The China Vortex

Some signs point to a rapid deceleration of the Chinese economy:

• Politburo to convene urgent economic meeting
• Chinese Domestic Olympic Travel Falls Lower Than Expectations
• Unsold inventories climbing
• Shanghai Vanke first to lower real estate prices in Shanghai (in Chinese)

The whole idea of an urgent politburo meeting just three weeks before the Beijing Olympics is a strong indicator of how serious the ruling levels of the Chinese government see this situation and would, in my opinion, be an ominous sign.

All of the signs point to an economy which is rapidly deflating, following on the falling performance of the Shanghai stock exchange, which has fallen more than 50% in the first half of the year. A lot of money which people thought they had made, and did not think of converting into cash thinking that it would go higher, is no longer there.

In China, this is always a warning sign of potential social instability. It also explains a lot about why the Chinese government has introduced new licensing regulations for online video and other communications means where people can communicate quickly, spreading views contrary to the official line, and events can quickly spin out of control.

If the Chinese economy deteriorates, as signs suggest, then it would be safe to say the government controls would tighten further. This would especially be the case in areas where foreign investment capital has gone into sensitive media sectors, which is always viewed with some degree of suspicion by the Chinese government.

Technorati Tags: Beijing, beijingolympics, capital, China, Chinese, communications, community, economic, economics, economy, events, exchanges, government, investment, licensing, money, news, olympics, online, people, prices, regulation, shanghai, social, stocks, travel, video

Just a quick note about what I see happening behind the scenes in China.

The administration of Hu Jintao has made a recent effort to push for transparency and accountability in China, especially related to disbursement of funds related to the Sichuan earthquake, and then acting quickly against corrupt local officials in Wengan in Guizhou province.

The center in Beijing is responding to a popular demand for greater accountability and transparency, and is using this as an opportunity clean house within the ruling party. The message from Beijing to the local party officials is simple: Shape up or be removed from your position.

When Deng Xiaoping introduced his reforms beginning in 1978, he gave local officials wide leeway as to how investment was brought in. The reason for this was simple: Beijing had no money; it was bankrupt. The side effect of this policy has been rampant local corruption. All kinds of games have been played in the name of making the numbers reported back to Beijing. Many of these corrupt officials have escaped China, and are living in the US in multi-million dollar mansions paid for in cash. Behind the scenes, the Hu administration has been quietly working with the US’s Justice Department to bring these officials back to China for prosecution.

As the amounts of the corruption have grown, so has popular resentment. Beijing knows that it must act to clean house. The failure of local governments and party organizations to act forcefully and clean up their own houses have handed Beijing an excellent excuse to act forcefully, and handed multiple PR victories to the center. Chinese bloggers who highlight local corruption have become the eyes and ears of Beijing on the local level. When the decision is made that local corruption needs to be escalated to the national level, then Xinhua mobilizes its formidable machine to shape public opinion on the national level. Then Beijing comes in and acts forcefully, removing the corrupt officials, and making them an example to local government and party organizations all over China.

If you believe that this is simply about accountability and transparency though, you would be naive. It is also about money and how investment decisions are made in China.

Beijing is seeking to recover many of the financial and investment decision making powers which Deng handed over to the provinces and local party officials. In the context of this drive against local corruption, the local administrations and organizations are in a weak position to resist Beijing’s efforts to recover investment-making decisions. China needs higher value-added, higher technology industries which rely more on research, development and IP. Provincial governments and party organizations have not acted quickly enough to upgrade from inefficient, dirty industries which rely on cheap labor. This means that now the investment decisions need to be made from the center in Beijing, with the support of public opinion, of course.

While the Chinese government does not understand PR in a western context, it knows exactly what it’s doing in a Chinese context.

Technorati Tags: Beijing, business, China, Chinese, corruption, earthquake, hu_jintao, investment, PR, technology

The CHINICT conference, hosted by the Beijing municipal government, will be held on May 22 and 23 in Beijing. This is a major event for IT stars, and is an excellent venue for new and rising IT companies in the area.

Kaiser Kuo, publisher of Ogilvy China Digital Watch, will moderate during the two days.

I will be at the Tech Week Charity Cocktail on the evening of May 23 which is sponsored by The China Business Network. Proceeds from the event will go to help the Sichuan earthquake victims.

Hope to see you there!

