From AI to facial recognition: how China is setting the rules in new tech

In its bid to rival the US, Beijing wants to establish the industrial standards that will shape future industries

James Kynge in Hong Kong and Nian Liu in Beijing 

Zhao Houlin is head of the UN’s telecoms agency, an independent international arbiter that sets some of the rules shaping the modern technology industry. But that does not stop him from letting his patriotism burst into the open.

A former government official in China, Mr Zhao has repeatedly lionised the Belt and Road Initiative, the pet project of Chinese president Xi Jinping to invest in overseas infrastructure. He has also defended Huawei, the controversial Chinese telecoms champion, against US accusations that its equipment can be used for espionage.

“Those preoccupations with Huawei equipment, up to now there is no proof so far,” Mr Zhao, who is secretary-general of the International Telecommunication Union, told reporters in Geneva last year. “I would encourage Huawei to be given equal opportunities to bid for business.”

But it is in his unabashed support for Chinese technology standards that Mr Zhao’s loyalty to Beijing is most striking. Although he was sworn into his ITU role with a pledge to act “with the interest of the union only in view” while avoiding influence from any one country, he regularly celebrates China’s growing presence in the telecoms and internet industries.

“Nowadays in the discussion of relevant ITU standards, China’s technical strength is already in the first echelon and the international community expects China to play a greater role in the UN system,” Mr Zhao was quoted by the People’s Daily, an official Chinese newspaper, as saying last week. In other statements carried by the Chinese media he has praised the role of the country’s telecoms companies in setting new industry standards.

Mark Warner of the US Senate intelligence committee says Beijing is intending to control digital infrastructure and, as it does so, to impose principles that are antithetical to US values © Saul Loeb/AFP/Getty

Zhao Houlin, head of the independent UN telecoms agency, regularly celebrates China’s growing presence in the telecoms and internet industries © Denis Balibouse/Reuters

Mr Zhao declined to comment on his statements. His advocacy of China’s interests, however, throws light on the intensifying geopolitical battleground of technological standards, a much overlooked yet crucial aspect of a new struggle for global influence between China and the US.

Such standards might seem obscure, but they are a crucial element of modern technology. If the cold war was dominated by a race to build the most nuclear weapons, the contest between the US and China — as well as the EU — will partly be played out through a struggle to control the bureaucratic rule-setting that lies behind the most important industries of the age.

Gearing up

The commercial and geopolitical power of industrial protocols has long been recognised. Werner von Siemens, the 19th-century German industrialist and innovator who gave his name to the Siemens conglomerate he founded, said: “He who owns the standards, owns the market.”

Standard-setting has for decades largely been the preserve of a small group of industrialised democracies. Everything from the width of train tracks, to software, satellites, the frequencies that mobile phones use and a whole gamut of rules about how electronic gadgets work and process data have been decided by western-dominated standards organisations.

But China now has other ideas. “Industrial standards are an important area of contestation in the new cold war, with both Beijing and Washington gearing up to shape the development and implementation of global standards,” says Adam Segal, director of the digital and cyber space policy programme at the Council on Foreign Relations, a New York-based think-tank.

He and other experts say an intensifying US-China battle to dominate standards, especially in emerging technologies, could start to divide the world into different industrial blocs. In the same way that rail passengers who travel from western Europe to some former Soviet bloc countries must to this day change trains to accommodate different track widths, strategic competition between the US and China raises the spectre of a fragmentation of standards that creates a new technological divide.

Mr Segal says it is possible, for example, that 5G mobile telecoms — a bedrock technology that enables the “internet of things” — may be divided into two competing stacks to reflect US and Chinese influence. Some measure of division is also possible in semiconductors, artificial intelligence and other areas where US-China rivalry is intense, he adds.

A software engineer works on a facial recognition program in Beijing. The technology used in 'smart cities', which automate multiple municipal functions, represent a big prize for China’s standards drive © Thomas Peter/Reuters

“In some sectors, there will be two stacks that are relatively incompatible,” says Mr Segal. “But in others, there is likely to be some demand that they co-operate. It is possible that large markets that make it clear they do not want to choose between China and the US may be able to pressure Chinese and US tech firms to ensure some degree of compatibility.”

In Washington, the battle for influence over technology standards is seen in some quarters as crucial to defending democracy from the influence of China, which Madeleine Albright, a former secretary of state, describes as “the world’s leading pioneer of what we call techno-authoritarianism”.

