Huawei’s Soft Power Charm Offensive

♠ Posted by Emmanuel in ,, at 2/25/2019 03:51:00 PM
With the United States portraying Chinese telecommunications gear manufacturer Huawei as the devil incarnate seeking to infiltrate the rest of the world, a Huawei pushback was perhaps inevitable. But the question is, how exactly do you counter the American accusations of large-scale PRC espionage being facilitated by this seller of telecoms equipment? It appears that tactics differ based on the audience in question.

Canada, where the Huawei CFO has been detained by officials for violating US-led sanctions on Iran, is receiving ads that refrain from suggesting anything unusual is going on with Canada-PRC relations (like, say, putting Canadian citizens on death row in retribution). Soft power it is, then:
As a nasty diplomatic feud deepens between the two countries over the tech company, involving arrests and execution orders, it hasn’t gone unnoticed that Huawei’s bright red fan-shaped logo is plastered prominently on the set of “Hockey Night in Canada.” TV hosts regularly remind the 1.8 million weekly viewers that program segments are “presented by Huawei smartphones.”

The cheery corporate message contrasts with the standoff over the arrest of Huawei Chief Financial Officer Meng Wanzhou on a U.S. warrant. In what looks like retaliation, China detained two Canadians and plans to execute a third — heavy-handed tactics that, because they leave some Canadians with the impression the privately owned company is an arm of the Chinese government, give its sponsorship a surreal quality.
What's at stake here commercially speaking is substantial, and is no less than the future of technology. Huawei is advanced in the manufacture of 5G gear that will undergird the next generation of telecoms equipment. However, the United States is trying to convince everyone else that it's a "Trojan horse" for china's Communist Party to infiltrate global networks for sinister purposes.

Hence, the public relations contest is ramping up:
The TV deal is one of many examples of how Huawei, the world’s biggest telecom gear producer and one of the top smartphone makers, has embarked on a global push to win consumers and burnish its brand. It sponsors Australian rugby, funds research at universities around the world, and brings foreign students to China for technical training. It has promoted classical music concerts in Europe and donated pianos to New Zealand schools.

Its efforts are now threatened by the dispute with Canada and U.S. accusations that it could help China’s authoritarian government spy on people around the world. “Huawei’s marketing plan up until Dec. 1 (when Meng was arrested) was working very well,” said Guy Saint-Jacques, a former Canadian ambassador to China. Now, “public opinion is changing toward China and Huawei.”

At stake for Huawei are lucrative contracts to provide new superfast mobile networks called 5G. The U.S. says Meng helped break sanctions and accuses Huawei of stealing trade secrets. It also says the company could let the Chinese government tap its networks, which in the case of 5G would cover massive amounts of consumer data worldwide. U.S. Secretary of State Mike Pompeo pressed that point to European allies on a tour this week.
5G is a challenge to American technological dominance; that much is apparent from the alarm raised by US government officialdom. What I would like to know, though, is the alternative proposed by the Yanks. How can the rest of the world meet their technology upgrading needs with non-Huawei (or ZTE for that matter) gear? Are there other European, American or non-Chinese Asian suppliers they recommend instead? It seems to me that this round of technological upgrading from the American standpoint is not so much about the benefits on offer but about bashing manufactures from a particular nation. That is, the framing is almost entirely negative about the downsides of buying Chinese without identifying upsides of not doing so.

It's in this respect where Huawei can accentuate the positives for 5G adoption and contrast such a message with the relentlessly dour American vision of technological apocalypse. After all, soft power is about persuading through attraction instead of (obtuse) threats the Yanks are brandishing nowadays.

Fat-Shaming & Debt-Shaming Undisciplined Yanks

♠ Posted by Emmanuel in , at 2/20/2019 02:52:00 PM
Oink, oink: Can the archetypal American Porker-in-Chief be fat-shamed...and debt-shamed, too?
It was perhaps inevitable that the lard-assed American President Donald Trump would be medically classified as obese sooner or later. And so it was that we recently received news that he is clinically obese. In this case at least, Trump exudes the true American spirit in being really, really fat: nearly 40% of his countrymen have the same kind of bulbous, fat-laden Jabba-esque physique. In a previous post, I have made the obvious connection between American health indiscipline and fiscal indiscipline. That is, American super-indebtedness and super-obesity originate from the same place, which is a lack of self-regulation.

