Tax season is here

China Daily reported recently that China's tax revenue for 2006 grew by almost 22%. Over the same period, GDP grew by 10.7%. Both numbers are impressive by any measure. The discrepancy between them is most curious. Since GDP is the sum of all income, companies or individuals, and all income are subject to taxsation. Obviously, China's tax burden was not distributed evenly and the government was on the more profitable side.

Personal income taxes account for only 6.5% of the total tax revenue. The rest came from the corporate sector. In 2006, urban investment and industrial enterprises grew 26.6% and 30.7% respectively. These two sectors contributed most of the tax revenue increases. Compared to individuals, investors and companies made more money and, therefore, paid more taxes than individuals.

Since government can spend taxes only on the country it governs, taxes are a form of wealth redistribution. The simpliest way is to pay salaries to government employees. A more subtle form is to invest on infrastructure — a bridge to a remote village, a power plant when rates are regulated, high-speed data backbones, or massive projects for Olympics. These infrastructure should enable the citizens to make themselves more prosperous. So, indirectly, the wealth is redistributed. China has found a way to collect money from the most profitable sectors and invest them to fuel the growth of the whole country. The redistribution of the newly generated wealth has not been uniform. Some believe it is wrong to be, at least not now.


If we give 1.3 billion people a dollar each, the whole society is 1.3 billion dollar richer, just like if we give 1,300 people a million dollar each. But these 1,300 people will create enterprises. Those enterprises need suppliers. The ripple effect will multiply and reach widely. At the end, the society will be several times richer. Wealth works better concentrated.


What about equity? What about those millions of poor farmers in the west or rural areas? Where is the compassion when rich people get fat and happy while children are starving and left behind in the education system? I live the inequity here and witnessed the suffering. Surely something can be done.

Then I realized the truth about government. It is about priority, planning, and the selection of whom to benefit first. Throughout human history, there are always social-economical classes. Part of the population will be elite and part will get the shorter end of the stick. The job of the government is not to eliminate inequity, but to raise the quality of lives, in a sustainable manner, for most people. Impatience, short-term thinking, or succumbing to the sensational media pressure are not good governance. The choices are which and how many generations to wait for that eventual prosperity, not whether. Of course, this is a perfect disguise for corruption, but it is also the right answer. If you give the government power, it may corrupt, but it may also do much better than if you don't.

And this is why some countries experienced many decades of poverity and other reached prosperity quickly.

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The Thirteenth Tale: A Novel

The Thirteenth Tale: A Novel


Diane Setterfield


ISBN: 0743298020

Pub. Date: September 12, 2006

Publisher: Atria

“Dad, do you ever read books with a plot?,” asked my smart-tongued kid. She concluded that my books are all boring. I must admit not having read a good story for a while now. That's why I picked up this one from the best-seller table at Barnes & Noble.

Unlike Rowling, Diane Setterfield wrote for adults. I have not been helplessly kept awake since Harry Potter #3.

Formulaic it is not. Setterfield focused on imprinting the characters so that you can see and hear them. The story is original and well structured. I found myself having to continue, knowing that I won't be able to sleep anyway.

Setterfield wrote for book lovers. Her definition, however, extends beyond the love of reading and into the fondness of book's physical attributes. Main characters all share this passion and are amateur library curators. They collect, categorize, and store books.

And what's the point of collecting multiple versions of the same book? I do appreciate a well constructed book. It will be easy to hold, to turn, and most importantly, for these pair of aging eyeballs to read. I would have possess the spirit of the book after reading it. Ink and paper do not constitute books. I generally do not read a book more than once, and definitely not for the different printing quality or binding style.


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Guardian Lions

Everywhere you go, a pair of lions guards the entrance of a respectable establishment, be it a temple, restaurant, government agency, bank, or simply a residential house. The most common material is stone. Some of them are made with iron or bronze.

Stone Lions

Lions do not exist in China naturally. Since there were no live examples, the ancient artists created the mythical lions to guard entrances. They are mostly modeled after dogs — more cute than fierce.

The lions are not symmetrical. Facing away at the door, the left-side should sit the male lion and the right-side female. The female usually cuddles a puppy with her paw. Some of the more creative ones have the puppies climbing all over her. The male one, on the other side, typically plays with a ball.

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First snow

Last winter, the first snow fell on January 12th. This one, today. They say it is going to be a warn winter.

I like snow.

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The Diamond Cutter

The Diamond Cutter: The Buddha on Strategies for Managing Your Business and Your Life


Geshe Michael Roach


ISBN: 0385497911

Pub. Date: Reprint edition (July 15, 2003)

Publisher: Doubleday

“grok.” Jargon File 4.2.0. 18 Nov. 2006. Dictionary.com
/grok/, var. /grohk/ vt. [from the novel “Stranger in a
Strange Land”, by Robert A. Heinlein, where it is a Martian word
meaning literally `to drink' and metaphorically `to be one with']
The emphatic form is `grok in fullness'. 1. To understand, usually
in a global sense. Connotes intimate and exhaustive knowledge.
Contrast zen, which is similar supernal understanding experienced
as a single brief flash. See also glark. 2. Used of programs,
may connote merely sufficient understanding. “Almost all C
compilers grok the `void' type these days.”

