Wednesday 20 June 2018
FT
C002D5556
BUSINESS DAY
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FINANCIAL TIMES
World Business Newspaper
Kim Jong Un visits Beijing after Trump summit Third China trip this year as North Korean leader pushes for relaxation of sanctions LUCY HORNBY, CHARLES CLOVER AND JUNG-A SONG
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orth Korean leader Kim Jong Un has visited China for the third time this year, seeking a relaxation of sanctions in the latest flurry of diplomacy following this month’s historic summit with US President Donald Trump. A police-escorted motorcade carried the reclusive Mr Kim along Beijing’s central artery, Chang’an Avenue, on Tuesday to kick off a visit that China’s official Xinhua news agency said would last for two days. The announcement was a departure from protocol, as Beijing usually waits until after North Korean leaders have left to acknowledge their visits. The trip is viewed as a chance for Mr Kim to brief Chinese leaders on the Singapore summit on June 12, which was the first such meeting between sitting leaders of the US and North Korea. The summit’s commitments for North Korea to denuclearise in return for a reduction in joint military exercises by the US and South Korea are in line with a proposal first floated a year ago as a Sino-Russian blueprint to defuse growing tensions on the Korean peninsula. The Pentagon on Monday said it had suspended planning for “Freedom Guardian”, a large-scale war exercise with South Korea that had been scheduled for August. Pentagon spokesperson Dana White said the US had made no decision about subsequent military exercises with South Korean forces. North Korea has long considered such exercises as a provocation. The meeting also offers Mr Kim the chance to press for resumed trade with his isolated country’s top economic partner. “North Korea
surely hopes for a quick resolution in lifting sanctions,” said regional expert Jin Canrong of Renmin University in Beijing. The Chinese foreign ministry said last week that the United Nations should consider lifting sanctions imposed to dissuade North Korea from its programme of nuclear weapons development, calling the sanctions “a means, not an end”. In the town of Hunchun, where the Chinese, Russian and North Korean borders meet, locals were optimistic that trade would soon revive. “After the summit, everything changed. Business is much better and there are more traders from foreign countries coming here,” said Lyuba, a businesswoman who provides translators for Russian and Korean visitors. She declined to give her last name. About two dozen trucks were lined up on the Chinese side of the border. Drivers said many more would have attempted the crossing before the sanctions were imposed. “The most urgent thing for North Korea is to shake the current sanctions framework. Mr Kim will ask [Chinese President Xi Jinping] to relax its participation in international sanctions against Pyongyang,” said Kim Hyun-wook, professor at Korea National Diplomatic Academy. “Mr Xi is likely to accept Mr Kim’s demand, given the ongoing trade war between Beijing and Washington.” Nicolas Bonner, a British resident of Beijing whose travel agency specialises in bringing tourists to North Korea, said he had seen a fall in purchases of luxury goods in North Korea this winter, as Chinese efforts affected both the stateowned and private economies. “This time I am sure he is looking for some kind of investment because Kim Jong Un needs that,” he said.
Mario Draghi reinforces dovish message on interest rate rises Euro falls 0.8 per cent against the dollar following ECB chief’s Sintra speech CLAIRE JONES
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ario Draghi reinforced his dovish message on the European Central Bank’s retreat from ultra-loose monetary policy, saying interest rates would only rise at a slow pace from September next year. As it called time on three years of quantitative easing during which it bought €2.4tn of bonds to prop up the economy, the ECB last week shifted its focus to a more conventional tool — interest rates. The bank said last Thursday that it expected rates to remain at record lows “at least through the summer” of 2019, leading most investors to bet on early autumn for the first rate increase. In a speech about that change in the message on rates at the bank’s annual Sintra conference on Tues-
day, Mr Draghi said: “This enhanced forward guidance clearly signals that we will remain patient in determining the timing of the first rate rise and will take a gradual approach to adjusting policy thereafter.” He signalled that markets had interpreted its message correctly, saying: “The path of very short-term interest rates that is implicit in the term structure of today’s money market interest rates broadly reflects these principles.” The euro, already down on the day on the back of rising US-China trade tensions, fell further in response to Mr Draghi’s remarks, trading 0.8 per cent lower. Demand for government bonds increased, while the spread in 10-year US Treasury-Bund yields widened. The single currency fell last week Continues on page A4
Kim Jong Un (L) to brief Chinese leaders on the Singapore summit on June 12 © AP
Wilbur Ross sale of Putin-linked shipping group shares revealed US commerce secretary shorted Navigator Holdings before a critical article appeared SHAWN DONNAN
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S secretary of commerce Wilbur Ross sold shares he owned in a New York-listed shipping company just days before the publication of an article that revealed the company’s ties to Vladimir Putin’s inner circle. Documents released by the US Office of Government Ethics on Monday show Mr Ross took a “short” position worth between $100,001 and $250,000 in Navigator Holdings on October 31. The move came just days before the November 5 publication of a New York Times article linking Mr Ross and Navigator to Gennady Timchenko, a Russian oligarch and judo partner of Mr Putin who is the subject of US sanctions. The article was part of the Paradise Papers investigation conducted by the Times with the International Consortium of Investigative Journalists. Also linked to Navigator was Mr Putin’s son-in-law, Kirrill Shamalov, who is married to the Russian president’s youngest daughter. Mr Ross closed the short position on November 7, 2017, after the article was published, according to his filings. Navigator’s shares fell only marginally during the period he held the short position. In a statement sent to the Finan-
