1 00:00:04,120 --> 00:00:07,120 Speaker 1: Hello, and welcome to Stephanomics, the podcast that brings the 2 00:00:07,160 --> 00:00:14,160 Speaker 1: global economy to you, and this week we're giving you 3 00:00:14,200 --> 00:00:16,560 Speaker 1: a sneak preview of a day in the life of 4 00:00:16,600 --> 00:00:20,239 Speaker 1: global trade, an exceptional project we pulled together for a 5 00:00:20,280 --> 00:00:24,360 Speaker 1: special issue of Bloomberg Markets magazine devoted to trade. I 6 00:00:24,440 --> 00:00:27,159 Speaker 1: also discussed the long term future of globalization with the 7 00:00:27,160 --> 00:00:30,920 Speaker 1: economist and author Stephen King. But first we felt we 8 00:00:30,920 --> 00:00:33,000 Speaker 1: should spend a few minutes on the big story of 9 00:00:33,000 --> 00:00:35,959 Speaker 1: the week, which is the global march of the coronavirus. 10 00:00:40,200 --> 00:00:43,880 Speaker 1: At times like this, markets get nervous, epidemiologists get a 11 00:00:43,920 --> 00:00:46,720 Speaker 1: lot of calls from the media, and economists attempt to 12 00:00:46,880 --> 00:00:49,320 Speaker 1: estimate what the impact on the global economy will be, 13 00:00:49,720 --> 00:00:52,839 Speaker 1: usually without very much to go on. Tyler Cowen is 14 00:00:52,840 --> 00:00:55,600 Speaker 1: a professor of economics at George Mason University and co 15 00:00:55,800 --> 00:00:59,400 Speaker 1: author of the very popular Marginal Revolution blog. He's also 16 00:00:59,480 --> 00:01:02,840 Speaker 1: a regular columnist for Bloomberg. I don't think he's an 17 00:01:02,840 --> 00:01:05,440 Speaker 1: epidemiologist in his spare time, but he has written some 18 00:01:05,480 --> 00:01:08,760 Speaker 1: wise columns on the coronavirus since the outbreak first hit 19 00:01:08,800 --> 00:01:11,200 Speaker 1: the news. He's on the line now, Tyler, thanks very 20 00:01:11,280 --> 00:01:14,280 Speaker 1: much for joining us. Thank you Now, you haven't been 21 00:01:14,319 --> 00:01:17,200 Speaker 1: coming up with guestimates for the impact economic impact of 22 00:01:17,200 --> 00:01:19,440 Speaker 1: the virus, but you've had something to say about the 23 00:01:19,520 --> 00:01:23,880 Speaker 1: kinds of institutions and cooperation you need to respond to 24 00:01:23,959 --> 00:01:26,600 Speaker 1: these kind of outbreaks. I guess one question is do 25 00:01:26,640 --> 00:01:30,000 Speaker 1: you think America's health system is up to the task 26 00:01:30,080 --> 00:01:33,119 Speaker 1: of dealing with this if it continues to spread? Well, 27 00:01:33,160 --> 00:01:36,240 Speaker 1: if any pandemic comes along, it's very important. How good 28 00:01:36,319 --> 00:01:40,440 Speaker 1: is your local public health infrastructure? Do your emergency rooms 29 00:01:40,440 --> 00:01:44,280 Speaker 1: have surge capacity? Two? People trust the messages they're receiving 30 00:01:44,319 --> 00:01:48,640 Speaker 1: from public health authorities rather than overreacting. Do you have 31 00:01:48,720 --> 00:01:51,800 Speaker 1: the ability over longer stretches of time to gear up 32 00:01:51,880 --> 00:01:55,760 Speaker 1: vaccine production once you have a vaccine? So the best 33 00:01:56,440 --> 00:02:00,240 Speaker 1: way to approach remedying the costs of a pandemic it's 34 00:02:00,280 --> 00:02:03,480 Speaker 1: not to quarantine everyone, which is usually not going to work, 35 00:02:03,760 --> 00:02:06,960 Speaker 1: but to think about response and trust within your system 36 00:02:07,000 --> 00:02:10,240 Speaker 1: and just the robust, decentralized properties of how you're going 37 00:02:10,240 --> 00:02:13,520 Speaker 1: to deal with all of the various small issues. And 38 00:02:13,600 --> 00:02:15,960 Speaker 1: if you just we're just thinking domestically here. I mean, 39 00:02:15,960 --> 00:02:18,640 Speaker 1: there's obviously is a big international anguera, but within America, 40 00:02:19,040 --> 00:02:23,200 Speaker 1: you know, we tend to think that faith in government institutions, 41 00:02:23,280 --> 00:02:28,880 Speaker 1: investment in um public infrastructure has got worse over the 42 00:02:28,960 --> 00:02:31,959 Speaker 1: last few years. Is that something that will then sort 43 00:02:31,960 --> 00:02:34,919 Speaker 1: of feel feel, particularly the impact of with the spread 44 00:02:35,000 --> 00:02:36,880 Speaker 1: of this kind of virus, or do you think actually 45 00:02:36,960 --> 00:02:39,400 Speaker 1: was still in a fairly good shape. Well, we did 46 00:02:39,440 --> 00:02:42,359 Speaker 1: some pandemic planning around two thousand six when there was 47 00:02:42,400 --> 00:02:45,239 Speaker 1: a possibility that a v and fluid spread, and it 48 00:02:45,520 --> 00:02:48,640 Speaker 1: turns out that was not a major emergency. But in 49 00:02:48,680 --> 00:02:50,880 Speaker 1: some ways we're in a better position than we were 50 00:02:51,520 --> 00:02:54,600 Speaker 1: I say, twenty years ago. Keep in mind, a lot 51 00:02:54,600 --> 00:02:57,200 Speaker 1: of the planning is not just public sector, it's also 52 00:02:57,320 --> 00:03:00,880 Speaker 1: private employers. So say, for instance, at schools are shut 53 00:03:00,919 --> 00:03:04,360 Speaker 1: down and children stay at home, a lot of parents 54 00:03:04,400 --> 00:03:07,680 Speaker 1: can't get to work. Are there robust workforce plans in place? 