It’s the end of the world as we know it—or so we’re told, not just by R.E.M., but also this week by the venerable Economist, which carries a lengthy special report pondering “The Next War.”
The issue’s lead essay warns that “powerful, long-term shifts in geopolitics and the proliferation of new technologies” are eroding America’s global dominance, obliging thinking people everywhere to think about the unthinkable. “Conflict on a scale and intensity not seen since the second world war is once again plausible,” the essay intones. “The world is not prepared.”
The Bulletin of Atomic Scientists, too, is sounding the alarm. On Thursday, the group moved the “Doomsday Clock,” its symbolic predictor of the likelihood of nuclear apocalypse, to “2 minutes to midnight.” The new setting is 30 seconds closer to catastrophe than last year, signaling that the world is as close to nuclear disaster, in the group’s assessment, as it has ever been.
The Economist, in highlighting higher risk of global conflict, cites the Pentagon’s new national defense strategy, which identifies “great power competition” between the US, China and Russia as the “central challenge to US prosperity and security.” The report deems China and Russia greater threats to US security than jihadism. (Fortune flagged that report for CEO Daily readers last week.)
The Economist cites North Korea as the world’s most immediate security flashpoint. But it twits US president Donald Trump’s refusal to uphold America’s traditional role as world leader as the main long-run threat to global stability. “Mr Trump says he wants to make America great again, but is going about it in exactly the wrong way,” Economist editors opine. “He shuns multilateral organizations, treats alliances as unwanted baggage and openly admires the authoritarian leaders of America’s adversaries. It is as if Mr Trump wants America to give up defending the system it created and to join Russia and China as just another truculent revisionist power instead.”
Strong stuff. Officials from the Bulletin of Atomic Scientists also decry American abdication of global leadership under Trump as a key source of global instability.
Trump’s decision this week to impose steep tariffs on imports of washing machines and solar panels did little to allay such concerns. A host of publications, including the BBC and Bloomberg, warned that, should push come to shove, China has many options for retaliation. Former Morgan Stanley economist Stephen Roach, in an essay entitled “How to Lose a Trade War,” decried Trump’s trade policies as “backward looking at best” and putting growth of the US economy at risk.
Trump as ever remains unfazed. In his speech to the World Economic Forum at Davos, to which he is the first US president to attend since Bill Clinton in 2000, the US leader declared that America’s economy is “roaring back” and “open for business.”
Enjoy the weekend!
China in Davos
Closed door policy. The CEO of China’s second-largest e-commerce company, JD.com, has accused the U.S. of "serious" protectionist practices against Chinese companies, which would ultimately hurt the American economy. Speaking at the World Economic Forum in Davos, Switzerland, Richard Liu outlined his firm's ambitions to become a global retailer, but cited the U.S. as a particularly difficult market. Reuters
Us or them. Global business and political leaders have to pick between “two fundamentally different outlooks”: Xi's vision of a “shared future” or Trump’s “America First” policy, Chinese state media Xinhua wrote in a post-Davos commentary this week. The article also claimed that this year's Davos theme “Creating a Shared Future in a Fractured World” was drawn directly from the catchphrase Xi has often used since coming to power in 2012, and which featured in his 2017 Davos speech. Quartz
Come in, we're open. China will further open up its economy this year with new reform measures, some of which will "exceed the expectations of the international community," Xi Jinping's top financial advisor Liu He said in Davos this week. The new reforms mark the 40th anniversary of China's shift away from a closed economy, and is "not only important for China, but also for the whole world," Liu said. Bloomberg
Say no to wars. Alibaba founder and e-commerce mogul Jack Ma likewise warned against protectionism and trade wars in his Davos speech, shortly after two of his companies were set back by the Trump administration's toughened stance against China. Alibaba was blacklisted in the U.S. for the second year running for trafficking in counterfeit goods, and financial arm Ant Financial's big to buy MoneyGram was blocked by American regulators earlier this month. CNBC
Technology and Innovation
Buzzfeed scales the Firewall. Buzzfeed has inked a content licensing deal with Bytedance, a Beijing-based company known for its social media services such as news aggregator Jinri Toutiao and Youtube-like Xigua platform. Under the agreement, BuzzFeed’s content, including its popular Tasty cooking videos, will be distributed to Bytedance's over 300 million daily active users. Bloomberg
Tencent goes to Hollywood. Tencent is buying a less than 10% stake in Skydance Media, the Hollywood company behind “Terminator" and "Mission Impossible". The two firms will co-finance movies, TV shows and videogame projects while trading their expertise in their respective markets. Wall Street Journal
B is for Mobike. Chinese bike-sharing incumbent Mobike has filled its coffers with another $1 billion. The investors in its latest fundraising round are unclear, though Chinese group-buying site Meituan-Dianping is said to have held a long-standing interest in the Tencent-backed start-up. Caixin Global
Didi rolls out. Didi Chuxing, Chinese ride-hailing giant, launched its own branded bike-sharing service in the southwestern city of Chengdu this week. Its turquoise-hued Qingju brand does not require users to put an initial deposit to start riding, as it common in the sector. Didi is the lead investor in bike-sharing service Ofo with a 25% stake and bought over Bluegogo after it went bust in December. Caixin Global
JD jockeys for more. JD.com is looking to sell 15% of its logistics unit, JD Logistics, to early investors including Tencent. A third of the shares on offer will go to Tencent as part of the deal, which will likely complete mid-February. The news follows last week's reports that JD Logistics is planning to raise US$2 billion ahead of a possible initial public offering. China Money Network
In Case You Missed It
Davos Lauds China’s Climate Efforts Even as Emissions Rise New York Times
Politics and Trade
The Kushners cut back. Jared Kushner's family-owned real estate company will stop seeking $150 million from Chinese investors for its One Journal Square building project in New Jersey. The project, which the Kushner family marketed under the EB-5 program that grants temporary visas to wealthy foreign investors and which they boasted had "government support" and "celebrity developers", raised ethical questions about using the family's White House ties to raise money. Associated Press
Mirror, mirror. Beijing is reluctant to act against North Korea, because it sees echoes of itself in Pyongyang, argues The Diplomat writer and China Channel founder Bonnie Girard. North Korea's dictatorial rule and extreme poverty is an uncomfortably close reflection of the Chinese Cultural Revolution and its impoverish agrarian past, a source of humiliation for both the Chinese leadership and its citizens. The Diplomat
Stop thief! Sinovel Wind Group, a Chinese wind turbine maker was convicted this week for stealing trade secrets from Massachusetts-based AMSC, causing the latter to lose more than $800 million. The Trump administration earlier this week slapped tariffs on imports of solar panels, a focus area for Chinese industry. It is also investigating the illegal transfer of U.S. commercial secrets by Chinese firms. CNN Money
Chip switch. Chipmaker Qualcomm has inked memorandums of understanding for sales totaling at least $2 billion with leading Chinese phone makers such as Lenovo, Oppo, Vivo and Xiaomi. The support from Chinese marques comes after Broadcom made an unsolicited takeover bid for Qualcomm in November, but their potential merger would raise regulatory scrutiny in China, where Qualcomm was previously fined over anti-trust issues. Reuters