Could Trade War Be A Blessing In Disguise For China?

What I’m about to write could be controversial for the time we’re living in now.  As we all know president Trump’s tariffs on China are the means to push China to negotiate a fairer trade — at least this is how the president promotes to the public.  So far China isn’t willing to be a pushover and so they decide to retaliate pound for pound.  This means whoever blinks first would lose a lot more in the long run, but in the end, both the United States and China would lose in short-term — well, at least this is how the news programs promote this.

I’m thinking that could tariff be a blessing in disguise for China?  How come?  China has been known as the factory for the world since they opened up their market and joined the World Trade Organization.  This means China can ramp up production of almost anything!  As Trump’s tariffs hit China, companies that want to avoid tariffs from the United States and still want to export to the United States would move their operations out of China.  Nonetheless, there are Chinese and foreign companies in China that produce the same stuff but have yet to export their products to the United States would find the vacuum suddenly is a lot more pleasant to navigate and do business.

The Chinese government could also be more lenient toward companies that decide to keep their operation within China, thus allowing these companies to prosper while China’s internal consumer market ought to grow bigger in time.  Remember Google?  Google left the Chinese market a long time ago but now Google has shown signs that it wants to grab a chunk of the Chinese’s huge consumer market.  Unfortunately, Google isn’t making much progress in this front and allowing similar Chinese homegrown companies to grow unchallenged within China.

Since Chinese companies that are going to stay in China could ramp up their production unchallenged as the trade war between the United States and China heats up, these companies ought to grow bigger in a more empty but lucrative Chinese consumer market.  Perhaps some European companies may want to open up their operations in China to give the Chinese companies some competitions.  Anyway, I think Chinese companies could grow unchallenged in their home market and mass produce even cheaper products to saturate the world market even more.  In the end, I think trade war could only harm a weaker foe who got no means to fight back and could not ramp up production.  In the case of China, I think trade war could be a blessing in disguise for the reasons I surmised thus far.

 

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Asia’s First, If Not The World’s First, Fully Automated Container Terminal In Port Of Qingdao, China

As of late, people all over the world are taking notice how China has become a leader in the port industry.  For an example, in 2016, August 10th, if I got the date right, Chinese shipping group, China Ocean Shipping Company (Cosco), completed the majority purchase of Greece’s Piraeus port.  Since then, Cosco has turned Piraeus into one of the leading ports in the world.  Just now, China is taking its port business into the next level by turning a terminal at Port of Qingdao into a fully automated container terminal.  This means no human involvement is needed on most of the port container activities at this terminal.  Well, you get a better idea if you watch the video right after the break.

As China is continuing to automate its industries, I wonder how will they cope with more unemployment.  On business level though, things will be a lot more efficient in productivities and costs, but at what costs to the traditional social values such as full employment?  Of course, certain traditional social values can always be updated or let go, but employment is one of the things that help put foods on the table for a modern fellow.  Without employment, one would go hungry pretty fast or whatever a bad case that would be.

With roughly 1.4 billion plus population, if I’m not off on the number, China would be in big trouble if so many people won’t be able to find jobs.  Automation will definitely create unemployment problem to be even more acute than ever before.  Right now though, opportunities seem to be abundant in China still, because even some foreigners are leaving their home countries to travel to China for job opportunities.  Nonetheless, once automation becomes evermore prevalent in China, I wonder how the opportunity picture in China would form.  I can see the applications of automation will make China be evermore competitive in many global industries.  In this case it would be all about the port/shipping industry.

China’s Banking Transformation: The Untold Story – How Chinese Banks Operate Under Chinese Government

If you’re listening to Gordon Chang, he could convince you China would collapse tomorrow.  Now, if you want to be convinced why China, at least in its banking industry, is doing rather well and sound, you should read Jim Stent’s book “China’s Banking Transformation: The Untold Story.”  To tell the truth, I haven’t read his book, but I have seen his YouTube video, and I think he sounds truthfully and on points in regarding to China’s current banking industry.  Without further ado, check out the video right after the break and enjoy!

Crocodile in the Yangtze – How Jack Ma Built Alibaba From Nothing

Real life stories about famous people like Steve Jobs are inspiring.  In China, Jack Ma’s real life story is too also inspiring.  Nobody knows what will the future hold for Jack Ma, but it’s already truly inspiring and amazing to see how Jack Ma has built his Alibaba company in his apartment to the size of Alibaba today which has tens of thousands of employees.  I got to know about Jack Ma’s amazing real life story thus far through Crocodile in the Yangtze documentary which was written and directed by Porter Erisman — a man who once worked for Jack Ma’s Alibaba company.  How Jack Ma from nothing built a company that went to war against Ebay, a truly super large company, in his own country, China, to bringing the competition to Ebay’s doorstep in America is definitely not something everyone can just wake up one day and say I can do that too.  So, check out how Jack Ma had done such an amazing feat through the video right after the break.  Enjoy!

Should Minimum Wage Be Raised Or Not?

For pure intellectual reason, I got interested in the debate of should we raise or not raise the minimum wage.  After watching Walter Block and Bill Quigley debate on minimum wage, my interest in this topic can only be enhanced.  The video of this debate is right after the break.

In my opinion, minimum wage is good when you apply it in good time.  The key is good time.  What is good time?  Good time is when the economy is doing good, low inflation on basic need prices (e.g., food, clothes, education, etc…), strong purchasing power at home and abroad (i.e., high living standard in term of strong currency value without the need of devaluing the currency for strong export market), and whatnot.  Minimum wage is effective in good time as it can apply some justice on punishing greedy corporations that just only want to maximize profitability rather than pay livable wage to their employees; punishing them to pay appropriate wage for their employees.  In good time, higher minimum wage encourages poor people to save less and spend more, but this is a redundant effort since good time doesn’t need the spending of the poor to elevate the economy.

