One Belt, One Road, and a Lot of Debt

Is Beijing strong-arming borrowers with ‘debt-trap diplomacy’?

By Nathaniel Taplin

Workers carry construction materials near the Luang Prabang railway bridge—a section of the China-Laos Railway, which is part of the Belt and Road initiative. Photo: Taylor Weidman/Bloomberg News

Beijing isn’t creating vassal states through predatory lending. But it is winning friends and influencing people—and allowing other problems to build up.

The gargantuan international infrastructure-lending program is known both as “One Belt, One Road” and, more simply, “Belt and Road.” By one estimate, from mining giant BHP, the total outlay on related projects could hit $1.3 trillion in the decade to 2023—in inflation-adjusted terms, a sum more than seven times as large as the U.S. Marshall Plan after World War II. Other calculations range as high as $5 trillion.

Such analogies invariably raise the hackles of U.S. security hawks fearing “debt-trap diplomacy” to boost Chinese influence. Emerging-markets investors are also concerned, seeing the potential for infrastructure boondoggles and rising indebtedness. After Sri Lanka failed to pay interest on a portion of its Chinese borrowings, Beijing accepted a 99-year lease on a Sri Lankan port in return for debt relief. Accusations of corruption are frequent.

Chinese President Xi Jinping, hosting a Belt And Road Forum in Beijing over the weekend, was at pains to assure foreign leaders that such cases are the exception, not the rule. In an apparent concession to intensifying criticism over the past year, Mr. Xi promised a “debt-sustainability framework” and to encourage compliance with international infrastructure-contracting standards.

In fact, the evidence that Beijing is engaged in a coordinated campaign to enmesh borrowers in debt—and then strong-arm debtors or snatch away prized strategic assets—is thin. In most cases, China has had a light touch in dealing with delinquent creditors, which may be one reason such borrowing has grown so fast. A new analysis, by Rhodium Group, of China’s past external loan renegotiations found that of 40 cases across 24 countries, only the Sri Lankan case involved a confirmed asset seizure, while a land transfer from Tajikistan to China in 2011 may have involved debt forgiveness. That compares with 16 instances of write-offs, 11 deferments, and four refinancing deals.

The Belt and Road is nonetheless problematic. State-owned companies heading up the projects—often without a transparent bidding process—have a clear incentive to inflate costs. Investors in emerging markets eyeing rising debt loads and expensive new infrastructure are right to be skeptical.

U.S. hawks also have valid concerns. Rhodium says many write-offs were conceded without a formal renegotiation process, meaning that debt forgiveness was probably meant to signal support for recipient countries and improve bilateral relations.

In other words, the real political purpose isn’t a debt trap but building goodwill and high-level relationships that could enable real military, diplomatic or trade alliances down the road as China’s rise continues. From the U.S. or Indian strategic perspective, that’s already worrying enough.

A Troubled World Means A Stronger Dollar – For Now

by John Rubino

You’d think that the more trouble the US causes around the world, the weaker the dollar would trade.

Who, after all, wants to own the currency of the country perceived by most to be the source of today’s long list of trade conflicts and dirty wars?

Apparently everyone, in a dynamic that’s been defying logic for some time: When the US has and/or causes problems, the impact is even more severe overseas where a growing list of badly-run countries are either on the brink of financial ruin or heading that way fast.

So trouble of any kind anywhere sends terrified capital pouring into US Treasury bonds, resulting in a strengthening dollar…

stronger dollar

… and plunging US Treasury yields. Here’s the 10-year:

10 year Treasury bond stronger dollar

A new-to-the-scene observer might see these trends as indicative of a country in good shape, with soaring demand for its paper serving as a resounding global vote of confidence.

But this, like most trends positive involving fiat currencies and rising debt, is both deceptive and temporary, and will, if history is still a reliable guide, reverse suddenly and violently.

Here’s one way it could play out:

A rising dollar makes it harder for US companies to sell goods – priced as they are in an appreciating currency – overseas. This lowers corporate profits, which spooks the stock market and produces a reverse wealth effect in which companies scale back capital spending and investors buy fewer cars, houses and luxury vacations. Economic growth, as a result, slows or reverses.

