China slashes fuel price subsidies, crude unchanged. Will anything bring down the price of oil? – 24 June 2008

 

China’s sudden fuel and electricity price hike on the evening of Thursday 19 June came as a surprise to most. From 1 July 2008, the average price of retail fuel in China will be increased by 16.7%, diesel by 18.1%, and the electricity price by 4.7% (although earthquake areas appear to be exempt). The Chinese will still have to pay less than USD100 a barrel, but the effect of these fuel price hikes will probably be to increase headline CPI by around 0.3% this year. Given the Chinese government’s fear of inflation, most pundits guessed that by raising fuel prices, the government was signaling that other inflation (particularly food price inflation) is firmly under control.

 

But I am sceptical – the sudden slashing of subsidies seems to be linked to the rather tense relationship between the Chinese government and the Chinese refiners. As the price of crude has rocketed, the refining companies have had their margins squeezed as they have been forced to buy increasingly expensive crude oil on the international markets and sell at domestic prices fixed at low levels by the PRC government. Subsidies for the refiners have been financed out of China’s large current account surplus, but with the oil price at USD130+, these subsidies do not dull the pain as much as they did six months ago.

 

Reports of shortages of refined products and electricity began to emerge several weeks ago. It seems as if the refiners were refusing to run crude through their plants because of the losses incurred by the Chinese “buy-high, sell-low, receive fixed-subsidies” system. This is reflected in China’s imports of refined products (red line on the chart), which have shot up since January in volume terms, even as the price of crude oil has moved skywards (white line). The refiners were getting stroppy and refusing to refine! The Chinese government could have chosen to boost subsidies or to raise domestic fuel prices; they chose the latter path.

 

 

After the Chinese fuel and electricity price hikes, the price of crude oil on COMEX immediately dropped by around 5%. The assumption was that higher oil prices will send a ‘price signal’ to Chinese consumers, who will consume less oil. US consumers have not had their oil subsidised, and so it has simply become too expensive for Americans to drive as much as they used to. They have also started to buy relatively fuel-efficient Japanese vehicles rather than Detroit monster-trucks, and so demand for gasoline has dropped. Now that subsidies have been eased in China, there appears to be an assumption that high oil prices will also lead to demand destruction there (and elsewhere in Asia where fuel subsidies have been cut over the last three weeks). However, I am very doubtful that this will occur as quickly or on the sort of scale that some commentators seem to be expecting…

 

Nearly 50% of crude demand in the US is estimated to come from discretionary consumer demand for gasoline, in other words from the US national driving addiction. That is an awful lot of demand which is waiting to be destroyed. The equivalent figure in China is around 8% of consumption (reflecting the fact that auto penetration is lower); most of the rest of Chinese fuel consumption is from industry demand which powers GDP growth. I would bet that in the short-term, Chinese industry will go on buying oil and contributing to GDP in the same energy-inefficient way that it always has. Although Chinese GDP growth will probably slow slightly in 2008 on a yoy basis, the CCP knows that it is imperative that GDP growth should not fall below +8%, say. If it did, this would violate their great unspoken ‘pact’ with the Chinese people, i.e. given that there is now no overriding ideological basis for CCP governance in China (save a vaguely-defined patriotism), the Party must continue to enrich the Chinese people in order to stay in power.

 

Analysts are estimating that recent price hikes across Asia could shave 100,000-200,000bpd off global demand assumptions. Last weekend, Saudi Arabia announced that it would boost production by 200,000bpd. Rare positive news from both the demand- and supply-side, but even this does not seem to have been enough to bring down the price of oil.

 

Maybe it is just as well to remember that Middle Eastern consumption has been responsible for just as much of the growth in oil demand that China has. The higher the price of oil goes, then the more cash flows into Middle Eastern coffers, which is in turn spent by Middle Eastern consumers and governments, which then contributes to world oil demand and higher oil prices. An interesting virtuous (or vicious) circle, depending on your viewpoint…

Wenchuan and other tremors – 17 May 2008

 

An earthquake of magnitude 7.8 hit Wenchuan County in Sichuan Province on Monday 12 May at 14:30 local time. Six days later, the death toll stands at more than 20,000, with 50,000 people missing.

