Philippa Kaur

When a New York short-seller’s report wiped some $150bn, or two-thirds, from the combined value of the Adani Group’s listed holdings in late January and early February, several big questions were keeping India Inc up at night. Would Indian banks and insurance companies with significant exposure to the ports-to-power conglomerate also teeter? Would the contagion spread to the rest of the Indian financial world? And would India’s government pursue an aggressive investigation into the short-seller’s allegations of fraud and stockmarket manipulation, which set off the imbroglio (and which the Adani Group vehemently denies)?A month and a half on, the answers to the first two questions are, happily for India, “no”. The answer to the third is less categorical, and somewhat less constructive: the government seems in no rush to settle the matter, perhaps because the Adani firms’ modest free float means a small number of mostly big shareholders bore much of the pain and no angry mob of retail investors is pressing Delhi to get to the bottom of it, fast. With those big questions out of the way, attention has turned to the next conundrum: can the Adani Ggroup and its eponymous tycoon founder, Gautam Adani, recover? Or will they founder, possibly dragging the Indian government’s grand plans for investments in infrastructure and green energy down with them?The past month has offered hope to those rooting for Mr Adani and his businesses, which operate some of India’s biggest ports and airports, store a third of its grain, run a fifth of its power-transmission lines, produce a lot of its cement—and have their eye on clean hydrogen and steelmaking, among other ventures. The group’s total market value has climbed back to more than $110bn, from a low of $82bn. That of its flagship public company, Adani Enterprises, is up by 54% from its nadir on February 27th. The yields on bonds issued by some Adani firms have come down from levels indicating distress. The big turn in the Adani Group’s fortunes came in early March, after GQG Partners, a fund that is based in America, listed in Australia and run by an Indian, bought $1.9bn in shares of several of the group’s companies directly from the Adani family. At the time, GQG’s boss, Rajiv Jain, who lives in Florida, told the Financial Times that “the market was mispricing Adani” and praised the conglomerate’s “very competent management” and “fantastic” execution capabilities. Mr Adani used the proceeds to help repay $2.1bn in margin loans that used Adani companies’ shares as collateral, relieving one possible source of financial stress. Another $1.1bn, half coming from the Adani family and half from the Adani businesses’ cashflows, was used to meet other near-term obligations. These moves reduced the group’s outstanding debt by just 4%, to $27bn. But they eased pressure and reassured the market. So did the acquisitive conglomerate’s decision to pause new capital investments, beyond those it had already pledged, until September 2024, and to put big takeovers on hold.As these demonstrations of financial discipline were taking place, the Adani Group embarked on a global charm offensive, set to conclude on March 17th in California. It appears to be working. Mr Jain, for one, has said GQG’s stakes in Adani businesses “most likely will increase depending on the price and how they deliver”. The group says it has been receiving plenty of interest from investors looking to park their money in its assorted companies. It says that a recent news report of a sale of just under 5% in its cement operations is bogus. But it does not dismiss the possibility of selling stakes in some of its divisions. Several of these, like the ports business, are solid operations offering predictable returns—maybe even good ones, if India’s economy continues to grow at its recent pace of 7-9% a year.With the Adani Group on more stable footing, another question is bound to arise: how long can Mr Adani hold his nation-building ambitions in check? On March 1st his conglomerate was awarded a bauxite mine in a government auction. For the time being, the asset, for which the company had always been planning to bid, will be folded into Adani Enterprises’ mining subsidiary. But before the short-seller’s assault, the bid for the mine was widely regarded as part of a larger plan to enter aluminium smelting, steelmaking and other bits of heavy industry. Mr Adani is unlikely to have forsaken that idea for ever. ■To stay on top of the biggest stories in business and technology, sign up to the Bottom Line, our weekly subscriber-only newsletter. More

After Bill Anderson, Bayer’s new boss, arrives on April 1st at the firm’s headquarters in Leverkusen, Werner Baumann, the German drug-and-chemicals giant’s outgoing chief executive, will be on standby for two months to ensure a smooth transition. Given Mr Anderson’s lack of experience in crop sciences, Bayer’s biggest business, you might ask what the board was thinking handing him the reins. The answer is that he has two qualifications that make up for his shortcoming. He used to run the pharmaceuticals business at Roche, a Swiss drug behemoth. And he is American. That makes him just the man for a company that is betting big on its pharma business across the Atlantic.Listen to this story. Enjoy more audio and podcasts on More