Mark Warner, Democratic vice-chair of the US Senate intelligence committee, sees the threat from China in equally unambiguous terms. Beijing is intending to control the next generation of digital infrastructure, he says, and, as it does so, to impose principles that are antithetical to US values of transparency, diversity of opinion, interoperability and respect for human rights.

“Over the last 10 to 15 years, [the US] leadership role has eroded and our leverage to establish standards and protocols reflecting our values has diminished,” Mr Warner told a webinar in September. “As a result others, but mostly China, have stepped into the void to advance standards and values that advantage the Chinese Communist party.”

“Communist party leaders are developing a model of technological governance that . . . would make Orwell blush,” Mr Warner added, referring to George Orwell, the British writer of the dystopian novel 1984.

Such issues are exercising others in Washington too. Two congressmen, David Schweikert and Ami Bera, introduced bipartisan legislation called the Ensuring American Leadership Over International Standards Act in June to commission a study on China’s influence in the setting of global technology standards.

Military and civil applications

From a US perspective, China’s challenge derives from three main areas. First, it is developing world-beating technology in several emerging areas, such as 5G telecoms and AI. 

Second, as it exports this technology — often to more than 100 countries that participate in the Belt and Road Initiative — it is nurturing adherence to a distinctly Chinese set of standards and protocols. Third, Beijing is boosting its influence in the UN and other standards-setting bodies to enhance the interests of its own companies.

Yang Guang, a Beijing-based senior analyst at Strategy Analytics, a consultancy, says China has long been interested in raising the profile of its technology standards. “It is just that foreigners didn’t pay attention before,” he says, naming as examples TD-SCMA and WAPI, two telecoms standards that largely failed to catch on more than a decade ago.

The Chinese government is working towards a standards masterplan — China Standards 2035 — which Beijing was expected to publish before the end of this year. 

The strategy is expected to set out standardisation goals for crucial next-generation technologies. It is also due to emphasise the imperative to strengthen China’s role in standards organisations, analysts say.

“The strategy will also focus on standards to facilitate civil-military fusion — a concept that has gained considerable traction in China and has caused a stir in strategic communities overseas, particularly in Washington,” wrote research fellow John Seaman in a report this year for the French Institute of International Relations and the Policy Center for the New South.

Military-civil fusion is a plan to use the best of civilian research and development to bolster the technological capacities of the People’s Liberation Army. The drive is led by Mr Xi himself, who heads the Commission for Military-Civil Fusion Development. It is believed to target civilian advances in “dual use” areas such as quantum computing, big data, semiconductors, 5G and AI, but concrete initiatives are shrouded in secrecy.

“China’s greatest potential lies in areas where standards have yet to be collectively developed and defined,” Mr Seaman says. “It can roll out technologies using Chinese standards in foreign markets, creating ‘facts on the ground’.”

Digital silk road

Crucial to the goal of popularising Chinese standards overseas is the Belt and Road Initiative, which Mr Zhao described in a blog on the ITU’s website as holding “so much promise”.

The BRI is generally seen as a huge Chinese programme to build roads, railways, ports, airports and other forms of infrastructure in mostly developing countries. But this portrayal overlooks a key point. The BRI is also a means of diffusing Chinese technologies — and the standards they operate on — across the developing world by constructing what Beijing calls a “digital silk road”.

A Huawei logo in Belgrade, Serbia. Zhao Houlin of the UN’s telecoms agency has defended the company against US accusations that its equipment can be used for espionage © Marko Djurica/Reuters

“The Chinese government has been actively promoting its internet and cyber governance playbook in many developing countries, most recently by leveraging 5G connectivity and smart city projects along the digital silk road,” says Rebecca Arcesati, an analyst at Merics, a Berlin-based think-tank.

“Smart cities” are a focus of this standards diffusion effort because they incorporate so many emerging technologies. The facial recognition systems, big data analysis, 5G telecoms and AI cameras that go into creating smart cities are all technologies for which standards remain up for grabs. Thus smart cities, which automate multiple municipal functions, represent a big prize for China’s standards drive.

“China is setting standards from the bottom-up through widespread export and foreign adoption of its technology,” says Jonathan Hillman, an analyst at CSIS, a Washington-based think-tank. “A country such as Serbia might not sit down and decide they want to adopt Chinese standards, but after enough purchases and deals, they might end up with Chinese standards. There is the risk of lock-in, a point after which switching becomes too costly.”

