Posts Tagged ‘World Economic Forum’

India’s Economy Beats China

June 15, 2018

(Photo by Mikhail MetzelTASS via Getty Images)

Modi’s Indian economy expanded at an annual rate of 7.7% in the first quarter of 2018, compared to 5.6% a year ago, as manufacturing and investments picked up steam. Meanwhile, China’s economy expanded at an annual rate of 6.8% over the first quarter of 2018, the same as a year earlier — see Table 1

By  Opinions expressed by Forbes Contributors are their own.

Table 1

Economy Expansion Rate

Month India China
July 2017 5.6% 6.8%
January 2018 7.0 6.8
May 2018 7.7 6.8

Source: Tradingeconomic.com 6/12/18

What’s behind this metric? The growth stages the two economies are in.

India’s economy is still in an early growth stage, where there’s still plenty of excess resources. Therefore, it can grow by better utilizing these resources with conventional technologies. China’s economy, by contrast, is in an advanced growth stage, operating close to full capacity. Therefore, it can no longer grow by using conventional technologies. It must innovate, and that isn’t easy given China’s current economic structure where most of its economic sectors are controlled by the government.

That could explain why India’s economy is beating China in another metric: competitiveness. In the last four years, India gained 20 points in the World Economic Forum’s (WEFR) Global Competitiveness rankings, while China’s ranking remained roughly unchanged — see Table 2.

 

Table 2

Competitiveness Rankings For Selected Years

Year India China
2010 49 29
2012 56 26
2014 60 29
2016 55 28
2018 40 27

Source: Tradingeconomic.com; World Economic Forum

Rising competitiveness hasn’t been sufficient to help India close its current Account gap. For the fiscal year 2016-17, India’s current Account deficit remained 0.70% of GDP. Meanwhile, China recorded a current Account surplus of 1.30% of GDP.

This means that Indians continue to live beyond their means, while Chinese live below their means.

This is situation that could spell trouble for India’s currency and financial markets, as U.S. interest rates are rising and foreign capital flows back from emerging markets to the U,S.

Financial markets have taken noticed, with dollar denominated Indian ETFs underperforming Chinese ETFs—see Table 3.

Table 3

Dollar Denominated ETF Performance

Index/Fund 12-month Performance 2-year Performance
IShares China (FXI) 19.57% 46.12%
iShares S&P India 50 (INDY) 4.72 17.91%

Source: Finance.yahoo.com /6/12/2018

https://www.forbes.com/sites/panosmourdoukoutas/2018/06/14/indias-economy-beats-china/#5e2e0d343e78

Advertisements

The Secret to Winning The Trade War

May 24, 2018

Authored by Valentin Schmid via The Epoch Times,

Liberalize domestic trade to compete in international trade…

 

In early 2018, the gloves finally came off: The United States started to punish China for its unfair trade practices and threatened allies, like Europe and Canada, for their uneven trade policies. Since then, trade has been dominating the headlines, with threats and counterthreats from the opposing sides.

But the bluster is distracting the world from the fact that we’re in an outdated paradigm, and a major solution could be fairly simple.

For the current trade paradigm, when viewed from inside the complex, rigid, and bureaucratic international trade system that is the World Trade Organization (WTO) and the different domestic institutions tasked with managing trade, the Trump administration’s move to escalate the trade war is entirely understandable and justified.

According to the – severely flawed – rules of the game, China is exploiting the United States’ and Europe’s relatively free-trade policies to officially pursue its policy of complete domination of all industries. Europe and the rest of Asia are trying to gain an edge over the United States, although they are more interested in fair trade in principle than China.

For the United States, the tolerance of such trade practices resulted in persistent trade deficits with the rest of the world worth hundreds of billions of dollars, the loss of millions of manufacturing jobs, and trillions in international debt obligations. On the flip side, it also increased profit margins for multinational American corporations who produce abroad to sell in the United States, and it lowered prices of gadgets (some productive, many useless) for consumers.

So the Trump administration’s plan is to level the playing field by more or less getting even with tariffs on inbound goods, which are, on average, 10 percent in China, 4.8 percent in the European Union, and 3.5 percent in the United States. Those tariffs may be a simplified proxy of the complex trade barriers every country manages, but they do provide a good estimate of how much a country is really interested in free trade.

Whether the increase of tariffs will ultimately work remains to be seen. China has more to lose but can also suppress discontent much more easily than the United States, where some states and industries will mobilize politically to defend the status quo once they suffer from retaliatory measures.

