Gary Ling, Digital Producer, Data Monetiser, Political Savant, Information Economist, Solution Seller, Business Strategist.
"Life, is a Virtual State of Mind" - Gary Ling
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China-US Relations - It's All Business

26/10/2012

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Two important events to watch in November as they will impact all our lives: The US Elections and the Chinese Communist Party Congress.

With just days to go to the US Elections on November 6th one of the most interesting outcomes to watch is the reaction of China to the results. Whilst it's understandable that everyone's focus is on the Presidential election, the Senate and House votes matter as they have a major impact on Sino-US relations too.

At various times over the past few years odd Congressional players have been urging successive administrations to label the Chinese 'currency manipulators' .  On my trip to China I noted evidence of this at a micro level (see here). Since the President oversees the Executive branch of the US government, the US Treasury has avoided assigning this label to the Chinese for foreign policy reasons.  Will the election of Mitt Romney change this? 

During the both the primary and general election campaigns Romney has taken a 'hardline stance' on China. During the primaries he said that "China was stealing intellectual property rights from the US and other nations and responsible for a large number of cyber attacks on US facilities and bases". More recently he has accused China of manipulating its currency.  Perhaps if the Republicans win back control of the House of Representatives, the Treasury may be urged to change its stance after all. A move Obama's campaign have said would be "highly disruptive" to the bi-lateral relationship given the sanctions the US would levy against China as a result.

Yet on recent foreign policy 'problems' the Chinese have hardly been supportive of the more 'liberal' approach that the US and Europe thinks is likely to improve levels of international trade. Chinese support for Syria's President Assad at the UN is a case in point and demonstrates that China is not ready to step up to its broader responsibilities as a global Leader/Player. 

Interestingly, it seems likely that the Big US business supporters of Romney may lobby against him taking too tougher a stance against China.  The Washington Post recently reported that General Motors sells more cars in China than in any other country. Three years ago, Apple counted on China for just 2 percent of its revenue; in the most recent quarter, it was 16 percent. Starbucks thinks that China will be its second-biggest market by 2014. In short this constituency is looking for a slowing China economy to take up the slack from the brow beaten US consumer.

In the end, all these economic issues may play second fiddle to plain old political ones.  It is arguable that the US Elections are not the most important 'elections' anyway this year.  Two days after they are held China hosts its Communist Party Congress which will see more than 2,000 delegates gather in Beijing to formally anoint the country’s next generation of leaders.  At least if Romney is elected he will have already made his pile of cash in the private sector. Yesterday's extraordinary New York Times story on how Chinese Premier We Jiabao's family has made billions since he has been in power highlights some key differences between the two political systems.

Then again, it also illustrates some similarities. Things are never allowed to get in the way of profit making business. As usual, Money makes the world go round...

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Droning on...and on...

15/10/2012

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Just how significant to the military balance of power in the middle east is the news that the Israeli air force shot down an unarmed reconnaissance vehicle (UAV) over Israeli territory last week?  It’s probably too early to tell.

What is important is that the Iranians have now admitted that both they and Hezbollah, the Lebanese based Jihadist group, played a part in launching the remote-controlled drone.  According to the Associated Press, Iranian Defence Minister General  Ahmad Vahidi said "Great job by Hezbollah.  The era in which the Zionist regime (Israel) could think it has regional supremacy is over."

This statement comes few days After  Hezbollah leader Sheik Hassan Nasrallah claimed responsibility for the launch and said the drone was manufactured in Iran and assembled in Lebanon.

It is also interesting to note that last December the Iranians brought down an American drone over their territory after it apparently malfunctioned whilst flying over neighbouring Afghanistan. At that time the Guardian reported  an Iran official saying: "An advanced RQ170 unmanned American spy plane was shot down by Iran's armed forces. It suffered minor damage and is now in possession of Iran's armed forces."

It is well known that because of economic sanctions against the country, the Iranians excel at reverse engineering many things. Just 9 months after downing the US's UAV, the Iranians announced their own home made drone capable of reaching Israel.  All of which raises the question: Where else will the Iranians be able reach as they develop the technology behind these unmanned birds? This is a story that will run and run so watch this space.

