As per Reuters, the Trump administration has two motives right now: strengthen its hand in trade talks with the Xi Jinping administration while forcing Beijing to relax its grip on rare earth minerals needed for a wide range of US industries, including vehicle manufacturing, chipmaking, and aerospace.

The US Department of Commerce is positioning itself to increase pressure on Beijing should the White House call upon it to do so.

Washington has already slowed export licensing for airplane parts bound for China in recent weeks. Trump administration officials have also expressed interest in issuing an export regulation that could make it easier to restrict landing gear and other aircraft parts to China.

Another draft version included a new licensing requirement on aviation hydraulic fluid shipped by US suppliers like ExxonMobil.

To prevent stockpiling, the Commerce Department has limited the number of parts licensed for shipment to China’s state-owned planemaker, COMAC.

In October 2025, Trump said the US could impose export controls on Boeing plane parts as part of Washington’s response to Chinese export limits on rare earth minerals.

However, things changed slightly since then.

In the recent summit on the American shores, US and Chinese officials met in New York and Washington to negotiate key economic issues between the two countries, including US access to Chinese rare earth minerals, agricultural trade, and issues around AI safety and governance.

The XI-Trump meet saw both sides extending a trade truce set to expire on November 10, giving negotiators until January 10, 2027, to tackle tougher issues regarding the bilateral exchange of goods and services.

While Trump’s tariff policies have affected nearly every industry since 2025, the aerospace sector has remained largely unscathed.

However, things changed last month, as the Republican, amid the ongoing tariff war with Canada, threatened not to allow Bombardier to sell its planes in the United States unless it starts manufacturing aircraft on the American shores.

However, he chose not to escalate things further as his party went against such harsh trade moves.

The aviation industry in general has been ⁠wrestling with shortages of parts and materials due to geopolitics.

Producers of thermal coating sprays used to protect jet engines, for example, continue to struggle with Chinese controls of rare earth materials that have led to delays.

Beijing has already sought several years’ worth of spare parts for 200 Boeing jets it agreed to purchase last spring, in what would be the US planemaker’s first major deal with Chinese carriers in nearly a decade.

However, the Trump administration reportedly views the parts as leverage to secure future concessions and has been reluctant to provide guarantees.

The American aerospace suppliers have established a sort of monopoly when it comes to China’s dependence for spares and parts for Boeing and Airbus jets operated by Chinese carriers, as well as COMAC, which eyes ramping up production of its own commercial jets.

However, the Trump administration has effectively utilized the monopoly as a bargaining chip.

In 2025, Washington imposed new export restrictions on aircraft products as the trade war with Beijing intensified.

The White House also suspended export licenses for GE Aerospace’s jet engines, Honeywell Aerospace navigation systems, and other parts ⁠for COMAC.

Even the manufacturers of hydraulic fluid used in Chinese airplanes came under the short-lived export license requirement.

Image Courtesy: White House

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Virtual agreement exists that mastering emerging technologies is essential to winning the geopolitical competition of the twenty-first century. As Russian President Vladimir Putin warned, a leader in artificial intelligence (AI) “will become the ruler of the world.”

After that, a consensus quickly disintegrates. There is disagreement on which technologies are essential or how to “master” them. There is great excitement surrounding “innovation,” which has sparked a spate of government activity to support and encourage that creativity. But this might not be the best course of action. Entrepreneurs slogging away in garages and incubators with an idea in mind and hoping for an extensive initial public offering won’t produce success in the tech industry. Instead, governments should concentrate on integrating new technologies into all sectors of the economy. It’s not a sprint but a marathon.

Since the industrial revolution, innovation has been the primary engine of long-term economic growth. Increased productivity allows for the release of some resources and the creation of new applications for others. As a result, the value rises, generating wealth, and development follows.

In the past, emphasis was on creating those fresh concepts. That reflects both the availability of metrics that measure relative success rates and the Anglo-American orthodoxy that prioritizes markets over all other factors (i.e., that an individual’s or a specific business interest’s effort is more important than the society in which they operate) (R&D spending, in particular). In some nations, a potent “science lobby” supports this tendency.

The focus is on creating innovations. According to economist Michael Kitson at Cambridge University’s Judge Business School, the focus on creating innovations is erroneous. Instead, he contends that prioritizing the diffusion of innovation across the economy is a better strategy. As “innovation-using sectors” are much larger than “innovation-generating sectors,” creation diffusion has dramatically impacted economic growth since the industrial revolution. Or, to put it another way, execution is more important than invention.

