Plus: Istanbul (not Constantinople)
Hi Intriguer. I was sorry to hear of Daniel Kahneman’s passing yesterday. If you’re like me, reading Kahneman's ‘Thinking, Fast and Slow’ was your first real exploration of the fact that our brains are full of biases that impact our decision-making.
Studying cognitive biases is thankfully now mandatory in most leadership courses, which might be an even more impressive achievement than his 2002 Nobel Prize in Economics.
Our briefing today leads with President Xi Jinping’s surprise audience with US CEOs yesterday, and hoo boy, is it a story that puts all of our cognitive biases on show.
Are US CEOs suffering from ‘The Ostrich Effect’? Potentially. Are China hawks showing signs of the ‘Backfire Effect’? Arguably. Is everyone with a hot take on Twitter putting on an absolute clinic of confirmation bias? Abso-freaking-lutely.
– John Fowler, Co-Founder
PS – This is our last briefing for the week, but we’ll be back in your inbox this Tuesday after a short break!
Israel asks US to reschedule meeting. Israel has asked the White House to reschedule a high-level meeting to discuss Israel’s planned Rafah ground operation, in an apparent bid to ease tensions between the two allies. Prime Minister Benjamin Netanyahu cancelled the meeting on Monday after the US declined to veto a UN Security Council resolution calling for a Gaza ceasefire and hostage release. Meanwhile Ireland, which has previously called for a ceasefire in Gaza, says it will intervene in the ongoing ICJ case against Israel under the Genocide Convention.
EU strikes Ukraine tariff-free deal. EU member states have struck a deal to extend tariff-free trade with Ukraine until June 2025, though there’s a new provision to safeguard some EU products from Ukrainian oversupply. The agreement comes after weeks of protests from European farmers calling on the EU to do more to protect the sector.
Yellen warns China against clean energy dumping. US Treasury Secretary Janet Yellen has warned China not to flood the world market with its cheap clean energy exports (like EVs and solar panels). She pledged to “make it a key issue in discussions” during her upcoming trip to China. Meanwhile, China has opened dispute settlement proceedings at the WTO against the US over Washington’s EV subsidies.
Amazon to make $2.75B AI investment. The tech giant announced the $2.75B investment into generative AI startup Anthropic, adding to its previous $1.25B commitment. This is Amazon’s largest outside investment to date.
(Not) A second to lose. The world’s clocks may have to be put back one second in the year 2029 to account for a faster-rotating Earth, according to a new study. This would be the first-ever “negative leap second”.
TOP STORY
President Xi’s surprise audience with US CEOs
President Xi with US CEOs and others at the Great Hall of the People yesterday.
Credits: Huang Jingwen/Xinhua/AP
China's leader, Xi Jinping, held a last-minute meeting with 20 US business leaders in Beijing yesterday (Wednesday) as part of a broader charm offensive.
The CEOs were in town for Beijing’s annual flagship China Development Forum. But before flying out, they received a cryptic invite to meet a "top Chinese leader". That same elliptical language had appeared in invites to Xi’s dinner with CEOs in San Francisco last November, so they duly cleared their schedules.
The group of bigwigs that then emerged (🇨🇳) on state TV with Xi in Beijing’s Great Hall of the People included familiar faces, including from Blackstone, FedEx, and Bloomberg, plus chipmakers Qualcomm and Broadcom, and even Harvard professor Graham Allison.
What'd they say?
Everyone in the room ended up rehearsing familiar lines, but it’s still worth recapping them here. In the 90-minute meeting, Xi reportedly (🇨🇳) said:
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“China-US relations cannot go back to the old days, but they can embrace a brighter future”
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China hasn't "peaked", but rather its prospects remain "bright"
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China will continue building a "first-class business environment", and
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There's nothing “inevitable” about the 'Thucydides Trap' (the term popularised by Professor Allison above, to describe the history of conflict between rising powers like China and established powers like the US).
Xi reportedly then "listened carefully" as the visiting executives raised their own familiar lines around the need to offer a fairer playing field for foreign companies in China, including better protection for intellectual property, and more transparency and predictability around China’s business rules.
So if it was all so familiar, why did Xi host this last-minute meeting? Three main reasons.
First, it's a follow-up to his San Francisco dinner with US CEOs last November (plus his meeting with President Biden, which helped stabilise US-China ties). Of course, it's still been an eventful five months since then: just this week, China filed its suit against US electric vehicle subsidies at the WTO, while the US and the UK levelled major allegations of mass hacking by China.
Second, there's probably a degree of compensation at play, both for the fact that Xi is skipping this week's annual Boao Forum (aka 'the Chinese Davos'), plus for the fact that Premier Li Qiang's annual meeting with foreign CEOs at the China Development Forum was axed earlier this week.
But third and most crucially, this surprise audience is a response to real domestic and international concerns around China's economy. Net foreign direct investment (FDI) collapsed by 80% last year, FDI itself is at its lowest levels since 1993, and consumer confidence is still hovering near recent lows.
