Economist 4/30/15

  1. WITHIN the next few months, the biggest defence contract for what will probably be many years to come will be awarded by the US Air Force, to build a new long-range strike bomber. The B-3, as it is likely to be named, will be a nuclear-capable aircraft designed to penetrate the most sophisticated air defences. The contract itself will be worth $50 billion-plus in revenues to the successful bidder, and there will be many billions of dollars more for work on design, support and upgrades. The plan is to build at least 80-100 of the planes at a cost of more than $550m each. On one side is a team of Boeing and Lockheed Martin; on the other, Northrop Grumman. The result could lead to a shake-out in the defence industry, with one of the competitors having to give up making combat aircraft for good.After the B-3 contract is awarded, the next big deal for combat planes—for a sixth-generation “air-dominance fighter” to replace the F-22 and F-18 Super Hornet—will be more than a decade away. If Boeing were to lose, Mr Aboulafia thinks it may seek to buy Northrop’s aircraft-building business, to ensure it gets the job after all. If Northrop were to depart the field, that could leave Lockheed Martin as the only American company with the ability to design combat planes, and thus the biggest winner of the three.
  2. THE conference of the 191 signatories of the Nuclear Non-Proliferation Treaty (NPT) got under way at the UN headquarters in New York this week. The last such meeting, in 2010, produced agreement over a 64-point action plan. This time it is likely to be a much more divisive affair.Only three countries have never signed up—India, Pakistan and Israel. Only one, North Korea, has ever left.At least one bit of good news for the four-week conference was the announcement on April 2nd of a framework agreement to overcome the decade-long crisis over Iran’s nuclear programme. If a comprehensive deal can be reached by the end of June and then successfully implemented, it will go a long way towards vindicating the NPT and the tools it provides to bring those who violate its safeguards back into compliance.The aim of “RevCon”, as it is known, is to take stock of progress (or otherwise) over the previous five years in strengthening the three pillars on which the NPT’s “grand bargain” rests: the commitment to pursue disarmament by the five “official” nuclear weapons states—America, Russia, Britain, France and China, also known as the P5;
  3. Since late last year, as part of the most intense and sustained anti-corruption drive in the history of Communist-ruled China, officials have been stepping up efforts to persuade foreign countries to send back those who have fled with their ill-gotten gains. On April 22nd they released a wanted list, together with mugshots, of 100 such people, as part of a new operation called Sky Net. The list was compiled by a Communist Party body, the Central Commission for Discipline Inspection (CCDI), whose agents often hold suspects in secret detention and torture them.Among the wanted fugitives, for whom Interpol has issued arrest warrants, 48 were the most senior officials in their workplaces. But anti-corruption officials have a big problem: the 39 countries with which China has extradition treaties do not include America, Australia or Canada, which are among the favoured destinations of corrupt fugitives.
  4. IN NOVEMBER, after months of frantic land reclamation in the South China Sea aimed at boosting its vast territorial claim there, China tried a subtler approach. It opened a think-tank in Arlington, Virginia—an outpost of its National Institute for South China Sea Studies on Hainan.On April 16th the Institute for China-America Studies, as the Virginia-based centre is called, held a conference at a hotel in Washington. Its Chinese-government connections clearly had pull. Henry Kissinger, a former secretary of state whom Chinese leaders much revere, spoke in a pre-recorded video about the importance of ties between Beijing and Washington.China’s efforts to put a scholarly gloss on its claims (which, on its official maps, are represented by broken lines of striking crudity) are unlikely to convince many in America or in South-East Asia. China’s recent construction spree on more than half a dozen reefs has caused widespread alarm among the other claimants, which include Brunei, Malaysia and Vietnam, as well as the Philippines, an American ally. On April 28th leaders of the ten-member Association of South-East Asian Nations (ASEAN) issued an unusually strong statement. They called the island-building effort, much of it near the Philippines, a potential threat to “peace, security and stability”.