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'ROI Terrorism' - a smoldering issue

12/10/2012

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Sometimes as the torrent of news stories flow on a daily basis it is hard to see the wood for the trees.  It becomes harder to pick out moments that may have some larger more lasting meaning.  Over the past weeks, two stories have caught my eye that portends developments of an ominous nature.

It seems that that both the Taliban and al-Qaeda, or in the case of the latter at least, some of their satellite groups or hangers-on, have rediscovered the true value of 'ROI terrorism' - where inflicting a high economic price on the target community is the key objective of the 'attack'. I’m sure that bin Laden understood the economic impact of hitting the Twin Towers just a stones’ throw away from Wall Street.  Yet this thought was likely secondary to the cost in human lives and the worldwide visual impact accentuated by the fact that it happened in New York City - the world’s largest media market.   The 9/11 event (I call it this since they haven't managed to repeat it yet on US soil) took months of planning and cash according to the
report of the US commission setup to investigate it.  Any objective observer would surely agree that 9/11 provided a tremendous return on this investment (hence, ‘ROI terrorism’) for al-Qaeda.  Somehow they have failed to get similar returns from other subsequent events. The problem is that after 9/11 what we are all watching for in the 'west' is the next big spectacular, with 'spectacular' being the operative world.

Yet the real story of modern terrorism is that it is a mind numbing, daily grind for both the people who perpetuate it and those who try to prevent it.  Of course, the terrorists only have to be lucky once whereas defenders have to be lucky all the time but both sides just hammer away continuously trying to find that odd moment that they can call a 'win' - a return on the investment that they have made in carrying out or preventing terrorism.  9/11 and bin Laden's death are both sides of the same coin even if the respective investments of either side are asymmetric.   


Still, when one party consistently presses home an attack on the weaker parts of the other it can be a game changer which brings us to the two stories I mention above. The first is the Taliban's attack on the
Allied Camp Bastion base in Afghanistan in which 6 Harrier jets were destroyed and a further 2 were seriously damaged. Unbelievably, this was the single biggest loss in American airpower since Vietnam. The full impact of this story was under reported precisely because it took a few days for the full details to emerge and the world had moved on.  In fact, the cost of these assets alone is over US$150 million and that's beyond the reputational damage to the allied forces involved.  For the loss of just 11-15 Taliban lives this must be considered an ROI win for the terrorists/insurgents. 

The second, has even more serious implications in my view.  This is the report from the Russian news service that Russia’s security chief has warned that international terrorism is changing and spreading its tactics, from setting fire to European forests to obtaining Weapons of Mass Destruction in Mid-East countries that suffer from internal crisis.  The latter is to be expected as al-Qaeda worms its way in behind well-intentioned reformers but the former is really disturbing.  As budgets are cut across Europe, terrorist ‘elements’ can cause disastrous results with a just a few matches and little chance of dying or getting caught. If this turns out to truly be a tactical shift, the implications are as serious as they are profound.

This is not new.  The IRA recognised the value of economic targets particularly those in the City of London but its remergence as an explicit terrorist tactic seems to me to be a cause for grave concern. My good friend Roger has spent most of his life studying terrorism - both the modern kind and its history.  He authors a great blog
here detailing all sorts of ingenious schemes that those wishing to wreak havoc have come up with to do exactly that.  I have looked at this for a number of years and I now realise that the most effective ones are those that get the best ROI.  As an economist, I might be expected to say this but it seems to be self-evident that the longer lasting the economic impact the more likely the terrorist is to cause extensive damage to the morale and psyche of western democracies - which is their ultimate aim.

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Just what is 'Mental Health'?

4/10/2012

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Mental Balls. On the same day that Reuters reports that 'Internet Addiction' is on its way to being classified as 'mental Illness', the BBC says that  26% of the workforce in Britain has been diagnosed with depression and that 58% of those people are likely to take time off of work because of it.  Among workers in Europe experiencing depression only those in Germany (61%) and Denmark (60%), take off more time because of it than in Britain.  

I confess that part of the reason I started this blog piece was to record these statistics somewhere so that I could easily find them for prosperity since they are disturbing.  Maybe a lot has to do with how we define conditions that are considered to be mental illness.  My knowledge is not sufficient to debate this suffice to say that if every addiction is classified as 'mental illness', I don't know how many people that will leave as 'mentally fit'. To me three things are critical to a sound mind.

