卦Trigram 2.0
Asian Snowcrash

All things change, and the globalized economy is no exception. The globalization of the early noughties was based on cheap oil - but oil isn’t cheap any more. At the same time, globalization took the internet… almost everywhere.  Two stories that I found via Slashdot show future directions…

1. Rising fuel costs make outsourced manufacturing less desireable. The cost of shipping manufactured goods from low-cost countries such as China is now such that it’s beginning to outweigh the price benefits of low wages. As a result, manufacturers in Western countries are becoming competitive again.
2. If the rising cost of oil is reversing the outsourcing of things, there is no such barrier to the outsourcing of knowledge work. Students in the UK have been found outsourcing their assignments to graduates in lower-cost countries. Universities are stumped for a solution. “The problem is definitely getting worse, it is hard to detect, the number of these sites is spreading all the time and it is impossible for us to monitor all of them.”, says one administrator.

Will these two trends develop and become persistent? The consequence will surely be a globalisation very different from what we first anticipated - manufacturing becoming strong and locally-based again, while intellectual work becomes the most competitive (and dishonest?) sector…

Living in China is fascinating in very many ways; one of them is watching the transformation of values as prosperity spreads through Chinese society. The Chinese are, of course, just like everybody else: they want security, consumer goods, education… and that shouldn’t be any surprise; it’s odd sometimes to hear Western commentators (especially in the US) attributing more sinister reasons to China’s increasing demand for the resources needed for a better life.

The worrying thing is whether it can last - not just here, but everywhere. Looking at my RSS feeds, I see many worrying trends:

• the price of oil is rocketing - $200/barrel soon? - and that’s affecting our entire society. In the US, the consequences will be felt most of all; Paul Krugman talks about this in today’s IHT, for example.
• One consequence is the rising price of food, for example, partly because so much agriculture is based on oil-derived fertilisers, partly because of the substitution of crops for ethanol production instead of food crops. (This situation may soon get much, much worse as the Ug-99 fungus looks set to devastate wheat production throughout Asia and the Middle East).
• The rise in food prices has already sparked food riots in Africa, Asia, and the Caribbean. What happens when people realise that their government is not capable of ensuring affordable food? Of course, they lose faith in the government and, eventually, seek more effective affiliations - perhaps criminal, or insurgent… and these groups are getting more and more powerful, with sometimes international or global influence. This is the kind of trend that John Robb is documenting in Global Guerillas, and it can make worrying reading. Just as a thought, who do you think will be strengthened by food riots in Afghanistan?

So the future looks tough. I don’t think it will necessarily be the Grim Meathook Future that did the rounds a year or two back; there will be technical fixes, and new discoveries, and political initiatives. At least, I really hope there will. Still, it’s worth reading and comparing two IHT articles on transition from abundance to scarcity and self-reliance. Which one would you choose for yourself?

1. Voluntary simplicity re-emerges. A renewed trend in the US of affluent, educated professionals shedding their possessions, and opting for a simpler lifestyle as on-line homesteaders, or techno-nomads.
2. Living off the land in a post-Soviet world. When their economic and political world collapsed, well-off skilled workers in Kyrgzstan were forced to become subsistence farmers. They were the lucky ones, perhaps, with land and clean water.

Like I say - which transition would you prefer? What’s the best way to prepare?

Are we heading for a global recession? All of the signs are that the US economy is now in recession. The next thing we find out is how much knock-on damage this will cause in developing markets. Are the Asian markets sufficiently decoupled from the US economy for India-China trade to keep everyone here afloat? We’ll find out in the next few months.

This recession, which was sparked off by the US housing bubble and compounded by bankers’ recklessness, has been a long time coming. Steven Roach at Morgan Stanley was warning about it even before I took my MBA, so it’s not as if we haven’t seen it coming.

What has come up swiftly and without much warning, and may yet bite us hard, is the shortage of food staples - rice, especially. With a number of media sources warning of food riots and social instability as a consequence, this is likely to be tough all around.

The people who are going to suffer the most are the ones Niti is investigating at the bottom of the pyramid - and this is going to be very different from anything we’ve seen before.

I remember, as a child, seeing the pictures of the famine in Cambodia, and the appeals for public donations. I helped to organize a Blue Peter Bring & Buy sale at my primary school to contribute. Soon afterwards, the focus shifted to Ethiopia. Here I oversimplify horribly, of course, but in essence the famine victims here had to be essentially passive, waiting for external food aid to arrive.

In a lesser case of food shortage, citizens in the old Soviet Union had to opportunistically join queues as soon as they saw one forming, hoping it meant that a delivery of food or other scarce goods had just arrived - even when (famously) they often didn’t know what they were waiting for until they reached the head of the queue. This would just be luck of the draw.

