China’s export-led growth strategy has been very successful in providing employment for people moving from the countryside to cities, and has provided strong GDP growth, but it has weaknesses that have become more apparent since last year’s financial crisis.
That was the impression I got on my recent visit there, as noted in my column a couple of weeks ago, and it is reinforced by reading the European Chamber report on severe over-capacity in Chinese industries such as wind power, steel-making and oil refining.
The intrigues of the Murdoch family are always fascinating, especially since Rupert Murdoch wants one of his children to succeed him at the helm of News Corporation.
That makes Lachlan Murdoch’s sale this week of half his non-voting shares in News Corp, followed by a deal for his company to buy a 50 per cent share in Daily Mail & General Trust’s radio operations in Australia, an interesting event.
The financial crisis has come full circle. Having started in Florida, home of speculative property development and sub-prime lending, it is culminating in Dubai, the most fragile of the United Arab Emirates.
The ambiguity over the financial strength of Dubai, a trading entrepot that relies on Abu Dhabi, the richest of the emirates, for financial backing ended on Wednesday with the disclosure that it wants investors to agree a debt standstill at Dubai World, its flagship holding company.
My column in the FT this week is on the Cadbury takeover battle:
Silicon Valley’s commitment to shareholder democracy – or to public shareholder democracy as opposed to the influence wielded by venture capital firms – does not seem to be strong.
The news that Facebook has established a dual-class share structure, converting its existing shareholders to Class B stock carrying 10 times the voting rights of Class A shares, suggests that (despite its denials) Facebook is readying itself for an initial public offering.
There are sometimes doubts about US brands overseas and whether they enjoy the same influence and respect as they do at home. I wonder, however, whether the opposite is a bigger worry.
The thought is prompted by talking to senior executives of Starwood Hotels and Resorts, the US hotel chain that owns brands including Sheraton, Meridien, W, Westin, and St Regis.
Rupert Murdoch’s talks with Microsoft about removing his newspapers’ stories from Google, and giving the rights to index them to Microsoft’s Bing, could be a pivotal moment in internet economics.
Mr Murdoch appears to be willing to sacrifice a lot of traffic to the websites of papers such as the Wall Street Journal and The Times in return for a payment from Microsoft. In effect, he would be swapping his revenue stream from online advertising with a payment from Microsoft for drawing visitors to Bing.
My column in the FT this week is on Beijing’s rapid development:
Sitting in Qingdao at the FT Chinese annual forum, I am confronting at first hand the shift in the pattern of Chinese censorship towards social networking sites such as Facebook and Twitter.
It is easy to access media sites such as the websites of the Financial Times and the Wall Street Journal. Twittering or adding an entry to Facebook is, however, much harder.
I’ve written a piece about Rupert Murdoch’s stand-off with Google for the Weekend FT, saying he ought to stop talking about it and go ahead and charge for access to newspapers such as The Times online. You can read it and comment on it here.
Do not be quotable is probably a good motto for bankers, one that was ignored by Chuck Prince, the former chairman and chief executive of Citigroup. Now Lloyd Blankfein, head of Goldman Sachs, appears to have fallen into the same trap.
Mr Blankfein’s wry claim that Goldman is “doing God’s work” by financing companies and investors is among the most memorable things a Wall Street banker has said since Mr Prince told the Financial Times that “as long as the music is playing, you’ve got to get up and dance.”
In my FT column this week, I have written about this week’s recall of 1m folding pushchairs by Maclaren, the British company – and what we can learn from how it mishandled the event. FT.com has now introduced a comment facility on all articles so please add your comments there.
Incidentally, the most confusing thing I found in researching the piece is that the US Consumer Product Safety Commission refers to all large after-market interventions – such as Maclaren’s provision of repair kits for its pushchairs – as “recalls”, even if the product is not actually called back.
One does not need statistics to know that a lot of media companies – music labels, film studios, newspapers etc – are facing a crisis of profitability. However, the figures do bear it out.
Some new research from Deloitte has found that, while many industries suffer from intense pricing pressures and falling return on assets, the media industry is doing worst of all. In fact, the industry now has a negative return on assets of 4.4 per cent, compared with a positive 7 per cent 40 years ago.
The recalling of up to 1m Maclaren pushchairs – or strollers, as they are called in the US – must rank as one of the most sweeping ever. It affects not just a single model but all of the umbrella-folding strollers sold by the British company in the US since 1999.
Furthermore, the product recall, which comes after 12 reports of small children having their fingers amputated by the folding mechanism, affects the main selling point of the pushchairs since they were invented in 1965 – that they are easily foldable.
My column in the FT this week is on the Sage of Omaha: