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The race to lead the WTO begins

AND THEY’RE off! On July 8th the window for members to nominate the next director-general of the World Trade Organisation (WTO) closed. Over the next few months members will try to pick between eight candidates, each hoping to rescue the institution from its present sorry state. The process will highlight some of the WTO’s best features—but will also show why the organisation is in such a mess.Fans of the multilateral trading system boast about its openness. In line with that principle, the top job at the WTO is not sewn up…

Some economies are bouncing back. But recoveries can easily go wrong

ORFORD NESS, on Britain’s east coast, was a site for military tests in the 20th century. Large pagodas on the shoreline, still standing today, were designed to prevent blasts from doing damage to the surrounding wetlands. On July 4th the area braced itself for another sort of explosion. “Super Saturday” marked the opening of pubs and restaurants for the first time since lockdown began. But in Orford the beery bomb never detonated. The Jolly Sailor, a pub near the quay, had only a handful of customers in the garden. Across…

Stockmarket mania comes to China again. Can it last this time?

IN CHINESE STOCKMARKET mythology, the rarest of beasts is the slow bull. The past couple of decades have brought two fast bulls: vertiginous surges in share prices, neither lasting more than a year. Those soon led to fast bears when stocks crashed and, eventually, to slow bears as the descent became more gradual. Most of the time there have been what might be termed long worms as the market moved sideways, such that the CSI 300 index, a gauge of China’s biggest stocks, has averaged the same level over the past five years…

Trade finance stumbles into the digital era

“IN WARM WEATHER, fewer people wear socks,” says Paul Rotstein of Gold Medal International, a wholesaler in New York. People may not sport socks in the summer but his firm starts shipping them to retailers in July, ahead of the start of the school year. There is, however, a big lag before he is paid. He normally uses trade-credit insurance to protect against the risk that his invoices go unpaid, but this year the insurers have slashed the amounts they are willing to cover by 50-90%. That leaves him with two options: shoulder…

How resilient are the banks?

WHEN FINANCIERS and governments redesigned the financial system in order to make it safer after the debacle of 2007-09, most of them imagined that a shock as bad as the subprime fiasco would be a generation away. In fact it arrived only a decade or so later. Lockdowns have led to a savage recession that is expected to produce huge loan losses as firms and households suffer.So are too-big-to-fail banks really safer? The latest stress tests conducted by the Federal Reserve suggest the answer in America is “yes”. On June 25th…

The poorest countries may owe less to China than first thought

THE FOUR-LANE, 62-km toll road being built between Masiaka, a business hub in Sierra Leone, and Freetown, the country’s capital, promises shorter journey times, fewer accidents and smoother drives. It is nonetheless controversial. Awarded to China Railway Seventh Group, the project added over $160m to the country’s foreign debt, according to the China-Africa Research Initiative (CARI) at Johns Hopkins University. The work has suffered delays, which the company blames on the pandemic and the need to compensate property…

China’s prodigious exporters have some new tricks

NORMALLY 200,000 buyers, hailing from just about every country, would have flocked to the Canton Fair, the world’s biggest trade show. This year, because of the pandemic, it was conducted entirely online, running for ten days and ending on June 24th. Although no substitute for meetings in the flesh, the virtual fair was testament to China’s manufacturing muscle. Some 25,000 exhibitors hosted live-streams, often from their factories, chatting to anyone interested in their products.Among them Wen Li, a young product manager,…

What if the dotcom boom and bust hadn’t happened?

THERE IS A lovely quotation at the start of “Security Analysis”, a canonical text by Benjamin Graham and David Dodd published in 1934. “Many shall be restored that now are fallen and many shall fall that are now in honour.” It is by Horace, a Roman poet who knew all about reversals of fortune, having lived through Rome’s bloody transition from republic to empire. Two millennia later, amid the ruins of the dotcom mania, Warren Buffett was moved to recall Horace’s words. “My appreciation for what they say about business and…

Economists grapple with their race problem

IN JANUARY 1970 a group of black economists wrote a letter to the American Economic Association (AEA). They criticised colleagues who ignored discrimination in the profession and paid no heed to racial inequality in their own research. Just over half a century later, similar complaints have resurfaced. This time the AEA seems to be listening. On June 5th it issued a statement saying that “we have only begun to understand racism and its impact on our profession and our discipline.”Openness to more diverse groups of people and…

China is the world’s factory, more than ever

NORMALLY 200,000 buyers, hailing from just about every country, would have flocked to the Canton Fair, the world’s biggest trade show. This year, because of the pandemic, it has been conducted entirely online, running for ten days and ending on June 24th. Although no substitute for meetings in the flesh, the virtual fair was a spectacle in its own right, testament to China’s manufacturing muscle. Some 25,000 exhibitors have hosted live-streams simultaneously, often from their factories, chatting to anyone interested in their…