Sunday, February 14, 2016
Japan economy contracts 1.4%; UK steel suffering like coal once did; Intelligent robots and the jobs threat
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.