While this is happening, the dollar might actually continue to rise for a while as falling US stocks are seen as a bigger threat overseas than here at home, causing Russians, Chinese, Europeans and Latin Americans to step up their Treasury buying.

But the result is the dreaded “crowded trade” that usually fails once all the greater fools have bought in. Yesterday’s Wall Street Journal notes that the futures markets are pointing towards that outcome.
Behind the Bond Rally: A Strong Dollar 
A persistently strong dollar is underpinning a rally in U.S. government bonds, as rising global trade tensions stoke demand for safer assets
foreign treasury bond holdings stronger dollar
International investors typically hedge their holdings of foreign bonds using derivatives, which allow them to borrow foreign currency in exchange for their own, and lock in a future interest at which they will reverse the transaction. 
[But] Some investors are wading into U.S. Treasurys without paying to protect themselves against fluctuations in the dollar, a bet that continuing U.S. economic strength and comparatively high interest rates will keep the currency grinding higher. 
That marks a reversal from late last year, when the high cost of hedging against the dollar’s fluctuations kept some foreign investors out of U.S. debt and yields climbed to multiyear highs. 
The strategy has rewarded investors who bet on the dollar recently, as the currency defied the expectations of many Wall Street banks by steadily appreciating to a recent two-year high.

But really They’re All Doomed

Short-term fluctuations in interest rates and currency exchange rates are interesting and maybe profitable for those brave souls willing to bet against crowded trades. But the overriding truth is that all fiat currencies are losing value, most at an accelerating rate. So “strong” currencies are only strong when measured against their weaker cousins. Measured against real things – farmland, oil wells, gold, silver – the long-term trend points to a single destination: fiat’s intrinsic value of zero.
dollar futures stronger dollar

Commission President

Merkel and Macron at Odds over New EU Leader

After disagreements over Brexit, the Nord Stream pipeline and Eurozone reforms, the relationship between France and Germany has grown tenser. Now, another conflict is brewing: Who should become president of the European Commission?

By Julia Amalia Heyer, Christiane Hoffmann, Peter Müller and Britta Sandberg

German Chancellor Angela Merkel and French President Emmanuel Macron

The décor of the room in which the German chancellor hoped to convince the French president to support her favored candidate was telling: brown leather chairs, a lonely potted plant at the window, a bottle of mineral water and a thermos of coffee on the table. It was clearly more Chancellery than Élysée.

It was here, in one of the German delegation's rooms on the fourth floor of the new European Council building in Brussels, that Angela Merkel and Emmanuel Macron met on Tuesday afternoon before joining their counterparts for an informal EU dinner 45 minutes later. Merkel's spokesman posted a photo on Twitter in advance of the meeting: Angela Merkel and Emmanuel Macron, both smiling.

But appearances were deceiving. The relationship between Berlin and Paris is tenser than it has been in quite some time. Ever since Macron moved into the Élysée Palace two years ago, the German-French relationship has been a bit more heated. Macron wants to change Europe, but the Germans prefer to stall.

Berlin has rejected Macron's proposals to reform of the Eurozone and the two countries are fighting over armament projects and weapons exports. It was difficult to find a compromise on Brexit and common ground German-Russian Nord Stream 2 gas pipeline proved just as elusive.

And now, following European elections, the EU is now in the process of choosing new occupants for its top positions -- and additional tensions may be on the horizon. In the wrangling over those leadership positions, Paris and Berlin have conflicting interests. Macron wants to take advantage of the opportunity to remake the EU, as he has said in numerous speeches. To do so, he needs an energetic European Commission president who shares his aims.

Merkel, meanwhile, must support Manfred Weber, the German lead candidate for the European People's Party (EPP), the center-right European Parliament group to which Merkel's Christian Democrats (CDU) belong. She has little choice in the matter, particularly given that her party already suspects her of having left them in the lurch during the campaign. Ever since Merkel gave up her position as the chairperson of the CDU and announced her impending retirement from politics, she has become a lame duck. To prevent her power from crumbling further, the chancellor needs to prove she can still represent German interests in Brussels. She needs to prevent a commission president from being selected whom the Germans do not like.

