'Tech Curbs'
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The World
U.S., China Plunge Further Into a Spiral of Hostilities: “Just a few weeks ago, China and the U.S. were tiptoeing toward something akin to a diplomatic cease-fire. President Biden’s envoy was due in Beijing to craft a possible framework for high-level government-to-government dialogues and stabilize ties after years of bitterness. Then, a suspected Chinese surveillance balloon was detected crossing North America, casting a new shadow over relations. The fence-mending trip was postponed and relations between the two powers have plunged further into a spiral of recrimination and tension. This week, China’s leader, Xi Jinping, and his foreign minister accused Washington of suppressing China’s development and driving the two countries toward conflict. “Everything the other side does is seen as negative and done with evil intention,” said Suisheng Zhao, a China foreign-policy specialist at the University of Denver. “That is the Cold War mentality.” (Wall Street Journal)
China responds to US tech curbs, financial risks with broad regulatory shake-up. Beijing will create a new oversight body for parts of the finance sector, strengthen the science and technology ministry, and establish a new data regime. The restructuring fits President Xi Jinping’s efforts to fortify China against what he sees as growing external uncertainties and a domestic economic slowdown. (South China Morning Post)
China berates Japan over massive military expansion plans: An unusually harsh scolding reflects Beijing’s frustration at Tokyo’s willingness to side with the US, analyst says. (South China Morning Post)
A record-low 15% of Americans view China favorably, marking a five-percentage-point, one-year decline in this rating, which Gallup has measured since 1979. China has been gradually falling in the U.S. public’s esteem in recent years and is down a total of 38 points since 2018. More than eight in 10 U.S. adults have a negative opinion of China, including 45% who view it very unfavorably and 39% mostly unfavorably. (Gallup)
Intelligence Suggests Pro-Ukrainian Group Sabotaged Pipelines, U.S. Officials Say. New intelligence reporting amounts to the first significant known lead about who was responsible for the attack on the Nord Stream pipelines that carried natural gas from Russia to Europe. (New York Times)
Ukraine has denied any involvement in last year’s explosions that damaged the Nord Stream gas pipelines connecting Russia and western Europe, after media reports in the US and Germany suggested pro-Ukrainian operatives may have been behind the attacks. (Financial Times)
Japanese Views of Russia Are Particularly Negative: Japanese adults have the most negative views of Russia among all countries surveyed on Morning Consult's Russia-Ukraine Crisis Tracker, with Japanese net favorability toward Russia — the share with positive views minus the share with negative views — 77 points underwater. Japan may seem far from the action in Ukraine, but Tokyo has a long history of animosity with Moscow dating back to the 19th century, and Japan has been among the most generous supporters of Kyiv outside Europe. (Morning Consult)
A parliamentary delegation from Hungary said it supports Sweden’s NATO membership bid after meeting the speaker of the Swedish parliament to iron out what Hungary’s governing party has called “political disputes.” (Associated Press)
France was partly brought to a standstill as millions of protesters took to the streets in one of the biggest strike actions yet. Rejecting the government’s proposed pension reform bill, which includes raising the legal retirement age from 62 to 64, workers across all sectors turned out in force to show their disapproval in nation-wide demonstrations. (France 24)
Gender equality will take 300 years to achieve, UN chief warns: Progress toward gender equality is “vanishing before our eyes,” United Nations Secretary General António Guterres told the Commission on the Status of Women. Guterres cited high rates of maternal mortality, girls being forced into early marriage, and girls being kidnapped and assaulted for attending school as evidence that hope of achieving gender equality “is growing more distant.” (CNN)
Japan moves to ease export curbs on South Korea, eyes a visit by President Yoon Suk Yeol. Trade talks to resume as Japan Prime Minister Fumio Kishida hails 'opportunity' to advance bilateral relations. (Nikkei Asia Review)
The Turkish Enterprise and Business Confederation estimates the total cost of the Feb. 6 earthquake that killed at least 45,000 people at $84.1 billion — nearly 10% of the country’s annual economic output — the lion’s share of which would be for housing, at $70.8 billion, with lost national income pegged at $10.4 billion and lost working days at $2.91 billion. “I do not recall… any economic disaster at this level in the history of the Republic of Turkey,” said Arda Tunca, an Istanbul-based economist at PolitikYol. (CNN)
California forecasters warn of an approaching atmospheric river: Another atmospheric river system has set its sights on California, raising considerable concern about flooding and structural damage as warm rain is expected to fall atop the state’s near-record snowpack this week. “It now appears increasingly likely that a potentially significant and very likely warm atmospheric river event will probably affect some portion of Northern or Central California sometime between about late Thursday and Saturday,” UCLA climate scientist Daniel Swain said. (Los Angeles Times)
Greenland temperatures surge up to 50 degrees above normal, setting records. (Washington Post)
Economy
