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An American princess in London Beware Italy’s next government How firms cope with Trump’s sanctions Special report: China in the world MAY 19TH–25TH 2018 Gaza There is a better way PURE AEROSPACE The state that revolutionized the automotive industry has taken to the skies to become one of the top places in the country for aerospace business. Michigan. Home to more than 600 aerospace-related companies, Michigan is ranked among the top 10 states for major new and expanded facilities. When it comes to aerospace success, the sky’s the limit in Michigan. michiganbusiness.org/pure-aerospace Contents The Economist May 19th 2018 3 6 The world this week 34 The Murray-Darling From paddles to puddles 35 North Korea Leaders Forewarned on disarmament 9 Israel and Gaza 36 Banyan There is a better way A Malaysian tsunami 10 Pharmaceuticals The price is wrong China 10 Italy’s next government Fiddling before Rome burns 37 Language One country, many tongues 11 The dollar The About that big stick 38 Football The royal wedding The home advantage monarchy is stronger than it 12 Non-compete clauses has been for years—and the Restrain the restraints government is weaker: On the cover Middle East and Africa Bagehot, page 51 Israel must be held to Letters 39 Burundi’s referendum account for this week’s Back to the bad old days 14 On happiness, crypto- deaths in Gaza. But it is time currencies, Marx, mental 40 Zimbabwe for Palestinians to take up Can the economy be fixed? health, Deutsche Bank, non-violence: leader, page 9. the post 41 State airlines in Africa Why Palestinians are ready to Where one is not enough brave bullets and risk death 41 Gulf politics on the border fence between Briefing Why Qatar is raising cows Gaza and Israel, page16. 16 Gaza Despite the politics of fear, Siege mentality 42 Iran’s stricken economy Israel is more successful A system in shock than ever, page18 18 Israel at 70 Promised land 42 Iraq’s election Muqtada al-Sadr’s win Trump and sanctions America The Economist online United States must take care when wielding Special report: its extraordinary power over Daily analysis and opinion to 19 The Justice Department China in the world A finger on the scale global finance: leader, page11. supplement the print edition, plus Opening the gates Business has little choice but audio and video, and a daily chart 20 Politics in California After page 42 to cave in to the Trump Economist.com Wacky races administration’s unpredictable E-mail: newsletters and 22 Gambling on sport sanctions policies, page 54. Europe mobile edition For the bettor How to escape a hegemonic Economist.com/email 22 Medicaid 43 Italy’s coalition talks currency: Free exchange, Print edition: available online by Will work for health care The wills of the people page 68. Europe has few good 7pm London time each Thursday 23 Missouri’s governor 44 Spain and Catalonia options for dealing with Economist.com/printedition Under fire No surrender America’s president: Audio edition: available online Charlemagne, page 47 26 Lexington 45 Sex in French to download each Friday A Democratic deficit Vive la différence Economist.com/audioedition 45 Orban visits Poland Drinking from one glass The Americas 46 Georgia’s hipster politics 27 Venezuela Dance dance revolution Mr Maduro’s mock election 47 Charlemagne 28 Peru Standing up to The Donald Volume 427 Number 9092 Vizcarra’s vision Published since September1843 30 Bello to take part in "a severe contest between Britain intelligence, which presses forward, and Argentina and the IMF an unworthy, timid ignorance obstructing 48 Corbynomics our progress." The great transformation Asia Editorial offices in London and also: 51 Bagehot Italy The prospect of a Beijing, Berlin, Brussels, Cairo, Chicago, Madrid, 31 Politics in Thailand Mexico City, Moscow, Mumbai, Nairobi, New Delhi, American princess populist government is more New York, Paris, San Francisco, São Paulo, Seoul, Vacuum power dangerous than people think: Shanghai, Singapore, Tokyo, Washington DC 32 Rebellions in Myanmar leader, page 10. The new Rumble in the jungle administration threatens to 32 Bombings in Indonesia be fractious and risky, page 43 A new low 1 Contents continues overleaf 4 Contents The Economist May 19th 2018 International Science and technology 52 Higher education 71 Conservation in Colombia Ranking universities Something to shout about 72 Glaciology and history Business Core values 54 American sanctions 73 Astronomy What the OFAC? Inconstant 55 Music streaming 74 The science of songs Bad rap What makes good music? 