Tag: China

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Learning by Proxy

Learning by Proxy | China

China

This edition became insanely long. I going to have to take some of the stuff that happened this week and move it to the next edition. Something significant is afoot in China and its relationship with the rest of the world.

As a kid, I used to love cricket. Now and then there would be these matches where India would play a team that represented the Rest of the World. All without exception were exhibition matches, but there was a thrill associated with it. If we won, we got to beat the whole world in a single match. The best from every country.

China is increasingly taking a position where it looks like China (and some crook states) Vs the rest of the world (not that there are no crooks here). How it will end is anybody’s guess, but the tension is building.

The biggest participants of the first world war were France, Britain and Germany, but it started in Sarajevo with the assassination of Franz Ferdinand. The world is a tinderbox right now. A random spark can set it ablaze.

Shifting Sands

Japan was considered a manufacturer of cheap transistors in the 1960s. Their products were considered low quality. Fast forward to 1980s, getting a Sony was a mark of buying a high-quality product. China went through a similar cycle. Even a decade back Chinese products were considered cheap and low quality. The last decade has caused a huge pivot in perception. Along with that pivot, a lot of product manufacturing moved to China. 

Being at the epicentre of the manufacturing revolutions made Japan the economy it became. From the ruins of Hiroshima and Nagasaki emerged a nation that was revitalised and more powerful economically. The same happened with China, from being a hopelessly poor agrarian economy, they became the second-largest economy in the world. With the newfound power and money, there are new problems that are emerging.

Where does China end? (Physically)

China has always had a different interpretation of where its borders end. China seems to think all of the South China Sea belongs to it. The reason the South China sea is important is because of its strategic value to trade. The countries involved in this dispute include – Japan, Vietnam, Philippines, Malaysia, and Borneo. By extension of the fact that the US is responsible for the safety of Japan as per the treaty to end World War II, they are also involved.

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Hong Kong has been burning for the past 2 years. China is not used to defiance by its citizens. Further, they cannot afford for this spark to spread to the mainland. A lot of money and power will be at stake if that does happen. Hence the clampdown on Hong Kong.

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China has had border disputes with India for the past 60 years. They continue to claim that land on the Indian side. This has led to a war-like situation at the northern border. For China, Aksai Chin which they occupied over 60 years ago is important to keep their control over Xinjiang. The road from Tibet to Xinjiang passes through Aksai Chin.

The northern army commander, Lt Gen. Y.K. Joshi, on Saturday said the army would “continue all efforts to restore status quo ante along the LAC”, the statement assuming significance against the backdrop of the no-intrusion claim by Prime Minister Narendra Modi.

This is the first time an army commander has officially spoken about “restoring status quo ante” along the Line of Actual Control, which entails that the Chinese have occupied Indian territory.

Source: The Telegraph

They have also been having disputes with Bhutan

China is stepping up pressure on Bhutan to settle their bilateral border dispute. In addition to laying claim to more territory in Bhutan, Beijing has revived an old land swap deal that will require Thimphu to cede control over the territory to settle its border dispute with China.

Source: The Diplomat

Pandemic

There are a lot of tall buildings in China, but there is no Trump Tower in China. Also unlike Moscow, Beijing never wanted one. So Trump has been quite pissed with China right from the outset. Despite berating them for years, he did not have anything that he could really hold against China given the American dependence on China for manufacturing.

COVID-19 provided the perfect segue to turn against China and also get all of the “allies” to turn against China as well.

China made things worse

China had been giving away loans across Africa because Africa was seen as the next big thing. The idea was not to help them develop, the idea was to trap them in debt. This became obvious when they squeezed Sri Lanka for the port China had financed. Sri Lanka could not repay the debt and ended up handing over the port. There is a Wikipedia article on this – Debt trap diplomacy. 

The total loans outstanding from China come up to USD 600 Billion.

There is a global (especially western) push to forgive African Debt. This is deeply motivated by other considerations and China has said – No.

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Also, when the pandemic began, and a lot of countries rushed supplies to China.

A total of 21 countries and the United Nations Children’s Fund have donated epidemic prevention and control supplies to China, a foreign ministry spokesperson said Wednesday.

Those countries are the Republic of Korea (ROK), Japan, Thailand, Malaysia, Indonesia, Kazakhstan, Pakistan, Germany, Britain, France, Italy, Hungary, Belarus, Turkey, Iran, the United Arab Emirates, Algeria, Egypt, Australia, New Zealand, as well as Trinidad and Tobago, spokesperson Hua Chunying said at an online press briefing.

Source: Xinhuanet

A couple of months later when those same countries needed supplies…

Countries’ procurement agents are fighting each other in China for access to the protective equipment that must play a key role in stemming the spread of the novel coronavirus, German Health Minister Jens Spahn said.

He was responding to a spate of reports of consignments of protective masks destined for European countries being bought up by United States officials, sometimes even as aeroplanes stood ready for departure on the tarmac.

Source: Reuters

Hanlon’s Razor – Do not ascribe to malice what can often be ascribed to incompetency. Even so, the mind looks for a more complex explanation.

In this context

Hong Kong is an important port through which a lot of capital moves. The Chinese take over of Hong Kong has hurt the financial interests of rich people in several countries. There is no better way to attract the ire of nations than hurt the rich. The policy, for now, seems to be to hurt China economically.

Huawei is a Chinese company which has played a crucial role in the development of telecom infrastructure across several countries. The next couple of years were supposed to be windfall years with the introduction of 5G. Hurting Huawei means hurting China. The UK which is going to embrace Brexit screaming and yelling at the end of this year fired the first shot!

Culture secretary Oliver Dowden told the House of Commons that UK mobile providers will be prevented from buying Huawei 5G equipment after December 31 under a revised telecommunications bill that the government will table for a vote in the fall. Dowden also announced that providers with Huawei kit in their networks must remove it by 2027.

Source: Quartz

Australia in the meantime is heavily dependant on the Chinese import of ore. Mining is a huge contributor to the Australian economy and China is the biggest trading partner. Even so, in a world that is rapidly changing, it is important to pick sides.

Australia has declared “there is no legal basis” to China’s territorial and maritime claims in the South China Sea, marking an escalation of recent tensions with Beijing and bringing Canberra further in line with Washington.

Source: The Guardian

India which is even more hopelessly dependent on China banned TikTok and 58 other apps. This is by far the most inconsequential push back. But you know how they say – an enemy of an enemy is a friend. Not only that, but there are also three Trump Towers in India.

The two countries have been working quietly to step up information sharing amid the tense military standoff between Indian and Chinese troops — it has been on for 11 weeks now — along the Line of Actual Control in Ladakh.

After US Secretary of State Michael R Pompeo spoke to External Affairs Minister S Jaishankar in the third week of June, at least two high-level phone conversations, the key to this cooperation, have taken place.

Source: Indian Express

and

India and the US are close to inking a “quick” trade deal, Commerce Minister Piyush Goyal said Tuesday, adding that the pact aims to get issues that have been pending over the past couple of years “out of the way”.

Source: Indian Express

The USA also has banned Huawei. In addition to that, there has been heavy rhetoric. That rhetoric translated into action finally. The US government forced the Chinese Consulate at Huston to shut down. Why? The claim was that espionage operations were being run from the consulate. The Chinese diplomats were burning files outside the consulate causing local emergency service to respond to the smoke. And then…

US officials prised open a small back door having previously tried to gain access via three other entrances. The consulate was ordered to close on Wednesday by the Trump administration which said it was seeking to protect American intellectual property.

Source: Express

And then

Beijing ordered the US embassy to close on Friday in a tit-for-tat move, after Washington instructed China’s consulate in Houston, Texas, to cease operations, claiming it had been involved in a US-wide Chinese espionage effort.

Source: CNN

From the perspective of manufacturing –

Entire nations and their governments are questioning their excessive dependence on Chinese manufacturing. Scores of companies have been instructed and have already started moving production to other countries. Production of strategic importance like pharmaceutical and electronics are being moved to home countries. TSMC, the largest contract chip manufacturer, was given Billions by the US government to set up production in Arizona.

A Gartner, Inc. survey of 260 global supply chain leaders in February and March 2020 found that 33% had moved sourcing and manufacturing activities out of China or plan to do so in the next two to three years. Survey results show that the COVID-19 pandemic is only one of several disruptions that have put global supply chains under pressure.

Source: Gartner

Reliance boss Mukesh Ambani, announcing the partnership at his company’s annual meeting last week, said Google would build an Android operating system (OS) to power a low-cost “4G or even 5G” smartphone that Reliance would design.