Technorati Tags: Beijing, China, chinabusinessnetwork, CHINICT, IT, technology

I just read The Economist’s lead article this week titled “Angry China”. I came away from it disappointed, and I would like to explain why.

The main gist of the article is that the Chinese government should be worried about the rising tide of Chinese nationalism because a great deal of the anger now directed at western policies and interests are in fact, anger at Chinese government policy. Handled the wrong way, this tide of Chinese nationalism could very well turn against the Chinese government, leading to unpredictable consequences.

Here are the money quotes:

China’s rage is out of all proportion to the alleged offences. It reflects a fear that a resentful, threatened West is determined to thwart China’s rise. The Olympics have become a symbol of China’s right to the respect it is due. Protests, criticism and boycott threats are seen as part of a broader refusal to accept and accommodate China.

There is no doubt genuine fury in China at these offences; yet the impression the response gives of a people united behind the government is an illusion. China, like India, is a land of a million mutinies now. Legions of farmers are angry that their land has been swallowed up for building by greedy local officials. People everywhere are aghast at the poisoning of China’s air, rivers and lakes in the race for growth. Hardworking, honest citizens chafe at corrupt officials who treat them with contempt and get rich quick. And the party still makes an ass of the law and a mockery of justice.

This is a classic “bait-and-switch” argument. The anger directed at the west is in fact domestic Chinese anger at Chinese government policies, according to this thesis. This is a dismissal of any anger at the west as an argument completely without merit, and an attempt to shift all of the blame onto the Chinese government.

It is exactly this kind of argument which Chinese see as western hypocrisy and double standards. Of course there is anger at some Chinese government policies, but these are a separate issue. Please don’t try to change the subject!

Sure, there are some aspects of Chinese government policy which Chinese citizens would like to see change. But the pro-Tibetan independence folk have committed the sin of lumping Chinese citizens together with the Chinese government in their criticisms. To the Chinese, it seems like a classic attempt to hijack the Olympics, something which almost all Chinese are truly proud of, and to turn it into a bully pulpit for their claims of Tibetan independence.

What angers both the Chinese government policymakers and people is that while the country has developed in economic terms and yes, even in human rights terms, that has not been recognized in the west. Instead, there continue to be politicians and media figures who continue to hector China, and play a leading role in shaping western opinions and political policy about China. To the Chinese, it seems like no matter how hard they run to the finish line, there is always someone out there moving the finish line even further away while they are running the race.

Trying to steal the Olympics and letting the Chinese have their day in the sun would be very similiar to insulting an American simply because George W Bush is his president. This is exactly what the pro-Tibetan independence supporters, and the China media critics have done.

Why should these people, who have little deep understanding of China and the Chinese (or Tibetans for that matter) have such an influential role in shaping opinion about such an important relationship as the west’s relationship with China, and be given so much ink and free air time? In light of this, why shouldn’t Chinese get angry about this very unfair and one-sided view which is put forward in much of the western media, and then passed off as the truth? And why doesn’t the western media instead reach out to westerners who have lived in China, and maybe, even speak the language in order to get a deeper understanding of the country?

Is this fair?

The real reason many Chinese are angry is not redirected anger at Chinese government policies, it is a genuine anger at a very biased and one-sided view about China which casts it as irresponsible, selfish, oppressive and wrong, and then throwing all Chinese citizens into the same basket.

The Economist is, generally speaking, a fair and open-minded newspaper, and usually presents well thought-out positions and arguments . It should look deeper than dismiss all of the Chinese anger out of hand.

If this lead article is the best that they can do, then I’m not optimistic about relations between China and the west.

Technorati Tags: American, Beijing, bush, China, Chinese, economist, media, olympics, opinion, Tibet, US, western

The Chinese government has done much to encourage the development of China’s west, particularly Sichuan province, which is the home to some 100 million people, making it larger in population than any single western European country, including Britain, France and even Germany.

From a business and consumers’ point of view, the region holds tremendous promise. Many large western companies, including Intel, Wal-Mart, MacDonald’s and KFC have all moved into the region in the hope of capturing some of the yuan which locals have to spend. From a consumer marketing point of view, and also from the manufacturing point of view, the region holds great promise.

However, this is still not enough. Compared to the east coast region’s of China, it is still far behind.

So what is holding the region behind in development?

