Category Archives: Entrepreneurs

China and Thailand Back on Track

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Thailand is seeking more opportunities to collaborate with China, especially in the areas of rail transport, agricultural products and tourism, after months of political turmoil.

Phaichit Viboontanasarn, commercial minister at the Thai embassy in Beijing, said that plans for a high-speed rail line linking Chiangmai and Bangkok have been modified by the new Thai government, led by former army head Prayuth Chan-ocha.  The railway will instead be a conventional line connecting Nong Khai in northeast Thailand with the capital. Phaichit said the country will gradually improve its national railway network and work closely with Chinese companies that have mature technology at prices lower than those of many international competitors.

Many parts of Thailand’s rail network are still single-track lines, and the government wants to improve the basic rail system first by building double-track lines and related facilities.  Thailand is a large member economy of the Association of Southeast Asian Nations, which has 600 million consumers.

“With stable economic growth driven by tourism, modern manufacturing and agricultural development, Thailand will build its own high-speed railway system when the time is ripe, which will help us further enhance trade. China surely will be a big contributor to our high-speed railway sector,” Phaichit said.

Bilateral trade surged from $26 million in 1975 to $70 billion in 2013, and this growing trade has improved the service sectors including aviation, tourism and hotels.  Bangornrat Shinaprayoon, director of the Tourism Authority of Thailand’s Beijing office, said: “Thailand is doing its best to reduce the negative impact of the political chaos and has shifted the government’s top priority to economic development, especially the tourism, agricultural processing, transportation, electronics and vehicle industries.”  In the first seven months of this year, 2.22 million Chinese visited Thailand.

Bangornrat said that Thailand expects 4.3 million Chinese tourists this year.  “Thailand has waived visa fees for Chinese tourists from August 9 to November 8 and opened eight customs channels for Chinese visitors at airports in Thailand,” Bangornrat said.

Thailand Tourist Destinations

Chinese Anti-Trust Regulator Goes After Microsoft

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A Chinese antitrust regulator said on Tuesday that Microsoft Corp has not been fully transparent with its sales data on the software it distributes in China, including information on sales of its media player and web browser software.
Zhang Mao, head of the State Administration for Industry and Commerce, said in Beijing that Microsoft has expressed willingness to cooperate with ongoing investigations.
“After multiple meetings, including at high levels, they’ve expressed a willingness to respect Chinese law and collaborate with investigating officials,” Zhang said.
The Microsoft investigation comes amid a series of antitrust probes into foreign firms in China, including mobile chipset maker Qualcomm and German carmaker Daimler’s luxury auto unit Mercedes-Benz.
The State Administration for Industry and Commerce said earlier this month that Microsoft is suspected of violating China’s anti-monopoly law.
This is in relation to problems with compatibility, bundling and document authentication for its Windows operating system and Microsoft Office software.
“The investigation is ongoing and we will disclose the results to the public in a timely fashion,” Zhang said, adding that the Microsoft probe is one of nine investigations opened this year that include the software, tobacco, telecommunications, insurance, tourism and utilities sectors.
The companies involved in the nine investigations comprise domestic, foreign, State-owned enterprises and trade associations, according to Zhang.
Microsoft China Chief Executive Ralph Haupter did not respond to Zhang’s comments, saying only that more work needs to be done on Chinese information safety protection.
An industry insider said on Tuesday that despite policy barriers, global tech giants can still enjoy great opportunities in China if they can find the right marketing strategy.
Derek Shen, China head of the United States social networking website LinkedIn, said foreign tech companies should understand Chinese requirements when doing business in the country.
“To survive in China, they have to figure out the strengths that are difficult for local rivals to replicate,” he said.  “It is a tough task even for Google, because its technological edge can be quickly overrun by Baidu or Tencent Holdings. Overseas tech giants seem unaccustomed to the Chinese marketing climate.”

