The economic future of China-Latin America relations — Stuart Krusell

Director of MIT Sloan's Office of International Programs Stuart Krusell

Director of MIT Sloan’s Office of International Programs Stuart Krusell

What do the economies of Latin America and China have in common? They are both extremely interdependent on the other for growth.

China purchases a significant percentage of raw materials from Latin America, which are used in the manufacturing of goods. Many of those goods are then sold back to Latin America. This cycle has increased over the last decade, as China’s trade with the region has surged more than 20-fold since 2000. So while they are competitors, they also are trade partners. It’s a slice of globalization that is representative of the larger world.

China and Latin America’s relationship becomes even more intriguing when you consider the geo-political environments of both regions. What is the impact of Brazil’s elections on its trade partnership? Populist rhetoric to keep jobs local and not to be so dependent on China is appealing to many, but what happens to the region’s economy if trade with China decreases? Further, how do the corruption investigations in China impact trade? If China’s GDP is affected, it could mean the country is buying fewer natural resources from Latin America.

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For breathable air, China must reduce the costs of its growth — Yasheng Huang

MIT Sloan Prof. Yasheng Huang

MIT Sloan Prof. Yasheng Huang

From South China Morning Post

The visible effect of pollution in China is undeniable. I recently spent two weeks in Beijing, where I grew up, with my family. For the first seven days, the sun did not shine. A hazy layer of greyish-white smog hung over us. Every morning, I checked the air quality index, which uses guidelines set by the US Environmental Protection Agency (EPA), on my smartphone app and the results were alarming.

Air quality came in at around 300. According to the EPA, levels between 301 and 500 are considered “hazardous”, meaning people should steer clear of all outdoor activity. Essentially, it’s like breathing in the fumes from a forest fire. (For comparison, Boston’s air quality is about 45.)

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Why democracy still wins: A critique of Eric X. Li’s “A tale of two political systems” — Yasheng Huang

MIT Sloan Professor Yasheng Huang

MIT Sloan Professor Yasheng Huang

From TED Blog

Imagine confusing the following two statements from a cancer doctor: 1) “You may die from cancer” and 2) “I want you to die from cancer.” It is not hard to see a rudimentary difference between these two statements. The first statement is a prediction — it is saying that something may happen given certain conditions (in this case death conditional upon having cancer). The second statement is a preference, a desire, or a wish for a world to one’s particular liking.

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Containing Contagion: ‘There is no replacement for good macro-fundamentals’ — Kristin Forbes

MIT Sloan Prof. Kristin Forbes

What began as a singular sovereign debt problem in Greece in 2009 quickly spread to the rest of Europe. First Ireland; then Portugal and Spain and Italy. Today—only three years after the first signs of trouble—virtually all Europeans have felt the destructive effects of the euro zone turmoil, and its impact is being felt around the world.

Contagion, a phenomenon where financial tumult in one country or region spreads to another country, is now a fact of life. The globalization of finance has, in many ways, made contagion inevitable. The world has become much more integrated through trade, investors, and banks, and these ties have caused countries’ financial markets to move together more closely during good times and bad. Read More »

How waiting longer for the iPhone could help workers — Richard Locke

MIT Sloan Deputy Dean Richard Locke

From the So. China Morning Post

Richard Locke faults a production system geared to speed at all costs

Two decades after Nike faced heat for poor working conditions in its suppliers’ overseas factories, Apple has been responding to a series of scandals – health and safety problems, worker suicides and riots by workers employed at Foxconn, one of its lead suppliers in China. And, once again, consumer activists and others are calling for better standards, more workplace inspections and other steps to prevent such abuse. Read More »