The Economist - 02.22.2020_

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, taking

overfromSergioErmotti,who

turnedtheSwissbank’sfor-

tunesaroundafterthetumult

ofthefinancialcrisis.

Burdenedwithwrite-downs,

hsbc’spre-taxprofitsankbya

thirdlastyear,to$13.3bn.The

bankannouncedyetanother

restructuring,slashing35,

jobs(analystshadexpected

10,000),shedding$100bnin

risk-weightedassetsand

shrinkingitsbusinessinEu-

ropeandAmericainorderto

concentrateonAsia.

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.Thecombined

businesswillmanage$1.5trnin

assets.

Japanseemedtobeheadingfor

a recession,asdatashowedthe

economyshrinkingby6.3%at

anannualisedrateinthefinal

quarterof2019.A riseinthe

consumptiontaxwasblamed;

anincreasetothetaxin 2014

ledtoa similarcontraction.

Britain’sannualinflationrate

leaptto1.8%inJanuaryfrom

1.3%inDecember,raising

questionsabouttheprospect

ofaninterest-ratecutfromthe

BankofEngland.

TheTurkishcentralbank

lowereditsbenchmarkinterest

ratebyhalfa percentagepoint,

to10.75%.Thatwasthesmall-

estina seriesofcutsoverthe

pastyearbutkeepsthebankon

coursetofulfila pledgeby

Turkey’spresident,Recep

TayyipErdogan,togettherate

intosinglefiguresasheseeksa

returntogrowthbackedby

credit.Thecutcomplicatesthe

government’sattemptsto

stabilisea weakeninglira.

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.

Underpressurefroma 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

*Bequests

Source:TheChronicle

ofPhilanthropy

20100 504030

James LeVoy Sorenson 2008*

Leona Helmsley 2008*

Jeff Bezos 2020

Helen Walton 2007*

Warren Buffett 2006