Serbia is just one of many countries that has signed up to a Chinese-installed smart city package complete with surveillance cameras supplied by Hikvision, a company blacklisted by the US because of suspected human rights abuses in Xinjiang. 

Indeed, the smart city package is proving immensely popular for governments that wish to automate services such as traffic management, sewage systems and public safety while keeping a close eye on what its people are up to.

According to research by RWR Advisory, a Washington-based consultancy, Chinese companies have done 116 deals to install smart city and “safe city” packages around the world since 2013, with 70 of these taking place in countries that also participate in the Belt and Road Initiative. 

The main difference between “smart” and “safe” city equipment is that the latter is intended primarily to surveil and monitor the population, while the former is primarily aimed at automating municipal functions while also incorporating surveillance functions.

Cities in western and southern Europe together signed up to a total of 25 such “smart” and “safe” projects, according to RWR Advisory. Cities in south-east Asia and the Middle East were also key recipients, taking 16 and 15 respectively.

Andrew Davenport, chief operating officer at RWR Advisory, says smart cities open the door to a series of risks. “Smart cities essentially increase the downside risk considerably of cyber intrusions or abuses, both in terms of data security and cyber security,” he says. 

“The cyber risk that is associated with entities that are subject to Chinese laws and governance structures is amplified in this environment.”

People pass facial recognition cameras at Peking University. China's growing influence in global IT standards-setting bodies is facing a US backlash, while the EU is likely to be squeezed by competing superpower ambitions © Thomas Peter/Reuters

Chinese school children learn about artificial intelligence technology in Haian City. Some measure of global division is possible in semiconductors, AI and other areas where US-China rivalry is intense © Costfoto/Barcroft Media/Getty

Alongside these export moves designed to inculcate its technology standards, China is also active in signing political agreements to the same end.

The 2019 China Standardisation Development annual report, an official document, makes clear that promoting Chinese technology standards is a BRI priority. As of 2019, some 85 standardisation co-operation agreements with 49 countries and regions had been signed, though scant literature exists on the depth and specific contents of such agreements.

Institutional push

Not content with forging bilateral agreements along the Belt and Road, China is also trying to persuade multilateral standards agencies to recognise its growing clout.

As recently as 2007, China was a minnow in the International Organization for Standardization, one of the world’s leading standards-setting bodies, with 164 member countries. Back then, it had sparse representation on the all-important technical committees and subcommittees that do much to decide which standards to adopt.

But in 2008, Beijing managed to win a place as the sixth permanent member of the ISO’s council and in 2013 it became a permanent member of its technical management board, alongside the US, Japan, the UK, Germany and France. In 2015, the organisation got its first Chinese president when Zhang Xiaogang, a former steel industry executive, was chosen for a three-year term.

US secretary of state Mike Pompeo discusses the ‘5G clean path’ cyber security programme © Andrew Harnik/Pool/Reuters

It has been a similar story at the 88-member International Electrotechnical Commission, an organisation that publishes standards on all electronic items. China’s influence at the IEC has grown steadily, culminating in the appointment in January of Shu Yinbiao — who is also chairman of the State Grid Corporation of China — as president of the IEC. Mr Zhao completes the picture as head of the ITU, which he is due to lead until 2023.

The increased representation has had a marked effect on China’s standards-setting clout. As of March 2019, for instance, China had proposed 11 standards for the internet of things within the ISO/IEC framework, of which five had been adopted and published and six were still pending review, Mr Seaman said.

State Grid Corporation of China has also pulled off a coup. The IEC has agreed to take on co-ordinating standards for a concept called Global Energy Interconnection, which essentially aims to create huge grids of power cables that run between countries and continents. If the idea gets off the ground it could directly benefit State Grid, which is the global leader in making ultra-high voltage transmission lines.

The build-up of such institutional firepower in these standards-setting bodies is a sure sign that China is set to wield much more influence over global technological standards. But equally as sure is that the backlash from Washington is building. Europe, for its part, is likely to be squeezed by competing superpower ambitions.

“The non-transparent and authoritarian way in which China is going about data security management at home undermines trust in its standards and platforms abroad,” says Merics analyst Ms Arcesati. “On the other hand, the current US strategy is essentially equating data security with a total and unilateral decoupling from Chinese technology in the digital domain.

“This puts Europe is an extremely difficult position,” she adds.