Liberalize Domestic Trade

A cursory glance at the WTO proceedings for applying tariffs and counter-tariffs as well as the many unintended consequences of managed trade, even if they are pro-American, show that this problem needs to be solved at a higher level, outside the paradigm of government-managed trade.

The solution is to radically liberalize trade, but not only internationally—the liberalization of domestic trade is more important.

Domestic trade? Mainstream economics and the mainstream media have indoctrinated us to believe that only nations trade. However, as with all aggregate economic statistics, this is nonsense. It is private companies and private individuals who trade, and it doesn’t really matter whether this is domestic or international.

If I order a couple of bars of Cailler Frigor Swiss chocolate on Amazon, I do the trading with the company that ships them to me from Europe through Amazon. I send them money, and they send me the product.

But the same is true if I buy a couple of domestically produced bars of Hershey’s—much cheaper but certainly not as good—from Amazon here in the United States.

Goods or services are exchanged for money, whether domestically or internationally. Every tax, tariff, or regulation that stands in the way of these transactions is hindering trade.

For domestic trade in the United States, the most important barriers to trade between individuals and companies are taxation on buying and selling goods and services (sales tax) and, more importantly, taxation on selling labor services (income tax).

Capital gains taxes and taxes on dividends stand in the way of the free flow of capital. The corrupt fractional reserve fiat money system under the management of the Federal Reserve further prevents capital from finding the right places to invest, leading to overcapacity in sectors like real estate and a complete lack of infrastructure investment, to cite just one problem.

Add to this other regulations that limit or prohibit commercial transactions, especially in the labor market, and you get the picture that domestic trade is severely crippled and operating far below its potential.

It is ironic that most of the people who are ostensibly pushing for the liberalization of international trade—in reality, they merely want regulations to favor them—are most against the liberalization of trade domestically.

If the potential of domestic trade were fully unleashed, the United States would not have to worry about 10 percent average tariff rates in China or exports to China at all, because domestically produced goods could easily compete with products coming from a semi-state planned, developing economy. Without the tax and regulatory costs, even solar panels produced in the United States would be cheaper and better than the state-subsidized products from China.

State planning is less efficient and effective than the operation of free markets; therefore, China cannot win the game in the long run, just as the Soviet Union could not win it, nor Japan, whose markets were very heavily managed by the state during its boom years. Of course, this does not mean China could not score some victories here and there by dumping some products on the U.S. market virtually for free and undermining an industry. Nothing is perfect. But the costs of China doing so would be even higher than they are today and would deplete the country’s resources in the long term.

As a result of liberalized domestic trade, people and companies in the United States would either produce domestically, because the added cost of taxation and regulation would be much lower, if not removed entirely, or trade with countries who are interested in real free trade. The ideal scenario would be that almost every product that now comes from China would be produced for the same price or less domestically, so no international trade tariffs would be necessary.

Interestingly, the Trump administration is also pushing in this direction, and its tax cuts and deregulation are going in the right direction considering the starting point of illiberal domestic trade. However, if the United States wants to compete with hostile foreign players like China, taxes and regulation need to all but disappear.

Stuck in the Middle

At the moment, the United States occupies an awkward middle ground. Its international trade policies are relatively free compared to its competitors, and so are its national trade policies and regulations—and this is why the United States is still the most competitive large economy, according to the World Economic Forum (WEF) Global Competitiveness Index.

However, as job losses and the increase in debt have shown, U.S. domestic trade is not free enough to compete with hostile actors like China in the short term. This is the main risk of the free domestic trade strategy.

When unnecessary regulations, taxes, and tariffs are scrapped, there is bound to be some volatility as the economy adjusts to the freer environment. A hostile actor like China could use this adjustment period to move in and buy up companies and intellectual property.

Maybe this is why the Trump administration’s strategy of domestic liberalization and international interventionism could be just right for the time being, although both domestic and international barriers to commerce have to be removed eventually.

Many countries in the top 10 of the WEF competitive index who also rank highly in the enabling trade index, most notably Singapore (No. 1) and Hong Kong (No. 3), had their adjustment periods a few decades ago and are thriving with free domestic and international trade. They are international trading hubs and have relatively benign tax and regulatory regimes.

Both countries also have relatively balanced trade, with Singapore averaging a small surplus since the 1950s and Hong Kong a small deficit.

