Selected highlights so far from the third key day of the World Economic Forum in Davos, Switzerland:
TOP STORIES:
Philippine President Says He Is Seeking Ways to Defuse Tensions With China -- WSJ
The Philippines is increasing cooperation with the U.S. and developing stronger mechanisms to defuse disputes with China as it walks a fine line between the two superpowers, President Ferdinand Marcos Jr. said. "I learned an African saying: When elephants fight, the only one that loses is the grass," Mr. Marcos said in an interview with The Wall Street Journal on the sidelines of the World Economic Forum in Davos, Switzerland, this week. "We are the grass in this situation. We don't want to get trampled." China is one of the Philippines' largest trading partners, while the U.S. is a longstanding security ally, making the Philippine government reluctant to take sides against either. "It's a very precarious balance, " Mr. Marcos said.
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Uber in Talks With Automakers to Build Vehicles Customized for Ride-Sharing, Delivery -- WSJ
Uber Technologies Inc. is in talks with automobile makers about building lower-cost electric vehicles tailored for its ride-hailing and delivery businesses, part of its effort to electrify its fleet. Speaking Thursday at an event hosted by The Wall Street Journal, Uber Chief Executive Dara Khosrowshahi said that the company is working with manufacturers on vehicles optimized for city use, ferrying passengers and deliveries. For ride-sharing, that includes cars with lower top speeds and with seating areas where passengers can face each other. "I do think that top speeds, for example, that many cars have are not necessary for city driving that's associated with rideshare," Mr. Khosrowshahi said. "That can reduce the specs and if you reduce the specs you can reduce the ultimate cost."
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Microsoft Hosted Sting Performance in Davos on Night Before It Announced Layoffs -- WSJ
On Tuesday evening, Microsoft hosted an event. It was an intimate gathering of 50 or so people, including the company's top executives, who got to wile away the evening listening to a performance by the musical artist Sting, said people familiar with the event. The concert would end up sounding a sour note to some employees at Microsoft the next morning. On Wednesday--while much of the company's leadership team was halfway around the world from its Redmond, Wash. headquarters--it announced plans to lay off 10,000 people, the largest layoff Microsoft has had since 2014, and as CEO Satya Nadella would explain in a blog post, reflected the need for the company to adapt to a global economic slowdown.
INTERVIEWS AND PANELS:
European Central Bank President Christine Lagarde signaled that the bank will continue to increase interest rates this year amid an improved economic outlook and historically tight labor market. Speaking Thursday at the World Economic Forum in Davos, Switzerland, Ms. Lagarde warned that the ECB isn't satisfied with current high levels of inflation in the currency union. "On inflation we have way too high numbers," Ms. Lagarde said in a panel discussion. "We shall stay the course until such a time when we have moved into restrictive territory for long enough so that we can return inflation to 2% in a timely manner." Asked about the possibility that the ECB might limit future rate increases, Ms. Lagarde said she would advise investors to "revise their position."
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Allowing the semiconductor industry to become too dependent on Asia was a mistake and fixing it will likely take decades, Intel Corp. Chief Executive Patrick Gelsinger said. "We needed a global crisis to realize we had allowed ourselves to become dependent on single points of failure in the supply chain," Mr. Gelsinger told an audience at the World Economic Forum at Davos on Thursday, referring to the recent chip shortage. "We need resilient supply chains for the future." Mr. Gelsinger said just three decades ago the U.S. and Europe accounted for 80% of the world's chip output. Now, Asia accounts for that figure and the U.S. and Europe produce 20%, he said. "It will take decades to fix," he said.
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A fragmented satellite industry is facing more consolidations as new, well-funded players like Elon Musk's Starlink, as well as Chinese competitors, make plans to saturate space with new satellites, said Rajeev Suri, chief executive of Inmarsat Global Ltd., one of the world's largest satellite operators. He said 55 companies have laid out fully funded plans to launch some 100,000 new satellites into orbit by the end of the decade, on top of the 7,000 already there. "I think it does mean consolidation because you can't have, in a somewhat low-growth market, 55 players compete, and with deep pocketed new players coming in that don't have a desire for near term profit, i.e. its a long term bet," he said.
