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Posts Tagged ‘china’

Google Outgrows Its Youthful Ideals

Posted by hkarner - 19. August 2018

Date: 17-08-2018
Source: The Wall Street Journal

In middle age, the search giant’s motto has gone from ‘Don’t be evil’ to something more like ‘Get real.’

Google’s leaders’ display of a more pragmatic side risks alienating both its employees and its users.

Everybody’s got to grow up sometime. For Alphabet Inc.’s Google, that transition from youthful idealism to crusty, middle-age realism is in full swing.

The latest evidence of Google’s pragmatic side is its Dragonfly project, a version of its search engine that would conform to China’s strict censorship, so that Google can bring search back to that country after abandoning it in 2010. But this is hardly the first example of Google’s “Don’t be evil” approach morphing into something more like “Get real.” (Even that famous motto has been downgraded in the company’s latest code of conduct.)

In the past year, Google’s leadership had to rapidly backpedal from the company’s attempt to work with the Department of Defense on projects to enhance weapons targeting—and the decision to back out met with criticism as well. The company also recently found itself defending its practice of tracking users who have switched off “location services,” as well as its apparent lack of policing of developers who are granted access to users’ Gmail accounts. Den Rest des Beitrags lesen »

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When China Rules the Web

Posted by hkarner - 15. August 2018

Date: 14-08-2018
Source: Foreign Affairs By Adam Segal

Technology in Service of the State

For almost five decades, the United States has guided the growth of the Internet. From its origins as a small Pentagon program to its status as a global platform that connects more than half of the world’s population and tens of billions of devices, the Internet has long been an American project. Yet today, the United States has ceded leadership in cyberspace to China. Chinese President Xi Jinping has outlined his plans to turn China into a “cyber-superpower.” Already, more people in China have access to the Internet than in any other country, but Xi has grander plans. Through domestic regulations, technological innovation, and foreign policy, China aims to build an “impregnable” cyberdefense system, give itself a greater voice in Internet governance, foster more world-class companies, and lead the globe in advanced technologies.

China’s continued rise as a cyber-superpower is not guaranteed. Top-down, state-led efforts at innovation in artificial intelligence, quantum computing, robotics, and other ambitious technologies may well fail. Chinese technology companies will face economic and political pressures as they globalize. Chinese citizens, although they appear to have little expectation of privacy from their government, may demand more from private firms. The United States may reenergize its own digital diplomacy, and the U.S. economy may rediscover the dynamism that allowed it create so much of the modern world’s technology. Den Rest des Beitrags lesen »

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Trump’s Victorious Retreats

Posted by hkarner - 10. August 2018

Anatole Kaletsky is Chief Economist and Co-Chairman of Gavekal Dragonomics. A former columnist at the Times of London, the International New York Times and the Financial Times, he is the author of Capitalism 4.0, The Birth of a New Economy, which anticipated many of the post-crisis transformations of the global economy. His 1985 book, Costs of Default, became an influential primer for Latin American and Asian governments negotiating debt defaults and restructurings with banks and the IMF.

Why does US President Donald Trump keep making empty threats against other countries? While his detractors think he is simply a braggart, a fool, and an ignoramus, there could be a less unflattering, though equally depressing, explanation.

LONDON – Will Donald Trump back down in his trade war with China, or will he win it? The answer is probably both. Trump’s characteristic sequence of blood-curdling threats – “fire and fury,” “squeeze Iran’s exports to zero,” “tariffs on everything Chinese,” “consequences the likes of which few have ever suffered” – followed by a handshake, a hug, and a sudden outbreak of mutual understanding, is now a clearly established pattern.

The most dramatic example was Trump’s abandonment of any genuine effort to remove nuclear weapons from North Korea. More recently, there was Trump’s suspension of tariff threats against the European Union after his love-in with European Commission President Jean-Claude Juncker, the offer of a US-Iran summit “with no preconditions,” and then signals that escalation of tariff threats against China is actually a device to reopen negotiations. Den Rest des Beitrags lesen »

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Trump Advisers Urge Raising Additional China Tariffs to 25%

Posted by hkarner - 2. August 2018

Date: 01-08-2018
Source: The Wall Street Journal

Washington hasn’t made meaningful headway in easing its market-rattling trade dispute with Beijing

The White House and Beijing haven’t  made much progress in trade talks.