At the end of the economic cycle and in the long run, trade should always be balanced. By liberalizing domestic trade and unleashing the full productive capacity of the economy, the United States could achieve this goal and avoid trade wars.

ECB minutes highlight policymakers’ fears over currency wars — Is the Trump administration was deliberately trying to engage in currency wars?

February 22, 2018

Image may contain: skyscraper, sky and outdoor

Claire Jones in Frankfurt
Financial Times (FT)

The extent of European officials’ concerns over the weakness of the dollar was laid bare on Thursday in a set of European Central Bank accounts that highlighted fears that the US administration was deliberately trying to engage in currency wars.
The accounts of the ECB’s January monetary policy vote also reveal that the governing council’s hawks pushed for a change in the bank’s communications, saying economic conditions were now strong enough to drop a commitment to boost the quantitative easing programme in the event of a slowdown.Mario Draghi, ECB president, last month hit out at US Treasury secretary Steven Mnuchin’s claim that a weak dollar was good for the American economy, saying Washington needed to uphold the rules of the international monetary system, which forbid nations from deliberately devaluing their currencies.

.
Image result for Mario Draghi, photos

Mario Draghi

The remarks were seen as a signal that the US could ditch its strong dollar policy — and in so doing damage euro exports and lower imported inflation. US President Trump has since reaffirmed the strong dollar policy.

The accounts of the January ECB meeting, published on Thursday, show Mr Draghi’s fears were widely shared among the bank’s decision makers. “Concerns were . . . expressed about recent statements in the international arena about exchange rate developments and, more broadly, the overall state of international relations,” the account said. “The importance of adhering to agreed statements on the exchange rate was emphasised.” Those agreements explicitly rule out competitive devaluations.

The volatility in the euro was, the account said, “a source of uncertainty which required monitoring”.

The decline in the greenback following Mr Mnuchin’s remarks led the euro to soar to $1.25 in the days following the January 25 meeting of the ECB. The euro is now trading below $1.23.

The minutes highlighted dissent over the bank’s communications on its policy intentions, an element of what policymakers dub “forward guidance”.

The dissent was over the ECB’s promise to boost QE should economic conditions disappoint or financial conditions worsen.

“Some members expressed a preference for dropping the easing bias regarding the [QE programme] from the governing council’s communication as a tangible reflection of reinforced confidence in a sustained adjustment in the path of inflation,” the account said. “However it was concluded that such an adjustment was premature and not yet justified by the stronger confidence.”

The central bank is now buying €30bn of bonds a month under the €2.5tn QE programme.

.
https://www.ft.com/content/40eecbfa-17cc-11e8-9376-4a6390addb44

Related:

U.S. GDP Grew 2.6% at Year End, Extending Strong Stretch — Federal Reserve predicts 2.5% growth again in 2018

January 27, 2018

Image may contain: 2 people, suit

U.S. President Donald Trump at the World Economic Forum in Davos, January 26, 2018

.

By Josh Mitchell
The Wall Street Journal
Updated Jan. 26, 2018 3:32 p.m. ET

Eight years into what has been an unexpectedly slow expansion, the U.S. economy appears to have picked up steam.

Business executives have reported solid quarterly earnings in recent weeks and pointed optimistically to investment and hiring plans for 2018, supported in part by federal tax cuts. Stock prices keep churning higher. And on Friday the Commerce Department reported that U.S. economic output remained on an above-trend path in the final three months of last year.

Gross domestic product—the value of goods and services produced in the U.S.—rose at a 2.6% annual rate in the fourth quarter, the government said. That didn’t match the second and third quarters’ above-3% growth rates, but it exceeded the 2% average that has prevailed since the early 2000s. Output grew 2.5% in 2017 as a whole, the most in three years, and the Federal Reserve predicts 2.5% growth again in 2018.

That puts the economy in unusual territory: not quite booming, but still gaining momentum deep into an expansion. The growth cycle that began in mid-2009 already ranks as the third-longest ever and is set to become the second-longest this spring. Rather than fizzling, the expansion is being spurred on by robust consumer spending and business investment. It isn’t near the vigor of the late 1990s, but that was the last time growth clearly accelerated this deep into an expansion.

“We don’t have a lot of history to guide us here,” said Richard Moody, chief economist of Regions Financial Corp. “It is unusual to see what looks to be a strong acceleration this late in the cycle.”

