Fortune - Is the World Big Enough for Huawei? 10min

In the first quarter of 2016, Huawei sold 10 times as many phones as Apple in Finland, according to research firm IDC. And in October it soared ahead of Samsung for the market-share lead. ... Today you can’t stride through Helsinki without encountering a ­Huawei billboard. You can’t watch Jokerit, one of the country’s top hockey teams, without seeing Huawei’s flower-in-bloom logo. And you can’t find an electronics store where Huawei’s phones don’t outnumber Samsung’s and Apple’s. ... Enter Huawei—probably the most viable contender yet to loosen the giants’ grip. It’s a 170,000-employee company with $61 billion in sales, selling telecom equipment in 170 countries. Since 2014 it has been No. 1 globally in sales of the networking equipment that underpins telecommunication systems, taking the crown from Sweden’s Ericsson. And now its goal is to dominate the market for the phones themselves. It has taken big strides toward doing just that in China and in growing swaths of Europe—helped in those Western countries by side deals with wireless carriers that have not previously been reported.

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Foreign Policy - Backing Into World War III 18min

Think of two significant trend lines in the world today. One is the increasing ambition and activism of the two great revisionist powers, Russia and China. The other is the declining confidence, capacity, and will of the democratic world, and especially of the United States, to maintain the dominant position it has held in the international system since 1945. As those two lines move closer, as the declining will and capacity of the United States and its allies to maintain the present world order meet the increasing desire and capacity of the revisionist powers to change it, we will reach the moment at which the existing order collapses and the world descends into a phase of brutal anarchy, as it has three times in the past two centuries. The cost of that descent, in lives and treasure, in lost freedoms and lost hope, will be staggering. ... Where exactly we are in this classic scenario today, how close the trend lines are to that intersection point is, as always, impossible to know. Are we three years away from a global crisis, or 15? That we are somewhere on that path, however, is unmistakable. ... Both seek to restore the hegemonic dominance they once enjoyed in their respective regions. For China, that means dominance of East Asia, with countries like Japan, South Korea, and the nations of Southeast Asia both acquiescing to Beijing’s will and acting in conformity with China’s strategic, economic, and political preferences. ... For Russia, it means hegemonic influence in Central and Eastern Europe and Central Asia, which Moscow has traditionally regarded as either part of its empire or part of its sphere of influence. Both Beijing and Moscow seek to redress what they regard as an unfair distribution of power, influence, and honor in the U.S.-led postwar global order. ... The democratic order has weakened and fractured at its core. Difficult economic conditions, the recrudescence of nationalism and tribalism, weak and uncertain political leadership and unresponsive mainstream political parties, and a new era of communications that seems to strengthen rather than weaken tribalism have together produced a crisis of confidence not only in the democracies but in what might be called the liberal enlightenment project. That project elevated universal principles of individual rights and common humanity over ethnic, racial, religious, national, or tribal differences. It looked to a growing economic interdependence to create common interests across boundaries and to the establishment of international institutions to smooth differences and facilitate cooperation among nations. Instead, the past decade has seen the rise of tribalism and nationalism, an increasing focus on the Other in all societies, and a loss of confidence in government, in the capitalist system, and in democracy. ... Both the crises of the first half of the 20th century and its solution in 1945 have been forgotten. As a consequence, the American public’s patience with the difficulties and costs inherent in playing that global role have worn thin.

The New York Times - The Parachute Generation 16min

Even as U.S.-China relations have slipped toward mutual antagonism, the flood of Chinese students coming to the United States has continued to rise. Roughly 370,000 students from the mainland are enrolled in American high schools and universities, six times more than a decade ago. Their financial impact — $11.4 billion was contributed to the American economy in 2015, according to the Department of Commerce — has turned education into one of America’s top “exports” to China. ... It is a strange historical moment when the elites of a rising power send their only sons and daughters, products of China’s former one-child policy, to the schools of a geopolitical rival. Yet the idea of a liberal Western education exerts an almost talismanic hold over China’s ruling classes. While the country’s educational emphasis on rote memorization churns out some of the world’s best test-takers, many Chinese families harbor worries that diverge sharply from those of the tiger parents of popular conception. They fret about the toll competition exacts from their coddled offspring; they wonder if their child’s creativity is being stifled. ... In 2005, only 641 Chinese students were enrolled in American high schools. By 2014, that student population approached 40,000 — a 60-fold increase in a single decade

