Tag: Italy

Economics-Watching: Kuwait’s Banking Sector Posts Solid Credit Growth in October

[from NBK Group’s Economic Research Department, 21 November, 2024]

Kuwait: Solid credit growth in October driven by household credit. Domestic credit increased by a solid 0.4% in October, driving up YTD growth to 2.9% (3.2% y/y). The recovery in household credit continued, with growth in October at a solid 0.5%, resulting in a YTD increase of 2.4%. While y/y growth in household credit remains a limited 2.3%, annualized growth over the past four months is a stronger 4.7%. Business credit inched up by 0.2% in October, pushing YTD growth to 3.6% (2.9% y/y). Industry and trade drove business credit growth in October while construction and trade are the fastest growing YTD at 17% and 8%, respectively. In contrast, the oil/gas sector continued its downtrend, deepening the YTD decrease to 13%. Excluding the oil/gas sector, growth in business credit would increase to a relatively good 5% YTD. Looking ahead, the last couple of months of the year (especially December) are usually the weakest for business credit, likely due to increased repayments and write-offs, but it will not be surprising if the recovery in household credit is generally sustained, especially given the commencement of the interest rate-cutting cycle. Meanwhile, driven by a plunge in the volatile public-institution deposits, resident deposits decreased in October, resulting in YTD growth of 2.4% (4.2% y/y). Private-sector deposits inched up in October driving up YTD growth to 4.5% compared with 10% for government deposits while public-institution deposits are a big drag (-14%). Within private-sector KD deposits, CASA showed further signs of stabilization as there was no decrease for the third straight month while the YTD drawdown is a limited 1%.

Chart 1: Kuwait credit growth

(% y/y)

Source: Central Bank of Kuwait (CBK)
Chart 2: UK inflation

(%)

Source: Haver

Egypt: IMF concludes mission for fourth review, sees external risks. The IMF concluded its visit to Egypt after spending close to 2 weeks, holding several in-person meetings with the Egyptian authorities, private sector, and other stakeholders. The IMF released a statement mentioning that the current ongoing geopolitical tensions in the region in addition to an increasing number of refugees have affected the external sector (Suez Canal receipts down by 70%) and put severe pressure on the fiscal front. The Fund acknowledged the Central Bank of Egypt’s commitment to unify the exchange rate, maintain the flexible exchange rate regime, and keep inflation on a firm downward trend over the medium term by substantially tightening monetary policy. It also highlighted that continued policy discipline was also a key to containing fiscal risks, especially those related to the energy sector. The Fund, as always, re-iterated the need for promoting the private sector mainly through an enhanced tax system and accelerating divestment plans of the state firms. Finally, it also said that the discussions would continue over the coming days to finalize the agreement on the remaining policies and reform plans. However, the release did not provide any clear hints about the conclusion on the government’s earlier request to push the timeline of some of the subsidy moves.

Oman: IMF completes article IV with a strong outlook for the economy in 2025. Oman’s economy continued to expand with growth reaching 1.9% in the first half of 2024 (versus 1.2% in 2023), despite being weighed down by OPEC+ mandated oil production cuts as non-oil GDP grew a stronger 3.8% y/y in H1 (versus 1.8% in 2023). The fiscal and current account balances remain in a comfortable situation evident by a decline in public sector debt and the recent rating upgrade to investment grade. The Fund expects Oman’s economic growth to see a strong rebound in 2025, supported by higher oil production. It also believes that fiscal and current account balances will remain in surplus but at lower levels. Key risks to the outlook stem from oil price volatility and intensifying geopolitical tensions. The IMF also mentioned that further efforts are needed to raise nonhydrocarbon revenues through more tax policy measures and the phasing out of untargeted subsidies which should help in freeing up resources to finance growth under the government’s diversification agenda.

UK: Inflation rises more than forecast, reinforcing BoE’s caution on rate cuts. UK CPI inflation increased to 2.3% y/y in October from 1.7% the previous month, slightly above the market and the Bank of England’s forecast of 2.2%. On a monthly basis too, inflation rose to 0.6%, a seven-month high, from September’s no change. The steep rise was mainly driven by an almost 10% rise in the household energy price cap effective from October. Core inflation also accelerated to 3.3% y/y (0.4% m/m) from 3.2% (0.1% m/m). While goods prices continued to fall (-0.3% y/y), service prices rose at a faster rate of 5% from 4.9%. Recently, the Bank of England had cautioned about inflation quickening next year (projecting a peak rate of 2.8% in Q3 2025), citing the impact of higher insurance contributions and rising minimum wages as outlined in the latest government budget. Therefore, with inflation rising above forecast, the bank will likely slow the pace of monetary easing after delivering two interest rate cuts of 25 bps earlier, with markets now seeing only two additional cuts by the end of 2025.

Eurozone: ECB warns of fiscal and growth risks in its latest Financial Stability Review [archived PDF]. In its most recent Financial Stability Review (November) [archived PDF], the European Central Bank warned that elevated debt and fiscal deficit levels and anemic long-term growth could expose sovereign debt vulnerabilities in the region, stoking concerns of a repeat of the 2011 sovereign debt crisis. Maturing debt being rolled over at much higher borrowing rates raising debt service costs poses risks to countries with little fiscal space and leaves certain governments exposed to market fluctuations. The bank also emphasized the risks of high equity valuations, low liquidity and a greater concentration of exposure among non-banks. Moreover, it sees current geopolitical uncertainties and the possibility of more trade tensions as heightening risks. The Eurozone’s current government debt-to-GDP ratio stands at 88%, but the underlying data suggest a much more precarious situation with Greece, Italy, and France’s ratios at 164%, 137% and 112%. Recently, concerns about France’s high fiscal deficit (around 5.9% of GDP) and elevated debt levels saw yields on the country’s bonds rise steeply, widening the spread gap with German bonds to the highest level in over a decade.