Macron, meanwhile, has joined forces with the European liberals and hopes to form an alliance -- ideally with the Greens -- to finally end the dominance of the big blocs in EU politics, the center-right conservatives and the center-left Social Democrats. He rejects the very concept of the lead candidate. More than that, though, he is opposed to the man for whom Merkel has to fight: Manfred Weber, of the Christian Social Union (CSU), the Bavarian sister party of Merkel's CDU.

And so they stand opposed: a frustrated French president, disappointed by the timidity and worries of the Germans, determined if necessary to move Europe forward with help of other partners. And an outgoing chancellor, who wants to remain the most powerful woman in Europe to the end. Merkel and Macron spent an hour and a half on the phone the evening the European elections ended, but so far there are no signs that they are approaching agreement on top European jobs.

When Macron says the word "spitzenkandidat," German for lead candidate, it's clear how little he thinks of the concept. He rushes through the long German word, putting the stress on the third syllable and making it sound pointed, almost like barbed wire in the middle of the French surrounding it.

A New Landscape

After the meal with the heads of state and government, Macron explained for the umpteenth time how little he thinks of this selection process according to which only someone who campaigned as lead candidate in the elections can become commission president. Weeks ago, he was already insisting that there is no legal foundation for the process. Now, with the election now over, he sees it as anachronistic, mirroring as it does the old power structures characterized by the dominance of the erstwhile big-tent parties.

"These elections mark a turning point for Europe," Macron said in Brussels. For the first time since 1979, the two largest parties might not be able to form a majority, he said. "So we cannot simply continue as we are used to doing."

Macron had just experienced the opposition to his point of view during dinner, when Merkel -- over pork filet, asparagus and green beans -- clearly threw her support behind Weber. It was a tense discussion, and mobile phone reception was even blocked.

Merkel contradicted Macron's argument that Weber didn't have the necessary experience. It was something people had said about her, she recalled, when she took office 14 years ago. The evening ended with a temporary victory by the chancellor. Then on Tuesday, Merkel parried attempts by the French and others to finalize a set of firm criteria for the future commission president.

Merkel, of course, like Macron, has never been a fan of the lead candidate system. She does, though, see Weber is an acceptable candidate. She is accustomed to much worse from the CSU. More than anything , though, the chancellor knows that the CDU and the CSU back home are expecting her to get Weber through in Brussels. As a result, she finds the stubborn opposition from Macron and others to be unsettling.

From the German perspective, Macron's combativeness violates an unwritten EU rule. EU leaders know the expectations that each are facing from their own country; they all know the constraints firsthand. For that reason, they generally try not to make compromise more difficult by making statements in public.

But that's exactly what Macron is doing. He has heaped pressure on the chancellor and made the leadership issue into a power struggle. Now Merkel is defending Weber in part because she doesn't particularly like Macron's approach.

Macron is the fourth French president with whom Merkel has had to work during her chancellorship. To understand the fidgety Nicolas Sarkozy, she allegedly watched Louis de Funès films. François Hollande, meanwhile, blended into the woodwork next to the chancellor. But Macron stands up to her. He wants to shape Europe, and is threatening her position as the unquestioned top dog in Europe.

A Pushy Macron

Merkel knows that there could be a point at which she might have to give up on Weber. She seemed to lay the groundwork for this on Tuesday evening when she argued that the EU needs to remain functional and believes that the situation can't be allowed to become so contentious that the EU becomes blocked. She issued a warning at the summit that the leaders should "interact with one another carefully."

But Brussels diplomats fear that Macron is determined to use the admonishment as a sign of weakness, and to celebrate Merkel's defeat as a victory. Berlin is making it correspondingly clear to Paris that Macron shouldn't hope to place a French person in one of the top jobs if Merkel isn't able to bring in a German.

Macron's preferred alternative to Weber is either Brexit negotiator Michel Barnier or liberal Dane Margrethe Vestager. Barnier is, like Weber, a member of the EPP, which is still the strongest single group in parliament. And he is French.

