Since Xi Jinping came came to power nearly four years ago, hundreds of activists, lawyers, writers, publishers and employees of nongovernmental groups have been rounded up. Many more have been threatened and intimidated. Internet news sites have been ordered to stop publishing reports from sources that aren’t sanctioned by the state.
Julie Making reports: For five days last week, the confessions poured forth from Chinese human rights activists and attorneys rounded up last summer and held incommunicado for a year. Four men, facing trial for subversion, cowered before a court where they were represented by lawyers they didn’t choose.
A fifth person, knowing her husband was detained and teenage son under surveillance, declared her wrongs in a videotaped interview.
“As an old timer who’s been studying China since the Mao era, I have to say it’s the worst I’ve seen since then. It’s very discouraging.”
— Susan L. Shirk, chair of the 21st Century China Program at UC San Diego
China is in the midst of what many overseas scholars say is its harshest crackdown on human rights and civil society in decades. Since Xi Jinping came came to power nearly four years ago, hundreds of activists, lawyers, writers, publishers and employees of nongovernmental groups have been rounded up. Many more have been threatened and intimidated. Internet news sites have been ordered to stop publishing reports from sources that aren’t sanctioned by the state.
“I want to remind everybody to wipe their eyes and clearly see the ugly faces of hostile forces overseas. Never be fooled by their ideas of ‘democracy,’ ‘human rights’ and ‘benefiting the public.’”
— Zhai Yasmin, one of the defendants
Even as China has been touting its efforts to boost the “rule of law,” some critics of the government have vanished under mysterious circumstances in places like Thailand and Hong Kong, only to surface months later in Chinese custody, claiming rather unbelievably they had turned themselves in voluntarily. Many of those detained have appeared on state-run TV confessing to crimes before they have had a day in court.
“Xi likes to underscore his status as the new Mao Tse-tung by not giving a damn about what the major Western leaders, authors or media are saying about China.”
“As an old timer who’s been studying China since the Mao era, I have to say it’s the worst I’ve seen since then,” said Susan L. Shirk, chair of the 21st Century China Program at UC San Diego. “It’s very discouraging.”
The activists and lawyer prosecuted last week confessed to having illegally organized protests and drawn attention to sensitive cases at the behest of “foreign forces” in order to “smear the [Communist] party and attack the Chinese government.” They had erred in accepting interviews with international journalists, they added, and traveled abroad to participate in interfaith conferences and law seminars infiltrated by separatists and funded by enemies of China. Read the rest of this entry »
Apple on Tuesday said that it sold 74.8 million iPhones in its fiscal first quarter, which ended Dec. 26, up less than 1 percent from the 74.5 million sold a year ago. That represented the slowest year-over-year rate of growth for the device since it was introduced in 2007.
“There will be some speed bumps ahead until we get to the iPhone 7 mega-product cycle later this year.”
— Daniel Ives, an analyst at FBR Capital Markets
The iPhone, Apple’s flagship product, is closely watched by investors because the smartphone accounts for two-thirds of the company’s annual revenue.
In total, Apple’s revenue for the quarter was $75.9 billion, up 1.7 percent from a year ago, and lower than Wall Street forecasts of $76.6 billion. Net profit was $18.4 billion, up from $18 billion a year earlier.
Apple’s rate of growth is not set to improve anytime soon. The company, based in Cupertino, Calif., also issued a lower-than-anticipated forecast for the current quarter, which ends in March. Apple projected revenue of $50 billion to $53 billion, down from $58 billion from a year earlier and lower than the $55.4 billion forecast by Wall Street, according to S&P Capital IQ.
The results and forecast reflect how Apple, under its chief executive, Timothy D. Cook, is grappling with becoming a maturing tech company. While Apple once delivered high double-digit revenue gains on the back of soaring sales of the iPhone and other devices, growth rates have slowed as the iPhone has begun saturating the market and the company has not introduced a new blockbuster device.
Investors are already treating Apple more like a value stock than a growth stock, associating the company with predictable business results and a reliable dividend rather than runaway revenue growth.
In the period leading up to the earnings announcement, investors had lowered expectations for the quarter based on the belief that demand for Apple’s latest iPhones, the 6S and 6S Plus, had been weak. Read the rest of this entry »
Sending U.S. troops to intervene in Syria is a poorly thought out strategy that is likely to backfire.
In Senate testimony on October 27th, Secretary of Defense Ash Carter indicated that the U.S. might be taking on a more direct combat role in Syria’s civil war. Later today, President Obama is expected to announce the deployment of U.S. troops to northern Syria.