The world’s energy supermajors had a bountiful 2022. ExxonMobil, the largest of the private-sector giants, reported a record annual net profit of $56bn, after Russia’s invasion of Ukraine sent oil prices soaring. Mouth-watering—unless you are Saudi Aramco, in which case it’s peanuts. Last year the desert kingdom’s oil giant brought in some $160bn of net income, the most by any company in corporate history.■To stay on top of the biggest stories in business and technology, sign up to the Bottom Line, our weekly subscriber-only newsletter. More

Even people who love their jobs have a few gripes. Even people who excel at their work have their share of worries. The office environment makes it hard to concentrate; their colleagues are annoying beyond belief; their career path within the organisation is not obvious. There are aspects of the workplace, like “reply all” email threads and any kind of role-playing, which are completely beyond redemption. This column is here to administer the balm of consolation for some of work’s recurring irritations. Listen to this story. Enjoy more audio and podcasts on More

Don’t feel bad if MSC, the Mediterranean Shipping Company, is the biggest ocean-going carrier you have never heard of. It is meant to be that way. Its founder, Gianluigi Aponte, is a publicity-shy Italian billionaire, based in Switzerland, a country with no maritime borders and a culture of secrecy as deep as the ocean. His firm has taken the seafaring world by stealth. Born in 1970 with a single vessel trading between Somalia and southern Italy, msc last year overtook A.P. Moller-Maersk to become the world’s biggest container-shipping company. Yet its culture of silence remains. When its CEO, Soren Toft, spoke at a shipping jamboree in Long Beach this month, he revealed next to nothing. “We’re not going to make [talking in public] a habit,” he said gruffly. Listen to this story. Enjoy more audio and podcasts on More

On average, women earn less than men. Much of this is because of the jobs they perform, by choice or social expectation; these are often worse-paid than typical male occupations. Some, as when women’s pay is lower for the same position, is the result of discrimination. Before the covid-19 pandemic, the gap between median male and female wages was at least edging down. The Economist’s glass-ceiling index of female workplace empowerment, published each year on March 8th, international women’s day, shows that this salutary trend reversed in 2021 in some of the mostly rich members of the OECD, including Britain and Canada (see chart, and economist.com/glassceiling for the full index).One explanation is a hangover from the pandemic. When hotels, restaurants and shops shut their doors amid lockdowns, their workers’ wages suffered disproportionately. And those workers were disproportionately women. If so, the widening pay gap may have been a blip: demand from employers in these sectors has been hot since economies began to reopen. Americans working in leisure and hospitality have seen their earnings grow faster than those toiling in more male-dominated industries such as transport over the past year or so. The return to the pre-pandemic trend will be helped by women’s gains at the other end of the income spectrum. In 2022 the share of board members across the OECD who were women crept over 30% for the first time. MSCI now expects parity by 2038, four years earlier than previous estimates. Only 64 out of 3,000 or so big companies in the research firm’s global stock index had a female-majority board. But that was double the number in 2021 and includes giants like Citigroup and Shell. Analysis just published by Moody’s, a credit-rating agency, shows that such firms in North America have consistently higher credit ratings. Disentangling cause and effect is not easy. Empowering women ought to be.To stay on top of the biggest stories in business and technology, sign up to the Bottom Line, our weekly subscriber-only newsletter. More

AMERICAN-FOOTBALL fans munching potato crisps at Super Bowl parties last month were treated to an unexpected television commercial. In it, a woman magically switched between chic but cheap outfits as she scrolled through a mobile shopping app called Temu. The accompanying jingle—“I feel so rich; I feel like a billionaire”—refers to the sensation of wealth brought about by the endless choice and rock-bottom prices for Temu’s clothes. Since its launch last September Temu has become the most-downloaded app for iPhones. That is quite a feat for a young brand based in Boston. It is all the more impressive because Temu hails from China.This is a critical moment for Chinese companies in the West. On the one hand, Chinese brands have never been more popular in America. Just behind Temu in American iPhone downloads are CapCut, a video-editor, and TikTok, the short-clip time sink. Shein, a fashion retailer, ranks above Spotify and Amazon. This year it may pull off one of the world’s biggest initial public offerings (IPO) in New York.At the same time, Western suspicions of Chinese business are mounting, together with intensifying geopolitical tensions and mistrust between China and the West. America has banned Huawei, a Chinese maker of telecoms gear, at home and crushed its efforts to capture lucrative Western markets. On March 6th it was reported that Germany’s government was about to bar mobile operators from using Huawei kit and replace installed Chinese equipment. TikTok may be in for similarly harsh treatment. Several countries, led by America, are discussing full bans on TikTok over