But that is precisely the problem. The CDU -- the Germans, in other words -- are said to be especially opposed to Barnier. "Definitely no Frenchman," was the stance in Berlin, according to a leading European conservative. One observer described the negotiations as a "nasty relapse into nationalism" of the kind that many had hoped belonged to the past.

It's a danger that Paris also sees: "This is first and foremost about substance, not about nationalities. The position of the head of the Commission is not a battle for a national flag," argued Amélie de Montchalin, the state secretary for European affairs in the French Foreign Ministry. "This is not about a conflict between France and Germany, that has nothing to do with this."

The defeat of Merkel's CDU in the European elections and the self-destruction of her coalition partner in Berlin, the Social Democrats, threatens to throw her government into crisis. But Macron came to Brussels strengthened. Although his party La République en marche! only came in second behind Marine le Pen's Rassemblement National, the gap separating them from the right-wing populists was much smaller, at 0.9 percent, than had been feared.

More than anything, though, La République en marche! believes the election confirmed its position as a new political power in the country. The old-school French Republicans, Merkel's allies in the EPP, received 8.5 percent, an historic low. The Socialists received just over 6 percent. For En Marche, the election confirmed that they have irreversibly changed the French political landscape. That also has consequences for Brussels. Why, En marche argues, should the French trust Weber, a representative of the traditional center-right to lead European politics?

The conflict over the leadership post, to be sure, is just one of many conflicts paralyzing the German-French relationship. Increasingly, Paris and Berlin are supporting conflicting positions in Brussels. It is, as diplomats from smaller countries openly admit, a dangerous development.

The council's Polish president Donald Tusk said as much behind closed doors on Tuesday during dinner. Smaller EU member states, he said, don't particularly like it when the German-French motor is running smoothly since that means they don't have much influence. These days, though, he said, they are all hoping that Paris and Berlin could once again find agreement.

A thousand and one sleepless nights

How the trade war between China and America is changing global business

Alibaba’s experience shows how relations between America and China have soured

IF YOU WANT to understand how cooling relations between America and China are changing global business, a good place to look is Alibaba, an internet giant. It is China’s most admired and valuable firm, worth a cool $400bn. For the past five years it has also been a hybrid that straddles the superpowers, because its shares are listed only in America. Now it is considering a $20bn flotation in Hong Kong, according to Bloomberg. The backdrop is a rising risk of American retaliation against Chinese interests and the growing clout of Hong Kong’s capital markets. A listing there would be a sign that Chinese firms are taking out insurance to lower their dependence on Western finance.

The world looked very different back in 2014, when Alibaba first went public. Although based in Hangzhou and with 91% of its sales from mainland China, it chose to list its shares in New York, home to the world’s deepest capital markets, which also permitted its complex voting structure. Wall Street banks underwrote the offering. Alibaba’s boss, Jack Ma, already a rock-star in China, was toasted in Manhattan high society as the kind of freewheeling capitalist Americans could do business with. He was not alone: 174 other Chinese firms have their main listing in America today, with a total market value of $394bn, including the tech stars Baidu and A recent notable arrival is Luckin Coffee, a Starbucks wannabe, which floated for $4bn in May.
As Alibaba has found, however, America has become less hospitable. The firm’s profits have soared and investors have made hay. But in January 2018 Ant Financial, its payments affiliate, was blocked from acquiring MoneyGram, an American rival, on national-security grounds. In November Mr Ma’s American halo slipped when it was revealed he was a Communist Party member, like many Chinese tycoons (he is due to retire this year). Silicon Valley’s chiefs whisper that Alibaba’s global cloud business is a threat to American interests. If Alibaba invests in startups it could fall foul of a new law, known as FIRRMA, that requires foreign purchases of “critical technology” to be vetted. The firm is not yet under attack, unlike its compatriot Huawei, but the mood is tense.

The trade war between America and China has already spread from tariffs to a wide terrain encompassing legal extradition, venture capital and the global dollar-payments system. It is easy to see how an American listing could become a vulnerability. If, for example, China were to boycott Apple or Boeing, America could respond by suspending the trading of Chinese firms’ shares and stopping them from raising capital.

