Showing posts with label Economic. Show all posts
Showing posts with label Economic. Show all posts

23 October 2021

China’s Economy Continues to Slow, Rattled by Real Estate and Energy

Keith Bradsher

BEIJING — Steel mills have faced power cuts. Computer chip shortages have slowed car production. Troubled property companies have purchased less construction material. Floods have disrupted business in north-central China.

It has all taken a toll on China’s economy, an essential engine for global growth.

The National Bureau of Statistics announced on Monday that China’s economy increased 4.9 percent in the third quarter from the same period last year; the period was markedly slower than the 7.9 percent increase in the previous quarter. Industrial output, the mainstay of China’s growth, faltered badly, especially in September, posting its worst performance since the early days of the pandemic.

Two bright spots prevented the economy from stalling. Exports remained strong. And families, particularly prosperous ones, resumed spending money on restaurant meals and other services in September, as China succeeded again in quelling small outbreaks of the coronavirus. Retail sales were up 4.4 percent in September from a year earlier.

22 October 2021

The U.S. Has Some Catching Up to Do on Digital Currencies

Julia Friedlander, JP Schnapper-Casteras

Much of the recent policy debate over virtual currencies has been alarmist, with commentators going so far as to call for banning all cryptocurrencies or warning that U.S. efforts to develop digital dollars would wreck the banking system. The conversation around central bank digital currencies, or CBDCs, illustrates the point.

Whereas cryptocurrencies like Bitcoin are decentralized, CBDCs are issued and managed by a nation’s monetary authority. The idea has taken off around the world in recent years, largely in response to the rapid pace of digital innovation and to frictions within the existing financial system. Over 80 countries are in some stage of researching, developing or rolling out their own version of this novel monetary technology.

18 October 2021

The Malaria Vaccine Is a Big Deal, but Not a Silver Bullet

WHEN PATRICK DUFFY started his career at the Walter Reed Army Institute of Research in 1991, scientists were already a few years into testing a first-of-its-kind vaccine that would protect against malaria. Thirty years later, the World Health Organization has finally recommended the product of that research as a malaria intervention for children under age 5 in Africa. The RTS,S vaccine, also called Mosquirix, is the first vaccine to protect against a parasite.

Duffy, now the chief of the Laboratory of Malaria Immunology and Vaccinology at the National Institute of Allergy and Infectious Diseases, is excited about its potential to reduce the toll of a disease that kills more than 400,000 people every year. But he’s well aware that this vaccine isn’t a universal solution. “This prevents clinical malaria in children,” he says. But it doesn’t stop transmission of the parasite from mosquitoes to humans, and it doesn’t protect everyone who is vulnerable. “What about pregnant women? What about elimination?” he asks. “I feel as though this is a base upon which improvements can be made.”

These are the top 10 tech trends that will shape the coming decade, according to McKinsey

Sean Fleming
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The pace of change in the technology sector has always been brisk. As much as 10 years worth of growth in e-commerce may have been compressed into just three months in late 2019, according to McKinsey & Company, which predicts that we’ll experience more technological progress in the coming decade than we did in the preceding 100 years put together.

Any change can be unsettling and keeping pace with developments even more so. Part of the challenge is knowing which are the most significant changes and which are the ones that are less likely to bear fruit.

According to McKinsey, these are the 10 top technologies attracting the attention and funds of investors and technologists. They are also the ones most likely to feature prominently in the changing face of the modern workplace. Understanding the impact they will have on organizations and on the people whose jobs will be affected, could be key to avoiding any of the worst downsides of the disruption that may follow.

 Technology trends and underlying technologies. Image: McKinsey & Co

1. Process automation and virtualization

Around half of all existing work activities could be automated in the next few decades, as next-level process automation and virtualization become more commonplace.

“By 2025, more than 50 billion devices will be connected to the Industrial Internet of Things (IIoT),” McKinsey predicts. Robots, automation, 3D-printing, and more will generate around 79.4 zettabytes of data per year.

2. The future of connectivity

Faster digital connections, powered by 5G and the IoT, have the potential to unlock economic activity. So much so that McKinsey says implementing faster connections in “mobility, healthcare, manufacturing and retail could increase global GDP by $1.2 trillion to $2 trillion by 2030.”

“Far-greater network availability and capability will drive broad shifts in the business landscape, from the digitization of manufacturing (through wireless control of mobile tools, machines and robots) to decentralized energy delivery and remote patient monitoring.”

3. Distributed infrastructure

By 2022, 70% of companies will be using hybrid-cloud or multi-cloud platforms as part of a distributed IT infrastructure. It will mean data and processing can be handled in the cloud but made accessible to devices faster.