In two words, it’s human talent. “Interesting places attract interesting people” is one of my favorite mantras. When I go to a place, I like to find interesting people, regardless of their profession, and listen to what they have to say. I look for different angles and insights from individuals which I cannot easily find elsewhere. Most of the time, I think of these people as very smart generalists.

My experience is that Shanghai and Beijing is full of interesting intelligent and very talented people, which is why I’m attracted to these two cities in China. They are evolving rapidly, which means that these cities have not yet congealed around certain professions in the way American or European cities, or even Hong Kong, have. They are full of surprises, and most of the time, these are pleasant surprises.

My theory is that these two cities draw the best Chinese talent away from the rest of China, leaving the other cities to struggle with the people they can convince to stay there, who usually are not as smart and talented. So, when Chinese or expats talk about Tier 1 cities (Beijing and Shanghai), they could just as easily be talking about quality human talent.

This creates a problem for western China: they have the consumers, and they can have good manufacturing up to the middle of the value-added chain, but they cannot catch up with Beijing and Shanghai at the top of the value chain.

Unless cities like Chongqing can figure out a way to keep the best human talent in Chongqing, the wealth and knowledge gap between the western part of China and the Tier 1 cities will continue to widen. Instead of climbing to the top, they will peak out around the middle and won’t make it into the ranks of world-class cities.

What the Chinese government, and most other governments, fail to understand is that it is not buildings, boulevards and museums which make cities world-class, it is very literally human talent. In spite of China’s huge population, I have only seen two cities, Beijing and Shanghai, which have the potential to make them world-class.

While some Chinese may take this as a slight, it’s worth remembering that the US, which has only 1/4 the population of China, but has a longer history as an economic superpower, has only three cities which can be classified as “Tier One”: New York, Los Angeles and Chicago.

There must be some undiscovered rule which makes this the case.

Technorati Tags: Beijing, chicago, China, chongqing, development, economic, economy, human, losangeles, newyork, population, shanghai, sichuan, talent, US

When I talk about the west in the title, I’m referring to the western part of China.

A great deal of thought and ink and pixels have been devoted to how the recent violence in the western part of China has affected the country’s image in the runup to the Beijing 2008 Olympics. I’m not going to talk about that because I have nothing new to add to that conversation.

Instead, I’m going to talk about how those events are likely to affect Chinese government fiscal and monetary policy.

These recent events have shown that the income gap between Han Chinese and Tibetans is growing, and that there are significant numbers of Tibetan youth who do not see a bright future for themselves. They are perfect fodder for unrest. Beijing has tried to mollify things by moving significant numbers of Han Chinese into Tibetan areas to start small businesses but, for the most part, Tibetans are still deeply religious, and many prefer a nomadic lifestyle to living in cities where they cannot find work.

This is the trouble with an urbanization policy: it works fine if people are employed. If they are not employed, there are all kinds of social problems.

The biggest problem is that there is no Tibetan merchant class as there is among Han Chinese.

The central focal point of Chinese social policy is low unemployment at all costs, even if the businesses are not profitable. It is better to have people working in a loss-making enterprise than for them not to have a job at all and wandering the streets.

Part of the rationale for the violence was to scare Han Chinese out of the Tibetan regions. Many Han Chinese families may prefer to move back to their places of origin; the Chinese government may offer economic incentives for them to stay.

Faced with this situation, the Chinese government is unlikely to let the yuan rise significantly more this year. If asked to choose between which is more dangerous, social unrest in China, or increasing pressure from the European Union and the US over letting the yuan appreciate, I’m sure that the residents of Zhongnanhai would say that the former is the threat they fear the most, not the latter.

For them, it’s much more important to keep people working at their jobs in China.

Technorati Tags: appreciation, Beijing, China, economics, economy, employment, fiscal, han, monetary, olympics, policy, social, Tibet, tibetan, unemployment, yuan, zhongnanhai

Recently I have been involved in setting up an event in Beijing, it is the Result-Symbio Partnership Symposium on Feb. 28 (Thursday).

The CEO of Result, Ola Ahlvarrson, and the CEO of Symbio, Jacob Hsu, got together and decided that it would be interesting to bring technology and business professionals together to talk about how to bring Chinese and European Internet companies together to explore each others’ markets.

