The Economist - Christmas Issue II - Expats

The second article I enjoyed reading in The Economist is a piece on the experiences of Western expats in China, and of Chinese expats in the West.


I leave a question to my readers. Would you prefer to live an expat's life (with all the perks involved) in a dictatorship growing like crazy, or stay in "old" Europe with its small growth rates?

Still a long way

Lots of student and non-Brasilian friends ask me about the Brazilian economy and its recent emergence as an economics power house. I usually tell them that we have gone a long way, but still have a million problems to solve.

This graph below (from the FT's Beyond BRIC's blog shows the composition of Brazilian exports since 2002 split between primary and manufactured goods. Much of the increase in primary goods can be explained by the commodity price boom (both in prices and Chinese demand).

This is all fine in simple monetary terms, but if Brazil ever wants to be at the frontier of development we serious need to begin developed higher value-added products (and research). Otherwise we will be the granary of the world (with good caipirinhas and samba) and that's about it.

Financial Bets

This is funny: the directors of the Indianapolis Museum of Art waged an online bet with the New Orleans Museum of Art which depends on who wins the Super Bowl this Sunday (the Indiana Colts play the New Orleans Saints). The losing city will lend a good paiting to the winning one for three months (Indianapolis waged a Turner, while New Orleans waged a Claude Lorrain).

Here is a quick suggestion for how to solve the problem with the Chinese yuan overvaluation: if the US has more medals than China during the next Summer Olympic Games, the Chinese agree to revalue their currency by say 20%. If they lose, the US government refrains from calling for a revaluation for at least 20 years...

Why is it so difficult for foreign firms to suceed in China?

The Economist this week is full of interesting articles as usual. One that caught my attention is a piece on why foreign firms face so many difficulties in the country. Language and political regime (a capitalist dictatorship) do not explain as many other countries have the same characteristics.

The article says that firms "... they complain about subsidized competition, restricted access, conflicting regulations, a lack of protection for intellectual property and opaque and arbitrary bureaucracy."

I wonder whether China will ever open their domestic market enough to enable serious competition by foreign firms.