56 Samsung and labour 74 Microdrones University rankings League Chinese abroad China’s Workers of the Galaxy Petite fly from a bright guy tables lead universities to decision to let its people travel favour research over teaching 56 AirAsia abroad freely is changing the and hard sciences over the On a wing and a slogan Books and arts world. James Miles argues that humanities. Yet they also 57 Bankruptcy advice 75 Russian theatre it is changing China, too. See foster global co-operation, Raising a racket The bandage and the wound our special report after page 42 page 52 57 China Three Gorges and EDP 76 Modern opera Opening the floodgates His dark materials Subscription service 58 Toyota and autonomy 77 Organised crime For our latest subscription offers, visit Speed limit The biggest gang in town Economist.com/offers For subscription service, please contact by 59 Crypto-currencies 77 Irish fiction telephone, fax, web or mail at the details Bitcoining it How the past holds on provided below: 78 The history of silence North America The Economist Subscription Center Finance and economics Whereof we cannot speak P.O. Box 46978, St. Louis, MO 63146-6978 Telephone: +1 800 456 6086 61 The world economy Facsimile: +1 866 856 8075 Levelling off 80 Economic and financial E-mail: [email protected] indicators Latin America & Mexico 62 Buttonwood The Economist Subscription Center Istanbuls and bears Statistics on 42 economies, P.O. Box 46979, St. Louis, MO 63146-6979 plus a closer look at oil Telephone: +1 636 449 5702 Music streaming In response 63 NAFTA negotiations Facsimile: +1 636 449 5703 to #MeToo, Spotify kicks off a Labouring away E-mail: [email protected] cultural shift in the music 63 Boeing v Airbus Obituary Subscription for 1 year (51 issues) 8 business, page 55 Flying blind 82 Ninalee Allen Craig United States US $15 .25 (plus tax) Canada CA $158.25 (plus tax) 64 China’s current account A woman walking Latin America US $289 (plus tax) Discovering deficits 64 Life insurance Declining years Principal commercial offices: The Adelphi Building,1-11John Adam Street, 65 Pension bonds London WC2N 6HT Will Selfies stick? Tel: +44 (0) 20 7830 7000 66 Non-compete agreements Rue de l’Athénée 32 1206 Geneva, Switzerland Ball and chain Tel: +4122 566 2470 68 Free exchange 750 3rd Avenue, 5th Floor, New York, NY10017 The long arm of the dollar Tel: +1212 5410500 1301Cityplaza Four, 12 Taikoo Wan Road, Taikoo Shing, Hong Kong Global growth An economic Tel: +852 2585 3888 slowdown should not cause Other commercial offices: too many jitters—yet, page 61. Chicago, Dubai, Frankfurt, Los Angeles, How Turkey went from Paris, San Francisco and Singapore investment darling to a junk rating: Buttonwood, page 62. The demise of China’s current- account surplus will change the global economy, page 64 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 © 2018 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 MAGICAPPINMYHANDS,IFOLLOWYOUUNTILTHEEND MOBILE APP. Benefit from all its features: directions to the airport and boarding gate*, real-time flight information, notifications related to your flight, boarding pass available at any time… And so much more to discover at airfrance.us *At Paris-Charles de Gaulle. 6 The world this week The Economist May 19th 2018 ka, a transport hub, raising Fidesz government, which less keen on giving up its nuc- Politics fears that the disease will blames the Jewish billionaire lear weapons than it had previ- advance rapidly. At least 42 philanthropist for much that ously implied. people have been infected by goes wrong in Hungary. this latest outbreakso far. China marked the tenth anni- Time to talk versary ofan earthquake in Fancy a flutter? Sichuan that killed 70,000 The Supreme Court over- people. President Xi Jinping turned a law that banned said China had provided betting on sports, finding that “enlightenment forthe inter- it infringed on states’ rights. national community” in re- The law was passed in 1992 building disaster zones. Offi- (Nevada was exempted). cials imposed tight security, Americans already place an fearful ofattempts by parents estimated $150bn ofillegal to mourn children who died in Tens ofthousands ofPalestin- wagers on sports each year.
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