Related

  • Heard on the Street: Why Consumers Can’t Keep Driving the Economy
  • Fourth-Quarter GDP At a Glance
  • How Hurricanes Hurt and Helped
  • Durable-Goods Orders Rose 2.9% in December
  • U.S. Employers Slowed Pace of Hiring in December
  • Tax Incentive Puts More Robots on Factory Floors

Investors cheered the latest evidence of an economy that won’t quit, driving up the Dow Jones Industrial Average by more than 100 points, or 0.4%, at midday.

President Donald Trump has pledged to return the economy to a growth rate of 3% or more, pinning his agenda on a $1.5 trillion tax cut he signed into law last month, a rollback of environmental, labor, financial and other regulations, and tougher trade positions. By Mr. Trump’s standard, growth didn’t measure up in the fourth quarter, but the pickup that has played out over the past nine months still has given the president something to boast about.

“There has never been a better time to hire, to build, to invest and to grow in the United States,” he said to business and political leaders in Davos, Switzerland Friday. “America is open for business and we are competitive once again.”

While many economists anticipate a further pickup this year, many also say 3% will be difficult to achieve over the long haul given an aging population and meager productivity growth.

Several developments are helping the economy perk up. Among them: Synchronized global economic growth and renewed investment spending by U.S. firms, who had spent years hunkering down. Those factors have converged with low unemployment, tame inflation, low interest rates and a booming stock market to bolster business and household optimism and spending.

Shelving manufacturer B-O-F Corp. of Aurora, Ill., spent about $750,000 to combine two factories into a larger, single plant that opened this year. The company, which builds slanted shelves in cases at grocery and convenience stores, is aiming to boost production capacity by a third with the new plant.

Jamie Knorring, B-O-F’s president, credits the rebound in the housing market with his company’s good fortune, including a fourth quarter that was the company’s best ever.

“When they’re building more houses, they need to build more stores,” he said, adding the company plans additional factory upgrades and equipment purchases this year.

The global upswing is driving sales for Rockwell Automation Inc., the Milwaukee-based maker of factory software and hardware, as companies in a range of sectors look to boost productivity. Rockwell said this week its fiscal first-quarter revenue jumped 7% to $1.6 billion, driven by sales to heavy industry and energy companies.

Through Friday, 26% of S&P 500 companies have reported quarterly results, and out of those 76.69% beat earnings-per-share expectations. The current growth rate for earnings compared with last year is 12.3%.

Firms that earlier in the expansion focused on boosting payrolls while labor was cheap now appear to be renewing investment in facilities and equipment.

Employees perform quality control inspections on 2018 Honda Accord vehicles.Photo: Ty Wright/Bloomberg News

Stronger domestic demand prodded Heartland Produce Co., which sells fresh fruits and vegetables to grocers in the Midwest, to recently add 4,000 square feet to its warehouse in Kenosha, Wis.

“With the economy being stronger and unemployment being low, people have more buying power and they’re spending it at the store,” Heartland President Bill Dietz said in an interview. He said his company might look at opening another facility this year.

Investment in business equipment expanded at an 11.4% annual rate in the fourth quarter after a 10.8% growth rate in the third, the best six-month stretch since a burst of activity in mid-2014, Friday’s economic-output report showed.

While they were investing more, businesses pared back their inventories in the fourth quarter, which helped to reduce output. Inventory rebuilding could boost output in the months to come.

Consumers are driving growth, too. Consumer spending rose at a 3.8% rate in the period, an increase last exceeded in late 2014. Spending on long-lasting items known as durable goods rose at a 14.2% rate, the fastest pace since 2009.

David Alter, 34 years old, spent much of the past decade building his savings and investing in stocks. In December, he bought a car and a second home, in Orlando, Fla., where he just started a new job as a technology manager for a major theme-park company. He said the new job coupled with a big rise in technology stocks he owns gave him the confidence he needed to take on a second mortgage, a fixer-upper for which he just bought a new heating and ventilation system.

“I feel very good on how things are performing,” he said of the economy. “But it does make me worry like when that’s going to stop. It can’t ride up forever.”

There are other reasons for caution. A chunk of the fourth quarter’s growth likely reflected a temporary boost in spending related to a pair of hurricanes that ripped through Texas and Florida last summer. Spending that was halted by the storms—such as restaurant visits by consumers and construction—was simply pushed back into the year’s final stretch. Likewise the storms spurred a temporary boost in spending on repairs and replacement items, like cars.