Economist 4/29/15

  1. Utah was founded by exiles from the United States. After leading his disciples from Ohio, Illinois and Missouri in 1847, Brigham Young, the polygamist leader of the Church of Jesus Christ of Latter-day Saints, chose a plain fringed by the snow-capped Wasatch mountains deep in the desert West as the place to found his Zion, Salt Lake City.For the next 40 years the Mormons’ insistence on polygamy stopped their homeland being fully accepted into the United States; only after the practice was formally renounced in 1890 could the Utah Territory become a state.Utah’s curious history still defines it: the state’s population is nearly two-thirds Mormon.The state is among the most Republican: in 2012 just 25% of its people voted for Barack Obama. Its governor, both senators and the entire congressional delegation are all Republicans.Yet, oddly, it is not the most conservative state in America.
  2. In several aspects of policy, Utah is quietly forging a model of constructive Republicanism.Over the past decade Utah has reduced by around 75% the number of people living permanently on the street, by giving them homes without first insisting that they quit alcohol or drugs or solve their mental-health problems.Whether that is true or not, the Mormon church has a direct influence on the state’s politics. The sexual-discrimination bill passed largely because the church supported it,The state is 92% white; and yet, because Mormons marry young and have large families, it is the youngest state in America. It also has the lowest level of income inequality and one of the lowest poverty rates. That is partly thanks to a highly successful economic policy: it has a flat income tax of 5% and invests heavily in infrastructure.
  3. Just as restaurants promising more “natural” ingredients have been winning customers from McDonald’s in recent years, Kraft and other American processed-food makers have lost out to smaller food firms peddling healthier fare. At the same time, consumers who are less choosy about ingredients have become more picky on price, switching to supermarkets’ own-label foods . Americans’ growing interest in healthier, simpler fare is providing opportunities for all sorts of startups.Kind, which makes fruit and nut snacks, has gone from nothing to annual sales of more than $100m in ten years. Just as Kraft is promising with its macaroni, so Nestlé, the world’s biggest food firm, is pledging to remove all artificial flavours and colours in more than 250 types of chocolate sold in America. More recently PepsiCo said it would remove aspartame, an artificial sweetener, from Diet Pepsi sold in America. In 2012 Campbell’s bought Bolthouse Farms, which makes organic juices; a year later it took over Plum Organics, a maker of baby food. In 2013 Coca-Cola bought Innocent, a maker of fruit smoothies.
  4. This week Mylan, based in the Netherlands, rejected a $40 billion bid from Teva, of Israel, arguing that it “lacks industrial logic”. To be on the safe side it has enacted a poison-pill defence against hostile takeover. Combining the world’s largest generic-drug maker, Teva, with the third-largest, Mylan, would create a company with around $30 billion in annual revenues and, Teva says, $2 billion in cost savings.The merger proposals have triggered speculation that consolidation could cause the price of generic drugs to rise. All around the world, health-care providers are keen on buying cheaper generic copies of branded drugs whose patents have expired. There is no consensus among analysts as to the effects that mergers such as that of Teva and Mylan, if it happens, will have on drug prices.
  5. Volkswagen’s chairman, Ferdinand Piëch resigned on April 25th, instead of pushing out Mr Winterkorn.Having got rid of the group’s previous CEO, Bernd Pischetsrieder, in 2006, through a combination of a public snub and a behind-the-scenes campaign, Mr Piëch probably reckoned the same trick would work again.But other members of the group’s supervisory board backed the CEO.n many respects Mr Piëch leaves the company on a high. By building factories across the globe and making a string of acquisitions, from Bentley, a maker of luxury cars, to Scania, a lorry-builder, he has made Volkswagen the second-largest vehicle maker in the world, behind only Toyota. Last year it turned out more than 10m vehicles and made record net profits of €10.8 billion ($12 billion).VW hopes to boost these margins to 6%, around the group’s average. But this will be hard.