The worst-case scenario, as described by Mr Seaman, is of a growing technological divide. If international collaboration on standards grinds to a halt, it could create opposing technology blocs that do not talk to each other. “Think of it almost like trying to connect with someone on [Tencent’s] WeChat by using Facebook, but on an industrial scale.”

Mr Davenport sees a similar risk. “If the US does engage more proactively in trying to confront Chinese influence over standard-setting bodies . . . it could lead China to explore creating parallel alternatives. This could ultimately result in a more bifurcated arena on industrial standards.”

Charting a Coronavirus Infection

By Katherine J. Wu and Jonathan Corum

After months of downplaying the threat of the Covid-19 pandemic, President Trump announced early Friday morning that he and the first lady, Melania Trump, had tested positive for the coronavirus. 

He has been hospitalized at the Walter Reed National Military Medical Center and has experienced mild to moderate symptoms, including a fever, cough and congestion. He also reportedly had low blood oxygen levels at least twice on Friday and Saturday.

It’s too soon to tell whether his illness will follow a typical course, or how severe his symptoms may become. And with millions of people sickened worldwide, no single timeline can encompass the range of Covid cases. But months of data have helped scientists home in on the general portrait of a symptomatic coronavirus case.

Exposure and Incubation

The time between initial exposure to the virus and the appearance of symptoms is known as the incubation period. This period is typically four to five days, although it can last up to 14 days, or perhaps even longer in rare cases.

It remains unclear who infected Mr. Trump, although there are many potential candidates, several of whom gathered with the president during White House event for Judge Amy Coney Barrett on Sept. 26 or have traveled with him to crowded campaign rallies.

Symptoms and Recovery

Most people who come down with Covid recover within a couple of weeks and do not require hospitalization. Severe cases, however, may take far longer to resolve. And a growing cohort of coronavirus survivors, called long-haulers, has reported symptoms and side effects — including fatigue, impaired memory and heart problems — that can linger for months.

People who develop severe cases of Covid tend to be hospitalized within two weeks or so of the emergence of symptoms. But many of the factors that catapult certain people toward severe forms of the disease remain a scientific mystery. 

Scientists know that people who are male, older and obese — all descriptors of President Trump — are at higher risk for more serious effects of Covid.

Viral Load

After an initial exposure, the number of virus particles in a person’s body, or viral load, takes time to build up as the pathogen infiltrates cells and copies itself repeatedly. 

Mathematical models indicate that the viral load tends to peak before symptoms appear, if they appear at all, and starts to decline rather quickly in the days following the first signs of illness.

Experts have said that people are more likely to be contagious when their viral loads are high. If so, the window of peak infectiousness might be only a few days long, beginning a day or two before symptoms appear, and closing within a week thereafter.

This also means that people can be highly contagious during the so-called presymptomatic stage, in the days before they develop symptoms. 

Separately, asymptomatic carriers of the coronavirus have also been repeatedly pinpointed as the source of transmission events, although how the virus behaves in the bodies of such people is less understood.

If Mr. Trump’s symptoms appeared on Wednesday or Thursday, he may have exposed several people in the days prior. 

He most likely remains contagious now. In a series of tweets early Friday morning, the president confirmed that he and Mrs. Trump would isolate themselves — a move that swiftly canceled several events in the tense lead-up to the Nov. 3 election. 

Later, Mr. Trump was taken to Walter Reed for a stay of several days. He has been given an experimental antibody treatment developed by the drug maker Regeneron, an antiviral drug called remdesivir and the steroid dexamethasone.

Testing for the Virus

For months, the White House has screened people coming into close contact with Mr. Trump. Many of these screenings are rapid tests, delivering actionable results within minutes without needing to send samples to a laboratory. 

Such speed and convenience can come at the cost of accuracy: Rapid tests are worse at picking up on low viral loads and very recent infections, and more often produce false negatives or false positives. 

Some experts argue that true positives from rapid tests might coincide with the period in which people are most contagious, although this has not yet been confirmed.

Rapid tests like the much-discussed Abbott ID Now and BinaxNOW have been given an emergency F.D.A. green light only for sick people who are within seven days of the start of symptoms. 

Use on individuals who don’t feel ill is considered off-label, and negative results from such tests can’t rule out an infection or contagiousness.

People with known exposure to an infected person — like Mr. Trump — or who have already developed symptoms may need to take a more sensitive test. 

