Monthly Archives: October 2012

China’s new leadership faces many challenges
China’s new leadership team is due be unveiled at the Congress of the Chinese Communist Party, which begins next week in Beijing.The transition takes place against a troubled background. The economy is slowing and tensions are rising in a territorial dispute with Japan. Bo Xilai, who once expected to promoted in the reshuffle, is instead about to go on trial, and the outgoing premier, Wen Jiabao, has just been accused in the New York Times of using his position to accumulate huge wealth for his family. James Kynge, editor of FT China Confidential, and David Pilling, Asia editor, join Gideon Rachman to discuss the state of China at this crucial juncture.

Gideon Rachman

Gideon Rachman blogs on how damaging the trial of Costas Vaxevanis will be for Greece.  Read more

How important is the economy in deciding the result of US presidential elections? Is it really the case that, as in the often-repeated phrase from Bill Clinton’s 1992 campaign, “It’s the economy, stupid!”? If so then a look at history may be useful.

A lot of commentary in this campaign has concerned the unemployment rate, usually reiterating that the only president since the 1930s to win re-election with unemployment above 7% was Ronald Reagan in 1984. The argument is usually made that, with unemployment around 8%, President Obama faces a huge task to win.

2 unemployment rate

This chart is the crux of the President’s problem: three years of recovery but unemployment is still at historically high levels. The three incumbent presidents to lose – Ford, Carter and Bush senior – all went into the election with a similar proportion of the workforce without a job. Reagan’s re-election in 1984 was the exception.

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Welcome to a summary of US election coverage on a day when the advantages of incumbency will surely continue to work on behalf of President Barack Obama.

His role in supervising the clear-up of damage caused by the biggest storm to hit the eastern US in 75 years puts the president in centre shot of news footage that for at least the next 24 hours will be broadcast into every home of the US, airtime that could not be bought.

Latest polls show the presidential race is still being fought on the thinnest margins in states that have either been dealt glancing blows by Sandy – Ohio, Virginia, New Hampshire, – or know only too well what it is like to be mangled by the forces of nature – hurricanes in Florida, tornadoes in Iowa. Read more

Welcome to a storm-curtailed review of US election coverage after a day on which both President Barack Obama and his Republican challenger Mitt Romney stopped campaigning because of Tropical Storm Sandy.

As the Financial Times reports, the campaigns caught their breath as a combination of practical difficulties in travelling and organisation, and a desire not to be seen to be practising politics as usual at such a moment took hold. Mr Obama was assuming his commander-in-chief role at the White House.

Politico.com asked a question few were expecting to have to pose: could Sandy delay the election next Tuesday? Forecasting that seemed as difficult as predicting the weather.

“Whether the election can be postponed or not is a legal black hole,” said Adam Winkler, a law professor at the University of California at Los Angeles. “There’s very little precedent for such an act.”

Federal law requires presidential elections to be held on the Tuesday after the first Monday in November, but it also provides that if a state “has failed to make a choice on the day prescribed by law, the electors may be appointed on a subsequent day in such a manner as the legislature of such State may direct.”

The flooding that hit the north-eastern coast of the country, killing at least 16 people, was a disaster big enough to stop the juggernaut of campaigning, so the only non-storm news was the latest set of polling data. Read more

Alan Beattie

Just a week till presidential election day, but still time for more dialogue of the deaf about offshoring. The latest iteration was kicked off by a Romney comment (and slightly less misleading ad) wrongly suggesting that Jeep, owned by Chrysler, was moving production to China. (In fact Chrysler is restoring capacity there to service the Chinese market.) The Obama campaign has just released its response, and so another bout of breast-beating economic nationalism gets under way.

More sympathy might be due to the Obama campaign if it didn’t itself routinely equate foreign investment with sending jobs overseas, particularly its ill-advised attacks on the idea that a territorial corporation tax system would reward US companies for offshoring employment. As informed opinion on the subject routinely points out, the overall evidence is that foreign investment is a complement rather than a substitute to domestic expansion. If you want the specifics, read thisRead more

Gideon Rachman

(MIKE CLARKE/AFP/Getty Images)

Over the weekend, my son and I walked up to the Peak in Hong Kong. We set off from the wrong point, which meant that that the walk took longer than it should have – and we kept getting cut off, by private roads.

On the other hand, our circuitous route gave us the chance to stare into the front rooms, back gardens and swimming pools of some of the priciest properties in the world. For example, this modest town-house on Severn Road would set you back about $30m (that’s US). If you really want, you could spend twice that on a mere apartment in the most luxurious blocks in Hong Kong.

The downside of the incredible prices being fetched for Hong Kong property is that finding somewhere to live is increasingly tough for people on normal incomes. Now the Hong Kong government, normally noted for its laissez-faire attitude, has acted. Over the weekend it imposed a 15% stamp duty on property purchases by non-residents. Estate agents are predicting a sharp drop-off in interest from buyers from mainland China, who have been driving up prices. Read more