In my opinion, minimum wage is bad when you apply it in bad time.  The key is bad time.  What is bad time?  Bad time is when high inflation prices into everything to raise the prices of foods, everyday needs, rents, housing, and whatnot.  Even high inflation in currency would be a bad thing too as it devalues the currency power (i.e., purchasing power), leading to a lower standard of living, comparing to a normal standard living of course.  As the weaker the currency the more you have to slave away for money to just get what you need.  An example would be high inflation of $1 would require $2 or $3 to buy one lollipop instead of $1 a lollipop.  You probably think I have digressed with the inflation talk, but I just want to emphasize that raising minimum wage in bad time can encourage the inflation to go on steroid.

Why raising minimum wage in bad time could supersize inflation?  Let’s assume that you are an employer of a small shop.  You cannot really afford to hire too many workers.  Thus, you want to make sure each worker you hire does have high productivity rate even though you may not be able to measure such a thing in real number.  Nonetheless, you want to have a feeling that a specific worker you hire is doing a good job for your business.  You know each worker would cost you a lot in term of wage if you have to pay the worker a higher minimum wage.  When a government mandates that you need to pay higher minimum wage, it makes the choice of firing a worker easier for you since you have to think about sustaining the profitability, minimizing the cost of doing business and whatnot.  Furthermore, you would probably include the cost of higher minimum wage for an employee in the products that you are producing, servicing, selling, and trading.  The employees who work for you got higher minimum wage, but they don’t have more money since the purchasing power of their wage hasn’t changed much for the prices of the products they may buy would go up.  Not only the employees but the employers themselves are customers, thus the costs of doing business such as buying materials for business would go up.  Simply put, raising minimum wage in bad time invites inflation to become hyper inflated.  It would be bad for the whole economy.

Big corporations love to have a good public relation image, because they think good public relation image will popularize their brand even more.  Furthermore, corporations believe that the more popular a brand is in image, the better the brand would perform in selling whatever.  It’s common sense really!  Thus in bad time, big corporations won’t mind raising minimum wage for their employees, because their profit margin is already high.  At the same time, their brand’s image gets a boost by paying higher wage for their employees in bad time.  Smaller businesses will have harder time in playing the PR game of raising wage, because their profit margin isn’t high enough to comfortably raise wage for their employees.  Thus, minimum wage encourages big corporations play PR game without taking the inflationary effect into the account.

Should we abandon minimum wage altogether?  Once minimum wage got raised, it’s really hard to undo the minimum wage’s level.  Don’t you think it’s really ugly for a government to tell her people to work for less than yesterday minimum wage?  Lowering the minimum wage isn’t going to be popular at all.  Abandoning it isn’t the solution either.  I think many things are relative, and minimum wage is definitely relative to changing time (i.e., good or bad time).  This is why I think raising minimum wage in good time would look good, and lowering the minimum wage in bad time invites protests.  I think since minimum wage is already in effect, the best thing to do is to not messing with it at all.  This means you better have a really good reason to raise the minimum wage.  Instead of messing with minimum wage to help the poor out, why not aiming for low inflation prices of foods, clothes, and whatnot.  Lower inflation would help out the poor in term of purchasing power as long the currency of a country isn’t already devalued to the point of near worthless.  After all, cheaper foods and whatnot would be a good thing for the poor and everybody else!

In conclusion, I don’t think minimum wage is the same thing as high productive wage.  I think individual company can do good by paying high productive wage (i.e., paying more) for employee who has done a stellar job in his/her role, because retaining a good employee from leaving the company for a competitor would be a good thing, in the consideration of having good, long term, business prospect.  When raising minimum wage without thinking about the consequence in having inflation on steroid would be extremely irresponsible thing to do.  In my opinion, instead of messing with the minimum wage, the government should worry about controlling the high inflation in everyday needs for the poor.  I don’t think the argument of minimum wage encourages productivity makes any sense, because productivity is a self-fulfilling-prophecy kind of thing.  Higher productivity will always be in demand in the business world, thus the competition for higher productivity will be abundant.  Higher minimum wage may encourage employers to fire employees easier and hire employees with better productivity rate.  Without raising minimum wage, the employers may give the employees with low productivity rate a second chance in retaining their jobs.  After all, retraining new employees would disrupt the flow of productivity anyway!  In general, the less poor people out there on the street, the better the economy and the society will be more stable.  If raising minimum wage can make inflation goes on steroid, then raising minimum wage is just an illusion for having done something good.

Starbucks Manager Goes Crazy On Customer

Lately, Starbucks got some bad lucks.  From the news, a cop was suing Starbucks for spilled hot coffee.  Another news reported that hackers are targeting Starbucks’ customers who use Starbucks app.  Just in, a manager exploded and accused a customer of stealing a straw.  The whole incident was recorded and now is being shared on the Internet.  Check out the videos right after the break to have a glimpse at the incident.

I got free coffee from Starbucks before, and so I’ve had great experience with Starbucks.  Nonetheless, I definitely don’t want to ever have to experience something similar to the customer who was at the receiving end of an angry Starbucks’ manager.  Fortunately, so far I have not yet had any crazy incident like that at anywhere I have gone to.  Oh wait, there was one time that I went into a Subway sandwich store near the closing time, and a stranger gave me a peck (a brief kiss) on my cheek for no apparent reason.  I think she was drunk or something of that sort.  I felt uncomfortable of course, but everyone was laughing in the store.  I laughed along, but I got out of the store as quickly as I could after I had my order fulfilled.