concerns about the Chinese government using the platform for anti-Western propaganda or to gobble up Western users’ personal data (TikTok denies both these accusations). For ambitious Chinese businesses eyeing wealthy Western consumers this presents a conundrum: how do you do business in places where you are increasingly unwelcome? Companies like Shein, Temu and the beleaguered TikTok are all coming up with answers that have a lot in common. Whether they pull it off will determine the fate of Chinese commerce in the West.China Inc began making a mark on global markets in the 1980s as foreign companies poured investments into Chinese factories which then shipped cheap goods to the West. Consumers would buy these almost exclusively through retailers such as Walmart or from Western brands that source products from Chinese factories. Then, in the mid-2000s, Chinese companies began building a presence in foreign markets. Until Uncle Sam clipped its wings, Huawei was selling its own networking kit and handsets across the West. Other Chinese champions such as Haier, a home-appliance maker, bought and nurtured Western brands (GE’s white-goods division, in Haier’s case). Between 2011 and 2021 Chinese firms acquired nearly $90bn-worth of foreign retail and consumer brands, according to Refinitiv, a data company. Many of the targets were Western.In recent years, however, the dealmaking has slowed. In 2022 Chinese companies spent just $400m on foreign brands. The authorities in Beijing have grown warier of capital flight even as Western governments have become more hostile to such transactions, often blocking them. Chinese brands seeking to build a Western presence have had little joy. Lenovo, a Chinese firm that in 2004 acquired IBM’s personal-computer division, has captured a mediocre 15% of America’s PC market, far behind HP and Dell, which together control more than half of it. Xiaomi, which in 2021 overtook Apple to become to world’s second-biggest smartphone-maker, has been unable to crack America. The latest wave of global Chinese brands have taken a different approach. Many initially eyed the domestic market, before the covid-19 pandemic and China’s draconian response to it forced them to look abroad for growth, says Jim Fields, a marketer who works with Chinese brands in America. Companies such as Shein, Temu and TikTok may grab the headlines but hundreds of Chinese firms have been making similar inroads in America, Europe and Japan—using similar strategies.The first of these is not to flaunt their Chineseness. The Economist has reviewed dozens of companies’ websites and found that most could easily pass for a Western brand. Their names sound English: BettyCora produces press-on nails; Snapmakers makes 3D printers. Almost none acknowledges their country of origin. One young entrepreneur who is currently planning the launch of his own brand in America says there has been a long-standing prejudice against Chinese-made goods in developed markets. This perception is linked to the first wave of cheap factory wares in the 1980s. Increased hate crimes against people of Asian descent in America in recent years has not encouraged companies to come out as Chinese. Most people hoping to start such businesses will avoid references to China if possible, the entrepreneur says.The second commonly shared characteristic is the use of clever technology to beat Western competitors on service and price. Many Chinese firms use their own websites and mobile apps to sell directly to customers instead of relying on American retailers. That spares them from losing margin to the retailers. It also gives them access to data on consumer trends, allowing them to respond quickly to shifts in demand—or even, using sophisticated analytics, predict these changes and boost supply before consumers place their orders. This “on-demand manufacturing” has allowed Shein to triple its American revenues between 2020 and 2022, to over $20bn. Its app attracts 30m monthly users in America. Hundreds of Chinese companies are now experimenting with this model in the American marketplace. Halara, a newish women’s-apparel retailer, gets around 1.5m digital visitors monthly to its app. Newchic, a rival, attracts 1.7m. The Chinese firms’ ability to understand their customers through data analytics is a big advantage in developed markets, says Xin Cheng of Bain & Company, a consultancy. The companies’ savvy use of technology and supply chains allows them to limit their non-Chinese assets—their third shared strategy. Being asset-light appeals to investors, notes Zou Ping, of 36Kr, a Chinese research firm. It helps cut costs while also reducing the risk of assets being stranded should Western politicians turn up the pressure. For many Chinese brands, their only Western assets are their customer-facing websites and apps. Although it recently opened a distribution centre in Indiana, Shein ships most of its goods directly from China to customers in America bypassing warehouses. Its Boston base notwithstanding, Temu reportedly has no plans to use warehouses in America, let alone factories. Naturehike, a camping-goods maker, has expanded rapidly across the West and Japan without employing a single person outside China. Instead, says Wang Fangfang, the company’s spokeswoman, it is boosting its on-demand manufacturing capacity so that it can better understand its customers from afar. In February CATL agreed to furnish its electric-vehicle batteries to Ford