I love Businessweek!!!

I subscribe to a lottttttttttttttt of magazines! You have no idea how many! As a matter of fact, I could not even count them. All I know is that, the postmaster who’s been delivering them had already quit. We have a new one. Tameeka. Tameeka, being new, has been delivering mails all over the place – mali mali! Kaya tuloy, naglalaro kaming katukan nang pinto nang mga neighbors namen! One time, I got a porno magazine! And I was like – Tameekkaaaa! I swear! I did not subscribed to this one! Lo and behold! hehehehe! It was my neighbor! Dang!

Anyway, you know they’re supposed to insert these magazines one by one in our mailbox, instead they would just leave them outside by the door! Kaya when I go home and it rained! ‘Nyeta! Sasabunutan ko tong si Tameeka eh!!

THE PET ECONOMY 

Anyway, if you’re a business – money – finance – world’s current events guy, I’m no BW sales agent, I’d like you to grab one of these copies. It’s loaded with a lot of great, great, great articles! Heck, even Matilda who doesn’t know what these are – would certainly buy one. Why? She’s got a dog just like that. And the dog’s got a crown just like that. Can you imagine how Americans went gaga with their furry animals? It’s to the tune of $41 billion dollars. Now, that should give you a clue on what to open as a small business! You need help in business plan? Hire me! You need someone to prepare your financials and operate your company? Talk to me!

THE SUBPRIME MESS

Ok, to all you business students out there, this is a very good read to understand what’s a sub-prime and it’s effect on the American economy. Now, I have a much, much, simpler sub-prime explanation that starts from credit ratings all the way to bundling all of these mortgages and how they end up to the investment houses.

Now, in the BW article, there’s an added twist where at the center of controversy are the big bond ratings agencies – Moody’s Investors Service, Fitch Ratings and Standard and Poors. These firms are being paid by companies to grade their bonds. What are these bonds? These are collateralized debt obligations. Don’t be shocked. It’s just a quirky name for mortgages that were pulled all together and put in one single investment called fund or bonds. That’s it. Meaning, mortgage nang neighbor mo, mortgage nang tita mo, mortgage mo, pinagsama-sama at ginawang isang fund. Ganun.  Now, investors use those grades when deciding to invest or not. See the connection?

The big issue is that these ratings agencies are paid by bond issuers NOT by the investors who use their ratings. Now, this is way too simple isn’t it? If you issue bonds and then you pay someone to rate your bonds, isn’t that funky?! I mean, even myself, I’m gonna rate it sooo damn good so you’d pay me good money. Easy, ain’t it? Oh well, let’s just listen to all these blaming games.

BEST GLOBAL BRANDS

If you’re a business marketing student, can’t miss this great article! It discusses five brand names – big brand names that staged a turn-around. Then they have a list of the Top 100 Top Brands. I remember my marketing class in business school, we even discussed why these brands faltered. Reading marketing strategies is like reading spionage stories! But mostly, if you look at each brand, it’s all about differentiation strategy.

CHINA: A SLIPPING DRAGON

You know, there’s a lot of good news coming from China just in the last week or so. They have passed stringent regulations on food safety and all that. This is very good news. I hope they continue to do this – well, also human rights – but anyway, that’s good. But, in today’s BW, there’s a very, very interesting follow-up on last week’s issue of “Can China Be Fixed?” article. I really enjoyed reading this one.

Our July 23 Cover Story, “Broken China posed a provocative question. The article went beyond China’s flashy façade—the Starbucks cafés packed with young people surfing the Internet and streets clogged with shiny new cars—and examined the enormous challenges confronting the country on its path to becoming a modern industrial power. With China’s dangerous products, overheated stock markets, endemic corruption, and a spreading eco-crisis, the mainland’s growth-at-all-costs economic model is looking increasingly unsustainable. Worse yet, the involvement of local Communist Party officials in all facets of business makes it difficult, if not outright impossible, for Beijing to press ahead on reforms to build a social safety net, clean up the environment, spur innovation, and make China’s capital markets more efficient and transparent.

As soon as our magazine hit newsstands and went live on our Web site, letters and e-mails began to stream in. We were struck by the passionate defense of China from readers who accused us of unfairly taking Beijing to task. And several suggested that if we were to examine the U.S. through a similar lens, we might well find comparable ills. But many readers hailed the article for asking tough questions about whether China will be able to overcome its problems and develop into the world’s next superpower.