Source: Mint

Most importantly pharmaceuticals

But this grant was different. It went to a Richmond, Virginia-based public benefit company that was just seven months old. Before the pandemic, it hadn’t manufactured any drugs, although its founders were pharmaceutical veterans.

The company, named Phlow, isn’t tasked with making new drugs against Covid-19. Instead, its goal is to shore up the US supply of generic drugs.

Source: Quartz

Adding salt to injury

China’s economy had its first contraction in decades thanks to COVID. After a decline of 6.8% in the first quarter, the economy seems to be back to growth posting a 3.2% growth in the second quarter of the year.

China’s economy grew 3.2% in the second quarter following a record slump.

The world’s second-biggest economy saw a sharp decline in the first three months of the year during coronavirus lockdowns.

But figures released on Wednesday show China’s Gross Domestic Product (GDP) returned to growth between April to June.

Source: BBC

But here is the thing, Retail consumption is lower than it was pre-COVID. So internal consumption is low. Externally, every large economy, esp. the USA has been struggling with the effects of COVID. So the consumption is not coming from outside either; then how? It is a result of government spending. This was the original recipe that worked for China. But given that they are a much larger economy, with a highly developed infrastructure and a global economy which is stagnant at best; how long can they keep bankrolling it? Also, if the spending is on infrastructure what do they plan to build?

And the final nail in the coffin. China seems to be poised to have its own Lehman Brothers moment.

Losses at global banks are projected to soar by $926 billion to $2.1 trillion through 2021, according to Standard & Poors. Almost $400 billion of that increase is forecast to come from Chinese institutions, compared with a $360 billion increase for those in North America and Western Europe combined. While an impending wave of soured loans isn’t expected to cause a credit crisis, the forecast demonstrates the economic pain that’s anticipated from heightened unemployment and bankruptcies.

Source: Quartz

Fallout

The excessive nationalistic push at a time of great global economic instability is not helping China. If at all anything, it has helped galvanise opposition to the country. Even countries like Australia who are tied up in a lot of trade are pushing back.

The sands are shifting and we do not know where and how this will end. The one thing that is for certain is that many of the squabbling global powers – US, India, EU, Britain and Australia (mostly thanks to Trump) are seemingly uniting due to their hatred of China. In 6 months there might be a new president in America.

The sands are definitely shifting!

Indian Monsoon

Monsoon is very important for India because agriculture depends on it. This year the north-western branch of the monsoon has arrived with great fury. The winds carry moisture from the Bay of Bengal and move towards the north-east till they meet the Himalayas. From there they follow the Himalayas as the wind turns to move the clouds westwards delivering rains along the way. What started as heavy rains in Assam, turned into flooding and now has turned into a catastrophe.

“Since the first week of June, we are having no respite with wave after wave of flood that has wreaked havoc inside the Kaziranga National Park and Tiger Reserve,” said Kaziranga’s park director, P. Sivakumar. He said an animal that had drowned in a swollen river near the park on Saturday brought the death toll of the endangered rhinoceroses up to 10.

Source: New York Times

Now as the monsoon clouds move westwards, it’s claiming more victims. 

Floodwater entered one more district of Samastipur in Bihar and spread to more inundated areas, hitting half a million more population on Tuesday, even though no fresh casualty was reported and the count remained at 10, an official bulletin said.

According to the bulletin by the state Disaster Management Department, more than 5 lakh people were affected by floods on Tuesday alone, taking the tally of marooned people to 29.62 lakh in 12 districts of the state.

Source: NDTV

It remains to be seen how far this monsoon rage continues. UP, Haryana and Punjab are very important to the food production in the country and if flooded especially at this time, it could turn into an unmitigated disaster especially since the economy is already reeling.

When you see it

Donald Trump had expected to head into the elections with a great economy, unemployment at historic lows and a great platform. Instead, his Attorney General is being questioned on the hill, unemployment are at historic highs (only the great depression saw worse unemployment) and a GDP decline of 10%. The US economy has contracted by 1.8 Trillion dollars! Yes – perspective – add a Trillion to that – India’s GDP.

Gross domestic product — the broadest measure of goods and services produced — fell 9.5 per cent in the second quarter of the year, the Commerce Department said Thursday. On an annualized basis, the standard way of reporting quarterly economic data, G.D.P. fell at a rate of 32.9 per cent.

Source: New York Times

Another way to looking at it. The US economy lost a shade more than the Market Capitalisation of Apple (which posted blockbuster results last quarter). (~1.75 Trillion)

One of the stories last week was titled – Spending is back to normal for poor Americans—but not for rich ones. 

Research shows that when low-earning families lose income, they do substantially decrease how much they buy. So it’s not that poor Americans are going into credit card debt to keep up their spending. Rather, economists have found that the US government’s stimulus payments and enhanced unemployment insurance have kept many low-income families afloat.

Source: Quartz

To me, this fact only indicates how little the poor have for discretionary spending. They are surely not going to be buying anything that is not absolutely necessary when they are living on doles. Turns out their lives were the same as living on a 600 dollar cheque even before COVID!

Simply put, rich people spent 1.8 Trillion less.

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No sooner was this data released, Trump tweeted that the elections needed to be postponed! To which Mitch McConnell said, “Never in the history of the country, through wars, depressions and the Civil War, have we ever not had a federally scheduled election on time, and we’ll find a way to do that again this Nov. 3,”

The illusion of democracy is the only thing America has going for itself. If that illusion falls apart, there would not be much that is different between America and Russia.

Raising Capital

Now that Mukesh Ambani and Reliance have tasted blood, they can’t stop coming up with fundraising ideas. A while ago, Amazon had bought up stakes in Kishore Biyani’s Future Retail, which had been saddled with debt. In the aftermath of Facebook, Microsoft, Google investments in Jio, Amazon felt left out. 

Jeff Bezos called Mukesh Ambani and said ‘aisa kyun bewafa?’ (why this unfaithfulness?). 

Mr Ambani promptly asked – you got money? 

Jeff said lots – I have so much money that the only way I can blow it up is building spacecraft and destroying Flipkart.

Mr Ambani – I might have something else you can blow it upon…

Rumours are that Amazon is going to buy 9.99% of Reliance Retail. Now some corporate juggling is taking place to bring Future group under the same umbrella.

Mukesh Ambani’s Reliance Industries Ltd will pay between Rs 24,000 crore and Rs 27,000 crore ($3.2-$3.6 Billion) to buy the Indian retail chains owned by Future Group 

Source: ToI

The Antitrust people are looking on the wrong side of the Atlantic. This is just wrong. The Confederation of All India Traders has been going to court and making a ruckus about Flipkart and Amazon, where are they when they have to fight?

Rise and fall of the OTT

Since we are talking about the Atlantic. Recently Apple acquired the Tom Hanks movie ‘Greyhound’; a World War II story from the middle of the Atlantic. The movie is said to have cost USD 50 Million. Given that the year is a bust and going to the theatre does not make any sense, Mr Hanks sold it to Apple. But what about movies that are made with budgets of hundreds of millions of dollars? No OTT player would buy it! What then?

Paramount Pictures announced yesterday it is delaying the releases of two highly anticipated blockbuster films again—this time until 2021. A Quiet Place: Part II will move from Sept. 4, 2020, to April 23, 2021, while Top Gun: Maverick will eject out of its Dec. 23 date and now land on July 2, 2021. Both films had already been postponed from their original release dates this summer.

Source: Quartz

Signing off…

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Learning by Proxy

Learning by Proxy | Business of Politics and Politics of Business

Every Saturday, I publish this series called “Learning by Proxy”. It is a capsule of some of the stuff that I found interesting over the week along with some context to it. I hope you enjoy it.

Follow Up

It turns out the Indian and Chinese forces have been brawling at the border since September 2019 when the government decided to convert the Ladakh into a Union Territory. The current situation was just an escalation of the troubles that had been boiling over for a while. So – The government has kept this issue concealed from the people because they would not have wanted to be blamed for fomenting it.

In the past two months, there have been at least three clashes between Indian and Chinese soldiers in the Pangong Tso area. As seen in satellite images, the Chinese side has constructed pillboxes, shelters, breast-walls and bunkers at Finger 4, both on the bank and the ridge, where they have deployed troops in large numbers.

Source: Indian Express

Politics

Politics of Business

You know how companies owned by the Indian government, which have created an entire category, end up in a heap of losses. You need to look no further than aviation to see the shining example. Air India (né Tata Airlines) created the airline business in India. After the economy was opened up in 1990, many private airlines started to appear. The government, in its quest to ensure that cities other than metropolitans develop, created a rule forcing airlines to take up unprofitable routes to smaller cities and state capitals. Air India is a loss-making mess because it gets a disproportionate share of these routes.