55 00:03:07,760 --> 00:03:10,280 Speaker 1: For instance? And you were asked before you know, how 56 00:03:10,320 --> 00:03:13,480 Speaker 1: ready are we for this? No one is ever quite 57 00:03:13,480 --> 00:03:17,280 Speaker 1: ready for a major pandemic if that turns out to 58 00:03:17,320 --> 00:03:20,040 Speaker 1: be the case. And again we still don't know, but 59 00:03:20,080 --> 00:03:22,720 Speaker 1: I think there's a lot of improvisation along the way, 60 00:03:22,880 --> 00:03:26,120 Speaker 1: and I'm cautiously optimistic that the United States at least 61 00:03:26,440 --> 00:03:29,280 Speaker 1: is in a better position than many other countries. Well, 62 00:03:29,320 --> 00:03:30,959 Speaker 1: it's interesting you to say that. I mean in China, 63 00:03:31,000 --> 00:03:34,320 Speaker 1: obviously there is there's often been concerned, and we had 64 00:03:34,360 --> 00:03:38,080 Speaker 1: we saw it with Stars that local officials don't have 65 00:03:38,160 --> 00:03:41,400 Speaker 1: the right incentives to get ahead of crisis and certainly 66 00:03:41,440 --> 00:03:45,280 Speaker 1: to be open about something when it's first starting. It 67 00:03:45,280 --> 00:03:48,360 Speaker 1: seems to have have been a bit more transparent in response 68 00:03:48,400 --> 00:03:52,520 Speaker 1: to this virus, but the levels of social trust and 69 00:03:52,560 --> 00:03:55,880 Speaker 1: the sort of local institutions and not is not necessarily 70 00:03:56,280 --> 00:03:57,960 Speaker 1: as high as it is in the U S. Where 71 00:03:57,960 --> 00:04:01,320 Speaker 1: do you think China stands on that. Well, they're doing 72 00:04:01,960 --> 00:04:05,320 Speaker 1: some things quite effectively at the national level. They're trying 73 00:04:05,320 --> 00:04:08,600 Speaker 1: to be transparent. You've probably read the stories about them 74 00:04:08,600 --> 00:04:11,360 Speaker 1: trying to erect a hospital in six days in Wuhan, 75 00:04:11,920 --> 00:04:14,080 Speaker 1: and that sounds good, but they don't have the doctors 76 00:04:14,160 --> 00:04:16,919 Speaker 1: to staff the hospital. Health Care has been one of 77 00:04:17,040 --> 00:04:20,599 Speaker 1: China's weakest points for a long time. So I think 78 00:04:20,839 --> 00:04:24,400 Speaker 1: mostly they're very badly prepared compared to how well they 79 00:04:24,440 --> 00:04:27,200 Speaker 1: do certain other things, like say putting up buildings quickly 80 00:04:27,320 --> 00:04:30,279 Speaker 1: or doing high speed rail. If I think from an 81 00:04:30,320 --> 00:04:34,080 Speaker 1: economic standpoint, you know, the state of international economic cooperation, 82 00:04:34,360 --> 00:04:36,320 Speaker 1: it feels like it's worse than it was. I mean, 83 00:04:36,360 --> 00:04:39,440 Speaker 1: the levels of kind of mutual trust between leaders as 84 00:04:39,520 --> 00:04:43,520 Speaker 1: worse than it was a few years ago. How's the 85 00:04:43,560 --> 00:04:46,840 Speaker 1: international health cooperation? I mean, is that something? Obviously it's 86 00:04:46,920 --> 00:04:49,360 Speaker 1: very important at times like this for countries to work together. 87 00:04:50,279 --> 00:04:53,039 Speaker 1: I think a lot of the recent international problems will 88 00:04:53,080 --> 00:04:55,919 Speaker 1: go away in light of an emergency. If this turns 89 00:04:55,960 --> 00:04:58,560 Speaker 1: out to be one. In some ways, it could bring 90 00:04:58,600 --> 00:05:03,400 Speaker 1: the United States and China closer together again. So within 91 00:05:03,440 --> 00:05:07,480 Speaker 1: the United States, pandemics typically have been bipartisan issues. So 92 00:05:07,520 --> 00:05:10,160 Speaker 1: there's so much talk about how we're polarized, but the 93 00:05:10,240 --> 00:05:13,320 Speaker 1: response so far in this country has been quite transparent 94 00:05:13,720 --> 00:05:16,800 Speaker 1: and not a political issue per se. I'm heartened by 95 00:05:16,800 --> 00:05:21,479 Speaker 1: your optimism. I mean, it's qualified arguments. Some chance, you know, 96 00:05:21,600 --> 00:05:23,680 Speaker 1: quite a few more people will die. We don't know 97 00:05:23,839 --> 00:05:26,520 Speaker 1: what that chance is, and much of that we can't 98 00:05:26,520 --> 00:05:28,479 Speaker 1: stop no matter what we do. And of course we 99 00:05:28,480 --> 00:05:32,080 Speaker 1: should remember how many many people die of influenza every 100 00:05:32,200 --> 00:05:35,280 Speaker 1: year um and become part of our system. I mean, 101 00:05:35,320 --> 00:05:38,480 Speaker 1: I guess finally, just we when we again, when we 102 00:05:38,520 --> 00:05:41,080 Speaker 1: worry about maybe the changes that have happened in the 103 00:05:41,200 --> 00:05:43,680 Speaker 1: US and other places in the last few years. You know, 104 00:05:43,800 --> 00:05:47,520 Speaker 1: social media we now worry, you know, takes a particular 105 00:05:47,520 --> 00:05:51,320 Speaker 1: political trend and then makes it worse, tends to magnify it. 106 00:05:51,560 --> 00:05:55,760 Speaker 1: Could it also magnify the downsides of this epidemic, for 107 00:05:56,200 --> 00:05:59,920 Speaker 1: by spreading fear misinformation? Is that something we can worry about. 108 00:06:01,440 --> 00:06:03,600 Speaker 1: We should worry about it. But I am hopeful so 109 00:06:03,640 --> 00:06:07,359 Speaker 1: far that social media will do more good than harm 110 00:06:07,360 --> 00:06:10,760 Speaker 1: and does give people accurate information if you know where 111 00:06:10,839 --> 00:06:13,880 Speaker 1: to find it. I would just suggest to listeners not 112 00:06:14,000 --> 00:06:16,960 Speaker 1: to jump at scare stories, not to panic. Make sure 113 00:06:17,000 --> 00:06:20,600 Speaker 1: anything you're reading or passing along actually is true. If 114 00:06:20,640 --> 00:06:23,479 Speaker 1: there's anything that makes a response to a public health 115 00:06:23,520 --> 00:06:26,640 Speaker 1: problem worse, it is false information and panic. And the 116 00:06:26,760 --> 00:06:30,640 Speaker 1: same thing applies to the many remedies that are already 117 00:06:30,680 --> 00:06:33,440 Speaker 1: coming online as well. Tyler Cohen, thank you very much 118 00:06:33,480 --> 00:06:41,279 Speaker 1: for joining us. Thank you m h. Now let's turn 119 00:06:41,279 --> 00:06:44,200 Speaker 1: to that special project I mentioned for once. We wanted 120 00:06:44,200 --> 00:06:47,240 Speaker 1: to get past those breathless headlines about trade wars and 121 00:06:47,279 --> 00:06:49,720 Speaker 1: trade flows to see the nuts and bolts of the 122 00:06:49,760 --> 00:06:53,080 Speaker 1: global trading system up close. So on a single day, 123 00:06:53,440 --> 00:06:57,080 Speaker 1: December fourth, last year, reporters around the world went to 124 00:06:57,080 --> 00:07:01,200 Speaker 1: a particular place in the global trading system. Watch, listen 125 00:07:01,400 --> 00:07:03,880 Speaker 1: and learn who went to the banks of the Mississippi 126 00:07:03,920 --> 00:07:06,479 Speaker 1: in