Economist 4/28/15

  1. Signed into law in 1990, the ADA bars firms from discriminating against people with disabilities, whether they are employees or customers. Banks, shops, hotels and other “public accommodations” must remove barriers to the “full and equal enjoyment” of their goods and services. This guarantee may sound vague, but new technical standards from the Department of Justice, which went into effect in 2012, dictate everything from the slope of a ramp to the height of a bathroom basin. The regulations are well-meaning but confusing. The government enforces some of them, but mostly leaves it to people with disabilities to sue. Plaintiffs need not be customers, an appeals court decreed in 2013. And if they win, the defendant must pay their costs.This has created a cottage industry of so-called Title III lawsuits against bars, motels and the like. More than 4,430 reached federal courts in 2014—a 63% rise in one year.Few companies manage to follow all the rules, which are 252 pages long and very precise. But if there is a real problem Mr Berry, who uses a wheelchair, says he finds it easy to ask businesses to make changes. Most oblige.
  2. THE most interesting thing about Cuba’s municipal elections on April 19th was not who won. It was who lost, and who did not even turn up.Four months after a historic rapprochement between Cuba and the United States, for the first time two openly declared dissidents made it onto the ballot among more than 27,000 candidates competing for 12,589 municipal posts around the country. Predictably, they were defeated. Yoani Sánchez, a dissident Cuban blogger, said that 1.7m potential voters did not appear, or they cast void or defaced ballots.The winning candidates are rewarded with a thankless job. They face a barrage of complaints from residents about crumbling housing and poor public services, without having the power or money to do much about them. But voters know that if they do not show up, it is likely to count against them—in university applications, for instance.
  3. AFTER Argentina’s economy crashed in 2001, the ranks of informal workers grew along with those of the unemployed. In Buenos Aires, the capital, destitute citizens picked through rubbish to collect anything worth recycling, sold crafts on the pavement etc. In 2013 the local government conferred formal status on cartoneros¸ workers who comb the city for cardboard and plastic which they sell to recyclers. It recognised 12 of the co-operatives into which they are organised and provided them with uniforms, health plans and cash incentives on top of their earnings from selling rubbish.Other groups are seen as nuisances and are being dealt with brusquely. None is more despised than trapitos, or “rag men”. They wave people into parking spots and solicit fees for keeping cars safe.Another target is street merchants who operate outside areas set aside for them. Their number has increased fourfold since 2011,To date the government has had little success clearing scofflaw workers off the streets. Mr Macri, whose party lacks a majority in the city council, has failed in three attempts to pass a bill that would make it easier for police to arrest trapitos.
  4. Most have failed, managing little more than a big—and costly—bash. Eduardo Paes, the smooth-talking mayor of Rio de Janeiro, who will host the next games in August 2016 and oversees the bulk of the preparations, thinks he can do better. The precedent of last summer’s football World Cup is not encouraging. It cost Brazilian taxpayers 21.4 billion reais ($9 billion), a record sum for the competition. Popular anger about corruption and overspending on flashy projects sparked the biggest protests in Brazil for a generation.Yet there are reasons to believe that Mr Paes’s bullishness is not just the hype of an ambitious politician.The mayor’s Party of the Brazilian Democratic Movement (PMDB) is at the business-friendly end of the governing coalition in Brasília. Mr Paes has coaxed private investors to pay two-thirds of the cost of stadiums through public-private partnerships.  Compared with other recent Olympic games, Rio’s look cheap. Brazil reckons it will cost 37.7 billion reais ($12.5 billion). That will cover operating costs and pay for sports venues, transport links, waste-treatment plants and the refurbishment of the rundown port district. The contribution of all three tiers of government will be 16.4 billion reais, much less than British taxpayers spent on London’s Olympics in 2012.
  5. SOMETHING called Methylococcus capsulatus might not sound an appetising ingredient for a meal. Methylococcus is a methanotroph, a bacterium that metabolises methane. Fortunately, salmon are not fussy eaters. They will happily consume pelletised protein made from these bugs. For Dr Shaw,boss of Calysta, a biotechnology firm in Menlo Park proposes to take advantage of the rock-bottom price of methane, a consequence of the spread of natural-gas fracking, to breed Methylococci en masse as a substitute for the fish-meal such farmers now feed to their charges.The idea of using methanotrophs as fish food was invented by Statoil, a Norwegian oil and gas company. Calysta bought the technology in 2014, and has been refining it since then. Crucially, from a business point of view, the EU and Norway have already approved the use of Methylococcus-based fish food. Though America has yet to follow suit, this means there is a large available market for the stuff.

