Comments on Antonio Muscatelli "Greece: why there can be no winners in the Grexit game", 21/06/2015
Some people simply assume that Greece has not prepared for default and it's consequences., including the author of this article. That is only an assumption. That assumption may or may not be true.
It is possible that the Greece government may have carefully analysed and considered the default option and prepared for it already, but does not want to say it so as to force a better outcome than default out of negotiations. Of course, I am speculating too and don't have any better information than the author had. So don't hold me for my speculation as a certainty.
I think in the long term, it seems that an orderly Greece exit from the euro zone may prove to be better for both itself and the rest of the euro zone as a whole. A Grexit would allow it the freedom to have its own currency and to devalue as a way to adjust to increase its international competitiveness, as opposed to the simple austerity adjustments it has had so far.
The stubbornness of many participants not to actively and positively to consider Grexit may prove to be a serious mistake that carries huge costs for both Greece and the others involved. It is regrettable and it can only be avoided after a real Grexit.
Showing posts with label strategic gaming. Show all posts
Showing posts with label strategic gaming. Show all posts
2015-06-21
Sino-Russian strategic accord?
Comments on Tom Lairson and Ilan Alon "Disparities limit the scope for a Sino–Russian strategic accord", 16/06/2015
While it is true that there are significant dissimilarities between China and Russia that may possibly mean certain barriers for them to become close allies, whether they will develop into close strategic allies or not is also dependent on how the US and NATO behave.
For example, should the latter pose existential security threats to the former, then it is not inconceivable that they would develop into strategic allies to defend themselves together. Even though they may be currently seen as unlikely strategic allies, they may not have other and better alternatives to them if both faced with that kind of threats.
2009-07-20
Stern Hu, Chinese steel industry and Sino-Aussie relations
Comments on Peter Yuan Cai “The China ‘spygate’ affair and China’s steel industry chaos”, 19/07/2009, http://www.eastasiaforum.org/2009/07/19/the-china-spygate-affair-and-chinas-steel-industry-chaos/
There has not been much official information from China regarding Mr Stern Hu case that has frustrated many in Australia, including the foreign minister and the prime minister probably. So most if not all people have to speculate on what is happening according to own thinking and draw own conclusion. That is regrettable, to say the least.
On the one hand, it may reflect the complex and different Chinese legal system and the varying interpretations and difficult implementations of that legal system. On the other, it may also be a very complex situation, likely to be much more complex than most people have thought, that China has been in recent time, with potentially very broad implications.
If I were to speculate, I would link this to a wider context, like China’s (and other big developing economies too) demand for a more equal recognition and treatment in world economic affairs, such as IMF voting weights. Further, China also appears to be seeking to broaden international reserve currencies.
Reports have said that China officials say China treats Mr Stern Hu case as a business case and state that it will not affect China Australia relations. That may be the official line spoken in the open, just like the Australian Prime Minister and Treasurer said openly after the collapse of the Chinalco Rio deal that it was a business case and Australia welcomes Chinese investments in Australia.
Are there any unofficial lines that have not been spoken openly here in both countries? Or are there any different interpretations of what have happened, or at least misunderstanding of what have happened in both cases? What are happening below the table? Were they kicking each other?
In the case of the international iron ore market, China is the largest iron buyer, but it has not been treated as such, with the help of people who understand “how to deal with the Chinese”, such as using the tactics of “divide and conquer”. As some commentators have said, it may be difficult to be sure whether one has crossed the line between what is legal or illegal in pursuing business dealings that often can involve gifts and bribery and possibly more.
In terms of the Chinese steel industry, the “wars” between large steel firms and small ones can occur from time to time. When the economy is booming and demand for steel is strong with supply shortage, many small steel and mining firms spring up like new green shorts, and presumably making some profit from high steel and iron ore prices. But when the economy slows and demand for steel exceeds supply, the industry body and the government would like to close some small firms they say are inefficient in energy and intermediate inputs consumption and produce low quality products and damage the environment.
There are people who profit from the market conditions and make a lot of money. Many people here would say, why not, it is entrepreneurship, right? However, it is a situation in China where and when corruptions can occur and law and regulations can be breached.
It is a complex issue. In a reform era and constantly changing environment, what is appropriate and inappropriate today may be different tomorrow. Otherwise how can reforms be undertaken?
