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The World
China’s ambassador to Washington has warned Beijing will retaliate against US national security measures targeted at the country, including a mechanism to screen inbound investment being prepared by the White House. Speaking at the Aspen Security Forum, Xie Feng said China “cannot remain silent” while the US imposes sanctions and export controls that will make it harder for China to secure advanced US technology, including cutting-end chips. “The Chinese government cannot simply sit idly by,” Xie told the security forum on Wednesday. “We will not make provocations, but we will not flinch from provocations. So, China definitely will make our response.” (Financial Times)
Chinese leaders rebuffed attempts by John Kerry, President Biden’s climate envoy, to persuade them to commit to tougher climate action during three days of talks in Beijing, a response that suggested that tensions between the countries are making it difficult to work together on a crisis that threatens the planet. Mr. Kerry emerged late Wednesday from the lengthy negotiations in Beijing with no new agreements. In fact, the Chinese president, Xi Jinping, insisted in a speech that China would pursue its goals to phase out carbon dioxide pollution at its own pace and in its own way. (New York Times)
Russian President Vladimir Putin is under pressure as “cracks” have formed in his power structure following the Wagner Group’s munity, two senior British officials said in separate events Tuesday. Richard Moore, the head of MI6, assessed in a rare public address that the Yevgeny Prigozhin-led revolt against the Kremlin served as one of the greatest challenges to the autocrat’s two-decade rule. “I think he probably feels under some pressure. Prigozhin was his creature, utterly created by Putin, and yet he turned on him,” Moore said in Prague during a POLITICO event. “He really didn’t fight back against Prigozhin. He cut a deal to save his skin using the good offices of the leader of Belarus.” (Politico)
Russia warned that ships sailing to Ukraine's Black Sea ports from Thursday will be seen as potential military targets, days after its withdrawal from a safe-passage deal that threatens to worsen global food supplies. Ukraine said it was establishing a temporary shipping route via Romania, one of the neighbouring Black Sea countries. (Reuters)
Video appears to show Wagner chief for first time since aborted mutiny: Footage released on Telegram is said to show Yevgeny Prigozhin addressing fighters in Belarus. (The Guardian)
Swedish embassy in Baghdad stormed, set alight over Koran burning: Hundreds of protesters stormed the Swedish embassy in central Baghdad in the early hours of Thursday morning, scaling its walls and setting it on fire in protest against the expected burning of a Koran in Sweden. (Reuters)
Stanford University President Marc Tessier-Lavigne said he would resign from his post after a review by a panel of scientists concluded that research papers he contributed to contained “manipulation of research data,” according to a report released by a special university committee. The panel’s report determined that data was manipulated in scientific papers to which Tessier-Lavigne, a neuroscientist, contributed, although the panel found no evidence that Tessier-Lavigne knew of or engaged in the research misconduct occurring in his lab. Of the 12 papers the panel reviewed, Tessier-Lavigne is a principal author in five of them. He said he plans to retract three of the papers and correct the other two. (CNN)
Wesleyan University to End Legacy Admission. (Wesleyan University)
The U.S. has reached a milestone in the long struggle against Covid: The total number of Americans dying each day — from any cause — is no longer historically abnormal. Excess deaths, as this number is known, has been an important measure of Covid’s true toll because it does not depend on the murky attribution of deaths to a specific cause. Even if Covid is being underdiagnosed, the excess-deaths statistic can capture its effects. The statistic also captures Covid’s indirect effects, like the surge of vehicle crashes, gun deaths and deaths from missed medical treatments during the pandemic. During Covid’s worst phases, the total number of Americans dying each day was more than 30 percent higher than normal, a shocking increase. For long stretches of the past three years, the excess was above 10 percent. But during the past few months, excess deaths have fallen almost to zero, according to three different measures. (New York Times)
Economy
Wall Street banks spend over $1bn on severance costs amid sharp job cuts: The biggest US banks spent more than $1bn on severance costs during the first six months of 2023, underscoring the steep price of unwinding Wall Street’s overexpansion during the coronavirus pandemic. Goldman Sachs, which has been hit particularly hard by the slowdown in trading and investment banking, on Wednesday became the latest big bank to take a charge for recent job cuts, telling investors it had spent $260mn in the first half of the year in severance costs. Goldman has laid off about 3,400 employees, or about 7 per cent of its overall staff, this year. On Tuesday, Morgan Stanley, which has let go about 3,000 employees this year, said that it had spent more than $300mn on staff reductions. And Citigroup last week said that severance cheques have added $450mn to its expenses. The bank announced last month that it had nearly completed 5,000 job cuts. (Financial Times)