Source: ET

Something similar is afoot with the telecom sector. When a company takes 50% of the market share in a country like India, it often comes with a fair amount of support. It is unprecedented in world history for a 50-year-old industry to be shattered by a new entrant in 5 years. Now, when the government employees themselves start pointing it out.

Employees of state-owned telco Bharat Sanchar Nigam Limited (BSNL) feel that the central government is favouring Mukesh Ambani-owned Reliance Jio in awarding state-funded projects to it, and denying opportunities to other players by creating an uneven playing field.

Jio was recently allocated INR 50K Cr worth government contract under the Universal Service Obligation Fund (USOF) to deploy 54 mobile towers in Ladakh’s rural areas. Moreover, impending restrictions on BSNL to extend telecom connectivity in the so-called left-wing extremism (LWE) affected villages are also denting the state-run telco’s already frail revenue numbers.

Source: Inc42

Let me put that in context – Jio Platforms has raised ONLY twice that amount through all of the fundraisings that it has undertaken in the last 3 months.

Good Old Fashioned Regime Change

When you think regime change, you think CIA. Americans have been great players of this game. Having said that, others have also learnt a thing or two along the way. Chinese aggression against India is well known. In one of my previous editions, I had mentioned the dire circumstances that Pakistan is in. This leaves other neighbours that can be encouraged to stew trouble. Of all countries, Nepal decided to change its map and declare Indian territory as a part of Nepal. Now, India seems to be creating trouble for the leadership of Nepal. The PM is Nepal has been asked to put up or shut up.

Prachanda said at the outset that Oli’s allegation against India was wrong. “Not India, it is me who is demanding your resignation. You must furnish proof of such irresponsible remarks,” Dahal is believed to have said.

Two days after Nepal Prime Minister K P Sharma Oli claimed that India was trying to topple his government with support from some politicians at home, party leaders, including three former prime ministers, Tuesday asked him to prove his allegations or quit.

Source: Indian Express

Economics

Economic War

There has been a call to boycott Chinese businesses and Chinese products for the past couple of weeks since the border clashes took place. At the same time, a lot of ink has been spilt trying to argue how impossible it would be to disengage economically from China. Further, it would be Indian manufacturers and Indian consumers who would be hurt by such moves. In the meantime, the Indian government has been putting its greatest weapon to work – Its bureaucracy. Chinese shipments have been delayed at the port of entry for “checking”. The Chinese have been returning the favour. This has caused a lot of trouble to both exporters as well as manufacturers in India. The next step seems to be apps that generate little to no revenue from India.

TikTok has been banned in India. The IT ministry has banned 59 Chinese-owned applications, including TikTok, ShareIt, UC Browser, Likee, WeChat, and Bigo Live. The Ministry stated they were “prejudicial to sovereignty and integrity of India, defence of India, the security of the state and public order.”

Source: Indian Express

Supply Chain

Over the last 30 years slowly and steadily more and more of the manufacturing base shifted to China. First, it was due to the lower cost. Off late it has been only about convenience. China has been behaving badly using the Pandemic as a distraction to push its nationalistic agenda. From the South China Sea, Hong Kong and even up to India the country has been pushing to expand.

There is no other way to hurt them but economically. The military engagement will not end well for anyone involved. But shifting supply chains is a decades-long process. The biggest risk is chip manufacturing which is necessary not only for the phone in your hand but also for defence applications. TSMC one of the largest contract manufacturers of silicon set up a plant recently in Arizona with federal funding. It can produce as many chips in a month as their plants in China can in a day!

China’s rising costs had companies looking to broaden their sourcing well before the trade war or coronavirus, but those events are increasing the urgency. In a recent survey of 260 global supply chain leaders across different industries and regions, research and advisory firm Gartner found 33% had already moved their sourcing or manufacturing out of China or planned to do so within the next three years.

Source: Quartz

Business

Under Pressure

Facebook has been under pressure ever since Twitter flagged the Trump tweet on mail-in ballots. The Chairman of the Board, Peter Thiel; whose data company Palantir played a role in the Trump victory, was one of the prominent supported of Candidate Trump. It came as little surprise that Facebook was willing to look the other way. But when your revenues streams get threatened, you cannot continue to look the other way.

Facebook has said that it will flag all “newsworthy” posts from politicians that break its rules, including those from President Donald Trump.

Separately, Facebook’s stock dropped more than 8 per cent, erasing roughly USD 50 billion from its market valuation, after the European company behind brands such as Ben & Jerry’s and Dove announced it would boycott Facebook ads through the end of the year over the amount of hate speech and divisive rhetoric on its platform. Later in the day, Coca-Cola also announced it joined the boycott for at least 30 days.

Source: News18

Some have argued that the USD 10 Million per month or so that most of these companies spent on Facebook was a drop in the bucket. But come to think of it – USD 10 Million across a year is USD 120 Million, and 10 such clients backing out would mean a loss of a billion dollars in revenue. Anybody else wants to lose a Billion dollars in revenue during this economy?

How does the medicine taste?

Dear Chinese Tech Company, for years your government protected you. They pretended to be extending a level playing field to all but they really were not. They made life so difficult that behemoths like Google and Amazon had to call it quits and leave the country. Agreed, it was mutually beneficial. China needed you guys to win so that a local company could be beaten into submission when it came time to censor. How does it feel to be fed the same medicine by another? Hurts?

DTH Dying with Cinema

OTT is going to be the undoubted winner of Lockdown 2020. Cinemas have been shuttered and by the looks of it, are going to have to wait for a long long time before things return to business as usual. On the other hand, DTH companies are also having a hard time. In India during 2019, DTH lost 2 Million subscribers. With the glut of streaming services who wants DTH anymore?

India lost 2 Mn direct-to-home (DTH) television subscribers in 2019, findings from the Indian Telecom Services Performance Indicator Report October-December 2019 published by the Telecom Regulatory Authority of India (TRAI) revealed. The segment ended the year with 69.98 Mn subscribers, down from 72.44 Mn in March the same year. 

Source: Inc42

Technology / Science

Zoox

A few years ago, being pressured about Uber drivers not being given the same benefits as an employee, founder and CEO Travis Kalanick pushed back. He said anyway, they will all be replaced by self-driving cars and caused a slight panic amongst the drivers. The firing of Travis, a bad IPO and several dozen lawsuits later, Uber is nowhere close to bringing self-driving cars to the roads.

So it came as quite a surprise that Amazon went ahead and acquired a self-driving car company. Amazon’s logistics needs to deliver in hours or days not minutes and hence self-drive would not be valuable to Amazon as much as it would to a cab company or food delivery company. Google, Tesla and a few dozen other companies have been pursuing self-drive. Apple is rumoured to be testing something of the sort as well! Remains to be seen what road Amazon takes.

The e-commerce giant said it had agreed to acquire Bay Area-based autonomous vehicle company Zoox, a deal reportedly worth more than $1 billion. (Amazon did not respond to questions.) Since its founding in 2014, Zoox has been known for its technical chops, its secretiveness, and its sky-high ambition.[…]

In 2018, it showed off its first prototype vehicles, which look like sensor-laden golf carts on steroids. The company has also been testing its software on more conventional-looking Toyota Highlanders in San Francisco, where it is learning to handle chaotic city streets.

Source: Wired

Brain

When you see you are not really seeing. Your brain in interpreting the electrical signals being generated by your eyes upon being subjected to light. The same is true of almost every organ. Therefore there is almost no objective reality in the world. It is all subject to how your brain chooses to interpret it. This was highlighted by the ‘Yanni’ / ‘Laurel’ sound recording a few years ago, where, part of the people heard one thing while the other another. Also, perhaps why some people like classical music while other rock.

Instead of presenting his lab animals with real chemicals, he went straight into their brains. Last week, Chong and his colleagues published a study in the journal Science showing that they’d worked out some of the details of just how the olfactory bulb represents odours—by making mice smell scents that don’t actually exist in the real world.

Source: Wired

Misc

This should probably not come under Miscellaneous but the other sections are covered.

China is increasingly being isolated. Almost no country can eradicate its dependence on China for the moment but all attempts are being made. Further, there is also a push to align against China.

China is livid after the US stepped in on Wednesday evening to delay a draft press statement condemning the terrorist attack at the Karachi Stock Exchange at the UN Security Council. 

