Chinese workers deserve better

Recent worker unrest in China is a sign of time. The Chinese manufacturing industry has been exploiting cheap labor for decades. Given that there are billions of people in China and millions of them are still in poverty, a shortage of cheap labor was never a big concern to investors and business owners. Now the unlikely problem becomes a reality. If the situation doesn't change soon, today's worker unrest could lead to a greater social and political problem.

I don't believe all manufacturing companies in China are treating their workers like robots or slaves. But, there is no doubt that the benefits they are receiving are far less generous than what the companies could have provided.

A key problem in China is income unbalance. Factory workers often made significant less money than the skilled office workers in cities like Shanghai and Beijing. As the Chinese economy grows rapidly, people's desire for a better quality of life increases. It's understandable that the low-income workers, often come from rural areas, are upset when their purchasing power grows at a significantly slower rate than the wealthier city people.

I'm a believer of capitalism. While businesses are about profits and growth, but they mustn't forget to take care of their employees. Chinese manufacturing companies should take the news about Honda worker strikes and overworked Foxconn employees as an opportunity to re-evaluate their worker treatments. Better working conditions and benefits means happier workers. Happy workers often means an increase of productivity.

US the lifestyle superpower

Immigration is a hot topic in the US. Some people argue that immigrants will take jobs away from the locals and bring in new cultures that destroy the core American values. On the other hand, some people argue that the US is built by immigrants and welcoming new immigrants is in the core of the US culture.

Don't matter which side you stand. The truth is that people love coming to the US. They like living here not because the country automatically brings them wealth, but because living here each person can be who they want to be. The US is a big country. There are 50 states with 50 different sets of laws. It has a wide variations of climates and seasonal weathers. And most importantly, almost every person can find their own niche of lifestyles.

No matter where an immigrant hails from, he can find a cluster of his ethnic kin somewhere in America. In fact, he is probably spoilt for choice. If he wants to live in a suburb, eat Korean food and listen to fire-and-brimstone sermons in Korean, he can do so in northern Virginia. If he prefers an urban and secular Korean lifestyle, he can try Boston or San Francisco. If he craves Ethiopian food, Amharic radio and lots of gay clubs, Washington, DC, may suit him.

You can find welcoming clusters of ethnic minorities in other rich countries, but not nearly as many. In a European country, if you want Korean food and a particular denomination of Korean church, you might find it in the capital but you will struggle in the suburbs. In America, it is easier to find just the niche you want: Polish or Vietnamese, metropolitan or exurban, gay or straight, Episcopalian or Muslim, or any combination of the above.

You have a choice of weather and landscape, from snowy Alaska to baking Texas, from the mountains of Colorado to the forests of Maine. Northern Virginia, where Mr Lee lives, has the same climate as his homeland: winter is freezing, summer is muggy, autumn is delightful and spring brings cascades of cherry blossoms.

Check out A Ponzi scheme that works on The Economist, and see if you agree.

China secures oil supply from Brazil

As the credit market dries up, oil companies that need urgent investments are going to China for cash. Brazilian oil company Petroleo Brasileiro SA announced that it has secured a $10 billion loan from China in return for a long-term supply of oil.

This is not the only oil-for-loan deal that China made with oil-rich countries. Similar arrangements have been made with Kazakhstan and Russian oil and pipeline companies.

The good news is that the investments from the Chinese government in oil companies can help oil companies to continue infrastructure investments. This is important because when the global economy recovers, new supplies will be needed to meet a new wave of energy demands. However, if China is the only major investor in the field, it may reduce the market competitiveness.

China, Oil, Current Affairs

The Economist on world economy

In this issue of The Economist, it paints a rather cautious outlook of the world economy. Recent economic data shows signs of the world economy could be in a recovery. But, that could be an illusion, the article warns.

Among many tricky issues, reading economic data is always difficult. Even if the economy is on its way to a recovery, the path is going to long and painful. During this recovery period, we will likely to see multiple up-and-downs in the market.