“This trend will help companies boost their speed and agility, reduce complexity, save costs and strengthen their cybersecurity defenses,” McKinsey says.

Tech trends affect all sectors, but their impact varies by industry.

4. Next-generation computing

Next-generation computing will, McKinsey believes, “help find answers to problems that have bedevilled science and society for years, unlocking unprecedented capabilities for businesses”.

It includes a host of far-reaching developments, from quantum AI to fully autonomous vehicles, and as such won’t be an immediate concern for all organizations. “Preparing for next-generation computing requires identifying whether you’re in a first-wave industry (such as finance, travel, logistics, global energy and materials, and advanced industries),” McKinsey says, or “whether your business depends on trade secrets and other data that must be safeguarded during the shift from current to quantum cryptography.”

5. Applied Artificial Intelligence (AI)

We are still only in the early days of the development of AI. As the technology becomes more sophisticated, it will be applied to further develop tech-based tools, such as training machines to recognize patterns, then act upon what it has detected.

By 2024, McKinsey estimates AI-generated speech will be behind more than 50% of people’s interactions with computers. Companies are still searching for ways to use AI effectively though, the consultancy says: “While any company can get good value from AI if it’s applied effectively and in a repeatable way, less than one-quarter of respondents report significant bottom-line impact.”

Effects of technology trends in 2050.

6. Future of programming

Get ready for Software 2.0, where neural networks and machine learning write code and create new software. “This trend makes possible the rapid scaling and diffusion of new data-rich, AI-driven applications,” according to McKinsey.

In part, it could see the creation of software applications far more powerful and capable than anything available today. But it will also make it possible for existing software and coding processes to be standardized and automated.

7. Trust architecture

In 2019, more than 8.5 billion data records were compromised. Despite advances in cybersecurity, criminals continue to redouble their efforts. Trust architectures will help in the fight against cybercrime, McKinsey says.

One approach to building a trust architecture is the use of distributed ledgers, such as blockchain. “In addition to lowering the risk of breaches, trust architectures reduce the cost of complying with security regulations, lower the operating and capital expenditures associated with cybersecurity, and enable more cost-efficient transactions, for instance, between buyers and sellers,” McKinsey notes.

8. Bio Revolution

There is, McKinsey says, a “confluence of advances in biological science” that “promises a significant impact on economies and our lives and will affect industries from health and agriculture to consumer goods, energy and materials.”

Propelled by AI, automation and DNA sequencing, the bio revolution promises the development of gene-therapies, hyper-personalized medicines and genetics-based guidance on food and exercise. These developments will create new markets but will also raise some important ethical questions. “Organizations need to assess their bQ or biological quotient – the extent to which they understand biological science and its implications. They should then sort out the resources they need to allocate to biological technologies and capabilities and whether to integrate those into their existing R&D or partner with science-based start-ups,” McKinsey says.

9. Next-generation materials

Developments in materials science have the potential to transform multiple market sectors, including pharma, energy, transportation, health, semiconductors and manufacturing. Such materials include graphene – a single layer of carbon atoms arranged in a honeycomb lattice configuration, which is around 200 times stronger than steel, despite its incredible thinness. It is also a very efficient conductor and promises to revolutionize semiconductor performance. Another is molybdenum disulfide – nanoparticles of which are already being used in flexible electronics.

“By changing the economics of a wide range of products and services, next-generation materials with significantly higher efficiency in many as-yet-untouched application areas may well change industry economics and reconfigure companies within them,” McKinsey says.

10. Future of clean technologies

Renewable energy, cleaner/greener transport, energy-efficient buildings and sustainable water consumption are at the heart of the clean-tech trend. As the costs associated with clean-tech fall, their use becomes more widespread and their disruption is felt across a growing number of industries, McKinsey says.

“Companies must keep pace with emerging business-building opportunities by designing operational-improvement programmes relating to technology development, procurement, manufacturing and cost reduction,” McKinsey believes. “Advancing clean technologies also promises an abundant supply of green energy to sustain exponential technology growth, for instance, in high-power computing.”

14 October 2021

Olaf Scholz’s Quiet Revolution in German Economics

Caroline de Gruyter

At the meeting of finance ministers of the eurozone—the countries using the euro as their currency—in Luxembourg on Oct. 4, one prominent regular attendee was missing. Olaf Scholz, Germany’s finance minister and vice chancellor since 2018, was otherwise occupied in Berlin. Eight days earlier, his Social Democratic Party (SPD) had won national elections under his leadership, making him the most likely person to succeed Angela Merkel as chancellor, pending coalition negotiations.

