Trade

German consumer is poor substitute for China trade

21 May 2024

Consumption is up but won’t be enough to lift the country out of its funk, with growth of just 0.2% this year. Exports to the People’s Republic are threatened by worsening relations between Brussels and Beijing. Meanwhile a split Berlin government looks unable to launch reforms.

Private credit wonder drug works in limited dose

17 May 2024

The quantity of loans channelled directly to companies by funds has exploded to more than $2 trln. The economic benefits of diversified lending just about make up for the risks. The challenge is making sure financial innovation does not starve banks to death.

The dollar and the yuan are polar opposites

16 May 2024

The strong greenback and questions over a Chinese devaluation reflect the contrasting outlooks for the two economies. In this Viewsroom podcast, Breakingviews columnists debate why Beijing is unlikely to push down its currency and why the dollar will remain elevated.

Biden’s China policy is backed into a corner

14 May 2024

The president quadrupled tariffs on electric cars from the People’s Republic as homegrown efforts stumble. China leads on tech, and the US depends on the undependable Tesla. Muddled policy on everything from steel to batteries will only up the pressure for more rearguard actions.

Yuan devaluation isn’t worth the trouble

14 May 2024

A weaker currency would boost exports and prices, but speculation China could engineer a fall underestimates Beijing’s desire for a stable exchange rate. Aggressive US tariffs could change the calculus. For now, official signals point to a slow grind lower against the dollar.

The world can survive a strong dollar – for now

13 May 2024

The greenback has gained 17% against major currencies in three years. Other countries avoided repeating past crises through better fiscal policies and less foreign borrowing. But in the long run a mighty buck will put economies under stress, especially in emerging markets.

New ASML CEO’s job is harder than it might look

9 May 2024

The $360 bln Dutch firm is the sole maker of machines that produce the most advanced chips for Intel and TSMC. New boss Christophe Fouquet effectively runs a monopoly. But he still faces risks from staff retention, China-US spats, and as-yet-opaque risks to ASML’s domination.

EU’s China car tariffs face a very high bar

6 May 2024

Brussels would need levies as high as 50% on Chinese imports to slow sales by BYD and rivals, double recent precedents. It'd prompt a sharp response. President Xi Jinping can use his visit this week to remind Europe’s carmakers how much they stand to lose in such a scenario.

Von der Leyen’s China plan is all bark and no bite

30 Apr 2024

To keep her job atop the European Commission, Ursula von der Leyen will talk tough but wield a small stick towards Beijing. Open supply lines from the People’s Republic are key to Europe’s economic well-being. Brussels’ rhetoric will likely be harsher than sanctions and tariffs.

Silicon Valley models value of noncompete ban

24 Apr 2024

A new FTC rule forbids US companies from stopping employees joining a rival, or starting one. Freeing up opportunities for a fifth of the workforce should boost pay. California’s tech hub also showcases other benefits of labor mobility. Intel, for example, exists because of it.

Why rich nations have to keep helping poorer ones

16 Apr 2024

The world faces many onerous financial and climate challenges. Still, as Axel van Trotsenburg, the World Bank’s Senior Managing Director, explains in this Exchange podcast, governments and companies in advanced economies cannot afford to stop supporting developing ones.

China’s overcapacity is here to stay

9 Apr 2024

US Treasury Secretary Janet Yellen warned Beijing not to hobble Western firms by flooding markets with cheap exports. It’s a valid concern: banks are lending more to industry amid weak local demand. But China’s growth target means its factories have to keep churning out goods.

Next Chinese trade war could benefit the planet

8 Apr 2024

As Beijing floods the world with cheap green goods, the West will put up trade barriers. That will delay the energy transition in the United States and EU. But the glut of EVs, solar panels and the like will speed it up in China and much of the Global South.

TSMC’s most complex engineering task is itself

3 Apr 2024

The $625 bln chipmaker has built a monopoly in advanced semiconductors by staying in Taiwan. Now it’s expanding abroad, spurred by subsidies and US-China tensions. Despite higher costs, it can generate decent returns. The bigger challenge will be keeping its technological edge.

LNG angst seeps from consumers to producers

27 Mar 2024

A few years ago, supplies of liquefied natural gas were scarce and prices sky-high. Extra capacity arriving this decade means there could soon be a price-sapping glut. Big suppliers like Qatar and Shell have long-term contracts that can ease the pain, but only up to a point.

Mexican wave of nearshoring firms is all at sea

19 Mar 2024

The country’s proximity to the US could make it a preferred destination as multinationals move away from Asia. Companies like Merck and Tesla are building factories there but, so far, manufacturing is not growing. With relocations costs soaring, an economic boom looks elusive.

Time continues to be on TikTok’s side

12 Mar 2024

A US bill that would force the social media app’s parent ByteDance to sell the platform is gaining ground. Demands are like those made years ago, only the app is now more powerful, the relationship with China more complicated, and politicians less willing to compromise.

China’s financial clout will be hard to reverse

4 Mar 2024

Exports from the People’s Republic upended the world economy. Its $4.3 trln hoard of foreign assets is doing the same for global finance. As with trade, winding back the clock will not work. Multilateral problems require multilateral solutions.

UAE makes $35 bln bet on Egyptian virtuous circle

26 Feb 2024

The Gulf state is amping up support for Cairo by investing in a huge coastal tourist scheme. Prompt cash may make the recipient’s IMF loan deal more likely, and the UAE gets most of the project’s upside. But the plan reflects the scale of regional concern about an imploded Egypt.

Adani is a gift that will keep on giving

14 Feb 2024

Its flagship company is a top coal trader and is incubating new businesses from green power to airports. That will soon produce a wave of IPOs. Asia's richest man will keep testing and shaping India's $4 trln stock market for years to come.