a French vineyard in the Rhone Valley, the Nigeria 127 00:07:06,560 --> 00:07:09,560 Speaker 1: Benin border, and the Panama Canal, the West Bank, a 128 00:07:09,680 --> 00:07:13,360 Speaker 1: shopping mall in downtown Tokyo, and a favorite meeting point 129 00:07:13,440 --> 00:07:17,040 Speaker 1: for Chinese tourists in Sydney Harbor, all on the same day. 130 00:07:17,240 --> 00:07:20,000 Speaker 1: And we learned a lot more than I can describe 131 00:07:20,080 --> 00:07:22,680 Speaker 1: right now. But here's a taste from our chief Asian 132 00:07:22,680 --> 00:07:39,600 Speaker 1: Economy reporter and the current in Hong Kong. Oh, thank 133 00:07:41,600 --> 00:07:44,520 Speaker 1: that noise you hear is the sound of global commerce 134 00:07:44,640 --> 00:07:47,280 Speaker 1: in action. The Port of Hong Kong is one of 135 00:07:47,320 --> 00:07:50,720 Speaker 1: the biggest shipping junctions in the world. On this morning 136 00:07:50,720 --> 00:07:53,960 Speaker 1: in December, it's a buzz as hundreds of employees pour 137 00:07:54,080 --> 00:07:58,040 Speaker 1: in for their shift, crane's load and unload containers onto 138 00:07:58,040 --> 00:08:02,560 Speaker 1: trucks and chips. Overall, there are six thousand direct employees 139 00:08:02,680 --> 00:08:05,520 Speaker 1: at the port and in estimated one hundred and eighty 140 00:08:05,560 --> 00:08:14,200 Speaker 1: thousand in related roads. On this day, there are a 141 00:08:14,240 --> 00:08:16,800 Speaker 1: few obvious signs of the trade war between the US 142 00:08:17,040 --> 00:08:20,520 Speaker 1: and China. It might look like business as usual, but 143 00:08:20,680 --> 00:08:23,080 Speaker 1: Hong Kong has been caught in the middle of trade 144 00:08:23,120 --> 00:08:27,800 Speaker 1: and political tensions between the world's two largest economies. And 145 00:08:28,000 --> 00:08:30,640 Speaker 1: that is not all volumes in Hong Kong have been 146 00:08:30,640 --> 00:08:32,719 Speaker 1: on the decline to the last several years, so it's 147 00:08:32,720 --> 00:08:35,440 Speaker 1: hard to pinpoint everything on the trade war. There are 148 00:08:35,480 --> 00:08:39,679 Speaker 1: other issues here. Peter Levesque is the CEO of Modern Terminals, 149 00:08:39,720 --> 00:08:43,040 Speaker 1: one of the companies that runs Hong Kong's port. When 150 00:08:43,040 --> 00:08:45,360 Speaker 1: I talked with him, he was about to return to 151 00:08:45,400 --> 00:08:48,320 Speaker 1: the US in a different role, but as twenty five 152 00:08:48,440 --> 00:08:52,520 Speaker 1: years in Asia and makes his perspective valuable. Levesque was 153 00:08:52,559 --> 00:08:55,520 Speaker 1: noting that not all of the decline and volumes reflects 154 00:08:55,520 --> 00:08:59,680 Speaker 1: the barrage of higher turiffs. There's also stiffer rivalry from 155 00:09:00,040 --> 00:09:03,640 Speaker 1: person Asia slowing global demand, as well as their rise 156 00:09:03,720 --> 00:09:08,120 Speaker 1: of Chinese and regional competition. The uncertainty pieces is something 157 00:09:08,160 --> 00:09:10,679 Speaker 1: that businesses don't really like to deal with, and and 158 00:09:10,840 --> 00:09:12,319 Speaker 1: you want to do a three and a five year 159 00:09:12,360 --> 00:09:15,560 Speaker 1: strategic plan. We're trying to do, you know, plans that 160 00:09:15,720 --> 00:09:17,880 Speaker 1: last one or two weeks depending on you know, which 161 00:09:17,920 --> 00:09:21,720 Speaker 1: tweet comes out, and it's very difficult to try to 162 00:09:21,760 --> 00:09:24,559 Speaker 1: get a handle on on you know, what to expect 163 00:09:24,600 --> 00:09:27,320 Speaker 1: and what we're trying to do is just deal with 164 00:09:28,080 --> 00:09:32,880 Speaker 1: what's in our control. While Hong Kong may no longer 165 00:09:32,920 --> 00:09:36,200 Speaker 1: be the merchandise trade conjured for China that it once was, 166 00:09:36,600 --> 00:09:39,400 Speaker 1: it remains a vital source of capital and know how, 167 00:09:40,280 --> 00:09:43,960 Speaker 1: trading and logistics accounted for around twenty one of the 168 00:09:44,080 --> 00:09:52,000 Speaker 1: territories economy in two thousand and eighteen. On the ports 169 00:09:52,040 --> 00:09:55,359 Speaker 1: key side, I climbed a crane to watch the operators 170 00:09:55,400 --> 00:09:59,200 Speaker 1: doing their jobs. Perched in their cockpits about twelve stories 171 00:09:59,280 --> 00:10:02,199 Speaker 1: off the ground. They are pulling and prodding levers to 172 00:10:02,320 --> 00:10:05,000 Speaker 1: maneuver containers onto and off of the ships. The guys 173 00:10:05,040 --> 00:10:08,000 Speaker 1: in the cranes they can see for themselves whether there's 174 00:10:08,040 --> 00:10:11,439 Speaker 1: a ship underneath or not. And the fewer ships, you know, 175 00:10:11,520 --> 00:10:14,440 Speaker 1: they certainly talk about that they know that the state 176 00:10:14,440 --> 00:10:30,079 Speaker 1: of the market is. Of course, Hong Kong's economic relationship 177 00:10:30,160 --> 00:10:33,440 Speaker 1: with China is about more than just a shipment of goods. 178 00:10:34,080 --> 00:10:37,959 Speaker 1: Months of political protests have raised questions about the degree 179 00:10:37,960 --> 00:10:40,720 Speaker 1: of autonomy that Hong Kong is supposed to have and 180 00:10:40,880 --> 00:10:44,040 Speaker 1: what the political relationship with Beijing will be like the 181 00:10:44,120 --> 00:10:53,240 Speaker 1: common US. Ben Bland is a research fellow with the 182 00:10:53,360 --> 00:10:56,960 Speaker 1: Lower Institute, a think tank in Australia. He's also a 183 00:10:57,080 --> 00:11:01,480 Speaker 1: former journalist in China. I asked him why Hong Kong 184 00:11:01,600 --> 00:11:05,360 Speaker 1: still retains a key economic role for China. Where it 185 00:11:05,440 --> 00:11:08,160 Speaker 1: is really important is as a connector for the financial 186 00:11:08,200 --> 00:11:10,800 Speaker 1: markets between China and the rest of the world, and 187 00:11:10,840 --> 00:11:13,719 Speaker 1: particularly given that we've seen these efforts, initial efforts to 188 00:11:14,000 --> 00:11:16,360 Speaker 1: open up China's capital account to open up the R 189 00:11:16,440 --> 00:11:18,720 Speaker 1: and B kind of stall in the last five years. 