Archive for the ‘Taiwan’ Category

China Uber Alles

October 22, 2009

A few years ago when I was living in New York, there were three Chinatowns.  The old Chinatown in Manhattan was mainly Hong Kong Cantonese.  A newer Chinatown in Brooklyn was mainland Chinese, and Flushing, Queens had a mostly Taiwanese Chinatown.  According to the New York Times, the Manhattan Chinatown is now becoming less Cantonese and more Mandarin. How much longer can the Taiwanese resist the cultural behemoth, its hour come at last, slouching towards Flushing to be born?

Taiwan in Trouble

July 30, 2008

I have been fairly well convinced by Robin Hanson and Bryan Caplan that prediction markets are a good way to get informed information about the likelihood that something will happen.  Basically, prediction markets combine the so called miracle of aggregation or “wisdom of crowds” with the idea that the more someone is sure something will happen the more money he will be willing to wager on it.

The converse of trusting prediction markets is that when I disagree with them, I have to justify why I don’t agree, or maybe what I know that other people don’t.  I find this market on the likelihood of a Chinese attack on Taiwan by December 2010 worrying.  It has enough volume (>4000) to be accurate, and is trading at twenty five dollars a share.  This implies that there is a twenty five percent chance that an attack will happen.

This is far higher than I would put the likelihood of a mainland operation.  I would put it down around three or four percent.  In my opinion, the only likely situation in which an attack might happen is that the Chinese economy goes through a steep downturn, the current Communist administration falls, and the military takes over.  Chinese can be very nationalistic, so the military might view an attack on Taiwan as a way to consolidate power.

But in the absence of such a catastrophic turn of events, I can see many reasons why the Communist leadership of China would not want to attack:

-The new Taiwanese president, Ma Yingjiu, favors closer relations with the mainland.  Why attack when the winds of unification are blowing in the right direction anyway.

-An attack on Taiwan would alienate just about every foreign country.  China would face military action from at least the United States, and heavy sanctions from others.

-Any sort of military operation would cause instability within China’s economy.  Foreign exports and imports would certainly be affected in the short run.   Since the Communist party has no electoral mandate, it is in a much weaker position than many assume.

-The long run economic effects would be disastrous for China.  In the medium term exchange with most developed countries would certainly be curtailed.

-Even if the Taiwanese army had no foreign help, it would be a difficult force to defeat with its advanced American firepower.  In the event of an attack, there would be foreign help.  The Chinese can’t count on an easy victory.

My guess is that the disconnect between the market and me is caused by my knowledge of Chinese and recent experience in China.  I think foreign China experts tend to view the Communist party as being stronger than it is, and also reading too much into saber rattling headlines in mainland Chinese newspapers.

Maybe I should short some shares…

Pushing and Pulling towards Taiwan

June 29, 2008

I am taking advantage of my summer vacation to read up on the economics of migration, the topic on which I am going to write my master’s thesis.  Today I read part of one of my adviser’s papers about the effects of migration on fertility.   The underlying factor driving migration in her model is the differential in wages between rich countries and poor countries.  The idea is that the larger income increase an individual can get from migrating, the more likely he is to go.

The idea seems straightforward enough, but then I thought about my adviser herself.  She got her PHD a few years ago from UCLA, and for academics with American degrees there are few barriers to migration.  Combine this with the fact that teaching in Taiwan pays very, very little compared with an American university position (~$30,000/year vs. $94,000/year), and it seems like my adviser’s model would have a hard time explaining her own behavior.  Moreover, every single one of my professors last year at National Taiwan University had an American degree.

I suppose that proximity to one’s family or living in a familiar culture could also be considered wage factors, but with such a large nominal gap, one would not expect so many professors with American degrees to teach at NTU.

Engrish

April 16, 2008

Today I had my camera with me, so I captured a few Engrish snippets that I happened upon:

The first one is from the men’s room at a coffee shop where I study.  It’s next to the toilet paper dispenser:

Engrish

Next check out this building:

Building

And how should we call such an elegant residence?

Engrish

Far Glory For Tuna.

Finally, I took a different route home than usual, and happened upon this trustworthy motorcycle repair shop:

Engrish

Loss Aversion and Chinese Flowers

April 7, 2008

We have had 80 (27) degree weather here for the last four days and various shrubs and trees have got the message. There are flowers all over campus. I don’t remember seeing as many spectacular flowers anywhere else. On the other hand, I feel a bit like Lin Daiyu, a character from the Chinese classic novel Dream of the Red Chamber. She spends her Springs burying the petals from fallen flowers. Famously she sings this song (I’m skipping the hard parts…this was written in the 18th century and I can’t be bothered to look up the hard words at the moment):

Flowers wilt, flowers fall, flowers fill the sky. The reds disappear, the fragrance is cut short, and yet no one mourns. The girl from the mansion grieves over the Spring grave, sadness fills her heart with no reprieve. She leaves her chamber with a flowering spade, and has to endure trampling the fallen petals coming and going. While we can expect the pears and plums again next year, who knows next year who the mansion will hold. In the 360 days of the year, the knives of wind and swords of frost press on. How long can beauty last? One morning the wind blows and it’s never found again…

What we see here is typical loss aversion. It’s better to have flowers than not, but once you have them, it seems worse to lose them than never having had them at all. I felt that way today seeing all the beautiful flowers. On Wednesday we are supposed to get thunderstorms, and then they will all be gone.

The more I reflect, the more I realize that I (and I assume other people) are loss averse. I am much more worried about losing 20 dollars than I am about gaining 20 dollars for instance. Another possibly more personal example is that I am more worried about disappointing people who have a high opinion of me than impressing people who think I am mediocre.

Who would have thought I would have so much in common with a sensitive rich girl from 18th century China.

Robot Alert 1

March 30, 2008

I am getting very suspicious about Ma Yingjiu, the recently-elected Taiwanese president. This is how he smiles:

Human smiles involve lips curling up at the edges, but Ma’s lips don’t move–because they weren’t programmed to.

What Ben Mathis-Lilley didn’t understand in his post below is that the apocalyptic battle may be both robot and Chinese.