History doesn't repeat itself, but it does rhyme.

... between 1929 and 1932, the Dow Jones Industrial Average soared by more than 20% four times, only to fall back below its previous lows. Today’s crisis has seen five separate rallies in which share prices rose more than 10% only to subside again.

Why is it important for us to be cautious?

"... optimism contains two traps, one obvious, the other more subtle. The obvious trap is that confidence proves misplaced—that the glimmers of hope are misinterpreted as the beginnings of a strong recovery when all they really show is that the rate of decline is slowing. The subtler trap, particularly for politicians, is that confidence and better news create ruinous complacency".

I think the article is a good read. It gives a good overview of the current world economic conditions and intricate relationships between the government financial polices and macro- and micro-economics.

While the economy looks grim, but I have hope. The world's economy will eventually bounce back. In between now and then, there are many good investment opportunities. Individual investors need to be patient and cautious. The Economist article is a friendly warning that "those who try to time the market is a fool".

World Economy, Business

The Economist predicts China in 2009

The Economist predicts 2009 will be a challenging year for China, especially for the Community Party. As the world countries face a major economic downturn, the article argues that a slow growing economy will eventually lead to an unstable society and a troubled government in China.

I think there is some truth to the analysis.

Of all the huge uncertainties that plague attempts to predict the progress of the global financial crisis, two in particular hang over China.

One is the resilience of its political structure to stress of this kind. During the last several years of economic health, it has been hard to imagine anything that could dislodge the party. [...] The head of the IMF, Dominique Strauss-Kahn, has predicted GDP growth could fall to as low as 5-6% next year, half the rate of 2007 and far lower than anyone would have thought possible just a few months ago.

The other big uncertainty is how Chinese consumers will respond to the crisis. [...] Keeping the middle class happy and willing to spend is as vital now in China as it is in any economy. But given China’s rudimentary social-security system and strong tendency to save even at the best of times, this could be particularly difficult.

Certainly the Communist Party is going to face difficult time ahead in 2009 -- an unbalanced wealth distribution between the poor and the rich, a poor social-security and welfare system, and an overly restricted public and internet media. But, I'm rather optimistic about the future. Why? I believe the Communist Party is doing a relatively good job in making changes and adopting itself to changes in a time of great uncertainty.

We should not measure the success of a government by GDP or how much goods its people can consume, but rather, by the pace of progress of a government can bring about. As long as the Chinese government is committed to changes and is able to show progress, I think it can weather through any storms that is ahead in 2009.

Russia is not evil, the US is not angel

Besides the Beijing Olympics, the most talked about international news in the past week is Russia's invasion of Georgia. The story behind this event is rather complex. In the mainstream news media, the story is told as the follows. After the collapse of the Soviet Union, Georgia became an independent democratic state . Unfortunately, not everyone who live in that country are loyal to the new government. Some people in that country were loyal to the Russian government, and they lived in the area of South Ossetia. Recently, the Georgian government sent in military troops to crack down these Russian loyalists. The outcome of this event angered Russia. Military tanks and troops were sent in from Russia to protect Russian interests and revenge the Georgian attacks in South Ossetia.

There is another side of the story -- a fight for oil and gas control. Today, oil and natural gas demands in the Western European countries are supplied by Russia. In addition its national wealth of natural resources, Russia also controls most of the transportation pipelines. As the price of natural resources went sky high in the past few years, Russia gradually recovered its regional and international political power. The West doesn't like this a bit. Since the Clinton administration, the US has spent a significant amount of resources to open new corridors for oil and gas supply lines to bypass Russia -- building pipelines from the Caspian Sea to NATO ally Turkey. Supporting the Georgian government is part of this effort. Before the recent Russia's invasion, Georgia was seen as a stable country for natural resource transportation.