Mainland China’s vast but immature capital markets are not a substitute for Wall Street. Hong Kong, China’s offshore hub, is far from perfect, not least because China appears intent on gradually undermining the rule of law there. Still, it has become a plausible alternative venue for China’s global companies. It now welcomes firms with dual-share classes after a rule change in 2018. It has expanded its role as a conduit through which mainland investors can buy shares and global investors get access to China. Last year more money was raised in listings in Hong Kong ($37bn) than on Nasdaq or the New York Stock Exchange.

Hong Kong’s rise has been accompanied by an erosion of Western hegemony in Asian high-finance. A decade ago Chinese banks were peripheral. Now Wall Street firms are not as essential as they used to be. Last year seven of the top 20 equity underwriters in Asia were Chinese firms. Chinese banks are among the largest cross-border lenders in Asia. America still controls the dollar-payments system, but in time that could change, too.

With a Hong Kong listing, Alibaba would have an alternative place to raise capital. It is still expanding fast—sales grew by 51% last year. New York will continue to thrive as a financial centre, even if Chinese firms start to shy away. But the bigger message is that, as the trade war rumbles on, the immensely complex global network of financial and commercial ties is adjusting. Big hardware firms are tweaking their supply chains. Retailers are shifting their sourcing so that goods sold in America are not made in China. Banks are cutting their exposure to counterparties that could face American sanctions. And even the world’s most successful firms, such as Alibaba, feel they need a backup plan. It is a very different vision from the one Mr Ma held out when he rang a ceremonial bell at the New York Stock Exchange back in 2014.

Global Military Spending Soars

A new report shows that global military spending reached a new post-Cold War high last year.

By GPF Staff  

This week, the Stockholm International Peace Research Institute published a report showing that global military spending reached a new post-Cold War high last year of $1.8 trillion, fueled primarily by higher U.S. and Chinese military expenditures. Here, we take a closer look at how military spending breaks down around the world.

The Value of Fake News

Journalists, officials in emerging democracies often insist, must be constrained by the state until they are able to carry out their work responsibly. But, rather than accelerating the development of a credible free press, this approach impedes it.

Josh Friedman


NEW YORK – On a trip to Ethiopia in the 1990s, I met with Prime Minister Meles Zenawi to try to persuade him to stop jailing journalists. Since Zenawi’s guerillas had ousted a repressive Soviet-backed dictatorship a few years before, there had been an explosion of exuberant and sometimes wildly inaccurate little newspapers, many of them attacking Zenawi. So he had cracked down, introducing laws criminalizing what he called “insults” to the government and fining and imprisoning journalists for inaccuracies. Ethiopia quickly became one of the world’s top jailors of journalists.

Now, with a new reformist prime minister, Abiy Ahmed, in office for just one year, Ethiopia has made so much progress in freeing jailed journalists and lifting press controls that it is hosting World Press Freedom Day.

But don’t celebrate yet. Some in the newly freed press are publishing sometimes inaccurate stories – whipping up ethnic and tribal enmity and attacking Ahmed. With the first free elections in 15 years taking place next year, he is in the same spot Zenawi was, and is considering restoring some of the press controls he had canceled.

Before he does that, he should take a long and critical look at Zenawi’s crackdown and the lesson it holds: journalists are irrepressible, and controlling them achieves nothing in the long run. In fact, it merely delays the development of a more professional media.

Zenawi had offered a simple explanation for his government’s actions. “Our journalists are not professional like those in the United States and Western Europe,” he told me. “They do not know how to report the news accurately. We must set guidelines for them until they learn how to do their jobs.” If he were alive today, Zenawi would probably be railing against “fake news.”

Over more than three decades of fighting for a worldwide free press, and as an early chairman of the Committee to Protect Journalists, I have heard arguments like Zenawi’s many times. Journalists, officials in emerging democracies often insist, must be constrained by the state until they are able to carry out their work responsibly. But rather than accelerating the development of a credible free press, this approach impedes it.

