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The World
President Xi Jinping’s push to revive China’s economy at the outset of his historic third term in power relies on two abrupt shifts in policy: a hasty retreat from his zero-Covid strategy and a move to stabilize tense relations with the US. While the former effort is well under way and will provide at least a short, sharp boost to the world’s second-largest economy, the latter has been stalled by the “spy balloon” crisis, which has threatened to freeze diplomatic contact between the world’s superpowers and deepen divisions over advanced technology and Taiwan. If the aircraft was a surveillance operation, it would raise serious concerns about decision-making at the top of China’s policy apparatus just as Xi prepares to begin his precedent-breaking third term as president. (Financial Times)
China refused call with Pentagon chief on day balloon was shot down, US says: The US defense department requested a call between Lloyd Austin and Chinese Defense Minister Wei Fenghe immediately after taking down the surveillance device. (South China Morning Post)
The U.S. intelligence community has linked the Chinese spy balloon shot down to a vast surveillance program run by the People’s Liberation Army, and U.S. officials have begun to brief allies and partners who have been similarly targeted. The surveillance balloon effort, which has operated for several years partly out of Hainan province off China’s south coast, has collected information on military assets in countries and areas of emerging strategic interest to China including Japan, India, Vietnam, Taiwan and the Philippines. (Washington Post)
Japan, China Hold Foreign Minister Call Days After NATO Chief's Visit: Tokyo continues to try to keep relations with Beijing stable even as it deepens military cooperation with NATO and other partners. (The Diplomat)
Tankers in Iran’s “ghost fleet” have switched to carrying Russian oil since western curbs on Moscow intensified in December, as the Kremlin turned to sanctions-busting techniques pioneered by Tehran. At least 16 vessels that formed part of the “ghost” network that allowed Iran to breach US sanctions have begun to ship Russian crude oil over the past two months, according to Financial Times research. Before the surge, just nine vessels had switched on to the Russian route during the nine months since the start of the war in February last year.
Germany, Denmark and the Netherlands announced that they plan to provide Ukraine with at least 100 refurbished Leopard 1 battle tanks in the coming months, a pledge that comes as Kyiv anticipates a new Russian offensive around the anniversary of its invasion. The announcement followed Germany agreeing last month to allow deliveries of the more modern German-made Leopard 2 tanks to Ukraine. In a joint statement, the defense ministers of Denmark, Germany and the Netherlands said the shipment of the older Leopard 1 tanks was part of an effort “to support Ukraine in their endeavor to withstand Russian aggression.” (Associated Press)
The European Union’s legislature is preparing to host Volodymyr Zelenskyy should the Ukraine president decide to come to Brussels to attend an EU summit tomorrow. (Associated Press)
How Turkey’s Erdoğan responds to quake could impact his reelection chances: it’s an election year with very high stakes for him. Ahead of the May 14 presidential vote, Erdoğan’s reelection bid remains too close to call in the polls as he faces the biggest challenge to his leadership since he came to power 20 years ago, first as PM and later as president. Erdoğan knows he can’t have a repeat of 1999, when then-PM Bülent Ecevit bungled an even bigger disaster. His coalition government's inept and slow response to the İzmit quake was followed by a corruption scandal linked to licenses given to collapsed buildings – and later by the economic fallout of the tremor hitting heavily populated areas packed with businesses close to Istanbul. (GZERO Media)
Why it’s so hard to predict an earthquake: Many geologists say it’s nearly impossible to perfectly predict an earthquake, due to the sheer complexity of analyzing the entirety of the planet’s crust. Others say that a slew of new technology — including artificial intelligence, which may help make predictions faster and more precise, and smartphones, which can instantly send alerts and warn people to find shelter — can help save lives. But even the most promising efforts offer only seconds, or in some rare cases minutes, of advanced notice — making it hard to evacuate in time. A future where technology more precisely predicts the location, time and severity of an earthquake seems years away, earth science experts said, while inaccurate estimates can do more harm than good. “An earthquake happens very, very quickly,” Christine Goulet, director of the U.S. Geological Survey (USGS) Earthquake Science Center, said. “It’s fair [to say] that at this point, we are not capable of predicting earthquakes at all.” (Washington Post)