The US was the second country after Germany to delay the statement, both silent expressions of solidarity with New Delhi, after the Pakistan foreign minister Shah Mehmood Qureshi and later PM Imran Khan blamed India for the attack. 

Source: Quartz

How many enemies can you make before your luck runs out?

Cash Free India

I am very proud of the fact that when it comes to transaction protocols, India has some of the best and most secure protocols. 4 years ago, NPCI launched the UPI which made it really easy for anybody to make microtransactions right from their bank accounts. This further resulted in greater penetration of banking and online transactions.

India has been a cash-heavy country but the demonetisation coupled with the introduction of several of these technologies has changed the way things work in the country. UPI hit almost 2 Billion transactions last month. This is significant because the economy is busy taking a dump in the toilet and this number reflects the greater dependence on online transactions.

The National Payments Corporation Of India (NPCI) said that the Unified Payments Interface (UPI) recorded 1.98 Bn transactions worth INR 2,06,950 Cr in June 2020.

Source: Inc42

Signing off…

Categories
Learning by Proxy

Tax – Real Estate – Water | Learning by Proxy

Every Saturday, I publish this series called ‘Learning by Proxy’. It is a capsule of some of the stuff that I found interesting over the week along with some context to it. I hope you enjoy it.

Follow Up

Indian and China have been having a lot of heated exchanges in Ladakh. This week it escalated and resulted in India losing 20 soldiers including a Commanding Officer.

Defence Minister Rajnath Singh Tuesday reviewed the current operational situation in Eastern Ladakh, following Monday’s violent faceoff on the LAC, along with the Chief of Defence Staff and the three Service Chiefs. External Affairs Minister S Jaishankar was also present during the meeting.

Source: Indian Express

One name is conspicuously missing, don’t you think? Modi has been AWOL.

Also

The Indian army said that both sides suffered casualties, but there has been no word on numbers from China yet.

Tuesday’s battle was reportedly fought with rocks and clubs. However, no shots were fired.

The Indian army said a number of its troops “were critically injured in the line of duty”.

Source: BBC

Rocks and Wooden Clubs? No Shots fired? What the hell is going on?

China has taken the Galwan Valley and now their Foreign minister is like – Go on. Nothing to see here. Everything is resolved.


Politics

LGBTQ

Law is always very political and the appointment of supreme court justices is the greatest power wielded by politics over law. Trump got to appoint two Supreme Court justices and that was expected to swing the Supreme Court towards the far right. Imagine the surprise then, when the court declared that employment could not be taken away if a person was LGBTQ. The final vote came down the interpretation of the term ‘sex’ in a 1964 act. Whether it meant only man and woman or all sexual orientations. Neil Gorsuch who was the first appointments by Trump wrote out the order.

The Supreme Court’s decision on Monday outlawing anti-LGBTQ employment discrimination is a triumph for both the country and the court. It is a victory for the country because, in one fell swoop, the court granted vital protections to LGBTQ people in every state, making the United States a fairer, freer place.

Source: Quartz

Shooting yourself in the foot

The so-called stimulus package is an attempt by the Modi government to roll out the red carpet to investors to choose India. At the same time, the abysmal state of the government is forcing the tax officials to look at any vestige from which revenue can materialise. The Central GST collection during the lockdown fell from Rs. 47,000 Crores same period last year to a shade below Rs. 6000 Crores this year. An 87% per cent drop. The IT Department slapped Tiger Global with a tax bill of Rs. 14,500 Crores. Flipkart would not be Flipkart without Tiger Global. Antagonising them despite a Double Tax treaty with Mauritius is not a great move.

Earlier this week, news reports said Tiger Global may take India’s quasi-judicial body, Authority of Advance Ruling (AAR), to court over its claim that the investor has outstanding tax dues on its sale of shares in e-commerce major Flipkart in 2018.

Prima facie, experts, believe Tiger Global is protected against the payment under the India-Mauritius Double Tax Avoidance Agreement (DTAA), which prevents investors from being taxed twice on the same income in both countries.

Source: Quartz

Economics

Tipping Energy

Coal has been on its way down for a few years. In the US, gas-powered power plants have proved to be a much more viable source of energy than coal. This combined with the falling costs of renewable energy has made it harder for coal mines to continue to operate. Trump had said he will bring these coal jobs back. No one can stop the steady march of better economics, especially in a capitalistic system. This is not about the environment, it’s about profits.

The Texas-based utility that owns the Maryland plant just announced it will shut down Dickerson’s three power units after 60 years of operation, citing the high cost of operation. Like dozens of other coal plants across the country, Dickerson is a casualty of coal’s fast-moving demise. The industry has been squeezed between cheaper natural gas and expanding use of renewable energy for several years, but now the Covid-19-driven recession has jammed a stake through its economic heart.

Source: Wired

Stimulus – Togo Style

All of the big nations have been busy announcing large stimulus programs to get their economies back on their feet. To date, Germany has been one of the few that has put its money right in the hands of the workers who have lost their jobs or stand to lose their jobs. Togo is going a step further and putting money in the Novissi (digital wallet) accounts of informal workers!

For its part, Togo has looked to solve that problem with Novissi, a digital cash transfer program that sends funds to citizens through mobile money. Togo’s President Faure Gnassingbé has said the scheme targets informal workers whose incomes were “disrupted” by lockdowns. As of mid-April, over 1.1 million Togolese citizens—13% of the population—had registered for Novissi with around 450,000 people (65% of which were women) proving eligible beneficiaries and receiving up to 35% of the minimum wage.

Source: Quartz

Business

Flying Low

The airline industry has always been out with a begging bowl. In good times and in bad. As Richard Branson famously put it – If you want to be a Millionaire make a Billion dollars and start an airline. Almost every major western airline has been bailed out by the government and in some of them, the governments hold massive stakes. Interestingly, low-cost budget airlines in Europe seem to be in better stead despite not having needed a bail-out.

Ryanair and Wizz stocks are better bets right now than Air France-KLM and Lufthansa, according to Morgan Stanley. That’s because the flag carriers rely more heavily on business travel and long-haul routes that will likely to be slower to bounce back. They will also have a lot of work to do to repay the money they’ve borrowed from taxpayers. (Norwegian Air, a discount carrier for long-haul flights that got a $271 million loan from the Norwegian government, has fallen more than 90% in the stock market this year.)

Source: Quartz

Real Estate

I had written about the reckoning that real estate will soon be faced with. The increasing move towards ‘work from home’ and the closure of malls causing an upsurge in OTT was bound to hit commercial real estate. Malls thrive because of the footfalls multiplexes drive to the malls. Multiplexes have been closed and have no clear opening date. Retailers refused to open their stores unless malls waived rent. An open mall with stores closed does not make for good business. DLF blinked.

Under the new proposal, DLF Shopping Malls is offering rental partners a 100% waiver on MG rent for the entire lockdown period till June 15. Post this, a 75% off on MG rent is offered till June 30, sources said. DLF has also proposed a 50%, 24% and 10% waiver on MG rent for July-September 2020, October-December 2020 and January-March 2021, respectively, they added.

Source: Financial Express

To add insult to injury, CavinKare one of the large FMCG companies based in the south known for brands such as Chic and Nyle decided to pull the shutters on its HQ. Everyone except factory employees can work from home!

“We have shut down our corporate office and closed all four branches. We see no need for it. We have called for bids from tenants for the 40,000sqft office,” Ranganathan said. Additionally, the four branches have also been shut. “Only factories and R&D centres will have employees come in and work,” he said. Nearly 300 people worked out of the corporate office, while the company has a staff strength of 1,900. 

While most companies have announced aggressive WFH models in a bid to save on costs and stop the spread of the Covid pandemic, Cavinkare’s Ranganathan said he has chosen it for productivity reasons. “It is more from a productivity standpoint. We have seen a 30% increase in productivity in the nearly 100 days of lockdown,” he said.

Source: Times Of India

Technology / Science

The Price of Water

In space water is an especially valuable resource, but not for the reasons that you think. Yes, water is important for humans to survive. Also, in space, the only way to create thrust is by losing mass. Water = Mass. When you use fuel in space to propel, you are essentially ejecting mass to create force (thrust) towards the opposite direction. It costs about USD 18,500 to put one Kg in space. Not the most economical way to put fuel in space. Alternatively, you can mine the water on the Moon and use it as fuel. Now, NASA is going to determine the price for it.

That’s why Bridenstine’s statement is so important: If NASA follows through by saying we’ll pay $X for propellant delivered to location Y, that could give hypothetical lunar mining entrepreneurs the market they need to get off the ground and encourage private propellant buyers to make their own plans to use these resources. (One technological wrinkle will be designing spacecraft for regular refuelling.)