One of the reasons for deception is that it takes time for new technologies to make an impact. A few inventors can foresee all possible applications for their ideas. We frequently utilize new technology to perform previously completed tasks using outdated methods. Revolutions happen when technologies are used well, sometimes in ways that weren’t previously possible.

Automobiles, for instance, revolutionized how we live because they freed people from the oppression of imposed transportation systems as they sped up travel. Moreover, because cars allowed people to travel wherever they wanted, they made the suburbs possible.

Because of their extraordinary potential impact, new technologies also pose a challenge to significant vested interests. As a result, the political clout of those interests or cultural barriers may prevent adoption (sometimes another expression of those economic interests).

An expert on AI and China, a professor at George Washington University, Jeffrey Ding, approaches this issue from a slightly different perspective. In a paper published in 2021, Ding argued that two opposing paradigms could account for innovation and its effects on the economy and world politics. States advance by dominating “critical technological innovations in new fast-growing industries,” claims the leading sector (LS) approach, which is the standard account (leading sectors). The nation that dominates innovation in these sectors rises to become the world’s most productive economy by taking advantage of a narrow window to monopolize profits in advanced industries.

General Purpose Technologies (GPT), which Ding claims are crucial and are “fundamental advances that can stimulate economic transformation,” present a challenge to the LS framework. GPT impacts economic productivity only after a “gradual and protracted process of diffusion into widespread use,” distinguished by its capacity for constant improvement, pervasive applicability throughout the economy, and synergies with complementary innovations. Consider GPT as an enabling technology for various concepts. The classic GPT includes automobiles, railroads, and electricity. The Internet, artificial intelligence, biotechnology, and nanotechnology are some examples of recent GPTs.

Ding examined three industrial revolutions using his theory. First, the industrial production of interchangeable parts, also known as the “American system of manufacturing,” was spurred by inventions in machine tools during the second period (1870–1914), which embodied the main GPT trajectory. Third, the US advantage in education and training systems also helped to standardize best practices in mechanical engineering and broaden the skill base. In the first decades of the 20th century, this served as the cornerstone for the United States rise to economic prominence on a global scale.

Ding also examined the third industrial revolution, or the development of computers and information, which took place in the final third of the 20th century. However, the dog, in this instance, didn’t bark. Despite all the concerns raised by Japan’s achievements, the geopolitical balance of power has not changed due to Japan’s “remarkable advances in electronic and information technology” or its “lead in technologically progressive industries, such as consumer electronics or semiconductors.” Instead, the United States spread new technology using its “superior ability to cultivate the computer engineering talent necessary to advance computerization,” protecting its economic hegemony.

Ulrike Schaede, a business professor at the University of California, San Diego, bolsters Ding’s theory. She emphasized the 2017 METI study, which revealed that Japanese companies dominated at least 478 global high-technology product markets in “The Business Reinvention of Japan” (out of 931 industries surveyed). She claimed in an email that these businesses are the best in Japan and “have all figured it out.”

However, not even those globally successful companies can propel the Japanese economy. The issue is that internal change resistance is extreme in many businesses. According to Schaede, “Japan’s tight culture (high consensus on what constitutes appropriate behavior and sanctioning of deviants) makes it difficult for reformers to push things through.” “Boycotting of change is common — as common as everywhere else, perhaps, but because it’s quiet and polite, it’s even more difficult to overcome.”

It is not dry academic prose or dry history. Call me traditional, but it seems crucial to comprehend how technological advancements can change the economic balance of power, especially when a transition appears to occur and geopolitical competition escalates. Ding’s theory of GPT diffusion questions accepted wisdom regarding how the power balance between the United States and China may change due to revolutionary technologies. His analysis, which focuses on the two nations’ capacity to implement AI across the economy rather than total R&D spending or notable scientific advances, concludes that the US advantage is more remarkable than anticipated.

However, the government bases most policies on the LS model, which is why innovation funds and entrepreneurship are popular. For instance, the Japanese government has released its new economic security law guidelines. In addition, it will use a $500 billion ($3.6 billion) fund to encourage the development of 20 cutting-edge technologies through public-private partnerships.

Moreover, a nation might waste those funds if its ability to adapt and modify general-purpose technologies across its entire economy over time determines its level of success. “The most important institutional factors may not be R&D infrastructure or training grounds for elite AI scientists,” Ding wrote, “but rather those which broaden the skill base in AI and enmesh AI designers in cross-cutting networks with entrepreneurs and scientists.” Education systems and technical associations are crucial for him.

