Three consecutive editorials in China's People's Daily have expressed concern that the country's demographic crisis could hit its economic growth. It follows China's population falling to 1.41 billion last year, marking its first decline in six decades after a record low birth rate of 6.77 per 1,000 people. The editorials supported President Xi Jinping’s vision to create a “talent dividend” by ensuring the development of individuals and boosting education. However, Professor Yuan Xin of Nankai University's School of Economics said there is a growing disadvantage in terms of population size and migration, optimisation of human capital, “will finally become quiet”.
Demand for internships dropped by 19% on last year's figures, with the steepest fall (61%) seen in software development, according to a report by Indeed.com. Marketing and finance followed software with drops of 41% and 43%, respectively. Summer jobs declined by 17%, while course-related work, which can be taken for university credit or as part of a co-op programme, was down by 43%. However, overall demand for internships was 18% higher than pre-pandemic levels. Meanwhile, demand for summer and seasonal staff was up by 55%.
Queen Elizabeth II’s funeral cost taxpayers £162m, which has encouraged a discussion over whether the Royal Family is worth the cost. The British government funds the King’s official business through an annual payment from the “Sovereign Grant”. Additionally, the monarch receives approximately 15% of the profits from the Crown Estates, including London's Regent Street. The Royal Family is invaluable for attracting tourism to the UK, pumping hundreds of millions of pounds into the country, generating almost £10m in income to supplement the Sovereign Grant. The Royal Family is a connection to a rich history and heritage that millions of people globally travel to see.
Growing numbers of foreign students are enrolling in UK universities, many of which are not of the highest quality, according to journalist Sarah Vine in the Mail on Sunday. The primary reason for the influx is be the offer of work permits, meaning many students do not leave when their courses finish. Britain’s leading educational institutions have granted a rising proportion of places to international candidates, with Imperial College boasting a 60% enrolment figure of overseas students. Critics argue the UK’s higher education sectors functions like a Ponzi scheme, with senior management benefiting from high salaries and staff often languishing on lower pay. Children with top academic records from less privileged backgrounds are being rejected from the best universities, only to be replaced with overseas students offering £29k in fees. Many experts claim the government has ignored the impact on social mobility by promoting the recruitment of foreign students for the sake of the higher education industry’s profit margins.
Queen Elizabeth II’s funeral cost taxpayers £162m, which has encouraged a discussion over whether the Royal Family is worth the cost. The British government funds the King’s official business through an annual payment from the “Sovereign Grant”. Additionally, the monarch receives approximately 15% of the profits from the Crown Estates, including London's Regent Street. The Royal Family is invaluable for attracting tourism to the UK, pumping hundreds of millions of pounds into the country, generating almost £10m in income to supplement the Sovereign Grant. The Royal Family is a connection to a rich history and heritage that millions of people globally travel to see.
Oxford University has pushed back against allegations that it is restricting freedom of speech. The University issued a statement saying that both the university and its associated colleges hold “hundreds of events each term” and that freedom of speech is “alive and well at Oxford,” with a policy of allowing “difficult views” to be heard. The statement added that although student union had concerns about the activities of the Oxford Union debating society, it would continue to encourage open discussion and dialogue. The remarks followed a letter from former Oxford Union President Nick Gallagher, who said that the union had been barred from last year’s freshers fair because of action by the student union.
If the US fails to reach an agreement to raise the debt ceiling, financial markets will experience a global "black swan" event that would make the 2008 crisis look insignificant, with it causing a downturn that would affect the whole of the UK, according to Simon French, chief economist at investment bank Panmure Gordon. It would also lead to a sharp drop in the value of the dollar, which would make food and fuel more expensive and raise the cost of living for millions of consumers, as well as make British mortgages more expensive and increase unemployment.