190 00:11:19,120 --> 00:11:20,800 Speaker 1: R and B stands for M, M and B, the 191 00:11:20,920 --> 00:11:23,880 Speaker 1: name of China's currency. The nation has been trying to 192 00:11:23,960 --> 00:11:26,960 Speaker 1: promote the use of it globally, but the currency remains 193 00:11:27,000 --> 00:11:30,880 Speaker 1: under tighter control than the US dollar. Hong Kong really 194 00:11:31,000 --> 00:11:34,520 Speaker 1: retains its importance as that key valve, if you like, 195 00:11:34,720 --> 00:11:43,880 Speaker 1: for flows of capital both out of and into mainland China. Yeah. 196 00:11:46,920 --> 00:11:50,200 Speaker 1: I also recently visited the Hong Kong Toy and Baby Fair, 197 00:11:50,640 --> 00:11:54,000 Speaker 1: the world's second larger show of its kind. Hong Kong 198 00:11:54,040 --> 00:11:57,360 Speaker 1: continues to be a vital cog in that industry. Even 199 00:11:57,440 --> 00:12:00,720 Speaker 1: though the territory has long ceased to be the world's 200 00:12:00,800 --> 00:12:05,080 Speaker 1: toy factory, much of the production has merely shifted next 201 00:12:05,120 --> 00:12:09,000 Speaker 1: door to the province of Gongong in mainland China, while 202 00:12:09,040 --> 00:12:14,360 Speaker 1: Hong Kong remains the region's banking captain. The message from 203 00:12:14,440 --> 00:12:19,120 Speaker 1: organizers was upbeat. Trade officials expect the recent Phase one 204 00:12:19,160 --> 00:12:23,040 Speaker 1: accord to boost export of toys from Hong Kong, and 205 00:12:23,200 --> 00:12:26,040 Speaker 1: they say the holiday shopping season was good, but you 206 00:12:26,080 --> 00:12:29,160 Speaker 1: can still sense the competition the port is facing. Chipping 207 00:12:29,160 --> 00:12:32,600 Speaker 1: cost from shan Jen is chipped in Hong Kong. Ken 208 00:12:32,679 --> 00:12:36,360 Speaker 1: Quok is the chief operating officer of three zero, a 209 00:12:36,480 --> 00:12:40,680 Speaker 1: Hong Kong based company that specializes in action figures from 210 00:12:40,720 --> 00:12:45,080 Speaker 1: popular shows such as Transformers and Game of Thrones. Like 211 00:12:45,160 --> 00:12:48,920 Speaker 1: so many it makes its goods in mainland China. Now 212 00:12:49,200 --> 00:12:52,559 Speaker 1: instead of Hong Kong. More of his customers are choosing 213 00:12:52,559 --> 00:12:55,400 Speaker 1: to have their goods shipped out of Shenzen, which is 214 00:12:55,440 --> 00:12:59,320 Speaker 1: just across the border in the mainland. Secondary is because 215 00:12:59,400 --> 00:13:03,720 Speaker 1: most of the our manufacturer shoot out their products in 216 00:13:03,920 --> 00:13:08,520 Speaker 1: China so that they they can consolidate the groods in 217 00:13:08,679 --> 00:13:12,600 Speaker 1: China's warehouse and China warehouse off cause there's lower price 218 00:13:12,640 --> 00:13:20,040 Speaker 1: than Hong Kong. In one way, the toymakers at the 219 00:13:20,080 --> 00:13:23,640 Speaker 1: trade show have dodged a bullet. The recent deal took 220 00:13:23,720 --> 00:13:27,360 Speaker 1: tarts from toys off the table, but the exhibitors are 221 00:13:27,400 --> 00:13:29,840 Speaker 1: still aware of their risk of tariffs may come back 222 00:13:29,920 --> 00:13:34,120 Speaker 1: later and they are planning accordingly. That means considering where 223 00:13:34,120 --> 00:13:37,560 Speaker 1: to move their supply chains. I dropped by the booth 224 00:13:37,679 --> 00:13:41,440 Speaker 1: of good Baby International, a maker of strollers, car seats 225 00:13:41,440 --> 00:13:45,640 Speaker 1: and other baby products. Amy Goo, the company's general manager 226 00:13:45,679 --> 00:13:48,959 Speaker 1: for Asia Pacific, says the company has manufacturing in both 227 00:13:49,080 --> 00:13:52,440 Speaker 1: China and the US, but she has been pitched by 228 00:13:52,440 --> 00:13:55,840 Speaker 1: officials from Saudi Arabia. The company has also looked at 229 00:13:55,880 --> 00:14:01,079 Speaker 1: manufacturing options in Southeast Asia light and we are consideringly 230 00:14:01,120 --> 00:14:03,920 Speaker 1: because it's not an easy move that the change the 231 00:14:03,960 --> 00:14:09,280 Speaker 1: manufacturing facility to another country, but we are investigating this 232 00:14:09,920 --> 00:14:13,840 Speaker 1: so it could be a potential area for the new 233 00:14:13,880 --> 00:14:18,200 Speaker 1: manufacturing base. That theme of the difficulty in shifting supply 234 00:14:18,320 --> 00:14:22,160 Speaker 1: chains is a recurring one. I actually met an international 235 00:14:22,240 --> 00:14:25,520 Speaker 1: yo yo superstar at the toy fair. His name is 236 00:14:25,560 --> 00:14:28,680 Speaker 1: Hans Van dan Elson, and he's also president of a 237 00:14:28,760 --> 00:14:32,320 Speaker 1: yo yo maker called yo Yo Factory. They're high end 238 00:14:32,360 --> 00:14:36,040 Speaker 1: yoyo's can fetch up to three dollars. I travel the world. 239 00:14:36,040 --> 00:14:38,120 Speaker 1: I teach children how to play yoyo. I'm a professional 240 00:14:38,160 --> 00:14:40,800 Speaker 1: Yoyo instructor. I've been in the Guinness Book three times. 241 00:14:41,760 --> 00:14:45,760 Speaker 1: Van dam Elson creates and designs his products in Arizona, 242 00:14:46,120 --> 00:14:49,200 Speaker 1: but the yo Yo factory itself is actually in Shenzhen. 