Tuesday, February 24, 2009

The Dangers of Distraction

The Dangers of Distraction

8:11 AM Monday January 19, 2009
by Christina Bielaszka-DuVernay

Tags: Personal effectiveness, Productivity, Time management

Maggie Jackson is the author of Distracted: The Erosion of Attention and the Coming Dark Age. She recently sat down with HarvardBusiness.org editor Christina Bielaszka-DuVernay to discuss her work and its implications for time-pressed, always-on managers.

Q: BlackBerry in one hand, phone in the other, eyes fixed on several of the 15 windows open on his laptop screen: today's high-performing manager owes his superior productivity to technology-enabled multitasking. That's the popular view, at least. You see things differently. Your book argues that "multitasking" is a productivity killer.

Multitasking is sold to us as the ultimate in efficiency: supposedly, you're performing several tasks simultaneously. But multitasking is really about hopping back and forth among several tasks in quick succession, never giving deep, full attention to any of them. It's characterized by frequent interruption, and that makes it highly inefficient. Each time we're interrupted -- or we interrupt ourselves -- it takes time to get back to where we were on a project.


Q: What's the consequence of this constant interruption and disruption?

It fosters a culture of lost threads, stunted thinking, and stress. When we're constantly losing the thread of what we're trying to do, it becomes difficult to define and pursue goals. New ideas get abandoned and forgotten before they barely have a chance to develop.

When we're rushing between tasks, we don't have room for serendipity or epiphany; creativity has neither time nor space to take root. A Harvard Business Review article examined the results of a study in which 9,000 knowledge workers kept diaries recording the effects of interruption on their work; only when they had periods of uninterrupted time did they feel creative.

Creativity is not the only hard mental work that suffers in an atmosphere of information overload and constant interruption. Another study found that one-third of knowledge workers say they don't have the time to reflect back on their work: to think about what they could have done better, to consider ways to work more effectively. When we in a so-called knowledge economy can't reflect on our work, that's a major loss -- and a danger sign.

Most important, though, is how hierarchies of knowledge become flattened. When what we pay attention to is driven by the last email we received, the trivial and the crucial occupy the same plane.


Q: When our attention is "fractured" -- to use your term -- how does this affect our professional relationships as well as our personal ones?

We have a finite store of attention to pay to ideas and to people. Whether we're trying to keep up with an excessive number of information sources or hundreds, even thousands, of Facebook "friends," we've got only so much attention to spread around. When we keep up with so many ties, our ties can't help but get thinner. This gives us less energy and time for deep, considered thinking or in-depth relationships.


Q: Your book Distracted argues that our "climate of distraction" is not new, not a novelty born of email and instant messaging and, but rather something that's been long time developing.

All that we're coping with didn't start with the BlackBerry; it goes back to inventions from 150-200 years ago and the new experiences of time and space they provided us. Locomotion, for instance. The telegraph.

The possibility of doing two or more things at once has long intrigued us. Our fascination with speed and travel is directly connected to our sense today that to move quickly between places and ideas is good; to stay still and deeply contemplate one place or idea is not.

So our climate of distraction, our misplaced valuation of multitasking, does not arise solely from recent technology. But one problem is that we confuse tech savvy with knowledge generation.


Q: What are your suggestions for keeping distractions at bay?

We need to revalue stillness and deep thought, and not always prioritize movement and activity.

First, pay attention to your attention: be cognizant of when and where you are paying attention. Are you reacting to every ping? Notice when your responses to immediate calls on your attention squeeze out deeper relationships, fuller conversations, time to reflect. Notice when they keep you too rooted in the moment, and prevent you from taking time to think deeply and plan for the future.

Second, set aside slow time. I've become ferociously careful about setting aside time and space for quiet, deep reflection.

We need to take control of our attention, draw boundaries around it, instead of always reacting to demands on it, which dooms us to drown in minutia.


Q: What can leaders and companies do to help their employees stay focused?

Something I hear from knowledge workers all the time: "To get work done, I have to go home." This shows us that something is really wrong with our work environments.
Leaders need to role-model undivided attention. When you're in a meeting and you keep looking at your BlackBerry, you're telling the speaker: "You're not worth my time."

You're also saying the same thing to the other meeting attendees. By diverting your attention elsewhere, you're shattering the opportunity for that connection called "a meeting of minds." And you're serving as a poor role model for everyone who witnesses your behavior.

Companies can take certain steps to minimize distraction. Ad agencies have long encouraged people to create "white space" -- to schedule time on the calendar for unwired, focused thinking or brainstorming. A Texas ad agency created what it called "A Womb Room" for conceiving and gestating ideas. IBM has its Think Fridays. This was a grassroots innovation by a software engineering department that eventually spread throughout the organization.