CFA Institute - The Middle East and the New World Order 25min

The world is about to experience the greatest geopolitical transformation in at least the past three generations. The United States’ need for oil has greatly diminished, and its goals in the Middle East have changed. The United States now views the world wholly in relation to its other interests. Global and local demographics, new outsiders in the area, and a new contest shaping up between Iran and Saudi Arabia contribute to continuing instability in the Middle East. A global energy crisis could soon draw many countries into the Middle East, and a simultaneous political crisis could erode state authorities there, unleashing a new wave of violence and terrorism. ... The United States is transforming into a country with global reach but no global interests. For the 4 billion people on this planet who are utterly dependent on global trade for their well-being, this transformation is possibly the worst outcome imaginable. ... Even if the United States was convinced that its economic and physical security required international engagement, it is about to step out to lunch, and it is going to be a very, very long lunch. Just as the rest of the world needs the United States, it is leaving the building.

Bloomberg - Cracking the Case of the Counterfeit Makeup 12min

Cosmetics companies have been fighting counterfeiters for as long as they’ve been in business, but the scope of their efforts isn’t widely known. The Estée Lauder Cos., the $30 billion company that owns MAC, Clinique, and other brands, has waged an especially aggressive campaign. Since 2003 its global security team has been led by the former head of the U.S. Drug Enforcement Administration’s New York office, and it employs 42 full-time agents around the world. They infiltrate flea markets, make test purchases on EBay, and gather evidence for civil suits against counterfeiters. Increasingly, they’re coordinating with local and national governments. That includes pointing Chinese police to the country’s dingy fake-makeup factories and advising U.S. prosecutors on criminal investigations here ... Global seizures of counterfeit perfume and cosmetics jumped 25 percent from 2011 to 2013, according to a recent report by the Organization for Economic Cooperation and Development, making them a growing sector of the $461 billion annual trade in pirated and counterfeit goods. ... becoming a dealer in the U.S. no longer requires having shady contacts in Asia or smuggling suitcases through airports: Anyone with a few thousand dollars can buy contraband wholesale online and resell items individually on EBay and Amazon.com, or through more traditional channels such as flea markets, beauty salons, and mall kiosks.

Financial Times - Electric cars: China’s battle for the battery market 8min

CATL, which had capacity to produce 7.6 gigawatt hours of batteries last year according to Goldman Sachs, says that by 2020 it plans to produce more than the gigafactory, the Tesla Motors and Panasonic joint venture that opened in Nevada in January and is expected to be the largest producer in the US. That would potentially make it the biggest battery factory in the world. ... Backed by aggressive government policies —ranging from subsidies for electric vehicles to restrictions on foreign rivals — China’s battery companies are beginning to dominate an industry which has been led for three decades by South Korean and Japanese manufacturers such as Panasonic, which makes the battery cells for Tesla cars. ... As carmakers invest more heavily in electric vehicles the lithium-ion battery will be a key technology for at least the next decade ... worth $40bn by 2025 and dominated by China.

Bloomberg - The Great Nevada Lithium Rush to Fuel the New Economy 12min

Already, the four companies that in 2015 provided 88 percent of the world’s lithium can’t keep up: Lithium contract prices have increased from $4,000 per metric ton in 2014 to as high as $20,000 today. ... That’s why a host of junior entrants are scrambling to get into the game. Whoever can figure out the extraction and chemistry required to get lithium out of the ground and into batteries stands to capture a significant share of the market. But as with any commodity, it’s a precarious business. ... Lithium can be mined from rocks, as in Australia and China, but in Clayton Valley and the lithium triangle it’s extracted from briny aquifers. ... The best hope new entrants have of catching Albemarle lies in a process being developed by Tenova SpA, an Italian engineering company. This method, which strips the lithium using an ion-exchange system and returns the water to the ground, would allow companies to skip evaporation ponds, slashing production time from months to hours while yielding a higher concentration of lithium.

BBC - Murder in the Lucky Holiday Hotel 28min

Five years ago, China's most charismatic politician was toppled from power. His disgrace allowed his great rival to dominate the political stage in a way unseen in China since the days of Chairman Mao. ... All this was made possible by a murder. ... And the story of that murder begins not in China but in a British seaside town.

