Merry Christmas

I hope that everyone is able to enjoy this day with his or her family.
I wish you a merry Christmas!

© Sheepcafe

Climate Change Performance Index: China ranks 40th, the US 55th...

German NGO Germanwatch recently published its 2008 Climate Change Performance Index (CCPI). The CCPI is a measure of the climate protection performance of the 56 most polluting countries, which together are responsible for over 90 per cent of global emissions. I think this index is extraordinarily innovative because it not only takes into account the current emission levels, but also the trend in emission levels as well as policy actions directed towards energy-efficiency and emission reduction. The three top ranks are occupied by Sweden, Germany and Iceland. Interestingly, they are closely followed by Mexico and India with their scores being positively influenced by policy actions and the emission trend. The remaining top 10 positions are held by Hungary, the UK, Brazil, Switzerland and Argentina.

Alarming though are the positions of the world's two top-polluters, China and the US (China is currently responsible for 18.8% of the world's energy-related CO2 emissions, the US for 21.4%). With China ranking 40th and the US 55th, those countries with the largest possible lever on emission reduction are not found in the top ranks. But while China has improved by 4 positions during the last year (from 44 to 40), the US has lost 2 ranks (from 53 to 55). China of course has to improve further and implement more emission reduction measures, but we nevertheless have to bear in mind that the Middle Kingdom is still a developing country (at least in its rural areas). Though the ranking trend shows that the country is already moving into the right direction. When talking about the US, I think that it is a shame that the political leaders of the country which led the world's economic development after the second world war and also initiated the informational revolution in the nineties is today still totally ignorant to the issue of climate change, which has been a scientifically proven fact for several years and even more since the publication of the recent UN climate reports. For the benefit of the world, let us hope that reason soon also makes its way to the White House - and if not during this presidency, then at least in the course of the following...

Back online

After two months of suffering without an Internet connection, I am finally back online. Assuming there are still people checking my blog once in a while, there will soon be new posts. Stay tuned.

Japan - Asia Could Not Be More Convenient for International Guests

We all have probably heard about Japanese efficiency, the country's high level of organization as well as the people's wealth. Having experienced Japan in reality for some days, I would like to share my experiences with two well-known Japanese stereotypes: the public transportation system as well as Japanese English skills.

When it comes to public transportation Japan is in my opinion second to none (having lived in Switzerland for almost six years I think I know what I am talking about :-)). When our train arrived in the station at Osaka airport, suddenly a cleaning team appeared and meticulously defected all cars before it pushed a button which automatically turned every seat so that it would face the direction of train. Quite impressive. Taking the Shinkansen bullet train from Kyoto to Tokyo was an even more remarkable example of Japanese engineering skills - making the 513 kilometres in 2 hours and 15 minutes including three stops yields an average speed of over 250 km/h. Well I think I do not have to add that Japanese trains are punctual...

As for Japanese English skills, I had expected the worst (even though I knew that Beijing would probably not be beaten...) - only to find that is quite easy to get around in Japan with English. Indeed most Japanese will answer your question "Do you speak English?" with an appointed "No!". The funny thing though is that they will nevertheless understand you when you keep talking in English and will even answer your questions. I have to quote the following dialogue from the Tokyo railway station:

Me: "Do you speak English?"
A Japanese railway official: "No!" (shouting with a humorous undertone)
Me: "Hm, then you certainly won't be able to tell me where I can buy subway tickets..." (already walking away)
RO: "Subwayticket? YoustillintheJapanrailsection! Gooutandyouwillfindticketmachinewhereyoucanbuysubwayticket!!" (the missing spaces can only slightly insinuate the speed of his spoken English :-))

Well, I do not know whether it is just a lack of self-confidence or part of the Japanese manners but even though Japanese people mostly deny it, they do understand English quite well. When compared to China and especially Beijing, Japan was heaven on earth and after having spent six weeks in the US, where public transportation is not usable or even nonexistent, Japan felt like being back in the developed world...

I always knew it...

It was on the summit of Mt. Washburn in Yellowstone National Park where I recently met a hiker. In this remote environment it was natural to start a lively chat about wildlife (he showed me pictures of a bear he had seen on his hike), the mountains and – of course – personal backgrounds. Instead of the usual short «lovely!» as a response to revealing Austria and Switzerland as my home countries he replied: «Oh, it's nice over there. I was in Switzerland last week and hiked for a couple of days in Vorarlberg and Eastern Switzerland». This was followed by a detailed monologue about Swiss and Austrian (hiking) areas. After having told him about the route to come he did provide me with details on almost any national park destination which could be of interest to me. My natural conclusion was that he must either be a professional hiker or retired. But I proved to be wrong: he was a law professor who seemed to add vacation days to any of his professional trips. Maybe some of us should rethink their career plans and appreciate the long-term advantages of an academic career. For me, this had never been more obvious than on the summit of Mt. Washburn :-)

USA - A Country of Contrasts

After having traveled the US for almost two weeks now, I think it is already time to reflect upon this fascinating country because the last days were full of amazing impressions.

Even though it is not my first time here, it is now that I have fully realized that the US is probably best described as a country of severe polarities: mega-cities and undiscovered nature, a relatively small number of incredibly rich people living the American dream in opposition to a vast majority struggling every day for their dream to become true one day, openness towards people from all over the world in contrast to a certain indifference towards occurences outside the continent are only some examples that come into my mind.

But for me - and this is admittedly my subjective impression - the most important insight arises in comparison to my recent stay in China: when I left the Middle Kingdom last December I was happy on the one hand because I would soon see my friends and family again but on the other hand I knew that from the day of my departure I would miss out on something important. I never had this feeling during the last two weeks: not in Boston, not in Chicago and not even in the financial capital of the world - New York city. I really enjoy the US - people and the country alike - but today I am more sure than ever that the future hub of the world economy will be Asia and not the US.