Now, let's fuse the above facts together to see a better picture of the region's political struggle. First, the Western countries want to reduce Russia's political power. By allying countries like Georgia, the West is able to inject its influence into that region. Bypassing Russia controlled pipelines effectively reduces Russia's economic growth and political influence on the Western Europe. Second, as the economy of Russia improves, because of high oil and gas prices, it is able to strengthen its military and boost it's influence in the neighboring countries. Russia's recent aggressive actions toward Georgia is not without justification. It did so to protect its country's interest. Third, it's difficult to say that the US helping Georgia is simply for the idea of democracy and freedom. It's obvious that helping Georgia to be independent from Russia can reduce the West's dependence on Russia's oil and gas and effectively reduces Russia's political influence.

Really, Russia is not necessary evil, and the US is not necessary angel.

Read about these issues in the Economist, Busisnessweek and NYTimes:

• A roadblock to Russian oil and gas


• The dangers of the safe route


• Russia resurgent


• Russian Forces Detain Georgian Soldiers at Port

Depressing economy, but don't panic

It's really hard to find good news about the US economy. Everything seem to be falling apart: the real estate market is in trouble, banks are closing their doors and the stock market is a bear mode. I woke up this morning and asked myself, but what can I do today to protect my financial future?

First, don't panic. Don't let negative media news cloud your judgment. Don't sell your investments just because the market is in a bear mode. Don't sell your house just because its price is falling every week. Second, assess your family's financial situation. Know how much debt your family is carrying. Known how much asset your family has. Once you understand all these, evaluate your family's financial goals -- saving for retirement, children college education or a new house down payment. Third, develop plans to achieve your financial goals. Your plans must be independent from the current market condition. They should work in both good and bad market condition.

Let me argue why people should not panic. The ups and downs of the world economy are cyclical. Unless we expect the world comes to its end soon, there is no reason to believe that the economy will continue to go down and collapse completely. If you are lucky enough to live for a good number of years, you will experience many more ups and downs of the economy.

We shouldn't ask the question whether or not the current conditions will improve. We know for a high degree of certainty that it will improve. The question we don't know for sure if when. It's difficult to time the market.



Since no one has a crystal ball that can tell the future, we must rely on our understanding of the history. Because we expect the market to come back sometime in the future, while everything is cheap, it's a good time to invest.

World CO2 levels at record high

According to the data published by the US National Oceanic and Atomspheric Administration (NOAA), the concentration of carbon dioxide in the atmosphere has reached a record high.

Scientists at the Mauna Loa observatory in Hawaii say that CO2 levels in the atmosphere now stand at 387 parts per million (ppm), up almost 40% since the industrial revolution and the highest for at least the last 650,000 years.

The worst part of the news, though is expected, is that the situation is worse than scientists have previously predicated. The Earth is losing its natural ability to soak up CO2 each year.

Climate models assume that about half our future emissions will be re-absorbed by forests and oceans, but the new figures confirm this may be too optimistic. If more of our carbon pollution stays in the atmosphere, it means emissions will have to be cut by more than currently projected to prevent dangerous levels of global warming.

Source: World CO2 levels at record high, scientists warn, guardian.co.uk

China to be the second-highest in R&D investment

A key to maintain a country's competitiveness is to invest heavily in research and development. The U.S. is a good example. Scientific advances and entrepreneurship have helped this country to be a dominant force in the global market.

According to OECD (Organisation for Economic Co-operation and Development), by the end of 2006, China will become the second-highest investor in R&D.

The burgeoning economic powerhouse has rapidly increased the money and manpower being invested in R & D, and spending by government and businesses will reach more than $136 billion in 2006, the OECD said Monday.

For comparison, Japan, formerly the nation with the second-highest investment in research and development, will dole out $130 billion this year, and the EU nations (including France, Germany and the U.K.) together will allocate $230 billion.

An interesting fact is that the growth rate of China's R&D surpasses the growth rate of the country's GPD.

Its R&D went from 0.6 percent of its GDP (gross domestic product) in 1995 to more than 1.2 percent in 2004. That doubling growth rate is faster than the rate of growth for China's entire economy.

