1 New signs of China slowdown (BBC) Growth in
China's investment and factory output in August has come in below forecasts, in
a further indication that the world's second-largest economy is losing steam. Factory
output grew by 6.1% from the year before - below forecasts of 6.4%. Growth in
fixed-asset investment - largely property - slowed to 10.9% for the
year-to-date, a 15-year low.
Growing evidence that the world's economic
powerhouse is slowing down has caused major investment market falls. Other
indications that the economy is weakening can be seen in falling car sales and
lower imports and inflation. Chinese manufacturers cut prices at their fastest
pace in six years, largely on the back of a drop in commodity prices, which
have dropped sharply over the past year as demand from China faltered.
China has already cut interest rates five times
since November to encourage lending and spur economic activity, along with
other measures to boost growth. Premier Li Keqiang pledged that China would
take more steps to boost domestic demand and that it would implement more
policies designed to lift imports.
China recently revised down its 2014 growth figures
from 7.4% to 7.3% - its weakest showing in nearly 25 years. For this year, the
government is targeting annual economic growth of about 7%. China's industrial
economy is dominated by 111 conglomerates which are state owned.
2 Brics collapse and the almighty dollar is back
(The Guardian) Brazil, which saw its credit rating downgraded to junk last
week, is only the latest Brics economy to crumble in the face of a strong
dollar, a global trade slowdown and the prospect of higher US interest rates.
Russia is already in recession; many economists
believe China is heading towards a “hard landing”; and South Africa, which
managed to append itself to the emerging-markets club in 2010, is on the brink
of recession. Of the group once identified as the shining economic beacons of
the future, only India has so far remained relatively insulated.
It wasn’t supposed to be like this. In 2009, as the
rich western countries were surveying the chaos wrought by the financial-market
crisis, China was cranking up an immense fiscal stimulus programme to boost
demand and kickstart growth. “Decoupling” became fashionable. But seven years
on from the collapse of Lehman Brothers, the chaos wrought across financial
markets in emerging countries by the prospect of a rise in US interest rates is
a reminder of how closely tied the Brics economies remain to the world’s
biggest economy, and vice versa.
Today, the twin threats of a strong dollar – driven
by the prospect of central bankers lifting interest rates in the relatively
strong US economy and a sharp slowdown in Chinese growth – have sent
emerging-market currencies plunging. The fallout goes well beyond Brazil, which
has pegged its fortunes closely to serving Chinese demand, and Russia, which
has been hit by the oil price crash. It is being felt in a swath of other
countries, from South Africa to Turkey.
China has long wanted to dislodge America’s crown as
the uncontested hegemon of the global economy. If, as Willem Buiter, chief
global economist at Citigroup, predicted last week, China is leading the world
into recession, it will underscore its weight in the 21st century world economy
– but not in quite the way that Beijing might have been hoping.
3 Tim Cook’s coming of age (Madhumita Murgia in
Sydney Morning Herald/Daily Telegraph) When Apple revealed its new, giant iPad
Pro with a special accessory called Apple Pencil on Thursday, the crowd in the
San Francisco audibly tittered.
The reason? The $99 accessory is not a revolutionary
new invention - it's just a fancy stylus, an electronic pointer of the kind
abhorred by Apple's former, much-loved chief executive Steve Jobs. The joke
dates back to 2007 at the iPhone 1 launch, when Jobs famously said: "Who
wants a stylus? You have to get them, put them away. You lose them. Yuck.
Nobody wants a stylus."
Fast forward eight years, and it turns out Apple does
want a stylus after all. Of course, the new Apple Pencil appears to be an
advanced version. But it's also the symbol of a new era. It shows Apple chief
executive Tim Cook's willingness to break the hard rules set down by Apple's
opinionated founder - and finally emerge from Jobs' shadow.
During Apple's product launch event, Cook announced
a slew of new products, with a mix of marginal and radical improvements on
their predecessors. The new products announced this week aren't the first time
Cook has strayed from the party line. In March, he unveiled the Apple Watch,
the first completely new device created under his leadership - and designed
without the input of Jobs.
We can't say yet how the new bets will play out -
whether people will start buying (and wearing) Apple Watches, subscribing to
Apple Music or paying with Apple Pay. But it signifies that Apple has moved
forward and continues to experiment, rather than simply cultivating its
existing, highly profitable range of products.
It's clear that Cook's Apple is financially healthy.
Its stock has risen from a split-adjusted $54 to $110 since Jobs died,
resulting in a market capitalisation north of $600 billion. The big difference
between the larger-than-life Jobs and the more human Cook then is that Cook
isn't wedded to a higher vision - he seems able to hear what customers are
asking for, and make those products available.
At a memorial tribute for Jobs in 2011, Cook said
Jobs advised him to never ask what he would do. "Just do what's
right," he said. It's time for the rest of us to let go too, and stop
asking: "What would Jobs do?"
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