Someone close to me insisted that I read this book. He gave me a copy right before I embarked on one of those trips over a large body of water.

Must be a gimmick. Buddhism and business? I have read enough books that try to link ancient philosophies — I-Jing, Arts of War, Confucism, Taoism, etc. — with business management. Those books cheapened the ancient wisdoms which should be seriously studied as philosophical heritages, not turned into few aphorismic catch phrases and managerial quick tricks.

Michael Roach appears to be genuine. According to his book, he studied Buddhism in Tibet for years. His guru wanted him to enter business so he could become a better monk. Yes, he is a Tibetan monk, shaved and chanting, the whole sh-bang. “Geshe” is not part of his name. It is an honorific title bestowed only after passing some vigorous tests after years of studies.

Buddhism originated from India. During the Tang (618~907 AD) dynasty, it flourished in China and became the dominant religion here. All “denominations” use the same Buddhism scriptures that were translated from ancient Indian. Unlike the Bible, these translated versions stayed in the same form for over a thousand years. Scholars and gurus re-interpreted them all the time, but one could always go back to the original version. This book is based on one single scripture whose title is roughly translated into Diamond Sutra. It records one of the most important lectures from Buddha himself.

Geshe Roach first laid a foundation on his managerial approach. He then provided a recipe for 46 common managerial situations (Chapter 7). He could have ended there, but part 3 is where the real message lies.

In part 3, he revealed a few methodologies of Tibetan Buddhism studies that placed equal emphasis on bodily control, mind concentration, and theological studies. This approach is sensible. A weak body weakens the mind. If one cannot concentrate, there will be no higher understandings or progress in one's physical skills. Only with both can one achieve the ultimate level of understanding.

Geshe Roach described the simple trick of meditation. I happened to practice a version of it when I was quite young. So many people swear that this is a miracle cure for everything. I know, personally, that it works for insomnia. Meditation first clears your mind. It then allows you to think on one subject, or to plan on one project. With a clear mind, you don't need to write your thoughts down. You remember them. Geshe Roach recommends meditation every morning before the day starts. You would then have a plan for that day. The plan would be aligned with the overall plan for your life.

Simply put, meditation is to grok.

Thanks to WANG HaiLan who made this entry easier to read.

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Be Selfish

Be Selfish Ootober 31st, 2006

Managers deliver business results. All other things support this singlton goal, nothing else matters. First, you must understand what business results are.

Young, and often junior, managers do not get this. They focus on secondary objectives such as morale, teamwork, collaborative spirit, effective communication, personal charisma, etc. All of those are good, but there are so many and how can you possibly address them all? Ah, the tried and true methodology — prioritize and do them in order. Then prioritization implies a value system, or a clear higher level objective. We are again back to square one. Can someone tell me, pleeeease, what are the objectives or our value system? Don't ever ask that question in public. Do you see corporate vision, mission, values, strategies, goals, etc. prominently displayed everywhere?

We are in the purgatory of deeply confused with too much guidance.

You have a team. They do things; they do things in certain way; they abide by a set of rules and policies; they follow, so you hope, your leadership.

The things they do. Can they do more, better, or faster? How about 200%? What's limiting them? Can they finish their week's job by Tuesday afternoon? Why can't they? By the way, what happens if they stop what they are doing? Are you sure?

The processes they follow. If you are to start from scratch, would you design them the same? Are there others doing similar things or following similar proceses? (The answer is always “yes.”) Have you talked to them? What are the lessons you can learn from each other? Are processes robust, in terms of reacting to changes in personnel, resources availability, scale, etc.? If part is destroyed suddenly, what would happen?

The rules. When is the last time anyone question those rules? What was the objectives of them? Who else are subject to the same rules? Did you make those rules?

Pick any of these questions and make that your, or your team's, mission.

Then, take a look of your boss's objectives (or mission). See if yours is aligned. Most likely, you can adjust to align them well. After that, take a look of what your company is trying to accomplish. (They are usually widely published. Hint: making money is always a goal.) Again, adjust to align with that too. These adjustments should not be difficult. If so, go back and pick a different mission.

Now that you have a mission. You have defined success. Tell your team, “This is what I want.” Assess their skill-sets, experience, personalities, and enthusiaism. Gently ask those who do not, will not, or can not, help you to work for someone else. All those remain, stand by them, support them, endorse them, give them everything you've got. They will give you everything they've got. And you will accomplish your mission.

Don't feel bad for those who are not chosen to be on your team. After all, why are you so special to be the one who makes the calls that affect people's lives? If you are in a battlefield, would you hestitate picking only the most suitable in your squad? If you are a coach, would you send anyone less than your bests? You are a professional software practioner. You cannot afford anyone who's not best for you. If you fail, your whole team fail.