Economist 4/27/15

  1. As China urbanises, its cities are producing a lot more rubbish. They are running out of good places for landfills and are turning instead to burning rubbish, generating electricity at “waste-to-energy” plants like the one in Hangzhou. About 70 such incinerators are now being built, in addition to more than 180 in operation.Most rubbish in China ends up either in landfills or in unregulated heaps outside cities, where it gives off methane as it decomposes. There is a lot of informal recycling.More recycling would help. But encouraging households and local governments to co-operate in this will take time.The waste burns at temperatures of 850°C or higher, hot enough to eliminate toxic dioxin pollutants. The gases heat water to produce steam, in turn driving turbines that generate electricity. On a recent visit to the site, there was no detectable odour outside.Normally this sort of claim makes Chinese citizens scoff. Many of the factories and mills that have polluted rivers or made skies smoggy are state-owned. Their dismal record is one reason why residents near environmentally sensitive projects are often quick to anger when they hear about them.
  2. AFTER pro-democracy protests in Hong Kong late last year that blocked several main streets for weeks, neither the territory’s leaders nor their backers in Beijing are in any mood to make concessions. On April 22nd the Hong Kong government revealed how it would like to conduct elections in 2017 for the territory’s chief executive, as the most senior official is known.For the first time, Hong Kong residents will all be allowed to cast a vote for their leader. But the only candidates will be ones approved by a committee stacked with the party’s supporters.  Pro-democracy legislators were quick to show their contempt for the government’s plan.The current chief executive, Leung Chun-ying, has warned that if they do reject the plan, the next chief executive will be chosen by the same method as last time, which involved no public vote at all.
  3. THE rise of low-cost index-tracking funds over the past 40 years has put active fund managers—those who claim the ability to pick the best shares—on the defensive. Figures from Morningstar show that the majority of fund managers in the American market beat the index in just five of the past 20 years.All fund managers are not equal, the research claimed. Those who assemble portfolios that closely resemble the index are doomed to underperform, because of costs. However, managers who take more daring bets by veering a long way from the index—the academic term is having a high “active share”—are able to outperform. Since then, fund managers have been using a high active share as a marketing device.That argument is challenged by a new paper** from AQR, a fund-management group that specialises in quant (mathematically-based) strategies. It finds that fund managers who did well on the “active share” measure were actually just following a different benchmark: they tended to be focused on smaller or midsized firms.
  4. The Fifth Amendment requires the government to provide “just compensation” when it takes “private property…for public use”. A lower court held that this only applies to such things as land and houses.The government maintains that the programme is intended to help raisin farmers by curbing supply and stabilising prices. The Supreme Court seemed sceptical.The government maintains that the programme is intended to help raisin farmers by curbing supply and stabilising prices. The Supreme Court seemed sceptical.
  5. HUMAN beings are a distractible bunch, and their propensity to be elsewhere, mentally speaking, is particularly dangerous when they are motoring.A study published in March, by the American Automobile Association, a motoring club, reviewed nearly 7,000 videos of teenage drivers who had had monitoring cameras put into their cars between 2007 and 2013 in exchange for cheaper insurance premiums. This analysis found that distraction was a factor in 58% of crashes—four times the figure estimated for this age group from accident reports compiled by the National Highway Traffic Safety Administration. Phone use was the second-greatest contributor to accidents. (Interaction with passengers was top.) Another approach is to integrate phones better with a car’s other controls. Manufacturers such as Citroën, Ford and Volvo have already added phone controls to the touchscreen which regulates the vehicle’s air conditioning, navigation system and so on. One improvement in Mr Greenberg’s sights is voice control, extending the limited set of tasks that existing speech-recognition software on smartphones can accomplish.