The global upswing is a two-edged sword for the U.S. Exports are rising, but so are imports. So while consumer spending is on an upswing, many of the goods Americans are buying are being produced abroad. That runs against Mr. Trump’s “America First” agenda. A widening trade deficit subtracted more than a percentage point from growth in the fourth quarter, the Commerce Department said. That came even though the dollar has weakened, a development that should be improving the U.S. trade position by making imports more expensive and exports cheaper.

—Andrew Tangel contributed to this article

Write to Josh Mitchell at joshua.mitchell@wsj.com

https://www.wsj.com/articles/u-s-economy-grew-at-2-6-rate-in-fourth-quarter-1516973505

Opinion: Donald Trump unmasks World Economic Forum in Davos

January 26, 2018

There was not really anything essentially new in US President Donald Trump’s speech in Davos. But his appearance there highlighted the well-known restrictions of the World Economic Forum, DW’s Andreas Becker writes.

Donald Trump in Davos

There had been massive speculation about the much-anticipated speech of the US president on the final day of the World Economic Forum in Davos. Would he make any concessions? Praise the merits of free trade and multilateral treaties?

After all, participants at the forum had been meeting to help shape a joint future in a fractured world, according to the event’s motto, which was seen by many as a deliberate broadside against Donald Trump’s policy agenda.

But, after his 15-minute address, it was obvious that Trump had said what he’d been saying all along. He lauded his own policy, which he said was behind increased employment and economic expansion in the United States. He emphasized that the interests of his own nation were his top priority, adding that every other national leader in the room would also be well advised to care primarily about their own countries’ interests.

Trump insisted that there would be no free trade without fair accords. Nor did I hear anything new when he talked about migration, North Korea or Iran.

DW correspondent Andreas Becker

.

DW correspondent Andreas Becker

The president just didn’t want to let his audience get distracted from his main message: Invest in the US! He repeatedly encouraged business and finance leaders to seize the opportunity and do more robust business in the United States. By the way, I’ve seen many other heads of state and government touting their countries as good business locations too.

But Trump’s campaign to attract investments is absolutely straightforward and direct. “America is open for business,” he said, mentioning the benefits of tax cuts, cheap energy and less red tape.

Applause, applause!

World Economic Forum founder Klaus Schwab praised Trump’s recent tax reform, saying it would provide a boost to the global economy. He didn’t mention that the International Monetary Fund keeps forecasting that this boost will be short-lived, with the resulting budget deficits bound to cause massive problems. Other business leaders also lauded Trump’s tax breaks for companies, including Siemens CEO Joe Kaeser.

Trump’s speech revealed once more what all the debates about wealth inequality, cryptocurrencies, artificial intelligence, science and culture weren’t able to conceal: The annual Davos forum in essence remains a gathering for investors out to do brisk business. All the rest, while being important, only seems to be a sideshow.

Schwab is no doubt right in saying how important multilateral cooperation and accords are in today’s world. Trump’s take — that the world is improving as long as companies are in good shape — is unfit for meeting global challenges such as climate change and controlling migration flows.

There are only casual talks in Davos about such issues, with the tough fight for solutions and agreements taking place at less-glamorous summits at the United Nations and elsewhere.

The World Economic Forum is out to improve the state of the world — or so it says. But it’s definitely not half as important as it wants to make us believe.

http://www.dw.com/en/opinion-donald-trump-unmasks-world-economic-forum-in-davos/a-42326642

Donald Trump came to Davos with a mission to reassure

January 26, 2018

BBC News

Donald TrumpImage by EPA

Few people knew what to expect.

Would this be belligerent Trump – wagging his finger at the global elite about how divorced they were from reality, from what people really want?

Or would this be conciliatory Trump, setting a different tone? We heard the second.

The president touched many of the World Economic Forum’s erogenous zones. But many were not quite sure how to take it considering the pit bull they were expecting.

He talked about the voices of the forgotten – a constant theme here among the “super-haves” who are coming to a creeping realisation that the system has to change if faith in the capitalist system is to endure.

He talked about economic success being about more than the sum of production, it was about the “sum of its citizens”.

Businesses, he argued, had to remember their obligations to the people who worked for them.

Critics will pick at the easy holes. For example, on those income tax cuts it’s the wealthy who will gain more.

And the business tax cuts are far larger than those for middle-income Americans.

Mr Trump said that America First did not mean America Alone. It was the key line of the speech.

Fair trade, not trade war

And it was a message echoed by other leading members of the White House power pack here, including Gary Cohn, the president’s chief economic adviser and head of the US National Economic Council.

