South China Morning Post (June 21)
“China’s rapid transition to electric vehicles (EVs) has been widely hailed as an economic success story. But it is also creating a serious headache for the country’s local governments, which are tasked with maintaining one of the world’s largest road networks.” EVs accounted for fully 60% of last month’s new car sales, but the EV boom “is creating a growing fiscal black hole, as heavier electric cars send roadwork costs spiralling while simultaneously undercutting the tax revenues used to fund repairs.”
Tags: $60, China, Economic success story, EVs, Fiscal black hole, Fund, Governments, Headache, Heavier, Maintaining, New car sales, Rapid transition, Repairs, Road networks, Roadwork costs, Spiralling, Tax revenues, Undercut
The Times (June 11)
“Since the historic Nato summit in The Hague one year ago this month, European leaders have pledged massive increases in defence spending in the face of increasingly acute threats of Russian aggression. Yet the reality is that key west European governments – especially the UK, France and Italy – are not putting their money where their mouth is for fear of undermining lenders’ confidence in their national debt.”
Tags: Confidence, Defense spending, Europe, France, Governments, Historic, Italy, Leaders, Lenders, National debt, Nato summit, Pledged, Russian aggression, Threats, UK
Reuters (May 22)
“Asia buys about 80% of oil shipped through the shuttered Strait of Hormuz and stress in foreign exchange markets is one of the clearest signs that rising fuel prices are starting to hurt growth.” Asian governments have been left in “an unenviable position. The path to preserving growth is precarious because falling currencies can shake confidence and stoke inflation, but supporting them with higher rates means a hit for consumers and the economy’s growth engine on top of the fuel shock.”
Tags: Asia, Confidence, Consumers, Currencies, Forex, Governments, Growth, Inflation, Markets, Oil, Precarious, Prices, Rates, Shuttered, Strait of Hormuz, Unenviable
Washington Post (February 26)
“Many Asian governments used threats from President Donald Trump as a pretext to enact unpopular but necessary free-market reforms…. To get lower tariff rates, they agreed to pry open their closed markets to allow in American beef, auto parts and crude oil.” Now that the Supreme Court has ruled against the tariffs and Trump has instead “imposed a baseline tariff of 15 percent… some leaders feel buyer’s remorse.” In fact, it looks like the elusive goal of “liberalizing Asia’s tightly protected markets” may slip away, something that “would be a shame on both sides of the Pacific.”
Tags: Asia, Auto parts, Beef, Buyer’s remorse, Crude oil, Free market reforms, Governments, Necessary, Pretext, Supreme Court, Tariff rates, Threats, Trump, U.S., Unpopular
New York Times (October 6)
“For companies and governments worldwide, defending their digital operations is a constant challenge.” Recent cyberattacks at big British brands demonstrate how they can “upend company operations.” Marks & Spencer, Co-op, and Jaguar Land Rover have all been “severely disrupted by cyberattacks this year, bringing pain to the lives of customers, workers, suppliers and government officials.” In fact, “Jaguar Land Rover hasn’t built a single car” since shutting its systems down on September 1. This has halted “production at its factories in England, as well as sites in Brazil, China, India and Slovakia.”
Tags: Brazil, Challenge, China, Co-op, Companies, Customers, Cyberattacks, Defending, Digital, Governments, Jaguar Land Rover, Marks & Spencer, Officials, Operations, Suppliers, UK, Upend, Workers
Washington Post (June 25)
“Governments around the world are scrambling for ways, often at great fiscal cost, to slow or even reverse their baby busts. From cash incentives to paid leave, the results have been disappointing.” They would do better to quit fighting and focus on adaptation. After 17 years of population decline, Japan “now offers a surprisingly hopeful counter that an aging economy can still offer growth and prosperity.” Recent analysis by Goldman Sachs found that in Japan “the demographic decline that once drained vitality is now creating a ‘virtuous cycle’ of tightening labor markets, increased worker bargaining power and more investment in productivity-enhancing tech. These trends are helping prop up the economy even as it weathers a shock from the U.S.-led trade war.”
Tags: Adaptation, Aging economy, Baby busts, Cash incentives, Cost, Demographic decline, Goldman Sachs, Governments, Growth, Investment, Labor markets, Paid leave, Population, Prosperity, Reverse, Scrambling, Tech, Virtuous cycle
Fortune (January 20)
“Two-thirds of the world’s population already lives in countries where fertility is below” the replacement rate (an average fertility rate of 2.1 children per female). “Some of those economies are on track to see 20%-50% population declines by 2100, requiring big changes to societies and governments.” Younger people will also face a growing burden. “The world’s support ratio was 9.4 in 1997, or more than nine working-age people supporting one older person,” but this is expected to drop to just 3.9 by 2050 and currently stands at 6.5.
Tags: 1997, 2050, 2100, Burden, Children, Economies, Fertility, Governments, Population declines, Replacement rate, Support ratio, Two-thirds, Working-age
The Economist (May 4)
“It is easy for investors to lose a fortune in the financial markets—and even easier for governments.” When Japan tried to prop up the yen in 2022, the nation “spent more than $60bn of its foreign-exchange reserves,” but supporting a currency “is expensive and futile.” Since breaking the ¥160/$1 barrier, there are rumors of another intervention. As long as the giant interest rate gap exists with the U.S., Japan would be “wrong to try to prop up the yen.”
Tags: $60bn, ¥160/$1, 2022, Currency, Expensive, Financial markets, Forex, Futile, Governments, Interest rate, Intervention, Investors, Japan, Reserves, Yen
Wall Street Journal (July 31)
“Once a lonely and largely impassable maritime expanse where countries worked together to extract natural resources, the Arctic is increasingly contested territory. As sea ice melts and traffic increases on the southern edges of the Arctic Ocean, governments are maneuvering in ways that mirror great-power rivalries in lower latitudes.”
Tags: Arctic, Contested, Governments, Great-power rivalries, Impassable, Lonely, Maneuvering, Maritime expanse, Melts, Natural resources, Sea ice, Traffic
Fortune (April 24)
“National governments are spending a record amount of money on defense and arms, as Russia’s invasion of Ukraine and a more complicated geopoltical environment push countries to buy more military equipment.” All told, defense spending grew by 3.7% in 2002. Roughly “half of that increase was due to a 640% surge in military spending by Ukraine, as the country quickly expanded its armed forces to defend against the invasion.”
Tags: Arms, Complicated, Defense, Environment, Geopoltical, Governments, Military equipment, Record, Russia, Spending, Ukraine
