Dec 13, 2018

Axios Future

By Bryan Walsh
Bryan Walsh

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1 big thing: The new U.S.-China brinkmanship

Illustration: Sarah Grillo/Axios

The escalation of the U.S.-China trade war into tit-for-tat arrests suggests a new stage of hostility in their rivalry for economic and technological dominance in the coming decades.

  • Everyone is a potential target in this brinkmanship as nerves fray, the global order erodes and the old rules of international engagement are thrown out.

The big picture: In recent days, China has detained two Canadian citizens — Michael Kovrig and Michael Spavor — for "engaging in activities that endanger the national security" of China, a Chinese Foreign Ministry spokesperson said. In interviews with Axios' Erica Pandey and me, U.S. experts interpreted the detentions as direct retaliation for an arguably provocative new American approach toward China.

  • In October, Belgian police arrested Yanjun Xu, a Chinese intelligence officer accused of economic espionage in the U.S., on the request of American authorities. He has already been extradited to the U.S.
  • On Dec. 1, Canadian authorities arrested Meng Wanzhou, CFO of Chinese phone giant Huawei, and daughter of the company's founder. Meng allegedly violated U.S. banking fraud laws and sanctions against Iran. The U.S. is seeking her extradition.

"By making a prominent example of Canada, Beijing is sending a message globally," Dennis Wilder, the National Security Council's senior director for East Asia under George W. Bush, tells Axios.

"Foreign businesses and other entities operating in China need to recognize that there are no more 'grey areas' in the Xi Jinping era when it comes to conforming to the letter of Chinese law. You might get away with it in the near term, but then you will be a convenient target when tensions with your home country escalate."
— Chris Johnson, Center for Strategic and International Studies

Why it matters: It's rare for the U.S. to seek and achieve the arrest of a senior official — commercial, military or political — from any other major country. While it's not surprising for a country to nominally file charges against the elite of a rival nation, it's highly unusual for detention and extradition to actually happen, largely because — as has occurred in this situation — it is hard to know where tit-for-tat would stop.

  • "It is a clear escalation of the economic competition between China and the United States and its allies. Tariffs are one thing, putting each other’s citizens in jail is another," says Michael Beckley, a professor at Tufts University.
  • Meanwhile, Trump has gone on to violate yet another legal norm by suggesting his readiness to seek Meng's release in Canada should he manage to strike an advantageous trade deal with China.
  • In a statement today, Canada warned Trump to stop and "not seek to politicize the extradition process or use it for ends other than the pursuit of justice."

The bottom line: As we've reported before, the U.S. and China are racing to "reborder" the world for a new cold war — in effect, redividing the world into spheres of influence. This new brinkmanship could accelerate that dynamic.

Meanwhile, firms and governments on both sides are on high alert.

  • Cisco urged some employees to postpone nonessential travel to China for fear that they may become targets of a counterstrike, the NYT reports.
  • The government of British Columbia is rescheduling a trade trip to China for the same reason.
  • Zhang Ruimin, CEO of the Chinese appliance maker Haier, told Bloomberg that Meng's arrest "has created a shadow in everyone’s hearts."
2. Killer fentanyl

Photo: Getty Images

Fentanyl — thousands of times more powerful than heroin — is featuring more prominently in the U.S. opioids crisis: A high share of fatal cocaine, heroin and oxycodone overdoses also involves fentanyl, according to new data from the Centers for Disease Control and Prevention, Axios' Sam Baker and Caitlin Owens report.

  • About 40% of deaths attributed to cocaine also involved fentanyl, the CDC says, as did 37% of heroin deaths and 19% of fatal oxycodone overdoses.

The big picture: As the nation's addiction crisis has unfolded, the No. 1 cause of overdose deaths has shifted from prescription drugs to heroin to fentanyl. And now cocaine is also seeing a spike.

By the numbers: While only about 1,600 overdose deaths were attributable to fentanyl in 2011 and 2012, the number skyrocketed to more than 18,000 in 2016.

Related: Fentanyl is so potent (and so easy to smuggle into the U.S.) that now experts are worried about it as a potential weapon for terrorists, Bloomberg's Anna Edney reports:

  • “Fentanyl-based drugs have been used in conflicts in other countries, so we know it’s possible," said Rick Bright, director of the U.S. Biomedical Advanced Research and Development Authority.
3. Now hiring: Ex-cons, drug users

Illustration: Rebecca Zisser/Axios

To fill a whopping 7.1 million job openings in the tightest labor market in a half-century, employers are loosening their requirements and raising traditional benefits to lure workers, Axios' Shannon Vavra writes.

Stat of the day: 10% of small businesses this past quarter have offered — for the first time — to repay a part of student loans, relax drug policies or hire ex-cons, according to the latest CNBC and SurveyMonkey Small Business Survey. Reeling from the 3.7% unemployment rate, businesses large and small have also raised wages and benefits.

By the numbers:

  • 12% of small businesses offered student loan repayment as a new benefit in the last quarter.
  • 14% relaxed their drug policies.
  • 12% considered candidates with a criminal record for the first time.

But, but, but: While firms are debuting these new practices, there has also been a shift in bargaining power toward employers. Weaker unions, outsized firms and more noncompetes "make it harder for workers to look for and get outside offers," Indeed's chief economist Jed Kolko tells Shannon.

4. Worthy of your time
Expand chart
Reproduced from Zachary Labe using PIOMAS data; Chart: Axios Visuals

The loneliest generation (Janet Adamy, Paul Overberg — WSJ)

The Arctic is unraveling as climate change intensifies (Andrew Freedman — Axios)

Can France revive its industrial heartland? (Harriet Agnew — FT)

How opioids affect babies' brain growth in the womb (Aimee Cunningham — Science News)

The reverberations of New York's Uber wage law (Erin Winick — MIT Tech Review)

5. 1 👻 thing: Millennial slang infiltrates the Fed

No one at work. Photo: Getty Images

"Ghosting" — a term that began as a way to describe ending a romantic relationship by simply never speaking to the other person again — has made its way into the Fed's lexicon.

Erica writes: The Fed's new "Beige Book" calls ghosting a rising phenomenon in the workplace, Quartz reports. Translated from dating to the office, ghosting could mean any number of things.

  • Deciding during an interview that you don't want a job, but never giving the company a formal "no."
  • Accepting a job offer, but getting cold feet and never showing up for your first day — without a word.
  • Dodging emails or Slacks from your manager ... forever ... and never showing up to work again.
Bryan Walsh