Experts often recommend laboratory tests that rely on a technique called P.C.R. (polymerase chain reaction) that can detect very small amounts of the virus, but that usually takes several hours to run on sophisticated, expensive machines.

Because a P.C.R. test is more sensitive to low viral loads, it may be able to detect a coronavirus infection very early on. 

But the diagnostic test can also pick up harmless bits of the virus that linger in the body after symptoms have resolved, and perhaps after a person stops being contagious.

Antibodies are produced by the body in response to an invading pathogen, starting about a week or so into an infection, and can persist in the blood for months. Another type of test, called a serology test, looks for these antibodies instead of the virus. Experts do not consider antibody tests to be a reliable way to determine whether a person is harboring the coronavirus.

Preventing Infection

Because the virus can be transmitted by people who feel healthy, experts have stressed the importance of deploying multiple public health measures to combat its spread. While no single tactic can confer complete protection, combining actions like mask-wearing, physical distancing, handwashing and avoiding crowded spaces rapidly ratchets down risk.

Masks and face coverings that swaddle the nose and mouth can block much of transmission, and seem especially effective at waylaying outbound virus from an infected individual. But there’s evidence that masks can thwart some percentage of inbound pathogens as well, even if they don’t make the wearer impervious to infection.

Mr. Trump has repeatedly shirked masks for much of the pandemic. On Tuesday night during the debate, he mocked former Vice President Joseph R. Biden Jr. for his stringent commitment to face coverings and physical distancing.

Infected people can also reduce the chance of passing on the virus by isolating themselves for at least 10 days after symptoms appear, as long as they continue to improve. 

Those who have been exposed to someone with a known case of the coronavirus should quarantine for two weeks and seek a test. Up to 40 percent of infections might lack symptoms, although some estimates have been even higher.

Based on data gleaned from other respiratory viruses, researchers think there is likely to be a minimum infectious dose for the coronavirus, or the lowest number of virus particles necessary to establish an infection. That number most likely varies from person to person, and there is not yet firm data on what a typical dose might be.

The Centers for Disease Control and Prevention note that people with Covid are unlikely to be infectious for more than 10 to 20 days after their symptoms start.

Argentina bondholders accuse government of undermining recovery

Rebuke comes as bond prices are mired in distressed territory just months after restructuring deal

Colby Smith in New York and Benedict Mander in Buenos Aires

       Bondholders were critical of policies implemented by the government of Alberto Fernández, Argentina’s president © Argentinian Presidency/AFP via G

Some of Argentina’s biggest bondholders issued a sharp rebuke of how the government is handling the country’s deteriorating economic situation, just a few months after reaching a compromise to restructure $65bn worth of debt. 

Two creditor groups at the heart of the recent negotiations to resolve Argentina’s unsustainable debt burden accused the government of putting forward policies that “undermine” its own economic recovery, in a statement released on Thursday.

They also called into question whether “their sacrifices to provide a debt structure Argentina is capable of servicing were essentially meaningless”.

“Argentina’s economic authorities have not only failed to restore confidence, but policy actions taken in the immediate aftermath of the debt restructuring have dramatically worsened the country’s economic crisis,” wrote members of the group, representing holders of previously restructured exchange bonds as well as the Argentina creditor committee.

They added: “Instead of heralding a reopening of access to markets to support Argentina’s manifest investment needs, the aftermath of the debt restructuring is a virtual wasteland for Argentine credit.”

Argentine bond prices have sunk back into distressed territory since the restructuring process was finalised in early September. The deal involved Argentina pushing back the timing of large debt payments and slashing the aggregate amount set to be paid out to creditors.

The country’s bond set to mature in 2030 has slipped to 38 cents on the dollar, having debuted above 50. Another approximately $20bn in bonds maturing in 2035 have since plunged to 34 cents on the dollar.

Meanwhile, the peso has slumped after already-strict capital controls were tightened last month. So far government measures aimed at protecting net liquid foreign exchange reserves, which have fallen below $1bn, have failed to convince investors, as the central bank continues to resort to massive money printing to finance spending.

The gap between the official and black market exchange rates has reached historic highs, with many fearing that the country’s seventh devaluation since Argentina’s peso abandoned its peg to the dollar in 2002 is imminent. On the black market a dollar can now fetch as much as 190 pesos. 