 

It wasn’t until I saw the photo on the front page of the South China Morning Post (Wednesday 14 May) that the full force of the disaster hit me. The photo showed rescuers unearthing the curiously intact corpses of children who had been crushed and buried in the rubble of their primary school classroom in Dujiangyan. They slumped together in a pile, faces and school uniforms lightly coated in a fine layer of white dust, eyes gently closed. Accompanying articles described how the wails of stricken parents pierced the air, and how a heavy pall of smoke hung in the sky over the school – from the piles of paper money they had burnt to send after their children into the afterlife.

 

 

In one county, a reported 80% of all buildings were destroyed. There also appear to have been many school collapses, not just the Dujiangyan incident. Given that many parents have lost their only child, grief has already started to turn into anger. Articles from the South China Morning Post and BBC (among others) claim that Chinese construction firms have skimped on safety when building schools. Given the breakneck speed at which the country has developed, this would hardly be surprising. When the bodies have been counted, expect a righteous backlash against the developers and construction firms involved.

 

This disaster has overtones of other recent Asian earthquakes. In the aftermath of the Taiwan 921 earthquake (1999), many were shocked to find that building codes had been flagrantly ignored, in some cases by stuffing layers of breeze blocks with plastic drinks bottles. This compromised the structural integrity of buildings, leading to more building collapses and deaths. In the Japanese ‘Aneha Scandal’ (which broke in November 2005), it was discovered that architectural and construction firms had been cutting costs by skimping on the requisite number of iron rebars when building hotels and condos, violating strict earthquake-resistance standards. The bureaucracy saw fit to tighten up construction regulations in August 2007. (This led housing starts to drop by 45% in the summer of 2007, which was meant to have shaved around one percentage point off GDP growth in Japan in 2007.)

 

What are the likely ramifications of the Wenchuan earthquake? It is worth noting that the worst damage appears to have hit the rural areas, with cities like Chengdu getting away relatively unscathed. First, earthquake damage is apparently covered by insurance in China, so those with insurance cover will be able to claim and start to piece their lives back together. It is as yet unclear what happens to those with no cover… Second, although Sichuan only accounts for 4% of national GDP, it does make a larger contribution (at 6%) to total national value-added agri output (accounting for 5.8% of China’s grain production, and 11% of national pork production). It is thus likely that the quake will exacerbate food price inflation. Third, more bank lending will be necessary in Sichuan to provide loans to clear up the damage. However, given national bank loan quotas in force, this will likely be at the expense of bank lending elsewhere in China (just as was the case after the snowstorms of February this year).

 

The Wenchuan Earthquake is the biggest since Tangshan in 1976; more than 240,000 people died in that disaster. 1976 was a year of great change in China, witnessing the deaths of Zhou Enlai and Mao Zedong. It was also the also the year when the Gang of Four fell from grace; this was in no small part due to their reaction to the earthquake. Jiang Qing (quoted in Wild Swans) allegedly made the following comments in relation to Tangshan: “There were merely several hundred thousand deaths. So what? Denouncing Deng Xiaoping concerns 800 million people.” In contrast, Hua Guofeng, who was to arrest the Gang of Four only two months later, made a point of visiting the site of the Tangshan earthquake only days after it happened.

 

Ever since the Zhou dynasty displaced the Shang, the concept of the ‘Mandate of Heaven’ (天命) has been invoked to legitimize the rule of a sovereign. Heaven approves of a just ruler and grants a long tenure, but it sends natural disaster to show its displeasure at abuses of power. Such portents would traditionally indicate that the mandate of heaven has been revoked, and that it is justifiable for the people to rise up and replace the unjust incumbents. Such moral exegeses were embraced by Chinese philosophical luminaries such as Mencius.

 

The current leadership of China, only too aware of the historical overtones of such a destructive earthquake, is pulling out all the stops. Premier Wen Jiabao has already flown to Sichuan to preside over relief efforts and be photographed with survivors. President Hu Jintao has followed in his wake. They wasted no time in declaring the earthquake a national disaster and mobilizing the PLA. However, the CCP seems to be concerned that it were unable to exercise its usual level of control over the media portrayal of the earthquake. According to the Financial Times, one local Sichuan channel broadcasting gritty coverage of the disaster went off the air on Wednesday. Since then, senior propaganda officials having been stressing the “correct guidance of public opinion”.

