Comments on Ryan Manuel "Why China’s e-commerce rules have exporters in a flurry", 4/05/2016
They, exporters to China. should not be worried, because the new rules, as you described, just aims at close loopholes, so importers, particularly consumers are treated the same whether the purchases are from special zones or not, as long as China imposes duties on those imports.
I don’t see any reasons for concerns. It is no worse and arguably better than the fact that Australia is imposing GST on online imports, because GST is a sales tax and the sales didn’t happen in Australia.
There is no need to exaggerate on what China does and to paint it to something it is not.
The title of this post, understandably, reflects a poor interpretation of the China’s e-commerce rules at its best, and is more likely at its worst to show the potentially China bashing sentiments in some circles in the West. It is regrettable at least.
I am surprised it is from the Australian Centre on China in the World, The Australian National University. It may reflect very poorly on the poor understanding of the author on China.
Showing posts with label regulation. Show all posts
Showing posts with label regulation. Show all posts
2012-01-21
High time for ACCC to use plan B
Comments on Stephen Bartholomeusz “Plan
B for the ACCC”, 21/01/2012,
http://www.businessspectator.com.au/bs.nsf/Article/ACCC-Rod-Sims-Metcash-Franklins-Austar-Foxtel-take-pd20120120-QP4CX?OpenDocument&src=sph&src=rot
It was an interesting case by the ACCC
bordered on bizarre, considering the Wesfarmers acquisition of Coles
was done, while the ACCC had objected the Metcash' Franklin case.
For a market regulator to rely on
theoretical argument without putting into a proper practical and
commercial environment reflects how out of touch government
organisations can be.
The ACCC should adopt a similar
approach to the Productivity Commission in using applied model in
testing and determining its decisions. The PC, from its predecessor,
the Industry Commission, has been using models, including CGE models
to study complex economic cases for policies.
The sort of models the ACCC would need
to use may be different from those used by the PC, but modern
contemporary merger and acquisition cases can only properly
understood by informed studies from using practical models.
ACCC must have a clear overall goal to
ensure market competition, efficiency and consumer welfare and use
the best applied models available to measure it. Otherwise it will
fail in its regulation of the market to enhance Australian welfare.
I would argue that many of ACCC
decisions did not have a clear measure how much gain/loss should that
case be or not be allowed.
In that context, it is high time for
the plan B to be used!
2010-05-19
Cap and trade on red-tape costs - an excellent idea
Comments on Oliver Marc Hartwich “Cap and trade our way out of red-tape pollution”, 19/05/2010, http://www.theaustralian.com.au/news/opinion/cap-and-trade-our-way-out-of-red-tape-pollution/story-e6frg6zo-1225868389302
An excellent idea!
I would make two additional points:
1. Any accounting and future audit should be conducted by independent agencies/institutions with highest transparency possible to ensure their reliability.
2. Specify personal penalties for the chief person in charge of a bureaucratic agency any breach of that cap. The first chief must bear the penalties to ensure the accountability. Penalties should include severe monetary losses, demotion or sacking.
A side but related issue is that some kind of similar accountability should be imposed on elected politicians as well for their effects on regulations, and for serious public policy failures.
An excellent idea!
I would make two additional points:
1. Any accounting and future audit should be conducted by independent agencies/institutions with highest transparency possible to ensure their reliability.
2. Specify personal penalties for the chief person in charge of a bureaucratic agency any breach of that cap. The first chief must bear the penalties to ensure the accountability. Penalties should include severe monetary losses, demotion or sacking.
A side but related issue is that some kind of similar accountability should be imposed on elected politicians as well for their effects on regulations, and for serious public policy failures.
2009-10-06
This shows how unwise the Rudd/Conroy Telstra policy is
Comments on "DEALS TV: Dead ringers", 6/10/2009, http://www.businessspectator.com.au/bs.nsf/DealsTV?ReadForm&vid=1628133&vidkey=08f9b61c9750d8596b57&
From the introduction one immediately realises how the small minded Australian government and its regulatory body the ACCC have done to damage the well beings of Australians by unwisely restrict Telstra's hand and strategies.
The Australian government should catch up with the modern economic and business reality and learn how to live with monopolies and supersized multinational firms, including Australia's own ones. The key is how to regulate their activities and prices and behaviours, as opposed to heir structure from an outdated view in the past.
