The future trajectory of the Chinese economy is a subject for doctoral theses rather than casual column items. But the advent of the Year of the Dragon, at last weekend’s Lunar New Year, was greeted with such pessimistic commentaries that the natural contrarian should ask whether the consensualists are getting it wrong: maybe the dragon is merely marking a pause before martialling its mighty resources for the next transglobal burst of fire?

The negative narrative goes like this. In spite of deflation in consumer prices, Chinese shoppers are frightened of spending. Despite central bank interventions aimed at boosting asset prices, the property market is crashing after the collapse of the developer Evergrande and the Shanghai stock market has been falling since last April. Youth unemployment is high; there’s ‘chaos in the pork market’; and annual GDP growth has halved (or worse) from the 9 per cent level of earlier years. While some reports had Beijing hoping forlornly for an upward blip as a result of reunion celebrations over the new year period, others foresaw the end of ‘the Chinese economic miracle’.

All of which reminds me of a western new year long ago when our then editor Boris Johnson rang me and said: ‘Everyone’s saying China’s the new great world power. Why don’t we say exactly the opposite?’ We did – and won a lot of attention for our contrary view. Am I bold enough to go against the crowd now? No – this time I’ll go mainstream, sticking to my long-held belief that China’s internal tensions, financial weaknesses and inability to provide rising prosperity for its people will one day tear it apart. This dragon’s set for a serious fall.

Arm fever

Shares in Arm, the Cambridge-based chip designer that opted to list on New York’s Nasdaq exchange last September rather than in London, have risen by more than 80 per cent in a week on the basis of better-than-expected quarterly figures and news of potential applications for its products in artificial intelligence. The surge is the latest manifestation of a US craze for stocks with an AI angle; investors’ top current target, the Californian AI chip producer Nvidia, has quintupled in value since the start of last year and is now worth more than Amazon or Google.

To be the punters’ favourite in such a feverish market is not always comfortable, in case the next quarter disappoints. But the growth of Arm’s market value to more than $150 billion is all the justification its executives and major shareholder – Softbank of Japan, which bought Arm for $32 billion in 2016 – might ever need for the Nasdaq decision which caused such political upset over here. The plain fact is that nothing like this could happen on the London stock exchange; and the higher Arm soars, the lower will fall London’s attraction for high-growth high-tech.

Cosy with Fujitsu

As long ago as May 2021 I wrote that ‘the spotlight of justice’ should turn on Fujitsu as the maker of the Horizon computer system that ruined the lives of so many innocent sub-postmasters. Finally, the postal minister Kevin Hollinrake is talking about extracting compensation from the Japanese company which will have earned £1.5 billion over the life of the Horizon contract, while Fujitsu’s own European boss Paul Patterson has described as ‘shameful’ the way Horizon’s faults were concealed for so long and admitted a ‘moral obligation’ to pay up for the sub-postmasters.

So the wheels are slowly turning. But how fascinating to read in the Guardian (which found out via Freedom of Information requests) that at the Davos gathering of the global elite in January 2023, Kemi Badenoch – then international trade secretary, now Business Secretary and Hollinrake’s boss – had a meeting with senior Fujitsu people in which she declared herself ‘keen to hear their views on the UK as an investment destination’ and asked which bits they liked best of the 2020 trade agreement between the UK and Japan.

How high-powered that meeting must have felt; how ill-advised was the minister to have gone ahead with it despite mention of Horizon in her briefing notes; how cosily illustrative was it of the many-tentacled Fujitsu-Whitehall-defence-establishment relationship that helped the delinquent supplier stay out of sight. The relationship needs investigating as much as the company.

Lost in the rainforest

When The Body Shop cosmetics chain founder Dame Anita Roddick died in 2007, I saluted her as ‘the creator… of pamper-yourself-and-feel-righteous ethical consumerism’. The way she associated her body butters and shower gels with animal welfare and saving rainforests – while furiously dissing what she called ‘the pin-striped dinosaurs’ of the City who did so much to boost her company’s fortunes – was a performance of new-age marketing genius a generation ahead of the rest of the high street. Yet by the time of her death she stood accused of selling out in more ways than one: for £652 million, of which she and her family collected £117 million, to the French cosmetics giant L’Oréal, which in those days faced criticism for animal testing and use of chemicals.

And if I’d ever given The Body Shop another thought – I’m no fan of body butter – I might have supposed it had expired shortly after that sale, trampled by up-and-comers such as Lush. Brands built around charismatic personalities rarely survive their founder’s departure. In fact L’Oréal sold The Body Shop to Natura of Brazil in 2017 for £880 million and Natura sold it to Aurelius, a private equity firm, last year for £207 million. Now Aurelius has put it into administration: shop closures and job losses are bound to follow. The diminished brand may stagger on, but without the passion of Roddick it has long been lost in its own rainforest of ethical imitators.