Stock marketsIndexDaily Change (%)YTD Change (%)
Regional
Abu Dhabi (ADI)9,405-0.23-1.80
Bahrain (ASI)2,043-0.373.62
Dubai (DFMGI)4,7610.6117.26
Egypt (EGX 30)30,588-0.33 23.18
GCC (S&P GCC 40)7090.09-0.52
Kuwait (All Share)7,353-0.087.86
KSA (TASI)11,868-0.07-0.83
Oman (MSM 30)4,6090.002.10
Qatar (QE Index)10,4380.12-3.62
International
CSI 3003,9860.2216.17
DAX19,005-0.2913.45
DJIA43,4080.3215.17
Eurostoxx 504,730-0.454.60
FTSE 1008,085-0.174.55
Nikkei 22538,352-0.1614.61
S&P 5005,9170.0024.05
3m interbank rates%Daily Change (bps)YTD Change (bps)
Bahrain5.86-1.29-66.34
Kuwait3.940.00-37.50
Qatar6.000.00-25.00
UAE4.433.81-89.96
Saudi5.50-4.75-73.14
SOFR4.52-0.09-81.13
Bond yields%Daily Change (bps)YTD Change (bps)
Regional
Abu Dhabi 20274.665.0033.9
Oman 20275.496.0033.0
Qatar 20264.686.0016.1
Kuwait 20274.693.0035.0
Saudi 20284.961.0043.9
International 10-year
US Treasury4.411.7755.3
German Bund2.340.3531.2
UK Gilt4.472.6093.0
Japanese Gov’t Bond1.071.045.4
Exchange ratesRateDaily Change (%)YTD Change (%)
KWD per USD0.310.04-0.05
KWD per EUR0.32-0.46-1.98
USD per EUR1.05-0.49-4.47
JPY per USD155.430.5010.19
USD per GBP1.27-0.25-0.62
EGP per USD49.670.3461.00
Commodities$/unitDaily Change (%)YTD Change (%)
Brent crude72.81-0.68-5.49
KEC73.780.74-7.26
WTI68.87-0.75-3.88
Gold2,648.20.8028.40

Disclaimer: While every care has been taken in preparing this publication, National Bank of Kuwait accepts no liability whatsoever for any direct or consequential losses arising from its use. Daily Economic Update is distributed on a complimentary and discretionary basis to NBK clients and associates. This report and previous issues can be found in the “News & Insight / Economic Reports” section of the National Bank of Kuwait’s web site. Please visit their web site, nbk.com, for other bank publications.

Movies as an Education in Global Looting: The Sea Hawk (1940)

Movies and the World as an Arena of Violent Domination and Global Looting

The classic Warner Brothers swashbuckler, The Sea Hawk, from 1940, within its romantic adventures and intricate swordfights (perhaps comparable to the car chases of later movies) is a partly historical, partly fictional version of a world built on imperial struggles and ransacking and despoiling. The hegemonic power in the West (and perhaps worldwide) is Spain. Phillip II the king-emperor wants to own and dominate and rule the whole world. In 1588, his Spanish Armada loses to England. (The British of course want to compare this to the Battle of Britain against the German Luftwaffe.)

Set in 1585, The Sea Hawk opens with King Philip II of Spain plotting world domination, laughing that all world maps will soon read simply “Spain” — once England is out of the way, of course.

The Spanish ambassador departs for England to escort his niece to Queen Elizabeth’s court, but in a spectacular sea battle, the Spanish galley is soundly damaged, boarded, raided and sunk by a group of pirates led by Captain Geoffrey Thorpe, a Sir Walter Raleigh stand-in played by Erroll Flynn. Thorpe rescues the galley slaves — they row the boat — and spares the crew, taking them aboard and delivering them to England. The jewels and other bounty (or a portion thereof) are a gift to the Queen.

His crew is part of a noble privateer coalition — the Sea Hawks — who justify their piracy as reclamation of English goods (and enslaved sailors) from the Spanish behemoth. The political fallout from Thorpe’s abduction of the ambassador forces Elizabeth to outlaw the Sea Hawks, including an official denial (and private approval) of his mission to Panama to steal a shipment of Aztec gold.

Inca gold is also mentioned in the movie as a target of robbing.

Sir John Hawkins (1532–1595), part of this group of global sailor-pirates and master-mariners, was one of the most notable sailors and naval commanders of the sixteenth century.

He is known for his pivotal role in the maritime history of England and the rise of the global slave trade.

John Hawkins, the son of a merchant, was born in Plymouth in 1532. He became a sea captain and in 1562 became the first Englishman to start capturing people in Sierra Leone and selling them as slaves to Spanish settlers in the Caribbean. (Notice that selling slaves does not discriminate against Spaniards even with Phillip II threatening England. Business is business.)

Stealing Aztec gold as part of colonial or imperial plundering and the slave trade were part of the dark side of history, something the standard history books “skate over” dishonestly.

A key scene between the Spanish aristocratic beauty and Captain Thorpe:

Doña María Álvarez de Córdoba: “I’m not in the habit of conversing with thieves. I thought I made that quite clear, Captain Thorpe.”