Most people involved may be lucky enough not being caught. But from time to time some of those people are caught by a crack-down by the authorities.
It cannot be said that China’s legal system is perfect. So such a system exists. One has to live with that system if you deal with China, although people may ask that China improves its legal system.
It is not unusual that corruptions and briberies may happen in China. In fact, it is more prevalent than in Australia. Some involves very high level officials.
Many Australians assume that Mr Stern Hu have not involved in appropriate business dealings in China. That is a still open case. Australian politicians have tried to use political pressures on China.
Maybe that is what China like to see them to do and also to show them it is not working.
As Paul Kelly’s article in The Australian on Saturday says it is a tussle that we cannot win and China may want to dictate the relationship.
We Australians need to treat the Chinese fairly and equally. We cannot continue to assume that they can be treated as second class people internationally and they will accept that. We cannot assume that we are better than playing games than the Chinese are.
I have said before that it is hard to know which side will win if strategic gaming is played out between the two governments.
There has not been much official information from China regarding Mr Stern Hu case that has frustrated many in Australia, including the foreign minister and the prime minister probably. So most if not all people have to speculate on what is happening according to own thinking and draw own conclusion. That is regrettable, to say the least.
On the one hand, it may reflect the complex and different Chinese legal system and the varying interpretations and difficult implementations of that legal system. On the other, it may also be a very complex situation, likely to be much more complex than most people have thought, that China has been in recent time, with potentially very broad implications.
If I were to speculate, I would link this to a wider context, like China’s (and other big developing economies too) demand for a more equal recognition and treatment in world economic affairs, such as IMF voting weights. Further, China also appears to be seeking to broaden international reserve currencies.
Reports have said that China officials say China treats Mr Stern Hu case as a business case and state that it will not affect China Australia relations. That may be the official line spoken in the open, just like the Australian Prime Minister and Treasurer said openly after the collapse of the Chinalco Rio deal that it was a business case and Australia welcomes Chinese investments in Australia.
Are there any unofficial lines that have not been spoken openly here in both countries? Or are there any different interpretations of what have happened, or at least misunderstanding of what have happened in both cases? What are happening below the table? Were they kicking each other?
In the case of the international iron ore market, China is the largest iron buyer, but it has not been treated as such, with the help of people who understand “how to deal with the Chinese”, such as using the tactics of “divide and conquer”. As some commentators have said, it may be difficult to be sure whether one has crossed the line between what is legal or illegal in pursuing business dealings that often can involve gifts and bribery and possibly more.
In terms of the Chinese steel industry, the “wars” between large steel firms and small ones can occur from time to time. When the economy is booming and demand for steel is strong with supply shortage, many small steel and mining firms spring up like new green shorts, and presumably making some profit from high steel and iron ore prices. But when the economy slows and demand for steel exceeds supply, the industry body and the government would like to close some small firms they say are inefficient in energy and intermediate inputs consumption and produce low quality products and damage the environment.
There are people who profit from the market conditions and make a lot of money. Many people here would say, why not, it is entrepreneurship, right? However, it is a situation in China where and when corruptions can occur and law and regulations can be breached.
It is a complex issue. In a reform era and constantly changing environment, what is appropriate and inappropriate today may be different tomorrow. Otherwise how can reforms be undertaken?
Most people involved may be lucky enough not being caught. But from time to time some of those people are caught by a crack-down by the authorities.
It cannot be said that China’s legal system is perfect. So such a system exists. One has to live with that system if you deal with China, although people may ask that China improves its legal system.
It is not unusual that corruptions and briberies may happen in China. In fact, it is more prevalent than in Australia. Some involves very high level officials.
Many Australians assume that Mr Stern Hu have not involved in appropriate business dealings in China. That is a still open case. Australian politicians have tried to use political pressures on China.
Maybe that is what China like to see them to do and also to show them it is not working.
As Paul Kelly’s article in The Australian on Saturday says it is a tussle that we cannot win and China may want to dictate the relationship.
We Australians need to treat the Chinese fairly and equally. We cannot continue to assume that they can be treated as second class people internationally and they will accept that. We cannot assume that we are better than playing games than the Chinese are.
I have said before that it is hard to know which side will win if strategic gaming is played out between the two governments.
