8 The EconomistFebruary 22nd 2020
The world this week Business
The European Commission
published its wide-ranging
digital strategy that, among
other things, seeks a “guaran-
tee” of human oversight over
artificial intelligence and a raft
of measures, such as data
sharing, to restrain America’s
tech giants. Mark Zuckerberg,
Facebook’s boss, visited Brus-
sels to push his alternative
plan on regulating social-
media content, which empha-
sises monitoring standards
and systems rather than hold-
ing firms liable for content.The coronavirus outbreak in
China caused Appleto lower
its sales forecast for the quar-
ter. The company said it was
“experiencing a slower return
to normal” than it had expect-
ed in a country where most of
its products are assembled. Its
renowned just-in-time supply
chain has been disrupted by
the restrictions on movement.hnagroup, one of China’s
most acquisitive conglomer-
ates until the government told
it and others to rein in their
debt-fuelled spending, was
reportedly on the verge of
collapse. The group’s main
asset is Hainan Airlines,
which, along with other
carriers in the region, has been
hit hard by the coronavirus,
complicating hna’s debt-
restructuring scheme.A year after its merger plan
with Siemens was derailed by
the eu’s competition regulator,
Alstomannounced that it was
buying Bombardier’strain-
making business, which Bom-
bardier valued at €7.5bn
($8.1bn). Alstom supplies many
rail systems around the world
(it built half the trains on the
London Underground). The
deal should help the French
group compete against China’s
globally ambitious state-
backed train manufacturer,
which has reportedly said it
could build Britain’s hs2high-
speed rail line in just five years.ubsappointed Ralph Hamers
as its new chief executive. Mr
Hamers currently heads ing, a
Dutch bank. He will start his
new job in November, takingover from Sergio Ermotti, who
turned the Swiss bank’s for-
tunes around after the tumult
of the financial crisis.Burdened with write-downs,
hsbc’spre-tax profit sank by a
third last year, to $13.3bn. The
bank announced yet another
restructuring, slashing 35,
jobs (analysts had expected
10,000), shedding $100bn in
risk-weighted assets and
shrinking its business in Eu-
rope and America in order to
concentrate on Asia.A common purpose
Royal Bank of Scotlandalso
unveiled a new strategy,
through which it will pare its
investment-banking business
and become a “purpose-led
organisation” tackling green
issues. rbs, still majority-
owned by the taxpayer after its
bail-out a decade ago, is chang-
ing its group name outside
Scotland to NatWest.Morgan Stanleyannounced a
takeover ofE*Trade, an online
trading platform that special-
ises in retail clients. The $13bn
deal is one of the biggest in
finance since the global crisis
of 2007-09. In another big
acquisition, Franklin Temple-
ton, an asset manager, said it
would buy Legg Mason, a rival,for $6.5bn. The combined
business will manage $1.5trn in
assets.Japanseemed to be heading for
a recession, as data showed the
economy shrinking by 6.3% at
an annualised rate in the final
quarter of 2019. A rise in the
consumption tax was blamed;
an increase to the tax in 2014
led to a similar contraction.Britain’sannual inflation rate
leapt to 1.8% in January from
1.3% in December, raising
questions about the prospect
of an interest-rate cut from the
Bank of England.TheTurkish central bank
lowered its benchmark interest
rate by half a percentage point,
to 10.75%. That was the small-
est in a series of cuts over the
past year but keeps the bank on
course to fulfil a pledge by
Turkey’s president, Recep
Tayyip Erdogan, to get the rate
into single figures as he seeks a
return to growth backed by
credit. The cut complicates the
government’s attempts to
stabilise a weakening lira.Return of the jedicontract
A judge slapped a temporary
injunction on Microsoftfrom
working on the Pentagon’s
Joint Enterprise Defence Infra-structure project, giving a new
hope to Amazonin its legal
claim that it was not awarded
the contract because of Donald
Trump’s feud with Jeff Bezos,
the company’s boss. Amazon’s
cloud-computing business had
been the front-runner in the
bidding for the $10bn contract.
In a court filing, Amazon itself
came under fire from Oracle,
which questioned the in-
centives offered to two former
Pentagon employees.Under pressure from a green
workers’ group at Amazon, Jeff
Bezospledged to give $10bn to
scientists, activists and ngos
working to mitigate climate
change. Amazon’s carbon
footprint is substantial be-
cause of its vast delivery net-
work and powerful data cen-
tres. “We can save Earth,” said
Mr Bezos, who recently bought
a sizeable chunk of earth when
he paid $165m for a mansion
estate in Beverly Hills.Biggest single gifts
$bn, January 2020 prices*BequestsSource:The Chronicle
of Philanthropy20100 504030James LeVoy Sorenson 2008*Leona Helmsley 2008*Jeff Bezos 2020Helen Walton 2007*Warren Buffett 2006