What is the rest of the world to do with exploding American deficits as health spending on these  fatsos shoots into orbit? The estimated annual medical cost of obesity in the United States was $147 billion in 2008 US dollars; the medical cost for people who have obesity was $1,429 higher than those of normal weight [article here]. Ultimately, the rest of the world is paying the price for American obesity when it props up American indebtedness through the purchase of US Treasuries.

An interesting suggestion in the Atlantic argues that Americans have not been fat-shamed enough, resulting in a smug self-satisfaction about wallowing in pools of cellulite. Take, for instance, the social stigmatization of smoking that seems to have done wonders for forcing many folks to quite:
People don't hate being fat enough, basically, according to Hastings Center bioethicist Daniel Callahan. In an editorial published in the Hastings Center Report, he argues that nothing -- not diets, drugs, sugeries, nor appeals to our health -- is working, and goes on to make the case for fat-shaming people until they start eating more salad.

"An edgier strategy is needed," is his (earnest and entirely devoid of irony) way of putting it. The edgy strategy he came up with entails "social pressure combined with vigorous government action." Callahan likens it to the campaign to end smoking: The combination, in his experience, of being criticized, sent outside, and taxed for his "nasty habit" was the motivation he needed to quit. "The force of being shamed and beat upon socially," he writes, "was as persuasive for me to stop smoking as the threats to my health."
Trump is famously shameless; he's a lardbucket who's insulted any number of other people as fat despite his massive girth. However, it does make for an interesting idea: if Trump is so fat because he hasn't been fat-shamed enough, can the rest of the world debt-shame the United States? While the best solution from my perspective is to simply stop appeasing these debt-addled porkers altogether to instill discipline, maybe they haven't been shamed enough about their profligate ways that's causing this debt hemorrhage.

With a 40% obesity rate or so and $22 trillion in debt and counting, the rest of the world could surely do better in instilling discipline into these undisciplined Yanks. It is no mere coincidence that both American medical and fiscal are deteriorating rapidly with their poster boy, Donald Trump.

Development Debacle: Malpass for World Bank President

♠ Posted by Emmanuel in , at 2/11/2019 09:38:00 AM
Alumni of long-gone Bear Stearns and global financial crisis denier circa 2007: Meet David Malpass.
The abrupt resignation of Jim Yong Kim as World Bank president has opened up a lot of old wounds, especially now in the Trump era. If you will recall, there was a big brouhaha over the United States still getting to nominate its president. In an arrangement that's a throwback to when Western countries dominated the global political economy, the US still gets the right to select the World Bank's leader, while the Europeans still do so for the IMF's leader. The Obama administration's choice of the departed Kim was meant to be a partial appeasement to developing countries wanting more say in a body whose activities do affect them. Sure, he was an American, but he was a Korean-American immigrant.

Let's just say that Trump is the least international and the most US-centric American leader in a long time. So, he's unsurprisingly scotched any attempts to appoint a non-white or non-American to lead the World Bank despite his suspicion of all multilateral institutions:
Kim’s abrupt resignation leaves Donald Trump with the opportunity to appoint a successor. He could turn to Bulgarian national Kristalina Georgieva, the bank’s chief executive, who will take over as interim president when Kim leaves. The much-respected official was a European commissioner and EU finance chief before moving to Washington.

Before Kim took over, the bank laid down criteria for appointing future presidents, which were designed to exclude officials with little experience of running large organisations or who lacked relevant experience, especially in the developing world. However, Trump is expected to use his effective power of veto to make sure a close adviser or a sympathetic political figure takes over.
So Trump is going ahead and contravening new World Bank presidential selection criteria by nominating someone, er, unfamiliar with running large international organizations and development work in David Malpass. This fellow is a proud America-firster like Trump:
Donald Trump confirmed his choice on Wednesday that the World Bank should be led by the US treasury official David Malpass, a Trump loyalist and critic of such multilateral institutions who has vowed to pursue “pro-growth” reforms at the global lender.

Trump’s nomination of Malpass, the treasury department’s top diplomat, is subject to a vote by the World Bank’s executive board and could draw challengers from some of the bank’s 188 other shareholding countries...

