Next in the PRC Firing Line: Hermes, Gucci?

♠ Posted by Emmanuel in , at 8/30/2021 04:36:00 PM

Even your Commie-styled Hermes Birkin bag may not save you from the Wrath of Xi.
 

Unless you've been hiding under a rock these past few months, headlines about how the PRC is cracking down on its most lucrative companies--Internet-based services, video games, online education, and the rest--have dominated business news. This crackdown is ostensibly in the name of maintaining social order--not letting inequality get out of hand, not getting young people hooked on mindless games, and so forth. This social engineering is most evident in new rules aiming to restrict hours spent by those under 18 on video games to no more than three.

So far, the largest victims of this erstwhile Xi Jinping-organized socialist putsch have been local firms. However, those feared to be next in the firing line are foreign purveyors of luxury goods. Are they next in line in being styled as "enemies of the people"?

Chinese President Xi Jinping has stepped up his call for "common prosperity," sending shudders through luxury goods vendors, which worry that China's rich will not be able to splurge on $3,000 bags.  

The fear was palpable on the stock market last week. Shares of Paris-listed Kering, owner of the Gucci brand, slumped 17%. Switzerland's Richemont, the company behind such names as Cartier and Piaget, sank 14%. LVMH Moet Hennessy Louis Vuitton and Hermes slid 13% and 8%. Makers of high-end cars were hit as well, with Porsche down 10% and Ferrari 6%.

The catalyst was Xi's call for "common prosperity" as part of "high-quality economic development" last week at a meeting of the Chinese Communist Party's Central Committee for Financial and Economic Affairs. The committee called for adjusting "excessive incomes" and redistributing wealth that has become overly concentrated in the hands of a small number of people.

Veteran China commentator George Magnus (ex-UBS) I believe has it right when he says the current crackdown has more to do with the Communist Party maintaining control than any sort of re-commitment to socialist principles. Insofar as the likes of Alibaba and Tencent were gaining more and more of the "mindshare" of the Chinese people, they posed a threat to Communist Party fealty. Hence, they had to be knocked down to size to ensure that no other gods would be placed before the Party.

My belief is that Western luxury brands are not as vulnerable for this reason: while they may symbolize the wrong things like conspicuous consumption, they do not really pose a threat to the control that the Party has on various aspects of Chinese life--political, economic, social or technological. Ironically, it's the domestic tech giants who pose more of those kinds of threats, hence the recent actions.

Is Childbearing Immoral Amid Climate Change?

♠ Posted by Emmanuel in , at 8/12/2021 06:11:00 PM

Be fruitful and multiply during the age of climate change? Think again. 

One of the most fascinating existential questions has been posed on the business news channel CNBC, of all places, as would-be parents consider the wisdom of having children. While there are climate deniers like most of the US Republican Party and other reality-challenged individuals, most reasonable people accept the premise that global temperatures are rising due to human activity. The recent IPCC report leaves us in no doubt that things are getting worse in this regard. Already, we are witnessing severe climate change negatively affecting human life. So, the question is: Does it make sense to have children who will grow up on a degraded planet?

The article is interesting in probing a number of angles on this question, the answer to which will ultimately have significant implications on the future of humanity:

1. What is the carbon footprint of raising a child?

2. How does a warming planet impact fertility rates?

3. Is it ethical to bear children knowing their quality of life will be negatively impacted by worsening climate change?   

As a Catholic educator, the third question is the most interesting one to me. The obvious "Christian" answer would be that we should not presume things will get worse: It is still within the current generation's abilities to limit the future negative effects of climate change on future generations, although that window of opportunity is rapidly closing (see Pope Francis' 2015 encyclical Laudato Si). Given the massive collective action problems we have, though--including a main political party in the world's second-largest carbon emitter the United States denying the very existence of climate change--what are the chances of global citizens clamoring and working towards improvement? As the article suggests, more thoughtful would-be parents are giving these considerations a lot of though provided the almost non-existent progress on arresting warming trends observed around the world. 

There are no easy answers going forward.