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New technologies, from autonomous vehicles to artificial intelligence, are creating both increasing opportunities and new security risks, said Christopher Wray, the director of the Federal Bureau of Investigation. Speaking on a panel at the World Economic Forum in Davos, Switzerland, Mr. Wray said that the U.S. is particularly concerned about China's AI programs and their ability to hack into other countries. He also said that the FBI had proactively shut down a Russian cyber effort to probe American infrastructure at the start of the war with Ukraine. "The attack surface is broadening, the range of attack methods is increasing, in quality and quantity," he said.
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The European Space Agency is pushing a zero-debris policy that would mandate companies and governments to remove any space junk launched from Earth. "We want to establish a zero debris policy, which means that if you bring a spacecraft into orbit you have to remove it," Josef Ashbacher, ESA's director general said in a presentation at the World Economic Forum in Davos. "We need to protect our orbits for our own safety and the safety of spacecraft and astronauts."
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Governments and global health agencies need to find ways to ease the political friction that hampered the response to the Covid-19 pandemic as they build readiness for future health crises, according to Albert Bourla, chief executive officer of Pfizer Inc. Despite the many scientific and technical obstacles Pfizer had to overcome in developing and then distributing its Covid-19 vaccine, "the biggest challenge was the political challenge," said Mr. Bourla during a panel on ways to accelerate the response to future pandemics at the World Economic Forum in Davos, Switzerland on Thursday. Governments should focus now on developing mechanisms and systems to ensure that politics don't interfere with the rapid production and delivery of vaccines during future pandemics, he said.
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The world's elite are pondering how to expand access to banking and other financial services. Here are some takeaways from a Davos panel Thursday on financial inclusion:
--Without a phone-often a smartphone-access to banking is difficult. Add the need for cellphone signal and identity documents, and financial inclusion can vary widely by country and region, said Queen Maxima of the Netherlands.
--Understanding who needs financial services is key, said Shivani Siroya, founder of Tala, a smartphone-lending app. That insight comes from data gleaned by interacting with locals.
--Such data can show, for example, when mothers are saving for school fees, or crops are being harvested, so companies can create financial products accordingly, Queen Maxima said.
--Remittances, an important part of finance, show why making payments needs to be easy and digital, said Visa Chief Executive Alfred Kelly Jr.
--Blockchain could help expand the reach of some financial services, but the panelists were skeptical it could be an immediate solution. Networks can be electricity-intensive, and volatility in digital assets makes it difficult to build trust.
--Mr. Kelly of Visa argued for helping small businesses with low-tech solutions like point-of-sale devices that can allow payments even when the power is down.
MARKET TALK HIGHLIGHTS:
Climate change is a serious issue which should be taken seriously, and society isn't doing a good job at it, JPMorgan Chairman and CEO Jamie Dimon tells CNBC in an interview at the World Economic Forum in Davos. The world will need oil and gas for 50 years, and a transition and global deals are needed as it is no good if deals are made in some countries but not others, he says. "We need a real plan that is thoughtful," he says, adding investment in oil and gas isn't enough to keep prices low as the price of oil could rise again.
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The relationship between the U.S. with China should be competitive, not adversarial, JPMorgan Chase Chairman and CEO Jamie Dimon tells CNBC in an interview at the World Economic Forum in Davos.The West needs to do some restructuring when it comes to the country, while China has to open up and grow its economy to the world for itself, and what some call unfair competition needs to be negotiated, he says. China is going to be a large, civilized nation for 50 to 100 years, so if you are thinking about making long-term investments there, you should, he said.
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The European Central Bank will still need to increase interest rates by 50 basis points on more than one occasion in order to tame price growth, Dutch central bank's governor Klaas Knot says in a CNBC interview at the World Economic Forum in Davos. "Most of the ground we have to cover, we will cover at a constant base of multiple 50 basis-point hikes... It will not stop after a single 50 basis-point hike, that's for sure," he said.
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01-19-23 0903ET