How managers and other knowledge workers allocate their attention will be their chief challenge in the 21st century.

The 10 Emerging Technologies of 2009

arch/April 2009

The 10 Emerging Technologies of 2009

Technology Review presents its annual list of 10 technologies that could change the way we live.

By TR Editors

Credit: Art, Mike Perry; Photograph, Anna Wolf

Each year, Technology Review chooses 10 emerging technologies with the potential to change lives around the world. Some of this year's choices, such as paper-based medical tests and intelligent software that acts as a personal assistant, could reach the market within a year. Others, like biological machines and nanopiezotronics, could take longer but promise fundamental shifts in fields from computing to medicine, communications to manufacturing. The list includes technologies miniature and massive--from fast, cheap, capacious computer memory to batteries that can store enough energy to power a city. All are technologies that we bet will make a huge impact in the years ahead.

See the 10 Emerging Technologies of 2009.

Enterprise resource planning

Enterprise resource planning

Feb 23rd 2009
From Economist.com

Enterprise resource planning (ERP) is the setting up of electronic information systems throughout an organisation in such a way that disparate parts of the organisation are brought together, parts that may rarely in the past have had access to information about each other—manufacturing, for instance, and customer relationship management (CRM).

ERP software, designed to implement this, acts as a sort of central nervous system for the corporation. It gathers information about the state and activity of different parts of the body corporate and conveys this information to parts elsewhere that can make fruitful use of it. The information is updated in real time by the users and is accessible to all those on the network at all times.

Just as the central nervous system’s capacity can at times seem to transcend the collective capacity of its individual parts (a phenomenon that we call consciousness), so too can that of ERP systems. They (as it were) make the corporation self-aware. In particular, ERP systems link together information about finance, human resources, production and distribution. They embrace stock-control systems, customer databases, order-tracking systems, accounts payable, and so on. They also interface when and where necessary with suppliers and customers.

The interlinking of ERP systems can be extraordinarily complex. Firms usually start with a pilot project before implementing a group-wide scheme.

The history of ERP is the history of SAP (System Analyse und Programmentwicklung), a German software company that in the 1990s established an extraordinary dominance in the market for ERP systems. SAP was set up by three engineers in Mannheim in 1972. Their aim was to help companies link their different business processes by correlating information from various functions and using it to run the whole business more smoothly.

SAP’s software was designed to be modular so that a company’s systems could be rapidly adapted to take account of growth and change. It was so successful in recognising and meeting business’s it needs that by the late 1990s SAP’s share of the market for ERP systems was greater than that of its five nearest rivals put together. Its systems were reckoned to be running in at least half of the world’s 500 largest companies.

Its extraordinarily rapid growth at the time (an annual average rate of increase in sales of over 40%) was backed by a marketing strategy that encouraged management consultants to implement SAP systems within client firms. Many consultants set up specialist SAP departments for the purpose. Without this support in implementation, there might have been a crippling bottleneck in the growth of SAP’s business.

The ERP systems market itself grew rapidly as firms saw the benefits to be gained from consolidating information about their geographically and functionally dispersed bits and pieces. ERP systems enabled them to have a view of their organisation as a whole that they had never previously enjoyed. It was a bit like seeing the early colour photographs of earth taken from outer space.

For a number of reasons, these systems were initially most popular with large multinationals:

• they had advanced it infrastructures on which they could run the systems;

• they were keen to standardise their diverse range of business processes;

• they had the staff necessary to manage the systems once they were up and running.

As this big-company market became saturated, ERP systems providers began to look at how they might adapt their products to suit smaller organisations.

Further reading

James, D. and Wolf, M.L., “A Second Wind for ERP”, McKinsey Quarterly, No. 2, 2000

Shtub, A., “Enterprise Resource Planning: the Dynamics of Operations Management”, Kluwer Academic Publishers, 1999

Trade team heads to EU for big deals

Trade team heads to EU for big deals
By Diao Ying (China Daily)
Updated: 2009-02-24 06:51

A high-level business delegation heads to Europe today to sign deals potentially worth billions of dollars on a "wide range of buying interests".

Some media reports put the price tag at 15 billion yuan ($2.2 billion) while others believe that the figure could be considerably higher - but Ministry of Commerce (MOC) officials said there was no way to arrive at an amount before the contracts were actually signed.

Related readings:
Foreign trade plummets 29% in Jan
Foreign trade growth slows to 7-year low
Global financial crisis hits Beijing in foreign trade
More measures to spur consumption and foreign trade

The business delegation led by Minister of Commerce Chen Deming is seen as being on a mission to strengthen China-Europe trade ties prior to President Hu Jintao's trip to the G20 Summit, to be held in London in April.