What difference will it make when the poor, who are most desperately affected by food shortages, all have mobile phones? Will governments and aid agencies use it to inform people of deliveries, and in this way alleviate anxiety? Will be see spontaneous, SMS-directed “hunger mobs” flash-forming on the rumour of food availability (either delivery, storage or hoarding)? And what will it mean for us when instead of seeing appeals for donations on TV, the hungry millions are calling us for help personally?

Mao Zedong’s famous dictum says that “the guerrilla lives amongst the people like a fish lives in water”. Without the people, the guerrilla cannot live.

To survive, a large-scale guerrilla movement, or insurgency, must have a message, a purpose, that resonates to at least some degree with the feelings and beliefs of the population in which it exists. There must be enough people who are broadly sympathetic, in order to supply recruits, shelter, and material support.

What does it take to turn the people against the guerrilla?

The people of Afghanistan know what the Taliban are like. The Taliban used to rule the country, and their treatment of women, their bans on popular culture, their public executions, and so on, were not enough to make the people turn against them and stand up to them.

After the American-led invasion, the Taliban were forced to retreat to their heartlands, and the areas of Pakistan where they had deep support. And yet, people there are suddenly prepared to stand up to the Taliban, with force if need be.

What happened?

The Taliban destroyed mobile phone masts.

Claiming that the Pakistani military, and Western armed forces, were tracking militants by locating their phones, the Taliban opted to take down the network - and provoked an immediate and forceful backlash from the ordinary people, for whom the mobile phone has been a life-changing technology. Even the Taliban’s own fighters are angry.

According to Afghanistan’s Minister of Telecommunications:

“The people said please … repair the infrastructure and we will guarantee the security of the tower,” Sangin said. “We believe that if the Taliban continue with these kinds of activities the hatred will increase against them, and as a result we are awaiting a change in their policy.”

Of course, mobile phones are no panacea. We’ve seen plenty of examples of their use to enable terror and death. However, this example clearly shows how the mobile phone is successfully improving the lives of impoverished communities in developing countries, and bringing them the benefits of integration with the wider world.

Why are some wrapped, and others not?

The days have mostly been lovely and sunny, with clear blue skies.

Internet connection:

• David at Silicon Hutong suggests that I am not alone in experiencing a really draggy net connection lately.
• (A different?) David at tech86 reminds us that WiMax Beijing is coming soon…
• Kaiser Kuo at Ogilvy Digital Watch mentions that China’s trans-Pacific internet pipe is being upgraded.
• Another possible explanation for why websites keep timing out on me…

Most popular phones suggested to me in shops in the student area of Wudaokou (I’m looking for a camera phone):

• Nokia N6300 @ RMB 1980
• Samsung Anycall G608 @ RMB 5000
• SamsungAnycall D908i @ RMB 2550
• Nokia N95 @ RMB 5880
• Nokia N73 @ RMB 2680

On Chinese phone companies’ design approach:

• CECT offer a phone that doubles as a heart monitor….
• … and HEDY present us with a waterproof, washable phone (possibly inspired by unfortunate events at public toilets in China, which are often slits above a pit?)

From the link to the CECT ‘heart’ phone above, I note with interest this quote from CECT parent company Qiao Xing Mobile’s Chairman, Wu Zhi Yang:

“We dedicate a large amount of resources to our efforts to develop highly differentiated handsets. The C7000A is a result of these efforts. It represents a breakthrough in the use of mobile handset technology. No longer are handsets only tools for entertainment and communication. We have been able to incorporate a piece of advanced medical technology that could possibly save lives. It is this kind of differentiating handset feature that we continually strive to offer to our customers in China.”

Note that they’re only making a few hundred of this model. VERY exclusive… but without doubt something that could easily find a worldwide market. And I suspect that a washable phone might find a ready market in developing countries… Just another couple of example of phone design innovation in China… I’m going to try to track down more about that washable phone.

More from China Digital Times: it seems that construction of the eco-city at Tianjin, a collaboration between China and Singapore, will begin in July.

It will be very interesting to compare how this goes with the concurrent Anglo-Chinese project being developed by Ove Arup near Shanghai.

There’s been a lot written over the last couple of years about the latter:

• Wired: Pop-up cities
• The Guardian: British to help China build eco-cities
• China Digital Times: China’s Green Revolution
• IEEE Spectrum: How to build a green city

Between those, and other, articles, there’s a lot of detail available on the design of the new city, Dongtan, near Shanghai. The Tianjin project, on the other hand, seems to have generated lots of press releases, but as yet I can find very little detail on how the city will be designed, or how it’s expected to work. I get the impression that the project is still in its early stages as far as design is concerned, even if construction is will commence soon. There was an interesting piece in the Straits Times recently which mentioned, IIRC, that Singapore would be bringing its substantial knowledge of environmental technology to the project, but that the experience gained in the project would be fed back into future urban planning back home in Singapore - so the project is, in effect, an opportunity for Singapore to experiment with green design and architecture in China, see what works and what doesn’t, and use the winning lessons to re-design “the Garden City”. An interesting strategy from Singapore.