Captain Geoffrey Thorpe: “Why, yes, all except your definition. Tell me, is a thief an Englishman who steals?”

Doña María Álvarez de Córdoba: “It’s anybody who steals… whether it’s piracy or robbing women.”

Captain Geoffrey Thorpe: “Oh, I see. I’ve been admiring some of the jewels we found in your chest… particularly the wrought gold. It’s Aztec, isn’t it? I wonder just how those Indians were persuaded to part with it.”

The Sea Hawk (1940)

Donald Trump continues this tradition of looting when he says of Iraq’s oil:

“Think of it as our oil under their sand.”

Thus the whole world is an arena where the weak don’t have any property rights: not the oil or gold, not themselves (slavery) and not their country (colonialism).

This exploitative hierarchy and “world-system” is part of “the way of the world” and even a romantic adventure story like 1940’s The Sea Hawk gives you a Hollywoodized glimpse into its roots. Imperial struggles in the West spill over into colonization and ransacking and looting. History books one sees in high school are dishonest and in that sense uninformative or even disinformative.

The popular PBS travel series Rick Steves’ Europe unintentionally gives us a wonderful example of this notion of plunder and looting as a pillar of world history in the show on Venice. Rick Steves is talking about the various statues in Venice’s central St. Mark’s Square (Piazza San Marco), and comments “I’d call the style ‘Early Ransack.’”

This Rick Steves quip about ransacking and historical wealth-building is very informative.

Science-Watching: Forecasting New Diseases in Low-Data Settings Using Transfer Learning

[from London Mathematical Laboratory]

by Kirstin Roster, Colm Connaughton & Francisco A. Rodrigues

Abstract

Recent infectious disease outbreaks, such as the COVID-19 pandemic and the Zika epidemic in Brazil, have demonstrated both the importance and difficulty of accurately forecasting novel infectious diseases. When new diseases first emerge, we have little knowledge of the transmission process, the level and duration of immunity to reinfection, or other parameters required to build realistic epidemiological models. Time series forecasts and machine learning, while less reliant on assumptions about the disease, require large amounts of data that are also not available in early stages of an outbreak. In this study, we examine how knowledge of related diseases can help make predictions of new diseases in data-scarce environments using transfer learning. We implement both an empirical and a synthetic approach. Using data from Brazil, we compare how well different machine learning models transfer knowledge between two different dataset pairs: case counts of (i) dengue and Zika, and (ii) influenza and COVID-19. In the synthetic analysis, we generate data with an SIR model using different transmission and recovery rates, and then compare the effectiveness of different transfer learning methods. We find that transfer learning offers the potential to improve predictions, even beyond a model based on data from the target disease, though the appropriate source disease must be chosen carefully. While imperfect, these models offer an additional input for decision makers for pandemic response.

Introduction

Epidemic models can be divided into two broad categories: data-driven models aim to fit an epidemic curve to past data in order to make predictions about the future; mechanistic models simulate scenarios based on different underlying assumptions, such as varying contact rates or vaccine effectiveness. Both model types aid in the public health response: forecasts serve as an early warning system of an outbreak in the near future, while mechanistic models help us better understand the causes of spread and potential remedial interventions to prevent further infections. Many different data-driven and mechanistic models were proposed during the early stages of the COVID-19 pandemic and informed decision-making with varying levels of success. This range of predictive performance underscores both the difficulty and importance of epidemic forecasting, especially early in an outbreak. Yet the COVID-19 pandemic also led to unprecedented levels of data-sharing and collaboration across disciplines, so that several novel approaches to epidemic forecasting continue to be explored, including models that incorporate machine learning and real-time big data data streams. In addition to the COVID-19 pandemic, recent infectious disease outbreaks include Zika virus in Brazil in 2015, Ebola virus in West Africa in 2014–16, Middle East respiratory syndrome (MERS) in 2012, and coronavirus associated with severe acute respiratory syndrome (SARS-CoV) in 2003. This trajectory suggests that further improvements to epidemic forecasting will be important for global public health. Exploring the value of new methodologies can help broaden the modeler’s toolkit to prepare for the next outbreak. In this study, we consider the role of transfer learning for pandemic response.

Transfer learning refers to a collection of techniques that apply knowledge from one prediction problem to solve another, often using machine learning and with many recent applications in domains such as computer vision and natural language processing. Transfer learning leverages a model trained to execute a particular task in a particular domain, in order to perform a different task or extrapolate to a different domain. This allows the model to learn the new task with less data than would normally be required, and is therefore well-suited to data-scarce prediction problems. The underlying idea is that skills developed in one task, for example the features that are relevant to recognize human faces in images, may be useful in other situations, such as classification of emotions from facial expressions. Similarly, there may be shared features in the patterns of observed cases among similar diseases.

The value of transfer learning for the study of infectious diseases is relatively under-explored. The majority of existing studies on diseases remain in the domain of computer vision and leverage pre-trained neural networks to make diagnoses from medical images, such as retinal diseases, dental diseases, or COVID-19. Coelho and colleagues (2020) explore the potential of transfer learning for disease forecasts. They train a Long Short-Term Memory (LSTM) neural network on dengue fever time series and make forecasts directly for two other mosquito-borne diseases, Zika and Chikungunya, in two Brazilian cities. Even without any data on the two target diseases, their model achieves high prediction accuracy four weeks ahead. Gautam (2021) uses COVID-19 data from Italy and the USA to build an LSTM transfer model that predicts COVID-19 cases in countries that experienced a later pandemic onset.