by licensing its patents to the American carmaker rather than building its own factory in America. The most dramatic way in which some Chinese companies are trying to guard themselves against a Western backlash, as well as Communist Party meddling in their Western business, is by distancing their governance structures from China. The first big name to pursue this strategy was ByteDance, TikTok’s parent company. From the start, it kept TikTok’s popular Chinese sister app, Douyin, completely separate from the version used in the rest of the world (which in turn cannot be used in China). Then TikTok moved its headquarters to Singapore and tried to distance itself from decision-making at ByteDance’s headquarters in Beijing. Now it reportedly wants to create an American subsidiary tasked with safeguarding the app, which would report to an outside board of directors rather than ByteDance. ByteDance itself stresses that it is domiciled in the Cayman Islands, not China. Seeing that none of this has fully satisfied Western regulators, other Chinese companies are going further still. Last year Shein also decamped to Singapore, from Guangzhou. The city-state is now its legal and operational home. Add its planned New York listing and its executives almost bristle when you call their firm Chinese. More businesses seem likely to adopt a version of this model. The success of these strategies is difficult to gauge. Export figures from China do not differentiate between Chinese brands and goods produced for Western companies. Many packages are sent via express courier and are not counted as exports. But it is clear that, in some niche areas at least, Chinese brands are taking significant market share in the West. Anker, an electronics company, has become one of America’s biggest purveyors of phone chargers and power banks. In 2021 about half its $1.8bn in global revenues came from North America; less than 4% came from China. Several Chinese makers of robot vacuum cleaners and other smart appliances are now cited as top global sellers alongside American and German companies. One such firm, Roborock, had foreign sales of $500m in 2021, accounting for 58% of its total revenues, up from 14% just two years earlier. Its main market is America. Several Chinese companies, such as EcoFlow, are poised to dominate the market for household power banks in America.Investors are bullish. Shein’s IPO could be a blockbuster. Late last year Hidden Hill Capital, a Singaporean fund, raised nearly $500m in partnership with TPG, an American private-equity titan, to invest in the companies backing the supply chains of future global brands. Some of the entrepreneurs behind these success stories nevertheless worry about their businesses’ prospects. One concern is overcoming the “Made in China” label, which has historically not screamed quality. This fear is compounded by fake or shoddily made me-too products, which can hurt the reputation of Chinese companies that have invested in research and development. Two years ago Amazon banned 600 Chinese brands on concerns that they were churning out fake reviews of their own wares. It is the deteriorating Sino-American relations that cause the Chinese bosses the most sleepless nights. For many of them, TikTok is the bellwether. In January the firm said it would set up a data centre in America to store American users’ data and give American authorities access to its algorithms; on March 6th the Wall Street Journal reported that it is pursuing a similar arrangement in Europe. Despite such assurances, a committee in America’s House of Representatives has advanced legislation that would let President Joe Biden ban the app. If Beijing and Washington continue to grow apart, which seems likely, American politicians may take aim at other Chinese apps, especially those that collect data on shopping habits—which is to say most of the consumer-facing ones. That would turn their technological strength into a geopolitical weakness. Facing up to that threat will require a whole other level of commercial ingenuity. ■ More

“I think we might exceed a one-to-one ratio of humanoid robots to humans,” Elon Musk declared on March 1st. Coming from the self-styled technoking of Tesla, it was not so much a prediction as a promise. Mr Musk’s car company is developing one such artificially intelligent automaton, codenamed Optimus, for use at home and in the factory. His remarks, made during Tesla’s investor day, were accompanied by a video of Optimus walking around apparently unassisted. Given that Mr Musk did not elaborate how—or when—you get from a promotional clip to an army of more than 8bn robots, this might all smack of science-fiction. But he has waded into a very real debate about the future of work. For certain forms of AI-enabled automation are fast becoming science fact. Since November ChatGPT, an AI conversationalist, has dazzled users with its passable impression of a human interlocutor. Other “generative” AIs have been conjuring up similarly human-like texts, images and sounds by analysing reams of data on the internet. Last month the boss of IBM, a computing giant, forecast that AI will do away with much white-collar clerical work. On March 6th Microsoft announced the launch of a suite of AI “co-pilots” for workers in jobs ranging from sales and marketing to supply-chain management. Excitable observers murmur about a looming job apocalypse. Fears over the job-displacing effects of technology