Good morning, Quartz readers!
What to watch for today
Lots of talk about the fiscal cliff. Obama is preparing to hold talks with labor and business leaders in the hope of finding a “balanced solution” to the deficit challenge, his aides are saying. With the Dec. 31 deadline approaching, businesses and investors have expressed major concerns that lawmakers won’t reach the compromises needed to avoid sharp tax hikes and spending cuts due to take effect at the end of this year. Both Republicans and Democrats expressed some optimism Sunday. Quartz analyzed the possible basis for a deal between President Obama and House Speaker John Boehner.
More talk of a Greek tragedy. Greek Prime Minister Antonis Samaras got the 2013 budget through parliament early this morning, only to face the prospect this week of defaulting on a €5 billion ($6.4 billion) debt repayment. The Greek government has announced plans to cover the gap by selling more debt on Tuesday, but the Financial Times reports that the treasury bill auction is likely only to raise €3.5 billion, leaving a shortfall of €1.5 billion (paywall).
Tough talk on multinationals’ UK tax strategies. Executives from Google, Starbucks, and Amazon are scheduled to face tough questions from a parliamentary committee about how they’ve kept their UK tax bills so low. They’re not alone, and the UK isn’t the only place wishing it could collect more from multinationals. Apple recently disclosed that it paid corporate taxes of less than 2% on its profits outside the US in its last fiscal year. But the issue is gaining steam in the UK: the Guardian reassured consumers in detail about how they could do their holiday shopping while boycotting Amazon over the tax issue.
While you were sleeping
China clamps down on talk. Feeling sensitive about its once-per-decade leadership transition, the Communist Party has banned ping pong balls and balloons in case activists use them to carry subsersive messages, and its censors are waging war on the internet. Canada’s Globe & Mail comments here that the closed-door 18th congress at which the Party is choosing its new bosses is: “more like a papal conclave than a political convention, although the Communist delegates don’t yet have the voting power that the cardinals of the Vatican gained in the 11th century.”
But releases scraps of information from its Party congress. Small amounts of news are emerging from the congress. Outgoing President Hu Jintao will step down as military chief, unlike his predecessor Jiang Zemin who kept that post for more than two years after retiring, sources told the South China Morning Post. The securities regulator announced new measures designed to improve access for foreign investors. Banking regulators insisted the country has no problem with bad debts.
Predictions of Japan’s recovery look silly again. Japan’s economy shrank 3.5% in the last quarter, the fastest pace of contraction since the earthquake and tsunami in early 2011. Analysts often predict Japan is about to recover. But this latest data are not only bad news for Japan bulls. They also pile extra pressure on Prime Minister Yoshihiko Noda, whose approval rating just touched an all-time low (paywall), to call an election and possibly make way for new blood. As this interactive graphic from WSJ.com shows (paywall), Japan’s economy has been in the doldrums for much of the last two decades.
BBC Trust tried to restore trust. The BBC Trust, the UK public broadcaster’s governing body, has been holding emergency talks and promising reform after Director General George Entwistle resigned after just 54 days. He stepped down amid new accusations of gross mismanagement, when its Newsnight television program wrongly leveled pedophilia allegations against a UK politician. BBC figureheads have blamed budget cuts and mismanagement for the Newsnight bungle. But the media organization has also faced charges of covering up an internal sex abuse scandal.
Chinese students flocked to US universities. Their number rose 23% last year, according to the non-profit Institute of International Education (IIE), which tracks student mobility data. The most popular subject for Chinese students was business, followed by engineering, and math. Chinese parents send their children to American universities to learn creative thinking and leadership skills, which are not prioritized by China’s rote learning-focused education system.
New details emerged surrounding the affair that unseated US spy chief David Petraeus. Petraeus’s extramarital relationship with biographer Paula Broadwell, which led to his resignation last week, was uncovered amid an FBI probe of emails she sent.
Other news from the weekend
The latest James Bond film opened in the US to a bigger box office take than any of the earlier films in the 007 series. “Skyfall” has already grossed (paywall) more than $500 million globally.
Apple resolved a smartphone battle. Apple has backed down from one of its patent fights, agreeing with Taiwanese manufacturer HTC that the pair will quit all legal battles. While this does not guarantee that smartphone peace will reign supreme between Cupertino and Taipei forever, Apple and HTC have agreed to stop all legal action worldwide and struck a 10-year global licensing agreement covering present and future patents. Apple is still fighting it out with other smartphone makers over intellectual property issues.
Toyota said it would spend up to $2.7 billion to expand in Indonesia. The Japanese automaker, which already has a more than 60% share of passenger vehicles there (paywall), aims to further tap the growing middle class.
Foreign investment is “not a bogey,” Indian PM insisted. India’s growth will slow to 6% (paywall) next year, Prime Minister Manmohan Singh said. For growth to recover, he is relying on parliament passing new laws that encourage foreign investment into sectors such as multi-brand retail and insurance. That is not assured. Some Indian politicians, and the public, are wary of foreign investment as it invokes bad memories of the nation’s colonial past. “Some people still try to make FDI into a bogey,” Mr Singh said at the weekend.
Quartz obsession interludes
Christopher Mims on the Mobile Web and the $20 tablet from India that could educate billions, blindside PC makers and transform computing. “The Aakash 2 isn’t just the cheapest fully functional tablet PC on the planet because the Indian government has decided it should be—it’s the cheapest, period….Which means the Aakash, or something like it, could become the sole computer for hundreds of millions of people in India, not to mention elsewhere in the developing world.” Read more here.
Matters of debate
Tax havens are essential and laudable.
US Republicans should support raising taxes on millionaires. It won’t kill the country, argues a prominent conservative editor.
Corruption threatens to bring down China and Russia.
Lying is essential in Japan. It gets things done, according to this BBC correspondent.
It’s possible to learn a language with 22 hours of effort. The key is linking the sound of each word to an image representing its meaning.
Philanthropists write bigger checks directly after praying. According to one psychologist, anyway.
Taxing fatty food does not deter fatties. Denmark has scrapped its so-called “fat tax” after fast food addicts traveled outside the country to purchase their fatty, sugary junk instead.
Best wishes from Quartz for a productive day. Please send any news, queries, suggestions, or thoughts on tax havens to email@example.com or hit “Reply” to this email.