 

Now there will have to be some serious gestures to assuage the justifiable grief and anger felt by the people. This morning there was already news that an investigation has been launched into the massive number of school collapses. Going forward, expect scapegoats to be named, blamed, and even executed. This year is already shaping up to be an eventful one for China…

 

An old flame – 9 May 2008

 

  

The Olympic Flame, or at least an Olympic flame, made it to the top of Mount Everest yesterday – a triumph of perseverance, or perhaps PR. “One World, One Dream” shouted the Tibetan team-leader Nyima Cering as the torch reached the summit. One suspects that his down-jacket would have been confiscated for the downward leg had he not said something appropriate. Comments from other climbers were more cryptic – attempted “interference” with the torch’s progress up the mountain was alleged: “Right up to now, there are still people trying to interfere with us. We were not afraid. We overcame these interferences.” One wonders what sort of interference this might have been, given that both the Chinese and Nepalese sides of the mountain were closed to climbers and a shoot-to-kill policy in force.

 

When the torch came through HK last week, potential protesters were cleared off the streets by police “for their own protection”. “All Chinese come over here and sing the National Anthem!” shouted one particularly patriotic Chinese mainlander, brandishing a megaphone in one hand and a large red flag in the other. Half the street promptly did as he said, following up their rousing chorus with shouts of “Zhongguo jiayou!”. Most local HKers seemed bemused by the spectacle.

 

More than a few residents of this hazy city have since complained to me that the displays of loyalty to the Chinese motherland along the roadside seemed to demonstrate a profound misunderstanding of the Olympic Spirit (http://www.olympicspirit.org/mission.php). And presumably the same goes for the somewhat overzealous behaviour of the Chinese security guards worldwide who have been guarding the flame’s passage.

 

I would argue, however, that even if the torch relay for the 2008 Olympics has not yet succeeded in “building a peaceful and better world in the Olympic Spirit… with a spirit of friendship, solidarity and fair play”, the exercise has at least been conceived in the mould of the original torch relay. This, of course, was held in the run-up to the Munich Olympics of 1936. Proposed by the controversial Carl Diem to showcase Nazi power, the relay was immortalized on celluloid by Leni Riefenstahl in her classic Olympia. One of the crowning scenes of the film is when Fritz Schilgen (who had been chosen by the Fuhrer for his aesthetic running style) trotted gracefully up to light the Olympic cauldron.

 

 

But times have moved on, and even greater spectacles are expected. In Barcelona (1992) an archer fired a burning arrow over the stadium to light the cauldron and launch the games. The question now is, who will light the Olympic cauldron in the Bird’s Nest Stadium in Beijing at the opening ceremony on 8 August 2008, and how? This person’s identity is still shrouded in the utmost secrecy, but I think I know who it will be… The towering Yao Ming will light the cauldron by slam-dunking a flaming basketball through the Olympic rings and bringing the so-far-so-farcical torch relay to a suitably entertaining end.

 

Inflation and the Lhasa riots – May 1 2008

 

The Olympic torch arrived in Hong Kong amidst much fanfare on Wed 30 April, and authorities have been doing their utmost to ensure that the HK torch relay is not hit by the same sorts of pro-Tibet protests that have dogged the flame’s progress thus far. Various media outlets have reported that pro-Tibet activists have been deported from HK over the last few days, and the BBC even notes that a Chinese factory in Guangdong manufacturing ‘Free Tibet’ flags has been closed down (http://news.bbc.co.uk/2/hi/asia-pacific/7370903.stm) – made in China indeed. More worryingly (from a press freedom perspective) was the last-minute decision by the Hong Kong Law Society to pull a thought-provoking article by Senior Counsel Paul Harris debating whether Tibet is entitled self-determination. The article had been commissioned for their journal the Hong Kong Lawyer. Thankfully, the ever vigilant David Webb has published the article on his Webb-site (http://webb-site.com/articles/tibetharris.htm). It is well worth a read.

 

Lest we forget, it was the events of mid-March – starting with the Lhasa riots – which gave the torch protests impetus. Depending on which version of the Lhasa riots story you believe, either the culturally-repressed Tibetans rose up against their overlords in a popular expression of discontent, or some “criminal elements” seeking Tibetan independence rioted and attacked Han Chinese businesses, killing some Chinese, in an action which was said to be masterminded by the Dalai Lama. (The People’s Daily puts the Chinese side of the story and will “Tell you a True Tibet” at: http://english.people.com.cn/90002/93607/index.html.) In any case, with sentiment running high on both sides, facts can be hard to come by.

