Why China Can’t Innovate

Why China Can’t Innovate

by Regina M. Abrami, William C. Kirby, and F. Warren McFarlan

The Chinese invented gunpowder, the compass, the waterwheel, paper money, long-distance banking, the civil service, and merit promotion. Until the early 19th century, China’s economy was more open and market driven than the economies of Europe. Today, though, many believe that the West is home to creative business thinkers and innovators, and that China is largely a land of rule-bound rote learners—a place where R&D is diligently pursued but breakthroughs are rare. Read more of this post

The benefits of shale oil are bigger than many Americans realise. Policy has yet to catch up

Saudi America: The benefits of shale oil are bigger than many Americans realise. Policy has yet to catch up

Feb 15th 2014 | MIDLAND, TEXAS | From the print edition

DENNIS LITHGOW is an oil man, but sees himself as a manufacturer. His factory is a vast expanse of brushland in west Texas. His assembly line is hundreds of brightly painted oil pumps spaced out like a city grid, interspersed with identical clusters of tanks for storage and separation. Through the windscreen of his truck he points out two massive drilling rigs on the horizon and a third about to be erected. Less than 90 days after they punch through the earth, oil will start to flow. Read more of this post

The English empire: A growing number of firms worldwide are adopting English as their official language

The English empire: A growing number of firms worldwide are adopting English as their official language

Feb 15th 2014 | From the print edition

YANG YUANQING, Lenovo’s boss, hardly spoke a word of English until he was about 40: he grew up in rural poverty and read engineering at university. But when Lenovo bought IBM’s personal-computer division in 2005 he decided to immerse himself in English: he moved his family to North Carolina, hired a language tutor and—the ultimate sacrifice—spent hours watching cable-TV news. This week he was in São Paulo, Brazil, for a board meeting and an earnings call: he conducted all his business in English except for a briefing for the Chinese press. Read more of this post

Carmaking in Australia: Toyota’s move to the off-ramp signals the demise of a prized industry

Carmaking in Australia: Toyota’s move to the off-ramp signals the demise of a prized industry

Feb 15th 2014 | SYDNEY | From the print edition

WHEN Australia’s first locally made car, a Holden FX, rolled off the production line in 1948 it was greeted with an excitement that befitted a symbol of a youthful nation taking its place among advanced economies. Such was the enthusiasm for an indigenous car that around 18,000 punters paid deposits to buy one without even seeing it. Read more of this post

Manufacturing in Indonesia: On a wing and a prayer; A state aerospace firm risks forgetting the lessons of the Asian crisis

Manufacturing in Indonesia: On a wing and a prayer; A state aerospace firm risks forgetting the lessons of the Asian crisis

Feb 15th 2014 | BANDUNG | From the print edition

THEY do not look much, but they are largely responsible for saving Indonesia’s aviation industry. The ribs that fit into a section of the wings on the Airbus A380, the world’s largest passenger aircraft, are made in a corner of the sprawling factory of PT Dirgantara Indonesia (PTDI), in the Javanese city of Bandung. Along with another part, they are flown to a second factory, in Britain, where they are incorporated into the A380’s wings, which are then sent to France to be attached to the planes. Read more of this post

Corporate governance: Anything you can do, Icahn do better; The pressure on companies from activist shareholders continues to grow

Corporate governance: Anything you can do, Icahn do better; The pressure on companies from activist shareholders continues to grow

Feb 15th 2014 | NEW YORK | From the print edition

TIM COOK’S nightmare is over, but John Donahoe’s has just begun. On February 10th Carl Icahn, the godfather of activist shareholders, ended his campaign to get Mr Cook, the boss of Apple, to return some of its $160 billion cash mountain to shareholders through share buy-backs. Mr Icahn declared victory, although Apple is not handing back as much of its cash as he had wanted. His next target is eBay, which he is pressuring to spin off PayPal, its online-payments business. Mr Donahoe, eBay’s boss, has told Mr Icahn to get lost, but surely knows he cannot brush off the pugilistic investor so easily. Read more of this post

Malaysia’s Sarawak: Last of the rajahs; A powerful chief minister bows out—or does he?

Malaysia’s Sarawak: Last of the rajahs; A powerful chief minister bows out—or does he?

Feb 15th 2014 | KUALA LUMPUR | From the print edition

FEW of Asia’s elected leaders have enjoyed the power of Abdul Taib Mahmud, the chief minister of Sarawak. For 33 years he lorded it over this Malaysian state on the island of Borneo, once densely forested and still rich in oil. Mr Taib was an appropriate successor to generations of the British Brooke family, who ran the territory as their own monarchy for a century from 1841. They were known as the White Rajahs. Their 77-year-old, white-haired modern equivalent, Mr Taib, will officially retire on February 28th, passing the job to a hand-picked successor, Adenan Saten. Mr Taib, though, will probably get another comfortable job himself, retaining much influence. Read more of this post

Privatisation: The $9 trillion sale; Governments should launch a new wave of privatisations, this time centred on property

Privatisation: The $9 trillion sale; Governments should launch a new wave of privatisations, this time centred on property

Jan 11th 2014 | From the print edition

IMAGINE you were heavily in debt, owned a large portfolio of equities and under-used property and were having trouble cutting your spending—much like most Western governments. Wouldn’t you think of offloading some of your assets?

