News Items.
9 September 2019. By John Ellis.
1. 5G, short for fifth-generation wireless, promises to be the heartbeat of the future. Expected to be 100 times faster than today’s 4G networks, 5G’s seamless connections could enable innovations such as driverless cars, robot-run factories and remote surgery. Because 5G is set to be embedded in so many fields of endeavor, the country that dominates the technology is likely to reap outsize profits, attract top-tier engineering talent and seize an edge in other critical future technologies, including weaponry. President Trump has said 5G is a race that the U.S. must win. But while American wireless carriers are leading in early deployment of the technology, some telecom-industry leaders say Beijing is poised to vault ahead in coming months.
2. Beneath China’s stable headline economic numbers, there is a growing belief among economists, companies and investors around the world that the real picture is worse than the official data. That has analysts and researchers crunching an array of alternative data—from energy consumption to photos taken from space—for a more accurate reading. Their conclusion: China’s economy isn’t tanking, but it is almost certainly weaker than advertised. Some economists who have dissected China’s GDP numbers say more accurate figures could be up to 3 percentage points lower, based on their analysis of corporate profits, tax revenue, rail freight, property sales and other measures of activity that they believe are harder for the government to fudge.
3. Chinese auto sales fell for the 14th time in 15 months, extending what’s already been a historically prolonged slump in the world’s largest car market. Sales of sedans, sport utility vehicles, minivans and multipurpose vehicles in August fell 9.9% from a year earlier to 1.59 million units, the China Passenger Car Association said Monday.
4. Car sales in India tumbled more than 40 per cent in August as the worst industry slowdown in recent memory deepened, intensifying concern that months of steep declines could spark a full-blown crisis. Passenger car sales for the month came in at 115,000, down 41 per cent from a year earlier, according to the Society of Indian Automobile Manufacturers. That marked the fifth month of double-digit losses, the sizes of which have beaten anything recorded since the turn of the millennium.
5. Japan’s economy grew at a slower pace than initially estimated in the second quarter as the U.S.-China trade war prompted a downward revision of business spending, intensifying calls for the central bank to deepen stimulus this month. Weakness in the global economy and worsening trade protectionism have emerged as risks to growth and added some pressure for the Bank of Japan (BOJ) to expand stimulus when it meets next week. The economy grew an annualized 1.3% in April-June, revised Cabinet Office data showed Monday, weaker than the preliminary reading for 1.8% annualized growth and in line with economists’ median forecast.
6. Russia’s ruling party has lost more than a third of its seats in Moscow’s city council as angry voters delivered a strong rebuke to president Vladimir Putin after a summer of discontent in the country’s capital. The local ballot followed months of protests that saw voters take to the streets amid anger over falling living standards, government corruption and moves to suppress opposition politicians, despite a police crackdown against demonstrations. While the results of the normally low key local elections have little impact on how the city is governed, the ballot was seen as a barometer of dissatisfaction with Mr Putin, ahead of parliamentary elections in 2021 and his potential handover of power in 2024.
7. Least surprising news of the day: Russia’s opposition accused the Kremlin of dirty tricks yesterday amid widespread reports of ballot stuffing and other voting irregularities at regional elections across the country. Observers recorded cases of people stuffing ballots into voting urns at polling stations in numerous regions, including Tatarstan, St Petersburg, Bashkortostan, Podmoskovye and Lipetsk. In many cases, the violations were caught on camera. There were also reports of state workers and soldiers being brought by bus to vote en masse for pro-government candidates.
8. Iran has begun installing more advanced centrifuges and is moving toward enriching uranium with them even though that is forbidden under its nuclear deal with major powers, the International Atomic Energy Agency said on Monday. The 2015 deal only lets Iran produce enriched uranium with just over 5,000 of its first-generation IR-1 centrifuge machines. It can use far fewer advanced centrifuges for research but without accumulating enriched uranium. But in response to U.S. sanctions imposed since Washington withdrew from the deal in May last year, Iran has been breaching the limits it imposed on its atomic activities step by step.
9. Rockets were fired at Israel from the outskirts of Damascus by a Shi’ite militia operating under the command of the Iranian Islamic Revolutionary Guards Quds Force, the Israel Defense Forces said on Monday. A number of rockets were launched from Syrian territory but failed to hit Israeli territory, the statement said. “The IDF holds the Syrian regime responsible for all events taking place in Syria.” The rocket fire comes more than a week after an Israeli airstrike hit a team of IRGC members with “killer drones” south of Damascus. In related news, Hezbollah announced earlier today that it had downed an Israeli drone in southern Lebanon.
10. Legislation that would require Britain to seek another Brexit extension from the European Union if there is no withdrawal agreement by Oct. 19 is expected to become law today, a move that Prime Minister Boris Johnson has bitterly opposed. The opposition Labour Party and others have insisted that they will not consider Mr. Johnson’s request to hold a general election until a no-deal Brexit has been ruled out. They will get their wish once the legislation receives the queen’s approval. That will set the stage for another battle: whether, and when, to hold a general election.