2009-06-12
Monopoly and strategic gaming - please be realistic about it
Comments on Harry Clarke “More on Rio, BHP-Billiton & Chinalco’s rejected love”, June 2009, http://www.harryrclarke.com/2009/06/09/more-on-rio-bhp-billiton-chinalcos-rejected-love/
People are talking about the monopoly issue and the Cournot Nash model just like they can be applied anywhere without a need to be modified. It is laughable for such a naivety.
Don’t you think it might be more appropriate to use a strategic model of strategic gaming by monopoly and monoposony (not sure the spelling is correct)? There is a need for a little bit more advanced economics, perhaps. Let’s be more realistic.
China is much bigger than Australia. It is unlikely that Australia will benefit from strategic gaming with China. So it may be in Australia’s interest not to play that game and build trust with the Chinese to benefit both.
Just thinking one side can move and the other side, the bigger one doesn't is misleading to not only other people, but self-cheating as well. Let's be mature, alright?
People are talking about the monopoly issue and the Cournot Nash model just like they can be applied anywhere without a need to be modified. It is laughable for such a naivety.
Don’t you think it might be more appropriate to use a strategic model of strategic gaming by monopoly and monoposony (not sure the spelling is correct)? There is a need for a little bit more advanced economics, perhaps. Let’s be more realistic.
China is much bigger than Australia. It is unlikely that Australia will benefit from strategic gaming with China. So it may be in Australia’s interest not to play that game and build trust with the Chinese to benefit both.
Just thinking one side can move and the other side, the bigger one doesn't is misleading to not only other people, but self-cheating as well. Let's be mature, alright?
2009-04-24
Strategic gaming by Australian government - good or bad?
This blog will discuss potential strategic gaming by governments in relation to investment and trade. This issue arose from reading an article on KGB's Business Spectator, asking for the Australian government to price out the Chinalco bid to invest in Rio Tinto.
It seems that author seemed to understand more about Rio's business its own management team. He was concerned that the management is going to sell its assets short. Unable to influence the management, he attempted to influence the government.
It might appear to be legitimate concerns and a reasonable approach, if one assumes the game is going to be played only once and only Australian government has the choices to move, other governments are assumed to not react irrespective what the Australian government does.
However, assumptions are just assumptions. Sometimes they cannot be farther away from the truth. Anyone with some knowledge of game theories would understand that the above assumptions are very simplistic, unpractical and cannot be applied to real businesses.
If more realistic assumptions are made in the context of Australia - China relations and the international mining sector, one would certainly wonder why the Australian government would want to engage strategic gaming in relation to such investments. One has to consider carefully the potential possible options each government has, any first move, counter moves and continuous plays. Were it to start, there could be many rounds of plays and the outcomes for each side are very hard to predict.
Australia is a middle power internationally as it often self claimed. Its influence in the international arena is noticeable but fairly limited if one to be realistic. It is located in the Asia Pacific region and naturally wants to develop deep relationships with the Asia region where some of our important trading partners lie.
China is an emerging power with a rapidly growing economy now ranked third in the world. It will probably not be too long for it to replace Japan to become the second. Some forecast that China will become the largest economy before the middle of the century.
China would probably regard Australia highly. The main reasons include:
· The two countries are very complementary with each other economically;
a) Australia, an industrialised country with expensive labour costs, is rich in mineral and agricultural resources;
b) China, an industrialising and emerging economy with a huge need for resources, has abundant cheap labour supply, but lack of natural resources in per capita terms;
c) Compared to some other big resources rich countries, Australia is closer to China geographically;
d) Australia does not have too overly discriminative trade barriers for China, as some other larger industrialised countries do.
· As a result, the two sides are more likely to be partners rather than competitors or foes;
a) Australia needs external markets for its rich mineral and agricultural products;
b) China needs reliable and stable supplies of natural resources and needs friendly external markets for its labour intensive goods and services; and
c) Australia will benefit from cheap imports.
· Looking from international geopolitical point of view, there appears to be a need for China to have a close friend that is also the friend of the US – the world sole superpower, so when important matters can’t be more effectively be dealt with between China and the US, the mutual friend of both sides can play an intermediate role to facilitate achieving a better resolution of issues;
a) Australia is a strong US ally and is realistically pragmatic in dealing with China,
b) It is highly unlikely that the Australia and China will clash over extremely important strategic issues largely because of the larger international context, mutual needs and geographical locations.