The Atlantic - Mexico’s Revenge 10min

The Mexico–U.S. border is long, but the history of close cooperation across it is short. As recently as the 1980s, the countries barely contained their feelings of mutual contempt. Mexico didn’t care for the United States’ anticommunist policy in Central America, especially its support of Nicaraguan rebels. In 1983, President Miguel de la Madrid obliquely warned the Reagan administration against “shows of force which threaten to touch off a conflagration.” Relations further unraveled following the murder of the DEA agent Enrique “Kiki” Camarena in 1985. Former Mexican police officers aided drug traffickers who kidnapped and mercilessly tortured Camarena, drilling a hole in his skull and leaving his corpse in the Michoacán countryside. The Reagan administration reacted with fury at what it perceived as Mexican indifference to Camarena’s disappearance, all but shutting down the border for about a week. The episode seemed a return to the fraught days of the 1920s, when Calvin Coolidge’s administration derided “Soviet Mexico” and Hearst newspapers ginned up pretexts for a U.S. invasion. ... The grandiose promise of trade is that it binds countries together, breeding peace and cooperation. This is a risible overstatement when applied generally to the world. But in the case of the countries separated by the Rio Grande, it has proved wondrously true. A generation after the signing of the North American Free Trade Agreement, the United States and Mexico couldn’t be more interdependent. Anti-Americanism, once a staple of Mexican politics, has largely faded. The flow of migrants from Mexico to the U.S. has, more or less, abated. ... But the Trump administration has come dangerously close to trashing the relationship—and, in the process, unleashing a terrifying new reality.

Fortune - Inside China’s $43 Billion Bid for Food Security 9min

Why should we care about a Chinese chemical company buying a Swiss agricultural business, however mammoth the deal might be? For starters, it’s part of a wave of global consolidation in agriculture that will put an increasingly large portion of the world’s commercial seed market—roughly 50%—under the control of a few giant multinationals. In addition to the ChemChina/Syngenta union, Dow Chemical is buying DuPont, and Germany’s Bayer is in the process of swallowing up Monsanto, perhaps the most controversial producer of genetically modified seed species. This combined $170 billion deal binge promises to have a profound impact on the future of global agriculture. ... Beyond that, ChemChina’s purchase of Syngenta provides valuable insight about China’s broader view of its future. The deal signals important trends in the country’s policy on innovation, biotechnology, intellectual property, and globalization.

The New York Times - Is China the World’s New Colonial Power? 24min

Driven by economics (a hunger for resources and new markets) and politics (a longing for strategic allies), Chinese companies and workers have rushed into all parts of the world. In 2000, only five countries counted China as their largest trading partner; today, more than 100 countries do, from Australia to the United States. The drumbeat of proposed projects never stops: a military operating base, China’s first overseas, in Djibouti; an $8 billion high-speed railway through Nigeria; an almost-fantastical canal across Nicaragua expected to cost $50 billion. Even as China’s boom slows down, its most ambitious scheme is still ramping up: With the “One Belt, One Road” initiative — its name a reference to trade routes — President Xi Jinping has spoken of putting $1.6 trillion over the next decade into infrastructure and development throughout Asia, Africa and the Middle East. The scheme would dwarf the United States’ post-World War II Marshall Plan for Europe. ... China’s relationship with Africa goes back to the 1960s, when Chairman Mao Zedong promoted solidarity with the developing world — “Ya Fei La,” as he called it, using the first syllables for Asia, Africa and Latin America. Though it was poor and mired in the chaos of the Cultural Revolution, China won new allies in Africa by finishing, in 1976, a 1,156-mile railroad through the bush from Tanzania to Zambia. Aid continued to trickle in, but there were no other big projects for nearly 30 years

The New York Times - The Online Marketplace That’s a Portal to the Future of Capitalism 4min