 

Initial eyewitness reports of the riots (such as the excellent account by the Economist correspondent who happened to be in Lhasa at the time – http://www.economist.co.uk/world/asia/displaystory.cfm?story_id=10875823&CFID=12895953&CFTOKEN=25589131) have mentioned that it might have been the beating of two Buddhist monks by police which triggered the unrest. But Lhasa was apparently already a “tinderbox” waiting to be set alight. Cultural repression over the last few decades was almost certainly a contributory factor, as was the rapidly growing population of Han Chinese within Lhasa itself (many of whom had opened shops and businesses in the town). But there seems to be a key ingredient missing in this mix. Why had tensions risen so much over the last few months?

 

To me, the answer has to be: inflation. The historical record on this score is fairly unambiguous: Over the last 3,000 years in China, inflation has lead to unrest. One of the most notable recent incidences of high inflation was in 1988 (when inflation was running at approximately 19%). This inflation fueled tensions and helped give rise to the Tiananmen protests of 1989. In 1994, also a period of social upheaval, inflation was running at around 24%.  

 

 

The year-on-year headline inflation figure for March 2008 was 8.3%. Prices in March typically fall in China (following the Chinese New Year); this was also true this year, but the cumulative increases over the first quarter of 2008 are the fastest since the mid-1990s (the snowstorms in February were partly to blame). Bear in mind that it is food prices, up around 18% yoy, which make up a major component of this inflation figure. In China, food makes up around a third of the consumption basket for the general population (which is higher than in developed countries). However, poor Chinese spend as much as half of their income on food. Rising food prices are thus a recipe for popular discontent.

 

Now apply this situation to Lhasa… I have not been able to get my hands on food inflation figures for Tibet, but imagine that it is in line with China, or perhaps even running slightly higher because of high transport costs. A probable scenario was that relatively economically-disadvantaged Tibetans, who buy most of their food from Han Chinese shopkeepers, had to pay higher and higher prices for their groceries. Was it this that led to the mid-March “tinderbox” atmosphere in Lhasa? In such a situation, racial tensions would have risen to the fore. No doubt all that it would have taken to trigger unrest was an incident such as two monks being beaten…

 

As China modernizes, the Chinese authorities have various challenges; they are particularly aware of the threat that inflation poses to social stability. High inflation and social unrest is the last thing they need, especially in the year of the Olympics. It is best not to underestimate the measures they will take to slay this beast…

 

What bankers wear – April 21 2008

 

 

A friend working for a certain blue-blooded investment bank recently brought this to my attention. Sartorial advice for junior bankers – it really puts ‘hedge fund chic’ to shame.

 

I believe a certain number of points ought to be clarified for your future reference over acceptable wear for a banker working on the advisory side:

 

Shirt

• No breast pockets – it’s for pens and you look like you are missing a clipboard and a pair of horn-rimmed spectacles
• No single button cuffs – you’re not some provincial administrator or civil servant
• Two or three button cuffs are “informal” and should generally not be if meeting clients
• No “loud” cufflinks – you’re (hopefully) not arriviste
• No checks – you’re not a trader
• Pink or other “fruity” colours reserved for Thursday or later in the week – you’re not gay (unless you are)
• For God’s sake – no grey or dark coloured shirts – they make you look like you work in IT
• I personally wouldn’t advocate yellow shirts either although if you are clever at pairing with the right ties you can get away with it  

Tie

• Nothing too colourful and complicated (a single loud colour is acceptable for later on in the week) – similarly with woven ties and cut-offs
• Nothing shiny like those awful woven polyester fire hazards, usually pink on a mauve shirt or the like
• Nothing that makes you look as if you are wearing a piece of carpet from a Travelodge motel in the north of England, or from the upholstery of an aged London Underground train (i.e tiny diamonds, squares, &c)
• No unimaginative combinations of blue shirt / pink tie and vice-versa
• ABSOLUTELY NO “JOKE” TIES e.g. cartoon characters
• Thin knots only (NOT double Windsor) – and hence generally your shirts ought to not have too cut-away collars. Thick knots are for those whose parents’ job was selling vegetable our of a wheelbarrow in the East End
• Possessing at least one Hermes tie is obligatory – the classic “H” is my personal recommendation