It is a video doc and its introduction reads as:
Telstra Corp, News Corp, Shanghai Media Group, Telenor, BSNL, Zain, Myer, AIA, Volvo
Media and telco deals in Asia, Europe and the US are a painful reminder of the upside Telstra will miss out on by structurally separating. Elsewhere, Myer, AIA and Volvo are in the news.
From the introduction one immediately realises how the small minded Australian government and its regulatory body the ACCC have done to damage the well beings of Australians by unwisely restrict Telstra's hand and strategies.
The Australian government should catch up with the modern economic and business reality and learn how to live with monopolies and supersized multinational firms, including Australia's own ones. The key is how to regulate their activities and prices and behaviours, as opposed to heir structure from an outdated view in the past.
It is a video doc and its introduction reads as:
Telstra Corp, News Corp, Shanghai Media Group, Telenor, BSNL, Zain, Myer, AIA, Volvo
Media and telco deals in Asia, Europe and the US are a painful reminder of the upside Telstra will miss out on by structurally separating. Elsewhere, Myer, AIA and Volvo are in the news.
2009-09-25
G20 - helpful or unhelpful?
Comments on Uri Dadush “Four challenges in Pittsburgh for the G20”, 24/09/2009 http://www.eastasiaforum.org/2009/09/24/four-challenges-in-pittsburgh-for-the-g20/
Among the three important examples which go beyond the current crisis, the third one is likely to be the most difficult one. It is not a significant issue for quite a number of countries in the group that means there may not be enough incentive to have that on the agenda.
In a post crisis environment, it may be easier to achieve the second and the first ones.
There is enough momentum for the first one out of the UN summit meeting this week.
In terms of withdrawal of stimulus, the group is now more unhelpful than being helpful, because it should send a clear signal that while in many countries it is still too early to withdraw measures, the condition in some countries are such that their government should decide when and how to withdraw from stimulus, otherwise there will be a serious chance that they may do it too late that will accelerate inflation.
The group already has an adverse effect on some countries, say Australia. The Australian government is using the group to play domestic politics and delay withdrawal.
In terms of how to prevent future similar crisis, it is important not to over regulate the banking and finance industry to achieve financing efficiency and lower costs of capital. There may be some minimum international regulations / guidelines, and leave the rest to each country to make sure their banks are safe and efficient.
The worst thing is to have a group of unaccountable international bureaucrats to impose a set of excessive regulations in the wake of the crisis in the name of preventing another crisis that will significantly increase the costs of finance everywhere.
Banks in Australia have done through the crisis with little problems. In such a case, is there a need to tighten the regulations? The answer is definitely no. But the danger is that the Rudd government will do it nevertheless to fight the so called “neo-liberalism”, or “market fundamentalism”.
That will be a tragedy for Australia with higher interest rates than necessary.
Among the three important examples which go beyond the current crisis, the third one is likely to be the most difficult one. It is not a significant issue for quite a number of countries in the group that means there may not be enough incentive to have that on the agenda.
In a post crisis environment, it may be easier to achieve the second and the first ones.
There is enough momentum for the first one out of the UN summit meeting this week.
In terms of withdrawal of stimulus, the group is now more unhelpful than being helpful, because it should send a clear signal that while in many countries it is still too early to withdraw measures, the condition in some countries are such that their government should decide when and how to withdraw from stimulus, otherwise there will be a serious chance that they may do it too late that will accelerate inflation.
The group already has an adverse effect on some countries, say Australia. The Australian government is using the group to play domestic politics and delay withdrawal.
In terms of how to prevent future similar crisis, it is important not to over regulate the banking and finance industry to achieve financing efficiency and lower costs of capital. There may be some minimum international regulations / guidelines, and leave the rest to each country to make sure their banks are safe and efficient.
The worst thing is to have a group of unaccountable international bureaucrats to impose a set of excessive regulations in the wake of the crisis in the name of preventing another crisis that will significantly increase the costs of finance everywhere.
Banks in Australia have done through the crisis with little problems. In such a case, is there a need to tighten the regulations? The answer is definitely no. But the danger is that the Rudd government will do it nevertheless to fight the so called “neo-liberalism”, or “market fundamentalism”.