Result (www.result.com) is a Stockholm-based Internet consulting firm, and has had a successful track record helping companies such as Skype, Xing and Fon expand their presence across Europe and into other markets. Symbio (www.symbio-group.com) is a software engineering solutions provider which was founded in the US, but now has extensive operations in China.

Jacob Hsu, the Symbio CEO, asked me to help organize this event. Since many of the participants are heavy-hitters in the Internet field, we decided to have two panels in the morning and leave the afternoon open for breakout sessions. The first panel, to be moderated by Ola Ahlvarrson, will be about how European companies see the China market. The second panel, to be moderated by Kaiser Kuo, writer of the Ogilvy China Digital Watch blog will be about how Chinese companies look at the European market, and will include such well-known and respected members of the Beijing digerati as William Moss of ImageThief, Tangos Chan of China Web2.0 Review and Benjamin Joffe, founder of Mobile Monday in Beijing.

In the afternoon, there will be free-wheeling breakout sessions where technology and business people will have their opportunity to list topics they would like to discuss, and those interested will be free to join the conversations. One interesting new Chinese startup is Qifang.cn, founded by Calvin Chin. This P2P financial website was programmed and designed by Symbio’s web services group based in Chengdu, and has already received coverage in TechCrunch in the US. Calvin will be attending the event and will be talking in detail about Qifang.

The venue for the event will be the Beijing Guxiang 20 Club (actually it’s a boutique hotel) in Nanluoguxiang near Dianmen. Recently this neighborhood has become popular with discriminating visitors to China, and there are many small cafes, restaurants and bars in the nearby hutong.

If you are a reader of this blog and are, or will be in Beijing on Feb. 28, and think that this is something you would be interested in coming to, consider yourself invited by me. You can read the online invitation with details for the event here.

Just mention my name at the door and ask for me. I will be there all day.

Look forward to seeing you there!

Technorati Tags: Beijing, China, Europe, fon, qifang, result, skype, stockholm, sweden, symbio, xing

More frequently now, US-based (mostly Silicon Valley) tech and business professionals are contacting me, asking how to find work in China. The business people usually want to get paid US salary to stay in the US and do some BD work for a US or Chinese company. The technology people usually want to find work in China.

For the most part, it’s very hard to find work which requires that you stay in the US paid at US salary. I have never heard of a Chinese company hiring someone on the recommendation of a senior recruiter without first meeting senior and executive management over a period of time. I know of one VP in a gaming company who came back to China, was hired and worked in China for nearly a year, and was then sent to open up their new US west coast office. Of course, a job like this requires working with a very Chinese company, which means that you need to know Chinese. And you need to prove yourself in the home office before you will be sent to the US. So, it is not easy…

For technology pros with 10+ years’ experience, my advice is that they take a few months off to come to China, and network as much as possible. Paul Graham puts it very well in this article about web startups. Beijing is a very vibrant startup hub and its tech grads from Tsinghua University offer the cream of the crop; generally speaking people are very friendly and open about what they are doing.

Shanghai is a more western style city, and the mentalities of the people are very different from Beijing. A rough analogy would be to say that Beijing is like Silicon Valley + Washington DC, and Shanghai is like Los Angeles or New York when it comes to mainstream media.

If you are a tech pro with 10+ years working in Silicon Valley, you really should be thinking more in terms of startup than about joining a company as an employee. There is an upfront sacrifice in terms of time, but in the end you will be happier, and at least you will own a piece of a company. If you are younger, you can afford to make a few mistakes in your early startups; if you are older, you want to choose more carefully. The good thing about doing a startup is that even if it fails, you are likely to make excellent acquaintances which will help you in the future.

One reader of my previous article Is It Possible For A Western-Managed Company to Succeed In China? mentioned that I made it sound very hard for a westerner to succeed in China. Well, yes and no.

Over the weekend, I came across an interesting announcement on Danwei from Praxis Language, the parent company of Chinesepod, an online Chinese-language learning program. The company is based in Shanghai and is headed by Ken Carroll. I met Ken in 2005 at the first Chinese blogger conference, which was held in November of that year in Shanghai. I have never used Chinesepod, but I have heard many favorable comments about it from westerners who want to learn Chinese.

The announcement, which is on Ken’s blog, mentioned that the Chinese government agency in charge of the government-operated Confucius Institutes, had approached his company about partnering to create an online presence for their institutes and helping to teach Chinese to non-Chinese using the Internet.