One might think that other eurozone countries would be filled with anxiety as they tracked Germany’s election and its aftermath, given its outsized weight in determining the EU’s common economic and financial policies. But the reality is that Europe is hardly worried at all. That’s because, although the government’s makeup remains to be determined—it’s still too early to say for certain whether Scholz will end up leading Germany, much less who will succeed him as finance minister—the culture of German economics has already changed significantly in recent years. And that’s not least because of Scholz’s own influence.

Yemen’s Most Pressing Problem Isn’t War. It’s the Economy.

Rafat Al-Akhali

On Sept. 22, a high-level United Nations meeting co-hosted by Sweden, Switzerland, and the European Union concluded with donors pledging an additional $600 million toward the U.N.’s $3.85 billion humanitarian response plan for Yemen. These pledges are vital, but the humanitarian crisis in Yemen is a symptom of an underlying economic conflict. This conflict has contributed significantly to increases in food and fuel prices, and de-conflicting among the parties involved needs to be prioritized.

I am a Yemeni national and have been working on developmental and governance issues in Yemen for almost two decades in multiple roles: as a co-founder and trustee of a number of leading civil society organizations; as the team lead for policy reforms at the Ministry of Planning and International Cooperation in 2013 and 2014; as the minister of youth and sports in 2014 and 2015; as a senior advisor to international agencies on development, peace-building, and Yemen’s political economy; and as a researcher and practitioner on state fragility at Oxford University.

9 October 2021

U.S. Won't Follow China in Banning Crypto, SEC Chief Says


U.S. House, Securities and Exchange Commission (SEC) Chair Gary Gensler told Congress on Tuesday that his agency would not move to implement a ban on cryptocurrencies.

The topic was addressed after North Carolina Representative Ted Budd, a supporter of cryptocurrencies, asked whether the SEC would move forward in instituting a ban on the digital currencies like China instituted last month. To this, Gensler said:

"No, that would be up to Congress." He added, "I am technology-neutral. I think that this technology has been and can continue to be a catalyst for change, but technologies don't last long if they stay outside of the regulatory framework."

While Gensler has expressed concern over the crypto market, worrying that "people will be hurt," his recent comments fall in line with those of Federal Reserve Chairman Jerome Powell, who told members of Congress during a September 30 hearing that he had "no intention" of barring cryptos.

6 October 2021

The Next Generation EU: Opportunity and risk

Josep Mª Lloveras Soler

The COVID-driven crisis has created favourable conditions to complete the euro’s construction and push towards its unrealised convergence objective through reform and investment. If this opportunity is missed, circumstances are unlikely to be so propitious in the future. This paper will examine a number of related topics to demonstrate this: the objectives and structural problems of the euro; the debt crises starting in 2008 and the subsequent EU response; the COVID-driven crises and the corresponding EU reaction. Each deserves their own separate paper, and are outlined here only by way of background.

Next Generation EU (NGEU) – the COVID-19 recovery package at the centre of the new EU policy response – has been hailed as a “Hamiltonian moment”, with reference to the first US Secretary of the Treasury who replaced individual states’ debts with US federal debt. As the NGEU enters its implementation phase, it is time to question the value of such a claim. This paper will explore the novelties and transformative potential of this instrument. Specific reference is made to Spain, as it may constitute a test case for the success of the initiative.

Our International Institutions Are Failing Us (Or Are We Failing Them?)

Christine McDaniel
Source Link

Economists, analysts and other writers who have long looked to the World Bank’s “Doing Business” report for key data on country rankings recently learned the numbers were manipulated. These were data irregularities, according to the World Bank. This is devastating news because its self-proclaimed mission is to “provide a wide array of financial products and technical assistance, and help countries share and apply innovative knowledge.” What’s worse is that the person who reportedly oversaw the manipulation of the rankings now heads the International Monetary Fund.

Then there’s the new head of the World Trade Organization, who is rumored to already be over the job and threatening to quit due to the inability of the organization to move anything forward. The mission of the WTO is to deal with the global rules of trade between nations. Its main function “is to ensure that trade flows as smoothly, predictably and freely as possible.” Willing participants have signed on to eliminate tariffs on high tech goods and increase potential for market access in government procurement, but the most pressing trade issues of the current day—overfishing, intellectual property and cyber theft, and subsidies—seem beyond its reach.

2 October 2021

How ‘wonder material’ graphene became a national security concern

Jasper Jolly

Alarge shed on an unassuming industrial estate beside Swansea’s River Tawe does not at first glance seem vital to the UK’s national security. The facility, run by a small company called Perpetuus , sits beside a mortuary and a parcel depot.