Tianjin isn’t far from Beijing, and I wanted to go there anyway. Perhaps I should make a trip in July…

When I was working in the mountains of Lesotho, many moons ago, keeping in touch with people was a major undertaking. For example, my parents were concerned about my welfare - me being 17 at the time, and South Africa not being the most stable country then… and of course, this was before the time of cheap flights, so southern Africa was mentally much further away than it is in these days of mass air travel.

In order to speak to my folks, I had to wait for our truck to leave on its weekly supply run. Assuming that the bridges weren’t out, we would get to the nearest town, Hlotse (usually called Leribe), and then cross the border into the South African town of Ficksburg. I would have to go to the main post office, wait for the one official with an international line in her office to be free, go to her office to make a collect call to my parents, and then wait for them to call back. I could then talk, while the post office lady listened in. Luckily, she was very nice!

Getting a landline - or even a fax or telex - to our base up in the mountains was a dream - I have no idea whether or not they ever got one!

On another personal note, I remember the joy I experienced when I first got access to the internet back in 1994. Coming from a small country town, where information and knowledge were hard to come by. The Net changed all that. Suddenly, I was able to find things out without making a trip to the library in the nearest city; I was able to talk to people on the other side of the world who shared my interests.

The arrival of mobile telephony in developing countries is freeing hundreds of millions of people from the need to make the kind of trips that I had to make, and presenting them with the same kind of liberation that I experienced. What difference will it make to them?

I’m going to be looking at this a lot, particularly with reference to Africa and China. Pointers to more information are welcome!

First of all is this very interesting piece at worldchanging: Africa Calling - SND MNY 2 YR MBL. It’s a very good primer on how mobile banking via handphones is making life much easier for the poor, via services such as MTN Banking. It points out the similarity of this venture to similar successes in South Asia, and Bangladesh’s Grameen Phone in particular. This is the sort of thing that Niti is very interested in… Are there similar services in China? If so, who? If not, why not? What are the design needs for this kind of service? Watch this space for answers to these questions!

Seems like maybe it’s a good time to be going to work in China, and accumulating a pot of RMB…

RMB:USD

RMB:GBP

RMB:SGD

Yahoo! Finance’s exchange rates for today… Hmmm. My gut feeling tells me that the Olympics remains very important to the Chinese government; too much effort has been put into winning the Games, and preparing for them. Letting the RMB appreciate too much now would mean that foreign visitors would find their Olympic experience unexpectedly, even unpleasantly, expensive - and that wouldn’t be the result that Beijing wants, it would be a negative experience where no negative experience is desired. Better to wait, let people come and have a cheap good time in August, and then look at a significant rise…

Recently, I got asked to write a piece, in 300 words, about the global economy. A tall order! Bearing in mind that the target audience isn’t likely to be particularly aware of what’s going on in Asia, I couldn’t assume any prior knowledge. So, I decided to pitch it in a personal narrative format. On the basis of this, I’ve been asked to rewrite it in a longer form, with a more political spin, which I’m working on. Anyhow, here’s the original version (all rights reserved, copyright claimed, yadda yadda yadda!):

It’s 7am in Singapore. The view from my desk looks over a patch of jungle to the sea, flat and glowing gold in the early tropical sunlight. In the distance are palm-fringed islands, part of the Riau archipelago. Through the open window, the birds chirp and whoop; whiffs drift in of the incense being burned by the elderly caretaker at the Taoist altar in the car park, many floors below.

It might be a Joseph Conrad story – apart from the gargantuan cargo ship, stacked high with containers, which floats lazily just offshore. It’s one of dozens that will pass my window today on their way to China, carrying scrap metal, pig carcasses, telecoms equipment, water treatment plants, and Swiss watches: the lowest and highest ends of what Europe produces. Later, the tide will turn, and yet more ships will slip into the channel between Sumatra and the Malay Peninsula, heading for the Indian Ocean, and carrying – well, most of what you’re going to buy anytime soon.

Also in view is Singapore’s Art Deco railway station, the terminus of a line that will soon be able to take goods and travelers non-stop through Malaysia, Thailand, Cambodia and Vietnam, up to China’s Yunnan Province. From there, one way leads to Myanmar and the new Irrawaddy shipping lanes, or on to India. Another way leads up to northern China, and onwards to the Central Asian ‘stans, or the Karakoram highway to Pakistan.

Asia is reconnecting itself, and forming once more into a market that’s been disrupted since the Europeans first arrived. As barriers fall, incomes are rising, creating an internal economy that might someday overtake the EU and US. There is a definite energy and optimism, as people look forward to a better future. Of course, there are less positive sides to this development – but there’s a lot of good news too, and today, it’s pleasant to watch the ships and trains pass on their way.