"I always entertain the notion that I'm wrong, or that I'll have to revise my opinion. Most of the time that feels good; sometimes it really hurts and is embarrassing."
- Anthony Bourdain

No funny commentary from me this month. Digital nomad life be taxing. A personal message is at the end.

Chart of the Month:

Read:

The Economics of TSMC’s Giga-Fabs [Link]

The numbers here are just mind-boggling.

In 1983, UMC spent about $200 million to build a 1.2 micron fab. In 1999, they spent $1.8 billion for a 0.35 micron fab. In 2007, a 65 nanometer fab would cost $10 billion.
In 2010, TSMC invested about $9.4 billion in total across four phases to build its 28 nanometer GigaFab in Taichung - Fab 15. Eight years later, that 5 nanometer fab in Tainan - Fab 18 - will cost nearly double of that.

and oh mama that’s a big boi

TSMC's Fab 14 cleanroom is 31,000 square meters large or over 5.5 soccer fields. Fab 15's clean room is 104,000 square meters, 14.5 soccer fields. Fab 18 has them all beat with a 160,000 square meter clean room, 22.4 soccer fields.

The Weakness of Xi Jinping How Hubris and Paranoia Threaten China’s Future By Cai Xia [Link]

Cai Xia is a Chinese dissident and a former professor at the Central Party School, where she taught has taught high-ranking members and officials of the Chinese Communist Party. So yeh. We’re getting some bloody good insight.

For 15 years, I was a professor in the Central Party School, where I helped train thousands of high-ranking CCP cadres who staff China’s bureaucracy. During my tenure at the school, I advised the CCP’s top leadership on building the party, and I continued to do so after retiring in 2012. In 2020, after I criticized Xi, I was expelled from the party, stripped of my retirement benefits, and warned that my safety was in danger. I now live in exile in the United States, but I stay in touch with many of my contacts in China.

So when she says this, it’s a little worrying

To maintain his grip on power, he will continue to preemptively eliminate any potential rivals and tighten social control, making China look increasingly like North Korea. Xi might even try to stay in power well beyond a third term. An emboldened Xi may well accelerate his militarization of disputed areas of the South China Sea and try to forcibly take over Taiwan. As he continues China’s quest for dominance, he will further its isolation from the rest of the world. […]
The only viable way of changing course, so far as I can see, is also the scariest and deadliest: a humiliating defeat in a war. If Xi were to attack Taiwan, his likeliest target, there is a good chance that the war would not go as planned, and Taiwan, with American help, would be able to resist invasion and inflict grave damage on mainland China. In that event, the elites and the masses would abandon Xi, paving the way for not only his personal downfall but perhaps even the collapse of the CCP as we know it.

Gambling on Development Review [Link]

Not exactly on Asia-Pacific. But extremely relevant to Asia-Pacific. And bless Pradyu for providing a TL;DR

Economic development is dependent on the deal between elites of a country. In most poor countries, elites choose to extract resources from the economy because the policies that lead to development can endanger their political position.
When elites decide to have pro-growth policies, they’re taking a risk that it will work out and benefit them personally. Most elites do not want to take this risk, and would rather enjoy the spoils of corruption instead.
Some circumstances like the possibility of losing legitimacy (e.g. China after the Cultural Revolution) can force elites to focus on economic growth. But this doesn’t guarantee it. Elites also have to ration state capacity wisely and be open to correcting course for countries to escape extreme poverty.

Why Japan Stopped Innovating [Link]

Super insightful interview from Miyazawa Kazumasa who was the Sony engineer behind the VAIO laptop. The iPod vs MP3 player battle is interesting from his point of view:

MP3 music format, which compresses audio data, had begun to catch on, but because some MP3 content was illegal, Sony—as the parent company of Sony Music—was forced to tighten its copy-protection measures. Apple, on the other hand, used the MP3 format with laxer copy protection, prioritizing convenience and usability as it let users copy tracks to multiple devices. This approach would bring about a decisive difference between the two manufacturers.

And the investment environment for Japanese startups is pretty grim:

Venture capital investment in start-ups currently amounts to around 70 trillion yen globally. Of this, 40 trillion yen is in the United States, representing nearly 60 percent of the global market. By comparison, Japanese venture capital investment, at around 800 billion yen, accounts for only 1 percent of the global total. Even the UK-based SoftBank Vision Fund, said to have over 10 trillion yen of assets under management, while investing in hundreds of American, Chinese, and Indian start-ups, has only ever invested in three Japanese companies

The TikTok sensation who ditched offers from universities to become a bus driver like his godmother [Link]

this comment from /u/ContributionWhole850

I can understand why Singaporeans, just like any other Asian, push their kids to the conventional ‘professions’ such as engineering, law, etc. But what is especially peculiar about Singaporeans (the older ones typically) is that bus drivers are seen as a standard of failure, alongside cleaners. If you judge people for playing their part in society the best way they can, then your education is futile. No degree from ‘world top university like NUS NTU’ can make up for humanity.