That will be a tragedy for Australia with higher interest rates than necessary.
2009-09-14
Both government and its regulator ACCC should be fair and know what is fair
Comments on Stephen Bartholomeusz “Levelling Telstra's playing field”, 14/09/2009, http://www.businessspectator.com.au/bs.nsf/Article/Levelling-Telstras-playing-field-pd20090914-VV5KU?OpenDocument&src=sph
Both the government and the ACCC should not act as big brothers and ignore the economic reality.
They should not artificially change the underlying economics of its NBN versus Telstra's copper net through government regulations and destroy the value of the copper net.
The ACCC had always acted in an anti-economics manner, by artificially lower the price Telstra could charge. A consequence of that has been the lack of investment by the private sector on new a net, so the government has to step in and intervene.
The ACCC should learn how to regulate a monopoly so it does not abuse its market power, but the market will allocate the most appropriate resources to the sector as well.
Both the government and the ACCC should not act as big brothers and ignore the economic reality.
They should not artificially change the underlying economics of its NBN versus Telstra's copper net through government regulations and destroy the value of the copper net.
The ACCC had always acted in an anti-economics manner, by artificially lower the price Telstra could charge. A consequence of that has been the lack of investment by the private sector on new a net, so the government has to step in and intervene.
The ACCC should learn how to regulate a monopoly so it does not abuse its market power, but the market will allocate the most appropriate resources to the sector as well.
2009-07-27
Financial crisis, scapegoat and regulations
Comments on Jagjit S. Chadha “Is the love of finance the root of all evil?” 24/07/2009, http://www.eastasiaforum.org/2009/07/24/is-the-love-of-finance-the-root-of-all-evil/
I like this article. I find it fascinating and can’t help from commenting, though I didn’t rush in doing it earlier on after my first noting it.
Although it is against the current wind blowing heavily, it appears to be more sober analysis than most very loud noises calling for this and that.
While there may well be a case for strengthening some financial regulations, there is a real danger of overdoing it and over-regulation of the financial sector, at the expenses of efficiency and suffocation of innovations.
It is true that the world main financial and banking system came near collapse. But what were the main direct causes? It was the subprime problems and the malpractice of selling subprime mortgages in the US to the largest degree, wasn’t it? Imagine what would have been if there had not been those malpractices in which people without the ability to pay were given more 100% loans of the equities they bought, at very low interest rates.
International imbalance in saving and consumption may have contributed to the financial problems in the US. But, I would argue that the causal relationship is by no means inevitable and what had occurred in the US should have been avoidable in the first place.
For example, the US could have used the low interest rates afforded by excess international savings to invest in more productive sectors and areas, or even other countries, that would generate much higher returns and enhance the well beings not only in the US, but also other countries.
This in an indirect way would be similar to the argument of readdressing the patient and non-patient internationally discussed by Chadha in this article.
So I agree with Chadha that the size of the financial sector was not necessarily the problem. If looking at the worldwide, savings are not necessarily too high, because there are so many countries, mostly developing ones, have extremely low level of physical capitals and need to increase investment and accumulate them. Even in some advanced economies, infrastructures may need to be upgraded or replaced.
I find the argument that too much savings amusing, but can’t help laughing at it. When there are problems, it is easy and tempting to find a scapegoat, whether there is any justice to it or not is irrelevant to most people.
The financial and economic crisis is such a case in unprecedented scale.
I like this article. I find it fascinating and can’t help from commenting, though I didn’t rush in doing it earlier on after my first noting it.
Although it is against the current wind blowing heavily, it appears to be more sober analysis than most very loud noises calling for this and that.
While there may well be a case for strengthening some financial regulations, there is a real danger of overdoing it and over-regulation of the financial sector, at the expenses of efficiency and suffocation of innovations.
It is true that the world main financial and banking system came near collapse. But what were the main direct causes? It was the subprime problems and the malpractice of selling subprime mortgages in the US to the largest degree, wasn’t it? Imagine what would have been if there had not been those malpractices in which people without the ability to pay were given more 100% loans of the equities they bought, at very low interest rates.
International imbalance in saving and consumption may have contributed to the financial problems in the US. But, I would argue that the causal relationship is by no means inevitable and what had occurred in the US should have been avoidable in the first place.