So Xi’s meeting is really part of a broader full-court-press including Beijing’s first-ever ‘Invest in China Summit’ this week, a new 24 point action plan (relaxing various visa and investment rules), and its highly-anticipated new regulations (🇨🇳) to ease oversight of data heading overseas.
These kinds of public, investor-friendly acts are a way for Xi to ease some of the pressure he must be feeling abroad and, we can only assume, at home too.
INTRIGUE’S TAKE
Now, we’ve got to ask this: if you’re looking to ease concerns about your government’s predictability and transparency… is a last-minute invite to meet an unnamed senior official going to do the trick? Maybe not.
But that’s what happened, and it’s one of the many competing messages criss-crossing the Pacific right now. You’ve got the Pentagon saying China presents "the most comprehensive and serious challenge” to the US, while US CEOs get star-struck in the People’s Hall.
You’ve got Xi telling the world that China is open for business, while simultaneously spooking its neighbours with a massive military build-up.
You’ve got American CEOs criticising China’s continued government role in the economy, while Washington ramps up its own role in response.
And you’ve got China listening carefully to calls to boost its domestic consumption and then… boosting its massive manufacturing overcapacity instead – cue more global anxiety about China.
That’s the bewildering reality of a relationship this vast and complex. So then, in that context, will this week’s actions change anything? No. But do they reveal anything? Yes. In our view, they reveal the extent to which Xi clearly now realises the scale of the challenges ahead.
Also worth noting:
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Apple CEO Tim Cook was also invited to the audience with Xi, but he was already running his own charm offensive in Shanghai.
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The same day, Xi also met Dutch PM Mark Rutte. Seemingly referring to limits on Dutch chip equipment exports to China, Xi reportedly said that “no force can stop the pace of China’s scientific and technological development and progress.”
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MEANWHILE, ELSEWHERE…
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🇵🇰 Pakistan: Six people have died in a suicide attack against a convoy of Chinese engineers working at a dam project in Pakistan. This is the third attack against Chinese interests in the country in the span of a week. No group has yet claimed responsibility.
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🇩🇪 Germany: A group of leading German economic think tanks slashed their 2024 growth predictions for Germany to 0.1%, down from 1.3% six months ago. Germany was last year’s worst-performing major economy.
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🇲🇲 Myanmar: India is planning to spend $3.7B to fence its 1,610km (1,000 mile) border with Myanmar over the next decade to prevent irregular migration and smuggling. Last month, India announced it would end a decades-old visa-free movement policy with Myanmar, citing national security concerns.
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🇺🇸 US: The Port of Baltimore has been temporarily shut down following Tuesday’s catastrophic collapse of a nearby bridge that killed six people. The incident is expected to hit key supply chains, including for automobiles, construction machinery, and coal.
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🇿🇦 South Africa: A court has rejected an effort by the ruling African National Congress (ANC) party to ban former president Jacob Zuma’s new party from competing in May’s general election. Polls suggest the ANC could dip below 50% for the first time since 1994 when Nelson Mandela (from the ANC) became the country’s first democratically-elected leader.
EXTRA INTRIGUE
Here are some of yesterday’s top-performing stocks
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Airesis AG, an investment holding company involved in the sports sector, was top of the list in 🇨🇭 Switzerland.
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CWG Plc, an IT services company, closed +10% on the 🇳🇬 Nigerian stock market.
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And ITOXI Corp, a videogame developer, came out on top in 🇰🇷 South Korea.
TODAY IN HISTORY
A map of Constantinople from 1840.
On this day in 1930, the Turkish city of Constantinople became Istanbul following the establishment of the modern Turkish Republic in 1923. Istanbul isn’t the only city that’s had a name change over the years:
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New Amsterdam became New York in 1664
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Salisbury became Harare in 1982, and
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Bombay became Mumbai in 1995.
But the city with the most name changes in modern history? That’d be Astana in Kazakhstan, which has changed its name five times in the last six decades.
DAILY POLL
Who do you think should take the first step to repair US-China ties? |
Yesterday’s poll: What do you think Senegal's election result means?
🟨🟨⬜️⬜️⬜️⬜️ 🚀 Its democracy is consolidating and the future is bright (18%)
🟨🟨🟨⬜️⬜️⬜️ 🏛️ The anti-establishment will just become the establishment again (28%)
🟩🟩🟩🟩🟩🟩 🧢 A new generation of leaders is rising in Africa (51%)
⬜️⬜️⬜️⬜️⬜️⬜️ ✍️ Other (write in!) (2%)
Your two cents:
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🏛️ R.O: “Whoever you vote for, government wins.”
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🧢 J.R: “Hopefully this signals a positive change that lasts.”
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🚀 T.W.B: “Democracy will rise out of Africa once the first post-colonial generation dies off. I'm excited for Senegal and believe this will set an example for the rest of the former French colony nations.”