Think about it. The Chinese government partners with a non-Chinese headed company in Shanghai which knows something about language teaching online to help them promote the teaching of Chinese online around the world.

So, if you are good in your field, of course there are opportunities for western-owned startups in China.

Technorati Tags: Beijing, business, China, Chinese, chinesepod, confucius, confuciusinstitute, management, paulgraham, praxis, shanghai, technology

China’s increasingly important global role means that more and more businesses are coming to China. While there has been a significant presence among multinationals for nearly 30 years, now companies are coming in at earlier stages. Now some startups are even choosing to start in China instead of Silicon Valley.

This trend has been encouraged by venture capitalists, who now give a premium valuation to companies based in China.

This raises a very interesting question: “Is it possible for a western-managed business to succeed in China?”

First of all, a few qualifications. While there are many western multinationals in China, most of them have heavily localized their staff and management. The general trend in these companies is to localize staff and management as quickly as possible without sacrificing necessary management skills in the process. So, for the most part, while they are western companies, they are largely Chinese-managed.

Since most of my work is with startups, I’ll drill down in this field. Now the trend is for more American startups to start in China, even though they may not see China as their main market. In the gaming field, for example, China has a huge pool of people with talent and experience in the gaming field. This means that there is a pool of people with talent in programming and art, and understand gaming culture. The areas where the local Chinese population are weak is in product management. Chinese tend to gravitate to managing other people; there is a serious attraction to being able to say that a manager manages x number of people. Product management is more about managing resources, and coaxing cooperation from different stakeholders in the organization. Naturally, this requires more in the area of soft skills. And soft skills are an area where most technical people feel less comfortable with, and generally do not do as well in.

And unlike in the US, product management people in China are generally expected to be much more technical. So there is a difference here.

Hence the shortage of good product management people.

Naturally, this gives an advantage to startups which have experienced product management people. One mainly western-managed startup in Beijing which is strong in this area is ECitySky.

What about other kinds of companies, and what about the market for talent?

It all depends on what you are trying to do, and what audience you are trying to reach.

One tendency in the Internet field is that as the technology tools become more mature, the technology plays second fiddle to product marketing and marketing. Since the Internet has had just as long a history in China as it has in the west, it is getting harder for an experienced technology person to differentiate himself purely on technical skills alone. Increasingly he has to bring soft skills to the table, especially team management skills, to the table to be seriously considered. This means that for most technical people in China, the opportunities are becoming fewer, especially when you consider their significantly higher costs.

On the management and marketing side, it becomes more important to know how to communicate with your main audience in China. If the audience you are trying to reach is mainland Chinese, this means you must be keenly aware of social trends, the different social groups in Chinese society, government policy, what the different groups are thinking about, and the dynamics affecting the different groups.

The only way to get a deep feel and grasp is to know the language on a native level, including speaking reading and writing Mandarin Chinese. Basically, you need to become local. Assistants, translators and PR agencies will only get you so far because they cannot provide the social context to digest and understand the raw data to make good business decisions.

And then, even if you have a native command of Mandarin, that is no guarantee of success. I sum it up this way:

• If you don’t know Chinese (spoken, reading and written) and have not lived long in China, you don’t even know what are the right questions to ask.
• If you speak, read and write Mandarin on a native level, but do not socialize with mainland Chinese except on special occasions, you may know what you don’t know. More importantly, the most capable and intelligent mainland Chinese will not join the startup, instead choosing to start their own startup, often competing with the company they just left. (I’m thinking of many American-born Chinese, Taiwan and Hong Kong Chinese-managed companies which claim to be Chinese, but do not include mainland Chinese who have grown up in China in their management ranks. For the most part, they do not trust mainland Chinese and in private meetings, it is not unusual to hear them complain about things in China. In my opinion, they are doomed from the start.)
• If you have a startup which breathes, by which I mean that management does not have an inner circle dominated by any regional group or background, and freely allows people into senior and executive management based on their creativity, communication skills and ability to execute, then your startup will have the greatest chance of success. This is because a startup depends on moving quickly, and rapidly adapting to changes and competition in the marketplace.

So, in my opinion, when you get past the government regulatory issues, which are slanted to favor Chinese-owned companies in some sectors (especially media, where foreign companies are not allowed), it really is not any harder in China than many other parts of the world.