Alex Salter's new paper for The Heritage Foundation explores the relationship between free markets and the common good, and the framework it provides for thinking about economics, the human person, and community. Salter engages with nationalist trends on the American political right, rather than dismissing them as incompatible with classical liberal conservatism, and aims to figure out what the disagreements between the newer kind of conservative and older classically liberal conservatives are as well as to discuss the policy going forward. He highlights that just because there is a good understanding of how markets work, this does not necessarily give way to a broad-based deep-level critique of society's basic institutions.
Salter uses the example of Catholic social teaching to explain what is meant by the ‘common good’. He argues that if someone sees the world and only sees individuals, they are unlikely to see meaning in the concept of the common good. However, communities, such as families, nations, and other social institutions, are real and have needs that are not reducible to some private goods of their individual members. Therefore, Salter makes the case for engaging the broader political economic art that exists beyond scientific economics to help ensure essential communities can shape their individuals for the greater good.
As sanctions bite deeper into the Russian economy, and as defence spending is increased significantly, Russian finance minister, Anton Siluanov, ramped up talk this week that Russia has the means to withstand its downgrading by ratings agencies last week. Part of the rhetoric previously from finance ministry officials has been that Russia "has no plans to make any absolutely extraordinary moves or ask for any extraordinary measures". However, hard-hitting US and EU sanctions due to Obama last week broaden the economic pressure on Russia, to the point that Moscow's finances are being pushed to the brink. Many expect the outflows and balance sheet pressures to continue to build.
MIT economics professor Daron Acemoglu has published a book called Power and Progress that examines the past millennium of technological progress, its imbalances and the need for proper incentives and regulatory safeguards to be put into place. While it was assumed neoliberal globalisation would always be beneficial, Acemoglu's research shows that major technological disruption such as the Industrial Revolution can flatten wages for an entire class of working people, involving distributional conflict and power dynamics. He argues capital takes what it wants in the absence of constraints and technology is a tool that can be used for good or ill. Acemoglu says it's not automatic and economists must remember this process as it can create growth but not enrich the masses.
Economist Paul Krugman has responded to the widely held theory of why governments should not continuously run up debt. Krugman points out that individuals face a predictable life cycle in which earnings dwindle and lenders therefore expect individuals to pay off debts whilst their income is still high. Governments, on the other hand, normally see revenues rise. Consequently, whilst governments have to service their debts, there is no need to pay them off. Krugman highlights that discussion of government debt is often misleading and governments can often expect to see their ability to generate tax receipts grow year after year.
The UK economy is feeling the impact of the millions of people who stopped working during the pandemic and never returned, as growing numbers of work-limiting health conditions are keeping people out of the workforce. Economic productivity is suffering as one person is sick or unable to work long term for every 13 people working. The director of economic statistics at the Office for National Statistics says absenteeism is more serious than presenteeism, or working while ill, as it means people remain ill for longer. A report released earlier this year showed that by 2020, the first year of the pandemic, 18.1% of 16- to 64-year-olds had work-limiting health problems, amounting to over 7.5 million people. The number of those not in employment or seeking it is up by around 400,000 since the start of the pandemic. The knock-on effects of long-term absence from work continue to grow, with senior economists warning that the economy and businesses will both suffer as a result.
Economist Robert Lucas has died aged 85. His work moved economics away from the liberal Keynesian policies of the 1960s, instead adopting the conservative view that fiscal or monetary fine-tuning is a futile exercise. Lucas authored a series of models which are now the standard tools of macroeconomics, used by those who share his opinions as well as his detractors. While his contributions to fiscal policy, urban economics, and international trade were admired, his argument in 2003 that the task of preventing economic depression had been successful was contradicted by subsequent events.
