Mistress dispellers

Mistress-dispelling services, increasingly common in China’s larger cities, specialize in ending affairs between married men and their extramarital lovers.
 
Typically hired by a scorned wife, they coach women on how to save their marriages, while inducing the mistress to disappear. For a fee that can start in the tens of thousands of dollars, they will subtly infiltrate the mistress’s life, winning her friendship and trust in an attempt to break up the affair. The services have emerged as China’s economy has opened up in recent decades, and as extramarital affairs grew more common.
 

(h/t Ken)

Well this is something. Coming this fall to ABC, the explosive new series from Shonda Rhimes: The Dispeller, starring Halle Berry.

Mistress dispelling typically begins with research on the targeted woman, said Shu Xin, Weiqing’s director. An investigation team — often including a psychotherapist and, to keep on the safe side, a lawyer — analyzes her family, friends, education and job before sending in an employee whom Weiqing calls a counselor.
 
“Once we figure out what type of mistress she is — in it for money, love or sex — we draw up a plan,” Mr. Shu said.
 
The counselor might move into the mistress’s apartment building or start working out at her gym, getting to know her, becoming her confidante and eventually turning her feelings against her partner. Sometimes, the counselor finds her a new lover, a job opening in another city or otherwise persuades her to leave the married man. Weiqing and other agencies said their counselors were prohibited from becoming intimately involved with the mistresses or from using or threatening violence.
 

Even the term is spectacular—mistress-dispelling—like some overly literal translation of a Chinese phrase.

At first blush, this seems like a ridiculous solution, but understand the social context and there is a Coasean efficiency, an almost ingenious elegance, at work.

 

China's birth rate problem

China has changed its one child policy to a two child policy, but it may not do much to rejuvenate its aging population

"It leads to a drop in the proportion of the productive labor force, which in turn raises the average wage level, making China less competitive in labor-intensive industries," Council on Foreign Relations China expert Yanzhong Huang writes in the Diplomat. "If China is approaching its Lewis turning point, a point at which China would move from a vast supply of low-cost workers to a labor shortage economy, it could quickly lose its competitive edge to other emerging economies that still enjoy significant demographic dividends."
 
But here's the really scary thing for China: It's not obvious that ending the one-child policy will solve its demographic crisis. The one-child policy is not, on its own, the key cause of China's graying population — those include China's growing prosperity and increasing opportunities for Chinese women outside the home. It's not obvious that repealing the one-child policy now would be able to make up for the difference.
 
"As UNC demographer Yong Cai has shown, today, even when fertility restrictions are lifted fertility rates don't rise," University of Maryland sociologist Philip Cohen writes in the Atlantic. "People have few children in China today because children have become too expensive—good schools especially cost too much, and the health care burdens of children outweigh the hoped-for future return of a child to care for parents when they're retired."
 

I have yet to hear of a country that's been able to reverse its birth rate decline with cash incentives. I hope one country succeeds just so we get a sense of the price at the indifference point.

Assembled in China

This study also confirms our earlier finding that trade statistics can mislead as much as inform. Earlier we found that for every $299 iPod sold in the U.S., the U.S. trade deficit with China increased by about $150. For the iPhone and the iPad, the increase is about $229 and $275 respectively. Yet the value captured from these products through assembly in China is around $10. Statistical agencies are developing tools to gain a more accurate breakdown of the origins of traded goods by value added, which will be attributed based on the location of processing, not on the location of ownership. This will eventually provide a clearer picture of who our trading partners really are, but, while this lengthy process unfolds, countries will still be arguing based on misleading data.
 
Those who decry the decline of U.S. manufacturing too often point at the offshoring of assembly for electronics goods like the iPhone. Our analysis here and elsewhere makes clear that there is simply little value in electronics assembly. The gradual concentration of electronics manufacturing in Asia over the past 30 years cannot be reversed in the short- to medium-term without undermining the relatively free flow of goods, capital, and people that provides the basis for the global economy. And even if high-volume assembly expands in North America, this will likely take place in Mexico where there is already a relatively low-cost electronics assembly infrastructure.
 

An interesting piece in AEI about how shifting assembly jobs back to the U.S. might not be the economic boost it's often made out to be.

It’s an important distinction that Apple products (and other electronic goods) are really only “Assembled in China,” and not actually “Made in China.” The value of the final assembly in China is pretty small compared to the value added in the U.S., and yet China gets credit for the majority of the value according to the way trade statistics are calculated.

China: the Jeff Bezos of Industrial Production?

At Forbes, Karl Smith suggests that the global savings glut may be a result of the Chinese government's willingness to invest at a loss at an unprecedented scale, hoping to earn that back way down the road after more of its citizens have urbanized. 