After my meeting with Zenawi, I began seeking historical evidence for his claim that insufficiently professional journalism justified suppression of the press; that way, I could counter his argument on my next trip. I found one precedent in early US history. In fact, Zenawi’s words were eerily similar to arguments made in the eighteenth century by US President John Adams and his Federalists, who denounced a free and enthusiastic press that disseminated criticism – both accurate and inaccurate – of the new country’s politicians.

Arguing that an unrestrained press threatened America’s future, Adams succeeded temporarily in stifling journalists in 1798, when he signed the Alien and Sedition Acts, which authorized imprisoning and fining journalists who “write, print, utter, or publish any false, scandalous and malicious writing” against the government. Twenty newspaper editors were subsequently jailed.

But Thomas Jefferson and his Democratic-Republicans pushed back against the Federalists, both in Congress and the courts. And, fortunately for US journalists, Jefferson was elected president in 1800. Within two years, the alien and sedition laws either expired or were repealed.

That opened the way for the American press to experiment, thereby developing – over more than two centuries – a culture of deep and accurate reporting, including consistent fact-checking.

There’s no shortcut to a vibrant free press; it takes a long period of trial and error for the norms and institutions of professional journalism to develop. Politicians must trust the process – and maintain a thick skin. While repressive media laws may benefit leaders in the short run, in the long run, they stunt the development of a country’s press.

There is quantitative evidence of this effect. When the French Revolution began in 1789, press restrictions were lifted. Four years later, there were more than 400 newspapers in the country, including 150 in Paris alone. By 1799, that figure had risen to 1,300 newspapers across the country. That was 1,300 venues for aspiring journalists to learn and hone their craft.

But the revolution took a repressive turn. By the time Napoleon Bonaparte took power in 1799, the number of newspapers in Paris had plunged to 72. He soon reduced that number to 13, and then, in 1811, to four.

Likewise, after the collapse of the Soviet Union, media of all types flourished. But some of the newly independent successor states embraced the idea that media “guidelines” were needed.

Many enacted laws that were advertised as ensuring a free press, but that have been used to penalize journalists for aggressive, critical reporting. Libel was criminalized. Enormous fines were imposed on independent publications, broadcasters, and bloggers.

China and Turkey – both Olympic-level jailers of journalists – have ramped up their repression in recent years. Just last month, Russian President Vladimir Putin signed new laws authorizing punishment of individuals and online media for spreading so-called fake news and information that “disrespects” the state.

US President Donald Trump is trying to go in the same direction. His constant branding of journalists as “liars” and “enemies of the people” echoes the Nazis’ preferred label for the media: the Lügenpresse (lying press).

Even in the European Union, journalists are still jailed for criminal libel and insulting the government, according to a 2014 International Press Institute study. “The vast majority of EU states maintain criminal defamation provisions that provide imprisonment as a possible punishment,” the IPI found. “Prosecutions continue to be carried out and journalists continue to be sentenced to criminal punishments.”

Allowing the press to experiment, make mistakes, and learn from them has been crucial to the success of democracies worldwide. That is why governments and civil societies need to be vigilant in supporting a free press, even – or especially – if it is still developing.

Josh Friedman, a Pulitzer-Prize winning journalist, was Chair of the Committee to Protect Journalists and Director of International Programs at the Columbia University Graduate School of Journalism. He now chairs the Logan Nonfiction Program advisory board, sits on the advisory board of the Dart Center on Journalism and Trauma, and serves as Vice-Chair at the Carey Institute for Global Good.

miércoles, junio 05, 2019



No sex please, we’re millennials

A visitor from the 1990s marvels at the social conservatism on American campuses

TO UNDERLINE HIS theory that sexuality is a construct of human discourse, the philosopher Michel Foucault noted that people talk about sex a lot. “We convince ourselves that we have never said enough on the subject,” he wrote in his (four-volume) “The History of Sexuality”. “It is possible that where sex is concerned, the most long-winded, the most impatient of societies is our own.” After a three-hour discussion of sex and dating with 30 students at Northwestern University, on the rainy shore of Lake Michigan, your columnist felt he knew why. Few fields of human behaviour—and none more important—are so hard to explain.