Chair Jerome Powell said the Fed would consider raising interest rates by a larger half percentage point this month and was likely to lift rates higher than previously expected this year to cool an economy that has shown surprising strength. Powell’s comments to lawmakers laid the groundwork for a notable shift in tactics to reduce price pressures. He said hotter inflation and hiring could lead central bank officials to alter their recently adopted strategy of raising rates in smaller quarter-point increments. Stocks slumped, with the Dow Jones Industrial Average dropping about 575 points, or 1.7%. The S&P fell 1.5%. The Nasdaq Composite retreated 1.25%. The yield on the two-year Treasury note climbed above 5% for the first time since July 2007. The yield on the 10-year Treasury slid to 3.974% from 3.981% Monday. (Wall Street Journal)
Billionaire Ken Griffin said the setup for a US recession is unfolding, with the Federal Reserve needing to raise interest rates further after Americans were stung with “traumatic” levels of inflation. (Bloomberg)
Net cash outflows from Chinese-stock mutual funds have hit a two and a half year high as the market shifts from buying to profit-taking, with views divided on new measures announced at China's National People's Congress. Some in the market voiced concerns over President Xi Jinping's efforts to further strengthen the government, while others view the bolstering of cutting-edge industries such as semiconductors as an opportunity. (Nikkei Asia Review)
Series B investment tanks and that’s a bad sign of things to come: When technology and biotech valuations began to tumble last year, U.S. Series B funding held up at first. That’s no longer the case. In recent months, Series B funding to U.S. startups has fallen sharply. So far in 2023, investment is on track to come in at the lowest quarterly level in more than three years. (Crunchbase News)
Tech Layoffs Are Bad News for MBA Grads Seeking Jobs. (Bloomberg)
As Customer Problems Hit a Record High, More People Seek ‘Revenge’: Americans are encountering more problems with companies’ products and services than ever before, and a higher proportion of them are actively seeking “revenge” for their troubles, a new study has found. Some 74% of the 1,000 consumers surveyed said they had experienced a product or service problem in the past year. That is up from 66% in 2020, when the study last was conducted, and 56% in 2017. Only 32% told researchers they had experienced a problem in 1976, when a similar version of the study was first conducted. The percentage of consumers who have taken action to settle a score against a company through measures such as pestering or public shaming in person or online, has tripled to 9% from 3% in 2020, according to the study. That reversed a downward trend with regards to revenge-seeking behavior. (Wall Street Journal)
Technology
How Google Became Cautious of AI and Gave Microsoft an Opening: More than two years ago, a pair of Google researchers started pushing the company to release a chatbot built on technology more powerful than anything else available at the time. The conversational computer program they had developed could confidently debate philosophy and banter about its favorite TV shows, while improvising puns about cows and horses. The researchers, Daniel De Freitas and Noam Shazeer, told colleagues that chatbots like theirs, supercharged by recent advances in artificial intelligence, would revolutionize the way people searched the internet and interacted with computers, according to people who heard the remarks. Google executives rebuffed them at multiple turns, saying in at least one instance that the program didn’t meet company standards for the safety and fairness of AI systems, the people said. Now Google, the company that helped pioneer the modern era of artificial intelligence, finds its cautious approach to that very technology being tested by one of its oldest rivals. (Wall Street Journal)
Cartier and Tiffany are getting into AR to sell luxury to Gen Z: Our senior reporter Tanya Basu recently tried on a Cartier Tank watch and a slew of Tiffany bracelets, watching the metal and diamonds shine in the dim light. It wasn’t at a store, though; she was in bed, barefoot and in sweatpants, using an AR experience on Snap that let her see how the jewelry looked on her wrist. The Cartier and Tiffany AR campaigns are the latest in a series of collaborations Snap is making with brands to get Gen Z to invest in luxury using virtual try-on experiences. There’s evidence that, while they might not drive immediate purchases, these campaigns can change consumer attitudes and behavior. (MIT Technology Review)
Many VCs question whether the generative AI startups attracting eye-watering valuations will make enough money, fearing a repeat of the crypto investment hype. (Financial Times)
EV Startups Brace for Another Tough Year as Cash Dwindles: The earnings results over the past few weeks for these EV makers illustrated the urgency of their predicament. While companies are now producing vehicles, losses continue to mount as they have struggled to spool up assembly lines and boost sales as planned, whittling down their financial cushions and increasing the likelihood of needing to raise more money. (Wall Street Journal)
Atrium Health is partnering with tech retailer Best Buy to co-design hospital-at-home programming, to bolster Atrium’s existing hospital-at-home program and sell to other hospital clients down the line. The partnership aims to combine Atrium’s hospital-at-home program and existing telemedicine infrastructure with Best Buy Health, the retailer’s healthcare vertical that includes care-at-home business Current Health, along with its home installation and supply chain capabilities. The Atrium and Best Buy partnership seeks to improve some aspects of hospital-at-home programs that can be particularly tricky for operators, like patient education and technology installation in the home. (Healthcare Dive)
Smart Links
To circumvent higher costs and dodge crowds, many families opt to pull children out of class for trips. (Wall Street Journal)
A majority of millennials and Gen Zers pay for news. (Poynter)
Starbucks CEO to testify before Bernie Sanders panel on labor practices. (Politico)
A chunk of Rancho Palos Verdes is sliding into the sea. Can the city stop it? (Los Angeles Times)