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The World
Kim Jong Un, the North Korean leader, expects to travel to Russia to meet Russia’s President Vladimir Putin to discuss weapons sales to Moscow. A meeting between Kim and Putin would significantly step up military ties between Russia and North Korea as Moscow’s occupying forces try to contain a counteroffensive in the southern and eastern part of Ukraine. “Last month, Sergei Shoigu, the Russian defence minister, travelled to the DPRK [Democratic People’s Republic of Korea] to try to convince Pyongyang to sell artillery ammunition to Russia,” said Adrienne Watson, a spokesperson for the White House’s National Security Council. “We have information that Kim Jong Un expects these discussions to continue, to include leader-level diplomatic engagement in Russia.” Watson added: “We urge the DPRK to cease its arms negotiations with Russia and abide by the public commitments that Pyongyang has made to not provide or sell arms to Russia.” (Financial Times)
Putin and Erdogan Meet, Showcasing Cooperation but Little Progress on Grain Deal. Hours before the Russian and Turkish leaders met, Moscow’s forces attacked Ukraine’s southern Odesa region with drones, damaging grain infrastructure. In meeting Putin, Erdogan positions himself again as the middleman. But any sense of a significant change in Mr. Erdogan’s balancing act between Russia and the West appeared to evaporate on Monday, when he and Mr. Putin stood side by side after a meeting in the Russian resort town of Sochi and spoke of expanding cooperation. (New York Times)
Erdogan said after talks with Putin that it would soon be possible to revive the grain deal that the United Nations says helped to ease a food crisis by getting Ukrainian grain to market. Erdogan said that Russia's expectations were well-known to all and that the shortcomings should be eliminated, adding that Turkey and the United Nations had worked on a new package of suggestions to ease Russian concerns. (Reuters)
Zelenskyy sends strong signals with choice for Ukraine’s new defense chief. Ukrainian President Volodymyr Zelenskyy’s choice for the country’s new defense minister sends two clear signals to Ukraine’s allies and adversaries: Kyiv is serious about cleaning up corruption, and steadfast about regaining Crimea from Russian control. Umerov, whom Zelenskyy has put forward to replace Defense Minister Oleksiy Reznikov, is a Crimean Tatar with deep business and political experience, including chairing Ukraine’s commission monitoring international financial and military aid to the country’s war effort. As head of the State Property Fund since last year, he has revitalized the country’s privatization efforts. The defense ministry “needs new approaches,” Zelenskyy said in dismissing Reznikov, whose ministry has been plagued by corruption allegations. Reznikov himself hasn’t been implicated, but the controversy has tainted the ministry. (Politico)
China’s Leader Looks Set to Skip G20 Summit in Snub to India. China indicated that its top leader, Xi Jinping, would skip the Group of 20 summit meeting in New Delhi this weekend, dealing a blow to India, the event’s host nation, and raising questions about Mr. Xi’s profile as a global statesman. China will send the premier, Li Qiang, to the event, said Mao Ning, a spokeswoman for China’s Foreign Ministry, at a news briefing. Ms. Mao did not answer questions about Mr. Xi and declined to explain the reason for the decision, but there is no doubt that it is unusual. Mr. Xi has never missed a G20 summit, which brings together 19 countries and the European Union, since taking power in 2012. The announcement comes amid growing friction between China and several members of the G20 — namely the United States and India — over Beijing’s continued support for Russia (in the case of Washington) and its increasingly aggressive territorial claims around Asia (in the case of India). (New York Times)
Chinese Gate-Crashers at U.S. Bases Spark Espionage Concerns: Chinese nationals, sometimes posing as tourists, have accessed military bases and other sensitive sites in the U.S. as many as 100 times in recent years, according to U.S. officials, who describe the incidents as a potential espionage threat. The incidents, which U.S. officials describe as a form of espionage, appear designed to test security practices at U.S. military installations and other federal sites. Officials familiar with the practice say the individuals are typically Chinese nationals pressed into service and required to report back to the Chinese government. (Wall Street Journal)
China’s powerful spy agency has attacked recent diplomatic overtures from the US as mixing engagement and containment, hinting that a possible meeting of the two countries’ presidents in November will be in jeopardy if Washington does not show more “sincerity”. The rare warning from the Ministry of State Security came less than a week after US commerce secretary Gina Raimondo visited Beijing, praising her meetings with Chinese officials but saying US businesses viewed China as increasingly “uninvestable”. (Financial Times)
U.S. Commerce Secretary Gina Raimondo warned China in interviews that the patience of U.S. business was "wearing thin," saying American companies deserved a "predictable environment and a level playing field." The two biggest economies in the world used to be each other's largest trade partners, but Washington now trades more with neighboring Canada and Mexico, while Beijing trades more with Southeast Asia. While in China recently, Raimondo had said there was strong appetite among U.S. businesses to make the relationship work and that, while some actions of the Chinese government were positive, the situation on the ground needed to match the rhetoric. "China is making it more difficult," Raimondo told CBS's Face the Nation. "I was very clear with China that we need to - patience is wearing thin among American business. They need and deserve a predictable environment and a level playing field. And hopefully China will heed that message so we can have a stable growing commercial relationship." (Reuters)