Shopping involves scrolling through an intoxicating admixture of goods: Commodity necessities appear next to fast fashion and knockoff apparel; extraordinarily cheap but on-trend electronics mingle with what I can only describe as global manufacturing overspill. ... These shipments were made in accordance with a bilateral trade agreement between the United States and China that originated in 2010, meant to address the rising tide of cross-border e-commerce. Items up to 4.4 pounds — more than the weight of, for example, a violin and bow — can be shipped as ePackets, at extremely low rates with tracking numbers and delivery confirmation. ... This obscure trade deal has become the quiet conduit for an explosion in a new and underexamined American consumer behavior: buying things directly from their countries of manufacture. ... Because of ePacket, and the decades-old international postal agreements that serve as its foundation, lightweight product shipments from China are heavily subsidized by the U.S.P.S. ... Wish certainly illuminates the peculiarities of international shipping, but it casts a much brighter light on the state of globalized manufacturing and commerce. In fact, it offers a somewhat convincing vision of what they might become in the near future. ... Wish wastes no such effort on concealing its international character. Its product selection feels like a churning, infinite cascade; its lack of any sort of organizing principle is part of the reason it’s so hard to stop scrolling.

Bloomberg - Why Did a Chinese Peroxide Company Pay $1 Billion for a Talking Cat? 8min

Talking Tom Cat was an instant hit, launching a franchise whose titles have reached No. 1 in more than 100 countries on the App Store. Today, almost 350 million monthly active users support the apps, and Tom’s YouTube channel has more than 2 billion views. Unlike many mobile app creators, the Logins have proved adept at turning popularity into profit. Playing Talking Tom triggers an onslaught of advertising and in-game purchase offers, and Outfit7 earns more than $100 million a year. In early 2016 the Logins decided to cash out, hiring Goldman Sachs Group Inc. to find the most lucrative deal. ... The industrialists were willing to match the Logins’ asking price of $1 billion and let their team maintain autonomy. Samo and Iza signed away their company—having never taken money from outside investors, their stake was worth about $600 million. ... It’s hard to see the synergies between a maker of chemical solvents and a digital cat perched over a toilet. And curiously, the buyer, which had recently been renamed Zhejiang Jinke Entertainment Culture Co., had revenue of only $133 million in 2016, according to Bloomberg data pulled from regulatory filings, and its gross profit was $55 million. Jinke won’t say where the money to buy Outfit7 came from. ... The deal activity can best be understood as a consequence of quirks in the Chinese stock market. In China, industrial companies trade at valuations they’d never receive elsewhere in the world. ... some may trade at as much as 100 times their annual earnings—more than four times the multiple of General Electric Co. This means they can acquire companies at what is effectively a discount. ... Chinese companies are betting that by adding game studios that have better margins than a stodgy industrial business, their stock price will rise.

The New Yorker - The World Is Running Out Of Sand 16min

Sand covers so much of the earth’s surface that shipping it across borders—even uncontested ones—seems extreme. But sand isn’t just sand, it turns out. In the industrial world, it’s “aggregate,” a category that includes gravel, crushed stone, and various recycled materials. Natural aggregate is the world’s second most heavily exploited natural resource, after water, and for many uses the right kind is scarce or inaccessible. In 2014, the United Nations Environment Programme published a report titled “Sand, Rarer Than One Thinks,” which concluded that the mining of sand and gravel “greatly exceeds natural renewal rates” and that “the amount being mined is increasing exponentially, mainly as a result of rapid economic growth in Asia.” ... Geologists define sand not by composition but by size, as grains between 0.0625 and two millimetres across. Just below sand on the size scale is silt; just above it is gravel. Most sand consists chiefly of quartz, the commonest form of silica, but there are other kinds. Sand on ocean beaches usually includes a high proportion of shell pieces and, increasingly, bits of decomposing plastic trash ... Sand is also classified by shape, in configurations that range from oblong and sharply angular to nearly spherical and smooth. Desert sand is almost always highly rounded, because strong winds knock the grains together so forcefully that protrusions and sharp edges break off. River sand is more angular. ... Aggregate is the main constituent of concrete (eighty per cent) and asphalt (ninety-four per cent), and it’s also the primary base material that concrete and asphalt are placed on during the building of roads, buildings, parking lots, runways, and many other structures. A report published in 2004 by the American Geological Institute said that a typical American house requires more than a hundred tons of sand, gravel, and crushed stone for the foundation, basement, garage, and driveway, and more than two hundred tons if you include its share of the street that runs in front of it. A mile-long section of a single lane of an American interstate highway requires thirty-eight thousand tons.