Premier Wen Jiabao, who visited four European countries in early February, was the first senior Chinese official to announce plans for the so-called "procurement teams" during his trip.

The commerce minister's trip is scheduled to cover Switzerland, Germany, the United Kingdom, and Spain, the four countries on Wen's itinerary.

Observers also say the commerce minister's mission would showcase China's strong domestic demand as well as its determination to fight trade protectionism.

"Chen can take a positive message to the world: China, as a major trading power, has no interest in adopting protectionism," said Song Hong, an international trade researcher with the Chinese Academy of Social Sciences.

According to MOC officials, the trade delegates are from Chinese industry associations and companies associated with vehicles and vehicle parts, machinery and electrical products, and environmental protection technologies.

MOC spokesman Yao Jian has said China's rising demand for European goods stems from the 4-trillion yuan ($586 billion) economic stimulus plan that Beijing rolled out in November 2008.

The plan includes huge infrastructure projects, so "Europe has an obvious edge in providing us with the equipment we need," he said.

Zhang Yansheng, a research official with the National Development and Reform Commission, China's top economic planning office, said sending procurement missions to the EU can create a win-win situation.

"Chinese buyers would love to have government insurance on price, quality and delivery time while European sellers can see a good business opportunity," he said.

The initiative is also intended to create a balance in trade, officials said.

China is a key market for the EU and is the 25-nation bloc's fastest growing export destination. Bilateral trade increased 19 percent year-on-year to $425.6 billion in 2008, with China having a trade surplus of $160 billion.


Monday, February 23, 2009

Sunday, February 22, 2009

Schneller als 50.000 PCs

Schneller als 50.000 PCs

 

Im Forschungszentrum Jülich wird der erste "Peta-Computer" installiert. Ein gigantischer Rechner, einzigartig in Europa. Ein Interview mit Thomas Lippert, dem Direktor des Jülich Supercomputing Centre (JSC).

 

DW-WORLD.DE: Was ist ein "Peta-Computer"?

Thomas Lippert, Leiter des Jülich Supercomputing-Centre: Ein Peta-Computer ist ein Super-Computer, der in der Lage ist, eine Billiarde (eine Million Milliarden) Rechenoperationen pro Sekunde durchzuführen.

Das kann man sich nicht mehr wirklich vorstellen. Geben Sie uns ein paar Vergleiche ....

Ein direkter Vergleich ist schwierig weil die Zahlen so groß sind. Aber Sie können sich vorstellen, dass sie etwa 50.000 PCs sehr eng zusammenschalten müssten, um diese Leistung zu erreichen.

Und um wie viel leistungsfähiger wird der neue Super-Rechner sein, im Vergleich zu Jugene, der ja auch bei Ihnen steht und der immer noch der schnellste Computer Europas ist?

Also, die neue Maschine ist sozusagen eine Erweiterung von Jugene. Jugene wird um einen Faktor fünf bis sechs vergrößert.

Das heißt, Jugene wird nicht verschrottet ...

Thomas Lippert, Direktor des Jülich Supercomputing Centre (JSC) Thomas Lippert, Direktor des Jülich Supercomputing Centre (JSC)

Nein, Jugene wird umgebaut. Er bekommt unter anderem eine neue Kühlung - eine Wasserkühlung. Sie werden es nicht glauben aber da werden Schränke eingebaut, die direkt mit Wasser gekühlt werden und durch die die Luft der Prozessoren durchgeleitet wird. Dabei fließt das Wasser wie beim Autokühler durch Kühlrippen, die Luft wird durch diese Kühlrippen geleitet und dann geht das Wasser in den Keller - über Rohre in unsere Außenkühlanlage und schließlich kommt es wieder zurück- das ist ein riesiges System.

Es gibt also keinen Super-Computer, der ganz und gar ohne Kühlung funktioniert?

Nein, das gibt es überhaupt nicht. Die hohe Prozessorleistung erkauft man sich natürlich auch mit dem Erzeugen von Wärme.

Wie viele Prozessoren sind das beim neuen Super-Computer?

In diesem Gerät sind es ungefähr 72.000 Prozessoren, jeder Prozessor besteht aus vier Kernen. Das sind dann insgesamt etwa 280.000.

72 telefonzellengroße Schränle braucht der neue Peta-ComputerDer Peta-Computer soll in 72 telefonzellengroßen Schränken untergebracht werden.

Wird der Peta-Computer komplett in Jülich stehen?

