ITK Daily | November 3

Happy Thursday afternoon.

Here’s today’s ITK Daily | Annotated Edition.

To be ITK, know this:

+ @AFP: #BREAKING: Zelensky says he will not participate in G20 summit if Putin attends

BBC: Bank of England expects UK to fall into longest ever recession

+ BoE has warned the UK is facing its longest recession since records began in the 1920s

+ BoE warned the UK would face a "very challenging" two-year slump with unemployment nearly doubling by 2025

German companies ignore major risks in China: Critics like Economy Minister Robert Habeck are warning Germany's industrial giants from becoming too dependent on Beijing. But it seems many haven't the learned the lesson from Russia of the perils of doing business with autocratic countries. Der Spiegel

+ "With very few exceptions, no one wants to shut down their business in China."

+ The doctrine of "transformation through trade," to which Germany adhered for decades, was exposed as an illusion by Russia's invasion of Ukraine.

+ Germany has seen trade with the People's Republic quadruple since 2005, but during that same period, China has developed into a full-blown dictatorship.

+ "Henceforth: Marx gets precedence over the markets," says J?rg Wuttke, president of the European Union Chamber of Commerce in China. In his opening speech, he notes, Xi mentioned "Marx" 15 times, but the market only three times.

+ On November 3, Scholz is scheduled to land in Beijing to meet Xi for a day in the Chinese capital. A delegation of business leaders is to accompany him.

+ Ralf Brandst?tter has the most important job outside of Germany's in Volkswagen's global empire. Since August, he has been responsible for more than 30 plants with more than 90,000 employees in China.

+ Europe's largest automaker sells more than one in three cars in the People's Republic, and no other foreign market generates comparably high profits.

+ VW, like other automakers, is pursuing a dual strategy. The company wants to see cars in China as long as it can. But in order to prevent exposing itself entirely to China, the company is currently investing 7 billion euros in the world's second-largest car market, the US.

+ Germany, so the lesson goes, will have to seal itself off and become a little bit more like China in order to protect itself from the People's Republic.

German business is unusually reluctant to untangle itself from China: It should know better. Economist

+ Over the past two decades the interests of German business have shaped Germany’s China policy to the exclusion of other concerns. Mr Scholz’s corporate retinue suggests that this is still the case.

+ “The Chinese political system has changed massively in recent years and thus our China policy must also change,” declared Annalena Baerbock, Scholz’s foreign minister from the Greens party.

Who is China’s new no. 2? A business pragmatist or a party loyalist? Li Qiang’s record suggests he could serve as a moderating influence on Xi Jinping, but he has also fallen in line when it mattered. WSJ

+ Li, whom Xi appointed last month as China’s new No. 2, is known inside the country as a pro-business pragmatist unafraid to push the boundaries of Communist Party rule. Party insiders say he’s also a loyalist who will implement Beijing’s policies effectively and aggressively when needed.

+ Li has fallen in line with the Chinese leader when it mattered. In Shanghai, he imposed one of China’s harshest lockdowns this year after initially experimenting with a looser approach.

+ In Shanghai, he oversaw foreign investment from companies such as Tesla, which spent $2 billion building a factory there, its first outside the US Tesla was allowed to become sole owner of its Shanghai factory, while all other foreign automakers are required to build joint ventures with local Chinese companies.

Reuters: CBC News to shut China office after unanswered visa request for journalists

+ "Closing the Beijing bureau is the last thing we want to do, but our hand has been forced…While there was no dramatic expulsion or…public statements, the effect is the same. We can't get visas for our journalists."

Russia is fighting by the book. The problem is, it’s the wrong book. Max Boot

+ Civilians don’t talk much about military doctrine, but military professionals know how important it is. This is the intellectual concept that governs the training and equipping of military forces. Get the doctrine right and troops have a major edge in battle. Get it wrong and they have a major, possibly insuperable disadvantage.

+ The Russian military hasn’t been faring nearly as well fighting the Ukrainian army. In fact, the Russian war effort has been a study in ineptitude.

+ In a sense, the Russian doctrine can be seen as a response to the deeply ingrained Russian fear of foreign invasion from Napoleon to Hitler.

+ The world has totally changed in the past 40 years, but Russian military thinking remains stuck in the past.

+ But Russia is hobbled in fighting this conflict because its generals did not prepare for a protracted war of attrition. They expected that, if Russia was going to enter a lengthy conflict, the Kremlin would order a general mobilization from the start.

+ The Russian conduct of this war is not only a moral failure but also an intellectual one.

The 2022 Global Startup Ecosystem Report (GSER) has recognized Detroit as the top emerging startup ecosystem, further underscoring Michigan’s role as a high-tech hub in the Midwest.

The world tech made: Can Silicon Valley be redeemed? Margaret O’Mara

+ Today, six of the ten most valuable corporations in the world are US computer hardware and software companies. A seventh, Tesla, produces electric cars that are essentially supercomputers on wheels. All of these companies hail from the West Coast.

+ To keep faith in technology, as in any religion, one must “believe in things yet unseen.”

+ The rise of technology companies is the ironic culmination of the United States’ long revolt against bigness.

+ Silicon Valley’s empire of binary code encircles the planet, leaving individuals and firms searching (and paying) for relief through the mysticism of ancient faiths: mindfulness apps, yoga retreats, walking meditation labyrinths with corporate logos at their center.