Zibo, a formerly debt-ridden industrial centre in China’s Shandong province, has turned around its fortunes with a heavily-advertised “barbecue festival” designed to draw holidaymakers on a budget. Campaigners from the city government used discount vouchers, an interactive WeChat map and monitored pricing in hotels and restaurants to create a buzz around the event, which drew more than 120,000 visitors over the Labour Day holiday. While the measure may have contributed to an increase in the number of young people storming the city for the low cost option, doubts have been raised about whether barbecue can truly revive Zibo's local economy, which has recently experienced weakening export demand along with Covid-related disruptions in its chemical business. To maintain growth, the city must diversify its service industry, according to Chen Ji from the Capital University of Economics and Business.
Services exports from the UK have grown by 17.8% from 2016 to 2022, according to data from the Organisation for Economic Co-operation and Development, marking the strongest growth in the G7. While goods exports fell in the last quarter of 2022, leading economist Sophie Hale has labelled the rise in services export as a "boom" and equating the UK's growing ability to provide high-skilled professional and business services. The Bank of England has also revealed that approvals by banks to households for house purchase loans were at the highest in February since April 2015. This activity shows signs of stability for the UK's economy, with market experts stating that the growth reflects the value of the country’s service-based industries, including travel, education and banking.
Detente seems to be in the air between China and America according to an opinion piece in Bloomberg. It describes several significant breakthroughs in meetings between Chinese and American officials, a far cry from the frosty silence of recent times. Perhaps most poignantly, President Joe Biden’s National Security Adviser Jake Sullivan recently gave a speech at The Brookings Institute where he appeared to be intent on making Cold War II less chilly. Moreover, the opinion piece argues that the Chinese economy may not live up to its great expectations, showing some signs of headwinds with China’s dire demographic prospects and over-leveraged and depressed real estate sector.
As part of a drive to reduce poverty, Chinese officials are warning of the risks of mounting rural debt. They point to weaknesses, particularly in the agricultural sector, and a lack of options as collateral for loans as contributing to risk in the sector. A deputy head of the Ministry of Agriculture and Rural Affairs’ budget and finance department warned there is "too much risk" for lenders operating in rural areas. The Chinese central government is continuing to provide financial support for rural areas with loans totalling ¥49.25tn ($7.03tn) across agriculture and rural development.
Mindfulness is growing in popularity in executive education training, with schools using self-awareness and live-in-the-moment techniques to help business leaders adopt more reflective, analytical and collaborative managerial styles. This follows a trend towards encouraging reflection in executive education programmes that is not new. More than 25 years ago, Canadian academic Henry Mintzberg helped launch the International Masters Program for Managers, which focuses on five mindsets, one of which is the "reflective mindset", and emphasises the sharing of other people's management and decision-making styles. As we reported earlier this year, employers in the US are also being more proactive with mindfulness programmes, with more than half of all US employers offering some form of mindfulness training to workers. However, while studies have shown that mindfulness can improve self-esteem and reduce anxiety, some psychologists have warned that people who practice mindfulness may have the opposite effect, becoming anxious or leading to them having panic attacks.
A non-profit backed by fellowships engager Arsht-Rock Foundation and microinsurance start-up Blue Marble as well as a trade union, has teamed with ICICI Bank on one of the world's first insurance policies for extreme heat, which has 21,000 self-employed women in Gujarat, India, signed up to it so far. The policies offer a small payout if temperatures rise well above historical averages and stay there for at least three days, with payments being triggered if a predetermined threshold is breached. Reinsurer SwissRe has reported that global sales of parametric products have soared 40% since August 2021, while Allied Market Research estimates the market could hit $29.3bn worth in 2031 up from $11.7bn last year.
China's global port network provides the country with crucial power projection capabilities for its military, according to two defense analysts. China's dominant position in global port infrastructure has given rise to economic and strategic benefits, as the facilities are used to transport crucial commodities to and from the country and support global trade. However, the country's maritime industry also supports emerging signs of Chinese military power projection, with the People's Liberation Army regularly and reliably using Chinese-operated terminals to resupply and refurbish overseas naval forces. Observers say the international port network is now allowing China to project its military power far beyond its shores and will help the country to compete with the US on a global scale.
