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 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. 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

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

(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

If Barack Obama is re-elected on November 6, a large part of that will be down to the Latino vote. The big question for Mr Obama, then, is will enough Latinos be motivated to turn out on election day to boost his chances nationwide? Read more

The New York Times just ain’t what it used to be. It’s full of sensationalism, plagiarism and out-and-out fake news. Loyal readers are losing their faith.

Or so goes the verdict from that arbiter of fine journalism: the People’s Daily, mouthpiece of the Communist Party of China.

The People’s Daily made a crude attempt at a hatchet job on the New York Times in a lengthy opinion piece on its website on Monday. The immediate prompt was clearly the New York Times account published last Friday of how Premier Wen Jiabao’s family has accumulated “hidden riches” of about $2.7bn, though the People’s Daily refrained from mentioning that specific article.

Instead, it chose to rehash the New York Times’ two biggest reporting debacles of the past decade and various laments about how it has lost its way under the headline, “New York Times: Scandals multiply and reputation deteriorates”.

Apart from the obvious irony in the fact that the People’s Daily is trying to pass judgment about reporting standards, there is another, even more basic problem with its criticism of the Times: its words appear to have been almost entirely plagiarised.

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It may be a contest to become the most powerful human on the planet, but even the US presidential race has to bow to the might of nature sometimes. As Hurricane Sandy summoned up her powers to hammer the east coast of the US, organisers of the two campaigns hurriedly changed their plans and moved inland.

The weather is likely to have two effects, according to the US press, with practical concerns about travel and safety affecting both. But the campaign of President Barack Obama will be worse hit by a second factor, as the Wall Street Journal explains:

Today is the last day for in-person and mail-in voter registration in deadlocked New Hampshire, where the weather threatens to scuttle campaign stops planned by both camps next week. First lady Michelle Obama has canceled a Tuesday trip to the University of New Hampshire campus, which will be closed Monday and Tuesday in preparation for Sandy.

Mr. Obama’s campaign team is relying on banking votes during the early voting period in many states. Campaign aides are privately nervous about a potential disruption in early voting in Florida, North Carolina and Virginia.

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Silvio Berlusconi attends the presentation of the book "The big cheat" by Renato Brunetta (FILIPPO MONTEFORTE/AFP/GettyImages)

Following a Berlusconi trial is like going to the theatre — it is your civic right to enjoy a spectacle even though you know perfectly well the act bears no relation to reality.

Very little about Silvio Berlusconi, or about the Italian legal system, is quite what it seems. The four-year prison term to which the former prime minister was sentenced on Friday for tax fraud is a good example. There is next to no chance that he will go to jail. The likelihood that he will ever be definitively convicted of this particular offence is not much higher.

Contrary to what he and his devotees might think, the reason is not that he is a paragon of virtue. Nor is it that the Italian courts always uncover the truth in the end. It is rather that the three-tier judicial system operates so slowly that, even if a defendant is eventually found guilty in the highest appeals court, the case has been going on for so long that a statute of limitations kicks in. Read more

Welcome to a round-up of presidential election news and the quadrennial process of the “last dash for votes” stories has begun early this time around. Concepts like “momentum”, “campaign groundwork” and “heavyweight endorsements” are here to stay for the next 10 turbulent days.

Having voted in his home state of Illinois, President Barack Obama’s idea of momentum appears to consist of sitting in the Oval Office recording media interviews, while his challenger Mitt Romney has a slightly less hectic schedule than in the immediate post-debate days, with only two states, Iowa and Ohio, on his agenda on Friday. Read more

Two sets of impending economic data are likely to hit the headlines in the last days of the US presidential campaign, the first estimate of GDP for the third quarter of the year, out on Friday October 26, and the employment situation report for October, published on Friday November 2, four days before the election.

After the release of labour market data for September, President Obama’s camp made much of strong growth in hiring, up 114,000 compared with August, and a fall in the unemployment rate from 8.1 per cent to 7.8 per cent, taking the rate back to where it was when the president took office in 2009. Mitt Romney’s campaign countered that, if not for people exiting the labour market, the rate would be in double figures.

In the data due to be released there will again be enough detail for either side to claim vociferously that the economy is or isn’t recovering.

But perhaps not too much store should be given to either release. A study by the FT of revisions after initial publication shows how the data in the minds of the voters on election day may be very different when either Mr Obama or Mr Romney is inaugurated next January.

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Much of the action in China is now centred in cities you’ve probably never heard of.  Read more

The youtube video of Gangnam Style has received over 530 million views. As a point of reference, Nasa estimates that about 530 million people watched Neil Armstrong take one small step for man in 1969. What on earth is going on?  Read more

Germany’s Angela Merkel, left, with Greece’s Antonis Samaras during her Athens visit.

With Athens and the so-called “troika” of international lenders close to a deal on an overhauled bailout that would extend the programme by two years, the focus today shifts to Brussels, where talks begin on round two of the revised Greek rescue: how to pay for it.

As we reported in today’s dead-tree edition of the FT, those talks will focus on how to fill a new financing gap of between €16bn-€18bn through 2016.

Although officials have toyed with a bond buyback programme – which would have reduced Greek financing needs by purchasing debt at current distressed prices and retiring the bonds – it now looks like they’re going to focus instead on what they’ve done in the past: lowering rates on bailout loans even further to scrape together extra money. Currently, Greece borrows at 1.5 per cent more than the cost of the cash to lenders. So there’s room to cut.

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