Earlier this month, the company, which makes graphene – a “wonder material” made of a single layer of carbon atoms – grabbed the attention of the government, which said it would investigate a possible takeover involving a Chinese academic, in a highly unusual move that startled industry observers.

The controversy has shone a spotlight on the global race to develop graphene, suggesting that it may be about to make the long-promised leap from the lab to everyday products, and possibly to military uses as well. In particular, it has drawn attention to China’s attempt to corner the nascent industry, and the Communist state’s reach into British universities developing the technology.

1 October 2021

Clean drinking water

A safe water supply is the backbone of a healthy economy, yet is woefully under prioritized, globally.

It is estimated that waterborne diseases have an economic burden of approximately USD 600 million a year in India. This is especially true for drought- and flood-prone areas, which affected a third of the nation in the past couple of years..

Less than 50 per cent of the population in India has access to safely managed drinking water. Chemical contamination of water, mainly through fluoride and arsenic, is present in 1.96 million dwellings.

Excess fluoride in India may be affecting tens of millions of people across 19 states, while equally worryingly, excess arsenic may affect up to 15 million people in West Bengal, according to the World Health Organization.

19 September 2021

Defusing Saudi Arabia-UAE tensions through economic rebalancing

Hani Findakly

UAE Finance Minister and Deputy Ruler of Dubai Sheikh Hamdan bin Rashid Al Maktoum (R) speaks to Saudi Arabia's Finance Minister Ibrahim al-Assaf ahead of a group meeting of Gulf and Arab Finance Ministers in Abu Dhabi, United Arab Emirates, September 7, 2011. REUTERS/Jumana El Heloueh/File Photo

The recent disagreement between Saudi Arabia and the United Arab Emirates (UAE) over oil production quotas has drawn attention to broader issues, such as diverging interests in the Yemen war and disputes over borders. Missing from the public discourse, however, is an assessment of the economic factors that are a game changer in Riyadh-Abu Dhabi relations. These conflicting national interests arise from a symbiotic relationship that has created massive economic imbalances that heavily favor the UAE, which Saudi Arabia is taking steps to remedy. Although Saudi Arabia lifted travel restrictions to the UAE for citizens this month in conjunction with the Dubai Expo 2020, much remains unresolved.

The emerging schism is not inevitable. By identifying the economic imbalances contributing to the breakdown, recalibration is possible to rebuild a more balanced relationship that circumvents the zero-sum game that has given rise to the Riyadh-Abu Dhabi dispute. Otherwise, a slew of joint ventures, bank loans, investments, and transport will be disrupted, entailing costly disentanglement. In July, media reports indicated major land travel disruptions at the UAE-Saudi borders, and scores of businesses around the world were impacted. Should the rift continue, major shifts in logistics, as well as shipping and transit routes, will occur.

10 September 2021

What Is The Goal Of Beijing’s New Stock Exchange?

Jesse Turland

A new Beijing Stock Exchange was announced by Xi Jinping at the Global Trade In Services Summit in Beijing last Thursday.

Xi said the exchange would “deepen reform of the New Third Board,” referring to the existing financing mechanism in Beijing for Small and Medium-Sized Enterprises (SMEs).

SMEs are firms with fewer than 500 employees. Traditionally they have struggled in comparison with larger companies to acquire loans from banks. The new stock exchange appears designed in part to make redress for that by connecting SMEs with retail investors.

It comes against the backdrop of increased regulatory scrutiny of some of China’s largest existing publicly traded firms.

China has curtailed the power of big tech companies with moves such as blocking ride-hailing firm Didi from app stores in July over data privacy issues and fining other e-commerce platforms including Alibaba over alleged monopolistic business practices.

9 September 2021

China’s Crackdown on Private Equity Funds

Sara Hsu

As analysts are trying to wrap their heads around the flurry of regulation happening in China, the China Securities Regulatory Commission announced a crackdown on private equity funds. The private equity fund industry currently has an overall management scale of over 18 trillion renminbi ($2.79 trillion) with 111,800 managed funds. Most firms on the Sci-tech Innovation Board and ChiNext have received funds from private equity and venture capital funds.

As the industry is relatively new, this is one area in which additional regulation is necessary, as financial risks continue to pop up in China.

The chairman of China’s securities regulator, Yi Huiman, stated at a recent Asset Management Association of China meeting that fund managers must not exaggerate the benefits of their products. Some private fund managers have misappropriated client funds, encouraged fund churning, or even set up counterfeit funds. Yi stated, “The coexistence of true private equity and pseudo-private equity, the coexistence of excellent managers and ‘fake’ managers, the coexistence of registration management and disorderly growth of the market, has damaged the image and reputation of the industry, and affected financial security and social stability.”

