China’s Command Structure

Courtesy of FT Alphaville, Goldman Sachs has created a chart of the command structure of the Chinese government.  It's a useful reference for understanding the complexity of the path that reform efforts must navigate, despite the idea that the CCP, as an authoritarian government, essentially rules by diktat.  Even in single-party systems, there are competing stakeholders.

One Belt, One Road Promotion

I saw this commercial today while flipping through the football games.  Supposedly this commercial is sponsored by CLSA (aka Credit Lyonnais Securities Asia), but good luck sighting the CLSA brand anywhere.  For that matter, good luck spotting the fact that the One Belt, One Road initiative is sponsored by China.  Keep in mind that CLSA's parent company is CITIC Securities (China's largest brokerage).  I'm trying to figure out the angle here, but it eludes me.  It fails both as a brand promotion and as propaganda to highlight some positives about China.  Very strange.

The European Economy: More Like Japan, or the US?

FT's Alphaville picks up this interesting comparison by Deutche Bank:

Yup, apparently more US with a 2-3 year lag than Japan. As they argue (again and with our emphasis):

The difference between Europe today and Japan in the 1990s has become more pronounced than it was a few months ago…

A Japan-type dynamic could be defined as a situation in which private sector deleveraging is slow and is not accommodated by either aggressive fiscal nor monetary policy. As a result, the credit impulse (i.e. the pace of deleveraging) never reverses, and domestic demand remains under pressure. Ultimately, the economy converges to a situation in which inflation is negative and the output gap is widening while real interest rates are too high.

The Plaza Accord, Revisited

The stagnation that Japan has experienced since its real estate bubble ended in 1991 has caused much anguish and speculation for how Japan can turn its economy around and recapture some of the dynamism it experienced in the 1980s.  Many observers blame the Plaza Accords, pinpointing it as a cause of Japan's decline as an economic power.  The Nikkei Asian Review has an interview with Toyoo Gyohten, the former chief of the International Finance Bureau at the Ministry of Finance, and an official who was involved in the negotiation of the Plaza Accord.  He takes a more balanced view of the genesis of the Plaza Accord, and the cause of Japan's subsequent stagnation:

The Robot Revolution: Japan Edition

Bloomberg has a story out showing Japan's efforts to spur the robot revolution in order to address its labor pool decline and attempt to reinvigorate economic growth:

The rise of the machines in the workplace has U.S. and European experts predictingmassive unemployment and tumbling wages.

Not in Japan, where robots are welcomed by Prime Minister Shinzo Abe’s government as an elegant way to handle the country’s aging populace, shrinking workforce and public aversion to immigration.