Ja, die ganze Maschine steht kompakt an einer Stelle in Jülich. Denn wenn Sie sie aufteilen würden, käme das Problem ins Spiel, dass die Elektrizität, die Sie brauchen, um Informationen auszutauschen, eine gewisse Laufzeit hätte. Und die Laufzeit wäre dann so groß, dass die Prozessoren zwischenzeitlich nicht wüssten, was sie tun sollen. Deswegen muss man sie eng zusammenpacken und den Computer kompakt an einer Stelle aufbauen.

Macht es denn eigentlich noch einen großen Unterschied in der Leistung - ob man mit Jugene rechnet oder mit dem neuen Peta-Computer?

Klar! Sie können eine wesentlich höhere Leistung auf ein Problem ansetzen. Ein Problem, das Sie sonst so in fünf Monaten rechnen konnten, rechnen Sie mit dem neuen Super-Computer in einem Monat, beziehungsweise Sie können fünf Mal so viele Projekte behandeln. Insofern stellt das natürlich einen enormen Fortschritt dar.

Entscheiden Sie, wer mit ihrer Maschine arbeiten darf und wer nicht?

Nein (lacht) .... Wir arbeiten sehr eng mit der Wissenschaft zusammen und sind verantwortlich für die Bereitstellung der Maschine, der Software, der gesamten mathematischen und computertechnischen Grundlagen. Die eigentliche Rechenzeit-Vergabe geschieht über die Wissenschaft selbst. Über ein so genannntes "peer-review-system". Das bedeutet, dass herausragende Vertreter verschiedener Wissenschaftsbereiche und internationale Gutachter die Rechenzeit-Anträge bewerten und über die Rechenzeit-Vergabe entscheiden.

Welche Wissenschaftler kommen zu Ihnen und was möchten die tun?

Das ist ganz vielfältig, was hier gerechnet wird. Das reicht von Nanotechnologie, Nanoelektronik, von der Materialwissenschaft über biologische Geschichten bis hin zu den Ingenieurswissenschaften. Auch die Grundlagenforscher arbeiten mit dem Super-Computer. Also beispielsweise Teilchenphysiker, Elementarteilchenphysiker oder Astronomen. Wenn Sie zum Beispiel wissen wollen, wie sich aus dem ursprünglichen Mikrowellenhintergrund die Galaxien entwickelt haben - solche Dinge werden hier bei uns unter anderem simuliert.

Und die Nachfrage ist groß?

Sehr groß. Wir haben eine Überbuchung von Anträgen, die wir gerne genehmigen würden, um den Faktor fünf bis zehn.

Wann soll der Peta-Computer kommen?

Oh, der Peta-Computer kommt schon. Das umfangreiche Kanalsystem für diese Wasserkühlung ist schon gelegt. Die dicken Stromkabel sind auch da. Die Maschine wird Ende März aufgebaut sein. Dann geht sie in die Tests und eingeweiht wird sie Ende Mai.

Haben Sie denn schon einen Namen?

Nein, wir haben noch keinen Namen. Was sicher ist, dass er mit "JU" anfangen wird.

Ein Supercomputer wird verkabelt"Kabelsalat"

Herr Lippert, ist es denn Ihr großes Ziel, Jülich in Europa zur unangefochtenen Nummer eins zu machen in Sachen Super-Computer?

Nein, es geht nicht darum, die Nummer eins in Sachen Großcomputer zu sein. Es geht darum, die optimalen Bedingungen für die Wissenschaft zu schaffen, da die Überbuchung momentan gravierend ist und die Nachfrage nach Rechenkapazität von Seiten der Wissenschaft enorm ist. Der entscheidende Punkt dabei ist: wir haben in den letzten Jahren durch diese Rechner viele hochinteressanten wissenschaftlichen Veröffentlichungen mit gefördert, Veröffentlichungen, die in "Science" oder "Nature" erschienen sind.

In der Computerentwicklung geht es Ruck-Zuck - auch, dass Rechner wieder veraltet sind. Wo geht es eigentlich hin? Haben wir in einem Jahr zwei Billiarden Rechenoperationen pro Sekunde?

Das werden wir schon haben in ein, zwei Jahren. Der entscheidende Punkt aber ist, dass dies heutzutage nur erreicht werden kann, indem man immer mehr Prozessoren, beziehungsweise Computerkerne, zusammenbringt. Und es wird immer schwieriger, diese zu koordinieren. Das wird eine entscheidende Aufgabe für uns in den Computerzentren sein.

Wird denn irgendwann so ein Super-Computer schneller rechnen als das menschliche Gehirn?

