Category Archives: Economics

Data, not arms, the key driver in emerging US-China cold war | Robert Reich

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Cybersecurity comes down to which side has access to more information about the other and can utilize it best

This week, shares in China’s giant ride-hailing app Didi crashed by more than 20%. A few days before, Didi had raised $4.4bn in a massive IPO in New York – the biggest initial public offering by a Chinese company since Alibaba’s debut in 2014.

The proximate cause of Didi’s crash was an announcement by China’s Cyberspace Administration that it suspected Didi of illegally collecting and using personal information. Pending an investigation, it had ordered Didi to stop registering new users and removed Didi’s app from China’s app stores.

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Delta variant fears send shares down sharply in London and Europe

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Investors worry resurgence of Covid-19 cases will slow economic growth and stall global recovery

Fears that the fast-spreading Delta variant of Covid-19 will hurt the global recovery sent stocks sliding on Thursday, as investors worried that economic growth could be slowing.

Shares fell sharply in London and across other European exchanges, after losses in Asia-Pacific markets, on concerns that the economic rebound from the shock of the pandemic may have peaked, and on signs of a slowdown in China.

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‘Poverty divides us’: gap between rich and poor poses threat to China

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Xi Jinping himself has warned China’s wealth gap is not only economic but political and could threaten party’s legitimacy

When Wang Zhenyu moved out of his small village in central Henan province to the coastal city of Dalian at 18, he was astonished. “It was like a culture shock for me, even though it was just a big city in my country, not a foreign land.” A few years later when he was enrolled in Peking University as a graduate student, he found much fewer students in the country’s top university coming from a similar background to his.

Growing up in a small village of 2,000 farmers, many of Wang’s childhood friends dropped out of school after finishing their nine years of compulsory education. Now with a decent academic job, Wang begins to experience “reverse culture shock” every time he goes back to his village for the annual lunar new year.

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Forget GDP, ‘vulnerability index best gauges aid’ to small islands

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Commonwealth research says UVI is better measure of small island states’ aid needs, especially on climate

Small island nations on the climate crisis frontlines have been overlooked in overseas aid, according to a new index.

Urging a move away from the current benchmark of using gross domestic product (GDP) to measure aid allocation, researchers from the Commonwealth secretariat and the Foundation for Studies and Research on International Development (Ferdi), a French thinktank, have developed the universal vulnerability index (UVI) as an alternative. GDP, they claim, fails to reflect the realities nations face, particularly on climate.

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UK Covid recovery at risk as furlough scheme phased out, say economists

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Business leaders also warn of renewed threat to jobs and growth as Delta variant drives up infections

Britain’s economic recovery from Covid-19 is coming under pressure amid worker shortages and lengthier pandemic restrictions, as the Delta variant of coronavirus drives up infection rates.

As the government begins to wind down the furlough scheme on Thursday – despite delaying its roadmap out of lockdown by four weeks until 19 July – the Guardian’s monthly snapshot of economic developments suggests the pace of recovery has plateaued.

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Catalonia: threat to impose massive fines on ex-minister prompts outcry

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Dozens of Nobel laureates sign open letter condemning treatment of economist Andreu Mas-Colell

Threats of massive fines against the economist and former Catalan finance minister Andreu Mas-Colell for his alleged role in Catalonia’s failed independence bid in 2017 have prompted international condemnation.

Mas-Colell, 76, who served as finance minister from 2010-16, is among 40 officials, including the former Catalan presidents Artur Mas and Carles Puigdemont, accused by a tribunal of illegally using €4.8m of public money between 2011 and 2017 to further the cause of independence.

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Recipe for inflation: how Brexit and Covid made tinned tomatoes a lot dearer

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Combine the pandemic with rising raw material costs, stir in a labour shortage, a twist of Brexit, add a pinch of poor weather and voila …

Tinned tomatoes are a taken-for-granted store cupboard staple, relied upon by Britons to whip up home cooked favourites such as spaghetti bolognese. But the price could soon make you take notice, amid warnings of higher shopping bills, set against a backdrop of soaring global food prices.

From the packaging to the transportation and the energy used in manufacturing, nearly all aspects of the production of this popular ingredient now cost more. The crushed tomatoes alone are 30% dearer than a year ago, at €0.48 per kilo. The same pressures are driving the prices of many foods higher, meaning Britons will probably face bigger bills for groceries or meals out this autumn.

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Half of Zimbabweans fell into extreme poverty during Covid

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Poor families cannot afford healthcare and schooling but good harvests offer some hope, World Bank finds

The number of Zimbabweans in extreme poverty has reached 7.9 million as the pandemic has delivered another economic shock to the country.

According to the World Bank’s economic and social update report, almost half of Zimbabwe’s population fell into extreme poverty between 2011 and last year, with children bearing the brunt of the misery.

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Number of EU citizens seeking work in UK falls 36% since Brexit, study shows

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Figures from the jobs website Indeed expose the impact on employers as they struggle to recruit staff

The number of EU citizens searching for work in Britain has fallen by more than a third since Brexit, according to a study that exposes the impact on UK employers as they struggle to recruit staff.

Figures from the jobs website Indeed show searches by EU-based jobseekers for work in the UK were down by 36% in May from average levels in 2019. Low-paid jobs in hospitality, the care sector and warehouses recorded the biggest declines at 41%.

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China rushes through law to counter US and EU sanctions

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Foreigners could be placed on an anti-sanctions list and denied entry into China or expelled from the country

China has passed a law to counter foreign sanctions in response to US and EU pressure over trade, technology, Hong Kong and Xinjiang.