Source: China rising rapid in R&D, report says, CNET.com

China strengthens its tight with the Middle East

Not too long ago, the world is buzzing about the strengthen tight between China and African countries. Now everyone is focused on a different relationship, the strengthen financial tight between China and the Middle East.

According to The New York Times, instead of seeking foreign investments from the Western countries, Chinese have been seeking more investments from Saudis and other Middle Eastern investors. At the same time, investors from those countries are shifting their money into the Chinese red-hot IPO market.

Absentee ballot sent with precious stamp

A rare US stamp, estimated to be worth $500,000, was mailed with a Florida absentee ballot during the U.S. 2006 mid-term election. The stamp is a 1918 Inverted Jenny stamp, which depicts a biplane that was accidentally printed upside-down. Only 100 of those rare stamps have ever been found. Last year a block of four Inverted Jenny stamps sold for almost $3 million.

No one knows who was the owner of the stamp because th ballot was sent without a returned address. According the news report, the stamp is now Florida government property, and the ballot was disqualified because of missing voter identity.

Source: Yahoo! News

U.S. troops face sniper attacks in Iraq

The truth behind the Iraq war may never be told, but the bravery and heroism of the U.S. troops must be told. For the New York Times, reporter C.J. Chivers and photographer Joao Silva compiled two excellent presentations that tell stories about the 2nd Battalion, 8th Marines in Iraq -- a life-and-death situation in which they faced random sniper attacks.

After watching the presentations, I'm even more frustrated by the Iraq situation. Given everything we know today, it was mistake for the U.S. troops to be in Iraq. However, It was not the fault of the troops. They are the innocent ones who got caught in a complicated situation. I'm sadden to see troops fighting for their lives in Iraq for a cause that we don't really understand.

I don't claim myself knows the answer to the Iraq problem, but I do know that the current approach of the Bush administration is not working. Not only it's causing more pain to the Iraqi people, but also bringing about unnecessary casualties to the U.S. troops. We need options and we need change.

Source: Sniper Attacks Adding to Peril of U.S. Troops

The miscalculation of North Korea

On Oct. 9th, 2006, North Korea went with its first-ever nuclear test. North Korea hoped to use this test to threaten the US and other countries that want tougher foreign policies against the North Korea government. Given the current situation, I think North Korea has miscalculated the response from the global community.

• Rather than increasing North Korea's advantage, its test may united opposition. China and South Korea who were somewhat less aggressive than the Western countries are now very angry at North Korea's nuclear test.


• Countries (e.g., Australia) that previously didn't voice strong opinions about North Korea now advocate tougher UN sanctions.


• If no countries want to play soft with North Korea this time -- less international aids and tougher UN sanctions, who suffer the most is the poor North Korean people. This may eventually lead to instability within the country.

Source: North Korea blasts away hopes of engagement, Economist.com

North Korea is to make more nuclear weapons

North Korean officials told a US scholar that their country plans to unload nuclear fuel rods from one of its nuclear reactor by the year end, and the purpose is "to obtain more plutonium for nuclear weapons".

Selig Harrison, the US scholar who was in touch with the North Korean officials, said the new move by the North Korean government is aimed at urging the US to enter a bilateral talk with the country.

To the best of my knowledge, the current US administration continues to refuse a bilateral talk between the North Korean government and the US, and it wants a six-party talk.

While I think a six-party talk is a better option, which gives the US and another parties more bargaining power in trying to convince the North Korean government to give up its nuclear weapon program. However, I think this nuclear weapon issue is growing to become critical problem that will not only impact the security of the local regions but also the national security of the US.

Should the North Korea is allowed to produce more nuclear weapons, it may try to sell those weapons to terrorist countries and groups to support its country's troubled economy and social systems. If weapons were gotten into the hands of the underground groups, the US would have a much hard job to track and protect the country from what maybe terrorist attacks.

Regardless of whether the US plans to accept a bilateral talk or not, in general, I think the current US foreign policy is not working.

