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  • Capitalism Key to Fighting Muslim Extremism

    Eight years after 9/11, many in the West still think of Islam as a threat. Islamic extremists are seen as brainwashed robots, and the rest of Muslims as only a step behind in their blind acceptance of what their leaders preach. But this view misses a larger point: Islamic extremism is the direct result not of a problem with doctrine but of sclerotic, overregulated economies that stifle entrepreneurship; isolate people from the global economy; and deprive them of jobs, services, and hope for a brighter future. And there is a glimmer of good news: all this can change. Indeed, it already is. Recent years have seen the tentative emergence of a middle class throughout the Muslim world. And this capitalist trend, if encouraged by the West, offers the single best hope for combating Islamic extremism worldwide.Consider the problem first. For too long, standards of living have been falling in many parts of the Muslim world. Populations are getting younger, putting more pressure on weak...
  • 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,...