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Archive for 22. September 2018

Is China’s infrastructure boom past its peak?

Posted by hkarner - 22. September 2018

Date: 20-09-2018
Source: The Economist

A sharp slowdown in investment this year points to a more subdued future

CHINA does not do infrastructure by half measures. It has the world’s longest networks of motorway and high-speed rail (which Hong Kong joins on September 23rd). It has the tallest bridge as well as the longest. It is building nearly ten airports a year, more than any other country. It has the most powerful hydroelectric dam, the biggest wind farm and as much coal power as the rest of the world combined.

But the infrastructure boom has lost steam this year. After expanding at a double-digit pace for much of the past three decades, investment in it has slowed sharply. Since May spending on projects ranging from railways to power plants has fallen compared with a year earlier, the longest weak patch on record.

The question is whether this is a blip or a fundamental change. Some analysts argue that the decline in spending is only short-term, related to the government’s efforts to rein in debt. As the trade war with America rumbles on, they expect that China will try to boost the economy with another burst of infrastructure-building. But many others believe that even if this were to be attempted, it would not work. Their argument is not that investment should stop. China still usefully spends more in two months on such things as building roads and ports and laying cables than India manages in an entire year. Rather, they say, building at an even greater rate would risk outstripping demand. It is time to find other ways of fuelling growth. Den Rest des Beitrags lesen »

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How to bend the EU’s rules on free movement

Posted by hkarner - 22. September 2018

Date: 20-09-2018
Source: The Economist

Many countries interpret the principle rather more loosely than Britain

THERESA MAY’S government has long insisted that free movement of people from the European Union to Britain must end after Brexit. Commentary on this week’s Migration Advisory Committee (MAC) report has focused on its advice that Britain should not offer EU citizens preferential terms after it leaves. Yet the report pointedly adds that “preferential access to the UK labour market would be of benefit to EU citizens”. This clearly hints that a regime favouring EU migrants could be a bargaining chip to win better access to the EU’s single market.

The principle of getting free trade in return for free movement is implicit in the single market’s rules. As a matter of economics, a single market could be built around the free movement of goods, services and capital. But the EU deliberately adds free movement of people, which most citizens outside Britain see as a benefit of the club. Den Rest des Beitrags lesen »

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Can the EU become another AI superpower?

Posted by hkarner - 22. September 2018

Date: 20-09-2018
Source: The Economist
Subject: Big data, small politics

Taking on America and China will be hard

ANGELA MERKEL, Germany’s chancellor, has a reputation for being dour. But if she wants to, she can be quite funny. When asked at a recent conference organised by Ada, a new quarterly publication for technophiles, whether robots should have rights, she dead-panned: “What do you mean? The right to electric power? Or to regular maintenance?”

The interview was also striking for a different reason. Mrs Merkel showed herself preoccupied by artificial intelligence (AI) and its geopolitics. “In the US, control over personal data is privatised to a large extent. In China the opposite is true: the state has mounted a takeover,” she said, adding that it is between these two poles that Europe will have to find its place.

Such reflections are part of a wider realisation in Europe: that AI could be as important to its future as other foundational technologies, like electricity or the steam engine. Some countries, including Finland and France, have already come up with national AI strategies, and Germany is working on one. Once it is finished later this year, the European Union will condense these efforts into a co-ordinated plan on AI. Unsurprisingly, it is all highly Eurocratic: dozens of committees and other bodies are involved. But the question raised by Mrs Merkel is as vital for Europe as the ones about Brexit or immigration: can it secure a sizeable presence in between the AI superpowers of America and China? Den Rest des Beitrags lesen »

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A radical idea for reducing inequality deserves more attention

Posted by hkarner - 22. September 2018

Date: 20-09-2018
Source: The Economist: Free exchange

A social wealth fund could narrow the gap between the rich and the poor

RECENT decades have not been particularly good ones for those who toil on, rather than own, the means of production. Labour markets have made a slow and incomplete recovery from the trauma of the Great Recession. The crisis only briefly dislodged corporate profits as a share of GDP from historically high levels. Across much of the world, the share of national income flowing to labour has fallen over the past 40 years.

Taxing the rich in order to fund spending on the poor is a straightforward solution to inequality. But the well-heeled are adept at squeezing through tax loopholes, and at marshalling the political clout needed to chip away at high tax rates. Those frustrated by enduring levels of inequality are contemplating ever bolder ways to redress the lopsided balance between owners and workers.

In an ideal world, untrammelled markets would ensure that every firm and every worker earned precisely what they deserved. But as economists since Adam Smith have recognised, markets are inevitably distorted by the unequal distribution of power. As Smith wrote: “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public.” Den Rest des Beitrags lesen »

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Fortress Europe versus Eurafrica, that is the question

Posted by hkarner - 22. September 2018

Date: 20-09-2018
Source: The Economist: Charlemagne
Subject: Why Europe should focus on its growing interdependence with Africa

Sealing the Mediterranean will not work

IT IS a peculiarly modern habit to think of the Mediterranean Sea as a boundary. For over two millennia, civilisations bled across it and intermingled. Roman, Carthaginian, Moorish and Venetian empires expanded primarily along maritime routes. It took four days to get from imperial Rome to today’s Tunisia, but 11 days to reach Milan. The Sahara restricted contact between this Mediterranean Eurafrica and the regions to the south, but not entirely. A study of 22 skulls from Roman London found that four were African, for example. The medieval wealth of desert trading cities like Timbuktu and Agadez spoke of extensive north-south commerce. Later European colonialists penetrated, pillaged and parcelled up the continent; African troops fought in the trenches of the first world war; Europeans fought in Africa in the second.

Three subsequent events curbed this trans-Mediterraneanism. European powers left Africa with decolonisation; many African states sought to be neutral during the cold war; Europeans turned towards Asia’s booming markets as globalisation took hold. Tellingly, the geopolitical buzzword of the moment is “Eurasia”. Europe and Asia are integrating along old Silk Road routes, especially under China’s Belt and Road infrastructure splurge, yet “Eurafrica” remains relatively little discussed. Europe is too busy rushing into Asia’s arms to embrace a continent on its doorstep which may be even more significant in the long term.

Today’s waves of African migration are merely a prelude. Of the 2.2bn citizens added to the global population by 2050, 1.3bn will be Africans—about the size of China’s population today. And more of them will have the means to travel. Den Rest des Beitrags lesen »

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