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China: the Global Grown-Up Doing Brexit the Hard Way the Six Sects Of China: the global grown-up Doing Brexit the hard way The six sects of shareholder value Neuroscience’s faulty toolkit JANUARY 21ST–27TH 2017 Contents The Economist January 21st 2017 3 5 The world this week China 33 Geopolitics Leaders The new Davos man 7 A Trump White House 34 Aircraft-carriers The 45th president A symbol of power 8 African politics 36 Banyan A dismal dynast Forbidden City rifts 8 Britain and the EU A hard road Middle East and Africa 10 Regulating car emissions 37 The African Union Brexit Theresa May promises a Road outrage Continental dog’s breakfast “truly global Britain” outside 11 The legacy of gendercide 38 Qat-farming in Ethiopia the European Union. Is that Too many single men Green business boom plausible? Leader, page 8. The 45th president 39 Mozambique defaults Britain opts for a clean break What is Donald Trump likely Letters Boats and a scandal with Europe. Negotiations will to achieve in power? Leader, still be tricky, page 46. The 12 On Theresa May, the split 39 Bahrain page 7. The drama of the prime minister’s maximalist infinitive, Disney, An unhappy isle transition is over, and the Brexit supposes immigration missiles, steel, Flashman 40 Terrorism in Tunisia new president’s team is largely cuts. That is a mistake: Jihadists go home in place. Now for the drama Bagehot, page 48. How the of government, pages14-19. Briefing City hopes to survive the hard Both economics and politics 14 The Trump administration Europe road ahead, page 63. Donald could confound Republican A helluva handover 41 Turkey’s all-powerful Trump suggests a trade deal tax plans: Free exchange, with Britain, page 47 18 Peter Navarro president page 64. California, America’s Iron constitution richest state, is leading the Free-trader turned 42 Emigration from eastern fight against federal power, game-changer Europe page 21 The old countries United States 43 The European Parliament 21 Emboldened states A shift to the right The Economist online California steaming 43 Reform in Russia Daily analysis and opinion to 22 Women’s rights Listen, liberal supplement the print edition, plus March nemesis 44 Russian propaganda audio and video, and a daily chart 22 Asian-American voters Economist.com Putin’s puppets Bull in a China shop E-mail: newsletters and 45 Charlemagne 23 Chelsea Manning Europe and Trump mobile edition The long commute Gendercide The war on baby Economist.com/email 24 Lexington girls is winding down, but its Print edition: available online by Presidential history Britain effects will be felt for decades: 7pm London time each Thursday 46 Brexit leader, page11. If baby girls Economist.com/print Doing it the hard way are safer, thank urbanisation, Audio edition: available online The Americas economics and soap operas, 47 Trade with America page 49 to download each Friday 25 El Salvador The art of the deal Economist.com/audioedition Unhappy anniversary 48 Bagehot 26 Argentina Let the work permits flow Tango in trouble 28 Cuban migrants Special no more International 49 Gendercide The war on girls wanes Volume 422 Number 9024 Asia Published since September1843 50 Girls in South Korea to take part in "a severe contest between 29 Chinese influence in From curse to blessing intelligence, which presses forward, and South-East Asia an unworthy, timid ignorance obstructing our progress." The giant’s client Editorial offices in London and also: 30 Thai education Atlanta, Beijing, Berlin, Brussels, Cairo, Chicago, Not rocket science Lima, Mexico City, Moscow, Mumbai, Nairobi, Turkey Recep Tayyip Erdogan New Delhi, New York, Paris, San Francisco, 31 Street vendors in Mumbai may soon have the executive São Paulo, Seoul, Shanghai, Singapore, Tokyo, Stabbed in the snack presidency he has long Washington DC 31 Australian politics sought, page 41 Going for gold 32 Pakistan’s economy Roads to nowhere 1 Contents continues overleaf 4 Contents The Economist January 21st 2017 Business Science and technology 51 Cigarette companies 65 Modelling brains Plucky strike Does not compute 52 Fiat Chrysler 66 Panda genetics Gas puzzlers Hey, dude. Give me six! 53 Samsung 67 Solar physics and Heir of disapproval palaeontology 54 Luxottica Set in stone An eye-catching deal 68 Submarine warfare 54 Rolls-Royce Torpedo junction Xi at Davos China’s president Weathering the storm Neuroscience A paper casts seeks to portray his country as doubt on the tactics that 56 India’s IT firms Books and arts a rock of stability in a troubled Reboot scientists use to infer how the world. His timing, at least, is 69 America in Laos brain works, page 65 faultless, page 33. China’s 57 Tata Sons A great place to have a war aircraft-carrier programme Chandra’s challenge 70 Emile Zola disappears says a lot about its ambitions, 58 Schumpeter Accuser accused Subscription