Australia is likely to continue its strong engagement with Asia, including China to gorge stronger relations with them. After all, as Garnaut’s (1989/90?) book indicates, Asia is in the ascendance. It has been occurring for some time already. The 21st century is likely to be dominated by dramatic shifts between continental heavy weights with lasting implications for the whole world.
Before engaging in governmental strategic gaming, perhaps all sides will have and need to carefully ponder strategic thinking first. If we ask for transparency by the Chinese government on important issues, such as military spending, we ourselves will need to be transparent on important issues as well. Trade, investment and commercial considerations are likely to be more dominant issues in the heads of Australian and Chinese governments. Whether it is established on mutual trust or mutual deterrence, some transparency will be needed and equilibrium to be reached. It will be in our own interest to do our homework well and first before making strategic gaming moves.
It seems that author seemed to understand more about Rio's business its own management team. He was concerned that the management is going to sell its assets short. Unable to influence the management, he attempted to influence the government.
It might appear to be legitimate concerns and a reasonable approach, if one assumes the game is going to be played only once and only Australian government has the choices to move, other governments are assumed to not react irrespective what the Australian government does.
However, assumptions are just assumptions. Sometimes they cannot be farther away from the truth. Anyone with some knowledge of game theories would understand that the above assumptions are very simplistic, unpractical and cannot be applied to real businesses.
If more realistic assumptions are made in the context of Australia - China relations and the international mining sector, one would certainly wonder why the Australian government would want to engage strategic gaming in relation to such investments. One has to consider carefully the potential possible options each government has, any first move, counter moves and continuous plays. Were it to start, there could be many rounds of plays and the outcomes for each side are very hard to predict.
Australia is a middle power internationally as it often self claimed. Its influence in the international arena is noticeable but fairly limited if one to be realistic. It is located in the Asia Pacific region and naturally wants to develop deep relationships with the Asia region where some of our important trading partners lie.
China is an emerging power with a rapidly growing economy now ranked third in the world. It will probably not be too long for it to replace Japan to become the second. Some forecast that China will become the largest economy before the middle of the century.
China would probably regard Australia highly. The main reasons include:
· The two countries are very complementary with each other economically;
a) Australia, an industrialised country with expensive labour costs, is rich in mineral and agricultural resources;
b) China, an industrialising and emerging economy with a huge need for resources, has abundant cheap labour supply, but lack of natural resources in per capita terms;
c) Compared to some other big resources rich countries, Australia is closer to China geographically;
d) Australia does not have too overly discriminative trade barriers for China, as some other larger industrialised countries do.
· As a result, the two sides are more likely to be partners rather than competitors or foes;
a) Australia needs external markets for its rich mineral and agricultural products;
b) China needs reliable and stable supplies of natural resources and needs friendly external markets for its labour intensive goods and services; and
c) Australia will benefit from cheap imports.
· Looking from international geopolitical point of view, there appears to be a need for China to have a close friend that is also the friend of the US – the world sole superpower, so when important matters can’t be more effectively be dealt with between China and the US, the mutual friend of both sides can play an intermediate role to facilitate achieving a better resolution of issues;
a) Australia is a strong US ally and is realistically pragmatic in dealing with China,
b) It is highly unlikely that the Australia and China will clash over extremely important strategic issues largely because of the larger international context, mutual needs and geographical locations.
Australia is likely to continue its strong engagement with Asia, including China to gorge stronger relations with them. After all, as Garnaut’s (1989/90?) book indicates, Asia is in the ascendance. It has been occurring for some time already. The 21st century is likely to be dominated by dramatic shifts between continental heavy weights with lasting implications for the whole world.
Before engaging in governmental strategic gaming, perhaps all sides will have and need to carefully ponder strategic thinking first. If we ask for transparency by the Chinese government on important issues, such as military spending, we ourselves will need to be transparent on important issues as well. Trade, investment and commercial considerations are likely to be more dominant issues in the heads of Australian and Chinese governments. Whether it is established on mutual trust or mutual deterrence, some transparency will be needed and equilibrium to be reached. It will be in our own interest to do our homework well and first before making strategic gaming moves.
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