Economist 4/24/15

  1. Busking has not been a crime on New York city’s streets since 1970. In 1985 a New York court ruled that banning subway music was unconstitutional, too. Yet some police still think buskers need a permit. Matthew Christian, a violinist, started a group called BuskNY after he was arrested, in the hope of stopping future wrongful arrests of buskers. Since early 2014 buskers have seen an uptick in harassment by police, Mr Christian says.Another problem for them is that people are carrying less cash.The Busking Project, an advocacy group, has created a digital toolkit to let performers accept cashless payments. It is early days, but people are donating between $3 and $20 and—crucially—staying in touch afterwards. The project is also developing an app that would allow customers to buy a performer’s music from their phones.
  2. AMERICA’S unemployment rate is 5.5%. By historical standards, that is low. It is also falling rapidly: unemployment is down more than a percentage point from a year ago. Economic theory suggests that in such circumstances, workers should begin to enjoy healthier pay rises.Yet firms in America seem not to have got the message. Inflation-adjusted wages for typical workers are stagnant. In fact, they have barely grown in the past five years; average hourly earnings rose 2% year-on-year in February of 2015: about the same as in February of 2010.The biggest reason for sluggish wages, however, remains what it has been for most of recent history: America’s sickly labour market. Unemployment is low, but other measures of labour-market “slack” paint a much bleaker picture. The number of workers who work part-time but would rather be full-time is still much higher than before the recession hit.
  3. The purpose of TRAI’s (Telecom Regulatory Authority of India) paper was to ask whether “over-the-top” services such as data, internet telephony and instant messaging, which rely on mobile networks’ data connections and which in some cases compete with those networks’ basic call and text services, should be treated differently from other traffic. Bharti Airtel, India’s biggest operator, recently launched a scheme that gives customers free access to a select group of data services.But argues that Airtel’s differential pricing means it is not being neutral between providers of online content, and that consumer choice will suffer.The industry’s poor profitability, the result of intense competition, might indeed be boosted if it were allowed to charge variable prices for data traffic. But its squeezed profits also mean a lack of money to invest in improving call quality and extending mobile coverage.
  4. Petrobras, the state-controlled oil company of Brazil said that graft had cost it 6.2 billion reais ($2.1 billion). Other charges included a bigger-than-expected write-down of 44.6 billion reais, mainly on a flagship petrochemical complex and a big refinery. The net loss was 21.6 billion reais in 2014. The previous management’s borrowing binge left Petrobras as the most indebted company in the world, and—when the scandal broke—an outcast from the capital markets.The company’s future does not lie just with its management. Politicians must not only stop stealing: they must cease interfering too. President Dilma Rousseff’s left-wing Workers’ Party forced Petrobras to sell imported petrol at a loss to keep pump prices low. That made the company bleed cash. The government has since let it raise prices, but Petrobras still suffers political pressure, such as demands for big dividends, which help bolster Brazil’s threadbare public finances.
  5. China has overtaken America as the world’s largest car market, and it has contributed between a third and a half of the global profits of many big automobile manufacturers in recent years. Like BMW, other foreign firms are also betting heavily that the good times will continue by expanding production capacity in the joint ventures that the Chinese government requires them to form with domestic firms. China is the largest market in the world for the BMW’s big 5 Series and 7 Series models, and source of perhaps half of its global profits in recent years. And yet the hard truth is that these firms may now be headed for a car crash, shattering their dreams of never-ending profits. The first reason for this is that sales growth is slowing. The days of double-digit annual increases are over.A rough rule of thumb in carmaking is that assembly plants need to be working above about 75% capacity, assuming two eight-hour shifts each normal working day, to be profitable. In contrast the average for Chinese assembly plants has now slipped to below 70%.A handful of the best state-owned carmakers—like Shanghai Automotive, which has joint ventures with both GM and VW—do make handsome profits. However, they are viable only because the government forces foreigners into these joint ventures.