cial Times, Mr Ross said the short position was unrelated to the article. Rather, it was part of the broader divestment of the Navigator stake he began after being appointed commerce secretary. After beginning to sell Navigator shares in May last year, he discovered some he did not previously know he owned, which were in an account the company had opened for him “in electronic form”, he said. The short sale was the technical mechanism he used to sell out as soon as he realised he had them. “I decided to continue selling those shares, but since I did not have physical possession of them in order to make delivery in the required time period, I technically sold them short and, when the shares were delivered by the agent on November 16, I delivered those shares to the broker to close out the transaction,” Mr Ross said. “Therefore, it made no economic difference to me whether the shares went up or down between the sale date and the date I delivered them.” One of the journalists involved in the Times article said on Monday that the reporting team had approached Mr Ross with a list of questions for comment on Thursday, October 26, 2017, indicating the commerce secretary and his staff knew that the article was just days away from publication.
The short position and other questions about the former Wall Street turnround artist’s personal wealth were reported on Monday by Forbes Magazine. Last year, the magazine knocked Mr Ross off its annual billionaires’ list after accusing him of misleading statements about his net worth. In a statement, the commerce department said Mr Ross continued to follow the guidance of its ethics officials “to ensure compliance with federal laws and regulations”. It said the new financial disclosure documents released on Monday had been certified by both commerce department ethics officials and the Office of Government Ethics, evidence that Mr Ross had not broken any laws or regulations. The documents were first filed by Mr Ross in November and December of last year and certified by a department official on January 18, 2018. They were not given certification by the Office of Government Ethics until Monday, however, just hours before they were released following the publication of the Forbes report. A spokeswoman for the Office of Government Ethics declined to comment on why the documents’ certification and release had been delayed, though one document showed that some of the data contained in it had been revised only on Friday last week.
IBM computer holds its own against human debaters AI-enabled system comes up only slightly short in making persuasive arguments
RICHARD WATERS
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n artificial intelligence system built by IBM has taken on two humans in a formal debating competition and came up only slightly short in conjuring arguments that a human audience would find more persuasive. The demonstration of Big Blue’s latest AI lacked the clear drama — and the result — of its previous “man versus machine” stunts, including the Watson system that beat the top human champions at question-andanswer television game Jeopardy in 2011, and Deep Blue, which conquered world chess champion Garry Kasparov in 1997. But it was a graphic demonstration of how a set of technologies at the frontier of AI could be combined to challenge humans in a realm where they might have thought they still had a big lead over machines. It was also a sign that computers are venturing deep into subjective human territory where there are no straightforward
answers or clear winners. Unlike Watson, which IBM took years to develop into a commercial system, its latest AI — called Debater — could also have a far more immediate impact on the company’s fortunes. “We’re interested in enterprises and governments; our goal is to help humans in decision-making,” said Arvind Krishna, IBM’s director of research. By assembling arguments out of large bodies of information, the system could help people address important choices, he added. “Should we drill for oil in west Africa? Should we let our food supply have antibiotics in it? There are no right or wrong answers, but we want there to be an informed debate.” Monday’s debate was the culmination of six years of work by IBM researchers in Tel Aviv, a process that was launched in the wake of the Jeopardy victory. “Argumentation is one of the defining features of what it means to be human,” said Chris Reed, a professor of computer science and philosophy at the University of Dundee, who was in
the audience. “To see so many pieces of the puzzle coming together here is really impressive.” In two debates, the IBM system was matched against an experienced human debater and then judged by an invited audience. IBM said the system had not been given foreknowledge or trained on the topics — whether government support of space exploration and telemedicine are good things — but instead assembled its arguments essentially in real time, searching a body of “hundreds of millions” of newspaper articles for evidence. The computer was represented on stage by a smooth female voice spoken by a slim black slab, like a mini obelisk from the movie 2001: A Space Odyssey. It also drew on jokes that were programmed in advance and tactics that included suggesting its adversary was lying — techniques IBM said were used to make its presentation more accessible to human listeners and, at times, distract from the fact that it did not have a strong argument to draw on, just as a human would.