Source: Quartz

Retweet no more

Recently Twitter has grown a spine. This has meant that the company is beginning to cut back on all kinds of misinformation. How many times have you retweeted an article just after looking at its headline without even bothering to read it? They have started tracking that!

Twitter seemingly expanded the amount of data it collects from users to include the links in tweets that were opened, the tweet that included the links, and when it was opened. Zucker-Scharff noted that the link-tracking appears to have begun last month; he said the file containing the history of links on which he had clicked did not appear the last time he examined Twitter’s code in 2018.

Put together, this does much more than flag if a user is sharing something they haven’t read. It could also identify them. For example, if law enforcement has anonymized browser data on several users, officials could use timestamps to identify the person, matching the anonymous data with the Twitter timestamps.

Source: Wired

Spying with Lightbulbs

Researchers have found a way to listen to conversations taking place by watching the vibrations on a lightbulb! So stop using bulbs. LED all the way.

Researchers from Israeli’s Ben-Gurion University of the Negev and the Weizmann Institute of Science today revealed a new technique for long-distance eavesdropping they call “lamphone.” They say it allows anyone with a laptop and less than a thousand dollars of equipment—just a telescope and a $400 electro-optical sensor—to listen in on any sounds in a room that’s hundreds of feet away in real-time, simply by observing the minuscule vibrations those sounds create on the glass surface of a light bulb inside. By measuring the tiny changes in light output from the bulb that those vibrations cause, the researchers show that a spy can pick up sound clearly enough to discern the contents of conversations or even recognize a piece of music.

Source: Wired

Misc

Have you ever watched a Chess match? I am guessing not.

Hence it would come as a great surprise that Twitch, a service that streams video games is getting hooked to Chess. All thanks to Grandmaster Hikaru Nakamura. I was watching a short video included in the news piece and its amazing.

Signing off…

Categories
Learning by Proxy

Police – Students – Fashion | Learning by Proxy

Every Saturday, I publish this series called ‘Learning by Proxy’. It is a capsule of some of the stuff that I found interesting over the week along with some context to it. I hope you enjoy it.


Follow Up

India has had by far the most draconian lockdown in the world. The only other city (not country) to have a lockdown as strict and as prolonged was Wuhan. I had written a blog about the number of non-COVID deaths that COVID will cause. A pregnant woman died in Noida last week, trying to get into a hospital, being shunted from one to another for 13 hours! 

Despite the most draconian lockdown, testing was limited and continues to be. I had mentioned this last time as well. Delhi is still dissuading testing!

Asymptomatic people need not get tested for Covid-19, said Delhi Chief Minister Arvind Kejriwal Saturday while stressing on the need to test symptomatic and severe patients.

Source: Indian Express

And…

Delhi Police Constable Tests Positive For Coronavirus After Death

I had also written about the flash reforms that were undertaken under the guise of “stimulus”. Now, the government is offering embedded clearances for environmental and forest clearance for the auction of mineral mines.

[…] the government has now come out with a scheme under which non-coal, non-fuel mining blocks will have most clearances ready before these are put up for auction. According to an order issued by the mines ministry on June 3, the system of embedded clearances will be tried in at five green-field blocks in each mineral-rich state on a pilot basis, with the intent to scale it up over time.

Source: Financial Express

Politics

Police

A few years ago I was fortunate to have visited a Rotary meeting where Maja Daruwala happened to be speaking. She is the daughter of Field Marshall Sam Manekshaw and the executive director at the Commonwealth Human Rights Initiative. She said, India borrowed its police force from the British and never re-trained them. This is part of the reason, one often dreads getting even a complaint registered. The police were a tool of oppression under the British and we never changed their culture. Seems like something similar is afoot in the USA. There is a call for change and there are models that exist.

One small example: In a 2012 study in Queensland, Australia, officers at random checkpoints would either read from a specially designed script that invoked the principles of procedural justice (asking the citizen for input, meeting them at eye level, thanking them for their time), while other officers conducted themselves as usual. Citizens who encountered script-reading officers were more compliant and more satisfied with the interaction.

Source: Quartz

Student Power

When I first visited Vellore Institute of Technology (VIT), I had no idea what power an institution can wield on a city’s economy. VIT was plenty important to the economic growth of Vellore. The 25,000 students would create demand for food, retails, services and much more. So much so that Amazon set up a distribution centre in the city only to cater to the institution, thanks to the sheer volume that it represents. 

Indians don’t go to any educational institution to get educated. They go to get a job. Period. Now with work Visas seeming unlikely, they are making their way from the USA to Canada. Think about the University towns in America, their economy.

The number of Indians enrolled in graduate-level computer science and engineering courses at American universities declined by more than 25% between 2016-17 and 2018-19, according to an analysis of government data by the National Foundation for American Policy (NFAP).

Source: Quartz

Economics

Chinese Jobs

The Chinese pressure cooker requires a very important ingredient – Jobs. One and a half Billion people submit to some of the harshest laws on the planet with a complete absence of discontent because their lives keep improving each day. What the American Cops can do to the Blacks, the Chinese government can do to any citizen, rich or poor; powerful or not, and get away with impunity. The trade wars with the US, Coronavirus and the global slowdown has hurt Chinese jobs. Over the past decade, China had embarked on a journey to purge their cities of street vendors – now they are encouraging them!

Chinese premier Li Keqiang said on Monday (June 1, link in Chinese) that street stalls and small shops, just like bigger and high-end industries, are important sources of jobs and vital to the country’s economy.[…]

Prior to Li’s remarks, Beijing recently sent other welcoming signals to street vendors, marking a significant shift from the past—when municipal officials used to relocate, evict or fine them as China sought to “civilize” its cities into tidy, shiny places that evoke the gadgets its high-tech economy produces.

Source: Quartz

Gig Economy – The Saviour?

Over the past few years, the gig economy has taken a lot of brickbats. Gig workers are treated as contractors who can take up one sliver of work. Legislators across the globe have been after these entities to regulate them and force them to classify these gig workers as employees and provide them with full benefit. But what happens when employers throw them out due to poor economic conditions? Gig work might just have a silver lining! Call it part-time but it is a way out.

The numbers suggest efforts to restart the US economy are working as several states and metropolitan areas reopen many types of businesses. But they also point to a slow recovery: 40% of the new jobs, or 1.6 million, were part-time. 

Part-time positions often pay less than full-time employment. They don’t offer benefits like health insurance and paid leave, and are more unstable.

Source: Quartz

Business

Changing Fashion

During the 30 year war in Croatia, the Croatian soldiers used to wear a cloth around their neck to make them easier to identify. The French borrowed it and turned it into fashion. Even the French word for tie ‘Cravate’ comes from ‘Croat’. Every miserable period brings its fashion. 

So what about this pandemic? The excess work from home has resulted in fashion being redefined. The pant business is a tough one to thrive in today! Peter England is begging people to keep their pants on and Amazon is promoting ‘Lounge Wear’ and ‘[email protected]’

Even Jamie Dimon, the CEO of Chase was photographed with shorts on!

Technical Ethics

Over the last 5 years, there has been a huge push to use AI. AI – in today’s parlance, refers to technologies that can attempt to replicate human senses. Sight is Computer Vision; Listening is Natural Language Processing; and so on. 

Using Computer Vision there have been a whole host of facial recognition solutions that have been created. While a company like Apple uses it to authenticate users. Countries like China have been furthering their totalitarian state. Tech companies seem to have suddenly grown a conscience. IBM announced that they will abandon their facial recognition project.

On June 8, IBM CEO Arvind Krishna announced the end of his firm’s involvement in facial recognition in a letter to US Senators. The company, he wrote, “firmly opposes and will not condone uses of any technology, including facial recognition technology offered by other vendors, for mass surveillance, racial profiling, violations of basic human rights and freedoms.”

Source: Quartz

And then Amazon announced that it will keep their system out of police hands for ONE YEAR because that is how long it takes for conscience to fade. 

Amazon announced on Wednesday it was implementing a “one-year moratorium” on police use of Rekognition, its facial-recognition technology. Lawmakers and civil liberties groups have expressed growing alarm over the tool’s potential for misuse by law enforcement for years, particularly against communities of color.

Source: Wired

Technology / Science

Fight fire with fire

WhatsApp recently limited the number of people you could forward a message to. The move has reduced forward on the app by 30%. This was a step that was taken to curb misinformation. Misinformation is a massive problem across the world and such networks have been leveraged to influence elections. But when it comes to public health, there needs to be a firm solution. The Taiwanese government seems to have found a solution. 

