Comments on Satoshi Amako “China as a ‘Great Power’ and East Asian integration”, 4/04/2010, http://www.eastasiaforum.org/2010/04/04/china-as-a-great-power-and-east-asian-integration/
This article appears to be fairly constructive, although some of its views may clearly be outdated and incorrect, such as the characterisation of the “Chinese conception of world order”.
I would focus on what is likely to be more important to a successful East Asian community that will benefit all East Asian countries including China.
I regard it extremely important to develop a representative, democratic, dynamic and flexible regional governing mechanism that recognises both national sovereignty and contributions, that is fair representation, responsibility and accountability.
To that end, nations should have open dialogues and discussions.
I think the current political system of representative and senate mechanism has some attraction.
The representative half is good for representation of contributions and population, hence responsibility and accountability. The senate half recognises the sovereignty irrespective a nation's size. A combination of these two should be flexible enough to accommodate the needs of every member.
The concern of a Chinese hegemony in an East Asian community can be addressed in that framework. The rights and interest of small and smaller nations can be safeguarded.
Having said that, I would argue that can only act as a default or fall back position. Nations should seek to develop an even better and more superior system for an effective and beneficial regional community.
2010-04-05
Higher dimensions of economics
Comments on Peter Drysdale “Politics and Chinese integration into the global economy”, 4/04/2010, http://www.eastasiaforum.org/2010/04/04/politics-and-chinese-integration-into-the-global-economy/
The mainstream economics has been established on the premise of market efficiency in resources allocation, although even with that main stream, macroeconomics indicates that sometimes market can be seriously inefficient in the sense that large unemployment can occur from time to time and some non-market or super-market mechanisms, that is, government interventions have to be resorted.
Also, assets markets have shown to have tendance of extremely inefficient from time to time.
Further, there are different economies in the world that are vastly different in productivity, income levels and etc. The experiences of developing economies with different systems and growth have shown that the mainstream economics have serious limitations in terms of its applications to the non world-frontier economies.
It seems that there are multi dimensions in economics and efficiency. There may be cases where it is apparently and obviously inefficient by the norm of the mainstream economics yet the outcomes can be much more efficient than some cases where economics would say it is efficient.
Efficiency may work at higher dimensions than the current mainstream economics can comfortably handle. The current economics may be a special case or a branch in a higher dimension economics.
Maybe in economics of a higher dimension (that is yet to be developed), public institutions like government as opposed to pure market can improve the efficiency of a pure market approach. Alternatively, new institutions of a different nature from the current ones will be required to govern efficiency.
The mainstream economics has been established on the premise of market efficiency in resources allocation, although even with that main stream, macroeconomics indicates that sometimes market can be seriously inefficient in the sense that large unemployment can occur from time to time and some non-market or super-market mechanisms, that is, government interventions have to be resorted.
Also, assets markets have shown to have tendance of extremely inefficient from time to time.
Further, there are different economies in the world that are vastly different in productivity, income levels and etc. The experiences of developing economies with different systems and growth have shown that the mainstream economics have serious limitations in terms of its applications to the non world-frontier economies.
It seems that there are multi dimensions in economics and efficiency. There may be cases where it is apparently and obviously inefficient by the norm of the mainstream economics yet the outcomes can be much more efficient than some cases where economics would say it is efficient.
Efficiency may work at higher dimensions than the current mainstream economics can comfortably handle. The current economics may be a special case or a branch in a higher dimension economics.
Maybe in economics of a higher dimension (that is yet to be developed), public institutions like government as opposed to pure market can improve the efficiency of a pure market approach. Alternatively, new institutions of a different nature from the current ones will be required to govern efficiency.
2010-04-04
How many people, economists or otherwise, understand China?
Comments on Karen Maley “Is China a classic bubble economy?” 3/04/2010, http://www.businessspectator.com.au/bs.nsf/Article/Is-China-a-classic-bubble-economy-pd20100403-45R9U?OpenDocument&src=sph
While this article lists many of Edward Chancellor's arguments on the so called Chinese bubble and its similarity with "past manias and financial crises".
However, Edward Chancellor failed to mention or even to think about the many differences that exist between China's current case with the past cases.
Did Edward Chancellor mention productivity improvement in china and its implications for the differences?
The "past manias and financial crises" that Edward Chancellor implies presumably were mostly at the forefront of some "new things", but is the China case share any of the characteristics of those new things, that is, a new potential path that was full of uncertainties and may or may not be realisable?
What about the China case?
Is urbanisation not realisable in the sense that there is no precedence, like the internet frenzy that preceded the technology crash in 2000?
What about sustained rapid growth over a long period until a country reaches the world economic frontier?
Haven’t we got ample examples already?
Why did Edward Chancellor mention any of them?
To just take a simple example from the piece: It is said "Bubble-like signs are evident in the Shanghai stock market, and stretched real estate prices." It seems there may be half truth in that statement. Is the Shanghai stock market really bubble like now, based on what?