This is all about trade and the US approach.

The fear was that America under Mr Trump would throw up a series of trade barriers, increasing protectionism at a time when most government leaders at Davos – Narendra Modi of India, Justin Trudeau of Canada and Emmanuel Macron of France – were preaching the gospel of globalisation.

But today we heard a more nuanced manifesto. America, Mr Trump said, did not want a trade war, it wanted fair trade.

Which may come as a surprise to countries like South Korea, smarting this week following the imposition of tariffs on US imports of solar panels and washing machines.

Mr Trump’s argument is this:

The rules of the free trade world were built after the Second World War when America’s economic interests were rooted in the successful development of other countries’ economies.

These countries then became eager customers for American products.

That equation has changed. China is a much more powerful economy.

Donald Trump at DavosImage copyrightAFP

The Asian emerging markets, South America and Europe all now have much more muscular dogs in the fight for global trade.

Mr Trump said state planning, intellectual property theft and industrial subsidies were the new weapons of trade wars – and used against America.

“Fair and reciprocal trade” is the new US mantra.

And if the administration feels it does not receive such treatment, the president will act – for example, by passing an executive order pulling the US out of the Trans-Pacific Partnership, the 12-nation Asian trade deal.

Mutual benefit

It’s a message that has not fallen on stony ground here.

“I don’t think it’s inappropriate that we re-look at some of the treaties that were so asymmetric,” Larry Fink, the chief executive of investment company BlackRock, told me.

“Some of these countries now are very strong and very developed. It’s going to be a long game.

“The world is benefitting by global trade and we need to find ways of creating more global trade to benefit more humanity worldwide,” he said.

America is still a trading nation, one which gains far more economically from globalisation – world trade – than it does from protectionist measures.

And that brute economic truth means that Mr Trump has to play a different tune here – to the business leaders and investors who decide where to place their cash – than maybe to the left-behind voters of the US rust belt.

So the president said that America was ready to do bilateral deals that would be “mutually beneficial”.

He even suggested a re-engagement with the TPP. On trade, this was Trump 2.0.

The politics might have been angry in the past, but today, economic reality softened the president.

http://www.bbc.com/news/business-42833765

Davos: Trump calls on world to confront Iran’s ‘support for terrorists’

January 26, 2018

DAVOS: President Donald Trump on Friday called on world powers to do more to confront the threat posed by Iran due to its alleged support for terror groups.
.
He was addressing the World Economic Forum in Davos, a gathering of generally pro-free-trade political and business leaders.
.
“We continue to call on partners to confront Iran’s support for terrorists and block Iran’s path to a nuclear weapon,” Trump told the forum.
.
Trump also called for “maximum pressure” to de-nuke the Korean Peninsula.
.
The US president, in his debut appearance at the forum, said that the US was open for business, clarifying one of his campaign mantras.
.
“America First does not mean America alone,” he said. “The world is experiencing the resurgence of a strong and prosperous America. America is open for business and we are competitive once again.”
.
Trump said that the United States was more attractive than ever to foreign investment under his year-old presidency.
.
But he warned: “We cannot have free and open trade if some countries exploit the system at the expense of others.
.
“We support free trade but it needs to be fair and it needs to be reciprocal. The United States will no longer turn a blind eye to unfair economic practices.”

WATCH DONALD TRUMP ADDRESSING THE WORLD ECONOMIC FORUM

Soros to Google and Facebook: ‘Your days are numbered’

January 26, 2018

AFP

January 26, 2018
.
Image may contain: 1 person

Hungarian-born billionaire investor George Soros. (AFP FILE PHOTO)

 

Billionaire investor George Soros launched a scathing attack on tech giants at the Davos summit on Thursday, calling them monopolies that could be manipulated by authoritarians to subvert democracy.

During an annual dinner he hosted at the World Economic Forum held this week in the Swiss alpine resort, Soros turned his sights on a host of subjects, including United States President Donald Trump and the speculation frenzy surrounding the cryptocurrency, bitcoin.

But much of the Hungarian-born financier’s ire was reserved for the tech giants of Silicon Valley who, he asserted, needed to be more strictly regulated.

“Facebook and Google effectively control over half of all internet advertising revenue,” the 87-year-old told diners during a speech.

“They claim that they are merely distributors of information. The fact that they are near-monopoly distributors makes them public utilities and should subject them to more stringent regulations, aimed at preserving competition, innovation, and fair and open universal access,” he added.

