The Economist - UK (2019-06-01)

8 The EconomistJune 1st 2019
The world this week Business

FiatChryslerAutomobiles

confirmedthatit wasseekinga

mergerwithRenault, a combi-

nationthatwouldcreatethe

world’sthird-largestcarcom-

panybehindVolkswagenand

Toyota.fcaandRenaulthope

themergerwillsavecashto

bolsterinvestmentsinelectric

vehiclesandself-drivingcars.

ButRenaultisalsoina close

partnershipwithJapan’s

NissanandMitsubishi.That

alliancehasbeenstrained

sincethearrestofCarlos

Ghosn,itsformerboss,on

chargesoffinancial

misconductatNissan(which

hedenies)anditsfutureisnow

inquestion.

The Huawei effect

Alibabawas reportedly con-

sidering a second listing of its

shares, but in Hong Kong

rather than New York, where

its $25bn stockmarket debut in

2014 remains the world’s big-

gest ipo. This time it is seeking

to raise $20bn. Its decision to

list in Hong Kong comes amid

uncertainties over the future

treatment of Chinese compa-

nies by the American authori-

ties. Alibaba is using its profits

from e-commerce to invest in

artificial intelligence, quan-

tum computing and other

sensitive tech areas where

America and China are

competing aggressively.

The latest skirmish in the trade

war saw China threaten to limit

supplies to America of rare

earths, a group of 17 metals

vital to fast-growing business-

es such as electric cars but also

widely used in the defence

industry. China accounts for

the vast bulk of rare-earth

production; for some of the

metals it is the sole producer.

In 2010 it cut exports to Japan

during a maritime dispute.

Maersk, the world’s biggest

shipping company, gave a

downbeat assessment of the

effect of global-trade tensions

on its industry. It estimates

that container trade grew by

1.7% in the first quarter com-

pared with the same period a

year earlier. That is less than

half the average for 2018.

Boeing’s 737 maxaircraft is

unlikely to return to service

until at least August, according

to the International Air Trans-

port Association. A recent

meeting of global safety-regu-

lators avoided putting a date

on a return for the max, which

has been grounded following

two crashes. iatastressed that

it will be regulators who make

the final decision.

The Food and Drug Adminis-

tration approved a gene

therapydeveloped by Novartis

for treating spinal muscular

atrophy in children. Priced at

$2.1m, Zolgensma is the

world’s most expensive drug,

though it costs half the current

treatment for smaover the first

ten years of a child’s life.

The first trial got under way in

Oklahoma of a drugmaker

facing claims that its market-

ing of painkillers fuelled the

opioid crisis. Johnson & John-

son argues that it followed the

law and has decided to fight the

case. Its two former co-defen-

dants settled with the state:

Purdue Pharma for $270m and

Teva, this week, for $85m.

Germany’sunemployment

rate rose to 5% in May, the first

increase in five years. Most of

the rise is explained by a

change to the way the govern-

mentcountstheunemployed,

butthelabourministrysaid

thatGermany’sslowingecon-

omywasalsoa factor.

GlobalPayments, which

focusesonprocessingtransac-

tions,agreedtobuyTotal

SystemServices, which

specialisesinclearingthem,

for$21.5bn.It isthethirdbig

mergerinthepayments

industrythisyear.

Sky broadband

After delays because of bad

weather, SpaceX launched the

first batch of satellites that will

eventually form its Starlink

broadband-internet network.

Its boss, Elon Musk, lauded the

achievement, SpaceX’s heavi-

est payload yet. Not everyone

was happy. Around 12,

satellites will be deployed by

the mid- 2020s. They operate

in low orbit and are brighter

than expected, prompting

concerns from astronomers

about obstructed telescope

observations.

Arun Jaitleystepped down as

India’s finance minister be-

cause of ill health. Mr Jaitley

oversaw many of the financial

reforms introduced under the

government of Narendra Modi,

including a consumption tax.

Indian authorities stopped the

founder of Jet Airways, Naresh

Goyal, from flying out of the

country. The government has

promised to make it harder for

the bosses of bankrupt compa-

nies to leave India following

the case of Vijay Mallya. The

boss of Kingfisher Airlines fled

to London in 2016 and is fight-

ing extradition.

In the process of finalising her

divorce from Jeff Bezos,

MacKenzie Bezospromised to

give half of the $36bn she is

receiving as part of the settle-

ment to charity. Ms Bezos

made the commitment to the

Giving Pledge, an initiative

started by Warren Buffett and

Bill and Melinda Gates through

which the super-rich can

donate some of their fortune to

worthy causes. A contempla-

tive Ms Bezos noted that “we

each come by the gifts we have

to offer by...lucky breaks we can

never fully understand.”