Tag Archives: markets

“Sanctions”

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That’s what US, Canada, Britain, and European Union politicians are claiming they’ll impose on the People’s Republic of China in response to PRC genocide efforts against the Uyghurs in the PRC’s Xinjiang Uygur Autonomous Region.

The sanctions are expected to vary in type, and will include Global Magnitsky economic sanctions on individuals alleged to be involved with the mistreatment of the Muslims in the Xinjiang region of China.

Among those sanctions are these which the US, Canada, the UK, and the EU already imposed last Monday to four (count ’em) PRC officials:

  • Zhu Hailun, former deputy Communist Party head in Xinjiang
  • Wang Junzheng, party secretary of the Xinjiang Production and Construction Corps
  • Wang Mingshan, member of the Xinjiang’s Communist Party standing committee
  • Chen Mingguo, director of the Xinjiang Public Security Bureau (PSB)
  • Xinjiang Public Security Bureau itself

Politico noted, interestingly, that the EU explicitly omitted to sanction the top Communist Party boss in Xinjiang, Chen Quanguo.

That’ll show them. We’re wagging our fingers very firmly at the PRC, and shortly we’ll be wagging our fingers even more vigorously.

Right.

What’s truly needful here is—at the minimum—a ban on import or even purchase of goods manufactured, including constituent parts, or assembled in Xinjiang or any business anywhere in the PRC with any sort of tie back to Xinjiang, and a parallel ban on doing any sort of business with a Xinjiang-associated enterprise.

Better would be to expand that list to include an ever broadening set of imports from or exports to the PRC until that nation provides publicly available and publicly verifiable proof that the PRC has put an end to its assault on the Uyghurs.

Fat chance, though, as the politicians of the four nations have shown themselves too timid to do more

How Fast is Fast?

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Starlink is touting 120Mb/sec on its downlinks from its growing constellation of satellites purpose-built and -orbited to provide Internet connections.

Other satellite Internet providers in the offing are claiming similar speeds.

Put the speeds in context, though.

My Ethernet Internet connection gets link speeds in the gigabit/sec range.

My cable Internet provider gets me downlink speeds in the low hundreds of Mb/sec (faster than Starlink’s present 120Mb/Sec).

Consider another aspect of a satellite constellation network. Surface-based Internet connections (which cable connections are, for all that some of them still use microwave connections rather than underground copper (less obsolete than microwave) or glass to send their signals over much shorter distances than can satellites—which must bring the signal up from its ground-based origin, run it along that longer orbital arc, and then back down to the surface-based destination.

The throughput in any leg of that distance may well be lightning fast—which 120MB/sec is, for all that gigabit/sec is faster. But to all of that must be added the physics-created latencies—because the signal only goes at the speed of light—with further latencies created by each relay required as the signal is pushed from satellite to satellite before being relayed to the ground.

For all that negativity, though, a satellite-based Internet connection is fast, fast enough for consumer needs (so far) and for most business needs (so far), and it’s infinitely faster for those users in locations not reached by any other Internet network.

The follow-on question is whether a satellite-based Internet network can evolve as those “so fars” evolve.

A Treasury Climate Czar

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That’s what new Treasury Secretary Janet Yellen wants to set up. That’s not necessarily a bad idea.

A climate risk office inside Treasury actually could be useful—were its purpose properly targeted.

The risks that are worth assessing and which realizations worth planning for, though, are political and economic, not climatic.

The political risk is from government overreacting with laws and regulations to the overhyping of climate.

The economic risk is from businesses overreacting in anticipation of such political overreactions.

Somehow, though, I doubt that’s Yellen’s intention for her new office.

Cent Wise and Euro Foolish

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Barron’s has an example, centered on Europe’s very own Wuhan Virus situation.

The EU economy shrank last year by 6.3%, according to the latest EU forecast, published on Thursday. That amounts to about €877 billion ($1.1 trillion) of lost gross domestic product last year. Or about €17 billion a week.
Compared with this, the total bill of vaccines procured until now by the EU—based on contracts signed, and vaccine prices confidential in principle but tweeted last December by the Belgian health minister—would amount to €20.5 billion.

The finally agreed vaccine bill amounts to a bare day-and-a-half over a week’s lost GDP—and how many lives.

While Barron’s writes its own price-is-no-object foolishness—When dealing with the pandemic, vaccines are quite literally priceless—the EU plainly wasted ‘way too much time, money, and lives, quibbling over relative pennies.

An outcome of the European Union’s foolishness:

20% of the UK population has already received at least a shot of one of the three [EU- and British-]approved inoculations—the Pfizer-BioNTech, AstraZeneca-Oxford, and Moderna vaccines. More than 13% of Americans are in a similar situation—but barely more than 4% of Europeans[.]

Another Example

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…of the folly of doing business with companies domiciled inside the People’s Republic of China.

The particular company is Ant, a financial institution that PRC regulators lately decided its owner Jack Ma was getting too impudent regarding government actions—was getting too big for his britches—so the regulators blocked Ant from going public unless and until it massively reorganized and at least to significant extent downsized.

Now let’s back up in time a little bit.

In 2018, an exclusive group of global private-equity firms and mutual-fund managers including Silver Lake, Warburg Pincus LLC, Carlyle Group Inc, and T Rowe Price Group Inc took part in a coveted fundraising by Ant that raised $14 billion and minted the financial-technology giant as the world’s most valuable startup.
More than $10 billion of the money came from international investors, which bought shares in an offshore shell company set up by Ant to raise funds in US dollars. The unusual arrangement came about because in order to secure a payment license to operate Alipay, its highly popular mobile app, Ant had to be domiciled in mainland China. But that also limited the company’s ability to raise funds directly from foreign investors.

That’s the why. Now the what.

The global investors agreed to terms that were highly favorable to Ant, and which limited their ability to cash out if the company didn’t end up going public, according to people familiar with the matter. Ant also didn’t provide a listing time frame or guarantee investors a return while it stayed private, the people added.
The foreign investors didn’t receive any voting rights in Ant…. None was given a seat on Ant’s board.

They can’t recoup their investment; they didn’t even get a say in the governance of the company. Just “Here’s a boatload of money. Y’all have a gud time, y’hear?”

Now that was an exceedingly dumb thing for those investors, supposedly experienced in investing, in international finance, and in investing in PRC businesses, to agree. But the larger thing is demonstrated by the PRC government men’s behavior: investing in a PRC business, or investing inside the PRC, is exceedingly dumb.