The undeclared race to replace Emmanuel Macron. In a memorable phrase that captured his precocious ambition four years before he ran for the French presidency, Nicolas Sarkozy confessed in 2003 that his mind was focused on the top job and “not only when he shaved” every morning. The comment marked the start of his long and fractious struggle to succeed his boss, Jacques Chirac, which he did in 2007. Today, four years before the French elect a successor to their current president, an undeclared race to take over from Emmanuel Macron is also breaking out among his present and former lieutenants. The French constitution allows a president to serve only two consecutive terms (though after stepping down in 2027, when he will be only 49, Mr Macron could stage another bid five years later). But he still has plenty of time to try to reshape France, and he gives no sign of tiring of the job, nor of shrinking ambition. He vowed recently to keep governing “until the last quarter of an hour” of his term. (The Economist)
Scientists warn invasive pests are taking a staggering toll on society: Invasive pests are wreaking havoc across the planet, destroying crops, disseminating pathogens, depleting fish people rely on for food and driving native plants and animals toward extinction, according to a major report backed by the United Nations. The landmark assessment found more than 3,500 harmful invasive species cost society more than $423 billion a year, a tally only expected to grow as the modern age of global trade and travel continues to supercharge the spread of plants and animals across continents like never before. By hitching a ride on cargo ships and passenger jets, exotic species are bridging oceans, mountain ranges and other geographic divides otherwise insurmountable without human help. The result is a great scrambling of the planet’s flora and fauna, with dire implications for humans and the ecosystems they depend on. (Washington Post)
Blistering late-season heat wave baking eastern U.S.: An exceptional, expansive dome of unseasonable heat is baking the central and eastern United States, bringing early-September temperatures that would be high even by July standards and delaying the arrival of autumn air. On Labor Day, highs in the upper 90s to around 100 will spread from Texas to Minnesota to the Mid-Atlantic. (Washington Post)
Economy
Unemployment rate unexpectedly rose to 3.8% in August as payrolls increased by 187,000. The unemployment rate rose sharply in August, as the summer of 2023 neared a close with a job market in slowdown mode. Nonfarm payrolls grew by a seasonally adjusted 187,000 for the month, above the Dow Jones estimate for 170,000, the U.S. Bureau of Labor Statistics reported Friday. However, the unemployment rate was 3.8%, up significantly from July and the highest since February 2022, and nonfarm payrolls estimates for previous months showed sharp downward revision. That increase in the jobless level came as the labor force participation rate rose to 62.8%, the highest since February 2020, just before the Covid pandemic declaration. The total labor force size increased by 736,000. A more encompassing unemployment measure that counts discouraged workers as well as those working part-time for economic reasons jumped to 7.1%, a 0.4 percentage point increase and the highest since May 2022. (CNBC)
‘Very stupid’: Italy’s bank tax remains controversial as government scrambles to update it. Italy’s shock tax on banks continues to prove controversial, even as the government insists it can improve it. Europe’s main bank stock index fell almost 3% on Aug. 8, after the Italian government announced plans to impose a 40% windfall tax on banks’ profits. The move caught traders off guard and sent shockwaves throughout the continent. The market reaction and wide-spread backlash pushed Rome to tone down the plans within 24 hours. Nearly a month later, the government is still studying how to make the measure work — but analysts and policymakers remain criticial. “It’s a very stupid law,” Carlo Calenda, national secretary of the Azione political party, told CNBC over the weekend. Calenda, Italy’s former deputy minister of economic development, warned the policy could put off international investors. (CNBC)
For small biz reliant on summer tourism, extreme weather is the new pandemic -- for better or worse. For small businesses that rely on summer tourism to keep afloat, extreme weather is replacing the pandemic as the determining factor in how well a summer will go. The pandemic had its ups and downs for tourism, with a total shutdown followed by a rush of vacations due to pent-up demand. This year, small businesses say vacation cadences are returning to normal. But now, they have extreme weather to deal with — many say it’s hurting business, but more temperate spots are seeing a surge. Tourism-related businesses have always been at the mercy of the weather. But with heat waves, fires and storms becoming more frequent and intense, small businesses increasingly see extreme weather as their next long-term challenge. (Associated Press)
Diamond Prices Are in Free Fall in One Key Corner of the Market. De Beers has been forced to slash prices aggressively for one of its benchmark products. One of the world’s most popular types of rough diamonds has plunged into a pricing free fall, as an increasing number of Americans choose engagement rings made from lab-grown stones instead. Diamond demand across the board has weakened after the pandemic, as consumers splash out again on travel and experiences, while economic headwinds eat into luxury spending. However, the kinds of stones that go into the cheaper one- or two-carat solitaire bridal rings popular in the US have experienced far sharper price drops than the rest of the market. (Bloomberg)