243 00:14:50,160 --> 00:14:53,360 Speaker 1: I asked him if he's considering moving his manufacturing base 244 00:14:53,440 --> 00:14:56,240 Speaker 1: somewhere else. I want you to imagine a scenario where 245 00:14:56,240 --> 00:15:00,080 Speaker 1: you're making a product and you constantly have to you 246 00:15:00,520 --> 00:15:02,960 Speaker 1: oversee the production and make sure that everything is being 247 00:15:02,960 --> 00:15:06,520 Speaker 1: made correctly, and you're very concerned about that. But imagine 248 00:15:06,520 --> 00:15:09,400 Speaker 1: a scenario where the factory is actually selling the product 249 00:15:09,400 --> 00:15:11,680 Speaker 1: and helping you distribute it. And in my case, I 250 00:15:11,720 --> 00:15:14,760 Speaker 1: make yo yos. So if the children in China are 251 00:15:14,840 --> 00:15:17,960 Speaker 1: directly communicating back to the factory and they're complaining, hey, 252 00:15:18,000 --> 00:15:20,440 Speaker 1: there's a problem, the factory is already on top of 253 00:15:20,480 --> 00:15:22,960 Speaker 1: any problems that are happening, and so I get the 254 00:15:23,000 --> 00:15:27,600 Speaker 1: benefit of of that scenario where the quality control is 255 00:15:27,640 --> 00:15:30,880 Speaker 1: happening right there in China um and there the factory 256 00:15:30,920 --> 00:15:33,120 Speaker 1: is actually telling me when there's problems, rather than me 257 00:15:33,240 --> 00:15:36,880 Speaker 1: chasing the factory. And of course I couldn't help but 258 00:15:36,960 --> 00:15:40,240 Speaker 1: ask him to demo a yo yo. So this is 259 00:15:40,280 --> 00:15:42,920 Speaker 1: like a very professional Yelio sales for twenty five dollars 260 00:15:42,960 --> 00:15:45,120 Speaker 1: per hand. And when I say per hand, we actually 261 00:15:45,160 --> 00:15:47,920 Speaker 1: play with Yoyo's two yeos, you know, one in each hand. 262 00:15:48,080 --> 00:15:51,520 Speaker 1: Sometimes the yoos actually spin off the string. Okay, so 263 00:15:51,520 --> 00:15:53,200 Speaker 1: you can play on string a string, you can play 264 00:15:53,240 --> 00:15:56,080 Speaker 1: the two yalios. You could say that yo yo is 265 00:15:56,120 --> 00:15:59,160 Speaker 1: a metaphor for what these manufacturers have been through into 266 00:15:59,200 --> 00:16:02,920 Speaker 1: past two years, swinging repeatedly between the tower of threats 267 00:16:03,200 --> 00:16:06,520 Speaker 1: and hopes of trade peace. On top of that, the 268 00:16:06,680 --> 00:16:09,080 Speaker 1: protests in Hong Kong show a little sign of fading. 269 00:16:09,960 --> 00:16:12,240 Speaker 1: It all adds up to a less certain future for 270 00:16:12,320 --> 00:16:16,560 Speaker 1: Hong Kong's unique status as a critical economical link between 271 00:16:16,720 --> 00:16:20,320 Speaker 1: China and the rest of the world. Here's the lower 272 00:16:20,400 --> 00:16:24,600 Speaker 1: Institute spend bland again. People are less confident about investing 273 00:16:24,640 --> 00:16:27,760 Speaker 1: in the future because the political relationship is so important 274 00:16:27,760 --> 00:16:31,000 Speaker 1: to Hong Kong's future. Has long been this bridge, as 275 00:16:31,000 --> 00:16:33,600 Speaker 1: I was saying, between China and the outside world, and 276 00:16:33,760 --> 00:16:36,240 Speaker 1: in a different, happier time, that was a great advantage. 277 00:16:36,240 --> 00:16:39,400 Speaker 1: But now, partly because of the domestic tensions and partly 278 00:16:39,440 --> 00:16:42,440 Speaker 1: because of the outside environment, the US China tensions. Being 279 00:16:42,560 --> 00:16:45,720 Speaker 1: stuck between the US and China between the rest of 280 00:16:45,760 --> 00:16:51,640 Speaker 1: the world, and China doesn't necessarily look that advantageous for 281 00:16:51,680 --> 00:17:05,000 Speaker 1: Bloomberg News. I am end the current the economics of 282 00:17:05,040 --> 00:17:07,760 Speaker 1: the Yo Yo there from ender current. I wonder how 283 00:17:07,760 --> 00:17:10,120 Speaker 1: many of you saw that metaphor coming down the track 284 00:17:10,160 --> 00:17:12,679 Speaker 1: a mile off now. I mentioned at the start that 285 00:17:12,800 --> 00:17:15,760 Speaker 1: enders peace from the Hong Kong Docks was part of 286 00:17:15,800 --> 00:17:19,560 Speaker 1: a special project we did for Bloomberg Markets magazine, chronicling 287 00:17:19,560 --> 00:17:22,280 Speaker 1: a single day in the life of global trade, and 288 00:17:22,280 --> 00:17:25,080 Speaker 1: it's well worth a read, and so is the guest 289 00:17:25,280 --> 00:17:28,320 Speaker 1: essay we also have in that special issue on trade 290 00:17:28,760 --> 00:17:33,440 Speaker 1: by HSBC senior advisor and former Chief Global economist Stephen King. 291 00:17:33,920 --> 00:17:36,399 Speaker 1: Some of you might remember Stephen spoke on our panel 292 00:17:36,400 --> 00:17:39,280 Speaker 1: at the New Economy Forum in Beijing a few months ago. 293 00:17:39,960 --> 00:17:42,960 Speaker 1: I wanted to talk here in our last episode of 294 00:17:42,960 --> 00:17:46,600 Speaker 1: the series of Stephanomics about your essay, Stephen, because it 295 00:17:46,680 --> 00:17:50,080 Speaker 1: raises I think some some really profound questions about the 296 00:17:50,080 --> 00:17:53,479 Speaker 1: future of the global economy. Thanks for writing it for us, 297 00:17:53,520 --> 00:17:56,560 Speaker 1: Thanks for being here. We asked a lot of people 298 00:17:56,560 --> 00:17:58,640 Speaker 1: in the same issue whether they thought we were at 299 00:17:58,800 --> 00:18:02,760 Speaker 1: peak globalization and lots of important things You're not engaging 300 00:18:02,760 --> 00:18:05,160 Speaker 1: with that directly in this piece, But you do have 301 00:18:05,200 --> 00:18:09,960 Speaker 1: somber things to say about the direction that globalization might 302 00:18:10,000 --> 00:18:11,439 Speaker 1: be heading in. Do you want to give us a 303 00:18:11,520 --> 00:18:13,760 Speaker 1: very quick summary and then we can get into some 304 00:18:13,880 --> 00:18:16,440 Speaker 1: of the what lies underneath it. Yes, of course. So 305 00:18:17,119 --> 00:18:20,200 Speaker 1: globalization is something which I think ten fifteen years ago 306 00:18:20,240 --> 00:18:24,520 Speaker 1: people thought we're just naturally advanced. Through technological change of 307 00:18:24,560 --> 00:18:27,080 Speaker 1: one sort from another, we've become ever more integrated over 308 00:18:27,160 --> 00:18:30,560 Speaker 1: periods of time. But history suggests there are different kinds 309 00:18:30,560 --> 00:18:33,919 Speaker 1: of globalization. The kind we've been living through over the 310 00:18:33,960 --> 00:18:37,439 Speaker 1: last few decades is all about building global supply chains, 311 00:18:37,640 --> 00:18:42,560 Speaker 1: about connecting countries and industries more closely around the world. 