7 September 2021

Green Hydrogen in a Circular Carbon Economy: Opportunities and Limits


As global warming mitigation and carbon dioxide (CO2) emissions reduction become increasingly urgent to counter climate change, many nations have announced net-zero emission targets as a commitment to rapidly reduce greenhouse gas emissions. Low-carbon hydrogen has received renewed attention under these decarbonization frameworks as a potential low-carbon fuel and feedstock, especially for hard-to-abate sectors such as heavy-duty transportation (trucks, shipping) and heavy industries (e.g., steel, chemicals). Green hydrogen in particular, defined as hydrogen produced from water electrolysis with zero-carbon electricity, could have significant potential in helping countries transition their economies to meet climate goals. Today, green hydrogen production faces enormous challenges, including its cost and economics, infrastructure limitations, and potential increases in CO2 emissions (e.g., if produced with uncontrolled fossil power generation, which would be hydrogen but would not be green).

2 September 2021

China’s Digital Yuan: An Alternative to the Dollar-Dominated Financial System


Central bank digital currencies (CBDC) are digital tokens issued by central banks. In a way, they are the digital version of cash; their value is guaranteed by a central bank. Unlike money held in credit cards and mobile wallets, CBDCs are not a mere representation of physical money stored elsewhere. Instead, they are a complete replacement for currency notes. While several countries are developing their digital currencies, China is well positioned to take the lead with the digital yuan. This paper highlights ways in which China can use its digital yuan to internationalize the renminbi (RMB) and gradually chip away at the hegemony of the dollar.

The first part of the paper focuses on the dollar’s dominance in the global financial system and the privileges the United States accrues as a result of the dollar being the world reserve currency. The United States has a tight grip on the world’s payment rails, especially in the case of cross-border transactions. For example, the Society for Worldwide Interbank Financial Telecommunications (SWIFT)—the largest cross-border payment clearinghouse in the world—has to comply with and implement unilateral U.S. sanctions. These sanctions seriously hinder trade and damage the economies of the countries affected by them, as was the case with Iran, which lost $150 billion worth of revenue as a result of U.S. sanctions.1 Once a country is cut off from SWIFT’s network, it becomes extremely difficult for it to trade with the rest of the world. Thus, via the dollar’s dominance and its geopolitical muscle, the United States is positioned to maintain a tight grip on the world’s financial system.


The development of new financial technologies and their adoption by nation states and private actors is unleashing transformative effects on the international financial system. Though the dollar remains the dominant international currency today, there is contentious debate over whether it can be, or is in the process of being, replaced.

While another fiat currency replacing the dollar in the short term remains unlikely, the development of digital currencies in the form of central bank digital currencies (CBDCs), de-centralized cryptocurrencies, and private-sector digital currencies all pose threats to the U.S.’s ability to continue capturing gains from current systems, leveraging dollar centrality to enforce sanctions, and otherwise influence international financial transactions over the longer term.

Our 3-part series, The Future of Money, breaks down the technologies and geopolitical forces shaping the global financial landscape and is a critical resource for those looking to better understand and navigate its rapid transformation.

27 August 2021

Jeff Bezos' Next Big Mission - The End of Alzheimer's

The tech visionary who built a $1.6 trillion company from scratch has backed a tiny biotech with a new way to treat Alzheimer's.

The treatment is so promising, a Big Pharma giant recently bought an 11.2% stake in this small firm.Dear Reader,

In October 2013, a scientist wrote three words down on a piece of paper.

They were simple words. A five-year-old could say them.

But these words hold the key to a new breakthrough the Economist says would be

Which Companies Belong To The Elite Trillion-Dollar Club?

Just a handful of publicly-traded companies have managed to achieve $1 trillion or more in market capitalization - only six, to be precise.

24 August 2021


Jon Schwarz

IF YOU PURCHASED $10,000 of stock evenly divided among America’s top five defense contractors on September 18, 2001 — the day President George W. Bush signed the Authorization for Use of Military Force in response to the 9/11 terrorist attacks — and faithfully reinvested all dividends, it would now be worth $97,295.

This is a far greater return than was available in the overall stock market over the same period. $10,000 invested in an S&P 500 index fund on September 18, 2001, would now be worth $61,613.

That is, defense stocks outperformed the stock market overall by 58 percent during the Afghanistan War.

Moreover, given that the top five biggest defense contractors — Boeing, Raytheon, Lockheed Martin, Northrop Grumman, and General Dynamics — are of course part of the S&P 500, the remaining firms had lower returns than the overall S&P returns.