11. Boris Johnson is refusing to back down and pushing on with his hardline Brexit strategy despite the risk of being taken to court and the threat of more resignations from his Conservative Party. After a bruising week of defeats for his Brexit strategy culminating in the resignations of his own brother and cabinet minister Amber Rudd, Mr. Johnson faces further setbacks on Monday. The prime minister will probably lose another vote in the House of Commons and his Irish counterpart, Leo Varadkar, played down the chances of a breakthrough when Johnson visits Dublin earlier in the day.
12. Mr. Johnson has received a boost in the polls despite suffering three major Parliamentary defeats and facing widespread criticism over the sacking of 21 Tory rebels. Two polls published on Saturday evening give the Conservatives a commanding lead over Labour, suggesting that Mr Johnson’s hardline stance on Brexit is cutting through to voters. The Tories are up three points on 35 percent in the latest Opinium poll, with Labour trailing in second place on 25 percent and the Liberal Democrats on 17 percent. Meanwhile, Nigel Farage's Brexit Party has fallen three points to 13 percent.
13. Leaving the EU with a deal would boost the UK economy more than expected, according to an analysis that warns of starkly different outlooks depending on the outcome of Brexit talks. The economy will grow by 1.5 per cent in 2020 in the event of a deal and the pound could rise by as much as 15 per cent, the latest quarterly economic outlook report by KPMG says. The accountancy firm had previously forecast that the economy would grow by 1.3 per cent, but said that the labour market was performing well and that consumer spending remained robust.
14. Britain’s post-Brexit economy will be transformed by a boom in the science, technology and healthcare industries, creating millions of new jobs and generating billions of pounds in output, a major new report has revealed. The economy will undergo a major shift in the next two decades driven by a green revolution, technological change and the ageing population, analysis by BNP Paribas and the Centre for Economics and Business Research (CEBR) found. A combined 2.7 million jobs will be added to the economy by 2038 in their forecast, and investment will flood into certain regions, such as Manchester and the East of England, the location of Cambridge’s life sciences hub.
15. A large proportion of the world’s stock of foreign direct investment is “phantom” capital, designed to minimize companies’ tax liabilities rather than financing productive activity, according to research. Nearly 40 per cent of worldwide FDI — worth a total of $15 trillion — “passes through empty corporate shells” with “no real business activities”, the study by the IMF and the University of Copenhagen found. Instead they are a vehicle for financial engineering, “often to minimize multinationals’ global tax bill”, said researchers Jannick Damgaard, Thomas Elkjaer, and Niels Johannesen, who carried out the study. The findings come at a time when governments are trying to clamp down on multinational corporate tax avoidance.
16. Overseas acquisitions by Chinese companies plummeted in the first half of 2019, as tighter capital controls at home and growing wariness of Chinese takeovers abroad stifled such activity. Chinese businesses spent $24.5 billion on foreign acquisitions during those six months, down 42% on the year and less than one-fifth of the most recent peak seen in the first half of 2016, data from Dealogic shows. No deals exceeded $10 billion, the kind that attracts the attention of regulators.
17. Apple Inc. and manufacturing partner Foxconn violated a Chinese labor rule by using too many temporary staff in the world’s largest iPhone factory, the companies confirmed following a report that also alleged harsh working conditions. The claims came from China Labor Watch, which issued the report ahead of an Apple event on Tuesday to announce new iPhones. The non-profit advocacy group investigates conditions in Chinese factories, and says it has uncovered other alleged labor rights violations by Apple partners in the past. For its latest report, CLW said undercover investigators worked in Foxconn’s Zhengzhou plant in China, including one who was employed there for four years. One of the main findings: Temporary staff, known as dispatch workers, made up about 50% the workforce in August. Chinese labor law stipulates a maximum of 10%, CLW noted.
18. Americans across party and demographic lines overwhelmingly support expanded background checks for gun buyers and allowing law enforcement to temporarily seize weapons from troubled individuals, according to a Washington Post-ABC News poll, as President Trump and Republicans face fresh pressure to act. Although the poll finds a continued partisan divide on more far-reaching gun-control proposals, public opinion is firmly behind Democrats’ push for action as Congress returns to Washington on Monday. More Americans say they trust congressional Democrats over Trump to handle the nation’s gun laws, 51 percent to 36 percent, with independents siding with Democrats by a 17-point margin — a divide that could have political ramifications for the 2020 presidential and congressional elections.
19. Lawrence Lessig has written a long and empathetic essay about his friend Joi Ito, the former head of the MIT Media Lab. It is worth reading in full. Kara Swisher takes a markedly different view.
20. Rafael Nadal defeated a valiant Daniil Medvedev, three sets-to-two, in an epic duel that lasted five hours and may well be remembered as one of the greatest US Open Tennis Championship matches ever played. Mr. Nadal has now won 19 major championships in his storied career, including 4 US Opens.
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