312 00:18:42,560 --> 00:18:44,719 Speaker 1: That might have been the case in the past. If 313 00:18:44,760 --> 00:18:46,560 Speaker 1: you go back to the nineteenth century, you find a 314 00:18:46,640 --> 00:18:50,320 Speaker 1: very different version of globalization, which was really associated with 315 00:18:51,080 --> 00:18:54,600 Speaker 1: it's a horrible word to use, but the agglomeration of activity, 316 00:18:54,800 --> 00:18:57,440 Speaker 1: so factory has all been built in say the UK, 317 00:18:57,760 --> 00:19:01,320 Speaker 1: or in parts of Germany or France, and the economies 318 00:19:01,320 --> 00:19:03,440 Speaker 1: are scale that these factories gained was such that it 319 00:19:03,520 --> 00:19:06,920 Speaker 1: put industry out of business in countries like India and China. 320 00:19:07,280 --> 00:19:09,240 Speaker 1: So what you saw in the nineteenth century was a 321 00:19:09,280 --> 00:19:14,840 Speaker 1: story of some countries posting significant industrial advance and other 322 00:19:14,880 --> 00:19:18,639 Speaker 1: countries posting exactly the reverse. They became poorer and poorer, 323 00:19:18,720 --> 00:19:21,800 Speaker 1: they kind of de industrialized, they went back to rural 324 00:19:21,800 --> 00:19:25,280 Speaker 1: poverty in many cases. So in India had completely de 325 00:19:25,359 --> 00:19:27,879 Speaker 1: industrialized in this period. Absolutely. So you go back to 326 00:19:27,960 --> 00:19:32,680 Speaker 1: the eighteenth century, India was one of the dominant producers 327 00:19:32,720 --> 00:19:35,800 Speaker 1: of textiles around the world, and by around that nine 328 00:19:36,200 --> 00:19:39,359 Speaker 1: hundred had lost that position completely, largely because of the 329 00:19:39,400 --> 00:19:43,560 Speaker 1: impact of steam and factory technologies being used, particularly i 330 00:19:43,560 --> 00:19:46,680 Speaker 1: would say, in England. So the consequence was that even 331 00:19:46,680 --> 00:19:51,440 Speaker 1: as Europe industrialized, China and India de industrialized, and in fact, 332 00:19:51,480 --> 00:19:55,480 Speaker 1: you go back to the data, late eighteenth century, China 333 00:19:55,480 --> 00:20:00,520 Speaker 1: and India together accounted for almost sixty of global manufacturing output, 334 00:20:00,960 --> 00:20:03,639 Speaker 1: and by was down to about five percent or so. 335 00:20:04,560 --> 00:20:06,400 Speaker 1: And look, the key to this, I mean, I guess 336 00:20:06,440 --> 00:20:08,640 Speaker 1: now we want to know because as you point out, 337 00:20:08,680 --> 00:20:11,480 Speaker 1: there was that model of globalization which kind of increased 338 00:20:11,520 --> 00:20:14,399 Speaker 1: the gaps between the successful and the unsuccessful parts of 339 00:20:14,400 --> 00:20:17,639 Speaker 1: the world. And then the more recent period of globalization 340 00:20:17,720 --> 00:20:21,560 Speaker 1: where actually you had it was more more equalizing, it 341 00:20:21,640 --> 00:20:24,680 Speaker 1: was more you were dispersing income across across the world. 342 00:20:24,720 --> 00:20:26,240 Speaker 1: And of course, you know, people might think that sounds 343 00:20:26,240 --> 00:20:28,399 Speaker 1: odd because we always talk about rising inequality, But the 344 00:20:28,440 --> 00:20:32,360 Speaker 1: gap between rich and poor countries has got narrowed, has 345 00:20:32,400 --> 00:20:34,920 Speaker 1: got smaller, even the gap between the rich and poor 346 00:20:35,000 --> 00:20:37,480 Speaker 1: within countries has tended to get bigger. Yes, it's one 347 00:20:37,520 --> 00:20:40,960 Speaker 1: of the paradoxes of globalization that the gap between nations 348 00:20:41,000 --> 00:20:43,440 Speaker 1: has definitely narrowed. It's what happens when you've got China 349 00:20:43,520 --> 00:20:49,280 Speaker 1: growing it for a while per year, Indo growing at 350 00:20:49,280 --> 00:20:51,280 Speaker 1: maybe six or seven percent a year. When you've got 351 00:20:51,280 --> 00:20:53,399 Speaker 1: those kinds of growth rates coming through inevitable, you're going 352 00:20:53,440 --> 00:20:56,760 Speaker 1: to see some kind of convergence of economic activity. But 353 00:20:56,800 --> 00:20:59,399 Speaker 1: it equally is true that within countries you've seen this 354 00:20:59,600 --> 00:21:03,400 Speaker 1: big growth of inequality. And part of that within country 355 00:21:03,440 --> 00:21:07,680 Speaker 1: story I think might eventually apply across countries too. And 356 00:21:08,000 --> 00:21:10,159 Speaker 1: the reason for that is that within countries, it's not 357 00:21:10,200 --> 00:21:12,840 Speaker 1: just about the impact of globalization shutting down factories and so, 358 00:21:12,920 --> 00:21:15,359 Speaker 1: and it's also about the impact of technology. The technology 359 00:21:15,680 --> 00:21:19,199 Speaker 1: through robotics and artificial intelligence and sold has led to 360 00:21:19,800 --> 00:21:23,040 Speaker 1: a huge reduction the number of people employed in a 361 00:21:23,119 --> 00:21:27,160 Speaker 1: variety of different industries in manufacturing most obviously, but also 362 00:21:27,200 --> 00:21:30,119 Speaker 1: increasingly in clerical jobs and so on. Um and what 363 00:21:30,200 --> 00:21:32,520 Speaker 1: happens with these people lose their jobs in those particular 364 00:21:32,560 --> 00:21:36,200 Speaker 1: industries and then find new jobs, but often the lower 365 00:21:36,359 --> 00:21:41,000 Speaker 1: rate of pay. So you end up with maybe a 366 00:21:41,040 --> 00:21:43,320 Speaker 1: limited number of people who are you know, the Facebook 367 00:21:43,359 --> 00:21:46,680 Speaker 1: founders or the WhatsApp founders or whatever, who do incredibly well. 368 00:21:46,760 --> 00:21:48,720 Speaker 1: But at the same time there's large numbers of people 369 00:21:48,800 --> 00:21:51,280 Speaker 1: have been in Once it's left behind. I think what 370 00:21:51,400 --> 00:21:55,359 Speaker 1: is true within countries may begin to also apply across 371 00:21:55,400 --> 00:21:59,120 Speaker 1: countries too, because of the impact of robotics in reversing 372 00:21:59,160 --> 00:22:01,600 Speaker 1: global supplied So we might now go to a point 373 00:22:01,640 --> 00:22:04,600 Speaker 1: where there's more