Suit

• Nothing light in the Ernest Hemingway style. People think you are about to flee with their money
• Plain black is a bit odd too – unless you are moonlighting as a bouncer at a night club
• No thick “chalk-stripes” – this is another capital markets faux pas  

Shoes

• Full brogues ideal and should be standard. Half brogues are getting a bit playful. And no full banded brogues as they make you look as if you are wearing cowboy boots
• Oxfords acceptable for junior bankers
• Slip-ons can only be carried off by senior bankers
• Brown shoes indicate you are an accountant – “no brown in town” as they say

Socks

• The ONLY area where colour is acceptable – everyone should gave pairs of red socks on hand, and light blues or even those Duchamps ones which make you look as if you are wearing a lava lamp, are fine…

Blackle: the new Google – 18 April 2008

 

Use Google algorithms and save the environment too. That is the message from Blackle, the (relatively) new search engine which operates off a black screen. The idea is that displaying different colours (especially white) consumes considerably more energy than displaying black (in keeping with the theme of this blog,). Apparently, this black Google will save 750MWH of electricity per annum. Check it out: www.blackle.com.

 

Oil at USD 115 a barrel = War in the Middle East? – 17 April 2008

 

 

DOE crude oil inventories ticked down unexpectedly last night (see the red line on the Bloomberg chart) and this provided an excuse for oil to surge to a new high at USD115.21/b (white line). It remains a bit of a mystery why crude oil should be hanging up there when the US and other parts of the Anglo-Saxon world appear to be in recession. There do not appear to be any major supply-side issues. Certainly, the crude has been boosted by general dollar weakness. But this cannot explain everything; even in Euro terms, oil is at a record price.

 

Various commentators have cited the ‘China story’ to explain the phenomenon. China demand has certainly been resilient (witness the 10.6% GDP figure yesterday). Massive oil subsidies in China and other Asian countries disguise the true price of the commodity and serve to encourage demand. But with China GDP growth off its highs, and controls on industry about to be implemented in the run up to the Olympics, shouldn’t one expect the price of oil to start softening?

 

In a recent piece, Stratfor (a private intelligence agency based in Texas) suggests that such a high oil price is factoring in potentially significant geopolitical risk. The first point they highlight is that in September 2007, the Israelis bombed a unspecified target in Syria; the rumour-mill has be working overtime ever since, and there have been suggestions that the target was a nuclear reactor provided by the North Koreans or maybe even the missing Iraqi WMD. Whatever it was, both sides have been unclear about exactly what was hit. Secondly, the US started purchasing oil for its Strategic Petroleum Reserve in February 2008. This was a strange decision to make, given the impending economic slowdown and the record oil prices at the time – did the US Department of Energy expect some sort of oil supply disruption? Stratfor also noted some other interesting developments: a senior Hezbollah leader was assassinated in February, but Hezbollah did not retaliate; the US Sixth Fleet moved some ships near to the Lebanese coast in March; and Israel has recently conducted a massive military exercise which involved mobilizing reserves and causing significant disruption.

 

And in the background, there have apparently been the inevitable rumours swirling round the Middle East that some sort of war is imminent. Such rumblings are not unusual, but might not these factors, taken together, explain why oil costs USD115/b? Given such implied geopolitical risk, would you want to go short?

 

A sustained oil price of USD100/b or more will compound the severity of a US recession. But if war really were to break out, oil at USD150/b would not be unimaginable. Now that would be really messy…

Hanami in Tokyo, and (yet) another twist to the Edison Chen saga – 29 March 2008

 

A beautiful day in Shinjuku-Gyoen. Pink cherry trees swaying gently in the spring breeze, the countless delicate blossoms outnumbered only by the hordes of people trying to grab a patch of ground on which to sit and knock back a couple of cans of Kirin beer. Anyway, it had been a few months since I had been in Japan, and there I was catching up with friends and liberally doling out invitations to come and visit me in Hong Kong.

 

And it was over a beer that a gay friend turned to me and confessed: “I had a Hong Kong celebrity boyfriend until about a year ago. Met him in Tokyo when he was visiting a shop he has in Harajuku.” This piqued my interest:  “What was his name?” He paused dramatically, fluttered his eyelashes, then turned to me and whispered the star’s name: “Edison Chen.”