service page 34. Why Cambodia has Shareholder value For our latest subscription offers, visit 70 Joys of smoking Economist.com/offers embraced China, and what Naughty, but nice For subscription service, please contact by that means for the region, telephone, fax, web or mail at the details Finance and economics 70 AIDS in America page 29 provided below: 59 Italy’s bank rescue Chronicles of death foretold North America Saving Siena 71 Elbphilharmonie The Economist Subscription Center P.O. Box 46978, St. Louis, MO 63146-6978 60 Finance in Cyprus Hamburg makes waves Telephone: +1 800 456 6086 Facsimile: +1 866 856 8075 Bank from the brink 72 Johnson E-mail: [email protected] 60 Ukraine’s economy Mr Zhou and pinyin Latin America & Mexico The other war The Economist Subscription Center P.O. Box 46979, St. Louis, MO 63146-6979 61 Buttonwood 76 Economic and financial Telephone: +1 636 449 5702 Facsimile: +1 636 449 5703 Zombie companies indicators E-mail: [email protected] Statistics on 42 economies, 62 Indonesian capital flows Subscription for 1 year (51 issues) Nerves on edge plus a closer look at new United States US $158.25 (plus tax) 62 American finance passenger-car registrations Canada CA $158.25 (plus tax) Not with a bang Latin America US $289 (plus tax) Diesel cars To stop carmakers 63 Brexit Obituary bending the rules, Europe must Lost passports 78 Clare Hollingworth Principal commercial offices: get tougher: leader, page10. 63 Inequality A journalist sniffing the 25 St James’s Street, London sw1a 1hg Fiat Chrysler Automobiles is in Tel: +44 20 7830 7000 The eight richest breezes regulators’ headlights over Rue de l’Athénée 32 emissions, page 52 64 Free exchange 1206 Geneva, Switzerland American tax reform Tel: +4122 566 2470 750 3rd Avenue, 5th Floor, New York, NY10017 Tel: +1212 5410500 1301Cityplaza Four, 12 Taikoo Wan Road, Taikoo Shing, Hong Kong Tel: +852 2585 3888 Other commercial offices: Chicago, Dubai, Frankfurt, Los Angeles, Paris, San Francisco and Singapore Shareholder value Never fear, the guardians of businesses’ favourite doctrine will find a way to adapt to the age of populism: Schumpeter, page 58 PEFC certified This copy of The Economist is printed on paper sourced from sustainably managed forests certified to PEFC PEFC/29-31-58 www.pefc.org © 2017 The Economist Newspaper Limited. All rights reserved. Neither this publication nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of The Economist Newspaper Limited. The Economist (ISSN 0013-0613) is published every week, except for a year-end double issue, by The Economist Newspaper Limited, 750 3rd Avenue, 5th Floor New York, NY 10017. The Economist is a registered trademark of The Economist Newspaper Limited. Periodicals postage paid at New York, NY and additional mailing offices. Postmaster: Send address changes to The Economist, P.O. Box 46978, St. Louis, MO 63146-6978, USA. Canada Post publications mail (Canadian distribution) sales agreement no. 40012331. Return undeliverable Canadian addresses to The Economist, PO Box 7258 STN A, Toronto, ON M5W 1X9. GST R123236267. Printed by Quad/Graphics, Hartford, WI. 53027 The world this week The Economist January 21st 2017 5 An avalanche hit a hotel in the Rodrigo Duterte, the president Two people were killed in Politics Abruzzo region ofcentral Italy. ofthe Philippines, mulled Israel in clashes between Around 30 people were inside. imposing martial law ifneces- police and residents ofa Bed- The avalanche was apparently sary to advance his homicidal ouin village that the authori- triggered by one ofthree earth- campaign against drugs. ties are trying to demolish. quakes that struckthe region this week. Earthquakes in the No preferential treatment same area last year killed more BarackObama ended the than 300 people. 22-year-old “wet foot, dry foot” policy, under which Cubans Germany’s federal court who landed on American soil rejected an attempt to ban the were permitted to stay. Cu- neo-Nazi National Democratic bans who try to get into the Party. German states sub- United States will now be mitted a petition to ban it in treated like other migrants. Mr 2013, citingits racist, anti-Semit- Obama’s decision is in keeping After hard, soft and then red, ic platform. The court found with his policy ofnormalising white and blue, Theresa May that although the party “pur- relations with the communist announced a “clean” Brexit. In sues aims contrary to the government ofCuba. A high court in Egypt upheld a her most important speech yet constitution”, it does not pose ruling that prevented the on the issue, Britain’s prime a threat to democracy. The wave ofviolence in Bra- government from handing minister set out a position for zil’s prisons continued with sovereignty oftwo islands in quitting the EU that includes Davos man the deaths ofat least 30 people the Red Sea to Saudi Arabia.
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