it's winners and losers across the global 374 00:22:04,640 --> 00:22:08,199 Speaker 1: economy rather than I mean, the great justification and the 375 00:22:08,320 --> 00:22:10,920 Speaker 1: case for globalization in the last twenty years has been 376 00:22:10,920 --> 00:22:13,240 Speaker 1: the kind of convergence we were talking about. The good story, 377 00:22:13,320 --> 00:22:15,960 Speaker 1: you know, the ex million people who've been lifted out 378 00:22:15,960 --> 00:22:18,040 Speaker 1: of poverty is always the sort of number one part 379 00:22:18,080 --> 00:22:20,720 Speaker 1: of the justification or that, yes, the pros of of 380 00:22:20,760 --> 00:22:25,000 Speaker 1: globalization if we are if if the technology we're seeing 381 00:22:25,040 --> 00:22:28,159 Speaker 1: now is going to shift us more back to that 382 00:22:28,280 --> 00:22:31,240 Speaker 1: nineteenth century pattern that you were talking about where that 383 00:22:31,280 --> 00:22:33,760 Speaker 1: success is sort of concentrated in different parts of the world, 384 00:22:33,840 --> 00:22:36,919 Speaker 1: because the winners, the winning places are not necessarily going 385 00:22:36,920 --> 00:22:39,880 Speaker 1: to be the same as they were in the nineteenth century. 386 00:22:40,160 --> 00:22:42,639 Speaker 1: Quite possibly not. I mean, you'd certainly argue perhaps that 387 00:22:43,080 --> 00:22:45,879 Speaker 1: parts of North America and Europe would still emerge as 388 00:22:46,200 --> 00:22:49,760 Speaker 1: winners in the story. It also adds I think countries 389 00:22:49,760 --> 00:22:52,720 Speaker 1: like China that would emerge as winners from the story. 390 00:22:52,760 --> 00:22:55,199 Speaker 1: But there are countries and regions around the world that 391 00:22:55,240 --> 00:22:58,479 Speaker 1: have not really properly engaged with global supply chains as 392 00:22:58,600 --> 00:23:01,760 Speaker 1: yet kind of ing up to get to be part 393 00:23:01,840 --> 00:23:05,720 Speaker 1: of that story. But arguably they're not going to get there, 394 00:23:05,800 --> 00:23:10,000 Speaker 1: because if you're a company thinking of investing internationally, might 395 00:23:10,080 --> 00:23:13,440 Speaker 1: choose to invest in the country that itself is quite risky. 396 00:23:13,640 --> 00:23:16,120 Speaker 1: We might instead decide that you can do the same 397 00:23:16,200 --> 00:23:19,440 Speaker 1: thing at home using robots and AI rather than cheap 398 00:23:19,480 --> 00:23:22,639 Speaker 1: workers abroad. And if you think about late twenties century 399 00:23:22,640 --> 00:23:25,359 Speaker 1: globalization was very much a story of capital going in 400 00:23:25,480 --> 00:23:30,680 Speaker 1: search of that nice combination of relatively cheap but productive workers, 401 00:23:30,720 --> 00:23:32,840 Speaker 1: and that kind of tied the world together more than 402 00:23:32,880 --> 00:23:35,280 Speaker 1: have been the case previously. But if it turns out 403 00:23:35,320 --> 00:23:38,560 Speaker 1: that there are even cheaper robots with nothing in the 404 00:23:38,600 --> 00:23:42,200 Speaker 1: way of political risk to employ them. Then under those circumstances, 405 00:23:42,200 --> 00:23:45,080 Speaker 1: it may be that the global supply chains go into reverse. 406 00:23:45,119 --> 00:23:49,560 Speaker 1: They shrink, they become narrower, and moreover, if countries begin 407 00:23:49,640 --> 00:23:52,800 Speaker 1: to believe that they can it, one says, break away 408 00:23:52,800 --> 00:23:55,240 Speaker 1: from globalization, it may be that the kind of rules 409 00:23:55,280 --> 00:23:57,119 Speaker 1: of the game that we've thought of as being so 410 00:23:57,200 --> 00:24:01,040 Speaker 1: important over the last few decades, the enthusiasm for those 411 00:24:01,119 --> 00:24:02,840 Speaker 1: rules begins to break down. Yeah, I was going to 412 00:24:02,880 --> 00:24:05,679 Speaker 1: ask you about that, because what does happen to the 413 00:24:05,760 --> 00:24:07,639 Speaker 1: flow of trade in the scenario? I mean, we're not 414 00:24:08,520 --> 00:24:11,760 Speaker 1: we started we were thinking about this kind of sense 415 00:24:11,760 --> 00:24:14,600 Speaker 1: of peak globalization. But I guess what you're describing is 416 00:24:14,600 --> 00:24:16,879 Speaker 1: it's sort of the endpoint of globalization. Has that we 417 00:24:16,960 --> 00:24:18,679 Speaker 1: all come home, or that we are a lot of 418 00:24:18,680 --> 00:24:22,800 Speaker 1: the production comes home. Does that make these you know, 419 00:24:22,840 --> 00:24:26,840 Speaker 1: we're we're handringing over the future of the World trade 420 00:24:26,960 --> 00:24:30,520 Speaker 1: organization and the weakening effect of things like the US 421 00:24:30,680 --> 00:24:34,120 Speaker 1: China trade war? Does does technology make those things less 422 00:24:34,160 --> 00:24:39,000 Speaker 1: important or more important? Well? I think technology potentially is 423 00:24:39,000 --> 00:24:42,680 Speaker 1: a way of hastening the reversal of globalization that if 424 00:24:42,720 --> 00:24:46,560 Speaker 1: you happen to be a rich country endowed with large 425 00:24:46,560 --> 00:24:48,960 Speaker 1: amounts of domestic savings that you can use to invest 426 00:24:49,000 --> 00:24:52,600 Speaker 1: in robots and AI at home, then those circumstances you 427 00:24:52,600 --> 00:24:54,359 Speaker 1: could do that without having to worry about building those 428 00:24:54,359 --> 00:24:57,320 Speaker 1: global supply chains. But I guess the flip side is 429 00:24:57,359 --> 00:24:59,720 Speaker 1: if you have and as I suppose also did happen 430 00:24:59,720 --> 00:25:03,159 Speaker 1: in the eighteen hundreds and early nineteen hundreds, if you 431 00:25:03,280 --> 00:25:08,400 Speaker 1: have a slower flow of goods and services in this environment, 432 00:25:08,800 --> 00:25:11,639 Speaker 1: you might once again have greater flows of labor. And 433 00:25:11,640 --> 00:25:15,800 Speaker 1: it is the subtitle of your essay is the Rise 434 00:25:15,840 --> 00:25:18,320 Speaker 1: of the Robot the March of the migrants. Do you 435 00:25:18,359 --> 00:25:19,840 Speaker 1: think that is the other