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  • High-Speed Trains Are Making China Smaller

    For decades, rail travel in China meant an arduous overnighter in a crowded East German–designed train, riding along a rickety old track. Now China is undergoing a rail revolution. Over the next three years, the government will pour some $300 billion into its railways, expanding its network by 20,000 kilometers, including 13,000 kilometers of track designed for high-speed trains capable of traveling up to 350kph. Result: China, a nation long defined by the vastness of its geography, is getting, much, much smaller.Already, the journey from Beijing to Taiyuan, the capital of Shanxi province, has been slashed from eight hours to three. Shortly before the Olympics last year, the 120km trip from Beijing to Tianjin was cut from almost an hour to just 27 minutes. In the next few years, a train journey from Wuhan to Guangzhou, halfway across the country, will shrink from 10 to three hours. The trip from Shanghai to Beijing, which currently clocks in at 10 grueling hours—and twice that, not...
  • Derivatives Regulation Has Loopholes

    Wall Street's biggest banks aren't just back to handing out fat bonuses. They're also engaged in a stealth lobbying effort to keep one of their main sources of profits—derivatives—free of government control. These are the unregulated financial instruments, like credit default swaps, that helped cause the crash. To take the heat off itself, the banking industry has stood aside as a newly formed group, the Coalition for Derivatives End-Users, fights efforts to curb the use of exotic securities. The group includes Wall Street's biggest corporate customers, from Apple to Whirlpool, organized by the Chamber of Commerce, the National Association of Manufacturers, and the Business Roundtable. The lobbying met with some success last week, finding support among Wall Street–friendly "new Dems." The House Financial Services Committee passed a bill that its chairman, Rep. Barney Frank, said would force "large numbers" of derivatives trades to be done on open and regulated exchanges. But critics...
  • 6 Myths About China

    The conventional wisdom is that China is steaming through the global financial crisis by building on the momentum generated by its 30-year boom. Indeed, ever since it sailed through the last big global crisis—the Asian contagion 10 years ago—Beijing has been feted for uniquely steady helmsmanship in financial storms. So perhaps it's natural for forecasters to assume that the Chinese supertanker of state is not turning sharply now, particularly since it continues to grow rapidly even as other economies sink in the recession. Yet this crisis is different—bigger and more damaging than any seen in generations—and it is exposing limits and forcing change in just about every key piece of the China model: the supremacy of the one-party state, the smart economic management, the export-driven growth, the emerging consumer class, the burgeoning private sector, the headlong focus on growth at any environmental cost, and the drive to build world-class companies. What follows is a look at why...
  • Auction Houses Look to Asian Collectors

    The contemporary-art market is not much more robust in Asia than it is anywhere else. But in other genres, Asian buyers are showing some surprising muscle, snatching up pieces that Western buyers have shunned and creating a lone bright spot in an otherwise bleak market. Collectors from mainland China continue to bid aggressively on imperial artworks and porcelains viewed as heirlooms that must be repatriated. At Sotheby's New York auction last month, Asian buyers took all but one of the top 10 lots; at Christie's, 14 of the top 20 went to Asians. An Asian buyer spent $362,500 on a 12th- or 11th-century B.C. bronze food vessel, which Christie's had estimated at $20,000 to $30,000, while a rare imperial zitan stand and cover, also estimated at $20,000 to $30,000, went for $1.42 million.Asian buyers are proving to have deep pockets in new auction categories: those associated with a high-end lifestyle. Asian oenophiles, demonstrating an educated palate and an appetite for rare wines,...
  • Dominique Strauss-Kahn on the Financial Crisis

    The sense of relief at last week's G20 summit was nearly palpable: thanks to their decisive actions over the last year, world leaders had staved off a second Great Depression. But Dominique Strauss-Kahn, managing director of the International Monetary Fund, cautions that "crises never end." NEWSWEEK's Tony Emerson and Barrett Sheridan spoke with him about the knock-on effects of the recession, from war to banking reform. ...
  • Free Trade Policy: Intelligence Squared Debate

    Call it the Rubber-Chicken War—the looming trade dispute between the United States (which has announced punitive tariffs on imports of Chinese tires) and China (which is threatening retaliation against American poultry exports). Against the background of the G20 trade talks in Pittsburgh, that contretemps made this an auspicious time to examine the age-old question of protectionism. Last week, beginning the fourth season of public debates sponsored by Intelligence Squared US, six panelists discussed the proposition that "Buy American/Hire American policies will backfire." ...
  • Japan's Luxury Market Won't Recover Soon

     By Daniel McGinnJapan has half the population of the U.S., and less land than California, yet there are more than twice as many Burberry, Hermès, and Prada stores in the Land of the Rising Sun than in all of America. For decades they've been full of brand-conscious Japanese shoppers who typically dig deep for luxury labels, fueling a $20 billion-a-year market. But even before the global recession, there were signs of a slowdown. When McKinsey & Co. principal Brian Salsberg wanders through Tokyo's shopping district, he notices that "for every one luxury [brand] bag, there are 10 Uniqlo, Forever 21, or H&M bags," referring to trendy lower-priced labels. "It's easier and cheaper today to be fashionable in Tokyo [at] a 10th the cost," he says. In a new report, Salsberg cites several reasons for Japanese consumers' shifting taste. It partly stems from growing confidence: instead of relying on labels to ensure stylishness, Japanese women...
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    Green Rankings 2009

    Newsweek's debut list of environmentally-conscious businesses, in the United States.
  • Why the Solar Industry Is Struggling

    Last summer the future of the solar industry looked bright. Demand was high thanks to generous government subsidies, and solar stocks were soaring. But now it resembles a classic bubble. The solar industry overbuilt and is now struggling under the weight of excess capacity and falling prices. As the global recession took hold, credit dried up and governments cut subsidies, most notably in Spain, where the world's largest subsidy program blew up after spurring nearly 10 times the growth it had intended. When Spain capped it last year, the world's second-biggest solar market collapsed─and so has the price of solar panels, down 50 percent in 2009. That's great news for consumers but terrible news for manufacturers now sitting on warehouses full of overpriced panels. Most companies took huge write-downs in the second quarter, driving their stock prices even lower. Germany's biggest solar company, Q-Cells, had traded near 100 euros early last year; it's now about...