The statement from creditors came on the heels of the IMF’s most recent visit to Buenos Aires earlier this month. The fund lent Argentina $44bn as part of a record $57bn bailout package extended in 2018, and policymakers are now looking to renegotiate the repayment plans.

“This vicious cycle needs to be broken,” the investors said. “Creditors have already played their part, providing a historic opportunity to Argentina for a fresh start. It is now up to Argentina and the IMF to play theirs.” 

The Next Civil War?

Although US President Donald Trump has long hid his tax records and history of business failings, he has never made any secret of his willingness to destroy the US constitutional order if doing so will give him a political advantage. Not since the eve of the Civil War has America been so on edge.

Elizabeth Drew

WASHINGTON, DC – America’s capital is more on edge now than at perhaps any other time since the eve of the Civil War in 1860. The city was tense during Watergate, of course. 

But as much as Richard Nixon tested the constitutional system, as a lawyer who had served in government for decades, he recognized that there are limits that even a president dares not transgress. 

And now, with President Donald Trump, the First Lady, and a top aide all testing positive for COVID-19, there is more uncertainty in Washington, DC that at any time in living memory.

The non-medical crisis now facing the United States is that Trump doesn’t recognize limits. There is scant indication that he even understands, let alone respects, America’s constitutional order, the survival of which depends on whether those to whom power has been entrusted exercise restraint.

Trump, recklessly breaking precedents and norms, has consistently attempted to disable any checks on his behavior. He insists that Article II of the Constitution “gives me the right to do whatever I want to do.” And he is buttressed in his view by Attorney General William Barr, who is the kind of fealty-first law-enforcement chief that Trump has craved.

A critical part of Trump’s effort to undermine confidence in the election outcome, if it goes against him, is his attempt to discredit millions of ballots preemptively. The assumption is that, because of the COVID-19 pandemic that Trump has allowed to get out of hand, more Americans than ever before will vote by mail, and that most of those who do will be Democrats.

Earlier, misreading public opinion as he so often does, Trump sought to slow mail deliveries in order to disqualify millions of mail-in ballots. After a public backlash, these activities were supposedly suspended, yet mail delivery remains slower than before.

Then, in September, Trump started saying that the election aftermath will be peaceful as long as “we … get rid of the ballots” – whatever that means. He and his campaign team are now casting about for more ways to shape or otherwise invalidate the election’s outcome if necessary.

Allies of Trump’s challenger Joe Biden are discussing how to forestall Republican meddling with the outcome, and force the president from the White House if he loses the election but refuses to leave. The need to take this astonishing possibility seriously is a sign of how far things have deteriorated.

And so, the legal guns are being readied. With luck, real weapons won’t be used. But Trump has been encouraging violence since he first ran for office, and he doesn’t convincingly eschew it now. His calling at the first presidential debate on the Proud Boys, a violent right-wing white-supremacy group, to “stand back and stand by” has embroiled the White House in efforts to sanitize this ominous statement.

Meanwhile, the New York Times’ recent  exposé has made clear why Trump has frantically sought to keep his tax returns secret: he paid $750 in federal income taxes in both 2016 and 2017, and nothing for many years before that. The revelations about Trump’s dicey tax record and business dealings offers one explanation for his desperation to win another term in office. 

The Times’ reporting has scraped away Trump’s populist façade and revealed that the underlying rationale for his presidency – that he was a savvy billionaire who would apply his amazing business acumen to running the country – was entirely bogus.

The Times report also showed that, as was widely suspected, Trump had received financial help from authoritarian countries such as Turkey and Saudi Arabia. And Trump reportedly has voiced his own assumption that he has benefited from Russian oligarchs at the behest of Vladimir Putin. 

Numerous observers warn that Trump’s indebtedness to foreign countries makes him a national-security threat. As it is, Trump owes over $400 million in debts that will come due in the next few years; there’s no knowing where he’ll find the money.

Trump’s performance in the first presidential debate was the latest demonstration of the threat he poses to democracy. His thuggish behavior – serial interruptions, nasty wisecracks, and blatant distortions – were an extension of his persistent effort to destroy any means of holding him accountable. 

The debates are another democratic practice that Trump seeks to destroy. But despite all the lamentations over what a miserable event the debate was, the tens of millions of Americans who loathe him should celebrate his performance, displaying as it did the unvarnished Trump.