A deep-learning algorithm could detect earthquakes by filtering out city noise. (MIT Technology Review)
UK PM Rishi Sunak announced the biggest shake up of Whitehall since Brexit as he put energy security and scientific innovation at the forefront of his government’s agenda. The prime minister announced the creation of four new government departments as he attempted to focus his administration on turning Britain into a “scientific superpower”. He announced the creation of a new department for science, technology and innovation that would be led by Michelle Donelan, the former culture secretary. He told cabinet that “innovation would be the thing that drives the growth of the economy over the next decade”. (The Times)
The Mexican government said it opposes a possible restart of the Trump-era "Remain in Mexico" immigration policy, which forces asylum seekers to wait in Mexico for their cases to be processed in the United States. The program is currently suspended but the Biden administration may be forced to re-implement it should lawsuits from Texas and Missouri prevail. (Reuters)
In the first State of the Union address of a new era of divided government that at times turned surprisingly rowdy, Mr. Biden vowed to cooperate with the other party but offered no concessions to it. Instead, he called on Republicans to embrace his program of raising taxes on the wealthy and extending social aid to the needy, citing bipartisan legislation passed when Democrats were in charge. (New York Times)
TikTok is crushing YouTube in annual study of kids’ and teens’ app usage: According to an ongoing annual review of kids’ and teens’ app usage and behavior globally, the younger demographic — minors ranging in ages from 4 through 18 — began to watch more TikTok than YouTube on an average daily basis starting in June 2020. This past year, the gulf between the two widened, it said, as kids in 2022 saw their average daily use of TikTok climb to a whopping 107 minutes, or 60% longer than the time they spent watching video content on YouTube (67 minutes). TikTok not only topped the average daily usage of other video apps, like Netflix (48 mins.) and Disney+ (40 mins.), it also came out ahead of other social apps, including Snapchat (72 mins.), Instagram (45 mins.), Facebook (20 mins.), Pinterest (16 mins.) and Twitter (10 mins.) among the under-18 crowd. (TechCrunch)
Economy
Fed chair Jay Powell warned that the US central bank might have to raise interest rates more than expected by investors because it will probably take a “significant period of time” to tame inflation given stronger labour market data. Powell’s comments to the Economic Club of Washington were his first since data last week showed a surprising jump in jobs growth in January, which suggested the Fed might have to go further in its monetary tightening to cool down the economy. But even as Powell stressed that the central bank was prepared to be more aggressive if needed, his intervention was not as hawkish as expected by some economists and market strategists. (Financial Times)
The U.S. posted its largest trade deficit on record last year, as global demand weakened amid high inflation, climbing interest rates, disruptions due to the Ukraine war and the pandemic’s continued effects. America’s imports exceeded its exports by $948.1 billion in 2022, up 12.2% from 2021. (Wall Street Journal)
Trade between the U.S. and China set a record last year, despite bilateral tensions running high. Imports and exports of goods between the countries hit $690.6 billion, a U.S. Bureau of Economic Analysis report shows. The U.S. imported more toys and other consumer products, with China increasing imports of soybeans and other foods. (Nikkei Asia Review)
U.S. Business Owners Pay Premium to Hire Migrant Workers in Extremely Tight Labor Market: Employers, struggling to fill hourly wage jobs in construction, restaurants and other services, are offering higher pay and better working conditions to people coming to the U.S. to work; ‘The scarcity is huge’. (Wall Street Journal)
A new partnership between the US and India – targeting semiconductors, artificial intelligence and telecommunications, among other areas – could accelerate the realignment of global supply chains at the expense of China’s interests, according to analysts. Details of the US-India Initiative on Critical and Emerging Technologies (iCET), published last Tuesday, also include planned cooperation in quantum computing and defence. While China is not mentioned in the document, the agreement between Washington and New Delhi is seen as part of US efforts to limit the role of the world’s second-largest economy in global supply chains. (South China Morning Post)