The same spirit is for anything that you need to achieve your goals. There are information, fundings, requisitions, equipment, schedule accomodation, etc. Most of them do not come easy, even they are required for the job. Managers secure their own resources for their objectives. The 1st step is to have your objectives clearly understood, the 2nd step is to secure the resources.

And the game begins.

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In China's Shadow

In China's Shadow: The Crisis of American Entrepreneurship


Reed Hundt


ISBN: 0300108524

Pub. Date: October 16, 2006

Publisher: Yale University Press

Reed Hundt was Chairman of FCC during the Clinton administration. This book has a good thesis. It is well researched and eloquently put together. But it reads like a politician's long public speech. Long.

Make no mistake about it. This book is not about China. It is about America politics. Mr. Hundt would have picked a different topic that threatens some elements of American life-style or value-system. Just that it is easier to set poeple's blood boiling with China, or the aspect of America losing to them.

Don't you see. The crisis is upon us. Draconia actions. Congress must pass laws and allocate huge budget. Administration must enact policies. Citizens must behave differently. Everyone! Everyone! Rally behind me. This is the only way for us to avert the crisis. If you don't, you will certainly regret it. You will no longer be the leader. You will become 2nd class. You will make less money. And I would have said, “I told you so.” Here is the book.

Yes, he hit where it hurts — your pocket book. He sees China as both the threat and the means to America's continued prosperity; defined by taking over 70% of the value-add in the world. It can't be 70%, you see, if China is taking half of it. The only way, he stated, is to think like Cisco where John Chamber wanted to base his company's strategy entirely for China — how to sell there; how to beat the competitors from there; how to procure from there.

The description of government's invisble hand behind many events was scary. According to Hundt, Japan's decade-long depression was carefully designed by US, so was Internet and all those huge successes, like AOL, Google, eBay, etc. Government was so good that even those enterpreurs do not realize the helps government gave them. Proof? Bush administration stopped helping and we are losing the leadership in IT. Yes, he gave the government way too much credit, in both directions.

The general thesis is sound. No companies, or individual, can ignore China for the next 20 years. Only those with a clear strategy and execution strength can continue to prosper. Do you? Do we?

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Stuck in Africa

My usual route to work was jammed solid this morning. The alternative was too. The 3rd option across town managed to miss my lst meeting only by 15 minutes. Whew!

This is not the normal Beijing traffic. Red balloon lanterns line all expressways. Color flags beam welcome messages. Banners and billboards everywhere are all celebrating the same event Forum on China-Africa Cooperation (FOCAC). Yes, this country is entertaining a continent. More than 40 countries from Africa are visiting Beijing this week. This can be the largest meeting of countries other than United Nations. Rumors say those heads of state, including South African President Thabo Mbeki, will bring entourages consists of over 4,000 people, not counting the press.

Few days earlier, China and 10 Southeast Asian nations on Monday agreed to step up efforts to build a free-trade area (FTA) by 2010. Premier Wen Jiabao on Monday said China's strategic partnership with Asean (Association of Southeast Asian Nations) had reached its highest point, as he opened the regional leaders' summit in Nanning. Asean was founded by China and 6 other members – Singapore, the Philippines, Brunei, Malaysia, Indonesia and Thailand. Burma, Cambodia, Laos and Vietnam will join this FTA by 2015. The bilateral trades between Asean and China will reach US$200 billions in 2008.

Do you see the emergence of the Middle Kingdom?

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Double 9 day

WANG Wei (701~761) is one of my favorite poets. On this 9th day of the 9th lunar month, long, long time ago, he wrote this famous poem. It became an instant classic and spread all over China.

王維《九月九日憶山東兄弟》
獨在異鄉為異客, 每逢佳節倍思親。
遙知兄弟登高處, 遍插茱萸少一人。

In Chinese numerology, the number 9 stands for masculinity (Yang) and 6 for femininity (Ying). The double-9 day is the 9th day of the 9th month on the lunar calendar. In a branch of Daoism that values the masculine energy. The practitioners will climb up to the very highest point of the hill by noon to absorb all those energy from the Sun, the ultimate symbol for Yang. Since most of the Daoism practitioners are respectable members of the society. Many common citizens copy this behavior. After centuries, it becomes a tradition to climb up mountains on this day. It is also the day to pay your respect to the old, since Daoists tend to age very gracefully.

While you are up there, pick a branch from this fragrant Rutaceae plant and pin it on your clothes. Its aroma is know to expel bugs and enhance your health.

In this foreign land I am a lone stranger
Holidays make me miss the family most
Far away my brothers must be reaching for the height
Rutaceae branches on lapels, one extra

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Definition of Poor

According to China Daily, Beijing's average income per capita is US$2,508 per year. That is about the same purchasing power of US$7,550 as the person is living in US.

US poverty line is US$9,800 for a single person. The definition of poverty line is 3 times the annual cost of a nutritionally adequate diet. About 13% of US population fall below that line.

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