Nevertheless, I am looking forward to great days in the "Wild West" and its national parks trying not to think about economics and business :-)

Ms. Pacman - A Hostile Takeover Defense Strategy

For anybody who was, is or will be an intern or a full-time employee in an investment bank, I would really like to recommend the Investment Banking Monkey's Blog. Even though maybe a bit exaggerating at times, the stories feel so real when you have seen an investment bank from the inside - this blog (together with comps, presentations and models) kept me awake in the office after midnight ;-)

I have found this video also on the Monkey's blog. It's maybe the funniest way to illustrate an anti-takeover strategy in M&A - enjoy!

An Engineer, a Physicist and an Economist

Unlike stock markets, my blogging activity has been at an all-time-low during the last weeks due to something which we could call "intense end-of-study activities", e.g. job interviews and a thesis... As both projects have recently been completed and my spare time has become more abundant again, there is finally time to read non-university related books again :-) Well maybe not totally non-university related, but nevertheless very recommendable to anyone who is interested in financial markets is Benoit Mandelbrot's "The (Mis)Behaviour of Markets", an introduction to fractals as a means of modelling financial markets. Today, I stumbled across the following joke, which is, according to the author, and old one - nevertheless it was new to me and I think it is quite funny :-)

An engineer, a physicist and an economist find themselves shipwrecked on a desert island with nothing to eat but a sealed can of beans. How to get at them? The engineer proposes breaking the can open with a rock. The physicist suggests heating the can in the sun, until it bursts. The economist's approach: "First, assume we have a can opener..."

Data Crunching ;-)

Another Nr. 1 Ranking for Switzerland - This Time: Tourism!

The World Economic Forum (WEF) recently published its first Travel and Tourism Report Competitiveness Report, which ranked Switzerland Nr. 1, closely followed by Austria and Germany. While Switzerland does not lead the rankings in the three subindices "Regulatory Framework" (Nr. 1: Singapore), "Business Environment and Infrastructure" (Nr. 1: USA) and "Human, Cultural and Natural Resources" (Nr. 1: Austria), the country is positioned at a constant second place which makes it the overall leader in the ranking.

Even though tourism is a rather small sector in Switzerland (with spendings by foreign tourists of CHF 13.7 bn 2005, the industry can not challenge the revenues of most large Swiss companies), the study emphasizes that Switzerland (together with Spain) is the only high-income country having declared tourism a prioritized sector.

According to the WEF, the following factors were especially important for Switzerland's Nr. 1 position in the ranking: the country's first-class security and hygienic standards, quality of human resources due to a high number of unrivalled and prestigious hotel management schools, infrastructure as well as the country's cultural and natural resources (Switzerland is home to six UNESCO World Heritage sites).

As far as my own experience is concerned, I think that the outcome of this report is more than justified, even though I personally believe that the Swiss tourism sector has to conduct considerable investments - especially when it comes to ski resorts - in order to stay competitive when compared to other skiing countries (for example, Austria's ski resorts have invested heavily in their infrastructure during the last years - during the current season, €523 mn have been invested into ski lift infrastructure). An interesting article on Swiss tourism and its challenges was recently published by Zurich's leading newspaper, NZZ.

Wake Up! The World is Flat.

"China does not just want to get rich. It wants to get powerful. China doesn't just want to make GM cars. It wants to be GM and put GM out of business. Anyone who doubts that should spend time with young Chinese." (Friedman, 2006, p. 422).

This is a quote from "The World is Flat", the recent bestseller by US journalist Thomas Friedman, which describes those forces which led to the world as we know it today. Even though Friedman's approach might be more journalistic than academic, his book delivers the right message: political and technological innovations have put a large part of the world on a level playing field where a design student in a rural Chinese village fights with the same weapons as a professional design company in London - and both are competing for the same customers.

The books systematises what most of us have just started to realize in their everyday lives: through the (new) Internet, which has been made possible by increased bandwidth and object-oriented programming concepts like AJAX, the way we do things has changed dramatically. People collaborate all over the world, we share thoughts through blogs, we call our friends all over the world for free via Skype, we use online tracking systems for our parcels and connect through social networks - just to mention a few things which we certainly did not do ten years ago. All you need to participate: a PC and an Internet connection.

Jointly with the rapid economic development of India and particularly China, this will lead to enormous changes in the world's balance of power. I chose the above quote from the book because it exactly corresponds to my own impression of China after spending four months at Tsinghua University, China's most prestigious educational institution: China will not only continue to be the world's largest production site, it will soon also take the lead in geopolitical, cultural and global economic aspects. And this change is happening faster than anyone can imagine, so roll up your sleeves...

Dr. Eugen von Keller Confirmed My Own China Impression

Today, the recently formed Beijing alumni chapter of the University of St.Gallen hosted its "China Talks", which comprised of experiences by three students as well as a presentation by Dr. Eugen von Keller, Roland Berger's President for Asia-Pacific.

Even though most people in the audience were anything but China-freshmen, including several University of St.Gallen professors, Mr. von Keller managed to impress us by presenting data which does not appear in everyday newspapers. I recall for example the fact that today, 22% of the world's total steel output can be found on Chinese construction sites. In addition, he showed a graph stating a compound annual growth rate of Chinese insurance business of over 40% within the last decade. Furthermore, according to the presentation, China is today producing 75% of all toys sold in the world.

Unfortunately, due to the limited amount of time and another lecture, Mr. von Keller could only cover a small part of his presentation. I am looking forward to receiving his slideset, which will probably contain some more data surprises confirming my own impression about the Chinese economy.