Das kann schon sein, nur verarbeitet das menschliche Gehirn Daten anders als ein Computer. Ich denke, dass die Geheimnisse, wie das Gehirn funktioniert letztendlich über die Super-Computer erforscht werden können. Dazu gibt es schon jetzt interessante Projekte.

Herr Lippert, wo liegen die technischen Grenzen bei solchen Super-Computern?

Die Grenzen der momentanen Technik sind durch den Energieverbrauch gegeben. Also wenn Sie heute diesen Rechner, den wir installieren, betreiben, kostet der etwa zwei Millionen Euro Energie im Jahr. Aber verglichen mit der Leistung, die dieser Rechner bringt, sind das die geringst möglichen Kosten. Insofern ist es ein recht effizientes System. Nur weitergehen wollen wir nicht. Jülich hat es sich auf die Fahnen geschrieben, möglichst energiesparende Systeme aufzustellen und diese Sache nicht zu übertreiben. Das heißt im Klartext - es wird in Zukunft vor allem darum gehen, den Energieverbrauch die Prozessoren oder der Computerkerne immer weiter zu senken.

Die sieben Todsünden

Die sieben Todsünden

Die sieben Todsünden
Foto: picture-alliance / ©Electa/Leema

...die Wollust (Gemälde von: Thomas Couture

Die sieben Todsünden
Foto: picture-alliance / akg-images

Hochmut ist die Lieblingssünde der Frauen.

Die sieben Todsünden
Foto: picture-alliance / akg-images /

Habsucht teilen beide Geschlechter ebenfalls (Gemälde von: Marinus Claes van Roymerswaele).

Die sieben Todsünden
Foto: picture-alliance / akg-images /

Auch die Völlerei ist eine Sünde (Gemälde von: Hieronymus Bosch).

Die sieben Todsünden
Foto: picture-alliance / akg-images /

Trägheit ist auch schlecht angesehen (Gemälde von: Hieronymus Bosch).

Die sieben Todsünden
Foto: picture-alliance / akg-images

Zorn ebenfalls (Gemälde von: Francesco Petrarca).

Die sieben Todsünden
Foto: picture-alliance / akg-images /

Erst recht der Neid (Gemälde von: Giotto di Bondone).

I knew it

 
http://www.phdcomics.com/comics.php?n=1137

Saturday, February 21, 2009

《歌唱祖国》

《歌唱祖国》 




五星红旗迎风飘扬, 
胜利歌声多么响亮; 
歌唱我们亲爱的祖国, 
从今走向繁荣富强. 
歌唱我们亲爱的祖国, 
从今走向繁荣富强. 

越过高山,越过平原, 
跨过奔腾的黄河长江; 
宽广美丽的土地, 
是我们亲爱的家乡, 
英雄的人民站起来了! 
我们团结友爱坚强如钢. 

五星红旗迎风飘扬, 
胜利歌声多么响亮; 
歌唱我们亲爱的祖国, 
从今走向繁荣富强. 
歌唱我们亲爱的祖国, 
从今走向繁荣富强 

我们勤劳,我们勇敢, 
独立自由是我们的理想; 
我们战胜了多少苦难, 
才得到今天的解放! 
我们爱和平,我们爱家乡, 
谁敢侵犯我们就叫他死亡! 

五星红旗迎风飘扬, 
胜利歌声多么响亮, 
歌唱我们亲爱的祖国, 
从今走向繁荣富强. 
歌唱我们亲爱的祖国, 
从今走向繁荣富强. 

东方太阳,正在升起, 
人民共和国正在成长; 
我们领袖毛泽东, 
指引着前进的方向. 
我们的生活天天向上, 
我们的前途万丈光芒. 

五星红旗迎风飘扬, 
胜利歌声多么响亮; 
歌唱我们亲爱的祖国, 
从今走向繁荣富强. 
歌唱我们亲爱的祖国, 
从今走向繁荣富强.

Friday, February 20, 2009

The collapse of manufacturing

The collapse of manufacturing
Feb 19th 2009
From The Economist print edition


The financial crisis has created an industrial crisis. What should governments do about it?

Alamy
Alamy


$0.00, not counting fuel and handling: that is the cheapest quote right now if you want to ship a container from southern China to Europe. Back in the summer of 2007 the shipper would have charged $1,400. Half-empty freighters are just one sign of a worldwide collapse in manufacturing. In Germany December’s machine-tool orders were 40% lower than a year earlier. Half of China’s 9,000 or so toy exporters have gone bust. Taiwan’s shipments of notebook computers fell by a third in the month of January. The number of cars being assembled in America was 60% below January 2008.