For example, the US could have used the low interest rates afforded by excess international savings to invest in more productive sectors and areas, or even other countries, that would generate much higher returns and enhance the well beings not only in the US, but also other countries.
This in an indirect way would be similar to the argument of readdressing the patient and non-patient internationally discussed by Chadha in this article.
So I agree with Chadha that the size of the financial sector was not necessarily the problem. If looking at the worldwide, savings are not necessarily too high, because there are so many countries, mostly developing ones, have extremely low level of physical capitals and need to increase investment and accumulate them. Even in some advanced economies, infrastructures may need to be upgraded or replaced.
I find the argument that too much savings amusing, but can’t help laughing at it. When there are problems, it is easy and tempting to find a scapegoat, whether there is any justice to it or not is irrelevant to most people.
The financial and economic crisis is such a case in unprecedented scale.
2009-07-09
Not another review - there have been so many!
Comments on Joshua Gans, et al “Complacency is not an option”, 8/07/2009, http://www.businessspectator.com.au/bs.nsf/Article/Complacency-is-not-an-option-pd20090707-TQ39Y?OpenDocument&src=is&is=Property&blog=Concrete Detail/
While there may be a case for a review, we should avoid over regulations and over reviews.
The two important examples used in this article are bank deposit guarantees and residential mortgage-backed securities (RMBS). If they are the most severe problems with the current system, then there may not be a need for a review.
Bank deposit guarantees can be done easily when government sees a need. The Australian experience of both with no guarantees and with guarantees has proven this point.
The case of residential mortgage-backed securities (RMBS) is not a matter of Australia’s doing and Australia has little influence on the rise and collapse of that market. As a result, any Australian review is unlikely to contribute much to that market.
The fact that Australian banking system have performed well during the recent financial and economic crisis seems also to suggest that the need for a comprehensive review is not strong.
The authors raised quite a number of questions that they say are unanswered. But do they mean they can only be answered by a comprehensive review? What those relevant bureaucratic agencies do? Can’t they answer them or, at least some of them?
Some of the questions may not be very relevant. For example, the second question, whether banks should be subject to a ‘systemic capital charge’ to account for the risks associated with the correlation between bank balance sheets, is hardly necessarily a relevant question for Australian banks, given their remarkable performance during the severe international financial crisis. Their performances mean that the Australian banking regulatory system and capital requirement were and are good. Then why now to have a review of the system that works well?
The international financial crisis should not necessarily be an excuse for a comprehensive review in Australia! We must recognise there are costs associated with any reviews. It is not free and costs nothing!
PS: there have been so many adverse responses including from government to the proposal of a government bank. They indicate how out of touch those economists are!
While there may be a case for a review, we should avoid over regulations and over reviews.
The two important examples used in this article are bank deposit guarantees and residential mortgage-backed securities (RMBS). If they are the most severe problems with the current system, then there may not be a need for a review.
Bank deposit guarantees can be done easily when government sees a need. The Australian experience of both with no guarantees and with guarantees has proven this point.
The case of residential mortgage-backed securities (RMBS) is not a matter of Australia’s doing and Australia has little influence on the rise and collapse of that market. As a result, any Australian review is unlikely to contribute much to that market.
The fact that Australian banking system have performed well during the recent financial and economic crisis seems also to suggest that the need for a comprehensive review is not strong.
The authors raised quite a number of questions that they say are unanswered. But do they mean they can only be answered by a comprehensive review? What those relevant bureaucratic agencies do? Can’t they answer them or, at least some of them?
Some of the questions may not be very relevant. For example, the second question, whether banks should be subject to a ‘systemic capital charge’ to account for the risks associated with the correlation between bank balance sheets, is hardly necessarily a relevant question for Australian banks, given their remarkable performance during the severe international financial crisis. Their performances mean that the Australian banking regulatory system and capital requirement were and are good. Then why now to have a review of the system that works well?
The international financial crisis should not necessarily be an excuse for a comprehensive review in Australia! We must recognise there are costs associated with any reviews. It is not free and costs nothing!
PS: there have been so many adverse responses including from government to the proposal of a government bank. They indicate how out of touch those economists are!
