Recommended Weekend Reads

September 15-17, 2023

Here are our recommended reads from reports and articles we read in the last week. We hope you find these useful and that you have a relaxing weekend.   And let us know if you or someone you know wants to be added to our distribution list.

Indo Pacific

• “Electric Shock: Interpreting China’s Electric Vehicle Export Boom”  Center for Strategic and International Studies

  China’s rise as an automotive exporter is fueled by the growing importance of the country’s globally leading electric vehicle (EV) industry. However, despite the rapidly increasing sales by domestic firms like BYD, many of the EVs exported from China are made by Western companies like Tesla that have significant production capacity in the country. Exports of EVs made in China have critical implications for both legacy carmakers and policymakers in regions like Europe and the United States that have strived to diversify clean tech supply chains away from China while also advancing decarbonization. For the United States and Western Europe, focusing on boosting domestic innovation and manufacturing will continue to be an important tool to face this challenge.

• “Measurement Muddle: China’s GDP Growth Data and Potential Proxies”  Big Data China

  How fast is China’s economy growing? Or, given the recent trends, how much is it slowing down? Obtaining a reliable answer to these seemingly straightforward questions has proved amazingly elusive. Despite the production of mountains of official data and a plethora of unofficial estimates, these are questions for which there are no consensus answers. There has long been a concern that China’s statistical officials have inflated the country’s data for its gross domestic product (GDP), which is ascribed to political incentives to present a rosy economic picture to its populace and the rest of the world (see Figure 1). Another recurring concern has been the undercounting of the contribution of the private sector to the country’s growth and employment, which may be due to its second-class citizen status, which may make it harder for statistical authorities to monitor effectively, and the large share of economic activity that comes from the service sector, which is inherently harder to count than produced goods.

Africa

• “Gabon coup complicates country’s critical mineral ambitions”  Peterson Institute for International Economics

  Gabon, a former French colony, is best known for its oil exports and on-again, off-again membership in the Organization of Petroleum Exporting Countries (OPEC). But it is also the world’s second-largest producer of manganese. Manganese is an important input to iron and steel but also the production of electric vehicle (EV) batteries, with some calling it “the key” to lowering consumer costs and driving widespread EV adoption. Manganese is on the critical minerals/resources lists of the United States, European Union, and South Korea. As recently as 2021, Gabon accounted for 65 percent of US manganese ore imports.

Geo-Economics 

• “The Origins and Efficacy of the Price Cap on Russian Oil”   Russia Matters/Harvard Kennedy School Belfer Center for Science and International Affairs

  In the wake of Russia’s illegal invasion of Ukraine, the international community levied a series of sweeping and unprecedented sanctions designed to disrupt the Russian economy and limit Russian President Vladimir Putin’s ability to wage war. This effort included a price cap on Russian oil, a novel sanctions regime collectively imposed by the G-7, the European Union, and Australia, designed to simultaneously lower Russian revenue while preserving the supply of oil in the global markets. Preliminary assessments, such as an Aug. 3, 2023, analysis by the U.S. Treasury Department, suggest that the price cap has largely achieved these goals to date. Global supply remains mostly stable, and Russian oil continues to be sold at a discount relative to similar products produced by other countries.

Global

• “Five Things to Watch for at the UN General Assembly Opening”   Carnegie Endowment for International Peace

  The coming days will reveal whether the UN can remain relevant in a divided world. Top of FormBottom of Form  When world leaders convene next week for the annual opening of the UN General Assembly, the assembled nations will be anything but united. Geopolitical rivalries, political grievances, economic upheaval, and ecological crises are testing the legitimacy and credibility of the seventy-eight-year-old body. 

Graphic of the Week 

Where is Your Cup of Coffee Coming From?

 We are addicted to it in many forms.  But do you know where your coffee was grown?  It might surprise you. Bloomberg did a deep dive this week in the coffee industry.  Coffee is grown in about 70 countries, with five of them — including Brazil and Vietnam — making up about 85% of the world’s output. The rest comes from some 9.6 million growers in smaller producers around the world.