The destructive global power of the financial crisis became clear last year. The immensity of the manufacturing crisis is still sinking in, largely because it is seen in national terms—indeed, often nationalistic ones. In fact manufacturing is also caught up in a global whirlwind.

Industrial production fell in the latest three months by 3.6% and 4.4% respectively in America and Britain (equivalent to annual declines of 13.8% and 16.4%). Some locals blame that on Wall Street and the City. But the collapse is much worse in countries more dependent on manufacturing exports, which have come to rely on consumers in debtor countries. Germany’s industrial production in the fourth quarter fell by 6.8%; Taiwan’s by 21.7%; Japan’s by 12%—which helps to explain why GDP is falling even faster there than it did in the early 1990s (see article). Industrial production is volatile, but the world has not seen a contraction like this since the first oil shock in the 1970s—and even that was not so widespread. Industry is collapsing in eastern Europe, as it is in Brazil, Malaysia and Turkey. Thousands of factories in southern China are now abandoned. Their workers went home to the countryside for the new year in January. Millions never came back (see article).


Having bailed out the financial system, governments are now being called on to save industry, too. Next to scheming bankers, factory workers look positively deserving. Manufacturing is still a big employer and it tends to be a very visible one, concentrated in places like Detroit, Stuttgart and Guangzhou. The failure of a famous manufacturer like General Motors (GM) would be a severe blow to people’s faith in their own prospects when a lack of confidence is already dragging down the economy. So surely it is right to give industry special support?

Despite manufacturing’s woes, the answer is no. There are no painless choices, but industrial aid suffers from two big drawbacks. One is that government programmes, which are slow to design and amend, are too cumbersome to deal with the varied, constantly changing difficulties of the world’s manufacturing industries. Part of the problem has been a drying-up of trade finance. Nobody knows how long that will last. Another part has come as firms have run down their inventories (in China some of these were stockpiles amassed before the Beijing Olympics). The inventory effect should be temporary, but, again, nobody knows how big or lasting it will be.

The other drawback is that sectoral aid does not address the underlying cause of the crisis—a fall in demand, not just for manufactured goods, but for everything. Because there is too much capacity (far too much in the car industry), some businesses must close however much aid the government pumps in. How can governments know which firms to save or the “right” size of any industry? That is for consumers to decide. Giving money to the industries with the loudest voices and cleverest lobbyists would be unjust and wasteful. Shifting demand to the fortunate sector that has won aid from the unfortunate one that has not will only exacerbate the upheaval. One country’s preference for a given industry risks provoking a protectionist backlash abroad and will slow the long-run growth rate at home by locking up resources in inefficient firms.


Some say that manufacturing is special, because the rest of the economy depends on it. In fact, the economy is more like a network in which everything is connected to everything else, and in which every producer is also a consumer. The important distinction is not between manufacturing and services, but between productive and unproductive jobs.

Some manufacturers accept that, but proceed immediately to another argument: that the current crisis is needlessly endangering productive, highly skilled manufacturing jobs. Nowadays each link in the supply chain depends on all the others. Carmakers cite GM’s new Camaro, threatened after a firm that makes moulded-plastic parts went bankrupt. The car industry argues that the loss of GM itself would permanently wreck the North American supply chain (see article). Aid, they say, can save good firms to fight another day.

Although some supply chains have choke points, that is a weak general argument for sectoral aid. As a rule, suppliers with several customers, and customers with several suppliers, should be more resilient than if they were a dependent captive of a large group. The evidence from China is that today’s lack of demand creates the spare capacity that allows customers to find a new supplier quickly if theirs goes out of business. When that is hard, because a parts supplier is highly specialised, say, good management is likely to be more effective than state aid. The best firms monitor their vital suppliers closely and buy parts from more than one source, even if it costs money. In the extreme, firms can support vulnerable suppliers by helping them raise cash or by investing in them.

If sectoral aid is wasteful, why then save the banking system? Not for the sake of the bankers, certainly; nor because state aid will create an efficient financial industry. Even flawed bank rescues and stimulus plans, like the one Barack Obama signed into law this week, are aimed at the roots of the economy’s problems: saving the banks, no matter how undeserving they are, is supposed to keep finance flowing to all firms; fiscal stimulus is supposed to lift demand across the board. As manufacturing collapses, governments should not fiddle with sectoral plans. Their proper task is broader but no less urgent: to get on with spending and with freeing up finance.

Air safety over the past decade

Accidental loss

Feb 19th 2009
From Economist.com

Air safety over the past decade


THERE were 109 commercial-jet “hull losses” in 2008, up from 100 in the previous year, according to an annual report by IATA, an airline-industry body. These serious accidents that result in the destruction of a plane have fallen steadily for decades, but have been on the rise again since 2006. But the increase in accidents has not resulted in a growing number of fatalities. Some 692 passengers lost their lives in 2007, but this fell to 502 last year, a rate of 0.13 deaths for every million passengers carried.