 

This scurrilous and unconfirmed rumour, if true, would add another notch (or more) to Edison Chen’s increasingly whittled and frail bedpost. For those of you who don’t know (and you must have been hiding under a stone for the last three months), the Edison scandal broke in January 2008 when explicit photos of the Hong Kong actor with various nubile Hong Kong starlets (in different states of undress) were published on the internet. The official story goes that the photos were stolen from Edison’ laptop computer when he handed it in for repair at a computer shop.

 

However, there are stories circulating that there is more to the whole Edison incident than meets the eye. Some of these are summarised in an interesting ‘Asia Sentinel’ article:

http://www.asiasentinel.com/index.php?option=com_content&task=view&id=1050&Itemid=34

To summarise: Edison’s girlfriend (Vincy Yeung) has an uncle called Albert Yeung who heads up the Emperor Entertainment Group. All the starlets snapped with Edison appear to be members of Yeung’s stable of ‘entertainers’. The implication is that whoever released the photos was aiming to do maximum damage to CCP-connected Yeung and his business interests by smearing his celebrities… or so the article goes. Various blogs report that poor old Edison has now fled to Canada where he is hiding away, allegedly afraid that the (Yeung-connected?) triads will get him if he returns to HK.

 

In any case, there remains the possibility that there is a whole cache of ‘alternative’ photos are out there somewhere, ready to do the rounds. But don’t hold your breath. For as Edison’s ex-boyfriend in Tokyo told me wistfully: “I am a little disappointed – Edison never wanted to take any raunchy photos with me!”

The KMT and Ma Ying-Jeou win in Taiwan – 22 March 2008

My first anticlimax of the day was trying to gatecrash a polling station on the morning of Sat 22 March with some Taiwanese friends but being turned away for being foreign. My second anticlimax was the unexpected speed with which votes were counted and the election results announced. The polls closed at 16:00, and only two hours and 30 minutes later, at 18:30, we knew that the KMT had won. The DPP capitulated around an hour after that. I have to confess that all this caught me completely unawares, and having expected much more drama and excitement, I was reduced to watching the rallies and respective political speeches on television in a hotel room.  

A runaway victory for the KMT – 58.45% for Ma Ying-jeou and only 41.55% for Frank Hsieh. I thought it would be far closer than that, so what happened? A few DPP supporter friends whom I spoke to on Sat afternoon and evening told me that they were so disillusioned with the political process and the state of the economy that they had spoilt their ballot papers or had just not bothered to turn up to vote. I guess that should have given me a warning that the election was not going to be close. In the end, the total turn-out was around 75% (compared to 82% in 2000 and 80% in 2004); I guess the 5% who didn’t turn up were the disillusioned DPP voters, and that must also have been the reason why Hsieh lost his stronghold in Kaohsiung.  

Needless to say, Chen Shui-bian’s politics of identity were not a vote-winner this time round, and the referendum on UN membership was seen as an irrelevance. Not only did voters have to take a slip of paper (which had been posted through to them) which gave them the right to vote in the presidential election, they also had to take two other slips relevant to the UN referendum when they went to the voting stations! Many didn’t bother, and others (including former president Lee Teng-hui and his wife) simply forgot. Taiwanese identity is seen as self-evident these days (arguably Chen Shui-bian’s most important legacy), and so is the imperative not to anger China.  

The foremost issue that decided the election was management of the economy, and it looks like Ma will be judged primarily on this issue over the next four years. Opening up to the mainland will only be seen as a positive if it improves salaries and living standards of the Taiwanese. But now the Mainland economy has problems of its own. Anecdotal evidence from Taiwanese friends working for small family manufacturing companies in Shenzhen and Dongguan seem to indicate that costs are up (10-20%) and margins are being squeezed (not least as a result of the new China labour laws). Will the ‘capital links’ story really be the panacea that many think it will? An interesting space to watch… 

Anyway, after watching the inevitable victory speeches, I retired to the hot springs in my hotel to have a soak. Some more adventurous friends made it down to the tail-end of the KMT and DPP rallies, picking up free KMT base-ball caps and the telephone-numbers of some young ladies who clearly cared about politics. Apparently, politics provided some good chat-up lines at Luxy and Room 18 later that night. Isn’t it nice that the Taiwanese care about politics; I guess the vote actually makes a difference. I can’t imagine that degree of interest in politics in the UK or Japan.