On September 4, 1998, Larry Page and Sergey Brin, both PhD students at Stanford University at the time, founded a company named Google. Having gone public on August 19, 2004 at a valuation $23 billion, Google/Alphabet is now worth more than $1.7 trillion, making it one of the largest public companies in the world, trailing only Apple, Microsoft and Saudi Aramco, all currently valued above $2 trillion. Anyone who bought Google shares in the company’s IPO roughly 19 years ago and was smart enough to hold on to them through the financial crisis, the post-Covid tech crunch and several other ups and downs, can now look back at a sizeable return or even a small fortune, depending on the initial investment. An initial investment of $1,000 at the IPO price of $85 would now be worth more than $65,000. A $5,000-investment is now worth more than $300k and anyone lucky enough to bet a little more than $15,000 on Google in 2004 is now sitting on $1 million worth of Alphabet shares. But as we all know: hindsight is golden. (Statista)
Technology
New iPhone, new charger: Apple bends to EU rules. The firm's phones currently use its proprietary Lightning adaptor, unlike rivals, including Samsung. A European Union law requires phone manufacturers to adopt a common charging connection by December 2024 to save consumers money and cut waste. Most new Apple products such as the latest iPads already use USB-C, but the firm had argued against the EU rule.When it was introduced in September 2021, an Apple representative told BBC News: "Strict regulation mandating just one type of connector stifles innovation rather than encouraging it, which in turn will harm consumers in Europe and around the world." Lightning to USB-C adaptors are already available from other electronics brands including Amazon, and all iPhones since the iPhone 8 which launched in 2017 have supported wireless charging. As the current iPhone 14 now looks to be the last Apple device to exclusively use it, this could mark the beginning of the end of the Lightning cable - which retails on the Apple store for £19. It's unclear whether this will be a global change to the product, although the tech giant is less likely to make a different version of the handset for the European market alone. (BBC)
Mercedes and BMW want to take on Tesla. Check out their new electric concept cars. Mercedes-Benz and BMW took the wraps off electric concept cars as they look to catch up with Tesla in the premium end of the market. At the IAA auto show in Munich, Mercedes showed off the Mercedes-Benz Concept CLA Class while BMW revealed the BMW Vision Neue Klasse. These cars are built on an entirely new platforms from the German automakers that will underpin both their EV offerings for the coming years, in what has been their most aggressive push into battery-powered vehicles yet. They are concept cars, so it's unclear what their final form will look like when they're eventually produced. (CNBC)
Teardown of Huawei's new phone shows China's chip breakthrough. Huawei Technologies and China's top chipmaker SMIC (0981.HK) have built an advanced 7-nanometer processor to power its latest smartphone, according to a teardown report by analysis firm TechInsights. Huawei's Mate 60 Pro is powered by a new Kirin 9000s chip that was made in China by Semiconductor Manufacturing International Corp (SMIC), TechInsights said in the report shared with Reuters on Monday. Huawei started selling its Mate 60 Pro phone last week. The specifications provided advertised its ability to make satellite calls, but offered no information on the power of the chipset inside. The processor is the first to utilize SMIC's most advanced 7nm technology and suggests the Chinese government is making some headway in attempts to build a domestic chip ecosystem, the research firm said. (Reuters)
Meet Ernie, China’s answer to ChatGPT. Ernie bot has some controversial views on science. China’s premier artificial intelligence (ai) chatbot, which was released to the public on August 31st, reckons that covid-19 originated among American vape-users in July 2019; later that year the virus was spread to the Chinese city of Wuhan, via American lobsters. On matters of politics, by contrast, the chatbot is rather quiet. Ernie is confused by questions such as “Who is China’s president?” and will tell you the name of Xi Jinping’s mother, but not those of his siblings. It draws a blank if asked about the drawbacks of socialism. It often attempts to redirect sensitive conversations by saying: “Let’s talk about something else.” Ernie’s reticence will come as no shock to Chinese users familiar with a heavily censored internet. They may be more surprised by the ai’s origins. For Ernie is the brainchild of Baidu, a Chinese tech giant that has for years been outshone by rivals. Now, thanks to ai, the firm is staging a comeback. The extent to which it succeeds will say much about the prospects for Chinese tech, which is squeezed both by America’s export controls and Mr Xi’s increasing authoritarianism. (The Economist)
Smart Links
A Summer of Strikes: Work stoppages in the U.S. this year could reach heights rarely seen in recent decades. (New York Times)
Back-to-school US spending set to hit record high in 2023. (Reuters)
Where in the World Are People Back in the Office? (New York Times)
This veteran VC doesn’t think ARM’s IPO will have the impact that everyone is hoping it will. (TechCrunch)
Canada's economy unexpectedly shrinks; central bank likely to hold rates. (Reuters)
T-Mobile to lay off 5,000 employees. (CNN)