Few countries are better placed than Vietnam to get rich (The Economist)

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Few countries are better placed than Vietnam to get rich - The Economist (Full Access)

A brief but revealing panic struck Vietnam this month. On January 12th the country’s 79-year-old leader, Nguyen Phu Trong, failed to meet the visiting president of Indonesia. Mr Trong’s name was removed from the official schedule without explanation. Rumours spread that he was dead. For three days noodle shops raged with speculation about who his successor might be. Would it be someone corrupt? Or more pro-China? The ruling Communist Party, a secretive bunch, revealed nothing.

Then, on January 15th, official media showed a frail Mr Trong attending a humdrum session of the legislature in Hanoi, as if to holler “I’m not dead!” like a Monty Python plague victim. The public may never know whether it was sickness or something else that made the Communist Party chief disappear from view. But it was unsurprising that his absence should scupper a meeting with a global leader. Everyone wants to be Vietnam’s friend these days.

This is partly for geopolitical reasons. Vietnam, a country of 100m, has shrewdly positioned itself halfway between China and America, prompting both superpowers to woo it. In 2023 Vietnam was the only country honoured with state visits from both Joe Biden and Xi Jinping. In September it upgraded its relationship with America to a “comprehensive strategic partnership”, putting it on the same level as Russia and China.

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Wall Street titans are betting big on insurers. What could go wrong? - The Economist (Full Access)

Blackstone listed on the New York Stock Exchange during the summer of 2007. Doing so just before the global financial crisis was hardly auspicious, and come early 2009 the firm’s shares had lost almost 90% of their value. By the time the two other members of America’s private-markets troika rang the bell, Wall Street had been battered. KKR listed on July 15th 2010, the same day Congress passed the Dodd-Frank Act, overhauling bank regulation. Apollo followed eight months later. Each firm told investors a similar story: private equity, the business of buying companies with debt, was their speciality.

But as the economy recovered, private-markets firms flourished—emerging as the new kings of Wall Street. The biggest put more and more money into credit, infrastructure and property. By 2022 total assets under management had reached $12trn. Those at Apollo, Blackstone and KKR have risen from $420bn to $2.2trn over the past decade. Thanks to the firms’ diversification, their shares rose by 67% on average during 2023, even as higher interest rates caused buy-outs to grind to a halt. Although private equity has plenty of critics, the model of raising and investing funds—whether to buy firms or lend to them—seldom worries regulators. If things go wrong, losses are shouldered by a fund’s institutional investors and humiliated fund managers struggle to raise money again. There is little threat to financial stability.

The latest development in the industry is upending this dynamic. Private-markets giants are buying and partnering with insurers on an unprecedented scale. This is transforming their business models, as they expand their lending operations and sometimes their balance-sheets. America’s $1.1trn market for fixed annuities, a type of retirement-savings product offered by life insurers, has been the focus so far. But Morgan Stanley, a bank, reckons that asset managers could eventually pursue insurance assets worth $30trn worldwide. Regulators are nervous that this is making the insurance industry riskier. Is the expansion by private-markets giants a land-grab by fast-and-loose investors in a systemically important corner of finance? Or is it the intended consequence of a more tightly policed banking system?

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Giorgia Meloni has proved the doubters wrong - The Economist (Full Access)

At the start of a year in which she will face her first real test of popular opinion at the European Parliament elections in June, Giorgia Meloni will be hoping for some cheer from growth figures out next week. She is unlikely to get any. The last reckoning showed the economy had grown by a bare 0.1% in the 12 months since Italy’s hard-right prime minister took office in October 2022. Nicola Nobile of Oxford Economics says quarter-on-quarter growth in the final three months of 2023 may even have turned negative.

No blame has so far attached to Ms Meloni’s stewardship. Nor should it yet. The rebound of the economy, hit badly by the pandemic, was sure to peter out, and it has faced new headwinds, notably from the energy crisis caused by Russia’s invasion of Ukraine. But the lack of growth is one of two clouds in an otherwise largely clear sky. The second is a surge in the irregular immigration that Ms Meloni’s right-wing coalition is bent on curbing. The number of arrivals from the Mediterranean rose to 157,652 last year, a 50% increase on 2022 and the highest figure since the peak year of 2016. The government is hoping to divert some boats to holding centres in Albania. But the plan has run into a legal challenge there that has yet to be resolved.

Otherwise Ms Meloni “is increasingly in command of the scene”, says Lorenzo Castellani, who teaches politics at the LUISS university in Rome. Her coalition has a comfortable majority and remains united, despite squabbles. Recent polls give the prime minister’s Brothers of Italy (FdI) party almost 29%, compared with only 9% for the Northern League led by Matteo Salvini and 7% for Forza Italia, bereft of its founder, Silvio Berlusconi, who died last June. Efforts by Mr Salvini to claw back support lost to the Brothers with an increasingly hardline stance have not so far given the League better ratings. The opposition is split between the centre-left Democratic Party (PD) and the smaller and populist Five Star Movement. Polls suggest Elly Schlein of the PD is the least popular of Italy’s main party leaders.

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Why politicians are obsessed with mythical Chinese land grabs - The Economist (Full Access)

There was a time when Kim Reynolds, the governor of Iowa, had no problem with Chinese investment. In 2012, when she was the state’s lieutenant governor, she met Xi Jinping, then China’s vice-premier, on a visit to Beijing. In 2017, as governor, she visited again, this time posing with Vice-Premier Wang Yang. No longer. In her Condition of the State address to Iowa’s legislature on January 9th, Ms Reynolds claimed that “China continues to grow more aggressive, and buying American land has been one of the many ways they have waged this new battle.” Later this year she intends to introduce a new law that would toughen land-ownership reporting rules in Iowa. “American farmland should stay in American hands,” she says.

Ms Reynolds joins a chorus of state and federal politicians who worry about Chinese land grabs. On January 2nd Missouri’s governor, Mike Parson, issued an executive order banning “foreign adversaries” from buying land within ten miles of a military facility. Last October Arkansas ordered a Chinese-owned agricultural firm to sell 160 acres of land. Laws to restrict Chinese ownership of land have spread as far as Florida and Texas. Over the past few years the number of states with restrictions on foreign ownership has grown from 14 to 24, according to Micah Brown, of the National Agricultural Law Centre in Arkansas. Federal politicians are getting in on the act, too. Jon Tester, the Democratic senator from Montana, is among those to have proposed tighter federal laws on foreign land ownership.

Yet there is little reason to think that Chinese firms are really buying much American land at all—whether near military bases or otherwise. In fact, if official data are to be believed, Chinese landholdings are both tiny and shrinking. And Chinese investment in general into America has collapsed in the past few years. Is it all a storm about nothing?

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