These studies provide empirical evidence that transfer learning may be a valuable tool for epidemic forecasting in low-data situations, though research is still limited. In this study, we aim to contribute to this empirical literature not only by comparing different types of knowledge transfer and forecasting algorithms, but also by considering two different pairs of endemic and novel diseases observed in Brazilian cities, specifically (i) dengue and Zika, and (ii) influenza and COVID-19. With an additional analysis on simulated time series, we hope to provide theoretical guidance on the selection of appropriate disease pairs, by better understanding how different characteristics of the source and target diseases affect the viability of transfer learning.

Zika and COVID-19 are two recent examples of novel emerging diseases. Brazil experienced a Zika epidemic in 2015–16 and the WHO declared a public health emergency of global concern in February 2016. Zika is caused by an arbovirus spread primarily by mosquitoes, though other transmission methods, including congenital and sexual have also been observed. Zika belongs to the family of viral hemorrhagic fevers and symptoms of infection share some commonalities with other mosquito-borne arboviruses, such as yellow fever, dengue fever, or chikungunya. Illness tends to be asymptomatic or mild but can lead to complications, including microcephaly and other brain defects in the case of congenital transmission.

Given the similarity of the pathogen and primary transmission route, dengue fever is an appropriate choice of source disease for Zika forecasting. Not only does the shared mosquito vector result in similar seasonal patterns of annual outbreaks, but consistent, geographically and temporally granular data on dengue cases is available publicly via the open data initiative of the Brazilian government.

COVID-19 is an acute respiratory infection caused by the novel coronavirus SARS-CoV-2, which was first detected in Wuhan, China, in 2019. It is transmitted directly between humans via airborne respiratory droplets and particles. Symptoms range from mild to severe and may affect the respiratory tract and central nervous system. Several variants of the virus have emerged, which differ in their severity, transmissibility, and level of immune evasion.

Influenza is also a contagious respiratory disease that is spread primarily via respiratory droplets. Infection with the influenza virus also follows patterns of human contact and seasonality. There are two types of influenza (A and B) and new strains of each type emerge regularly. Given the similarity in transmission routes and to a lesser extent in clinical manifestations, influenza is chosen as the source disease for knowledge transfer to model COVID-19.

For each of these disease pairs, we collect time series data from Brazilian cities. Data on the target disease from half the cities is retained for testing. To ensure comparability, the test set is the same for all models. Using this empirical data, as well as the simulated time series, we implement the following transfer models to make predictions.

  • Random forest: First, we implement a random forest model which was recently found to capture well the time series characteristics of dengue in Brazil. We use this model to make predictions for Zika without re-training. We also train a random forest model on influenza data to make predictions for COVID-19. This is a direct transfer method, where models are trained only on data from the source disease.
  • Random forest with TrAdaBoost: We then incorporate data from the target disease (i.e., Zika and COVID-19) using the TrAdaBoost algorithm together with the random forest model. This is an instance-based transfer learning method, which selects relevant examples from the source disease to improve predictions on the target disease.
  • Neural network: The second machine learning algorithm we deploy is a feed-forward neural network, which is first trained on data of the endemic disease (dengue/influenza) and applied directly to forecast the new disease.
  • Neural network with re-training and fine-tuning: We then retrain only the last layer of the neural network using data from the new disease and make predictions on the test set. Finally, we fine-tune all the layers’ parameters using a small learning rate and low number of epochs. These models are examples of parameter-based transfer methods, since they leverage the weights generated by the source disease model to accelerate and improve learning in the target disease model.
  • Aspirational baseline: We compare these transfer methods to a model trained only on the target disease (Zika/COVID-19) without any data on the source disease. Specifically, we use half the cities in the target dataset for training and the other half for testing. This gives a benchmark of the performance in a large-data scenario, which would occur after a longer period of disease surveillance.

The remainder of this paper is organized as follows. The models are described in more technical detail in Section 2. Section 3 shows the results of the synthetic and empirical predictions. Finally, Section 4 discusses practical implications of the analyses.

Access the full paper [via institutional access or paid download].

World-Watching: China Globalization Conference

[from the Center for China and Globalization]

The Center for China and Globalization is proud to announce the full program of their upcoming 8th edition of CCG annual China and Globalization Forum 2022 to be held in online-offline hybrid format in Beijing. Everyone is cordially invited to join the events open to public virtually. All sessions open to public will be broadcast live. You will be able to access the sessions on Zoom:

Tuesday, June 21st

09:00-10:00—Forum Special Online Program I: Advancing the 2030 Agenda in Uncertain Times: Sustainability and the Quest for China–U.S. Cooperation – Fireside Chat with Sec. Henry M. Paulson, Jr. and Mr. WANG Shi (王石)

10:30-12:30—Ambassadors’ Roundtable: Global Recovery in Post-Pandemic Times: Trends, Challenges, and Responses

14:00-16:00—China–Europe Roundtable: China–Europe Economic Cooperation: Moving Forward with the Global Quest for Sustainability

17:30-18:30—Forum Special Online Program II: History at a Turning Point: Pandemic, Ukraine, and the Changing Relations between China, Europe, and the United States–Dialogue with Historian Niall Ferguson

20:00-21:30—Forum Special Online Program III: Realigning the U.S.–China Trade and Economic Relationship: Inflation, Tariffs, and the Way Forward – China–U.S. Think Tank Dialogue

Zoom:
Webinar ID: 894 5641 9097
Passcode: 566991

Once you’re admitted into the Zoom meeting, your camera and audio will remain off. Simultaneous interpretation of both English and Chinese languages will be available by selecting the language pane.