Shutterstock

With Cash to Spend, China Starts Investing Globally

February 21, 2009

With Cash to Spend, China Starts Investing Globally

SHANGHAI — With the world suffering through a tight credit market, China has suddenly gone shopping.

Beijing said on Friday that one of its big state-owned banks, the China Development Bank, agreed to lend the Brazilian oil giant Petrobras $10 billion in exchange for sending China a long-term supply of oil.

That investment came after similar deals were signed this week with Russia and Venezuela, bringing China’s total oil investments this month to $41 billion.

China’s biggest aluminum producer also agreed earlier this month to invest $19.5 billion in Australia’s Rio Tinto, one of the world’s biggest mining companies. And last Monday, the China Minmetals Corporation bid $1.7 billion to acquire Australia’s OZ Minerals, a huge zinc mining company.

Flush with cash and eager to take advantage of weak commodity prices, China is once again on the hunt for global energy and resources to power its growing economy. But this time, China is being welcomed as an investor overseas.

With President Hu Jintao of China traveling this week on his “Friendship and Cooperation Tour” in Africa, where China has substantial interests in resources and mining, Vice President Xi Jinping was visiting South America, meeting with the leaders of Brazil and Venezuela and signing cooperation agreements on oil and minerals.

Venezuela received a $6 billion loan from China and agreed to increase its oil exports to China, bringing China’s total investment in the country to $12 billion. In Brazil, China signed a $10 billion “loan-for-oil” deal that guarantees the country up to 160,000 barrels a day at market prices.

And in Beijing this week, Prime Minister Wen Jiabao met his Russian counterpart after China agreed to loan Russia’s struggling oil giant, Rosneft and Russia’s oil pipeline company, Transneft, $25 billion in exchange for 15 million tons of crude oil a year for 20 years.

“This is heavy energy diplomacy,” said Philip Andrews-Speed, director of the energy policy center at the University of Dundee in Scotland.

“If you need money you go to where the money is, and today, China’s the place.”

The investments are China’s biggest moves since 2005, when a Chinese state-owned oil company made an unsuccessful bid for Unocal, the American oil company, amid worries about whether fast-growing China was seeking to tie up global resources.

But the world has changed since then. Commodity prices have fallen sharply in recent months, after a long bull market that was partly fueled by China’s voracious demand for energy and resources. And China has built up nearly $2 trillion in foreign currency reserves, giving the country easy access to capital.

“What’s changed for China is that their key competitive strength has increased — and that’s capital,” said Andrew Driscoll, a resources analyst at C.L.S.A., the investment bank. “A lot of companies are begging for capital.”

China wants reliable supplies of crude oil, to fuel its growing transport sector; it needs iron ore for steel production, and copper and aluminum to build homes and consumer goods.

Analysts said there were still worries about whether China would compete with other nations, like the United States and India, for oil and other natural resources.

But some analysts said China’s investments were welcome because they would help finance much needed development, increasing the global supply of oil and natural resources at a time when many of the world’s biggest banks were reluctant to lend.

“It’s a good thing because a lot of projects have been postponed,” said Professor Andrews-Speed at the University of Dundee. “Oil companies may now have the money to produce oil. There’s going to be more oil produced.”

Analysts say China could continue to make deals for a variety of small oil and gas companies, mineral producers and mining firms.

This week, for instance, shares of the Australian miner Fortescue Metals Group rose after reports the company was in talks with China over a big investment to help the company expand.

In many cases, China has struck deals in countries that have access to large supplies of oil and minerals but where American and European countries are not well-positioned, like parts of Africa and the Middle East.

In one deal this week, China made an alliance with the government of Hugo Chávez, the president of Venezuela, who has denounced American leadership.

While the oil deals announced vary in terms, analysts say they ensure China a steady supply of oil for decades to come, sometimes at favorable prices.

In Brazil, the $10 billion loan is to be used to finance a deep water oil reserve that the government hopes will help turn the country into a major oil producer.

Bertelsmann enters China's logistics market

Bertelsmann enters China's logistics market
By Yu Hongyan (chinadaily.com.cn)
Updated: 2009-02-20 17:54

Bertelsmann Group, Europe's biggest media group, announced on Friday that it has established a joint venture in China with two leading local mobile phone distributors, its first foray into the country's booming logistics market.

The joint venture, to be based in Shenzhen, will distribute mobile phones to designated handset retailers.