But Taiwan, which is lauded for its success in containing the spread of coronavirus, has adopted humour as a tool in fighting the pandemic. Speaking at the TED conference this week, Taiwan’s digital minister Audrey Tang explained how a tactic called “humour over rumour” has effectively quashed misinformation about Covid-19.

Every time a hoax surfaces on social media, Tang and her band of civic hackers unleash a joke containing the facts of the matter within two hours of spotting the post, based on the idea that since people like to share funny memes on social media, doing so allows the government to wrest control of the narrative. Tang also said that government agencies have employed professional comedians as “engagement officers” to help in the cause. If they miss the two-hour window, Tang’s team locates the perpetrators and recruits them as allies in Taiwan’s coronavirus effort.

Source: Quartz

Fintech Rejoice

Telangana State is one of the most supportive of new technologies. The government encourages startups that are working in areas such as blockchain to explore the possibility of deploying it within the government. They see it as a way to encourage such startups to be based out of Telangana. Now, the SEBI is taking a step in creating a sandbox for startups that are working on new technologies.

Securities and Exchange Board of India (SEBI), on Friday (June 5), rolled out a circular to pave way for financial innovations in stock exchanges through regulatory sandboxes.[…]

For this, SEBI is looking to grant certain facilities and flexibilities to fintech platforms to test technologies in a live environment on a limited set of real customers for a limited time frame. “These features will be fortified with necessary safeguards for investor protection and risk mitigation,” SEBI said.

Source: Inc42

Misc

Some data – TomTom, the french company that makes GPS guidance systems for cars puts out a traffic congestion index. Guess what? Bangalore is Number One. Check it out, four Indian cities make the top 10. I was surprised to see Pune as a part of it.

And finally, I have heard of landslides on the hills when it rains too much. Have you ever seen a continental shelf just cede land to the sea? I hope the houses were empty.

Signing off…

Categories
Learning by Proxy

China V India – Telecom – Social Network | Learning by Proxy

Every Saturday, I publish this series called ‘Learning by Proxy’. It is a capsule of some of the stuff that I found interesting over the week along with some context to it. I hope you enjoy it.

I was planning to follow-up on some of the topics that I had written the last time. But the geo-politics of it is so interesting, it almost turned into an essay in and of itself. I lost the politics section to it.

Follow Up

See below!


Politics

Chris Voss is a former CIA negotiator and the author of the book ‘Never split the difference’. The premise of the book is – when you are negotiating for the life of a hostage you can’t agree to split the difference. You have to get it the way you want it. One of the lessons therein – When negotiating, always give your adversary a way out. If you corner them – expect the unexpected. 

Some context first

China had started down the path of world dominance a few years ago. They decided to use the American (actually British) play of economic dependence = political dominance. They announced this thing called One Belt One Road, which was to be second coming for the Silk Route. They engaged over 130 countries and poured in hundreds of Billions to create infrastructure such as Road, Ports, Airports, etc. Every continent apart from North America was involved. India refused to be a part of it.

Now let us see the corner China has been painted into.

Hong Kong was an itch which has been hard to scratch for the last 3 years. In addition to that Trump and his trade wars had made life difficult. 

The Coronavirus put a new spin on things. Many of these countries that China has lent to are poor Asian and African nations and with Coronavirus ripping up their economies, they have requested loan waivers and renegotiation. 

As the coronavirus spread around the globe, Pakistan’s foreign minister called his counterpart in Beijing last month with an urgent request: The country’s economy was nose-diving, and the government needed to restructure billions of dollars of Chinese loans. […]

With each request, China’s drive to become the developing world’s biggest banker is backfiring. Over the last two decades, it unleashed a global lending spree, showering countries with hundreds of billions of dollars, in an effort to expand its influence and become a political and economic superpower. Borrowers put up ports, mines and other crown jewels as collateral.

Source: New York Times

Pakistan was supposed to keep India in check. They are now broke. The Middle-East is in a financial crisis of its own with oil prices at historic lows. This implies very limited options available to finance terrorism. Therefore, Trump is not going to give money away to Pakistan as liberally as Obama did. 

Further, not agreeing to the cries of the poorer countries will make it seem like it was an engineered Virus. The optics of it all are terrible! 

Trump called it the ‘China Virus’ and has been pressuring WHO to investigate them – WHO acquiesced. India supported the probe into China. China grudgingly agreed.

A pretty deep corner you see. Now for the push back.

China put an end to Hong Kong by passing a law that forever ends Hong Kong’s democracy – at least the way we knew it. With Pakistan now being rendered incompetent, they had to take matters into their own hands. They started trouble in Ladakh and Sikkim. India pushed back. Both sides said they will protect their sovereignty. All good distraction. But then…

Chinese President Xi Jinping on Tuesday ordered the military to scale up the battle preparedness, visualising worst-case scenarios and asked them to resolutely defend the country’s sovereignty.

Source: Economic Times

That escalated fast!

Then Trump tweeted offering to arbitrate between India and China. China changed course and figured this was one more thing they would want the American to stay out of.

On Wednesday tensions between the two nations seemed to de-escalate as China took an apparently conciliatory tone by saying that the situation at the border with India is “overall stable and controllable.”

Source: India Today

While there is a change of tone, satellite pictures show artillery build up on the Chinese side of the border. The US in the meantime is preparing to pass a law rescinding Hong Kong’s trade status.


Economics

Truth

It was a couple of editions ago that I had mentioned that the truth about the actual economic state of India will emerge post-COVID when nobody is paying attention. It is happening. 

Bank lending to MSME collapsed after 2016 as per RBI data. This during a time when the government claimed to have 7.2% GDP growth rate. Many of the MSMEs are critical suppliers to large industries how could they not want loans? If they saw an opportunity, they would have taken loans to grow. 

While large industries saw their credit expand by Rs 1.73 lakh crore, or at an annual growth rate of 1.9 per cent between April 2016 and March 2020, micro and small industries saw their credit expand by only Rs 10,335 crore, or at a 4-yr CAGR of 0.69 per cent during that period.[…]

The decline in demand for credit by the industry, however, coincides with the decline in the demand in the economy and falling capacity utilisations. The RBI’s Order Books, Inventories and Capacity Utilisation Survey (OBICUS) for the October-December 2019 quarter shows that the capacity utilisation declined to at least 12-year low of 68.6 in the quarter ended December 2019.

Source: Indian Express

Repo Rate

The interest rate is an instrument that is used to stimulate the economy when the times are good, expectations form the future are clear and risk can be estimated. When none of this is clear – the Interest rate becomes merely a number. If you play with it unnecessarily, you diminish your power. Modi placed a historian at the head of the RBI to act as his puppet and the bankers are giving him a lesson. RBI dropper repo rate (the rate at which banks borrow) once again to 4%. An all-time low.

“When a heightened level of risk aversion exists among banks, lower cost of capital alone incrementally will not translate into higher lending in the current situation,” said Sreejith Balasubramanian, an economist at Mumbai-based mutual fund IDFC AMC. “Banks make lending decisions based on their risk appraisal and appetite which is currently low.”

Source: Quartz

Business

Sizzling Telecom

In a world that is locked inside their homes, connectivity is a very valuable resource. It is the only thing that preserves a certain degree of sanity and allows for commerce in whatever form to thrive. Connectivity is unlocking its value.

A couple of editions ago, I had mentioned how Reliance has used Jio to free itself of debt. Also last time I had shared the surprise upswing that Airtel had registered. Airtel is now borrowing a trick or two from the Reliance Playbook. They have raised over a Billion dollar through a stake sale and reduced their debt burden. 

Bharti Airtel’s promoter firm Bharti Telecom raised Rs 8,433 crore on Tuesday, selling 2.75% stake in the telecom major to institutional investors through an accelerated book-building process in the secondary market. With this, the Sunil Bharti Mittal led-Bharti Airtel’s promoters are ostensibly looking to go ‘debt-free’, a path similar to the one chosen by Reliance Industries’ Mukesh Ambani. Bharti Airtel share price traded flat on the BSE on Wednesday. After the sale, the promoter group will continue to own 56.23% in the company.

Source: Financial Express

Also, rumours are that Google is planning to buy into Idea-Vodafone.

Not to be upstaged – Jio Platforms as it continues to raise its Billions announced Microsoft as one of the suitors willing to throw in USD 2 Billion. And they also announced their wishes to list on an international stock exchange. 

Post bagging multi-billion dollar deals from marquee investors in the last one month, Billionaire Mukesh Ambani’s Reliance Industries is said to be now considering an overseas listing of Jio Platforms, according to people aware of the development.