Agenda

Monday, June 20th

09:00-10:00—Forum Special Online Program I: Advancing the 2030 Agenda in Uncertain Times: Sustainability and the Quest for China–U.S. Cooperation – Fireside Chat with Sec. Henry M. Paulson, Jr. and Mr. WANG Shi (王石)

Host

WANG Huiyao (王辉耀), CCG President, Vice Chairman of China Association for International Economic Cooperation (CAFIEC)

Speakers

Henry M. Paulson, Jr., former U.S. Treasury Secretary, Founder and Chairman of the Paulson Institute
WANG Shi (王石), CCG Senior Vice President, Founder and Honorary Chairman of China Vanke Co., Ltd., Founder of C-Team

This program will also be livestreamed on the web via the Baidu links and social media platforms below:

English language
Chinese language

Social Media
Youtube
Twitter
Facebook

10:30-12:30—Ambassadors’ Roundtable: Global Recovery in Post-Pandemic Times: Trends, Challenges, and Responses

Chair

WANG Huiyao (王辉耀), CCG President, Vice Chairman of China Association for International Economic Cooperation (CAFIEC)

Opening remarks

LONG Yongtu, CCG Chairman; former Vice Minister of Commerce
LIN Songtian, President of the Chinese People’s Association for Friendship with Foreign Countries, former Chinese Ambassador to South Africa
Siddharth Chatterjee, UN Resident Coordinator, United Nations in China

Participants

(in alphabetic order by country): 
Rahamtalla M. Osman, Permanent Representative of African Union to China
Graham Fletcher, Ambassador of Australia to China 
Paulo Estivallet de Mesquita, Ambassador of Brazil to China 
Nicolas Chapuis, Ambassador of European Union to China 
Laurent Bili, Ambassador of France to China 
Djauhari Oratmangun, Ambassador of Indonesia to China 
Luca Ferrari, Ambassador of Italy to China 
Raja Dato Nushirwan Zainal Abidin, Ambassador of Malaysia to China 
Clare Fearnley, Ambassador of New Zealand to China 
Signe Brudeset, Ambassador of Norway to China 
Moin ul Haque, Ambassador of Pakistan to China 
Luis Quesada, Ambassador of Peru to China 
José Augusto Duarte, Ambassador of Portugal to China 
James Kimonyo, Ambassador of Rwanda to China 
Alenka Suhadolnik, Ambassador of Slovenia to China 
Siyabonga Cwele, Ambassador of South Africa to China 
Bernardino Regazzoni, Ambassador of Switzerland to China 
Arthayudh Srisamoot, Ambassador of Thailand to China 
Ali Obaid Al Dhaheri, Ambassador of UAE to China

14:00-16:00—China–Europe Roundtable: China–Europe Economic Cooperation: Moving Forward with the Global Quest for Sustainability

Chair

Andy Mok, CCG Senior Fellow

Participants

(in alphabetic order)
Joseph Cash, Policy Analyst, China–Britain Business Council (CBBC)
CUI Hongjian, CCG Non-Resident Senior Fellow and Director of the Department of European Studies at the China Institute of International Studies (CIIS)
Vivian Ding, CCG Senior Council Member, Founder and CEO of WeBrand Global
FENG Zhongping, Director of Institute of European Studies, Chinese Academy of Social Sciences (CASS)
Allan Gabor, President of Merck China
Archil Kalandia, Ambassador of Georgia to China
LENG Yan, CCG Senior Council Member; Executive Vice President of Daimler Greater China
LIU Chang, Vice President of Knorr-Bremse Asia Pacific
Steven Lynch, Managing Director, BritCham China
Dario Mihelin, Ambassador of Croatia to China
Leena-Kaisa Mikkola, Ambassador of Finland to China
MIN Hao, CCG Senior Council Member; Founder, Chairman, and CEO of the Nanjing Easthouse Electric Ltd.
SUN Yongfu, CCG Senior Fellow; former Director-General of MOFCOM Department of European Affairs
Joerg Wuttke, President of the EU Chamber of Commerce in China
ZHOU Yanli, CCG Advisor; Former Vice Chairman of China Insurance Regulatory Commission
Helen Zhu, CCG Senior Council Member; Vice President of Sanofi China

This program will also be livestreamed on the web via the Baidu links and social media platforms below:

English language
Chinese language

Social Media
Youtube
Twitter
Facebook

17:30-18:30—Forum Special Online Program II: History at a Turning Point: Pandemic, Ukraine, and the Changing Relations between China, Europe, and the United States–Dialogue with Historian Niall Ferguson

Speakers

Niall Ferguson, Milbank Family Senior Fellow at the Hoover Institution, Stanford University
WANG Huiyao (王辉耀), CCG President, Vice Chairman of China Association for International Economic Cooperation (CAFIEC)

20:00-21:30—Forum Special Online Program III: Realigning the U.S.–China Trade and Economic Relationship: Inflation, Tariffs, and the Way Forward – China–U.S. Think Tank Dialogue

Moderator

WANG Huiyao (王辉耀), CCG President, Vice Chairman of China Association for International Economic Cooperation (CAFIEC)

Speakers

(in alphabetic order)
Craig Allen, President, US-China Business Council (USCBC)
Wendy Cutler, Vice President, Asia Society Policy Institute; former Acting Deputy U.S. Trade Representative
JIN Xu, President, China Association of International Trade (CAIT)
Adam Posen, President, Peterson Institute for International Economics (PIIE)
Jeremie Waterman, President of China Center and Vice President, U.S. Chamber of Commerce
YI Xiaozhun, former Deputy Director-General of World Trade Organization, former Vice Commerce Minister