The so-called debate didn’t ease Trump’s political predicament. He can scarcely afford to lose support at this point. His unwillingness to denounce white supremacists unambiguously, his apparent incitement of violence, and his threats – “This is not going to end well” – were as alarming as they were norm-shattering. Even some of Trump’s Senate Republican lackeys openly expressed unease.

Though Biden provided some substance and obviously didn’t stoop to Trump’s level, he wasn’t at his best. He occasionally appeared thrown off by Trump’s behavior, and failed to convey the stature and sense of command that people desire in a president. By calling Trump a “clown” and telling him to “shut up,” Biden may have been trying to show that he, too, can play a tough guy. But is this how Americans want a president to talk?

Some semblance of a coherent argument could be glimpsed in Trump’s attempt to ram through the Republican-controlled Senate the nomination of the right-wing judge Amy Coney Barrett to fill the Supreme Court seat vacated by the death of the liberal hero Ruth Bader Ginsburg. 

By trying to have her confirmed and seated in a few weeks, Trump is again going against democratic assumptions, and also public opinion. Trump openly states that he wants Barrett on the bench to improve his chances if a case involving the election outcome reaches the Court. Republican senators seem unwilling to insist that Barrett recuse herself to avoid such a flagrant conflict of interest.

Trump’s disinclination – and perhaps inability – to reach beyond his right-wing base, which is insufficient to elect him, also calls into question his political acumen, and is one of many reasons to doubt his basic intelligence (an issue on which he is quite sensitive). But one thing about the president is now clearer than ever: in order to perpetuate his hold on power, Trump is testing the constitution in unprecedented ways.

Elizabeth Drew is a Washington-based journalist and the author, most recently, of Washington Journal: Reporting Watergate and Richard Nixon's Downfall.

Spain Becomes Europe’s Weak Link

The Spanish economy is suffering from a particularly bad resurgence in Covid-19 cases as well as its outsized exposure to tourism

By Jon Sindreu

Once a rising star of the European economy, Spain is on a path to becoming its problem child—and the latest example of why global investors should tread carefully around Southern European stocks.

This week, the latest readings of the purchasing managers index published by IHS Markit confirmed two trends. The first is that global manufacturing activity is recovering at a much faster pace than services. The second is that, among big developed countries, Spain seems to be in particular trouble.

The pandemic has made these polls of companies more difficult to interpret than usual. Still, they show Spain performing worse than its European peers, including Italy, which was the economic laggard coming into the crisis and was worse hit by the first wave of Covid-19 cases.

Spain has been unable to contain the spread of the virus. 

In the spring, officials took too long to act, only to later establish the strictest of lockdowns. 

Unlike Italy, the country then tried to return to normal too fast—its leader of health emergencies went abroad on vacation just weeks after advising against travel between provinces. 

Infection rates rebounded sharply in the summer, such that Spain accounted for one-third of Europe’s daily Covid-19 cases. Now, Madrid is one of the region’s hardest-hit cities, and new measures that directly impact the services sector have been enacted.

The structure of Spain’s economy, which enjoyed a growth spurt between 2015 and 2019, explains why it is at risk now. 

Tourism directly accounts for 12% of Spanish gross domestic product—more than any other member of the Organization for Economic Cooperation and Development—and employs 14% of the population.

Official figures suggest that half of the one million jobs lost during the depths of the outbreak have already been recovered. But there are an additional 735,000 being propped up by subsidized furlough programs. 

Many are tourism-related roles that will probably disappear as soon as support ceases. 

The real unemployment rate is likely well above 20%, rather than the official 15%.

In the medium term, what is even more important for all economies is how much money consumers have once the pandemic is over. Reduced earnings could depress demand for years and even cause a double-dip recession. 

In the U.S., an expansion of unemployment subsidies and stimulus checks led personal income to increase more than 10% in the second quarter even as people lost their jobs. In Southern Europe and Spain in particular, by contrast, income losses have been very steep, Oxford Economics analyst Ángel Talavera has pointed out.

The reason is that these governments have been less willing or able to widen their budget deficits by opening their purses, despite support from the European Central Bank. While Oxford Economics forecasts a rebound in Spanish personal income in the third quarter, the economic gap with richer nations is likely to widen from here. 

European reconstruction funds will probably arrive too late—over the past week, governance questions have put the timing further at risk—and won’t fix Spain’s overreliance on relatively unproductive industries like tourism.

A big question for investors over the past few months has been whether to tilt their portfolios from the U.S. to Europe. The pain in Spain is a warning of the dangers involved.