How Tokyo Avoided the Affordable Housing Crisis [Link]

Again, bless Rei from Konichi-Value for providing a TL;DR

Tokyo’s affordable housing can be attributed to the Japanese New City Planning Law that was enacted on a national level in 1968. This law created 12 standardized land-use zones that covers all of Japan where apartments, restaurants and schools can be built in all but two zones. These laws have made it almost impossible for local groups to stop construction within the legal limits of the designated zone.

*Principle of Japanese zoning: credit -* Urban kchoze

The US and most of Europe is ruled by Euclidean zoning, which divides each land to a specific use and is decided on a local level. This have given rise to NIMBYs (Not In My Back Yard) movements, that can effectively stop all further development in their community in favor of their property prises rising.

*Principle of North American zoning: exclusive use per zone. credit -* Urban kchoze

The difference in zoning laws between Japan and the US have led to a massive housing crunch in US cities while Tokyo's newly built housing market is thriving. America’s largest city, New York started construction on just under 30,000 new housing units in 2020 while Tokyo started constructing 130,000 units.

related rabbit-hole content: Why Japan Looks the Way it Does: Zoning [VIDEO]

Other recommended reading:

Variant view: Japan's coming tourism boom - Excellent analysis by Michael as usual. Looking forward to more Variant View writing from him.
Quick-commerce in China - “fuelled by discounts and subsidised deliveries. It’s interesting to see that customers are only loyal to prices and delivery time- so it boils down to the VC funding available to burn in order to achieve both. It’s the race to the last company standing… To sustain the economics, it will be important for companies to improve supply chain and move towards fresh over FMCG so that the gross margins could be healthier.”
China: A Different Type of Housing Crisis
The South Asian Polycrisis - “In 1990-1991 New Delhi ran out of dollars to pay for imports and had to apply to the IMF for a rescue package. At the time India’s per capita income was no more than $390. It did not surpass $400 until 1996. In the decades that followed, India not only recovered, but embarked on a burst of dramatic growth. The GDP per capita figure now stands comfortably north of $2000 per capita. The jury is still out for what 2022 will mean for India’s role in the region and wider world economy.”
In Japan, start-up culture is starting to emerge - pair this with my interview with Tim Romero on startups in Japan

Podcasts:

Michael Fritzell from Asian Century Stocks on Life as a Creator (36 mins) [Spotify] [Apple] [Transcript]

Creator life can be a cruel mistress. Also, I’m back on the podcast bandwagon. Feelsgoodman

“I write on a Substack that I'm going to take four weeks of holiday each year. Now I'm not actually sure if people read that. […] I remember, last October, I went on a trip to Germany for six days or something and I took a picture of that and posted it on Twitter. And I don't know if it was coincidence or not, but immediately within a few hours, I got 4 unsubscribes. People, I guess, they were shocked that I wasn't working for them.”

A quick reminder to signup for my podcast Substack if you want to be notified when an episode releases! Future guests include Murray Hunter, Unseen Japan, Value Punks, Callum Morton-Smith, Rei from Konichi Value, Eugene Y. Park, and Ramon Pacheco Pardo.

If you ever have a guest suggestion or can help find a guest, get in contact with me by replying to this email or on Twitter @ScarrottKalani

Will Thrower on Longriver podcast - China's renewable energy industry [Spotify] [Apple]

Will knows his stuff. Admittedly, I didn’t take notes while listening, so just trust me on this one. Great episode. Related reading: Will's substack The Money Corner.

Videos:

As always, the most efficient way to share videos is through a YouTube playlist. I aim to highlight both well-known channels and some hidden gems. But mostly, I just want to showcase some of the most insightful and interesting videos related to Asia-Pacific for September.

*Click this link to see the full playlist (or click the image)*

Also, a cheeky reminder to subscribe to my YouTube channel! I post videos where you’ll not only learn a tonne but be entertained too.

Books:

[READ] Shrimp to Whale: South Korea from the Forgotten War to K-Pop by Ramon Pacheco Pardo

A future podcast guest! And will share a full-fledged review in due time, but a super fun read mostly of South Korea’s incredible rise over the last 100 years. Seriously good book. And an easy read.

We lost a good one. Meet Momo.

No description available. — *Momo (top) and her best mate Mango*

A rescue dog. With a personality more like a cat.

Loved? Food, sun, naps, and walks.
Loathed? Everything else.

My sister messaged me, “so much character yet none at the same time”.
Which sums Momo up well. Always there. Always doing her own thing. Never giving a flying fuck what anyone else thought.

Momo lived life her way. And I respect the hell outta that.

Stubborn. Sassy. Yet also a big softy. We thought we had so much more time with you big girl.

We love you so much. Wishing you eternal sunshine my friend.

Allocators Asia

Best of September in Asia-Pacific