China at some points has had investment rates of in excess of 40% of GDP. For super-geeks this exceeds the Ramsey Rule at a zero discount rate. For non-geeks it means that there is no investment strategy under which this is the profitable thing to do.
Its always hard to tell but on balance I think the Chinese government is aware of this, yet is willing to lose money on its capital investments in order to provide jobs for people moving to the city. This is a smart move if you think cities produce agglomeration effects.
With apologies to the less wonkish, China is using physical capital as a loss leader in order to grow cities that will produce network effects will in turn foster the human capital that really makes a country rich.
In this way China has become like Amazon’s Jeff Bezos, a Destroyer-of-Worlds. You can’t win a physical capital accumulation battle against someone whose plan is to overinvest and lose money on the physical capital.

If the Chinese government will invest so much of its GDP in these types of projects, that takes those investment opportunities out of play.

Miscellaneous

  • This is an old one. I don't think Apple should be able to patent much of what they do patent, but that doesn't mean this isn't a nifty touch: the pulsing LED light on Apple laptop covers is designed to fade in and out at the rate of human breathing, a rate "which is psychologically appealing."
  • Camera heavyweights Leica and Red have both announced digital cameras that will only shoot black and white. Why build digital sensors that only shoot black and white when color frames can be transformed into black and white? A typical CMOS sensor has a pattern of red, green, and blue filters that sit on top of the sensor, and each pixel is assigned one of those filters. Thus each pixel only records one color, and an algorithm (debayer) must be applied after the fact to interpolate the full color for that pixel. If you remove the Bayer filter, each pixel sees more light, and without having to debayer, the image is sharper and the tonal curve more smoothly rendered.
  • Are there cracks in China's march economic growth march? George Magnus of UBS thinks so, and a recent note he published drew lots of attention across the web. As this article summarizes, Magnus believes that "China’s innovation and technology shortcomings are rooted in a socio-cultural system and an incentive system that emphasizes incremental over radical change, and quantity over quality and uniqueness." This may leave China ever lagging other global leaders in innovation.
  • After reading The Secret Race: Inside the Hidden World of the Tour de France: Dping, Cover-ups, and Winning at All Costs, Tyler Hamilton's confession of the doping he did as Lance Armstrong's teammate and then competitor, I wasn't surprised at the revelations of the extent of the doping in professional cycling. Oddly enough, having visited the Tour de France in person several times, you'd hear ex-professionals, whether riders or soigneurs or mechanics, drop not-so-subtle hints that doping was common and expected. However, I was curious how Sally Jenkins would cover it. She wrote Lance Armstrong's two biographies (It's Not About the Bike and Every Second Counts), both great reads but, given Armstrong's participation, largely hagiographic, so I was curious if she'd have it in her to join those who've condemned him given his recent decision to give up the fight against the USADA. It appears that nothing short of a confession from Lance Armstrong will sway her. Her last column on Armstrong starts: "First of all, Lance Armstrong is a good man. There’s nothing that I can learn about him short of murder that would alter my opinion on that. Second, I don’t know if he’s telling the truth when he insists he didn’t use performance-enhancing drugs in the Tour de France — never have known." She goes on to condemn the USADA's methods, and she raises good questions about whether athletes can get a fair shake from them. Also, given our economy, the amount of money the USADA spends is of questionable value. Still, I was hoping Jenkins would address the Lance issue head on. It seems she'll simply pass.
  • I concur with Andy Greenwald about Boardwalk Empire: the lead role is miscast, and the dozens of storylines sprawl like so many strands of spaghetti. I've never warmed to the show. Has a show ever broken out in its third season the way wide receivers are rumored to in the NFL?

China's fast follow model

These photos from an abandoned Disneyland-like construction project in China caught my eye, in part because they were familiar yet not.

This is in contrast to many of China's more famous undertakings which are outright knockoffs, rather than inspired modifications. Of these, some of the most fascinating are its recreations of actual places. Notable recent examples include a full replica of the popular Austrian lakeside vilage Hallstatt and the Tower Bridge of London, and Beijing has an entire theme park, the World Park, filled with recreations of landmarks from all over the globe. China even copies itself; the wealthy village of Huaxi has knockoffs of the Tiananmen rostrum and The Great Wall.

Some might find it tacky, and that's hard to argue. However, it's likely harder to  innovate than copy, and thus it's a very rational economic and business model, especially when applies to areas that might improve the livelihood of the largest population on earth. The fast follow model works when an entity like the government can protect the efforts of the copycats, outsourcing the innovation costs to other countries.

This matters less when you're talking about global landmarks and more when discussing business models, especially Internet companies, of which China has cloned many:

It works well until the point at which the costs of negative sentiment towards China outweigh the benefits of hoarding the benefits of copying. Since the political and economic costs of the international community's retaliation are likely more difficult to quantify than the financial success of Chinese companies like the ones listed above, it will be a long time before the practice slows.