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Roula Khalaf, editor of the FT, picks her favorite stories on this weekly newsletter.
China's economic rise is nothing in need of remarkable. Over the past 4 many years, it has lifted nearly 800 million people out of poverty – and in some ways is already the most important economy on the earth. But many now suspect that his growth model, based on state-led capitalism, has reached the top of the road. In Vampire State: The Rise and Fall of the Chinese Economy (Birlinn, £20) Author Ian Williams – a long-time foreign correspondent who has reported extensively from China – highlights how the Chinese Communist Party has a good grip on industries, markets and entrepreneurs.
Williams argues that in major policy decisions and reforms, the continued survival of the party was at all times the first motive. In fact, the Chinese economy was largely an instrument of the federal government, and this manipulation undermined its fundamental development. In several well-discussed chapters, he describes how Beijing exerts its influence on the economy: from regulatory coercion and intimidation in boardrooms to the mysterious disappearances of entrepreneurs. He explains how rules, agreements and statistics can often be manipulated to attain the party's goals. And how the Chinese bureaucracy is organized globally and nationally based on Machiavellian schemes – including industrial espionage – in an effort to concurrently support and maintain control over the economy.
This is a timely and essential read. It's difficult to argue against Williams' skeptical predictions about China's economic future, especially because the state is currently struggling to revive the “animal spirits” which have been weakened by, amongst other things, President Xi Jinping's recent crackdown on wealth creators and technology corporations. However, given China's dominance in emerging technologies, critical minerals and green industries, it is usually difficult to put in writing off.
From China to artificial intelligence. Billions of dollars are flowing into AI as corporations look to capitalize on the technology's potential productivity advantages. But many are concerned about what the widespread use of AI could mean. In MoneyGPT: AI and the threat to the worldwide economy (Penguin Business, £18.99) James Rickards, a financial expert and investment advisor, argues persuasively that the most important danger isn’t that AI isn’t working properly, but that it’s working exactly because it should. Rickards shows how the possibly widespread use of AI in systemically essential areas – including financial markets and nuclear defense – should worry us all.
Using an insightful hypothetical scenario, the writer skillfully outlines how an AI-induced financial crash could unfold in real time from the angle of traders, central bankers and malicious actors. It highlights how bank runs and self-reinforcing sales spirals can reach warp speed under the influence of automated technologies. In fact, the book makes a powerful case for higher guardrails and limits around how humans might outsource decision-making as AI technology advances.
In the UK, all eyes are on Finance Minister Rachel Reeves as she prepares to deliver her first budget on October 30. The British economy is at a crossroads: growth has been weak for over a decade, demands on the state are also increasing, and the tax burden continues to rise. In Returning to Growth: How to Fix the Economy, Volume 1 (Biteback, £25) Jon Moynihan, a Conservative politician, delivers a rare, detailed diagnosis and a series of recommendations to get the country back on the right track. The writer makes an often underappreciated moral and economic argument for why growth should be a magnet for policymakers – and reiterates that the increasing size of the state risks increasingly displacing the private sector. He then succinctly cuts through the UK's tax system, regulation, government spending and public services, outlining specific savings, reforms and optimizations that might boost growth and reduce barriers to growth. Moynihan doesn't mince his words, and while some may disagree along with his assessment of Britain's problems – and the solutions – this can be a hugely worthwhile contribution to a debate that is usually lacking detail.
Finally. Bronwen Everill, lecturer in history on the University of Cambridge, in African Economy: A History of Western Ignorance (HarperCollins, £25) provides an in depth historical account of how the West and its development agencies have approached Africa's social and economic development over the past few centuries. Through a series of case studies, Everill attempts to clarify how Western ideas about trade, economic activity, debt, and social relations could have come into conflict with realities on the bottom. Although it’s unclear how Africa could have emerged if local norms and cultures had emerged on their very own without Western influence, Everill believes that the West's economic agenda – while filled with good intentions – has created significant problems for the continent. A deeper examination of the connection between Western-centric pondering and native political failures is actually warranted. Nevertheless, this can be a historically insightful read, with the writer ultimately arguing that development policy ought to be based on a greater understanding of the local environment.