First, a person is bound to feel stressed if they don't have choices. So if you seek security make sure that you have alternatives.  It's OK if you love your job in a big company but if you want to be loved back - get a dog.  Businesses don't love people, certainly they don't owe them a living.  In the ebbs and flows of commerce everyone is dispensable.  So even if you think you have the best and most 'secure' job in the world, make sure you 'what if...?' what the world looks like if this job is not there tomorrow.


Second, manage your own expectations.  Never let them get too high or too low. This is particularly true if you are expecting things from other people. If the above numbers are correct you have a 1 in 4 chance of coming across some poor individual who is suffering from depression in the UK workplace.  This may well affect what promises that they make to you that, in turn, may impact the delivery of your projects.


Three, make sure you surround yourself with a 'home support system' which is right for YOU.  Staying in an unhappy marriage, associating with people who constantly drain the life out of you is likely to mean you are perennially tired and make you depressed!  At least in your personal life don't get into a long term situation where you feel you are going home to face a battle every day.

I can't say what the mental health 'professionals' think of these points but I can attest that they seem to work for most of the successful and happy people that I meet. 

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'RACE HATE' OR PLAIN CRIMINALITY? 

1/10/2012

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Listen For Balls. Yesterday, I bumped into a neighbour who tells me that someone had 'keyed' both his car and another on our street.  I am surprised but not shocked.  Sometimes the behaviour of my fellow citizens leaves much to be desired. In this case the vandal had scrawled 'Frog' on a Renault Espace and 'Nazi' on a BMW.

Since it was a night time crime there is a natural assumption that drink was involved.  Even the Community Support Officer (a 'CSO' or a policeman) who turns up to investigate makes this assumption.  I am not so sure.  It takes some thinking or at least some logical process to walk along the street, see a German car and scratch 'Nazi' into the bonnet ('Hood' in American), walk further along the road (assuming this was the timeline) and then scratch 'Frog' (see photo) down the side of the French made Espace.  I would say the person was both thinking and motivated.   But just what were they thinking?  I spent a couple of minutes trying to think what would make someone act in such a way but came up empty.  

For the purpose of the police crime figures, the CSO in attendance informed us that this was to be recorded as a 'Race Hate' crime.  Further investigation on my part reveals that a government website says this of 'Race Crime':
  • Race crime doesn't just mean when someone becomes a victim because of the colour of their skin. It also includes nationality, culture and language. Any racial hate crime that is reported to the police is treated seriously, even if it could be classed as a minor incident, because of the fear that racist crime can create within communities.
This begs the question whether this piece of vandalism would be treated less seriously if not noted as a 'Race Hate Crime'? Clearly to the property owners affected it is immaterial how it is classified.  They are put out and angry regardless.  But surely our national crime statistics are being skewed if this is how the police  are recording crime. The owners of the cars were neither German nor French. If the vandal had a beef against 'Europe' then since England is a part of Europe does he have a problem with everyone?  

Further investigation of the 'Race Hate' concept leaves me even more disturbed since the Government website goes on..."If it's proven that the offender's main motivation was based on prejudice or their hatred of another race, then the sentence can be more severe than for the same offence without a racial motivation." 

So a plain old stupid drunken vandal gets a lessor sentence than one who is a racist (and probably drunk and stupid as well).  Not only does it seem that introducing the concept of 'racism' as a motivation into policing is distorting crime statistics but viewing crime through the prism of 'race' is distorting criminal sentencing. The police should treat crime for what it is, not try to layer on motivation for colour of skin, nationality, culture and language.  This is yet another example of the sloppy thinking that has destabilised efficiency and effectiveness in UK local government (see here).

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    (Pron. "bawl-zee thing-king")

    defined:
    adj: 1. Slang courageous and spirited reasoning; judgement  2. Characterized by clear, straightforward thought or thoughtfulness; rational: “That’s the sort of Ballsy Thinking to move us towards our objective”.

    n.  1. The act or practice of one that thinks differently, innovatively; new thought.  2. Leading by way of reasoning; judgment: “This is not ballsy thinking, it is too timid an idea.”


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Gary welcomes the opportunity to discuss projects that he might be able to work on with you.  
Tel: +44 7508 157 892 Email: ideas@garyling.com

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Photos used under Creative Commons from jdn, Editor B, WDanRoberts, Mike Licht, NotionsCapital.com