Economist 4/23/15

  1. The bed-bath-bread crisis in Netherlands was triggered on April 15th, when the Council of Europe reaffirmed a decision that the Netherlands must offer decent humanitarian conditions to rejected asylum applicants until they leave the country. Applications for asylum in the Netherlands jumped from 13,000 in 2012 to 24,000 in 2014, leaving a fair number of such rejected applicants hanging about—perhaps 5,000 according to Vluchtelingenwerk. Many refuse or are unable to leave. Returning them forcibly to their home countries is expensive and presents legal hurdles. Dutch municipalities do not like to have rejected asylum-seekers living on the streets, so many offer them food and shelter in city facilities, despite the fact that they have no right to be in the country.e Liberal prime minister, Mark Rutte, and the Labour party leader, Diederik Samsom, announced that they had reached a deal. The shelters for rejected asylum-seekers would be restricted to the Netherlands’ five largest cities. Asylum-seekers could stay as long as they showed they were co-operating in finding a way to leave the country; otherwise, they would be kicked out after two weeks.
  2. ABOLISHING thalassaemia is a noble goal. This inherited blood disease, which can cause severe anaemia and consequent organ damage, sometimes fatal, is a scourge to those who suffer it. And abolished it could be, if the broken gene that causes it (which is called HBB and encodes part of the haemoglobin molecule) were itself to be abolished.A newish DNA-editing technique called CRISPR/Cas9 is able, at least in principle, to make precise changes in particular genes. Several groups of researchers are trying to work out a way to use it to clear up beta thalassaemia in individual sufferers, by genetically modifying the stem cells which generate red blood corpuscles. But it is theoretically possible to go further. By modifying HBB in a fertilised egg (known technically as a zygote), and letting that zygote develop into a human being, you would abolish the disease not only in the resulting individual but also in his or her “germ line”—the line of descent.
  3. A decade ago Emirates, Qatar Airways and Etihad Airways were insignificant. But these three “super-connectors”, joined in recent years by Turkish Airlines, increasingly dominate long-haul routes between Europe and Asia. In 2001 Emirates and Qatar both flew from 17 destinations in Europe; they now serve 32. Last year all four super-connector carriers flew about 115m people into and out of their hubs in the Gulf or Istanbul, compared with 50m in 2008. Their combined fleet has swollen to more than 700 aircraft and they have a further 900 or so on order.
  4. The biggest cause of ungreenness is that biofuels made from food crops—or from plants grown on land that might otherwise produce such crops—hurt food supplies. A committee of the European Parliament agreed this week to cap the use of “first-generation” biofuels of this sort. The current European target is for renewables to make up 10% of the energy used in transport by 2020. The new proposal says only seven-tenths of this can come from first-generation fuels.Only two such advanced fuels, she thinks, are capable of large-scale production. One is turning waste cooking oil and other fats into diesel—a process for which Europe already has 2 billion litres of capacity. The other involves making ethanol from cellulose by enzymatic hydrolysis. Everything else, according to Ms Curry, is at least four years from commercial production. That includes the much-touted idea of renewable jet fuel.
  5. THE little pills of Tramadol are ubiquitous in Egypt. An opioid prescribed as a painkiller, Tramadol has a reputation for improving alertness and male sexual stamina—qualities much sought after in a country where people often have several jobs to make ends meet and where few women find it easy to experience orgasm because of widespread female genital mutilation.Until recently, Tramadol was selling for one or two Egyptian pounds a pill ($0.15-$0.3). It offers an affordable buzz in a country where average household income is less than $4,000 a year. Egypt is a transit point for pharmaceuticals shipped to nearby countries. Customs inspections under President Abdel-Fattah al-Sisi have recently been tightened. In 2013 the government seized 35m pills which, it said, had been smuggled in.. The price of Tramadol has risen sharply, at one point reaching $1-$3 a pill.

