October 2017

• The IMF has just increased GDP forecasts for all advanced economies – with the exception of Spain and the UK. When everything is going well, it’s time to think about what might go wrong. Medium and longterm challenges abound, ranging from spiralling levels of global debt (in the G20, non-financial sector debt amounts to $135tr – 235% of global GDP) and unfunded liabilities to the impact of technologies on our future. One thing is certain: when the next crisis strikes, traditional policy tools like interest rates’ cuts will be found lacking – ineffective in a lowinterest rate world.

• The 19th Party Congress has sealed the status of Xi- Jinping – the most powerful Chinese ruler since Mao Zedong. This also symbolically marks the irreversible ascent of China, now occurring indisputably at a time of Western decline. This challenges head-on the sacrosanct principle that countries democratise as they get richer. Whether Xi will succeed in delivering a digitally driven and economically efficient form of authoritarianism remains a moot question, but AI may clinch it by enabling a “market-based, plan-driven” model. As China ascends geopolitically, how long will it take before the renmimbi follows and the dollar reserve status begins to wane?

• Tech development and innovation are at the core of Chinese policy. To overcome the middle-income trap and to boost productivity, China aims to become world leader in AI (artificial intelligence) by 2030 and triple its production of industrial robots over the next three years. This means that the tech future may well be made in China, with a disturbing societal twist. The authorities are developing a “social credit system” that will become mandatory in 2020 and will rank citizens in terms of their “trustworthiness”, aiming to build a “culture of sincerity”. The world of The Circle and Black Mirror (respectively a novel and a series that depict a dystopian tech world) is not far-off… Our data-mined and branded online lives risk becoming a multifarious popularity contest. . .

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