2009-05-29
Regulate pricing behaviour better than regulate market structure
Comments on Stephen Bartholomeusz “Rethinking competition”, 29/05/2009, http://www.businessspectator.com.au/bs.nsf/Article/Rethinking-competition-pd20090529-SH46V?OpenDocument&src=sph
Most anti-trust laws have been based on the paradigm of “structure-conduct-performance”. As a result, anti-trust laws or regulatory authorities have a major focus on regulating the market/industry structure, such as the number of firms, market shares, etc. This makes the jobs of the regulatory authorities easier by limiting market shares, or concentration of an industry, such as the number of firms.
That approach may be good for markets or products where there are limited economies of scale. However, it can have significant adverse effects on the efficiency of costs and supply in cases where economies of scale are prevalent. Although the purpose of anti-trust is to protect the interests of consumers, the end results may hurt them, if anti-trust measures present costs of production from falling associated with economies of scale. But such negative effects are generally unobservable, so consumers don’t know if they have been hurt.
That is a paradox of anti-trust based on market structure. A better framework in protecting consumers seems for authorities to focus on firm behaviour/conduct, as opposed to market structure. Competition authorities or competition laws should have the power to collect costs and pricing information, if the market share of any individual firms exceeds certain percentage. Bu studying costs and pricing, the authorities can rule whether a firm has behaved competitively or not and take competition measures accordingly.
Both the world economy and individual national economies have changed so much with technologies, trade and economic integration and globalisation. It is time to rethink competition and how to manage competition, not for just the fears of concentration and for observable of the poor outcomes due to uncompetitive firm behaviours, but also for the economies of scale and their effects on costs and prices and ultimately the interest of consumers.
Authorities need to be prepared to do hard jobs. The days of easy doings should be gone.
Most anti-trust laws have been based on the paradigm of “structure-conduct-performance”. As a result, anti-trust laws or regulatory authorities have a major focus on regulating the market/industry structure, such as the number of firms, market shares, etc. This makes the jobs of the regulatory authorities easier by limiting market shares, or concentration of an industry, such as the number of firms.
That approach may be good for markets or products where there are limited economies of scale. However, it can have significant adverse effects on the efficiency of costs and supply in cases where economies of scale are prevalent. Although the purpose of anti-trust is to protect the interests of consumers, the end results may hurt them, if anti-trust measures present costs of production from falling associated with economies of scale. But such negative effects are generally unobservable, so consumers don’t know if they have been hurt.
That is a paradox of anti-trust based on market structure. A better framework in protecting consumers seems for authorities to focus on firm behaviour/conduct, as opposed to market structure. Competition authorities or competition laws should have the power to collect costs and pricing information, if the market share of any individual firms exceeds certain percentage. Bu studying costs and pricing, the authorities can rule whether a firm has behaved competitively or not and take competition measures accordingly.
Both the world economy and individual national economies have changed so much with technologies, trade and economic integration and globalisation. It is time to rethink competition and how to manage competition, not for just the fears of concentration and for observable of the poor outcomes due to uncompetitive firm behaviours, but also for the economies of scale and their effects on costs and prices and ultimately the interest of consumers.
Authorities need to be prepared to do hard jobs. The days of easy doings should be gone.
2009-05-20
Live with monopolies in modern time - the case of Telstra
Comments on Alan Kohler “Telstra's costly mistake”, 20/05/2009, http://www.businessspectator.com.au/bs.nsf/Article/Telstras-costly-mistake-pd20090520-S7SL4?OpenDocument&src=sph&alerts&loc=center
Alan, with due respect, I tend to disagree with you on two of the main points why Telstra should be split up. You mentioned that your main reason, “the reason”, is it has shown itself incapable of operating effectively as an integrated Telco, looking after both sets of customers. A firm is supposedly to maximise profit for its shareholders. How they conduct themselves to achieve that goal is their own businesses. If it is in their own interests to look after their customers, they will do that. If they don’t, they will not be able to achieve their maximum profits. Their main accountability lies in with their shareholders. If they do look after their shareholders interests, the management will be voted out of their jobs and will be replaced by others.