Jony Ive on life after Apple: The mastermind behind Apple’s most iconic products reveals how his design philosophy guides collaborations at his creative collective, LoveFrom. WSJ

+ Sir Jony Ive has his name on 1,628 US patents, part of 14,000 he holds worldwide encompassing both software and hardware.

+ “I don’t know what I would do without magnets,” he says, with a laugh.

+ “No designer of the 21st century has reached more people with the effects of their work and the physical presence of their work…. Jony has tried to make this avalanche of [technological] change into a dignified, humanistic one. In a world where we focus on screens and pixels but still need physical objects, he is fascinated by materials and cares a lot how people use things.”

+ “Language is so powerful. If [I say] I’m going to design a chair, think how dangerous that is. Because you’ve just said ‘chair,’ you’ve said no to a thousand ideas.”

+ “I love making things that are profoundly useful. I’m a very practical craftsperson.”

+ “I think people think of design as how something looks. But that’s a superficial definition—it’s how something works,” says Airbnb co-founder Brian Chesky.

+ “Success is the enemy of curiosity.”

US workers have gotten way less productive. No one is sure why. Bosses and economists are troubled by the worst drop in US worker output since 1947. WP

+ In the first half of 2022, productivity — the measure of how much output in goods and services an employee can produce in an hour — plunged by the sharpest rate on record going back to 1947, according to data from the Bureau of Labor Statistics.

+ Critical to a well-oiled economy, productivity is also the ultimate driver of standards of living: Higher productivity eventually translates to more goods and services available at a lower cost, and increased wages for workers, meaning higher productivity also combats inflation.

+ Mentions of burnout are up 42 percent in employee reviews on career site Glassdoor, compared with 2019 data, said chief economist Aaron Terrazas. Mentions of overwork are up 12 percent.

+ Outside the United States, other nations, such as France, Germany and Canada, have also seen productivity slow down, said Klaas de Vries, senior economist with the Conference Board.

WFH trend may have peaked, LinkedIn survey finds: The social network also found a growing disconnect between what employees want and what their employer demands. Bloomberg

+ In September, 12% of UK jobs advertised on the site were remote, compared with 16% in January, as “paranoid” employers worry about the productivity of working from home, said Josh Graff, the managing director of LinkedIn for EMEA and Latin America.

+ The company also found that three out of four bosses in the UK are concerned that the current economic slowdown means they will have to go back on flexible working, in a global survey of around 3,000 C-suite executives at large organizations.

+ The UK labor market is still running hot with the 3.5% unemployment rate the lowest since 1974, according to the Office for National Statistics. However, Graff said the hiring rate on LinkedIn fell by 10% in the UK in September from a year earlier, in a sign of slowdown.

Inside the Biden team’s fixation on gas prices: Many Biden aides say the president’s popularity is closely tied to a single economic number. They could be right. WP

+ White House Chief of Staff Ron Klain wakes up almost every morning at around 3:30 am in his suburban Maryland home, rolls over in bed, and pulls out his iPhone to check a number critical to the fate of the presidency - publicly available tracker on AAA.com — the average national gas price, which updates in the early morning.

+ Nobody in the White House has been more focused on lowering gas prices than Klain, according to interviews with half a dozen senior aides, Democratic lawmakers, and others familiar with the chief of staff’s thinking. It’s a reflection of the president’s own attention to the issue.

What to expect in the 2022 midterms: Grab some snacks and get ready for a long night of surprises and Republican victories. Karl Rove

+ At 7:30 pm, North Carolina and Ohio polls close. Republicans must win both Senate races.

+ This midterm’s gravitational forces—inflation, the economy, crime, border security, Biden’s approval rating, voters’ feelings about the direction the country is headed—all work to the GOP’s advantage.

Why does The Associated Press call US elections? AP

+ It’s been done that way since 1848 when the AP declared the election of Zachary Taylor as president.

+ AP began with “our own version of the Pony Express,” gathering vote totals from far-flung areas in the 1848 election.

+ In 2020, the AP was 99.9% accurate in all the race calls it made and perfect in declaring winners in the presidential and congressional races in each state.

Feeling the blues at Chelsea, can the US’ top star rise? English fans love to laugh at Christian Pulisic. As he prepares to face the Three Lions in the World Cup, now is his chance to prove them wrong. SI

+ Pulisic had appeared in six Premier League games this season, starting just one, for a grand total of 156 minutes.

+ For a wobbly USMNT side to get out of the group or have a prayer of taming the Three Lions, it’ll need Pulisic to prove the detractors in his adopted country wrong—about US football, and especially about himself.

+ The latest gossip has Leeds United, Newcastle, AC Milan, and Juventus being potentially interested in breaking Pulisic out of his Stamford Bridge prison.

Steve Nash is gone, and the Brooklyn Nets reboot. Again. A chronically chaotic basketball franchise confronts turmoil once more. Jason Gay

+ Such is life with the Nets, a team that happily abandoned Jersey for hipper Brooklyn in 2012, but has little to show after 10 years besides a hulking metal arena, a bunch of reboots, and acres of no-frills merchandise.

+ I suspect Brooklyn’s ex-coach isn’t merely feeling the sting walking out that door. He probably also feels relief.

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