As Washington and Beijing struggle to break a trade impasse, some administration advisers are urging President Trump to raise the stakes with a sharp increase in the level of tariffs proposed for $200 billion in Chinese imports targeted for punitive measures.

Trump administration advisers are debating measures that might bring Chinese negotiators to the table. Some are pushing the president to apply tariffs as high as 25% on $200 billion of Chinese imports, up from an original proposal for 10%.

The White House won’t make a final decision until at least late August on those tariffs, which are likely to target consumer goods and food as well as machinery components. Advisers are justifying the steeper tariffs, in part, to make up for the rapid depreciation of the yuan in recent months. Since May 30, the yuan has fallen 6% against the dollar. Den Rest des Beitrags lesen »

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Jack Ma’s Giant Financial Startup Is Shaking the Chinese Banking System

Posted by hkarner - 31. Juli 2018

Date: 30-07-2018
Source: The Wall Street Journal

Ant Financial is transforming how Chinese run their daily finances, drawing flak from big banks and warning shots from the government

It handled more payments last year than Mastercard , controls the world’s largest money-market fund and has made loans to tens of millions of people. Its online payments platform completed more than $8 trillion of transactions last year—the equivalent of more than twice Germany’s gross domestic product.

Ant Financial Services Group, founded by Chinese billionaire Jack Ma, has become the world’s biggest financial-technology firm, driving innovations that let people use their phones for buying insurance as easily as groceries, enabling millions to go weeks at a time without using physical cash.

That success is also putting a target on the company’s back. China, even more than the U.S., is now under pressure to reckon with the disruptive power of a financial-technology giant.

China’s banks complain Ant siphons away their deposits, causing them to pay higher interest rates, and is a factor leading them to close branches and ATMs. One commentator at a state-owned television channel described Ant’s huge money-market fund as “a vampire sucking blood from banks.”

Ant Financial was founded by Jack Ma, chairman of Alibaba.

Chinese authorities, clearly increasingly uncomfortable about Ant’s scale, have started to put limits on the activities it can pursue. Earlier this year, China’s central bank undermined a years-long effort by Ant to build a national credit-scoring system. The bank effectively prevented Ant’s system from being used by institutions making loans. Den Rest des Beitrags lesen »

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The US is at Risk of Losing a Trade War with China

Posted by hkarner - 31. Juli 2018

Joseph E. Stiglitz, a Nobel laureate in economics, is University Professor at Columbia University and Chief Economist at the Roosevelt Institute. His most recent book is Globalization and Its Discontents Revisited: Anti-Globalization in the Era of Trump.

The “best” outcome of President Donald Trump’s narrow focus on the US trade deficit with China would be improvement in the bilateral balance, matched by an increase of an equal amount in the deficit with some other country (or countries). In fact, significantly reducing the bilateral trade deficit will prove difficult.

NEW YORK – What was at first a trade skirmish – with US President Donald Trump imposing tariffs on steel and aluminum – appears to be quickly morphing into a full-scale trade war with China. If the truce agreed by Europe and the US holds, the US will be doing battle mainly with China, rather than the world (of course, the trade conflict with Canada and Mexico will continue to simmer, given US demands that neither country can or should accept).

Beyond the true, but by now platitudinous, assertion that everyone will lose, what can we say about the possible outcomes of Trump’s trade war? First, macroeconomics always prevails: if the United States’ domestic investment continues to exceed its savings, it will have to import capital and have a large trade deficit. Worse, because of the tax cuts enacted at the end of last year, the US fiscal deficit is reaching new records – recently projected to exceed $1 trillion by 2020 – which means that the trade deficit almost surely will increase, whatever the outcome of the trade war. The only way that won’t happen is if Trump leads the US into a recession, with incomes declining so much that investment and imports plummet. Den Rest des Beitrags lesen »

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More of Africa Finds Itself in China’s Debt

Posted by hkarner - 27. Juli 2018

Date: 26-07-2018
Source: The Wall Street Journal

Beijing’s widening economic and military footprint on continent raises concerns; President Xi Jinping secures host of deals on weeklong visit

NAIROBI, Kenya—Chinese President Xi Jinping has signed a slate of investment deals during a weeklong tour of Africa, feeding into concerns in the West and on the continent over ballooning levels of indebtedness to Beijing and its expanding political footprint.