What we can learn from the 2005 US census data

The U.S. Census Bureau recently released the 2005 US census data. The median household income -- the point at which half of residents earn more and half earn less -- in the US rose sightly faster than inflation in 2005. However, more people are without health insurance -- 16% of the US population. Nationwide, one in every 10 people over 25 years old have completed either a master's or doctorate degree.

The news about more people not able to get adequate health care really bothers me. Health care is one of the most fundamental needs of a human being in a modern society. It kills me to think that it's a fact that Paris Hilton's dog gets more health care than some kids living in a poor neighborhood. Who's fault this is? If people can't receive health care because they are financially poor, the Government is the one to blame.

I'm quite surprised to see 1 out of 10 people in this country have completed an advanced degree. Not sure what are companies' expectation these days when hiring new employees. Do they all expect candidates to have at least a master's degree?
News Source: Independent Record

US Census Bureau Reports:

• Income, Poverty, and Health Insurance Coverage in the United States: 2005 [PDF]


• Income, Earnings, and Poverty Data From the 2005 American Community Survey [PDF]


• Current Industrial Reports, Advance Report for Fourth Quarter 2005, Manufacturers’ Utilization of Plant Capacity: 2005 [PDF]

The Bargaining Chips Given To North Korea

Since the last missile test, while all key countries (China, the US, Russia, Japan and Sourth Korea) want North Korea to stop its testing and end its nuclear program, but not all agree on what strategy should be used to deal with North Korea (Who Stands Where on N Korea, BBC).

Economic sanction was an idea brought up by the US and Japan. China, Russia and South Korea are somewhere disagree with this "hardball" approach. Why?

Howard County, Maryland Goes Smokefree

On June 5th, 2005, the Howard County Council voted to eliminate tobacco smoke in restaurants and bars, a measure that would make the county part of a five-jurisdiction smoke-free zone stretching from the White House almost to Baltimore.

As a resident of the Howard County, I'm very happy to hear about this.

POD: Green is the New Red, White and Blue

This Monday's On Point has an excellent piece on the surging crude oil price and its impact on the US economy and foreign policies. The show host had a talk with New York Time columnist Tom Friedman who has a strong belief about what the US government should do in order to combat the increasing US demand for oil.

1. Let the market do its thing. Friedman believes that a higher oil price will encourage the development of alternative energy sources and bring social awareness to energy conservation.


2. Don't solve a long-term problem with a short-term solution. There are talks about the US Government will give each taxpayer $100 this summer to help to combat the rising gas price. Friedman believes that this is the worst thing that the Government can do. Not only this short-term solution can't solve our long-term problem (addiction to foreign oil), but it encourages people to use more gas, driving up more demand for oil.


3. Green is the new Red, White and Blue. Friedman believes that the only way to drive down the gas price is to use less of it. It's time for more people to become aware of energy saving and drive gas efficient vehicles. If you love you country's color, begin to love the color green.

I very much agree with Friedman's point of view. Though in the show, some of his arguments maybe a bit too extreme, but all of which are worthy of some serious discussion. While I don't believe we can change things over night, but I do believe it's time for people be serious about energy conservation.

Resource: Crude Reality, On Point with Tom Ashbrook, May 01, 2006, Podcast by WBUR.ORG.

High Gas Price! Five Unconventional Saving Tips

Down the street, the cheapest gas at my local gas station is $3.07 per gallon. This is expensive comparing to $1.50 per gallon that I was paying few year backs. Given the ongoing geopolitical uncertainty in many oil production countries, I don't expect the price of gasoline is going to fall anytime soon.

Meanwhile, I ask myself what can I do to reduce my spending on gasoline? And, what can I do as a consumer to help to drive the down the high gas price?

On the Current Illegal Immigration Issue

I'm a supporter of public policies that encourage legal immigration and not illegal immigration. While I believe immigration is one of the best means to encourage culture exchanges, however, there is a key difference between legal immigration and illegal immigration.

One group enters a country while obeying the laws of the country, and the other group enters a country while breaking the laws of the country. Regardless of the original intent of an illegal immigrate, entering a country without the proper documents is something that I don't support.