Politicians push privatisation at different times for different reasons. In Britain in the 1980s, Margaret Thatcher used it to curb the power of the unions. Eastern European countries employed it later to dismantle command economies. Today, with public indebtedness at its highest peacetime level in advanced economies, the main rationale is to raise cash. Read more of this post

South Korea’s housing market: Landlords are having to ditch a century-old rental system

South Korea’s housing market: Landlords are having to ditch a century-old rental system

Feb 15th 2014 | SEOUL | From the print edition

MOST South Korean urbanites would leap at the chance to part with $150,000 to rent a smallish flat for three years in Seoul, the capital. These days, however, most Korean landlords would spurn such a measly deposit. Read more of this post

Western Union: Finance in purgatory; The wonderful, awful business of international transfers

Western Union: Finance in purgatory; The wonderful, awful business of international transfers

Feb 15th 2014 | NEW YORK | From the print edition

ON FEBRUARY 11th Western Union’s executives glossed over a decline in earnings and revenues in an upbeat call. But a day earlier five law firms had cast light on some of its troubles when they petitioned a court to represent its shareholders in lawsuits related to dealings with financial regulators. Read more of this post

The Loch Ness consensus: Countries make macroeconomic policy by themselves for themselves. Should they?

The Loch Ness consensus: Countries make macroeconomic policy by themselves for themselves. Should they?

Feb 15th 2014 | From the print edition

“INTERNATIONAL policy co-ordination is like the Loch Ness monster,” Olivier Blanchard and Jonathan Ostry of the IMF wrote recently. It is “much discussed but rarely seen”. The oddity was sighted in New York in 1985, when the big economies conspired to weaken the dollar. It resurfaced two years later in Paris, when they decided to stop the greenback’s fall. Some also claim to have witnessed it in Washington in 2008, when the G20 group of big economies agreed to fight the financial crisis with simultaneous fiscal stimulus. Read more of this post

The growth paradox: Past economic growth does not predict future stockmarket returns

The growth paradox: Past economic growth does not predict future stockmarket returns

Feb 15th 2014 | From the print edition

EMERGING stockmarkets go in and out of fashion. They were battered during the Asian and Russian crises of the late 1990s, but then recovered to offer double-digit annual returns in the first decade of the 21st century. Since 2010, however, they have reverted to underperforming their developed-country rivals. Read more of this post

The petrostate of America: The energy boom is good for America and the world. It would be nice if Barack Obama helped a bit

The petrostate of America: The energy boom is good for America and the world. It would be nice if Barack Obama helped a bit

Feb 15th 2014 | From the print edition

“RISE early, work hard, strike oil.” The late oil baron J. Paul Getty’s formula for success is working rather well for America, which may already have surpassed Russia as the world’s largest producer of oil and gas (see article). By 2020 it should have overtaken Saudi Arabia as the largest pumper of oil, the more valuable fuel. By then the “fracking” revolution—a clever way of extracting oil and gas from shale deposits—should have added 2-4% to American GDP and created twice as many jobs than carmaking provides today. Read more of this post

The parable of Argentina: There are lessons for many governments from one country’s 100 years of decline

The parable of Argentina: There are lessons for many governments from one country’s 100 years of decline

Feb 15th 2014 | From the print edition

A CENTURY ago, when Harrods decided to set up its first overseas emporium, it chose Buenos Aires. In 1914 Argentina stood out as the country of the future. Its economy had grown faster than America’s over the previous four decades. Its GDP per head was higher than Germany’s, France’s or Italy’s. It boasted wonderfully fertile agricultural land, a sunny climate, a new democracy (universal male suffrage was introduced in 1912), an educated population and the world’s most erotic dance. Immigrants tangoed in from everywhere. For the young and ambitious, the choice between Argentina and California was a hard one. Read more of this post

Unemployment in America: Closing the gap; America’s labour market has suffered permanent harm

Unemployment in America: Closing the gap; America’s labour market has suffered permanent harm

Feb 15th 2014 | From the print edition

IT TOOK barely a month for the bubble of optimism that formed over the American economy at the start of the year to deflate. Job growth slowed sharply in December, and stayed weak in January, suggesting more than bad weather was to blame. Read more of this post

Why America Has Such A High Rate Of Payment-Card Fraud

Why America Has Such A High Rate Of Payment-Card Fraud

THE ECONOMIST RETAIL  FEB. 15, 2014, 3:25 AM

AMERICA leads the world in many categories: shale-gas production, defence spending, incarceration rates and, alas, payment-card fraud. In December Target, an American retailer, said that hackers had breached its network and stolen payment-card details of about 40m of its customers. Read more of this post