Individuals or entities involved in making or implementing discriminatory measures against Chinese citizens or entities could be put on an anti-sanctions list and may be denied entry into China or be expelled from the country. Their assets within China may be seized or frozen and they could be restricted from doing business there.

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Global economy set for fastest recovery for more than 80 years

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Slow Covid-19 vaccine progress in low-income countries will widen divisions between rich and poor nations

The global economy is set for the fastest recovery from recession for more than 80 years, but poor nations are at risk of falling further behind wealthy countries amid slow progress with the Covid-19 vaccine, the World Bank has said.

In its half-yearly outlook report, the Washington-based institution said the world economy was forecast to grow at 5.6% this year, in a sharp upgrade from previous estimates it made in January for growth of 4.1%.

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Why cryptocurrencies may remain merely a bit on the side

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Wise Bank of England heads are pondering the case for a state-run digital currency this week. But do we really need one?

When Google announced that bitcoin traders would be allowed to buy advertising space on its pages from August, central banks were alerted to the next likely surge in publicity for cryptocurrencies.

The increasing activity around digital currencies has not gone unnoticed at the Bank of England, and on 7 June Threadneedle Street’s brightest will publish a consultation document, setting out how a publicly operated electronic coinage system – one that would rival bitcoin – might work.

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Education for girls and vaccines can save Africa from disaster | Phillip Inman

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Parts of the continent potentially face a decade of crisis. These two measures are more important than any other in avoiding it

There are so many good causes in the world it is often difficult to know where aid money should go. As leaders line up to attend the G7 summit in Cornwall, the most effective destinations for aid money have become clearer – a global vaccination programme and improving girls’ education.

This is especially true in sub-Saharan Africa, where so much can go wrong over the next 10 years – a population explosion, massive biodiversity loss, desertification, famine and mass migration to mention just a few – that unless we focus our efforts on vaccines and girls’ education, whatever is done to alleviate poverty or tackle the climate emergency will be threatened or even sabotaged in almost every other region of the world.

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Research findings that are probably wrong cited far more than robust ones, study finds

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Academics suspect papers with grabby conclusions are waved through more easily by reviewers

Scientific research findings that are probably wrong gain far more attention than robust results, according to academics who suspect that the bar for publication may be lower for papers with grabbier conclusions.

Studies in top science, psychology and economics journals that fail to hold up when others repeat them are cited, on average, more than 100 times as often in follow-up papers than work that stands the test of time.

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UK ‘faces labour shortage’ as Covid and Brexit fuel exodus of overseas workers

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Experts say recovery at risk amid sharp fall in EU workers and dwindling interest in UK jobs from abroad

Britain’s employers are struggling to hire staff as lockdown lifts amid an exodus of overseas workers caused by the Covid pandemic and Brexit, industry figures reveal.

According to the Chartered Institute of Personnel and Development (CIPD) and the recruitment firm Adecco, employers plan to hire at the fastest rate in eight years, led by the reopening of the hospitality and retail sectors as pandemic restrictions are relaxed in England and Wales on Monday.

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UK dairy firms try to count the cost of churn in post-Brexit trade

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Country Milk’s trade with the EU has nosedived with the dairy industry particularly badly affected by new customs rules

A small error in the paperwork – a box ticked by mistake – and the tanker of butter oil was held at French customs for five days, with veterinary authorities at the border threatening to destroy it. The debacle nearly cost the tanker’s exporter, dairy company County Milk, a six-figure sum. After fraught negotiations, the cargo was eventually repatriated.

“You don’t need too many of those to be destroyed and you are in dire straits,” says Phil Langslow, trading director at County Milk, the UK’s largest privately owned dairy ingredients business.

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Biden attempts to consign trickle-down economics to the dustbin of history

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Analysis: why the president wants to build the US economy from the middle and bottom, not top down

Cut taxes on the rich. Unleash a wave of entrepreneurship. Growth will pick up and more jobs will be created. Everybody benefits. That, in essence, is trickle down – a theory of economics that Joe Biden wants to consign to the dustbin of history.

The US president was a young politician when the idea that cutting taxes on the well-off would be good for the poor first came into vogue in the 1970s. Now he has used his first address to a joint session of Congress to call on the US’s top 1% to pay for his $1.8tn (£1.3tn) American families plan – higher spending in areas such as education, childcare and infrastructure.

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Ireland will resist global corporate tax rate, says finance minister

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Paschal Donohoe says Dublin will not accept reforms that affect its ability to undercut its rivals

Ireland’s finance minister has signalled the country will resist attempts to rebalance the global tax system if they affect Dublin’s ability to undercut its rivals.

Under new tax proposals led by the US, Ireland could lose 20% of its tax revenues, according to Paschal Donohoe.

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FTSE 100 closes above 7,000 for first time since Covid crash

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Shares rise by more than 30 points as China reports record economic growth

The FTSE 100 has closed above 7,000 for the first time since the Covid-19 pandemic triggered a collapse in global markets last year, driven by rising hopes for the world economy after record growth in China.

The index of leading UK company shares ended the day up 36 points on Friday, or 0.5%, at 7,019, the highest level since late February 2020 when the first wave of Covid-19 sent shock waves through financial markets around the world.

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Gordon Brown calls for G7 to act on Covid vaccine ‘apartheid’

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Former prime minister says group should commit to global vaccine drive and slams UK’s foreign aid cut

Preventing poor countries suffering from vaccine “apartheid” will require the G7 group of rich nations to commit $30bn (£22bn) a year to a global immunisation drive, Gordon Brown has said.

The former Labour prime minister said the UK should use June’s G7 summit in Cornwall to rekindle the moral purpose of the Make Poverty History campaign of 2005, paying for its share of the new fund by reversing the government’s “misguided” cut to the foreign aid budget.

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