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The newly elevated vice premier of China, Liu He, is stepping into the spotlight at an awkward time. He formally took responsibility for the financial sector, state-owned enterprise reform, industrial policy and relations with the US in the same week that US president Donald Trump slapped 25 per cent tariffs on $60bn in Chinese goods. Tom Mitchell writes in a profile that this 66-year-old close confidante of President Xi Jinping has long been seen as the real power on economic matters.
The two men appear to have met when both were “princelings”, sons of party officials growing up in Beijing. Mr Liu was sent to countryside during the cultural revolution and later served in the army and worked in a factory. In the 1990s, he studied in the US, at Seton Hall University and Harvard's Kennedy School of Government. Senior Chinese officials predict that his elevation will swiftly be followed by reforms that significantly open up the country’s markets. But Mr Liu also faces challenges because he lacks bureaucratic experience and is seen as a thinker rather than a doer.
All in the genes: Parents wanting the best for their children should know they’ve already made the most important contribution — by passing on their DNA, according to Anjana Ahuja. She examines a new study of UK secondary school exam results that has found genes are far more important than educators. The follow-on conclusion: academically selective schools don’t necessarily offer higher quality education, they simply pick the students who already have genetic advantages.
Digital dystopia: Back in Soviet Russia, Josef Stalin once referred to his army of ideologically supportive writers as “engineers of human souls”. Imagine how much more effective they would have been with Facebook at their disposal, writes John Thornhill. The big US consumer tech groups must confront their role in peddling false information and propaganda.
Hope glimmers: The latest UK labour market statistics suggest that wages in Britain are finally starting to grow at a meaningful rate, increasing 2.8 per cent year on year in the three months to January. At the same time, the unemployment rate is at its lowest level since 1975. Nicholas Macpherson argues that this suggests that the UK may be starting to solve its productivity problem, but warns that the government needs to do more to foster a skilled workforce and sensible investment.
Best of the week
Requiem for the dead French political right by Anne-Sylvaine Chassany
Alexander Nix, a fake Bond villain obscuring the real mastermind by Robert Shrimsley
Campaigners hit Cambridge Analytica where it hurts by Gillian Tett
Cambridge Analytica exploited Facebook data with style by John Gapper
Economics failed us before the global crisis by Martin Wolf
Vladimir Putin is not as scary as he looks by Gideon Rachman
Cities only work if they accommodate rich and poor by Sarah O'Connor
Five reasons why US tech titans are having a bad week by Rana Foroohar
Britain’s latest Brexit strategy: any deal will do by Philip Stephens
Saudi Arabia’s rift with Turkey turns to soap opera by Roula Khalaf
What you’ve been saying
House prices? Blame QE— letter from Martin Allen
According to the evidence from antiquity, the main cause of excessive house prices is the substantial increase in the money supply due to high leverage and quantitative easing, rather than a dearth of construction. Suetonius, in The Twelve Caesars, describes how the emperor Augustus, bringing the treasure belonging to the kings of Egypt to Rome in his Alexandrian triumph, “made money so plentiful, that interest rates fell, and the price of land rose considerably”.
Comment from Good European on Campaigners hit Cambridge Analytica where it hurts
The notion that the internet is ‘beyond jurisdictions’ has passed its sell by date. It was always a nonsense and by giving it credence a quarter of a century’s worth of legislators, especially in America, have done the potential of the world wide web a great disservice. That’s twenty five wasted years and twenty five years of damage to what should have been one of the great inventions, now too much a tainted and lawless badlands instead of being the wholesome resource of promise. What is needed is for every jurisdiction across the planet to sign up to and jointly police a basic convention. To those who say that would be impossible, I offer exhibit A: International Maritime Law. Its been around in one form or another since at least Roman times and is how we regulate both inshore waters and the open oceans. These days it’s overseen by the International Maritime Organization, a sub division of the United Nations and headquartered in London UK. Every jurisdiction has a seat at the table.
Future cities will stand or fall by infrastructure— letter from Chris Gilchrist
Today, it seems, cities all over the world with more than about 10m people fall into the same pattern: an uber-wealthy centre with the same 5-star hotel and shop chains, a rising wealthy inner ring and a slum periphery of the poor. Perhaps developments in transport will change this, as the 19th century railways changed London, but the cost of new infrastructure to make cities work in the 21st century will surely be many, many times what building the railways cost. Yet if ever there was an investment that it made sense for governments to make, this is it.
Pay rises will not solve Britain’s productivity problem
The government may have declared victory on living standards, but we have been here before
Person in the News: Liu He, the man in charge of China’s economy
This low-profile adviser steps into the spotlight as the US ramps up trade war talk
Free Lunch: The interest rate dog that didn’t bark
With fiscal stimulus on the way, why does the Fed stay the course?
Ingram Pinn’s illustration of the week: Face value
Facebook’s share price falls after the revelation of data leaks from 50m profiles
Opinion today: Any Brexit deal will do
It is likely that the UK government will abandon its demands ever more quickly as time slips away
Undercover Economist: Even in Donald Trump’s White House, chaos has its limits
As the US president is learning, more ponderous forces may reassert themselves
Women urgently need to address the gender investment gap
Whether you do it yourself, or use a financial adviser, start saving for the future
Cynthia Nixon’s political bid will inspire luvvies everywhere
The ‘Sex and the City’ actress wants to be governor of New York — who will be next?
Instant Insight: John Bolton completes Trump’s America First goals
With the US president surrounded by nationalists, Pax Americana is weakening by the day
Instant Insight: US tariffs likely to draw measured response in China
Beijing’s trade rhetoric could be worse than its commercial bite
City Insider: Aviva chief Mark Wilson spins off in unexpected directions
After five years currying favour with investors, two recent moves have caused anger
FT View: Brexiters are spoiling for a transition fish fight
Britain’s negotiating hand is not as strong as some would like to think
FT View: Donald Trump cannot change China without help
Unilateral trade sanctions are not as effective as multilateral action
FT View: The market is speaking and Trump should listen
A wild political week has global markets spooked, with good reason
FT View: Britain needs its allies in Europe more than ever
Shouting about sovereignty will not alter interdependence
The Big Read
The Big Read: The anti-social network: Facebook bids to rebuild trust after toughest week
After $60bn was wiped off its market value over the data scandal, users’ privacy may become more of a concern for Mark Zuckerberg