Biden tries a new tool for handling China: realism 24 May 2022 At first glance a pact with India, Japan and Vietnam looks short on substance and skips sensitive issues. The U.S. also looks likely to drop many tariffs against China. But where his predecessors’ bids to woo or contain Beijing failed, Biden’s are at least likely to prove durable.
Smaller, warmer Davos confronts a siloed world 23 May 2022 The Swiss confab of global leaders returns this week after a gap of over two years. Pandemic, war, and the unusual spring timing explain some notable absences. As markets tumble and economies turn inward, founder Klaus Schwab’s knack for brokering relationships faces a test.
U.S.-China divide creates fast lane for Hyundai 23 May 2022 President Joe Biden's meetings with South Korean conglomerates signal closer bilateral ties. Both sides can benefit from less reliance on Beijing. For the automaker, which just pledged to invest $10.5 bln in America, access to the growing U.S. market might be the biggest prize.
Australian election augurs serious climate upgrade 23 May 2022 Labor’s more ambitious green goals helped unseat the conservative coalition. Wins by climate-focused independents warn further against complacency. New Prime Minister Anthony Albanese also will rely on Greens for support. Bolder 2035 emissions targets would set the right tone.
Ukraine’s spare energy can help itself and Europe 20 May 2022 The war-torn nation generates more electricity than it needs, and from carbon-neutral nuclear plants, too. But its links to the EU power grid are sketchy. Helping Ukraine bolster exports to the EU would support Kyiv’s economy while easing the bloc’s energy headache.
Drought of economic ambition blots Aussie election 20 May 2022 Despite a 48-year low in joblessness and navigating the pandemic, Prime Minister Scott Morrison’s party is in a dogfight. Homebuyer and dam-building policies smell fishy, and a lack of climate leadership hurts too. As times get tougher, whoever wins will have to be bolder.
Egypt’s hunger pangs are like 2011, but worse 19 May 2022 A decade ago the soaring cost of bread helped unseat Cairo’s long-term ruler, Hosni Mubarak. In 2022 food prices are rising faster, and Egypt’s population and debt are bigger. The more prices rise, the trickier the tradeoff between enraging financial and domestic constituencies.
China sits in Russia oil sanction sweet spot 19 May 2022 Moscow’s cheap crude, spurned by the West, is heading to Asia. Yet the increase in China is less than in India, and European states like Italy are still snapping it up. That reduces the scope for Beijing to suffer blowback, and raises the chance that it will buy more.
EU funds can ease, not end common energy pain 18 May 2022 Brussels has earmarked 300 bln euros to cut fossil fuel ties with Russia. Rising rates make cheap, repurposed Covid-rescue loans more attractive to many EU states, increasing the chance they’ll be used. But higher fuel purchases will still have to come from national budgets.
Using Russian assets in Ukraine would be a mistake 17 May 2022 Seizing $200 bln of central bank reserves frozen by the EU and U.S. could provide financial relief and moral comfort to the war-torn country. But it would also trigger legal fights and give Russia even less reason to back down. Confiscation is no substitute for a realistic plan.
Polish mortgage holiday is bad idea with allure 17 May 2022 Warsaw wants to protect citizens from surging inflation and interest rates by offering breaks on home loan repayments. That would cost the country’s banks up to $3.6 bln. Forcing lenders to bear the effects of Russia’s war is crude and distortive, but may also win votes.
Germany and France could make ECB’s life easier 16 May 2022 Inflation is surging in Europe’s biggest economies and the central bank is keen to avoid a wage-price spiral. If Berlin and Paris help the poorest households cope with rising costs, there may be less pressure for hefty pay rises. That would be a big help for rate-setters.
Xiaomi fight puts China Inc on India red alert 13 May 2022 The country’s tax and financial agencies have tried to block some $1.2 bln of the smartphone maker’s funds. New Delhi engaged Vodafone, Cairn and others in similar battles but its testy relations with Beijing up the ante. Xiaomi and Chinese peers in India face a slow decline.
Global brands set too much store in China recovery 13 May 2022 Western companies like Estée Lauder and Remy Cointreau remain hopeful about the country even though lockdowns have hit revenue. Yet continued mass testing due to Beijing’s zero-Covid push will weigh on demand. Excessive optimism risks delaying a much-needed diversification drive.
Emerging markets offer dubious investment appeal 12 May 2022 Stocks from developing economies have fallen as fast as U.S. equities. While they offer diversification benefits, China’s inclusion will weigh on future returns, Edward Chancellor argues. At the very least, investors should remove the People’s Republic from their portfolios.
India heatwave throws food security for loop 12 May 2022 Crops are wilting after weeks of climate change-induced scorching temperatures. On top of domestic pain, it casts doubt on India’s new role exporting grain to replace supplies lost to Russia’s war in Ukraine. That’ll create more dilemmas for political leaders near and far.
Marcos clan’s return to Manila is awkwardly timed 11 May 2022 The Philippines’ president-elect Ferdinand Marcos Jr, son of the late strongman, inherits an economy that grew 7.7% last quarter, but faces mounting headwinds. He will have to find drivers beyond the infrastructure spending that made his predecessor – and father - so popular.
Capital Calls: Turkey, Nintendo/Sony, India IPO 10 May 2022 Concise views on global finance: President Erdogan makes another ham-fisted monetary intervention; the Switch maker weathers supply chain ructions better than its larger rival; New Delhi needs to be even more generous in its landmark listing of Life Insurance Corp of India.
Zimbabwe borrows from bank of bad ideas, again 10 May 2022 With inflation at 96%, Harare plans to stop further currency slumps by a ban on bank lending. That stymies a sly trade where insiders play the spread between official and black-market FX rates. But as with prior moves it’s a blunt tool that erodes rather than builds confidence.
Post Roe-leak, it’s not the economy, stupid 6 May 2022 Republicans were in a sweet spot ahead of November’s U.S. elections. Joe Biden’s early presidency has brought inflation, a failed attempt to tax the rich, and little help for the middle class. A leaked Supreme Court opinion on abortion, though, changes the calculus.