Want to buy a Chinese car?

Nissan says to start exporting cars from China JVTOKYO (Reuters) – Nissan Motor (7201.T) will begin exporting passenger cars over the next few months from China, as a growing number of global industry giants tap their output in the world’s second-largest auto market to supply export markets.

Apparantly, at least in auto manufacturing, China is still giving companies cost advantages compared to production in other countries.  Newsworthy because of the strengthening Chinese currency compared to two years ago. I wonder if the lower costs might not be because of currency valuations, but because of differences in regulations, and fewer restrictions on investment and production methods. I would also expect that companies are gradually finding it easier to hire employees capable of working in a relatively high tech environment.

Will things reverse course? Eventually they will, but I suspect not for some time. At least here in my hometown of Suzhou, we are still seeing massive investment, even as rumors circulate that fewer foreign companies are making a home here. Has the domestic economy grown enough to drive economic growth?

Why we like expensive gasoline

Finally, a simple and sensible report on why US gasoline is too cheap–

Falling oil prices present mixed blessing for consumers

“Americans cut out 12 billion miles of driving in June, a 4.7% drop from June 2007. During the first half of this year, Americans reduced their oil consumption by 800,000 barrels per day as compared with the first half of 2007.

These changes are much more dramatic than anything resulting from proposals borne of political expedience. To be sure, high prices cause hardships, and the worst could come this winter from painfully high home heating oil prices. Congress and the president should look hard at increasing funds to help the poorest through a tough winter. But if oil prices continue falling, much of the recent momentum could be slowed, to the delight of those who profit from feeding the nation’s addiction.”

With all the exceptions, we sometimes get slapped in the face with the simplest lesson of market economics. Let the market work, and efficient use will result. Government policy, whether misinformed or driven by political expedience, is working against the long term interests of American consumers.

Shortage brings higher price?

Perhaps a curious application of supply and demand–

A mining town in Australia has a male/female ratio of five to one.
Outback mayor seeks “ugly duckling” women
This seems an easy enough application of the market model, quantity supplied is less than quantity demanded. Higher prices are expected.

But where is the higher price? Is “ugly” a price?

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