are, of course, nothing new. In early 19th-century Britain, Luddites burned factory machines. The term “automation” first rose to prominence as the adoption of wartime innovations in mechanisation sparked a wave of panic over mass joblessness in the 1950s (see chart 1). In 1978 James Callaghan, Britain’s prime minister, greeted the breakthrough technology of his era—the microprocessor—with a government inquiry into its job-killing potential. Ten years ago Carl Frey and Michael Osborne of Oxford University published a blockbuster paper, since cited over 5,000 times, claiming that 47% of the tasks American workers perform could be automated away “over the next decade or two”. Now even the techno-optimistic Mr Musk wonders what it would mean for robots to outnumber humans: “It’s not even clear what an economy is at that point.” Although Messrs Frey and Osborne still have a few years to be proved right, and Mr Musk can be safely ignored for the time being, the earlier fears about job-killing technology never materialised. On the contrary, labour markets across the rich world are historically tight—and getting structurally tighter as societies age. There are currently two vacancies for every unemployed American, the highest rate on record. America’s manufacturing and hospitality sectors report labour shortages of 500,000 and 800,000 respectively (as measured by the gap between job openings and unemployed workers whose last job was in the sector in question). The immediate problem for advanced economies is, then, not too much automation but too little. It is exacerbated by the fact that, for large businesses, automating has been hard to get right in practice. It is likely to prove no easier with the latest buzzy AIs.Rage for the machineMechanical arms on a factory floor performing repetitive tasks such as welding, drilling or moving an object have been around for decades. Robot usage historically centred on the car industry, whose heavy parts and large batches with limited variety are ideally suited to the machines. The electronics industry, with its need for precise but repetitive movements, was also an early adopter. More recently the list of industries embracing robots has widened, observes Jeff Burnstein, president of the Association for Advancing Automation, an American industry group. Advances in computer vision have made robots more dexterous, notes Sami Atiya, who runs the robotics business of ABB, a Swiss industrial firm. Lightweight “collaborative robots” now work side-by-side with humans rather than in cages, and autonomous vehicles ferry objects from one spot to another in factories and warehouses. At the same time, robot prices have tumbled. The average price of an industrial robot fell from $69,000 in 2005 to $27,000 in 2017, according to Ark Invest, an asset manager. Last December ABB opened a 67,000-square-metre “mega factory‘‘ in Shanghai where robots make other robots. Installation costs have come down, too, with newer “no code” systems requiring no programming expertise, notes Susanne Bieller, general secretary of the International Federation of Robotics (IFR), another industry group. As a result of better technology and lower prices, the global stock of industrial robots grew from 1m in 2011 to nearly 3.5m in 2021 (see chart 2). Sales at Fanuc, a big Japanese robot-maker, rose by 17% last quarter, year on year; those of Keyence, a Japanese firm that acts as an automation consultant to the world’s factories, shot up by 24%. Though down from the frothy peaks of 2021, when bosses sought alternatives to human workforces incapacitated by covid-19, robot-makers’ share prices remain a fifth higher than before the pandemic (see chart 3). For all that growth, however, absolute levels of adoption remain low, especially in the West. According to the IFR, even South Korean firms, by far the world’s keenest robot-adopters, employ ten manufacturing workers for every industrial robot—a long way from Mr Musk’s vision. In America, China, Europe and Japan the figure is 25-40 to one. The $25bn that, according to consultants at BCG, the world spent on industrial robots in 2020 was less than 1% of global capital expenditure (excluding the energy and mining sectors). People spent more on sex toys. The long lifetimes of industrial kit limit how quickly older, dumber machines can be replaced with cleverer new ones, notes Rainer Brehm, who runs the factory-automation unit of Siemens, a German industrial giant. And most menial jobs in advanced economies these days are anyway in the services industries, where tasks are harder to automate (see chart 4). The human body, with its joints and digits, is a marvel of versatility with 244 planes of motion. A typical robot has six such “degrees of freedom”, notes Kim Povlsen, boss of Universal Robots, a manufacturer. The automation of office work has been similarly halting, for similar reasons of legacy systems and corporate inertia. In theory, digitisation should make it possible to remove most human involvement from routine tasks like ordering inventory, paying suppliers or totting up accounts. In practice, most businesses born before the digital era use a tangle of outdated and incompatible systems, notes Cathy Tornbohm of Gartner, a research firm. Rather than shell out on IT consultants to come and untangle the thicket, many firms prefer to outsource the menial office work to low-cost countries like India or the Philippines. IDC, another research firm, More