Microsoft Not Transparent in China

Money Transfers in Somaliland

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Barclays was one of the last major international banks to still accept accounts held by money-transfer operators (MTOs), whose activities are seen in the West as open to abuse. But a record $1.9 billion fine slapped on HSBC by U.S. authorities for conducting business with banks in Mexico and Saudi Arabia with possible links to drug trafficking and terrorism appears to have tipped the balance for Barclays. The profit margins no longer seem worth the reputational risk. Now, ironically, Barclays finds itself in the role of “bad guy” by dint of its slowness in pulling out of the MTO sector.

“At the end of the day, the money will still come in, but at much higher transaction cost and with less transparency,” says Shire, Somaliland’s minister of planning. “So who do you punish by doing this? Is it the pirate, the terrorist, or the poor man?”  Money Transfers in Somaliland

Money Transfers in Africa

China Backing Small Cultural Companies

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China is to lend more support to micro and small cultural companies in financing, taxation and personnel management.  “High costs and financing remain obstacles for small companies, and our guideline encourages banks and other finance institutes to be more generous when granting them loans,” said Liu Yuzhu, assistant minister of culture.

The guideline, jointly released by the ministries of culture, finance, industry and information technology, targets cultural groups with less than 100 staff. Such companies comprise over 80 percent of all cultural enterprises in China.
The document encourages companies to convert disused factories or warehouses into their working bases and organize and participate in public cultural activities.
The ministry is planning a regulation for government departments to purchase cultural products and services from a widened range of companies and organizations to give more commercial opportunities for small companies.

The ministry is exploring a professional title system that will increase salaries and benefits for those working in non-public cultural companies in accordance with their experience and achievements, and thus, enable these groups to attract more talent.
“Micro and small cultural groups enrich our culture, boost creativity and prosperity and increase employment opportunities. They are of crucial importance to social harmony, economic transformation and upgrades,” said Cai Wu, minister of the Ministry of Culture.

With low employment barriers and more artistic freedom, small companies are more astute in understanding people’s spiritual demands, Cai said.  The guideline, echoing a decision by the Communist Party of China last year, offers suggestions on innovation, finance and tax.   “The guideline is only a starting point. Whether these companies can really succeed lies in enforcement of regulations,” Cai added.

Cultural Companies in China

US Infrastructure Spending

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Economists at the Federal Reserve Bank of San Francisco look at the impact of intrastructure repair on the economy:  Highway spending in the United States between 2008 and 2011 was flat, despite the serious need for improvements and the big boost to state highway funds from the Recovery Act of 2009. A comparison of how much different states received and spent shows that these federal grants actually boosted highway spending substantially. However, this was offset by pressures to reduce state highway spending due to plummeting tax revenues. In fact, analysis suggests national highway spending would have fallen roughly 20% over this period without federal highway grants from the Recovery Act.  Fueling Road Spending with Federal Stimulus

Infrastructure Repair

 

Addressing Employment at Jackson Hole

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The disappearing middle class has been a topic of much discussion in recent years. David A. Auter, Professor and Associate Department Head, Department of Economics, Massachusetts Institute of Technology is the author of “Polanyi’s Paradox and the Shape of Employment Growth.”  While much has been made of the loss of jobs to automation and robots, Prof. Auter says that data indicates rather than a loss of jobs occurring, a rearrangement of jobs within the economy is taking place.

Auter finds that for Europe and the U.S., growth is occurring in low wage occupations and in high wage occupations while middle wage jobs have been declining over the past couple of decades. He relates this to the relationships between men and machines which he structures in the context of the 1966 proposition of physical scientist, social scientist and philosopher Michael Polanyi that intuitive knowledge is something that transcends learned theory. Following this reasoning he is not surprised to find that the onset of an age of automation and robots is not marked by the obsolescence of human “labor” but actually a redefinition of what that effort is, as reflected by the empirical data.

In 1966, the philosopher Michael Polanyi observed, “We can know more than we can tell… The skill of a driver cannot be replaced by a thorough schooling in the theory of the motorcar; the knowledge I have of my own body differs altogether from the knowledge of its physiology.”

