to consider this is to remember that the leaders who made the British reforms of the 1870s possible were Gladstone and Disraeli, working in concert. Would you consider that any of the putative ‘reformers’ of contemporary Italian politics — Monti,Berlusconi, Bersani, or Grillo — is in their league?


Imagine this in Italy: Edwin Wilkins Field, one of the key reformers and the Secretary to the royal commission of 1865 on the Royal Courts of Justice, declined remuneration!

Evolution continues: didn’t have time to go see it, but the latest addition to the Royal Courts is the Rolls Building, opened in 2011.

Oh, the land…

April 15, 2013

Here is a link to a piece I wrote recently for the China Economic Quarterly about the agricultural underpinnings of development. It is something of a taster for a key theme of How Asia Works.

CEQ Q1 2013 Land Policy

Fade away and radiate

February 21, 2010

To San Martino di Castrozza for what northern Italians call una settimana bianca or ‘a white week’. In fact, this is the white week, the week of carnevale when northern Italian schools shut for a ski break and everyone grabs the three official days of public holiday and adds to them the inevitable ponte of two more days which takes them to the weekend, allowing for nine consecutive workless days. At the lift where ski school meets, we overhear a woman asking her friend if her husband is working this week. The response is as if the dumbest question in the history of the world has been asked: ‘But of course not, this is white week.’ Even if Italy sinks back into the Third World, its holiday arrangements will remain forever sacrosanct.

I have to leave white week early to give a talk in Florida. But this isn’t so bad because I already had three Sundays skiing at our local Umbrian mini-mountain, Monte Nerone. Despite living 45 minutes away for eight years, this is the first year we have been. There is just a single button lift, but it is quite long and gives access to two good pistes of about 800 metres. Better still, the place is run by very nice people. My son was initially undone by a pair of skis from the sales that are almost twice as long as the ones he used the year before. I could do little to help him because, as part of my ongoing mid-life crisis, I started using a snowboard when I hit 40. So one of the young lift operators put on his skis and spent two hours teaching Luca. Not the kind of thing that happens in your average ski resort. And, after all that, there is a decent enough rifugio at the bottom of the pistes which serves pasta at Euro7 a plate. Given that there is a web camera overlooking the bottom of the pistes which allows you to see exactly how much snow there is in real time, and given that you can wake up and arrive after a fresh snowfall to find there are only 10 other skiers at 10am, it is a pretty good deal. Adults pay Euro18 per day, children Euro10; the lift is only open on weekends when there is sufficient, natural snow. Amazingly enough, the place has been operating since 1969.

Florida is not quite like Umbria. I arrive via New York, which is very deep in snow and very white and beautiful from the air. Florida is unseasonably cold too. Landing in America there is the usual double-take at the number of very fat people. And then arriving in Orlando, there is the supplemental double-take at the number of old people and the number of trousers with elasticated waistbands. Ten minutes in Orlando and you begin to think that Italians have found the Holy Grail itself with their determination to maintain an attractive outward appearance. I take a cab to the 750-rooom hotel with its obligatory man-made lakes, two golf courses, jogging trails and written warnings not to ‘jog alone’. Reckless as ever, I complete a run on my own and live to tell the tale.

The talk I have to give is to a group of people who definitely do not originate in Florida – steel producers and traders, the kind of Americans who still smoke and drink large quantities of beer. They want to hear about China and are friendly. Given that I have to address them at 8am and they were out drinking the night before, I write up a short note about the four points I told them to bear in mind when thinking about China in the next few years.

That done, I am looking for something to occupy me on a Saturday night in Orlando when I notice a poster of an aging blond woman who looks strangely familiar. The haggard, too-much-Prozac look makes me think of a kindly Delta Airlines stewardess who served me coffee on the flight in. But no. On close inspection I realise that what I am looking at is the current incarnation of Debbie Harry, lead singer of the eponymous band Blondie. A quick web search reveals that she was born in Florida, before being adopted by shopkeepers in New Jersey. As if this isn’t compulsion enough, while I am on my rebellious lone jog, my i-pod randomly shuffles Union City Blues to the top of the playlist – a song I have not heard for a long time. It is obvious that I am destined to attend a Blondie concert at the Universal Studios theme park in Orlando. Will it be better than the theme park gig in This is Spinal Tap, where the rockers open for a puppet show?

We must support the aged. I take back what I said about Ms Harry’s appearance on realising that she – singer of one of the first singles I ever bought, aged about 10 – is now 65 years old. We must respect the aged because it will not be long before we dwell among their number.

On which subject, it is worth mentioning that a major golden oldie, one who has been to crack hell and back, has just brought out an album that may be rather good. After many disappointing later-life recordings, Gil Scott Heron has released an album with a slick, modern sound that may be what the poet-singer has been looking for for so long. I saw him in London, years ago, in the midst of quest for something new and good and he was rubbish. But in this album there reside flashes of the tortured genius of his youth. You can have a listen here.

And so what of Debbie Harry and crew in concert in a theme park? Well, let’s just say I may have seen the future and it ain’t entirely pretty. Debbie darling, if you are reading: you cannot wear a bondage girdle and have a tea mug on stage. There has to be a choice.



Oh, when we were young.

Upload: final three FEER articles

January 20, 2010

There have been various requests for me to upload some journalism and book-related work, so here is a (small) start. The following links connect to the last three articles I wrote for the Far Eastern Economic Review. We know they are the last articles, because in December the Wall Street Journal (now controlled by Rupert Murdoch), the owner of the FEER, closed that venerable magazine down. I was fortunate to be asked to contribute to the final issue, and wrote a piece contextualising China’s development in terms of what we have seen, historically, elsewhere in east Asia.  From the autumn of 2009 there is a piece about how China developed its iron and steel industry, again with lots of developing country perspective, which also explains why iron ore producers in Australia, Brazil, India and elswhere are making so much money out of China. Finally, in true Chinese spirit, there is a self-criticism of my 2002 book The China Dream, written in late 2008.