Financial Times, Jan 19, 2012

choi

My comment: Please go to the newspaper's website (www.ft.com) to read the first three reports, for they are worthy of the attention. I understand that with registration, FT allows eight free viewing a month *which seems to be consecutive 30 days rather than a calendar month, judging from my experience.

(1) Javier Blas and Caroline Binham, Traders Delve Into Past to Calm Gulf Tensions; Strait of Hormuz; Efforts are under way to head off a dispute in the oi-rich area.

Four consecutive paragraphs:

"At its narrowest point, the strait is less than 21 miles wide. But the sea lanes are even narrower as supertankers need at least 20-25 metres of draft and thus can navigate only in the deepest portion of the strait.

"In the area commonly known as the Strait of Hormuz, a 25-mile[-]long separation scheme keeps inbound and outbound vessels apart.

"But that navigation area, which is entirely within Omani territorial waters, is less of a worry for oil traders and ship brokers than the nearby 'western traffic separation scheme.' that lies just outside the strait proper but is within Iranian waters.

"The western separation scheme is about 50-miles [sic] long--far longer than the strait itself--and consists of two three-mile wide lanes separated by an eight-mile wide buffer corridor. Traders say if problems arise, the western traffic separation scheme wil be the focus.

My comment:
(a) draft (n; Middle English draght; akin to Old English dragan to draw):
"the depth of water a ship draws especially when loaded"
www.m-w.com
(b) A teaser in the front page heralding the report: "Veteran oil traders are dusting off old maps of the Strait of Hormuz and reaching for obscure legal treaties to deal with increaseingly tense crisis in the oil-rich Gulf region. For the international shipping and oil community, the nightmare scenario is that Iran starts to search supertankers passing through its waters. This would fall short of a military action and the law is not clear-cut about the consequences.
(c) The report states Strait of Hormuz itself (where shipping lanes are in Oman's waters, presumably the Iranian waters in the Strait is to shallow) is not the problem, but the part of waters immediately to west of the Strait, called "western traffic separation scheme" (for which one needs to consult the map in the print report. That is what the quotation is about.
(d) If the online version of the report does not carry the map, one may see one (the third map) in
Strait of Hormuz
http://en.wikipedia.org/wiki/Strait_of_Hormuz
(section 3 Etymology)
(e) The reports also says neither Iran nor US is a signatory of the 1982 United Nations Convention on the Law of the Sea, and thus not bound by it. However, Iran did sign "a 1958 convention which provides for 'innocent passage' of vessels in international straits" even if they (straits as weel as other bodies of waters) are territorial waters.
(f) The report then remarks, "But others say Tehran could technically search a vessel in its waters that it suspected of criminal activity, slowing down traffic in the strait."

Well, not "technically." In fact this kind of search is done frequently. That is how Goods bound for North Korea--an China's weapons to an African nation--were intercepted in the seas.


(2) Kathrin Hille, China University Expansion Fails to Repay Poor's Faith in Learning; Graduate Hopes; Students from the countryside are left saddled with high debts and few career prospects.

My comment:
(a) The first two and last paragraphs is about a man from the backwaters of Guizhou entered Ninbo University gloriously but could only find odd jobs when he could. So education is useless in the eyes of fellow villagers, who do not send their kids to school any more, but to factories to earn money.
(b) The report lists the disadvantages a country boy--and girl--faces relative to an urbanite.
(i) village schools lack qualified teachers and funds. "'The people they hire for our schools are mostly high school graduates who work as substitute teachers,' says Wu Bingfeng, a 22-year-old student of applied chemistry at Guizhou University. As a result, rural students fall behind their city rivals in nationwide entry exams and manage to enter only lower-ranking institutions.
(ii) Rural students "pay as much as those from the city. * * * Average annual fees between Rmb4,000 ($634) and Rmb6,000 [in a China's university] seem low compared with universities abroad. But that is still four to 10 times the annual household income in some of China;s poorest regions.
(c) At the end of the print report:
"AUDIO SLIDESHOW[:] Kathrin Hille talks to Jiang Guoli, the first person to attend university from a Chinese village where only half of the www.ft.com/ruralchina"  
  
(3) Qin Xiao, The Long March Ahead to a Truly Capitalist China (op-ed)
(paragraph 1: "It was widely believed in the early 1950s that the socialist Chinese government was the saviour of the poor and the free market an evil to our society. However, when the government sent me to the inner Mongolian countryside to be re-educated in the late 1950s, I realised that such idelogical fervour masked the intrinsic flaws of our planned economy. That was the very beginning of my China story.")

"Economists and politicians in history have sought alternatives to the modern market system. The two main experiments were the Soviet-era lenin-stalin model, on which China's planned economy was based during the Mao Zedong era, and the east Asian model typified by Japan from the 1960s to 1970s, which created the economic miracles of Japan and east Asian countries.

"In the 1930s, when western economies were mired in the Great Depression, the Lenin-Stalin model led to the rapid growth of Soviet economy, causing heated debateamong economists. Thirty or 40 years later, the Japanese model led to another hot debate. But history has declared the failure of these two systems.

"Beijing launched the reform and opening up the process in the late 1970s, then abandoned the planned economy and adopted a socialist market system. This averted the collapse of China's economy and fuelled rapid growth. During the early stages of the transition, as the market was not yet developed, it was necessary for the government to play a leading role, resulting in a state-dominated system similar to the east Asian or Japanese model. Now the mission of this state-dominated model is accomplished and it is time to" further the process of market reform.