Tuesday, June 21st

09:30-12:30—China Globalization 30 Roundtable Experts Roundtable: China and Globalization in the 21st Century (Chinese language livestream, not available on Zoom)

Chair

Mabel Miao, CCG Secretary-General

Discussants

(in alphabetic order)
CHEN Zhiwu, Director of Asia Global Institute, Professor of Business School, Hong Kong University
DA Wei, Professor and Director of Center for International Security and Strategy, Tsinghua University
DONG Guanpeng, Vice President of China Public Relations Association, Dean of School of Government and Public Affairs, Communication University of China
GE Jianxiong, Director of Institute of Chinese Historical Geography, Fudan University
GU Xuewu, Director of Center for Globalization, University of Bonn
HU Biliang, Executive Director of the Belt and Road Institute and the Institute of Emerging Markets, Beijing Normal University
LI Xiangyang, Director of Institute of Asia-Pacific and Global Strategy, Chinese Academy of Social Sciences (CASS)
LIU Guoen, Dean of Institute for Global Health and Development, BOYA Distinguished Professor, Peking University
LIU Junhong, Director of Globalization Center, China Institutes of Contemporary International Relations (CICIR)
SU Hao, Director of Center for Strategy and Peace Studies, China Foreign Affairs University
XIE Tao, Dean of School of International Relations and Diplomacy, Beijing Foreign Studies University
XUE Lan, Dean of Schwarzman College, Tsinghua University
WANG Huiyao (王辉耀), President of Center for China and Globalization; Dean of Development Research Institute, Southwest University of Finance and Economics
WANG Ning, Zhiyuan Chair Professor, Shanghai Jiao Tong University, Foreign Member of the European Academy of Sciences
WANG Yiwei, Professor of School of International Relations, Renmin University of China
WANG Yong, Director of Center for International Political and Economic Studies, Peking University
WU Xinbo, Dean of Institute of International Studies, Director of Center for American Studies, Fudan University
WU Zhicheng, Vice President of the Institute of International Strategic Studies, Party School of the Central Committee of CPC (National Academy of Administration)
YANG Xuedong, Senior Professor of Political Science, Tsinghua University
ZHANG Shuhua, Director of Institute of Political Science, Chinese Academy of Social Sciences (CASS)
ZHANG Xudong, Professor of Comparative Literature & East Asian Studies, NYU
ZHANG Yunling, Member of Presidium of Academic Divisions of Chinese Academy of Social Sciences (CASS)

This session will also be livestreamed on the web accessible via this Baidu link (Chinese language only, no simultaneous interpretation).

COVID-19 and “Naïve Probabilism”

[from the London Mathematical Laboratory]

In the early weeks of the 2020 U.S. COVID-19 outbreak, guidance from the scientific establishment and government agencies included a number of dubious claims—masks don’t work, there’s no evidence of human-to-human transmission, and the risk to the public is low. These statements were backed by health authorities, as well as public intellectuals, but were later disavowed or disproven, and the initial under-reaction was followed by an equal overreaction and imposition of draconian restrictions on human social activities.

In a recent paper, LML Fellow Harry Crane examines how these early mis-steps ultimately contributed to higher death tolls, prolonged lockdowns, and diminished trust in science and government leadership. Even so, the organizations and individuals most responsible for misleading the public suffered little or no consequences, or even benefited from their mistakes. As he discusses, this perverse outcome can be seen as the result of authorities applying a formulaic procedure of “naïve probabilism” in facing highly uncertain and complex problems, and largely assuming that decision-making under uncertainty boils down to probability calculations and statistical analysis.

This attitude, he suggests, might be captured in a few simple “axioms of naïve probabilism”:

Axiom 1: more complex the problem, the more complicated the solution.

This idea is a hallmark of naïve decision making. The COVID-19 outbreak was highly complex, being a novel virus of uncertain origins, and spreading through the interconnected global society. But the potential usefulness of masks was not one of these complexities. The mask mistake was consequential not because masks were the antidote to COVID-19, but because they were a low cost measure the effect of which would be neutral at worst; wearing a mask can’t hurt in reducing the spread of a virus.

Yet the experts neglected common sense in favor of a more “scientific response” based on rigorous peer review and sufficient data. Two months after the initial U.S. outbreak, a study confirmed the obvious, and masks went from being strongly discouraged to being mandated by law. Precious time had been wasted, many lives lost, and the economy stalled.

Crane also considers another rule of naïve probabilism:

Axiom 2: Until proven otherwise, assume that the future will resemble the past.

In the COVID-19 pandemic, of course, there was at first no data that masks work, no data that travel restrictions work, no data of human-to-human transmission. How could there be? Yet some naïve experts took this as a reason to maintain the status quo. Indeed, many universities refused to do anything in preparation until a few cases had been detected on campus—at which point they had some data, as well as hundreds or thousands of other as yet undetected infections.

Crane touches on some of the more extreme examples of his kind of thinking, which assumes that whatever can’t be explained in terms of something that happened in the past is speculative, non-scientific and unjustifiable:

“This argument was put forward by John Ioannidis in mid-March 2020, as the pandemic outbreak was already spiralling out of control. Ioannidis wrote that COVID-19 wasn’t a ‘once-in-a-century pandemic,’ as many were saying, but rather a ‘once-in-a-century data-fiasco’. Ioannidis’s main argument was that we knew very little about the disease, its fatality rate, and the overall risks it poses to public health; and that in face of this uncertainty, we should seek data-driven policy decisions. Until the data was available, we should assume COVID-19 acts as a typical strain of the flu (a different disease entirely).”