Here are some edited excerpts:

For years now we have heard endless stories about China’s labor-cost advantage being the reason so many U.S. factories have been shuttered, with production being shifted to China. The U.S. just can’t compete, we’re told. But the real cost advantage China has over the U.S. is the lack of oversight and regulation obvious in the poisonous air and water in China. The Chinese public puts up with environmental abuse on a scale that would never be tolerated here in the U.S. This is the real cost of cheap imports.

Eric Dalton
Little Rock, Ark.

I find this article a bit one-sided, to say the least. It is obvious that, once again, it is all about China-bashing. What China has achieved in 25 short years America failed to do in 100 years. Some people just refuse to accept the fact that the sleeping giant is now awake. Get used to it: 1.3 billion people don’t care about the views of the authors of this article. In time, China will address and fix some of its problems. The writers should concentrate on giving advice to America on how to fix its basket of domestic problems, such as health care, jobs, budget deficit, and lack of government accountability.

Screen name: humanbeing*

When I first came from China to America just a year ago, I could hear or see news about China every day, and most of it was about how fast China’s economy is growing. But all I could remember was the corrupt government officials, the poor countryside, and the extremely polluted water and air. The government is uncontrollably digging up minerals, drilling deeper wells for oil, chopping more trees to make space for factories. The system is unbalanced. The economy takes precedence over the environment. Sometimes, I feel that China is more of a capitalist country than the U.S.

Xuewei Wang
Leyden, Mass.

The capitalist system that China is moving toward is a well-beaten path, all its atrocities included. Once one realizes this, China’s ascent starts to seem quite ordinary. China’s competitive advantage—with its cheap labor supported by poor human rights, its cheap manufacturing subsidized through lack of regulation, its counterfeit culture thriving through lack of a strong government hand—will eventually diminish, and its growth rate will stagnate. Then the country will be left with some mighty big messes to clean up.

Ross Carver
Arlington, Va.

I taught English in Nanjing in the late 1980s, and from what I’ve read in this article it seems that despite the warp-drive growth rate and the glitzy Shanghai skyline, a lot of things, particularly the environmental problems, have hardly changed at all. That’s doubly true for the Communist Party cadres. My Chinese friends called them rascals then and are still calling them rascals now. Official corruption has been an important factor in the collapse of every imperial Chinese dynasty for over 2,000 years.

Screen name: Mike Gallagher

There are those who defend China by saying: “The West took several hundred years to reach its current level of technological development, social justice, and concern for human rights and the environment. Let’s be patient.” But if China started its industrial revolution with modern technology, why doesn’t it also embrace a modern mind-set? China adopted only the worst parts of capitalism: greed and selfishness. It has no use for democracy, human rights, social justice, and environmental protections. With its new wealth and technology, China will become a bully and menace to the world.

Screen name: Chang Liao

I had to keep coming back to your title page, Broken China, to realize I was reading about “them” and not “us.” “Why then is it so hard for this same government to crack down on exporters of tainted seafood, toothpaste…?” How many millions of illegal immigrants are now in the U.S.? “Shanghai’s stock exchange…an even bigger casino.” Ever heard of Enron or WorldCom? “In its pursuit of growth at all costs, China skimped on investments needed to provide basic affordable health care…”Seen Sicko yet? “…Local Communist Party officials enjoy wide latitude over social and economic affairs.” Who’s the ex-mayor of Newark (N.J.) who was just indicted on multiple counts? “China doesn’t lack the finances to fix its shortcomings, and it has the legal structure for regulating the environment, health care, and worker safety.” How much are the wars costing? Was that $12 billion a month? How many Americans are in favor of them? How many homes, post-Katrina, are considered fixed? Puh-lease. Give the Chinese a break; at least they’re trying.

Dan Coughlin
Garwood, N.J.

I am from China, and I think this article is fair. Most Chinese are conflicted between pride for our country’s development and concerns for its precarious social, legal, and economic infrastructure. I’ve seen a lot of traditional values eroded to make way for progress, and it’s disheartening. But I do believe that a moral backlash is imminent and China will act swiftly to clean up its act, or risk losing a lot of face.

Screen name: Chanalyst

“Can China be fixed?” is the wrong question. The right question is: “When will China be fixed?” Yes, the problems are daunting—one-party rule, environmental devastation, endemic corruption, and intellectual-property piracy, product quality problems, and a volatile stock market. But China’s precarious path is the same one followed by Japan, South Korea, and Taiwan to their current successes. The four Asian cultures also share the tools for fixing all things—a strong work ethic and high value placed on education. It’s too bad that we Americans don’t share the latter!

John L. Graham
Paul Merage School of Business
University of California at Irvine
Irvine, Calif.

* All comments signed by screen names are from BusinessWeek.com

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Tagged as: Business & Economy