The biggest barrier for many startups is to get the management right so that it does breathe. Management needs to set the right tone from day one.

The best management hires the best people, empowers them, and let’s them go. At that point, it’s no longer a western- or Chinese-managed company; it’s just well-managed.

Get that right and China’s your oyster.

Technorati Tags: , Beijing, China, Chinese, entrepreneurs, internet, language, management, Mandarin, marketing, product, siliconvalley, skills, staff, startups, talent, technology

Yesterday, the new national aquatics center was unveiled in Beijing. This will become the venue for the leading water events of the Beijing Olympics. After the Olympics are over, it will be converted to a shopping mall for Beijing’s masses.

Beijing is now the site for some of the most exciting architecture in the world. For many Chinese though, there is an underlying uneasiness. Is all this dramatic futuristic architecture the beginning of a new and exciting future of wealth and prosperity which Chinese have never experienced in their long history?

Or is this instead a blip of prosperity, and will the future be much less bright, and will their children and grandchildren look back and see the Beijing Olympics as the apogee of what has since become a downward trajectory? And will this architectural marvel become dirty and dusty and seedy?

China has seen prosperity before, only to have its dreams shattered. Westerners today see China as a rich, prosperous and growing power, but it has run into the wall before, and on many different points in history. The first Chinese industrial revolution, when Chinese factories started making goods for the Chinese market started at the end of the nineteenth century, with textile mills and flour processing factories spouting up in the Yangzi river delta, mostly started and financed by entrepreneurs from Shanghai and Wuxi. Then China went into political chaos in the period following the revolution which overthrew the Qing dynasty in 1911.

Another period of short-lived period of prosperity came in the early 30s, this was cut short by the Japanese invasion of China in 1937.

Then, in the period following the end of WWII, China fell into civil war between the two leading political parties, with the Nationalists losing and retreating to Taiwan. Following the establishment of the PRC, China was very poor, and then made even poorer by the Cultural Revolution. In 1978, the Chinese government essentially decided that they were tired of being poor and moved ideology off the national agenda. From now on, it would be about making money.

Even today though, with all their savings and comfort, Chinese feel that it can all change and all go away. That is why they save and sit on their cash.

Americans are the opposite. Until very recently, most Americans believed that the future would always be brighter, that although there were things that they did not understand, America was the strongest and most prosperous country in the world, and that there would always be a way. This is why theyspent their savings, and when their savings were gone, they would take loans on easy credit terms, promising to repay the loans and credit when they had income again. It led to a bigger and bigger mountain of debt. And now, Americans are much less sure about their ability to repay the loans.

This is a way of thinking which is completely foreign to Chinese, and makes no sense at all to them. For Chinese, the only real money is cash. And when money goes bad in times of high inflation, they don’t even believe in cash.

They believe in land, and if the politics becomes unstable, they go to gold.

Runaway inflation is something the Germans experienced in th 1920s, then again in the postwar period. Japan experienced it too in the postwar period. China also experienced it in the postwar period when the Nationalists had to change national currencies three times in the period up to 1949. With the runaway inflation in the cities, people had to carry their money in paper sacks to do their shopping. They would go to the markets carrying bags of money to buy their groceries, then they would use the same bags to carry their groceries back home.

When the Nationalists lost control of inflation, they lost the Chinese cities and the support of the business community. This paved the way for the establishment of the PRC in 1949. The first task for the government was then to stabilize the currency.

While China was very poor in the fifties, sixties and seventies, there was virtually no inflation.

Today in China, we are seeing the early signs of inflation again in food prices and property prices. For any Chinese government, and this government is no exception, inflation is the greatest single and most frightening enemy it faces. It may creep up slowly, but it unleashes forces which can easily spin out of control.

If a government cannot maintain the value of its currency, it cannot protect its citizens, and the people end up in the poor house. It’s that simple.

This is why the Chinese government will not easily revalue the yuan upwards, and why the government keeps such a tight control on credit.

One of the upsides for Chinese businesses investing in Africa is that although the people are poor, at least they pay cash. When times turn hard, you want to be paid in cash.

For most Chinese, you aren’t rich unless you own cash.

Credit is just a derivative and in tough times, no one wants derivatives.

Technorati Tags: architecture, Beijing, China, credit, currency, derivatives, germany, inflation, japan, loans, risk, watercube, yuan