Unfortunately, waiting for the data also means waiting too long, if it turns out that the virus turns out to be more serious. This is like waiting to hit the tree before accepting that the available data indeed supports wearing a seatbelt. Moreover, in the pandemic example, this “lack of evidence” argument ignores other evidence from before the virus entered the United States. China had locked down a city of 10 million; Italy had locked down its entire northern region, with the entire country soon to follow. There was worldwide consensus that the virus was novel, the virus was spreading fast and medical communities had no idea how to treat it. That’s data, and plenty of information to act on.

Crane goes on to consider a 3rd axiom of naïve probabilism, which aims to turn ignorance into a strength. Overall, he argues, these axioms, despite being widely used by many prominent authorities and academic experts, actually capture a set of dangerous fallacies for action in the real world.

In reality, complex problems call for simple, actionable solutions; the past doesn’t repeat indefinitely (i.e., COVID-19 was never the flu); and ignorance is not a form of wisdom. The Naïve Probabilist’s primary objective is to be accurate with high probability rather than to protect against high-consequence, low-probability outcomes. This goes against common sense principles of decision making in uncertain environments with potentially very severe consequences.

Importantly, Crane emphasizes, the hallmark of Naïve Probabilism is naïveté, not ignorance, stupidity, crudeness or other such base qualities. The typical Naïve Probabilist lacks not knowledge or refinement, but the experience and good judgment that comes from making real decisions with real consequences in the real world. The most prominent naïve probabilists are recognized (academic) experts in mathematical probability, or relatedly statistics, physics, psychology, economics, epistemology, medicine or so-called decision sciences. Moreover, and worryingly, the best known naïve probabilists are quite sophisticated, skilled in the art of influencing public policy decisions without suffering from the risks those policies impose on the rest of society.

Read the paper. [Archived PDF]

Education and the Historical Swirl: Part II

We concluded Part I on this topic with the following comments which we wish students to incorporate into their educations, irrespective of the major, field or concentration:

The gold standard itself, dominated from London led to intricate problems: Golden Fetters: The Gold Standard and the Great Depression, 1919-1939 (published in 1992) by Barry Eichengreen, the leading historian of monetary systems, shows the downstream pitfalls of the gold standard.

In other words, the de facto emergence of Britain/London as the world commercial and policy center and the relation of this emergence to empire and international tensions and rivalries, means it is very problematical for any country to steer a course other than staying in tandem with British moods and ideologies, such as free trade. Any country by itself would find it difficult to have a more independent policy. (Friedrich List of Germany, who died in 1846, wrestles with these difficulties somewhat.) The attempts to find “autonomy and autarky” in the interwar years (Germany, Japan, Italy) led to worse nightmares. The world seems like a “no exit” arena of ideologies and rivalries.

The “crazy dynamics” and the semi-anarchy of the system, which continues to this day and is even worse, means that policy-making is always seen through a “dark windshield.”

History in the globalizing capitalist centuries, the nineteenth and the twentieth, is a kind of turbulent swirl and not a rational “walk.”

Here’s a bizarre but necessary comment on this sense of turbulent and surprising swirl propelling history forwards and backwards and sidewards at the same time:

The historian, Barry Eichengreen (mentioned above), is a distinguished analyst of world monetary systems at U.C. Berkeley and perhaps the leading expert today on the evolution of such systems.

From movies such as Shoah and Last of the Unjust by the great filmmaker Claude Lanzmann, we know that Barry Eichengreen’s mother was Lucille Eichengreen, a Jew born in Hamburg, Germany (1925) and deported to the Łódź Ghetto in Poland during World War II. She survived through many miraculous accidents and contingencies, then wrote about her experiences.

We get a deeper insight into “the way of the world” by seeing that the Holocaust itself has as a backdrop the anarcho-craziness of the world. The Fascists and Nazis were jumping from the “frying pan into the fire” by imagining that world conquest and world-murdering could “stop the world.” They and their favored populations could “get off” and step into a racial dreamworld. They were taking today’s concept of “gated community” and applying it to the “racial community” (Volksgemeinschaft, in German).

This led to the phenomenon depicted in Goya’s famous aquatint: The Sleep of Reason Produces Monsters.

The perceived madness of the world and the madness of leaders that this perception leads to have never been analyzed together.

The fact that the behavior of world leaders could be “crazy like a fox” (half-insane, half-opportunistic, or Machiavellian “clever”) is a complicating factor or twist from Mussolini until today.

World-Watching: 21st International Economic Forum on Africa 2022

[From the Organisation for Economic Co-operation and Development (OECD)]

The Future Africa Wants: Better Policies for the Next Generation and a Sustainable Transition

Fast and brutal mutations in the global economy today are reshaping conditions for transforming African economies and creating better opportunities for its youth. Efforts to reduce the continent’s dependence on raw material exports, advance productive transformation and increase investment and domestic resource mobilization are being challenged.

Can innovative policies and international partnerships help address: 

Join OECD experts, African leaders and policy makers and shakers to discuss next steps for a more sustainable future.

The 21st edition of the AU–OECD International Economic Forum on Africa takes places in the framework of the OECD Ministerial Council Meeting (MCM), chaired by Italy under the theme “The Future We Want: Better Policies for the Next Generation and a Sustainable Transition.” The Forum is an opportunity for OECD members to engage at high level, yet informally, with Africa’s leaders, movers and shakers on the way forward.