He predicted that tech giants would “compromise themselves” to access key markets like China, creating an “alliance between authoritarian states and these large, data rich IT monopolies.”

“This may well result in a web of totalitarian control the likes of which not even Aldous Huxley or George Orwell could have imagined,” he warned.

Predicting that governments would start to more heavily regulate the sector, Soros said: “Davos is a good place to announce that their days are numbered.”

Known for his legendarily successful currency trading, Soros dismissed bitcoin as a “typical bubble”.

But he said the cryptocurrency would likely avoid a full crash because authoritarians would still use it to make secret investments abroad.

He described Russia’s Vladimir Putin as presiding over a “mafia state” and called Trump a “danger to the world”.

But he predicted that the US president’s appeal would not last.

“I regard it as a purely temporary phenomenon that will disappear in 2020 or even sooner,” Soros claimed.

But the investor’s traditional Davos predictions do not always pan out. Last year, in Switzerland, he warned that the stock market rally would end after Trump’s election and that China’s growth rate was unsustainable.

China’s growth has continued while US stocks are regularly hitting record highs.                        /kga

 

US President Donald Trump declares ‘America open for business’ at Davos summit

January 26, 2018

In a defense of “America First,” Donald Trump has urged companies from across the globe to invest in the US. The president also called for greater cooperation on combating terrorism and pressuring North Korea.

US President Donald Trump at the World Economic Forum

US President Donald Trump on Friday declared his first year in office a major economic success during his speech to delegates of the World Economic Forum in Davos, saying “now is the perfect time to bring your business” to the US.

Trump highlighted the US’s latest tax overhaul and reduction in regulations, which Davos summit Klaus Schwab said contributed to global growth before the president took the stage.

Read more: Davos: New momentum for Europe?

Also taking flak for isolationism at summit

  • Trump said that his “America First” policy does not mean isolation. He called for greater cooperation on a range of fields, including energy, trade and security.
  • However, Trump warned that the world “cannot have free and open trade if some countries exploit the system.”
  • Trump has regularly defended his “America First” policies, suggesting they are compatible with greater international cooperation. He also frequently points to US stock market growth.
  • Since Trump assumed office, US allies, including Germany, have warned Washington against pursuing an isolationist policy. Similar warnings have been issued by other speakers at the Swiss business forum.

Vows to continue ‘America First’

During his speech, Trump said:

  • That while the US has a “cutting-edge economy,” the country’s “immigration system is stuck in the past.” Trump has maintained a tough stance on irregular immigration, vowing to build a wall along the US’s border with Mexico.
  • Washington “will not longer turn a blind eye to unfair trade policies” That statement showed that Trump is not backing down from his desire for US-centric trade policies. However, he also said that “America First does not mean America alone.”
  • “The world is experiencing the resurgence of a strong and prosperous America.”

Have other US presidents visited Davos summit: Trump is the second sitting US president to visit the Davos summit. Bill Clinton was the first to do so for the forum’s 30th anniversary in 2000. However, the late Ronald Reagan had participated via video link in the 1980s.

Read more: Globalization: Even Davos gets the blues

What did Trump say about security: Trump claimed that the US-led coalition against the “Islamic State” militant group had “retaken almost 100 percent of the territory once held by these killers in Iraq and Syria.” He called on countries to continue to pressure North Korea to end their nuclear program, while reiterating his call for other countries to contribute their “fair share” towards global defense.

How did the audience react: While his speech received applause and laughter at times, there was a moment when Trump reportedly elicited boos, after saying: “It wasn’t until I became a politician I realized how nasty, how mean, how vicious and how fake the press can be.”

ls/msh (AFP, AP, dpa)

http://www.dw.com/en/us-president-donald-trump-declares-america-open-for-business-at-davos-summit/a-42318514

Related:

President Trump’s Speech to the World Economic Forum — “America is roaring back”

January 26, 2018

Trump pushes ‘America First’ in Davos

Trump arrives in Davos 01:32

STORY HIGHLIGHTS

  • Executives, entrepreneurs and political leaders have gathered in Davos
  • Trump’s visit to Davos was marked more by its conventionality than its disregard for international norms

Davos, Switzerland (CNN) — President Donald Trump on Friday pushed his “America First” message abroad as news broke at home that he had tried to fire the special counsel investigating him.

.