Polanyi’s observation largely predates the computer era, but the paradox he identified-that our tacit knowledge of how the world works often exceeds our explicit understanding-foretells much of the history of computerization over the past five decades. This paper offers a conceptual and empirical overview of this evolution.

The challenges to substituting machines for workers in tasks requiring adaptability, common sense, and creativity remain immense. Contemporary computer science seeks to overcome Polanyi’s paradox by building machines that learn from human examples, thus inferring the rules that we tacitly apply but do not explicitly understand.   David Auter Paper

Jobs

Nigeria: Launching Pad for Successful Business in Africa

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The Economist writes:   2001 MTN, a fledgling telecoms company from South Africa, paid $285m for one of four mobile licences sold at auction by the government of Nigeria. Observers thought its board was bonkers. Nigeria had spent most of the previous four decades under military rule. The country was rich in oil reserves but otherwise desperately poor. Its infrastructure was crumbling. The state phone company had taken a century to amass a few hundred thousand customers from a population of 120m. The business climate was scarcely stable.

MTN took a punt anyway. The firm’s boss called up colleagues from his old days in pay-television and found they had 10m Nigerian customers. He reasoned that if they could afford pay-TV they could stump up for a mobile phone. Within five years MTN had 32m customers. The company now operates across Africa and the Middle East. But Nigeria was its making and remains its biggest single source of profits.   Nigeria, The Launching Pad  

Nigeria's Problems Do Not Inhibit Development

 

Vocational Training in China

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As a migrant worker, Li Weichao spent much of his youth shifting from one temp job to another, living thousands of miles away from his family to perform backbreaking labor for minimal pay.  The hours were long, the travel was tiring and the pay, while better than some, was just enough to get by.

“I used to do manual work on construction sites, making around 300 yuan ($48) a day. I was always worried about finding my next job,” the 26-year-old from Henan province said.
But his recent graduation from vocational school looks to change that. Receiving technical training as a chef, Li recently landed a stable job close to home working at a restaurant in Zhengzhou, capital city of Henan province.  “Since attending vocational training school to receive training, I think the days of worrying about my next job are over,” he says.

As China loosens household registration restrictions to allow migrant workers to receive equal urban welfare, many like Li now seek to settle down in cities.
The household registration system is tied to one’s place of residence and was set up in 1958 to control movement of rural population into cities. The system has prevented the country’s 269 million migrant workers from receiving the same public benefits as city dwellers and is widely believed to hold back urbanization and domestic consumption.
With the restrictions changing as many as 100 million migrant workers are expected to become “real city dwellers” by 2020.  To ensure new residents can find stable jobs to afford city life, cities across the country are focusing on furthering vocational training for migrant workers.

Li’s home province of Henan, the country’s most populated, has a work force of 49 million people. In 2009, Henan launched a province-wide campaign to strengthen the working skills of its residents by offering training programs.
By the end of 2013, the programs helped train a total of 17.8 million people.

Anhui province, another region with a strong work force, also adopted training programs to improve the skill set of its workers. In Anhui, these programs are currently offered not just by government, but schools, private institutions and businesses.

Official statistics show that, since the new training programs, the average monthly income of Anhui’s migrant workers increased to 2,909 yuan – 300 yuan higher than the national average.  However, one survey found that only about 30 percent of China’s migrant workers have undergone vocational training. A lack of technical skills are the main obstacle preventing them from becoming urban and industrial workers, the survey found.
Zhang Junjie, a political advisor from Anhui, has been studying the vocational training of migrant workers for years. His research reveals that most vocational training schools only provide old-fashioned courses such as computer, welding and hairdressing. Such courses are out of touch with the diverse needs of China’s changing job marketplace.
The new programs include training in such skills as auto repair, molding for the manufacturing industry and heavy construction vehicle operation.

According to a national plan on urbanization issued early this year, China will conduct vocational training for 10 million migrant workers a year starting from 2014 to 2020 with the goal of helping develop the nation acquire specific skills.

Auto Repair in China