1 Japan economy contracts 1.4% (San Francisco
Chronicle) Japan's economy contracted at a 1.4 percent annual pace in the last
quarter as weak consumer demand and slower exports battered the recovery. The
preliminary data, which may be revised, were slightly worse than expected and
were a setback from the 1.3 percent expansion in the previous quarter. The
economy shrank 0.4 percent in October-December from the previous quarter.
Despite the lackluster report, Tokyo's main share
index, the Nikkei 225, jumped 4.4 percent to 15,615.84 in early trading Monday,
helped by a weakening in the Japanese yen.
The latest contraction, the second in 2015, adds to
worries that Prime Minister Shinzo Abe's strategy for reviving the economy
through inflation fueled by massive monetary easing is not delivering as
promised. The slowdown in China, one of Japan's biggest export markets, has
been a further hindrance.
Japan's central bank has already resorted to
imposing negative interest rates on some bank deposits it holds to help spur
more lending, though cash-rich companies appear generally uninterested in
borrowing.
Growth also has been stunted by slow increases in
wages, which leave households less inclined to spend. Companies are still
drawing down excess capacity built up during decades of fast growth, and have
held back on domestic investments, viewing their shrinking and aging home
market as less attractive than other faster growing economies in Southeast Asia
and elsewhere.
Despite the zigzags in growth last year, the economy
eked out a 0.4 percent expansion in 2015, better than the flat-lining of 2014.
But that pace of growth falls far short of the expansion needed to achieve
Abe's goal of a 600 trillion yen ($5.3 trillion) economy by 2020.
2 UK steel suffering
like coal once did (The Guardian) A historic industry is plunged into peril as
the life is slowly squeezed from it by slowing demand and a flood of cheap
imports as the government merely stands by. Sound familiar?
It is the grim reality
facing British steelmaking. But to anyone with a sense of recent industrial
history it is unlikely to come as a surprise; this was also how Britain’s once
mighty coal industry was snuffed out during the late 1980s.
“King Coal” was usurped
by on one hand a bountiful and cheap supply of North Sea oil and gas, and on the
other the sky-high price of British coal compared with much cheaper offerings
that poured in from places such as Russia, China and America. Back then,
Margaret Thatcher’s government sat back, refused calls to slap tariffs on cheap
foreign imports and allowed Britain’s coal industry to go under.
This time, David
Cameron has been accused of failing the UK steel industry after the government
confirmed last week that it was blocking proposals from other EU members to
tackle the dumping of cut-price subsidised product by China, the world’s
biggest producer. The government wants to build up Britain’s trade relations
with the People’s Republic.
MPs were told the
European commission wanted to increase the tariffs on Chinese imports to help
the struggling steel industry. But the government opposed increasing the
tariffs to the same punitive rate as the US – where 256% was imposed last year,
with the commerce department calling for more. The EU has only increased the
import duty on Chinese goods to between 9.2% and 13%.
Britain’s steel
industry is in the frontline of this fight for survival, after shedding 5,000
jobs since last summer. Karl Köhler, boss of Tata Steel Europe, has warned that
the situation facing the industry is “perilous” and has urged Brussels to take
“immediate and robust action” against China or thousands more jobs across the
sector will be threatened.
The Tata group received
a small boost last week from the Indian government, which has shown the
European Union the way by slapping minimum tariffs on steel imports from China
and South Korea. It is precisely the sort of respite that Köhler and the other
marchers will be crying out for in Brussels. Failure could consign British
steel to the history books: buried alongside King Coal.
3 Intelligent robots
and the jobs threat (Khaleej Times) Advances in artificial intelligence (AI)
will soon lead to robots that are capable of nearly everything humans do,
threatening tens of millions of jobs in the coming 30 years, experts have warned.
"We are
approaching a time when machines will be able to outperform humans at almost
any task," said Moshe Vardi, director of the Institute for Information
Technology at Rice University in Texas. Vardi said there will always be some
need for human work in the future, but robot replacements could drastically
change the landscape, with no profession safe, and men and women equally
affected.
"Can the global
economy adapt to greater than 50 per cent unemployment?" he asked. Automation
and robotisation have already revolutionised the industrial sector over the
last 40 years, raising productivity but cutting down on employment. Job
creation in manufacturing reached its peak in the US in 1980 and has been on
the decline ever since, accompanied by stagnating wages in the middle class,
said Vardi.
Today, there are more
than 200,000 industrial robots in the country and their number continues to
rise. By his calculation, 10 per cent of jobs related to driving in the US
could disappear due to the rise of driverless cars in the coming 25 years. According
to Bart Selman, professor of computer science at Cornell University, "in
the next two or three years, semi-autonomous or autonomous systems will march
into our society."
Selman said investment
in AI in the US was by far the highest ever in 2015, since the birth of the
industry some 50 years ago. Business giants like Google, Facebook, Microsoft
and Tesla are at the head of the pack. The Pentagon has requested $19 billion
for developing intelligent weapons systems.
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