Source: Mint

Technology

Social media is an echo chamber and that echo chamber has resulted in far too many countries in the world having right-wing governments. India included. Life is good so long as you are on the right side of the line – White in the US – Hindu in India and so on. Facebook knew what it was doing and why it was wrong. An explosive and incriminating report exposes the upper echelons of the company brushing aside genuine concerns. 

“Our algorithms exploit the human brain’s attraction to divisiveness,” read a slide from a 2018 presentation. “If left unchecked,” it warned, Facebook would feed users “more and more divisive content in an effort to gain user attention & increase time on the platform.” […]

But in the end, Facebook’s interest was fleeting. Mr Zuckerberg and other senior executives largely shelved the basic research, according to previously unreported internal documents and people familiar with the effort, and weakened or blocked efforts to apply its conclusions to Facebook products.

Source: WSJ

The person who made this presentation was the head of the ‘Integrity Team’ at Facebook. The company has none of it.

Twitter has been a haven for trolls permitting harassment at an unprecedented level. It came as a huge surprise when Twitter which is in part responsible for Donald Trump being president decided to flag this tweet at false.

[click on the tweet and open it to see the flag]

The move, which escalates tensions between Washington and Silicon Valley in an election year, was made in response to two Trump tweets over the past 24 hours. The tweets falsely claimed that mail-in ballots are fraudulent. Twitter’s label says, “Get the facts about mail-in ballots,” and redirects users to news articles about Trump’s unsubstantiated claim.

Source: Washington Post

The president threw a fit on Twitter about Twitter. Then announced on Twitter that he would be releasing an Executive Order against Twitter. 

In the meantime, Kellyanne Conway his “Counselor” went on a rant against – guess who? – the head of the Integrity Team of Twitter; Yoel Roth. He has been subjected to a lot of trolling by Republicans and Trump supporters – where else – on Twitter.

Here is a list of all the false claims made by the President of USA to date – all 18,000 of them. – https://www.washingtonpost.com/graphics/politics/trump-claims-database/

And Twitter is not backing down!


Misc

The Indian Government is using drones to chase away locusts.

These are designed to spray 10-litre of chemicals, along with creating a sound that would disperse the locusts into different areas. “It has successfully contained the movement of locusts in an open area and on the foothills where it was not possible for the usual tractors to make it reach. A detailed assessment of its impact is being studied by the field officers,” said Om Prakash, commissioner, state agriculture department.

Source: Times of India

The Democrats are using the Republican playbook – GOD. Only God can save them now. God is peddling conspiracy theories on Trump!

Go on check out the twitter handle. It’s got a lot more there. About Ivanka’s Shoplifting and much more…

Signing off…

Categories
Learning by Proxy

China – GST – Airlines | Learning by Proxy

Every Saturday, I publish this series called ‘Learning by Proxy’. It is a capsule of some of the stuff that I found interesting over the week along with some context to it. I hope you enjoy it.

This one became long thanks to all the political Chess.

Follow Up

The Prime Minister of India had announced a 21 Lac Crore Stimulus package. The details emerged.

Iron-fist continued – Several reforms have been pushed through in a hurry under the guise of the stimulus package. Apart from propping up the banking and NBFC system through doles from RBI. There is little in terms of real outlay made.

The APMC Act which had horrible consequences for the farmers has also been lifted and there is much to be happy about. The space sector has been opened up to private players which is also positive. 

Minerals, Defence, Civil Aviation, Power Sector and Atomic Energy have also been opened up and they are likely to attract a lot of investment especially given that labour laws have been waived and Companies Act has been decriminalised.

Apart from this everyone can take a loan. How many do end up taking is another question?

You can see the entire list of changes announced here.


Politics

Hong Kong – Democracy or not?

Hong Kong was the last of the British Dominions to be handed over. China which took control at the time promised to let the government be separated from Beijing till 2045. The Chinese government has been working hard to remove democracy from Hong Kong for the past few years. This led to the Umbrella Movement and several other protests that have rocked the city for more than a year. Coronavirus has offered the country a great opportunity to tighten the vice and undo democracy.

Beijing fired its opening salvo on April 17, when its liaison office in Hong Kong effectively dismantled over two decades of legal precedence by declaring that it has full authority to interfere in Hong Kong’s affairs, leaving legal scholars and experts on the city’s mini-constitution appalled. The next day, 15 veteran leaders of the city’s democracy movement were arrested over their roles in last year’s protests. A few days later, the central government’s Hong Kong and Macau Affairs Office issued a string of statements, voicing support for the liaison office while condemning opposition figures and politicians. In the span of five days, the rules of engagement between Beijing and Hong Kong—ostensibly a city with a high degree of autonomy over its own affairs—were completely rewritten.

Source: Quartz

Chinese infiltration in Ladakh

Last week I had mentioned the Chinese incursion and island-building in the South China Sea. They are also building up their presence in Ladakh where the Indian forces have had a few skirmishes with them. Now they are building up a presence on the Pangong Tso Lake.

The number of Chinese patrol boats, sources told The Indian Express, have gone up three times — they had earlier been using only three boats. The Indian Army also has a similar number of boats to dominate the 45-km long western portion of the lake which is under Indian control.

Source: Indian Express

WHO do we use

Trump has been berating WHO since April and blaming them for not bringing the “China Virus” to the world’s attention. Under pressure WHO finally agreed to investigate the origins of the virus. Trump promptly went ahead and ordered the WHO to “get things together in 30 days” or find its US funding cut. WHO is being used to wage a proxy battle against China. 

While the U.S. government was the first to call for a pandemic inquiry, Tuesday’s resolution happened largely in spite of the Trump administration, not because of it. The U.S. has annoyed allies by shopping inaccurate coronavirus intelligence to them and by undercutting global pandemic coordination from the U.N. Security Council through to the G-7. In the end, it was the European Union’s diplomacy that pushed the inquiry resolution towards the finish line.

Source: Politico

Flip Flop

When the lockdown was announced, the Indian government declared that nobody should be fired or be given a salary reduction. These were instructions from the highest office. Last week, that all went away. Under pressure for announcing a stimulus package which does not seem to be stimulating anything, the government blinked.

In a new notification, the home ministry has withdrawn its March 29 circular which had made it mandatory for all private enterprises to pay full salaries to their employees irrespective of their presence or absence in the workspace during the lockdown. The rule was also applied on micro, small and medium enterprises (MSMEs) as well.

Source: Inc42

Economics

Open and Shut

Several economies are trying to open up after the lockdown. Several including South Korea have discovered that it is not that easy. Now it is the turn of the French. Emmanuel Macron had announced a clear date for re-opening of the country – May 11th. They re-opened most institutions including schools. There was a sudden flare-up of 70 COVID-19 cases linked to schools and the government moved swiftly to shut the schools down.

But French Education minister Jean-Michel Blanquer sounded the alarm Monday, telling French radio RTL that the return has put some children in new danger of contamination. He said the affected schools are being closed immediately. French media reported that seven schools in northern France were closed.

Source: AP

When companies lose revenue its business; when the government loses revenue its economics!

When businesses lost revenue, the PM said ‘Aatma Nirbharta’. Now, they are on the other side of the table. The inevitable question of tax waiver has raised its head in India. GST is paid on all goods and services sold. And given the two-month lockdown, businesses are asking the government to waiver GST for these two months and more. For a government which was already broke – losing income is unthinkable. They concocted some lousy reasoning.

“In the past also, when the GST exemption on sanitary napkins was allowed, it had led to similar hardship for domestic manufacturers of sanitary napkins. Later, the domestic industry complained of adversity. So was the case with GST exemption on PPEs, mask, etc. The GST exemption would lead to blocked input tax credit (ITC) resulting in increase in the cost of manufacturing and a higher price for consumers,” an official said.

Source: Indian Express

Business

Volte-Face

Given the degree to which Jio has dominated the newswires, it is easy to be led to believe that the company is doing well. Last year the Supreme Court awarded a victory to the government on a 20-year-old case on spectrum charges. This left the established telecom companies saddled with nearly the equivalent of the (actual) Indian stimulus package – Rs. 90,000 Crores in fee and interest. Airtel along was responsible for a third of it. Idea declared itself dead. But the fight is not over yet!

Bharti’s India wireless revenue growth at 16% quarter-on-quarter, was significantly higher than Jio’s 6% q-o-q, a first since Jio started charging for services in 2017. “This print reinforces our view that Bharti may have closed the gap with Jio on revenue trends, and market share between the two players should not diverge from hereon,” Goldman Sachs noted.