side of this time? I 436 00:25:19,880 --> 00:25:23,680 Speaker 1: think it's quite possible. So one of the huge challenges 437 00:25:23,720 --> 00:25:26,199 Speaker 1: really for the global economy indefer global governance in the 438 00:25:26,200 --> 00:25:29,439 Speaker 1: next few decades is the extraordinary demographic change that are 439 00:25:29,480 --> 00:25:32,400 Speaker 1: taking place. Is not just about aging populations and shrinking 440 00:25:32,440 --> 00:25:36,240 Speaker 1: populations in parts of developed Asia and parts of Europe 441 00:25:36,240 --> 00:25:39,960 Speaker 1: and Song. It is also about the enormous growth through 442 00:25:40,080 --> 00:25:43,199 Speaker 1: baby boomer effects of populations in sub Saharan Africa and 443 00:25:43,280 --> 00:25:45,840 Speaker 1: also in the Middle East, Now if it turns out 444 00:25:45,920 --> 00:25:50,200 Speaker 1: that global supply chains go into reverse and people born 445 00:25:50,240 --> 00:25:54,280 Speaker 1: in these areas feel that somehow they just can't get 446 00:25:54,280 --> 00:25:58,080 Speaker 1: the economic opportunities within their own countries that they perhaps 447 00:25:58,119 --> 00:26:00,680 Speaker 1: would previously have hoped for, and I think they will 448 00:26:00,720 --> 00:26:03,520 Speaker 1: go marching. They will look for opportunities elsewhere. And why 449 00:26:03,560 --> 00:26:06,600 Speaker 1: shouldn't they, Because if life is tough in the particular 450 00:26:06,640 --> 00:26:08,800 Speaker 1: area they happened to be living in, they probably will 451 00:26:08,840 --> 00:26:10,840 Speaker 1: go on the march. And one interesting feature of gain 452 00:26:10,880 --> 00:26:13,480 Speaker 1: of the nineteenth century is that in the middle of 453 00:26:13,520 --> 00:26:16,479 Speaker 1: the nineteenth century you had huge flows of people from 454 00:26:16,560 --> 00:26:20,240 Speaker 1: particularly England and Germany to the US, often because they 455 00:26:20,280 --> 00:26:24,680 Speaker 1: had very high levels of skills in certain areas, much 456 00:26:24,800 --> 00:26:26,960 Speaker 1: much larger was a share of the population than what 457 00:26:27,000 --> 00:26:30,240 Speaker 1: we've seen reason absolutely um. And at the same time 458 00:26:30,280 --> 00:26:32,120 Speaker 1: that you had a huge number of people going from 459 00:26:32,240 --> 00:26:35,159 Speaker 1: Ireland to the US for totally different reasons than these 460 00:26:35,200 --> 00:26:38,679 Speaker 1: were effectively victims of the potato famine who went in 461 00:26:38,840 --> 00:26:41,680 Speaker 1: very desperate circumstances. And a little later with the nineteenth century, 462 00:26:41,680 --> 00:26:44,880 Speaker 1: as transportation costs came down dramatically, you had a lot 463 00:26:44,880 --> 00:26:48,359 Speaker 1: more migrants coming through from southern Europe, from Eastern Europe, 464 00:26:48,680 --> 00:26:51,440 Speaker 1: who typically were poorer than the people living at that 465 00:26:51,560 --> 00:26:53,639 Speaker 1: stage in the U S, who in many cases were 466 00:26:53,640 --> 00:26:56,600 Speaker 1: accused of undercutting the wages of those who who were 467 00:26:56,640 --> 00:27:01,080 Speaker 1: already there. And so like, the type of migrant changed 468 00:27:02,080 --> 00:27:04,720 Speaker 1: from being highly skilled in many ways to being people 469 00:27:04,760 --> 00:27:10,040 Speaker 1: who often came from poorer, less educated backgrounds. Um and 470 00:27:10,080 --> 00:27:13,040 Speaker 1: of course that created its own separate set of pressures 471 00:27:13,080 --> 00:27:15,560 Speaker 1: within the countries to which they were heading. UM So 472 00:27:15,560 --> 00:27:17,840 Speaker 1: when we look at what's happening currently in terms of 473 00:27:17,840 --> 00:27:20,359 Speaker 1: the flow of people, that's say, across the Mediterranean to Europe, 474 00:27:20,359 --> 00:27:23,199 Speaker 1: from Africa or from the Middle East, you begin to 475 00:27:23,240 --> 00:27:26,960 Speaker 1: think the same kind of theme might begin to emerge 476 00:27:26,960 --> 00:27:29,280 Speaker 1: in the much bigger way in decades to come. One 477 00:27:29,280 --> 00:27:31,720 Speaker 1: thing I've always liked about you, Stephen. In a world 478 00:27:31,720 --> 00:27:34,760 Speaker 1: of economists who are constantly being asked to look ahead 479 00:27:34,800 --> 00:27:38,280 Speaker 1: and make forecast, you are unapologetic and often looking backwards 480 00:27:38,560 --> 00:27:41,600 Speaker 1: and looking back into history for insight, which I think 481 00:27:41,680 --> 00:27:44,560 Speaker 1: is quite a good place to look. Stephen King, thank 482 00:27:44,600 --> 00:27:56,560 Speaker 1: you very much, Thank you, thanks for listening to Stephanomics. 483 00:27:56,880 --> 00:27:59,200 Speaker 1: This is the end of the current series. I'm sorry 484 00:27:59,240 --> 00:28:01,920 Speaker 1: to say, but promised we'll be back in early April, 485 00:28:02,160 --> 00:28:04,520 Speaker 1: and if I do anything really exciting, you may find 486 00:28:04,560 --> 00:28:07,280 Speaker 1: a few bonus episodes popping up on the Stephonomics feed. 487 00:28:07,280 --> 00:28:10,159 Speaker 1: Before there, you can always see the latest news and 488 00:28:10,200 --> 00:28:13,800 Speaker 1: analysis from Bloomberg Economics on the Bloomberg News website or 489 00:28:13,800 --> 00:28:17,240 Speaker 1: we're following at Economics on Twitter. You should especially check 490 00:28:17,280 --> 00:28:20,119 Speaker 1: out our stories for that special issue of Bloomberg Markets 491 00:28:20,160 --> 00:28:23,840 Speaker 1: Magazine on trade. The Hong Kong story in this episode 492 00:28:23,880 --> 00:28:26,560 Speaker 1: was reported and written by Ender Current. It was produced 493 00:28:26,560 --> 00:28:30,159 Speaker 1: by Magnus Hendrickson and edited by Lucy Meekin and Scott Lamman, 494 00:28:30,320 --> 00:28:34,160 Speaker 1: who is also the executive producer of Stephonomics Special Thanks 495 00:28:34,200 --> 00:28:39,560 Speaker 1: to Stephen King, Tyler Cowen, and Carter Woolley. Francesco Leady 496 00:28:39,760 --> 00:28:41,400 Speaker 1: is the head of Bloomberg Podcast