Economist 3/2/16

  1. WHEN Liu Wang, the European head of the Industrial & Commercial Bank of China (ICBC), opened its branch in Madrid in 2011, he probably did not imagine that he would one day return to the city as a prisoner. Yet on February 19th Mr Wang was arrested and jailed without bail. He is one of six of the bank’s executives accused of funnelling dubious cash deposited by Chinese expatriates back to China. Some of the money allegedly came from smuggling and illegal exploitation of workers.A study three years ago concluded that Italy and Spain had the European Union’s third- and fourth-biggest Chinese communities, at 330,000 and 170,000 respectively. Each had grown almost five-fold since the late 1990s.Most Chinese in southern Europe work above-board. But others are caught up in a cycle of systematic illegality. At its origin is the importation or smuggling of cheap, often counterfeit goods from the Far East. These are then sold without VAT at prices local firms cannot match.That sort of money inevitably attracts other types of criminal organisations.Yet the biggest threat to Chinese living abroad who skirt the rules may come from China itself. Officials are starting to enforce a rule that expatriates must pay tax on their entire overseas earnings.
  2. Crunching information from The Numbers, a website that collects data on film releases, and Rotten Tomatoes, an aggregator of critics’ and punters’ reviews, we found that the strongest predictor of absolute box-office receipts is a film’s budget. Even if it got no boost from its cast, from favourable reviews or other factors, a movie would generate an average of 80 cents at American and Canadian cinemas for every dollar a studio promises to spend on it.The more a studio commits to producing a film, the more it is likely to spend on advertising it. The budget also helps determine how widely a film is shown.Nearly one in five of the films Hollywood pumps out nowadays is a sequel, up from one in 12 a couple of decades ago. All other things being equal, sequels earn $35m more than non-sequels at the box office.Franchise films increasingly depend on superhero characters. Hollywood made just eight superhero films between 1996 and 2000, but 19 in the past five years. A $200m-budget superhero film will earn $58m more at the box-office than a non-superhero film of the same budget.How a star’s previous films did helps a bit in predicting their next one’s success.
  3. Each $1 earned by a leading actor’s previous, non-sequel films in the past five years adds 2 cents to their current one’s takings.Do critics play a role in the success of films? Not as much as they would like to think. Between 1996 and 2006 an extra ten percentage points on the aggregate critics’ score on Rotten Tomatoes was associated with just $4m in extra box-office takings. Now it is worth just $1m. The wisdom of crowds matters more these days: the same increase in positive audience reviews on Rotten Tomatoes is associated with an $11.5m increase in box-office revenues.“John Carter”, a $275m science-fiction extravaganza that was one of the biggest turkeys in Hollywood history, should have earned $235m according to our model. It made just $73m when it was released in 2012. Clearly, no one yet knows everything.
  4. The term deukhu comes from the Japanese otaku, and denotes those who pursue obsessive interests—think a “nerd” or an “anorak” with few social skills and a fetish for some aspect of popular culture. In South Korea, deukhu has long been a slur. Many associate it with a dangerously unpatriotic indulgence in Japanese cultural exports, many of them banned in South Korea from the end of Japan’s imperial rule in 1945 until as recently as the 1990s. More broadly deukhu were assumed to lead idle, unproductive lives, shut away in dingy flats playing video games or scouring the web for their next frivolous curio.Now attitudes are shifting. The social-media networks of cool 20-somethings are abuzz with the hashtagdeukmingout: coming out as a fanatic.Ji Jin-hee, a dashing 44-year-old actor, revealed that he bought piles of secondhand Lego to build models and sell them for a small fortune.Stars are helping to push the idea that geekishness is cool. But beyond that, Mr Kim says, is the growing cachet of not following mainstream taste: a turnaround for South Koreans under powerful social pressure to conform. As more people pursue their individual preferences, they become more accepting of others’ too.
  5. Filipinos will vote for a new president in May, and the candidates are trying to blame each other for the parlous state of Manila’s roads and public transport.The candidates tout diverse plans, from building more roads to increasing taxes on second cars to moving government offices out of the metropolis. Even with a perfect transport plan, Manila would probably have a problem. The population of the entire capital area rose from 18m to 23m between 2000 and 2010. It is dense.The capital has an unfortunate hourglass shape. The middle, which contains the main business districts, is pinched by Manila bay to the west and Laguna lake to the east. Suburbs sprawl to the north and south. So traffic is funnelled, and the funnel often blocks up.The city’s first fault is its failure to build an extensive, high-volume public transport system. Seven metropolitan railway lines have been planned but only three have been built since work began in the early 1980s, and the connections between them are poor. If Manila has too few trains, it probably has too many buses. Hundreds of small operators ply the roads—the fruits of a radical liberalisation in the 1990s. EDSA alone is served by 266 bus companies, while 1,122 operate somewhere in Manila.Yet the biggest reason Manila’s roads move so slowly is that so many people now drive. The economy of the Philippines grew by 5.8% last year, and a swelling middle class is buying lots more cars.
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