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Global Affairs

Breakfast Briefing: Crypto Hack, Merkel Wobbles and iPhone’s Illegal Labour

 3 min read / 

iPhone Supplier Used Illegal Labour

Foxconn employed high school students who were made to work 11-hour days assembling the new iPhone in China.

Editor’s Remarks: Foxconn’s struggle to keep up with demand for the new iPhone has been well publicised and it appears that the company turned to illegal labour to meet production targets. So far, six students have come forward and said they were forced to work overtime in direct contravention of Chinese law. The six students were part of a wider group of 3,000 interns working at Foxconn’s Zhengzhou plant. Allegedly, they were also told that they had to complete the internship in order to graduate from high school. Apple and Foxconn have both acknowledged the issue and are pursuing remedial action.

Tencent Outstrips Facebook

The Chinese internet titan is now one of the world’s five most valuable companies.

Editor’s Remarks: Tencent has now surpassed Facebook in terms of market capitalisation after a 127% stock price rally year-to-date added $292bn to its value. As such, the Chinese giant’s market cap stands at $523bn compared to Facebook’s $522bn. Although Facebook has around double Tencent’s 1bn strong user base, the latter’s offerings are more diverse. The company emerged some 20 years ago before cornering the internet games market. It now owns WeChat, which operates an effective monopoly over Chinese instant messaging. Accordingly, investors appear to believe that the company’s dominance over China’s internet will enable it to continually expand its operations.

Merkel Languishes in Chaos

The collapse of German coalition talks has heralded the lowest point in Angela Merkel’s 12-year tenure as the nation’s chancellor.

Editor’s Remarks: Merkel, typically cast as the figurehead of a strong, united Europe, is facing domestic disarray. In September, Merkel led her party, the CDU, to its worst election performance for a generation. More significantly, for the first time since WW2 ended, hard-right politicians entered the Bundestag in the form of 94 AfD members. The proposed three-way coalition between the CDU, the pro-business FDP, and the Greens means that Merkel is effectively out of options when it comes to potential partners. Accordingly, she has strongly hinted that she would prefer another election to take place than have to settle for a weak government.

Crypto World Reacts to Tether Hack

Tether, which operates the USDT cryptocurrency, had $31m worth of tokens stolen in a hack. 

Editor’s Remarks: Tether is not a major player in the cryptocurrency world, but this recent hack highlights the problems facing virtual currencies. Tether, unlike most cryptocurrencies, is pegged against the US dollar and is primarily used by exchanges for settling balances. However, this did not stop a hacker from attacking the company’s “treasury wallet” and digitally absconding with $31m of USDT. Tether said it will not replace the stolen tokens and is instead working on tracking them down in order to prevent them from re-entering the wider cryptocurrency market. In reaction, bitcoin dipped around 5% for the blink of an eye before storming back to new highs at around $8,200.

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