Sunday, September 18, 2016

Fears rise over likely China banking crisis; Robot taxis approaching fast; Global education as civil rights struggle of our time

1 Fears rise over likely China banking crisis (BBC) Risks of a Chinese banking crisis are mounting, according to a warning indicator from the banking industry's global watchdog. A key gauge of stress in the banking sector is now more than three times above the danger level, the Bank for International Settlements (BIS) says in its latest quarterly review.

China's credit-to-GDP gap hit 30.1 in the first quarter of 2016, it said. The BIS considers a credit-to-GDP gap of 10 to be a sign of potential danger. A year ago the BIS quarterly review put the figure for China at 25.4.

The BIS calculates the gap by looking at borrowing in relation to the size of the economy, and comparing that with the long-term trend of that ratio. When the two start to diverge, the BIS argues, a banking crisis could be on the way.

The health of China's banking sector has long been a source of concern for financial markets. Since the financial crisis of 2007-2008 there has been a boom in credit as the Chinese government has attempted to spur flagging growth.

But some of that lending has not been productive and the IMF estimates that loans worth $1.3 trillion are at risk of default. However, as the Chinese banking system is largely owned or controlled by the government, analysts say it would bail out the banking sector if necessary.

2 Robot taxis approaching fast (Carolyn Said in San Francisco Chronicle) Transportation and cities are about to be revolutionized by autonomous vehicles, which will make private car ownership in cities obsolete in less than a decade, according to John Zimmer, Lyft president and co-founder.

“By 2025, owning a car will go the way of the DVD,” he wrote in an essay published on Medium. From Tesla’s Elon Musk to Uber’s Travis Kalanick to Ford’s Mark Fields, that’s a view widely shared by executives in the tech and automotive industries.

But Zimmer wants to get the point across that it’s time now to focus on how autonomous cars will change the world around them, with unneeded parking spots freeing up space for parks, pedestrians and new places for people to connect.

Zimmer said that autonomous vehicles will account for the majority of Lyft rides in five years. He expects that robot cars will be primarily accessed through ride-hailing networks like Lyft, differing from Musk, who predicts that they will be privately owned.

Transportation expert Bryant Walker Smith, a law professor at the University of North Carolina said Zimmer’s timeline for autonomous vehicles aligns with his own and those of many others. “There won't be just one approach to automated driving,” Smith said. “We could ultimately see everything from networks of robotaxis to individually owned driverless mobile homes.”

3 Global education as civil rights struggle of our time (The Guardian) Gordon Brown has described funding education in the world’s poorest countries as “the civil rights struggle of our generation”.

Almost half of the world’s children face the prospect of growing up without proper schooling unless there is a transformation in education funding, UK’s former Labour prime minister said. Brown, who heads the international commission on financing global education opportunity, said the shortage of schooling represented a ticking timebomb that could trigger new protest movements among a generation frustrated by a lack of life chances.

Presenting the commission’s findings at the UN, Brown said $30bn in additional funding was needed if the goal of ensuring every child receives a full primary and secondary education by 2030 is to be achieved.

Much of the funding will have to come from within the countries concerned, but he acknowledged more would also be needed from the international community, including institutions such as the World Bank and donor governments.

The commission estimates that by 2030, 800 million of the world’s 1.6 billion children will not get a full education, of whom 200 million children will receive no formal schooling at all. “This is the civil rights struggle of our generation. At the moment we are betraying half our future,” Brown said. “A timebomb is ticking. These young children denied an education will be a source of massive discontent in years to come.

Brown said that low and middle income countries, which spend an average of 2% of annual GDP on education, needed to raise the figure to about 5%. He also called on donor governments to divert a greater proportion of their international aid to education projects, which currently account for just 10% of expenditure.

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