Source: Financial Express

Fly Away

The embattled airline industry has had close to zero income since the lockdown began. They have been flying supplies, which amounts to one or two flights a day. They also have to refund all the tickets that were booked and scheduled to fly during the lockdown, which they still have not. To make matters worse they had started taking new bookings for mid-April when the first lockdown was supposed to end. They desperately need to start flying and for cash rotation to begin if they are to make good on their obligations. It was finally announced that they can restart on the 25th of May. Alas, the joy was short-lived because…

The government will fix a price cap with both an upper and lower limit for domestic air fares for three months after flights resume on 25 May, following a nearly two-month hiatus two months during which the entire airline fleet was grounded, civil aviation minister Hardeep Singh Puri said on Thursday.

Source: Live Mint

Technology

Nuclear Technology has been stagnant for a long time and many including Bill Gates think that it is the salvation. The human energy needs are so high that no other technology can meet the need effectively in all weather conditions. Bill Gates and the Breakthrough Energy Ventures has invested in several experimental nuclear technologies including a football-sized reactor. This is another leap using 3D printer technology to print the reactor core. This will allow sensors to be embedded in the core which allows scientists and engineers to have visibility into what is happening within the core.

Although most of the reactor will be made from conventional components, the core will be entirely 3D-printed out of silicon carbide, an extremely rugged material that is all but impossible to melt. The cylindrical core is a dull metallic silver with several irregular nonagon fuel assemblies arranged in its center. 

Source: WIRED

Misc

Kanwal Rekhi is the man who invented the Ethernet. This post was genius. I just had to share it.

Categories
Learning by Proxy

Canada – Money – Election | Learning by Proxy

Every Saturday, I publish this series called ‘Learning by Proxy’. It is a capsule of some of the stuff that I found interesting over the week along with some context to it. I hope you enjoy it.


Follow Up

I had mentioned last week that the government is turning against its people and in the pursuit of higher growth, many iron-fisted moves are being made. The Indian Government relaxed a bunch of labour laws, with some states suspending all labour laws. ALL.

Some more on it from Rajiv Bajaj:

Also, I had mentioned cinemas are dying. Producers of a bunch of A-Lister movies decided to go directly to Online. A war of words has been on between the producers and cinemas.

Theatrics by a company that runs theatres. INOX decided to plant the first nail in its coffin. Read the comments, they are hilarious.


Politics

Canadian Thoughtfulness 

Thankfully, not all governments are like India. Canada announced that they would boost wages for essential workers. They made a provision for $3 Billion which should provide the basis of the boost. Given the inhuman hours and pressures that these workers have been under, it is a great gesture.

Prime Minister Justin Trudeau announced the federal government has reached cost-sharing agreements with almost all Canada’s provinces and territories for the wage boost for essential workers. The deal will see Ottawa put up three-quarters of the cost, with the provincial governments footing the rest.

Source: GlobalNews

Building in the Sea

China has never been up to any good. But as the world has been looking away due to the troubles in their backyard, China is using this opportunity to consolidate its position in the South China Sea. 

Last month, China caused alarm by establishing new administrative districts for the Spratly and Paracel archipelagos and naming 80 islands and other geographical features in the sea, claiming sovereignty over underwater features along the way. (Mischief Reef, in its natural state, was submerged at high tide.)

Source: Quartz

Economics

Numbers

As I had mentioned last week – the numbers will come clean now. Industrial output is said to have declined 16.5% in March 2020. Further, there was a decline of 0.7% for the entire FY20. The lockdown was in force for 9 days towards the end of March. According to the government we had been growing before that. An annual decline indicates that things were amiss much before. The government spent the whole year gaslighting economists and commentators.

Factory output growth was recorded at 4.6 per cent in February and 2.7 per cent in the same period last year. The data is likely to be revised due to lower response rate from the units from which data is collected, the National Statistical Office said.

Source: Indian Express

Printing Money

Last week the Indian government announced an Rs. 20 Lac Crore stimulus. It involves giving loans to some MSME businesses and also providing liquidity to banks. Rs. 17400 Crores given to farmers sounds like a lot. But when divided by 8.7 Crore of them, it translates to Rs. 2000 each. It is a mere drop in the ocean and unlikely to serve any purpose. On the other hand, Nobel Laureates have been suggesting printing more currency and putting it in the hands of the poor to stimulate consumption.

Cash transfers to India’s poor are the right thing to do “not just morally but also economically,” believes Nobel laureate Esther Duflo.

“Businesses should be keenly interested in this (cash transfers) and very much behind (it)…because it is the most important thing to do in their self-interest,” the Massachusetts Institute of Technology professor of economics said particularly in the context of India’s coronavirus lockdown.

Source: Quartz

Business

The business of testing

The USA has conducted the most number of COVID test in the world. Since March, when testing began, they have conducted close to 10.5 Million tests. With the resurgence of CoronaVirus cases in Wuhan, the Chinese government is determined to test every person living in Wuhan – 11 Million of them – in 10 days! Are they doing a Trump or do they have lots of test kits that they are not making available to the world?

The tests need to be conducted within 10 days and should prioritize people such as those living in older compounds or in densely packed residential buildings, or people originally from outside of Wuhan who are more likely to travel between different places, according to the document. It is unclear how the department plans to meet the huge volume of testing kits required.

Source: Quartz

Vaccine

Under normal circumstance, it takes years to develop any drug or vaccine. These are not normal times. Many countries and their regulatory authorities have given a go-ahead to pharma companies to start human trials for the coronavirus vaccine. There is, in fact, a website where one can volunteer to be a guinea pig for the study. They first inject the vaccine and then infect you on purpose to see if the vaccine works!

China, UK, US and even Italy are running tests on humans. Would this imply a new standard of ethics for drug trials in the future? For now, we do not even know if any of these would succeed or not. Let us hope one of them have found a solution.


Technology

Election

Several countries still conduct voting through a painful paper ballot process. The reason – Online is not secure enough to conduct voting. Well, it is safe enough to close contracts, transact Trillions of dollars worth of cash, commodities, bonds et al every single day. But ONE damn vote is impossible, is it not?!! The actual reason is to subvert democracy.

Democracy Live’s portal is hosted in Amazon Web Services through the cloud provider’s security-focused FedRamp certified offerings for the US federal government. It also uses AWS’s “Object Lock” feature on voters’ PDFs to keep submissions from being altered or deleted. The system has been audited by third-party security reviewers Shift State and RSM Labs, although those reviews are not posted publicly. When Democracy Live is used in voting, the elections also undergo retrospective audits to confirm the results.

Source: WIRED

Meet Artificial Meat

Meat is a big deal in the US. Americans love their pigs and cows (Not the way Indians do). A couple of years back artificial cell-cultured meat began to show up in stores. Cell cultured meat essentially grows proteins in Petri dishes – actually barrels. This has the same or perhaps better composition than real meat. The cattle lobby was up in arms and wanted brands to mention ‘Artificial Meat’ distinctly on the packaging. Then COVID happened. Will consumption shift completely?

Covid-19 has exposed the Achilles heel of the modern US meat system. As key meatpacking plants with sickened workers have been forced to pause production, consumers are facing the prospect of meat shortages in some places and higher prices virtually everywhere. Just one meatpacking plant in Sioux Falls, South Dakota is responsible for 5% of US pork production. When that plant and a handful of others stopped production in April because of worker illnesses, it decreased the slaughtering of beef cattle and hogs by 36% and 37% respectively, according to US Department of Agriculture data. The ripple effect was big: Already the price of meat and eggs have increased by 5%. 

Source: Quartz

Misc

Since we have spoken about vaccines, do you know how vaccination was discovered in the US? It was way back in 1721 that vaccination was imported to the US from – Africa! An African slave taught them how. It was called Innoculation. And the anti-vaxxer movement protested back in the day as well. Little surprise there.

The operation Onesimus described was a common procedure in certain parts of the world. What happened was that pus from an infected person was rubbed into an open wound of a person uninfected with smallpox. If one survived this procedure, one was thus inoculated against smallpox, and could never contract it. The procedure was done in different places. In Africa, in China, in India, in the Ottoman empire. Most accounts place the origin of inoculation in either China (where they would blow scabs up a person’s nose) or India, and in both places, it was largely a secret procedure whose technique was passed down mostly in families.

Source: Quartz

COVID Designs

Would you like to go to a restaurant that looks like this?

Personal atmosphere

Source: CNEWS

OR 

Planes designed like this

I wish everyone was this thin
Think about getting to the window seat on the second row!

Source: Travel and Leisure

Signing off…