Already Africa’s biggest single-country trading partner, China has become its biggest creditor, too. It holds at least 14% of the continent’s sovereign debt, having lent more than $100 billion to governments and state enterprises since 2000, according to the Washington-based Brookings Institution.

Mr. Xi started his trip on Saturday in Senegal, adding the West African country to the Belt and Road Initiative that will see China invest more than $100 billion in trade infrastructure in Asia, Europe and Africa. Den Rest des Beitrags lesen »

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Stress Testing China’s System Reform

Posted by hkarner - 26. Juli 2018

Xiao Geng, President of the Hong Kong Institution for International Finance, is a professor at Peking University HSBC Business School.

For China, America’s rejection of the rules-based multilateral order and embrace of bilateral deal-making creates significant uncertainty. But Chinese policymakers have the tools to overcome the challenge ahead, beginning with the systemic mindset that has shaped decision-making in the country for millennia.

HONG KONG – The historian Wang Gungwu recently observed that, whereas the West thinks in terms of ideologies, China has long thought in terms of systems. In today’s age of rapid and profound change – characterized, in particular, by a fundamental shift in America’s attitude toward the rest of the world – China’s system reform approach is being put to the test.

Under President Donald Trump, the United States seems to have abandoned its seven-decade-old commitment to the rules-based multilateral order, embracing bilateral deal-making instead, guided by an “America First” agenda. This includes a willingness to make just about any excuse for unilateral action, such as large trade tariffs, against other countries, in order to please domestic constituencies. Den Rest des Beitrags lesen »

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Europe in the New Era of Great Power Competition

Posted by hkarner - 19. Juli 2018

Date: 18-07-2018
Source: Foreign Policy By Alina Polyakova and Benjamin Haddad

How the EU Can Stand Up to Trump and China

In the run-up to last week’s NATO summit and the meeting between U.S. President Donald Trump and Russian President Vladimir Putin, European leaders could hardly hide their anxiety. In recent weeks, Trump has gone on a rhetorical warpath against the United States’ greatest allies. In a rally in June, he claimed that the EU “was set up to take advantage of the United States.” Earlier that month, Trump attacked German Chancellor Angela Merkel as she was facing a rebellion in her own coalition over immigration. “The people of Germany are turning against their leadership,” he tweeted. Trump also reportedly asked French President Emmanuel Macron to leave the EU in order to get a better bilateral trade deal with the United States. These latest attacks came on the heels of Trump’s refusal to join the G-7 joint statement, his imposition of new U.S. tariffs on steel and aluminum from U.S. allies, and his proposal to readmit Russia to the G-7. On the eve of the meeting with Putin, the U.S. president called the European Union a “foe.” The message seems clear: “America first” means Europe alone.

These recent debacles reflect not only a growing rift between the United States and western Europe but also a new reality: Europe, divided internally, is losing agency on the world stage, and the Trump administration, acting as a predator more than as a partner, is tempted to exploit this weakness. As great powers compete for influence across the globe, Europe, like the Middle East or Latin America, will become another battleground.

In a speech in June at the Heritage Foundation unveiling the administration’s Europe strategy, A. Wess Mitchell, the assistant secretary of state for European and Eurasian affairs, put it most directly: “Europe is indisputably a place of serious geopolitical competition. . . . We have to take this reality seriously. . . . America has to take it seriously.” Seen from Europe, this presents an existential challenge. European countries rely on the United States’ continued security commitment and leadership. With the latter gone and the former at risk, Europe will need to unify at home and undertake some savvy diplomatic maneuvering abroad if it is to continue to pursue its interests on the global stage. For Europe, learning how to live in the new era of great power competition is not just about managing an unpredictable U.S. president with a special disdain for multilateral alliances; it is a question of survival. 