Arvato Services, Bertelsmann's subsidiary, will take a 51 percent stake in the joint venture, and the rest will be held by Telling Group and Sinomaster Group, both of which are based in Shenzhen, the German media giant said.

The logistics company is expected to distribute at least 10 million mobile phones in 2009, according to Raoul Kuetemeier, president of the new venture.

The new firm will set its future sights on e-commerce, its management said.

It has signed up Taobao.com, China's largest online auction website, and Suning Appliance, the country's leading appliance retailer, as its customers.

Bertelsmann established its business in China in 1995 by introducing its world-renowned book clubs, which were closed in June last year due to poor performance.

The company has now shifted its attention to China's logistics market, according to Cui Juan, supervisor of its public relations department.

The Telling Group is a distributor of mobile communication products, as an agent for brands such as Motorola, Nokia, Samsung and Sony Ericsson.

The Sinomaster Group has 100,000 handset outlets in third- and fourth-tier cities.


It's time for a grand bargain between China and the U.S.

It's time for a grand bargain between China and the U.S.

SHANGHAI — With her visit to Asia this week, Hillary Clinton becomes the first U.S. secretary of state since Dean Rusk in the 1960s to cross the Pacific instead of the Atlantic on her first overseas trip. Her most important stop, it almost goes without saying, will be in Beijing. China and the United States are the yin and yang of the global financial crisis, the opposite poles of an imbalanced financial system that has helped throw the world economy into chaos.

Tensions are inevitable between the two Pacific powers, one with the world's biggest economy, the other with the third biggest. Beijing reasonably fears that Washington will try to get out of its rut by choking off the flood of imports from China that has given the U.S. an enormous trade deficit with China. The U.S. rightly worries that China will try to export its way out of trouble by letting its currency depreciate and making the price of the goods it sells to Americans even cheaper, killing U.S. jobs and draining away the benefits of Washington's stimulus package.

Ms. Clinton will try to smooth over these tensions. She will say reassuring things about trade, trying to wipe out the memory of her China-bashing during last year's presidential nomination campaign (“we play by the rules and they manipulate their currency”). She will insist that “buy American” need not mean “don't buy Chinese.” She will soft-pedal human rights, even though she considers herself a rights champion. The Chinese, meanwhile, will make similarly calming noises about their currency (“Depreciate? Us?”) and insist they are doing their bit to lick the crisis by spending hundreds of billions to stimulate their own economy.

It is not enough. Yes, it is good that Ms. Clinton recognizes the centrality of the relationship with China. And, yes, it is good that the Chinese have seen the need to be reassuring and not to beat up on the Americans, even though they believe Washington and Wall Street are entirely to blame for the whole mess.

But what is required is a truly co-ordinated approach in which the two economic powers work hand in hand to overcome it. (Japan, the world's second biggest economy, is so tied up in political knots that it is almost a non-entity.) A U.S. China watcher, Eswar Prasad of Cornell University, calls for a “grand bargain” between the two. The Chinese would agree to allow their currency to seek its natural value on the market and reform their economy so it relies more on domestic consumption than on exports. The Americans would agree to accept the Chinese as partners in global economic management and also to control their own consumption and debt.

All this makes great sense. The Chinese have been seeking improved voting rights on the International Monetary Fund and a seat at the Financial Stability Forum, a club of finance ministers, central bankers and the like. Bringing them on board would encourage responsible behaviour.

Letting the Chinese currency float would cause it to rise over time, making Chinese exports more expensive for Americans and thus lowering the U.S. trade deficit. Encouraging Chinese domestic consumption would help normalize an economy that relies to an abnormal degree on savings and investment. Curbing American consumption and debt would help correct the profligacy that helped get us in this fix in the first place.

Making a grand bargain happen is another matter. The Chinese are in a tight spot. Collapsing exports mean that millions of migrant workers have been thrown out of work, their frustration a potential time bomb for an unelected regime such as China's. Letting the yuan rise would increase the pain at a time when Chinese authorities have been trying to lessen it (by easing taxes on exporters, for instance). The Americans, for their part, are in the process of adding to their debt, not taming it. Doing so will entail great pain and a long political struggle.

But it must be done. China and the U.S. need each other as never before. China needs Americans to go on buying Chinese goods and keep Chinese workers employed. The U.S. needs China to bankroll Washington's debt and provide a manufacturing platform for U.S. multinationals. The rest of the world needs them both to work together on the imbalances that have distorted the global financial system.

“Some believe that China on the rise is by definition an adversary,” Ms. Clinton said before she left for Asia. “To the contrary, we believe the United States and China benefit from, and contribute to, each other's successes.” Quite so. Now let's see them prove they know it.