Malpass, treasury undersecretary for international affairs, has criticized the World Bank and other multilateral institutions for growing larger, and becoming more “intrusive” and “entrenched”, and targeted the bank for its continued lending to China, a country he sees as too wealthy for such aid.
Recall the last time an American president chose a controversial conservative figure to head the World Bank: George W. Bush selected the short-tenured Paul Wolfowitz, an architect of the ill-fated 2003 invasion of Iraq. Instead of blowing up other countries for no good reason, Malpass to his credit only failed to see how the Bush administration was blowing up the world economy. Malpass is a another conservative with extreme views, having been a chief economist at the ill-fated Bear Stearns who declared in so many words that there was no financial crisis brewing Stateside right before ti hit:
"Housing and debt markets are not that big a part of the US economy, or of job creation," Mr Malpass wrote before the impending economic crisis. "It's more likely the economy is sturdy and will grow solidly in coming months, and perhaps years."

The New York Times also criticised Mr Malpass for that and other Wall Street Journal articles, saying partisan bias towards Republican policy by economists had "unquestionably contributed to their forecast errors".
While it's true that other nominees may be put forward by other countries--especially developing ones--there is some doubt as to whether they would have meaningful chances at obtaining the World Bank's top job absent the support of the United States given its historical dominance of the institution. I also don't see much of a rallying cry to appoint a leader from the developing world this time. Perhaps we've become disenchanted with the whole process after what happened with Kim's victory under a far more progressive American president in Barack Obama.

Trump's worldview is prehistoric and his candidate is positively Neanderthal, but if everyone's fed up with the World Bank presidential selection process, it's going to be the same old story all over again.

Brexit or Not, London Loses Financial Centre Role

♠ Posted by Emmanuel in , at 2/10/2019 04:24:00 PM
This place used to compete with New York as the world's financial capital. No more.
I used to snicker whenever CNBC used to announce that it was broadcasting from New York, the "financial capital of the world."  In many respects, London held that honor well into the 21st century despite the United Kingdom long, long ago ceding global influence to the United States. Last year, the Global Centre Financial Index (GCFI) ranked New York ever-so-slightly ahead of London, with the rest of the pack catching up on these two.

If the end of Rule Britannia did not end London's role as the world's capital for finance, the 2016 referendum aftermath's result to leave the European Union has put paid to that status for good. You see, most of haute finance's titans circa 2019 are not sticking around to see the end of the sorry Brexit melodrama. They've had it and are packing their bags for continental Europe which is, er, actually still part of the European Union:
The world’s biggest investment banks will not reverse plans to shift billions of dollars and thousands of jobs out of the UK even if Britain ends up staying in the European Union, senior bank executives and people with knowledge of the plans revealed to Financial News.

In a big blow to the City, at least eight of the largest investment banks in London, including Bank of America Merrill Lynch, Citigroup, Goldman Sachs and JPMorgan, have said they will shift a significant proportion of their operations to Europe irrespective of the outcome of Brexit.

The move would harm the City of London’s status as a global financial centre. Banks are already preparing to move hundreds of billions of dollars from London to the continent after Brexit. Deutsche Bank is reportedly set to shift €400bn from its balance sheet to Frankfurt, while JPMorgan will move €200bn to the German city.
The marginalization of London will continue whatever the endgame for Brexit since, having already decided, banks will not be coming back whatever happens. What's more, hiring will more often occur where they will be in the future, i.e., continental Europe:
Longer term, bank executives say Brexit will change the way they recruit staff. “London would have been the natural choice to hire new bankers. Now, after the investment we’ve made in Europe, if someone leaves in the UK or we want to recruit someone, we’re just as likely to base them in Frankfurt or Paris,” said one European chief executive of a US investment bank.

Banks are unlikely to move people back in the event Brexit is overturned, said Jenni Hibbert, global practice managing partner at Heidrick & Struggles Financial Services, the recruiter. “If they do, it won’t happen overnight”, given the cost and effort involved.

The damage inflicted in the Square Mile will be permanent, said another head of investment banking. “London as a financial centre will remain, but will be severely diminished.”
Times are changing. Just as Little Englanders carried the day during the Brexit referendum, so it's fitting that the UK is left with a Lilliputian financial services sector to match its citizens' backward- and inward-looking proclivities. Frankfurt, Paris, parts unknown are calling...