AMERICAN PREDATOR
In an extraordinarily short time, Trump has begun to pivot the United States away from 70 years of U.S. foreign policy, which promoted European integration as a bedrock of U.S. security. Now that Washington aims to compete in Europe rather than alongside Europe, it will try to pick off European countries by dangling bilateral trade deals in front of them, such as the one Trump offered Macron. As the international relations expert Thomas Wright has argued, this could include using the United Kingdom’s weakened post-Brexit position to pressure it into signing a free trade agreement with the United States over one with the EU. The United States, in a predatory stance, will also exploit its greatest leverage, its defense and security commitments, to get short-term deals on trade. It will dole out defense dollars to the most loyal while punishing those who stand up to it. For 2019, Congress committed $6.3 billion toward the European Deterrence Initiative, an increase of $1.8 billion from 2018. Those funds, which are aimed at deterring Russia, disproportionately go to U.S. military forward presence and readiness in eastern Europe. But at the same time, the Pentagon is assessing the costs of U.S. military presence in Germany and the potential impact of withdrawing the 35,000 U.S. troops currently positioned there. These seemingly contradictory impulses—significant spending increases on European defense coupled with concerns over costs associated with keeping U.S. troops in Germany—make sense from the perspective of a United States interested in breaking up Europe rather than preserving it.

On the political front, the United States is moving to undermine European leaders who do not fall in line. Trump’s visit to the United Kingdom in July, during which he disparaged British Prime Minister Theresa May in a tabloid interview, revealed how such a strategy could play out in real time. The United States is undercutting Merkel by empowering far-right forces and fanning the flames of the immigration debate. The Trump administration is disregarding democratic backsliding in Hungary and Poland, much to the chagrin of the EU, which is looking for ways to punish those states for their increasingly illiberal policies. Hours before tweeting about the German migration crisis, Trump was on a call with Hungarian Prime Minister Viktor Orban, in which they spoke about the importance of border defenses. That conversation likely prompted Trump’s subsequent Twitter attack on Germany. In the pursuit of bilateral relationships, the Trump administration is actively sowing divisions in other multilateral institutions as well, including NATO and the G-7.

EUROPE THE WEAK
Europeans should take heed of this new reality. In just the last month, European leaders have been unable to sway the United States on major issues affecting their interests, from tariffs to the U.S. withdrawal from the Joint Comprehensive Plan of Action, commonly known as the Iran nuclear deal. Worse still, despite announcing measures to save the JCPOA, European leaders have limited options to shield their own companies from renewed U.S. sanctions on Iran. Major European companies, such as Allianz, Peugeot, and Total, have already announced their withdrawals from Iran. What’s more, the Trump administration has threatened to impose sanctions on the Nord Stream 2 gas pipeline from Russia to Germany, a move that would effectively end the project, in which Austrian, Dutch, French, and German energy companies hold significant stakes. That would be a harsh move by the United States, but European countries would have no obvious recourse. 

The current moment harkens back to the Suez crisis in 1956, when France and the United Kingdom belatedly realized their loss of influence in the Middle East. Attempting to intervene to overthrow Egyptian President Gamal Abdel Nasser after he announced the nationalization of the Suez Canal, French Prime Minister Guy Mollet and British Prime Minister Anthony Eden saw their ambitions thwarted by the combined opposition of the United States and the Soviet Union. Today, Europe’s predicament is even more concerning. Suez showed that Europeans couldn’t reshape other regions without the assent of great powers; now, they are faced with the prospect of losing agency over their own continent, too.

So far, Europeans have pursued the path of least resistance: holding firm on their positions but toning down the rhetoric to avoid alienating Trump. Macron, in particular, has relied on his charm to build a personal relationship with Trump. In April, Macron’s approach seemed to be paying off when he became the first foreign dignitary to be invited on a state visit to Washington during Trump’s presidency. But despite the Trump-Macron “bromance,” he walked away empty-handed: the United States withdrew from the JCPOA and imposed tariffs on the EU just weeks after Macron’s visit. Merkel has taken a more principled approach, which has only earned her Trump’s ire. Leaders of other countries, including the Baltic states, have adopted some of Trump’s rhetoric on defense spending and emphasized their own good behavior on meeting NATO’s two percent target. Yet they too know that their only option is to wait and see as major decisions about their future are made without them.

