Asia

Japan's aging population 11-17-18

Source - Economist, November 17, 2018: "Land of the rising bills"     

Statistics on Japan's aging population. The problems demography causes for Japan will be a preview of what the Western democracies can expect as their population ages. Increasing retirement ages and rethinking pension and medical benefits may be necessary to avoid running out of funds. Increased immigration to replace missing workers will also be needed.

Every year, Japan has 400,000 more deaths than births. This is exacerbating a worker shortage - the Japanese workforce syands at 67 million today but is expected to fall to 58 million by 2030. Increased immigration has not helped as immigrants only make up 2% of the Japanese workforce (compared to 17% in the United States). Overall, there are 1.6 jobs for every Japanese worker.

28% of the Japanese population is over 65, compared to 15% for the US and only 6% for India. Retirement programs, which begins at 60 in Japan, have placed a burden on the economy. Public debt is now 250% of GDP. The Japanese Prime Minister Shinzo Abe is considering mild reforms such as raising the retirement age to 65. Reforming the pension and medical system will be difficult and unpopular.

The rise of Chinese universities 11-17-18

Source - Economist, November 17, 2018: "Seizing the laurels"     

China sent its best students abroad beginning in the 1970's and now those PhD's are coming home to China where generous incentives reward them for publishing. China is poised to become a world leader in academia in the next decade.

Papers published

All from the article: Tsinghua University is a major source of Chinese pride as it contends for accolades for research in science, technology, engineering and maths (stem). In 2013-16 it produced more of the top 1% most highly cited papers in maths and computing, and more of the 10% most highly cited papers in stem, than any other university in the world. The Massachusetts Institute of Technology (MIT) still leads in the top 1% of stem papers, but Tsinghua is on track to be “number one in five years or less”.

Tsinghua and Peking University are modelled on Western research universities. The two are also neighbours and rivals, China’s Oxford and Cambridge. Tsinghua is the conventional, practical one—the alma mater of many of the country’s leaders, including the current one, Xi Jinping, and Hu Jintao, his predecessor. Peking University is the home of poets, philosophers and rebels; Mao Zedong worked in the library, and the university was at the forefront of the Tiananmen Square protests of 1989.

Since 1995 the central government has mounted a series of efforts, involving billions of dollars in spending, to turn China’s best universities into world-class ones. Money is the lever. The funding system motivates universities to produce top-class research. Universities, in turn, give their academics an incentive to do so. A study by three Chinese researchers, published last year, noted that payments for getting a paper published had risen steadily from the $25 that was offered nearly 30 years ago. Now such bonuses range up to $165,000—20 times the annual salary of an average academic—for a paper in Nature. The system has responded. China’s share of STEM papers in Scopus, the world’s biggest catalogue of abstracts and citations, rose from 4% in 2000 to 19% in 2016, more than America’s contribution.

The most important moment in the development of Tsinghua” was in 1978, when Deng Xiaoping said China would send larger numbers of students abroad. “We need to send tens of thousands,” Deng said. “This is one of the key ways of…improving our level of scientific education.” Officials worried that few of them would return, but Deng insisted that enough would. He was right. Forty years on, Tsinghua and the country’s other top universities are reaping the rewards. The return flow of highly trained people is gathering pace. The government has provided extra resources to attract them. Tsinghua cannot match the best American packages, but it can offer six-figure dollar salaries—and the opportunity for young parents to bring up their children in their own culture.  

And while China’s universities forge ahead in the hard-science league table, they seem less likely to triumph in the social sciences. One problem is language. All the world’s leading journals are published in English. That matters less for hard scientists, who communicate mostly in symbols, than for social scientists, who use many more words. An academic in Tsinghua’s education department says Chinese social scientists complain that their best ideas are difficult to translate. “Writing papers for English-language journals is like competing in an exam that is set by the West,” she quotes them as lamenting.

China's growing influence in South America 11-03-18

Source - Economist, Nov 03, 2018: "Latin lessons"     

China, not the United States is the dominant economic power in South America.

From the article: "China is the region’s second-largest trade partner after America, and the number one trade partner for Brazil, Chile and Peru, notably buying soybeans, iron ore, oil, copper and meat. Its loans are often at high interest rates and are tied to contracts for Chinese firms. They fund both useful projects and vanity ones for local despots." China's loans are based primarily on ROI not ideology.

"China stands out for its willingness to invest in risky or corrupt places with few alternative sources of capital or of cheap, robust technology. Its approach might be called sub-prime globalization. At best, sub-prime lenders are non-judgmental sources of second chances. At worst, they are see-no-evil profiteers, and vulnerable to backlashes. China is a bit of both."

"China’s restraint, tolerating Bolsonarian bluster while ignoring Venezuelan sycophancy, does not signal impotence. Its clout has grown astonishingly, notably in the region’s south. Five years ago, for South Americans, the leading outside power was the United States, says Argentina’s ambassador to Beijing, Diego Ramiro Guelar. “Today it is China. Not as a projection into the future. Now.”

Turkmenistan and the resource curse 7-7-18

Source: "Turkmenezuela"  

Central AsiaTurkmenistan should be a good place to live. With only 5 million residents and the fourth-largest natural gas reserves in the world, it should have high median incomes. Yet, reports are circulating that residents are being forbidden from boarding airplanes and leaving the country (the government denies this). 

Turkmenistan is another example of the Resource Curse. Because of political differences, neither Russia or Iran will buy Turkmenistan's gas, leaving China as their only customer. Selling to the Chinese required an expensive pipeline and the Turkeminstan government borrowed the money from Chinese banks. Now a large portion of their gas revenues go right back to China to repay interest on the pipeline loans. Further restricting government budgets are billions of dollars being held in private European bank accounts. The government has also wasted money on white elephants, like a falcon-shaped airport at Ashgabat. 

Turkmenistan enforces an official exchange rate of 3.5 manats to the dollar (the unofficial rate is more like 25 manats to the dollar). Citizens have their manat withdrawals restricted and lines at the state-owned supermarkets are long with lots of shortages. Unemployment is estimated to be as high as 60%.