September 2009 Archives

By: Clay Boswell

The credit crisis has put a spotlight on the flow of money from the US to China - and back, through the purchase of US Treasury bonds. The relationship seems to defy logic, as if one country were paying another to buy its products.

I'm reminded of a science project I did in the sixth grade, a modified balsa wood airplane. Like other such craft, it had a propeller at the front. Typically, the propeller would be powered by a wound rubber band, to which it was directly attached. (Get your own here!) My innovation was to eliminate the rubber band and connect the propeller, by means of a crude gear, to a paddle wheel further back. No child prodigy, I imagined that air flowing past the airplane would spin the paddle wheel, which would turn the propeller, which would pull the airplane through the air, which would spin the paddle wheel, which would.... You get the idea.

Mrs. Birch, the school principal, complimented my imagination, sweet lady. "But you know, of course, that perpetual motion is impossible," she added. Yes, I nodded cautiously, wondering what "perpetual motion" meant.

I'm no longer a stranger to the laws of thermodynamics. Indeed, I often see analogous relationships in unlikely places - such as America's trade deficit and debtor status. The economy isn't a closed system, however, and new wealth is being created all the time, sometimes even more quickly than it is destroyed. Likewise, the long-term trend in living standards does not suggest entropic decay.

Still, there does seem to be something fundamentally unsustainable going on. The Chinese government has been worried for some time. Last week, a former vice-chairman of the Standing Committee and the current head of China's green energy drive, Cheng Siwei, said Beijing was not pleased that the US Federal Reserve had resorted to buying US treasury bonds, essentially printing money to buy its own debt. "If they keep printing money to buy bonds it will lead to inflation, and after a year or two the dollar will fall hard," he was quoted as saying in the UK's Daily Telegraph.

That's pretty much what happened to my airplane: it fell hard. But that's science, right? With the economy, on the other hand - the stakes are a bit higher. And yet, I wonder: Are we like test pilots in a jumbo jet designed by a child?

I was really looking forward to my visit to East Asia. As soon as the invitation for a press trip to Shanghai, China, dropped into my email inbox last year, I was very quick to respond and get down to the local embassy to arrange my visa.

Aside from the obvious networking and news opportunities the trip would provide, I was particularly excited about the prospect of snagging a few bargains in the high-tech stores around the city. With a favorable exchange rate and access to one of the most innovative and advanced electronics markets in the world, I made sure I converted plenty of currency.

Despite major jetlag upon arrival, I had a few hours to kill before my first few meetings, and found myself gesticulating wildly to a passing taxi driver, urging him to take me to the city center. I roamed the streets, taking in the spectacular skyline - the bulbous Pudong Tower, the looming skyscrapers and massive illuminated signage I'd seen so often in the movies.

It wasn't long before I was accosted by a guy at a dodgy-looking stall, pleading with me to take a look at his "quality" goods. Other pushy street vendors made similar offers, which I respectfully declined. I'd heard from a fellow journalist back home about the risks of buying items in some parts of the city; counterfeiting is still rife in China. So I did business only in legitimate stores, the ones that provided receipts and offered a selection of items bearing all the leading brand names.

Sadly, someone I was with was not so lucky. Returning home, the large capacity computer memory stick they'd bought corrupted all their data, their DVDs didn't play properly and their selection of branded clothing barely made it through the laundry in one piece.

These were bought from what appeared to be reputable dealers, but it's still pretty easy to fall foul of unscrupulous vendors in China. Earlier this month, the World Trade Organization (WTO) hoped to address the situation by ruling that China should ease its restrictions on imported goods. The BBC website commented that, "China's current limitations on the import of official US DVDs and other media products has created a large domestic counterfeit industry."

My friend would have probably considered a return visit if the WTO had acted a little sooner.

(Photo credit: d'n'c)

You never really notice the convenience of things until they're gone. Such was the case on my vacation to Ireland in August.

Visiting the Emerald Isle for the very first time, and for a week, my wife and I made the capital city of Dublin our home base as we explored the city and took several day tours.

Making a quick run to Supermacs, the fast-food chain bearing a strikingly close resemblance to McDonald's, I ordered four cheeseburgers, fries, some fried chicken, and a coffee and tea to go.

Just your usual unhealthy fast-food order - but lo and behold, no plastic bags for your takeout!

Ireland first slapped a tax on plastic bags in 2002 and usage dropped 90% within months. There are just no plastic bags to be seen anywhere.

Instead of the plastic bag you're used to getting in my home town of New York, you get a flimsy paper bag. Now that's fine for the food, but not ideal for carrying hot drinks back to the hotel.

And at the "convenience" store, whatever you buy, you haul out with your hands and arms - no bag is offered. Good luck carrying several bottles of water, milk, juice, potato chips, a cup of yogurt and a banana.

If you insist on having a bag, it will cost you 22 euro cents there. Call me cheap, but I was loathe to pay for something I'm used to getting for free.

Sure, there could be benefits to taxing plastic bags - the streets do look clean and same for the countryside. Maybe it's worth a bit of inconvenience, but that's debatable.

I missed the convenience of plastic bags. And don't get me started on the napkin situation. Restaurants were very sparing with the napkins, making a messy eater like me look even worse. At a local Burger King, there was a half-joking sign that said that if you took more than 10 napkins, you were a thief!

In August, Mexico City became the latest major metropolis to ban non-biodegradable plastic bags from the retail sector.

In most of the US, many feel it is our God-given right to get a free plastic bag with our purchase - whatever it is!

But then again, we also thought it was our divine right to drive gas-guzzling SUVs fueled with $1/gal gasoline.

 

Photo credit: Yvonne Chang