So, the question is: is Edward Chancellor's arguments convincing?
The answer obviously is negative, I am afraid to say, although the author appears was convinced enough.
Unfortunately, that reflects a fact that how little many people understand history, economics and economic development.
While this article lists many of Edward Chancellor's arguments on the so called Chinese bubble and its similarity with "past manias and financial crises".
However, Edward Chancellor failed to mention or even to think about the many differences that exist between China's current case with the past cases.
Did Edward Chancellor mention productivity improvement in china and its implications for the differences?
The "past manias and financial crises" that Edward Chancellor implies presumably were mostly at the forefront of some "new things", but is the China case share any of the characteristics of those new things, that is, a new potential path that was full of uncertainties and may or may not be realisable?
What about the China case?
Is urbanisation not realisable in the sense that there is no precedence, like the internet frenzy that preceded the technology crash in 2000?
What about sustained rapid growth over a long period until a country reaches the world economic frontier?
Haven’t we got ample examples already?
Why did Edward Chancellor mention any of them?
To just take a simple example from the piece: It is said "Bubble-like signs are evident in the Shanghai stock market, and stretched real estate prices." It seems there may be half truth in that statement. Is the Shanghai stock market really bubble like now, based on what?
So, the question is: is Edward Chancellor's arguments convincing?
The answer obviously is negative, I am afraid to say, although the author appears was convinced enough.
Unfortunately, that reflects a fact that how little many people understand history, economics and economic development.
Public services and independent public institutions
Comments on Heather Ridout “Fixing our public service”, 4/04/2010, http://www.businessspectator.com.au/bs.nsf/Article/Fixing-our-public-service-pd20100401-43UQL?OpenDocument&src=is&is=Manufacturing&blog=Inside Industry
While the call for fixing public services has some merits, it misses the really most important point in Australia.
Public services are servants, not the master.
Consider what has happened in Australia since the Rudd government's election victory.
There have been so many public policy blunders, either in concept or in implementations.
The $43 billion NBN. The pink batts. The $16 billion BER. The Indigenous housing program. The ETS bill and Copenhagen. The much delayed and incomplete health reforms. And the wasteful cash handouts of over $20 billion (in terms of economic effects and impact on budget).
What has been a good one, can you name it?
The AI should be first one to understand it is not the public services that was the most important factor to those failures.
It is the Rudd government.
What does that mean?
We need better institutions that will guarantee good public policies.
Public services are a minor part of that.
But the most important institution is some publically funded independent institutions that can provide the best public advices, as opposed to just the government controlled public services as its slaves.
There should be a couple of independent institutions that are much more independent than the productivity commission that account only to the Australian parliament with guaranteed funding but not under the control of the government of the day.
Such independent institutions can provide independent, timely and high quality policy analysis and evaluations, and can be a serious and important check to the government and bureaucrats.
The RBA is independent, but it is not in a position to analyse and evaluate fiscal policies and other policies except monetary policy.
While the call for fixing public services has some merits, it misses the really most important point in Australia.
Public services are servants, not the master.
Consider what has happened in Australia since the Rudd government's election victory.
There have been so many public policy blunders, either in concept or in implementations.
The $43 billion NBN. The pink batts. The $16 billion BER. The Indigenous housing program. The ETS bill and Copenhagen. The much delayed and incomplete health reforms. And the wasteful cash handouts of over $20 billion (in terms of economic effects and impact on budget).
What has been a good one, can you name it?
The AI should be first one to understand it is not the public services that was the most important factor to those failures.
It is the Rudd government.
What does that mean?
We need better institutions that will guarantee good public policies.
Public services are a minor part of that.
But the most important institution is some publically funded independent institutions that can provide the best public advices, as opposed to just the government controlled public services as its slaves.
There should be a couple of independent institutions that are much more independent than the productivity commission that account only to the Australian parliament with guaranteed funding but not under the control of the government of the day.
Such independent institutions can provide independent, timely and high quality policy analysis and evaluations, and can be a serious and important check to the government and bureaucrats.
The RBA is independent, but it is not in a position to analyse and evaluate fiscal policies and other policies except monetary policy.
2010-04-02
STRATFOR's international economics
Comments on STRATFOR “China on a knife-edge”, 2/04/2010, http://www.businessspectator.com.au/bs.nsf/Article/Why-China-is-doomed-pd20100331-43CJG?OpenDocument&src=sph
It is fascinating to read this piece of article that pays little respect to economics especially the mutual benefits of international trade.
Further, it treats international trade as an extension of a country's power rather than an integrated international economy that produces common goods.
To Stratfor, the GFC has meant it can throw away every bit of economics!
It is fascinating to read this piece of article that pays little respect to economics especially the mutual benefits of international trade.
Further, it treats international trade as an extension of a country's power rather than an integrated international economy that produces common goods.
To Stratfor, the GFC has meant it can throw away every bit of economics!
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