BP reported a record profit of $28 billion for 2022 and hiked its dividend, but infuriated climate activists by rowing back on plans to slash oil and gas output and reduce carbon emissions by 2030. The blockbuster profit follows similar reports from rivals Shell, Exxon Mobil and Chevron last week after energy prices surged in the wake of Russia's invasion of Ukraine, prompting new calls to further tax the sector as households struggle to pay energy bills. (Reuters)
Home-buying companies are stuck with hundreds of homes they acquired on behalf of clients, an example of how housing-oriented companies that thrived when mortgage rates were super low are struggling to survive in a higher-rate environment. (Wall Street Journal)
Zoom plans to cut ~1,300 staff, or ~15% of its workforce, offering US employees up to 16 weeks severance, including salary, health care, and bonus. CEO Eric Yuan wrote in the blog post that as the world continues to adjust to life after the pandemic, the company needs to adapt to the “uncertainty of the global economy.” (CNBC)
Ebay to lay off 500 employees. (Reuters)
Some of Credit Suisse’s junior and mid-level bankers will get their bonuses paid out in installments, the latest twist in the firm’s handling of employee compensation amid a tumultuous overhaul. Each of the three installments will be paid about 40 days after April 1, July 1 and Oct. 1. (Bloomberg)
Technology
Microsoft announces new Bing and Edge browser powered by upgraded ChatGPT AI: Microsoft says it’s using conversational AI to create a new way to browse the web. Users will be able to chat to Bing like ChatGPT, asking questions and receiving answers in natural language. “It’s a new day in search,” said Microsoft CEO Satya Nadella at an event announcing the products. Nadella argued that the paradigm for web search hasn’t changed in decades, but that AI can deliver information more fluidly and quickly than traditional methods. (The Verge)
Joanna Stern: I Tried Microsoft’s New AI-Powered Bing. Search Will Never Be the Same. “We are grounded in the fact that Google dominates this [search] space,” Microsoft Chief Executive Satya Nadella told me in an interview. “A new race is starting with a completely new platform technology. I’m excited for users to have a choice finally.” (Wall Street Journal)
Why detecting AI-generated text is so difficult (and what to do about it): Last week, OpenAI unveiled a tool that can detect text produced by its AI system ChatGPT. But if you’re a teacher who fears the coming deluge of ChatGPT-generated essays, don’t get too excited. The tool is still very much a work in progress, and it is woefully unreliable, only identifying 26% of AI-written text correctly as “likely AI-written” 26% of the time. Even while we should expect this number to improve, we’re extremely unlikely to ever get a tool that can spot AI-generated text with 100% certainty. (The Algorithm)
Super Bowl ads fetch record rates: Fox Sports has sold out of ad placements for the Super Bowl. Some 30-second spots are fetching more than $7 million. Fox had signaled before the start of the season last September that it had already had takers for 95% of Super Bowl spots, an unusually fast start for the sales process even by the standards of the most-watched TV broadcast of the year. This year's event is notably missing one major category: crypto. (Axios, Deadline)
Meta is asking many of its managers and directors to transition to individual contributor jobs or leave the company as it tries to become more efficient. The process is known internally as a "flattening," the people said. Higher-level managers are sharing the directive with their subordinates in the coming weeks, separate from the company’s regular performance reviews that are currently underway. Individual contributors aren’t in charge of others, and instead focus on tasks like coding. (Bloomberg)
Meta is revamping its Horizon Worlds metaverse app: Facebook’s parent company is seeking to draw in more teen and young-adult users after working to improve the service’s design, according to a memo sent to the team working on the initiative. The new strategy includes opening up Horizon to teens under 18. A teen launch for Horizon could happen as soon as March. (Wall Street Journal)
Smart Links
US-EU Minerals Deal ‘Promising’ Route, German Economy Chief Says. (Bloomberg)
Super Bowl Betting Projected to Hit Record $16 Billion. (Wall Street Journal)
Single Women Own More Homes Than Single Men. (New York Times)
The Astonishing Transformation of Austin. (New Yorker)
27% of board directors at Russell 3000 companies are women, but only 7% of board chairs and 13% of lead directors are women. (Fortune)