Emerging market outflows, cybercrime in China, and on inequality and growth

The daily briefing “FirstFT” from the Financial Times.

Nearly $1tn has gushed out of emerging markets in the past 13 months, in a sign they are relinquishing their role as global engines of growth. Net outflows in the 19 largest emerging economies are double the amount that left during the financial crisis.

Analysts predict the trend could accelerate following China’s currency devaluation this month and nervousness ahead of an expected rate rise by the US Federal Reserve. (FT)

In the news:

Cyber crime and punishment

Authorities in China have arrested 15,000 people for alleged cyber crimes, Beijing announced on Tuesday. The arrests suggest the Chinese government has upped the ante in its fight to control the internet and cleanse it of pornography, cyber criminals and – seemingly – political dissent. (FT)

Ukraine on the brink

Concerns are mounting over a sharp escalation in fighting in the east of the country after an upsurge in violence since late July. Analysts believe the status quo is unacceptable to Russia, with the current stalemate a long-term drain on Moscow’s resources. (FT)

Getting a foot in the door

Apartment-sharing app Airbnb has tapped into a network of Chinese venture capitalists as it seeks to take advantage of booming demand in Asia. The San Francisco-based company said the number of Chinese guests staying at Airbnb properties last year increased by 700 per cent. (FT)

‘Female Viagra’

A controversial drug to treat low sex drive in women has won approval by health authorities in the US, despite potentially dangerous side effects and research results that even experts deemed modest. (BBC)

Tencent goes to Canada

The Chinese internet group has invested $50m in Kik, the teen-focused ‘WeChat of the west‘ app, valuing the Canadian start-up at more than $1bn. Tencent is betting that Kik could replicate its own success in developing chat apps into a platform that incorporates everything from ecommerce to banking in the US. (FT)

It’s a big day for:

Chinese stocks, which were sporting losses of 3 per cent by midday after a volatile morning in which key indices fell as much as 5 per cent. (FT)

Angela Merkel, who faces a test of her leadership when the German parliament votes on the latest Greek bailout package. Lawmakers are expected to vote overwhelmingly in support of the plan, although the chancellor is facing a sizeable rebellion from within her own party ranks. (Reuters)

Target, which is set to announce second-quarter earnings. The results come amid news that the US retailer has reached a $67m agreement with Visa over a massive breach of customers’ payment data in 2013. (FT)

Food for thought

On inequality and growth

Despite the excited chatter that redistribution is good for growth, the research results are mundane. “Whatever effect the gap between rich and poor might have on growth, other forces dominate, so we should not look to redistribution as the new engine of growth,” says the FT’s Chris Giles. (FT)

The case against ‘cash for reform’

EU bailouts were based on the belief that a wave of sovereign defaults could doom the single currency. But was it correct? (FT)

Backpackers vs gunslingers

America’s cultural divide over guns has moved into the woods. National forests have become free-fire zones, with hikers pinned down by gunfire and campers caught in the crossfire. The New York Times plots over 1,100 shooting violations in national forests or national forest land last year. (NYT)

An exit route for smokers

A new study by an agency of Britain’s Department of Health found that electronic cigarettes are 95 per cent less harmful than tobacco and should be promoted as a tool to help smokers quit. “In my view smokers should try vaping, and vapers should stop smoking entirely,” said a professor behind the study. (Reuters)

Tesla on autopilot

The electric vehicle manufacturer joined the ranks of car companies actively testing automated driving technology when it gave a select handful of Model S drivers the chance to experiment with its upcoming Autopilot system on the road. (Business Insider)

Video of the day:

Renminbi reverberations

China’s devaluation of its renminbi currency has shocked markets. Robin Wigglesworth asks the FT’s Henny Sender what the unexpected move means. (FT)

This article is published in collaboration with The Financial Times. Publication does not imply endorsement of views by the World Economic Forum.

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Author: FirstFT is the Financial Times’ editors curated free daily email of the top global stories from the FT and the best of the rest of the web.

Image: The headquarters of the European Central Bank (ECB) are pictured in Frankfurt. REUTERS/Ralph Orlowski.