“It is time for the president to forcefully state what everyone knows to be true: the United States has no magic formula for solving the Syrian conflict…Outside involvement has fueled the multisided civil war, but failed to deliver a decisive victory for any one faction.”
— Christopher Preble, Cato’s Vice President for Defense and Foreign Policy Studies
According to Cato Institute experts, this is a terrible idea.
“Defense Secretary Ash Carter’s statement…that the U.S. military ‘won’t hold back’ from engaging in ‘direct action on the ground’ in Syria is a troubling development,“ says Benjamin Friedman, Research Fellow in Defense and Homeland Security Studies at the Cato Institute. “It does not so much indicate mission creep as continuity of flawed policy. Competing objectives burden U.S. policy: helping weak rebels overthrow Assad, which prolongs the war and aids ISIS, and defeating ISIS, which aids Assad. Until we resolve that contradiction, the value of tactical gains against either foe will be limited. We should cease helping rebels and attack ISIS alone.”
“Unfortunately, there is probably little constructive the United States can do at this point to resolve the conflict in Syria and establish a stable new government. The Obama administration, therefore, should take care not to make a bad situation worse.”
— Visiting Research Fellow Brad Stapleton
Even without U.S. ground troops, the Obama administration’s policy of continuing to fund and arm Syrian rebel groups is problematic enough, especially now that Russia is more deeply involved in backing the Assad regime militarily. According to Visiting Research Fellow Brad Stapleton, this risks getting into a messy proxy war that won’t end well for Washington. “Unfortunately, there is probably little constructive the United States can do at this point to resolve the conflict in Syria and establish a stable new government,” Stapleton writes. “The Obama administration, therefore, should take care not to make a bad situation worse.”
Many commentators have proposed imposing no-fly zones or safe zones in Syria to ease the humanitarian crisis. But, as Emma Ashford, Visiting Research Fellow, explains, this is likely to backfire. “U.S. involvement in Syria displays no strategy, no boundaries and no clear goals,” Ashford writes. “The only viable long-term solution to Syria’s problems is diplomacy. But that has been pushed to the side in favor of airstrikes and limited, ad hoc rebel training programs.” Read the rest of this entry »
China’s stock markets suffered their sharpest daily fall since the global financial crisis on Monday, with the government withholding support at a time when investors world-wide have been rattled by volatile selling in China and a slowdown in its economy. As WSJ’s Chao Deng and Anjani Trivedi report:
The Shanghai Composite Index’s loss of 8.5% by Monday’s close was its largest daily percentage decline since February 2007. Today’s performance reminded investors of an 8.5% drop on July 27, when worries mounted that authorities were pulling back on measures to prop up the market.
Monday’s performance erased Shanghai’s gains for the year, reverberated across Asia and weighed on global markets at an inopportune time for China. Next week, it will host world leaders for a memorial parade meant to show off its military power and increasing clout on the global stage. In addition, Chinese President Xi Jinping is slated to visit the U.S. next month. But a global selloff was already gathering pace by late afternoon in Asia, with European stocks and U.S. stock futures falling sharply. Read the rest of this entry »
Before Dodd-Frank’s passage, former Sen. Chris Dodd said that ‘no one will know until this is actually in place how it works.’ Today we know.
House Financial Services Committee Chairman Jeb Hensarling writes: Tuesday will mark five years since President Obama’s signing of the Dodd-Frank law, the most sweeping rewrite of the country’s financial laws since the New Deal. Mr. Obama told the country that the legislation would “lift our economy.” The statute itself declared that it would “end too big to fail” and “promote financial stability.”
“What is most disturbing about Dodd-Frank is the authority it gives bureaucrats to control huge swaths of the economy.”
None of that has come to pass. Too-big-to-fail institutions have not disappeared. Big banks are bigger, small banks are fewer, and the financial system is less stable. Meanwhile, the economy remains in the doldrums.
Dodd-Frank was based on the premise that the financial crisis was the result of deregulation. Yet George Mason University’s Mercatus Center reports that regulatory restrictions on financial services grew every year between 1999-2008. It wasn’t deregulation that caused the crisis, it was dumb regulation.
The law has crushed small banks, restricted access to credit, and planted the seeds of financial instability.
“Oversight? CFPB funding is not subject to congressional appropriations, and Dodd-Frank requires courts to grant the bureau deference regarding its interpretation of federal consumer-financial law.”
Among the dumbest were Washington’s affordable-housing mandates, beginning in 1977, that led to a loosening of underwriting standards and put people into homes they couldn’t afford. The Federal Reserve played its part in the 2008 financial crisis by keeping interest rates too low for too long, inflating the housing bubble. Washington not only failed to prevent the crisis, it led us into it.