Register to attend in person.

Can’t come to Paris? Join the Forum online, watch it on OECD TV, Twitter or Facebook

Education and Seeing the “Swirl” of History

The tempo and rhythm of world events and world history are not captured in the linear and bland books one reads in schools and colleges where the sense of the stormy forward turbulence of the world is not communicated. Here’s an example that does communicate this “crazy dynamics”:

The leading historian, James Joll, in his excellent Europe Since 1870: An International History talks about gold and the gold standard in this way:

“The world supply of gold was diminishing, as the effects of the gold rushes in California and Australia in the 1850s and 1860s passed. This coincided with the decision in the 1870s of many of the leading countries to follow Britain’s example to use gold rather than silver as the basis of their currency — Germany in 1871, France in 1876 for example — so that the demand for gold rose just as the supply was temporarily declining. This in turn led to some doubt about the use of a gold standard and to much discussion about ‘bi-metallism’ and about the possibility of restoring silver to its place as the metal on which the world’s currency should be based, though this movement had more success in the United States than in Europe, where gold has now established itself firmly. By the 1890s however the discovery of new gold deposits in South Africa, Western Australia and Canada put an end to these discussions and uncertainties, as far as currency was concerned, for some fifty years.”

(James Joll, Europe Since 1870: An International History, Penguin Books, 1976, page 35)

These twists and turns and accidents or contingencies don’t communicate the real semi-turmoil surrounding all the decisions, which we can infer from the comment by a German politician in 1871, “We chose gold, not because gold was gold, but because Britain was Britain.” (Ian Patrick Austin, Common Foundations of American and East Asian Modernisation: From Alexander Hamilton to Junichero Koizumi, Select Publishing, 2009, page 99.)

Professor Joll delineates the emergent primacy of England:

“The establishment of London as the most important center in the world for shipping, banking, insurance-broking and buying and selling generally, as well as the growth of British industry, had been based on a policy of free trade.”

(James Joll, Europe Since 1870: An International History, Penguin Books, 1976, page 34)

The gold standard itself, dominated from London led to intricate problems: Golden Fetters: The Gold Standard and the Great Depression, 1919-1939 (published in 1992) by Barry Eichengreen, the leading historian of monetary systems, shows the downstream pitfalls of the gold standard.

In other words, the de facto emergence of Britain/London as the world commercial and policy center and the relation of this emergence to empire and international tensions and rivalries, means it is very problematical for any country to steer a course other than staying in tandem with British moods and ideologies, such as free trade. Any country by itself would find it difficult to have a more independent policy. (Friedrich List of Germany, who died in 1846, wrestles with these difficulties somewhat.) The attempts to find “autonomy and autarky” in the interwar years (Germany, Japan, Italy) led to worse nightmares. The world seems like a “no exit” arena of ideologies and rivalries.

The “crazy dynamics” and the semi-anarchy of the system, which continues to this day and is even worse, means that policy-making is always seen through a “dark windshield.”

History in the globalizing capitalist centuries, the nineteenth and the twentieth, is a kind of turbulent swirl and not a rational “walk.”

Education and the World’s Confusion

Students need to understand that the world and history and the mood of the moment are always a “confusing swirl,” as experience shows, and that implies the present intersection of world/history/mood is also such a confusing “opaque windshield.”

Take the example of Europe after World War I. Mussolini leaves his position at the left-wing paper Avanti! (English: “Forward”) and founds the bellicose Il Populo d’Italia (English: “The People of Italy”), which is nationalist and warlike.

Avanti! was an Italian daily newspaper, born as the official voice of the Italian Socialist Party, published since 25 December 1896. It took its name from its German counterpart Vorwärts, the party-newspaper of the Social Democratic Party of Germany. Il Populo d’Italia, was an Italian newspaper which published editions every day with the exception for Mondays founded by Benito Mussolini in 1914, after his split from the Italian Socialist Party.

Mussolini was a complete tactical opportunist and his profound flip-flops indicate that “the winds” of mood and opinion were capricious and somewhat blind to its own twists and turns.

Take the case of the (later) famous anti-fascist Arturo Toscanini, the great music conductor. His trajectory is non-linear and as “jumpy” as Mussolini’s, going the other way:

“From the start Fascism was an eclectic movement and in its early days in 1919 it attracted a number of people who, including some, such as the great conductor Arturo Toscanini, who soon became its most determined opponents.”

(James Joll, Europe since 1870: An International History, Penguin Books, 1976, page 266)

Toscanini ran as a Fascist parliamentary candidate in Milan (1919) and this is a clue as to the tremendous disorientation in the wake of World War I.

In 1983, the outstanding Hebrew University scholar, Professor Sternhell, wrote Ni droite ni gauche. L’idéologie fasciste en France, which was translated to English three years later under the title, Neither Right nor Left: Fascist Ideology in France. The title of this classic by Sternhell—“neither right nor left”—captures via its very title, the indeterminate fusion and hodge-podge quality of modern ideologies. If they’re neither right nor left, where are they?

We could say there’s a deep pattern: World War I (yielding communism and fascism and Nazism) and then World War II (with atomic weapons and Auschwitz) and the Cold War have all left very disorienting legacies and since people in 2022 are legatees of these three wars, outlooks are very foggy. As the world becomes extremely confusing, people react accordingly and veer from mood to mood and opinion to opinion.