The Atlantic - How to Deal With North Korea 26min

Kim’s regime may be evil and deluded, but it’s not stupid. It has made sure that the whole world knows its aims, and it has carried out public demonstrations of its progress, which double as a thumb in the eye of the U.S. and South Korea. The regime has also moved its medium-range No-dong and Scud missiles out of testing and into active service, putting on displays that show their reach—which now extends to South Korean port cities and military sites, as well as to the U.S. Marine Corps Air Station in Iwakuni, Japan. ... In short, North Korea is a problem with no solution … except time. ... True, time works in favor of Kim getting what he wants. Every test, successful or not, brings him closer to building his prized weapons. When he has nuclear ICBMs, North Korea will have a more potent and lethal strike capability against the United States and its allies, but no chance of destroying America, or winning a war, and therefore no better chance of avoiding the inevitable consequence of launching a nuke: national suicide. Kim may end up trapped in the circular logic of his strategy. He seeks to avoid destruction by building a weapon that, if used, assures his destruction.

Fortune - You’ve Never Heard of HNA Group. Here’s Why You Will. 12min

HNA Group, headquartered in Hainan in southern China, still lacks the brand-name status it eagerly seeks. That’s despite the fact that it has plowed tens of billions of dollars into buying up foreign assets since 2015, on every continent—including $5.66 billion in just the past six months, according to the tracking firm Dealogic. By the company’s estimation, its investments in the U.S. alone have reached $35 billion. ... Over the past two years, about $1 trillion has flowed out of China, as Chinese individuals and companies, having made fortunes at home and with state-owned banks willing to lend, invested elsewhere. ... In the case of HNA, its executives have crisscrossed the globe in a frenetic buying spree, making deals through a labyrinth of subsidiaries in China and abroad. The purchases have included household names for Americans and Europeans. Among them are Minnesota-based Carlson Hotels—owner of the Radisson and Park Plaza hotels—which HNA bought outright last December for an undisclosed sum. In March of this year, it bought 25% of Hilton Worldwide Holdings, the hotel group, from Blackstone for $6.5 billion. And in May it increased its stake in Deutsche Bank to become its biggest shareholder, with its stake worth about $3.7 billion. ... When he began, HNA’s sole operation was Hainan Airlines, a startup carrier which had exactly two airplanes. (HNA is a rough acronym for Hainan Airlines.) It was funded by the province’s government in an effort to lure tourists. One crucial early backer was hedge fund legend George Soros, who took a 25% stake for $25 million, which he later raised to $50 million.

California Sunday Magazine - To Catch a Counterfeiter 13min

Counterfeiting is a $400 billion industry in China. Factories churn out real Nike shoes just a handful of subway stops from illicit markets selling fake ones, and counterfeit versions of the latest iPhone are hawked in the Shanghai airport before the real ones reach many rural Americans. There are real car dealerships selling knockoff cars and fake Apple Stores where the employees aren’t in on the scam. And black-market goods are a lucrative export, too: China sends millions of pairs of counterfeit shoes to the EU and billions of dollars’ worth of counterfeit pharmaceuticals to Africa and Southeast Asia. ... The Pinkerton Agency got its start fighting counterfeiting nearly 170 years ago when Allan Pinkerton, a Scottish immigrant, busted a gang manufacturing fake money along the Fox River in Illinois. Abraham Lincoln credited the young agency with foiling an early assassination plot that was to take place during the train ride to his inauguration. Throughout the Civil War, the president relied on Pinkerton detectives to handle tasks now performed by the FBI, Secret Service, and CIA.

Bloomberg - A Baccarat Binge Helped Launder the World’s Biggest Cyberheist 11min

As big as it was, the heist could have been a lot bigger. The hackers originally intended to funnel $951 million of Bangladesh Bank’s money into phony accounts, according to various investigations. Via Swift, they fired off a series of messages to the New York Fed to do just that. The theft of the full amount was only averted because, after the initial payments had been made, several transactions were flagged “for sanction compliance review,” ... Since then, Philippine authorities have recovered almost a fifth of the stolen money and returned it to Bangladesh, but most of the rest, after flowing through a series of accounts, a ­money-transfer company, and into local casinos, disappeared into the muggy Manila air. ... All but cut off from the world and hamstrung by sanctions imposed by the United Nations, the U.S., South Korea, and Japan, North Korea needs convertible currencies to finance imports, among other things. It uses a shifting array of agents, shipping companies, and brokers to bring in illicit cash