RESURGENT EUROPE?
European leaders might assume that they can just wait this administration out. That would be a mistake. Trump’s policies, as harmful as they are to transatlantic relations, are also a response to European weakness and division. Previous U.S. administrations valued the transatlantic relationship and the common ideals that bound the two sides together, especially during the Cold War. But past U.S. presidents also had no illusions about Europe’s dependence on the United States. To remain relevant, Europe must learn how to play to its strengths in the face of great power competition.

Since the end of the Cold War, European elites and policymakers have believed that their model of multilateral decision-making, soft power, and institutional interdependence represents the future of international politics. In a best-selling book published in 2005, the political scientist Mark Leonard asserted that this European model would “rule the 21st century.” The EU’s predecessor, the European Community, was built on the ashes of World War II and premised on the idea that interdependence, cooperation, and integration would lead to convergence on liberal democracy. Today, that premise seems misplaced: Europe is becoming the exception, not the norm, as the British commentator Janan Ganesh recently put it.

If Europe wants to be an actor rather than a chessboard on which great powers compete, European leaders must take responsibility for defense and security and play up their economic strengths. Investing in European defense will necessarily go along with some decoupling from the United States. New efforts such as the Permanent Structured Cooperation and the European Defense Fund move Europe in the right direction but still fall short of achieving military autonomy. A more militarily independent Europe would also prove a more attractive partner for the United States, which still needs European cooperation in fighting terrorist groups such as the Islamic State (also known as ISIS). Ambitious countries such as France could take a more assertive role in regional conflicts such as the Syrian civil war, rather than waiting for U.S. leadership. Germany, which is Russia’s largest trade partner, could flex its economic muscle to push back against Putin. Europe should continue to engage the United States and push for its interests, but first and foremost, it should seize the moment to develop a vision for Europe’s role in the world.  

To be sure, the current U.S. approach to Europe is shortsighted. The web of alliances and common values that undergird transatlantic relationships form a much stronger counter to China and Russia than do raw economic or military resources. The Trump administration will get its way on European investments in Iran and might even manage to negotiate more favorable trade conditions with the EU. But the short-term gains of acting like a predatory and divisive power in Europe will be offset when Europe looks elsewhere for friends. In a speech last month, German Foreign Minister Heiko Maas called for deeper European defense integration, a welcome step, and has pushed for a broad European approach toward Russia, against the wishes of some in his own party. So far, Germany has held strong on the issue of Russian sanctions, but as right-wing populists with pro-Russian agendas gather strength across Europe and China tries to peel off European countries with economic enticements, an antagonistic U.S. strategy could drive Europe farther east. Without European support, the United States will find it difficult to compete with China and Russia in other theaters. Yet if Europeans truly want to make their case heard in Washington, they need to start at home. Den Rest des Beitrags lesen »

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China Shifts Gears to Support Economic Growth Amid Trade Conflict With U.S.

Posted by hkarner - 18. Juli 2018

Date: 17-07-2018
Source: The Wall Street Journal

Quarterly GDP expanded 6.7%, still within Beijing leaders’ comfort zone

Beijing is encouraging commercial banks to ramp up lending for subway and other railway projects.

BEIJING—Fall-offs in factory output and investment in buildings, machinery and such are weighing on China’s growth, complicating Beijing’s task in managing the world’s second-largest economy amid a trade conflict with the U.S.

The Chinese economy clocked a 6.7% expansion rate in the second quarter from a year earlier, down slightly from 6.8% in the January-March period, the statistics bureau reported Monday. While that rate is within Chinese leaders’ comfort zone, some economists said more troubling are the drop-offs in business activity and domestic demand.

Industrial output rose 6% in June from a year earlier, markedly down from a pace of 6.8% in May. Meanwhile, investment in fixed assets grew 6% in the first half of the year—a notch down from the 6.1% rate in the first five months and a level not seen since the late 1990s.

The slack is partly due to a government campaign against debt that has made businesses skittish about spending. While Beijing is already shifting gears to support growth—and fend off any ill-effects from the escalating trade fight with the U.S.—some economists expect the slowdown to worsen in coming months before the lingering effects of the credit-tightening dissipate. Den Rest des Beitrags lesen »

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