My comment:
(a) Summary: Having shifting from planned economy to socialist market system, China should now move to free market.
(b) Three errors in this essay, in my view.
(i) I do not know if Lenin-Stalin model succeeded for some time, but I (as well as other Taiwanese) have not heard of this until today. But I wish to point out two facts.
(A) The concept of GDP germinated on the eve of World War II. It took a decade to refine methodology and be accepted--that is when GDP data for the West started. (For years after KMT retreated to Taiwan, things were chaotic. So meanful GDP data started later.)  
(B) After collapse of Soviet Union, international organizations (such as World Bank) threw out all economic data of Soviet Union, saying they were not trustworthy.
(ii) Taiwanese always credit Taiwan's prosperity to themselves--not (and probably despite) the government, whose major role was, in contrast to China, provides a stable environment to develop economy. Many economic policies of Taiwanese government were/are wrong-headed (simply because a government is not good at economy or selecting a winner).
(iii) It is too early to declare Japan's economy is a failure. Its technology remains world class. In any event, the four tigers (particularly Hong Kong and Singapore) did not necessarily emulate Japan.

Taiwan has had the most state-owned enterprise (SOE) among Japan and four tigers. Whether it came from socialist root of KMT in China, or from KMT/ROC taking possessions of Japanese properties after WW II, I am unaware of.

S Korea has few SOEs. Its conglomerates were private from the beginning.

(A) For SOE, see government-owned corporation
http://en.wikipedia.org/wiki/Government-owned_corporation
(S Korea not mentioned; In Japan, Japan Post was reorganized into Japan Post Group in 2007 as a material step of the postal privatization. It is currently wholly owned by the government, but is planned to be sold into private ownership. Japan Railways Group (JR), Nippon Telegraph and Telephone (NTT) and Japan Tobacco (JT) were formerly owned by the government.)

JR, NTT and JT were privitized in 1987, 1985 and 1985, respectively.
(B) nationalization
http://en.wikipedia.org/wiki/Nationalization
(the only entry for "South Korea[:] 1946 USAMGIK nationalized all South Korean private railroad companies and made Department of Transportation. This now becomes Korail")

* USAMGIK stands for United States Army Military Government in Korea
http://en.wikipedia.org/wiki/Uni ... Government_in_Korea
(1945-1948)
* Korail
http://en.wikipedia.org/wiki/Korail
(Korea Railroad Corporation; operates passenger and freight trains throughout South Korea; headquarters in Daejeon; still government owned)


(4)
(a) Think Outside the Barrel (in The Lex Column)

The first two paragraphs:

"In highsight, BP's much-ridiculed 'beyond petroleum' campaign may merely have come a decade too early. The company's annual long-term energy forecast, one of the most detailed and insightful reports of its kind, expect oil to lose its starring role inthe world's fuel mix over the next couple of decades.

"Indeed, if it were not for the developing world then there would be hardly any growth in energy consuption period and an outright decline in oil use, reckon BP's economists. Some 96 per cent of energy demand growth will come from non-OECD countries while per capita energy consumption in the developed world falls. Coal will do better, but not by much. The only bright spot for traditional fossil fuels will be natural gas, spurred by liquefaction and hydrofracturing.

(b) Guy Chazan, Oil Demand Show First Fall Since 2009 Financial Crisis.

The first two paragraphs:

"Oil demand has fallen for the first time since the 2008-2009 global financial crisis, a result of weakening economy, a mild winter in the northern hemisphere and high crude prices, say estimates from the International Energy Agency.

"The industrialised nations' watchdog said that oil demand dropped 300,000 barrels a day year on year in the final quarter of 2011.

My comment: Though the text of the report does not say it, a bar chart with the print report shows "Global oil demand[;] Barrels per day (m)" to e slightly higher than 89 in 4Q11.

(c) Leslie Hook, Asia Proves Bright Spot Amid Weak Oil Demand; News analysis; Consumption in the region has gone some way to make up for failing demand in Europe and the US.

(i) Paragraph 2: "In the first three-quarters of last year, consumption growth in China, Japan and elsewhere in the region more than compensated for falling demand in Europe and the US. Asian demand kept rising in the fourth quarter but, for the first time since 2009, the economic might of Asia was not enough to outshine falls in the rest of the world.

(ii) A graph shows two panels: the left panel with a heading: "Chinese demand for oil products is picking up..." and the right panel (a pie chart) headlined "...while Asia makes up nearly a third of global oil demand[;] Projected global oil demand, 2012 (million barrels per day" and data (clockwise: Americas 30m, Asia-Pacific 28.8m, Europe 14.8m, Former Soviet Union 4.7m, Africa 3.6m, Middle East 8.3m)

() News digest
(a) Matt Steinglass, ASML Profits and Sales Surge.

Quote:

"The Netherlands' ASML, the world's largest maker of equipment for manufacturing computer chips, shot past analyst expectations with strong fourth-quarter results and record sales and profits for the year.

"The company benefited from strong worldwide demand for smartphones and tablets. It revised its projections for the first half of 2012 upwards.

(b) Robin Kwong, TSMC Sees Strong Recovery.

Quote: Lora Ho, chief financial officer, said on Wednesday [yesterday] that the company expected a douoble-digit increase in demand for chips used in computers and consumer electronics over the next three months.

"The increase is partly because of robust US retail sales over the festive season * * * TSMC as a result expects overall first-quarter revenues to be flat compared to the fourth quarter at between T$103bn to [sic] T$105bn, despite seasonal factors that in past years have led to lower revenues in the first three months of the year.

"TSMC is the first large technology to sound an upbeat tone for the PC industry in the first quarter.

Note: "News digest" is the name of a column.