1 Global impact of China’s zeal for steel (Jamie Fullerton in The Guardian) Until recently steel was a Chinese success story. Its steel industry kicked off in 1894 with a small victory against its historic rival, Japan, after the opening of the Hangyang Iron Works in Hubei province. Though it opened two years before Japan’s first steel plant, the factory was privatised in 1908 and was eventually bought by the Japanese.
The first world war stimulated demand, and after a postwar decline in production, further Chinese steel plants saw the industry take off. When Mao Zedong took power in 1949 and the People’s Republic of China was established, self-sufficiency rather than global industry domination was the driving force in a diplomatically isolated country.
Steel production expanded through the 1950s as Soviet-influenced heavy industrialisation kicked in. Annual output was 158,000 tonnes when Mao took over; by 1976, the year before his death and the final year of the decade-long Cultural Revolution, it was 20.5 million tonnes.
Early signs of the recent, disastrous, overproduction were apparent as targets were surpassed. In 1996, China overtook Japan to become the world’s biggest steel producer, churning out more than 101 million tonnes that year. The 2008 global recession failed to put the brakes on. Steel production was still rocketing, with output of 683 million tonnes in 2011.
After 2014, China’s economic growth slowed, and so did domestic demand. China responded by increasing steel exports, which led to accusations of dumping. In 2015 exports increased by 20% to 107 million tonnes. Prices were slashed as Chinese steel companies battled to survive.
The dumping cast a shadow over the UK steel industry, and has also meant shutdowns and layoffs at Chinese plants. Last month, before it became clear that 40,000 jobs were at risk in the UK, the Chinese government announced that 500,000 steel workers were to lose their jobs. All this is the result of China’s first annual steel industry contraction in a quarter of a century, announced last January. The government is aiming to cut steel production by 150 million tonnes by 2020.
2 Apple at 40, and the future (San Francisco Chronicle) Apple turned 40 on Friday, and it’s a very different company from the audacious startup that Steve Jobs and Steve Wozniak launched in a Silicon Valley garage in 1976.
Today, the maker of iPhones and Mac computers is the world’s most valuable public corporation, with 100,000 employees and a new, multi-billion dollar headquarters in Cupertino, California, set to open next year. But despite its astounding financials — Apple reported $53 billion in profit on $233 billion in sales last year — some critics have suggested Apple’s best years are behind it.
Not surprisingly, longtime employees like software vice president Guy “Bud” Tribble disagree. “We still think we’re going to change the world,” said Tribble. The company now boasts that more than 1 billion Apple devices — iPods, iPhones, iPads, Macs and Apple Watches — are in regular use around the world. But Apple depends on the iPhone for two-thirds of its revenue. And after selling a record number of iPhones last year, analysts say sales are leveling off and may even decline this year.
Apple is widely believed to be exploring new businesses, from electric cars to virtual reality, but analysts say developing products in those categories could take years. Apple’s growth hasn’t been smooth. Jobs was forced out in the 1990s, leading to a revolving door for chief executives until he returned in 1997, as the company he co-founded was on the brink of collapse.
3 Tragedy and destiny of South Africa (Matein Khalid in Khaleej Times) It pains me to see the state whose birth so inspired me degenerate into political and economic disaster. The South African rand has plunged 50 per cent against the US dollar, Pretoria’s debt will soon be sovereign junk (below BBB minus), global investors have lost faith in the integrity and even competence of Jacob Zuma’s African National Congress governments. Things fall apart. Cry the beloved country. The looting machine.
Jacob Zuma must resign as he has run a corrupt and incompetent ANC government, as the Gupta family’s political intrigues attest. I always wondered about the fondness of African Big Men for Indian money lenders. When the secretary general of the ANC warns that South Africa risks becoming a “Mafia state”, all bets are off. If private predatory capitalists seize power in Africa’s most industrialised economy, albeit one without a viable power grid, the investment case for continent evaporates.
ANC has squandered the moral authority Nelson Mandela and the dead of Soweto bequeathed to it. As the Black Death plagues the mining industry, its economy faces a grim future. The ANC has made a fatal mistake in once again white washing the embattled Zuma just so party cronies can continue to loote the state. This is not just post-apartheid South Africa’s loss but the loss of the entire continent.
Twenty years after the fall of apartheid, the jobless rate is 35 per cent, the education system is broken. Yet South Africa is also a $600 billion GDP state that has created world class companies, banks listed on the Johannesburg Stock Exchange – despite and not because of the ANC government that has failed the poor and the rising number of unemployed men and women in the shanty towns and townships of the veldt.
So many African economies and societies were destroyed by the regimes and ideas of the continent’s Big Men – Mugabe, Milton Obote, Emperor Bokassa, Mengistu, Mobuto Sese Seko, Jomo Kenyatta, Generals Abacha/Babangida, Julius Nyerere, Samora Machel, Gaddafi, Banda, Kutu Acheampong and the Dos Santos clan.
Almost sixty years after Harold MacMillan’s “winds of change” speech ended British colonialism in Africa, the world needs to rethink the continent’s models of political governance. Lenin said the Tsar’s soldiers voted with their feet. Professional investors like me vote on a country with our Bloomberg screens and the “best and brightest” of South Africa just leave Madiba’s broken rainbow nation forever in the quest for a green card.