“Before Dodd-Frank, 75% of banks offered free checking. Two years after it passed, only 39% did so—a trend various scholars have attributed to Dodd-Frank’s ‘Durbin amendment,’ which imposed price controls on the fee paid by retailers when consumers use a debit card. Bank fees have also increased due to Dodd-Frank, leading to a rise of the unbanked and underbanked among low- and moderate-income Americans.”
Dodd-Frank was supposedly aimed at Wall Street, but it hit Main Street hard. Community financial institutions, which make the bulk of small business loans, are overwhelmed by the law’s complexity. Government figures indicate that the country is losing on average one community bank or credit union a day.
“Because of Dodd-Frank, financial markets will have less capacity to deal with shocks and are more likely to seize up in a panic. Many economists believe this could be the source of the next financial crisis.”
Before Dodd-Frank, 75% of banks offered free checking. Two years after it passed, only 39% did so—a trend various scholars have attributed to Dodd-Frank’s “Durbin amendment,” which imposed price controls on the fee paid by retailers when consumers use a debit card. Bank fees have also increased due to Dodd-Frank, leading to a rise of the unbanked and underbanked among low- and moderate-income Americans. Read the rest of this entry »
MADRID—One of Spain’s “ghost airports”—expensive projects that were virtually unused—received just one bid in a bankruptcy auction after costing about €1.1 billion ($1.2 billion) to build. The buyer’s offer: €10,000.
Ciudad Real’s Central airport, about 235 kilometers south of Madrid, became a symbol of the country’s wasteful spending during a construction boom that ended with the financial crisis of 2008, the year the airport opened. The operator of the airport went bankrupt in 2012 after it failed to draw enough traffic.
Chinese group Tzaneen International tabled the single bid in Friday’s auction, Spanish news agency Europa Press said. The receiver had set a minimum price of €28 million. If no better bid is received by September, the sale will go through, the news agency said. Read the rest of this entry »
Edited from an interview with William Kazer
Julia Leung has spent two decades engaged in financial policy work for the Hong Kong government. During her time as an official, she’s seen the city’s economy whiplashed by the 1997-1998 Asian financial crisis and again by the global crisis a decade later. She has also witnessed the territory’s increasing economic links to mainland China.
In her new book The Tides of Capital, Ms. Leung examines the origins and response to financial crises of the 1990s and 2008 that shook economies across Asia and the world. The former Hong Kong Monetary Authority official and ex-undersecretary for financial services and the treasury (who also had a decade-long stint with the Asian Wall Street Journal) contends that emerging economies need a greater voice in global financial governance. China Real Time caught up with the reporter-turned-policy maker to talk about the financial challenges facing emerging nations, as well as China’s own financial and economic reforms.
In your book you conclude that the IMF and the U.S. offered up the wrong prescriptions in the Asian crisis of 1997-1998. Where do you see policy leadership headed in the future?
Twenty years ago, the world was divided between the core and the outlying periphery….Financial crises only happened in the periphery, and the core dished out advice. In 2007, financial crisis erupted at the core and rippled to the periphery. Between 2008 and 2013, the size of China ’s economy doubled in dollar terms. The U.S. grew 14% during the same period, while Europe including the U.K. still falls short of the peak reached before the crisis. Combined GDP of emerging markets now make up more than 50% of global GDP, compared to one-third in 1990.
There will have to be considerable give-and-take between the country that is still the world’s leading economy and the other important players, especially China, that are assuming a progressively more important role. In view of the economic stagnation and political infighting besetting Europe, that continent will not be playing a full part in developing and policing a series of better standards for world economic and financial governance. The world will rely ever more on a U.S.-Asian tandem for policy leadership.
You say the U.S. Congress is standing in the way of reforming International Monetary Fund quotas that would give more say to emerging markets. What will happen if there’s no reform?
The IMF is ideally positioned to provide policy leadership, particularly at times of crisis, but its effectiveness is undermined by its shareholding and governance structure, which has not kept pace with the shift in economic power to emerging markets. It is not surprising that developing countries have shown considerable frustration and exasperation with this imbalance, leading to new regional financing facilities, such as the Asian Infrastructure Bank and the New Development Bank.
When the core of the old world order continues to write rules that don’t take developing countries’ interests into account, the “peripheral” nations will use their own vast resources to start a new core…and write their own rules.
You say Asia needs to speak with a more coordinated voice. How much progress do you see here and what steps are still needed?
Even if Asia has a coordinated voice, it’s hard for it to be heard in the councils of the world power when the governance of these councils is slow to reflect shifting power. Read the rest of this entry »