United Airlines posted record quarterly earnings and forecast a strong third quarter due to an unrelenting travel boom, led by a return of international travel. The airline lost some of its capacity during the second quarter because of flight disruptions at its Newark, New Jersey, hub. But its quarterly results and forecast still surpassed analysts’ estimates due to strong demand. Shares rose roughly 3% in extended trading following the report. United is the second U.S. carrier to report results for the recent quarter, echoing Delta Air Lines’ upbeat travel demand outlook. American Airlines reports earnings before the market opens Thursday. United and other carriers have been expanding their international service to capitalize on strong bookings after a years-long pandemic slump. The airline’s revenue for international flights made up about 40% of its total sales but is growing faster than domestic sales. (CNBC)
An unexpected group of workers is leading the resistance to the five-day office week: top-tier executives. As the corporate push to get workers back to the office widens, new research from McKinsey shows that an influential group of senior employees strongly prefers the option of working from home at least part of the time. They are top performers and competitors will poach them with the promise of remote work. These executives may be small in number, but can have outsize stature inside organizations. “It’s a group of talent that has a lot of sway,” around company culture and what attendance looks like, says Brian Vickery, a partner at McKinsey. (Wall Street Journal)
Tension Is Rising Around Remote Work. (Harvard Business Review)
Technology
China built more 5G base stations in 3 months than US did in 2 years. China has exceeded its target for 5G base stations six months ahead of time, having built 3 million of them by the end of June, latest government data showed. The figures also suggest that China is leaving the United States far behind in the 5G connectivity race, with more than 600,000 new stations added in the last three months alone. By comparison, the US built about 100,000 5G base stations between 2019 and 2021, according to the latest available industrial estimate. In March, China’s Ministry of Industry and Information Technology (MIIT) announced plans to build 2.9 million 5G base stations by year-end. (South China Morning Post)
Apple is quietly working on artificial intelligence tools that could challenge those of OpenAI Inc., Alphabet Inc.’s Google and others, but the company has yet to devise a clear strategy for releasing the technology to consumers. The iPhone maker has built its own framework to create large language models — the AI-based systems at the heart of new offerings like ChatGPT and Google’s Bard — according to people with knowledge of the efforts. With that foundation, known as “Ajax,” Apple also has created a chatbot service that some engineers call “Apple GPT.” (Bloomberg)
Facebook parent company Meta Platforms has built an artificial intelligence system that rivals the likes of ChatGPT and Google’s Bard but it’s taking a different approach: releasing it for free. Meta CEO Mark Zuckerberg said Tuesday that the company is partnering with Microsoft to introduce the next generation of its AI large language model and making the technology, known as Llama 2, free for research and commercial use. Much like tech peers Google and Microsoft, the social media company has long had a big research team of computer scientists devoted to advancing AI technology. But it’s been overshadowed as the release of ChatGPT sparked a rush to profit off of “generative AI” tools that can create new prose, images and other media. (Associated Press)
Microsoft is offering free cybersecurity tools to some government and commercial customers following criticism of the tech giant’s handling of a major alleged Chinese hack that compromised US government email accounts. Starting in September, Microsoft cloud computing customers won’t have to pay extra money to get access to critical data to help them spot cyberattacks, Microsoft said Wednesday. The Wall Street Journal first reported on Microsoft’s policy change. The move comes after cybersecurity officials privately expressed frustration that Microsoft had not done enough to detect the alleged Chinese cyber-espionage campaign, according to US officials. The campaign hit two-dozen organizations and became public last week. The State Department says it detected the cyber activity in June and reported it to Microsoft. (CNN)
Netflix’s crackdown on password sharing appears to be paying off. The streaming giant on Wednesday said it added nearly six million paid subscribers during the three months ending in June, bringing its total to more than 238 million globally. The company said it has now launched paid sharing — its effort to get users to stop sharing accounts with others for free — in more than 100 countries, after beginning its broad rollout earlier this year. Netflix said revenue in those regions is now higher than before the service launched, and that “sign-ups are already exceeding cancellations.” (CNN)
Smart Links
US car dealer Carvana’s shares surge 40% on plan to cut $1bn from debt. (Financial Times)
Microsoft and Activision Blizzard Extend $75 Billion Merger Deadline to Mid-October. (Wall Street Journal)
The world's cheapest Domino's pizza is in inflation-hit India. It costs $0.60. (Reuters)
Wall Street Underdog Wells Fargo Grabs Highest Share in Years. (Bloomberg)
The Lounge Battle Royale Coming Soon to Your Airport: Chase Sapphire joins fight to woo big-spending travelers. (Wall Street Journal)
IBM misses second-quarter revenue estimates as tech spending cools. (Reuters)