Lexington’s visit was spurred by the latest evidence that young people in America—as in Japan and some other rich countries—are having much less sex. The portion of Americans aged 18 to 29 who claim to have had no sex for 12 months has more than doubled in a decade—to 23% last year. That is, counter-intuitively, despite the removal of many impediments to sex. Young Americans are less religious and more relaxed about sexual orientation than they have ever been. They are also readier to experiment, in part owing to the deluge of free porn they receive on smartphones. “You have access to the entire body of porn in your rucksacks!” marvelled Alexandra Solomon, a clinical psychologist who runs Northwestern’s renowned “Marriage 101” course, in a subsequent lectura. 
Her comment elicited hardly any amusement. Indeed, the most striking thing about the students to Lexington—in effect, a visitor from the 1990s—was how frank and unembarrassable they seemed. They were, despite their shared interest in studying sex at an elite university, a diverse crowd: straight and gay, black and white, outgoing and reserved. About half were from religious families; a couple from migrant ones. Yet all seemed willing to discuss their sexual likes, dislikes and anxieties, including use of porn, body shyness, and the possible role of both in fuelling a millennial obsession with pubic grooming. To the extent that they represented their generation, diffidence about sex is not the problem.
The biggest reasons for the “sex recession” are probably straightforward. Married couples have more sex than singletons and Americans are marrying later. Economic duress is another dampener: it is no coincidence that the slowdown in young Americans’ sex lives began during the great recession. Partly as a result of it, many of them still live with their parents. And the low esteem that poor prospects engender, as the experience of many Japanese tragically attests, can also cause mass celibacy.

The recent vigour of America’s economy might make this seem less relevant—especially among high-achievers like the Northwestern students. Yet it was striking how many mentioned the 2008 recession, including their memories of the distress it caused their parents, as a reason to prioritise their careers, even to the extent of forgoing romance entirely. “We’re not looking to get married any more, so what are we doing?” asked one woman.

But that still does not seem to explain the persistence of America’s sex recession, or its most extreme feature: how concentrated it is among men. Since 2008 there has been almost a threefold rise in the share of men under the age of 30 who claim to be having no sex. At the same time, the portion of sexless women increased by only 8%. A range of possible explanations for the disparity has been suggested, and the students seemed to corroborate several of them. Many felt men’s social skills had been especially eroded by over-reliance on technology. Overindulgence in porn meanwhile offered them an escape route from reality. Yet the most compelling answer, because it contains elements of all that and more, may be signalled by young people’s increasing reluctance to date.

This is often blamed on the “hook-up culture” of college campuses. Yet casual sex and dating coexisted in the 1990s. It is also easy to exaggerate—now as then—how many people are hooking up. Half the Northwestern students said they rarely or never did. Yet they also rattled off reasons not to date which, among the men, who would traditionally take the lead in such encounters, included uncertainty about how they were even managed. Many considered the prospect of chatting someone up in a bar not merely daunting but possibly offensive. “Revealing that your intention in talking to someone is sexual? That’s hairy,” shuddered one man.

A wrangle for the ring

The problem seems to be a profound anxiety about what the other party to a potential coupling might want and expect. The heavy stress that all the students laid on the importance of mutually agreeing the basis of any relationship, at every stage of its development, is probably both a cause and effect of this. Dating apps, which around half the students had used, can mitigate it at best. It is likely a response to increased female empowerment, the major change in sexual politics, and therefore further exacerbated by men’s dread of a #MeToo-style harassment charge. In short, young American men with rather poor interpersonal skills currently face a historically confusing mating-game, even as they worry a lot about their careers. No wonder many are opting to stick to their video games.

This is painful. But it does at least suggest that sexual relations are not so much hitting the skids in America as in flux. The forces that govern sexual behaviour are dynamic. Who could have predicted a little over a decade ago, when George W. Bush was splurging on abstinence schemes, that America would soon see a spike in celibacy fuelled by economics, technology, female empowerment and perhaps even casual sex? And that cocktail of circumstances will not last. The economy is strong. The currents in popular culture will shift. And once young Americans become more used to their more equal gender relations, they might re-embrace the degree of ambiguity and risk that romance entails. That is the hope, at least. Meanwhile, they might try putting down their phones, talking face to face a bit more, and even flirting.