Trump did not address the bombshell report that he had tried to fire Robert Mueller, who is investigating alleged collusion between the Trump campaign and Russia for 2016 election meddling as well as possible obstruction of justice charges against the President. Instead, he stuck closely to a script that emphasized favorable conditions for making money in the United States.
.
Sounding at moments like the president of a local chamber of commerce, Trump declared “there has never been a better time to do business in America.”
He insisted that his “America First” governing agenda would not prevent him from negotiating bilateral trade agreements as long as they favor American interests.
.
It was only after his speech concluded that Trump strayed from his pro-business platitudes and into the brash pronouncements about the media and Democrats that usually pepper his speeches.
.
Deriding the “nasty, mean, and fake” news media, Trump drew boos and hisses from the crowd of global elites, a break from the otherwise polite reception he received here at the yearly summit for the world’s ultra-wealthy.
.
The President’s tone was muted during much of his address, particularly compared to the booming enthusiasm he has shown on the campaign trail when railing against globalization, yet his words were upbeat. He sought to drive a hard bargain for global businesses to increase their investment in the United States.
.
“America is roaring back and now is the time to invest in the future of America,” Trump said, pointing to tax cuts, regulatory reform and new energy resources.

Diverting the spotlight

NYT: Trump tried to fire Mueller over 3 issues
.
Presidents often use foreign travel to distract from controversy back home, and in Davos, Trump sought to divert the spotlight from the developments involving special counsel Robert Mueller. But the Russia probe, which has clouded his presidency, remains front-of-mind for many in the well-read crowd here.
.
Executives, entrepreneurs and political leaders gathered at this mountainside village had been awaiting Trump’s remarks to the World Economic Forum with a sense of dread, fearing he’d use the platform to shame global elites in the same manner he railed against them during his populist presidential campaign.
.
And while the President did tout the commercial benefits of his “America First” agenda — a climate of competitive taxes and relaxed regulations — he downplayed the resentments and anger that have colored his previous assessments of the global financial elite.
.
He proclaimed that policies must be focused on improving conditions for “forgotten people,” a theme he campaigned upon as a presidential candidate.
.
“When people are forgotten, the world becomes fractured,” he said. “Only by hearing and responding to the voices of the forgotten can we create a bright future that is truly shared by all.”

A prelude

White House officials say Trump’s remarks in Davos served as a prelude to elements of the President’s first State of the Union address next week in Washington.
.
An honest discussion on trade was not featured in the speech, including how withdrawing from the Trans-Pacific Partnership has left the United States on the sidelines as the role of China and other countries rise.
.
Earlier this week, Canadian Prime Minister Justin Trudeau used his appearance at Davos to announce the finalization of the TPP agreement — without the United States.
.
Trump did, however, declare that his administration would consider negotiating Pacific trade agreements “either individually or perhaps as a group, if it is in the interests of all.”
.
The speech echoed the same message the President delivered personally over dinner on Thursday to a small audience of European business executives in Davos that he is trying to encourage to increase their investments in the US.
.
The speech was a far cry from the highly critical Davos message that Trump and many campaign advisers — like one-time chief strategist Steve Bannon — often espoused during his bid for office.
.
Trump and his aides anticipated a wary welcome to Davos by the businessmen and political leaders who flock annually to this snowy town. But instead of outright scorn, Trump was greeted by certain fascination when he strode into the Congress Center to begin meetings on Thursday.
.
Flocked by camera-wielding participants, Trump declared he’d already been given a warm welcome to the summit.
.
“This is like walking into the Academy Awards, except we have more photographers,” Trump told CNBC in an interview.
.
At a conference dedicated to global integration, Trump may not have been a natural guest, given his penchant for blasting the role of elites and the notion of free trade. But Trump checked nearly all of his criticism at the door, choosing instead to sell America and its economic strength.
.
In a brief question-and-answer session with Klaus Schwab, the founder of the World Economic Forum, Trump said his time as a businessman prepared him for his current role on the global stage.
.
“Being a businessman has been a great experience for me,” Trump said, noting that he is the first businessman elected president without formal political experience.
.
“I’ve always been very successful in making money. I’d been good at it,” he said.
.
And that, perhaps, was one of the strongest bonds Trump had with his audience, including many business titans from the United States and across the world.
.
Despite his well-known brand name, he had never before been invited to the World Economic Forum. But on Friday as they watched and waited to take their leave, Trump left quickly for his ride on Marine One above across the Swiss Alps to Zurich and his flight aboard Air Force One to Washington.
 https://www.cnn.com/2018/01/26/politics/trump-davos-speech-globalization/index.html