While government may have a role in looking after consumers, small businesses, they should do so with a clear framework. They should regulate according to well established principles. Similar to the case of Robin Hood, the government should not just bash big firms if there are problems between them and others. They should not take it as granted that big businesses are generally in fault when there is a conflict with others. That is ideological but irrational. That is a popular approach but an inefficient and unfair one. Government should have constraints to its behaviour too. It should not regard itself as above everyone and everything with free will to do whatever it wants or wishes to.
The other point is the so called “some theoretical regulatory preference” to do so. The key issue in this case is the existence of a monopoly in a market. What is it better to split an integrated company just because it operates both as a wholesaler and a retailer? To split it up into two, a wholesaler and a retailer, does not solve the case that the wholesaler is a monopoly. The government will still be faced with that monopoly and have to regulate its pricing, and possibly its conduct with regard to potential new comers. Telstra has been regulated heavily in terms of its wholesales pricing. In this particular regard, one may say that the government/ACCC has been too heavy-handed to Telstra in its pricing so that it discouraged new investments in the Telco infrastructure sector. So what else would the government do to further lower its wholesale price when Telstra is split up? Otherwise how can the government make the whole system better in terms of the price received by customers?
We need to approach regulatory issues rationally. It is equally intolerable to behave as a big brother; no matter it is a big company or a government. All firms, irrespective their size, should all have equal rights, similar like human rights. They should be respected, not violated at some people/government’s free will with little constraint.
Australia is relative small by international standard. When firms grow, it is inevitable that we will see some big ones or very big ones. If that is a result of efficiency, be it. We have lived with monopolies in the past. We should be able to live with some more of them in the future. We should not be intimated or even scared by big firms. We should re-examine the theoretic underpinnings of regulatory frameworks to enhance the welfare of all Australians. If big firms can do that, let them do it. If we have to regulate them, let’s follow well established international standards.
Alan, with due respect, I tend to disagree with you on two of the main points why Telstra should be split up. You mentioned that your main reason, “the reason”, is it has shown itself incapable of operating effectively as an integrated Telco, looking after both sets of customers. A firm is supposedly to maximise profit for its shareholders. How they conduct themselves to achieve that goal is their own businesses. If it is in their own interests to look after their customers, they will do that. If they don’t, they will not be able to achieve their maximum profits. Their main accountability lies in with their shareholders. If they do look after their shareholders interests, the management will be voted out of their jobs and will be replaced by others.
While government may have a role in looking after consumers, small businesses, they should do so with a clear framework. They should regulate according to well established principles. Similar to the case of Robin Hood, the government should not just bash big firms if there are problems between them and others. They should not take it as granted that big businesses are generally in fault when there is a conflict with others. That is ideological but irrational. That is a popular approach but an inefficient and unfair one. Government should have constraints to its behaviour too. It should not regard itself as above everyone and everything with free will to do whatever it wants or wishes to.
The other point is the so called “some theoretical regulatory preference” to do so. The key issue in this case is the existence of a monopoly in a market. What is it better to split an integrated company just because it operates both as a wholesaler and a retailer? To split it up into two, a wholesaler and a retailer, does not solve the case that the wholesaler is a monopoly. The government will still be faced with that monopoly and have to regulate its pricing, and possibly its conduct with regard to potential new comers. Telstra has been regulated heavily in terms of its wholesales pricing. In this particular regard, one may say that the government/ACCC has been too heavy-handed to Telstra in its pricing so that it discouraged new investments in the Telco infrastructure sector. So what else would the government do to further lower its wholesale price when Telstra is split up? Otherwise how can the government make the whole system better in terms of the price received by customers?
We need to approach regulatory issues rationally. It is equally intolerable to behave as a big brother; no matter it is a big company or a government. All firms, irrespective their size, should all have equal rights, similar like human rights. They should be respected, not violated at some people/government’s free will with little constraint.
Australia is relative small by international standard. When firms grow, it is inevitable that we will see some big ones or very big ones. If that is a result of efficiency, be it. We have lived with monopolies in the past. We should be able to live with some more of them in the future. We should not be intimated or even scared by big firms. We should re-examine the theoretic underpinnings of regulatory frameworks to enhance the welfare of all Australians. If big firms can do that, let them do it. If we have to regulate them, let’s follow well established international standards.
Subscribe to:
Posts (Atom)
Posts
