The joys of traveling.

Apart from the usual things like experiencing new cultures, new experiences, new food etc, one of the things I like about traveling overseas is reading the local newspapers because it usually never fails to give me some new ideas for economics resources!

Having just finished up 5 days on my first visit to China (Shanghai), I had to forgo some of my usual internet staples such as Facebook, Twitter, YouTube, and quite a lot of blogging sites that were blocked by the Great Firewall of China. But no matter, plenty to see and do and my followers / friends would just have to suffer without a tweet or status update for a little while, I'm sure they coped!

My first impression of Shanghai was the lack of traffic. For a city of 25 million, I have seen worse rush hour traffic in New York, london, and yes even in my home town of Auckland. This puzzled me until I picked up the newspaper the next morning.

The Shanghai Daily News article reported that the price of purchasing a license plate has continued to increase as demand increases. Every car requires a plate and 9,500 plates are made available for sale via auction every month. There was concern that speculators were driving up the price but new rules were meant to combat this by making it illegal to sell a plate within three years of purchasing it. However, at the latest auction the price has continued to increase (now over US$10,000 at current exchange rates) because demand has remained strong. I will discuss this with my students in terms of a supply and demand diagram along with concepts of elasticity of supply (perfectly inelastic) and demand, what the authorities were trying to achieve with the rules regarding speculators and how ceteris paribus came into play.

Right next to this article was another that I will also use to discuss a graph - one my students often find difficult. Hong Kong has intervened its own currency for the first time in three years as capital inflows have meant that the HK$ is hitting the top of its allowable range against the US$. The response was to sell over US$600 million of HK$ and according to the traditional market for currency diagram, the higher supply should lower the value of the HK$.

And finally was the report that last year the sum total of profits of China's SOE's was US$246 billion. Wow - that is greater than the GDP of the majority of countries! I will set my students a task on this - to try and find out where China's SOE's profits would rank in terms of world GDP - I think the answer is 40th!