Economist 4/22/15

  1. Tesco,Britain’s biggest retailer announced its financial results on April 22nd. It made the largest pre-tax loss, of £6.4 billion ($9.6 billion), in British retail history, eight times as much as the previous record, set by Morrisons last year. This was also the sixth-largest loss in the country’s corporate history. Most of it (about £4.7 billion) was accounted for by the fall in the property value of its British stores, reflecting how its out-of-town hypermarkets have fallen out of favour with consumers who shop online or use smaller convenience stores. its foreign operations are remarkably robust. Profits in Tesco’s Asian operations only fell by 15% year-on-year, and in Europe by 32%, compared to a whopping 79% for its British stores. The performance of the 3,000 or so British stores remains his biggest headache. Once the core of Tesco’s money-making machine, in the last six months of last year they hardly made any profit at all.Since early 2011 they have been losing market share, mainly to the much cheaper German-owned discount stores Lidl and Aldi.
  2. Vietnam’s 40m internet-users live in one of the better-connected countries in South-East Asia. Around 45% of Vietnamese are online (roughly the same proportion as in China). In the region, only Malaysia and Singapore have higher penetration rates. The use of social media has leapt—by two-fifths in the past year alone, according to one estimate.Vietnam patrols the internet with a relatively light touch.Facebook is the country’s most-visited website, ahead of Google’s search engine. Attempts to block it have been sporadic and half-hearted. Yet this does not mean there is free speech online. The party controls dissent by using vaguely-written laws—recently strengthened—to imprison bloggers and to impose fines on outspoken users of social media.
  3. Seven years ago the central government in Japan began allowing city residents to divert a proportion of their income-tax payments to a furusato or hometown tax of their choice. The response has been overwhelming. In the last fiscal year rural towns earned ¥14 billion ($1.2 billion) from such contributions. Some people choose a furusato not on the basis of any family ties, but simply because they like the area.Shrewd self-promotion by local governments has helped attract furusato money. Some have set up websites offering generous gifts of marbled beef, exotic seafoods and other goodies in return for a share of urbanites’ taxes. The biggest earner from the contributions, the town of Hirado in Nagasaki prefecture, has a glossy brochure of the local foods it promises to send as gifts.The central government has tried to crack down on the most lavish handouts, such as the gold ninja throwing-knives worth ¥400,000 that one city was offering in honour of its ninja spies.many towns were giving back in freebies half or even more of the value of the tax contributions they were raising.
  4. Under China’s household-registration system, known as hukou, rural connections, even if inherited, determine the kind of welfare benefits individuals may receive. Some of the first generation of migrant workers, who arrived in urban areas in the late 1980s, have reached retirement age. Most people can qualify for a state-supported or employer-backed pension scheme at 60; some women can do so at 55 or even 50. For city-born workers, that means nearly 2,070 yuan a month. But workers of rural origin receive far less—not nearly enough, in most cases, to sustain them in the cities in which they have been working. From 2008 to 2013 the number of such people over the age of 50 jumped from 26m to 41m, or from 11% to 15% of the migrant workforce. The ageing of China’s population will accentuate the problem.The minimum basic pension is 55 yuan (about $8.85) a month, far below the poverty line. The government says it increased rural pension benefits in 2014 by an average of 15 yuan per month. But increasing benefits substantially will be difficult as the ratio of pensioners to working-age migrants increases.
  5. Unlike the three Republicans who have declared so far (Marco Rubio, Rand Paul and Ted Cruz), Hillary Clinton declined to hold a rally to kick off her campaign. Instead, the former secretary of state tweeted and then uploaded a short video to a new website, in which she appeared with several Iowans who talked about their dreams for the future. After years of jet-setting, courting wealthy donors and giving $300,000 speeches, Mrs Clinton worries that she may be perceived as elitist. Smaller events, like these in Iowa, from which the press are largely excluded and at which carefully vetted regular folks are allowed to speak, help her to soften that impression. This show is necessary partly because Mrs Clinton faces no serious competition for the Democratic nomination. Mrs Clinton is thus working hard for votes that she seems assured of getting in almost any circumstances.