Because they recognize that artificial intelligence (AI) is a fundamental technology that can improve competitiveness, boost productivity, safeguard national security, and help address societal challenges, many countries are vying to gain a global innovation advantage in AI. By looking at six categories of metrics—talent, research, development, adoption, data, and hardware—this report compares the relative positions of China, the European Union, and the United States in the AI economy. It concludes that the United States continues to lead in absolute terms despite China’s audacious AI initiative. The European Union comes further back than China, which comes in second. As China seems to be advancing more quickly than either the United States or the European Union, this ranking may change in the upcoming years.

Innovation is essential, but implementation is the key to economic success. It is because implementation is what turns an idea into a reality and a reality that can be profitable. Businesses need to be able to take a picture and turn it into a product or service that people will want to buy to be successful. It is not always easy, and it often requires a lot of trial and error. But it is worth it because once a business has a successful implementation, it can scale up and make a lot of money. So, to be successful, focus on implementation, not innovation.

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The Chinese real-estate crisis

It is already taking place in China. The second-largest economy in the world has ordered banks to provide financial assistance to real estate developers so they may finish unfinished projects. People are increasingly refusing to pay their mortgages because they understandably find it unfair to be required to do so for homes they cannot inhabit.

Compared to pre-pandemic levels, new home sales have plummeted, and housing starts have nearly halved. It will cause issues for heavily indebted real estate corporations, the banks they borrowed from, and the economy. The real estate industry accounts for about 20% of China’s GDP. However, rising housing costs have already disappeared.

The China Banking and Insurance Regulatory Commission (CBIRC) have advised banks to accommodate developers’ funding requirements when required.

Despite the regulator’s intervention, Chinese bank shares rose briefly due to optimism that Beijing will have enough policy tools at its disposal to contain the crisis.

It was unclear, meanwhile, if the banks could bear the mortgage strike’s expense, which might be affecting 100 projects across 50 locations.

According to data provided by the banks, the connected mortgages have a total value of 2 billion yuan ($300 million). However, some analysts believe the actual number is much greater. For instance, Guangdong-based GF Securities estimated that the sum might reach 2 trillion yuan ($300 billion).

Since the creeping demise of Evergrande, China’s second-largest developer, started in 2021, the country’s real estate market, which contributes up to 30% of economic production, has been in turmoil.

Since then, the economy has begun to feel the adverse effects of its default on a sizable portion of its $300 billion debt pile.

The real estate market in America

In the three months leading up to June, the US economy shrank for the second consecutive quarter, with the slumping property market among the contributing factors. American home prices have skyrocketed in the two years since the coronavirus outbreak began in the spring of 2020, soaring by 20 percent in the year ending in May. However, the market is rapidly cooling, as seen by the steep decline in the average price of new houses in June.

In 2022, real estate market has disappointed many homebuyers. Already at record highs, home prices and mortgage rates continue to grow.

Others have put their property search on hold or given up because of escalating costs. The property market is declining as recession fears grow. New house sales are down, and development has slowed. Existing-home sales are below 2019 levels. As mortgage rates remain above 5%, applications have plummeted.

According to experts, home prices and mortgage rates will fall, so affording a home will remain challenging. Year-over-year home price growth is still in double digits. The Fed rate move will keep mortgage rates fluctuating. “Affordability is the biggest concern in the home market, and rising rates will make that worse monthly,” said Zillow’s senior economist.

June’s median home price was $416,000. Price increases have slowed. NAR reports that median home prices for existing homes rose 13.4% year-over-year in June, compared to a 23% increase in June 2021.

New-home prices are decreasing. According to the US Census Bureau and HUD, the median price of a new house fell to $402,400 in June from $444,500 in May.

Navy Federal Credit Union’s Robert Frick called it “the biggest break in home-price inflation.” If existing home prices follow suit, annual surges that have driven millions of Americans out of the market may end.
New homes make up 10% of transactions and older homes 90%. Most market prices aren’t decreasing. The 2011 housing prices will rise by 11%. It is less than the 16.9% year-over-year growth expected at the start of the year.

As higher mortgage rates reduce buyer demand, inventory and sales will rise, helping to lower prices in 2022. As a result, homes may lie on the market longer, and there will be more price cuts. Buyers who conduct more research may find a home with a price cut or better price negotiation.

David M. Dworkin and Bill McBride wrote at the National Housing Conference that home affordability is the worst since 1989, excluding the housing bubble of 2004-2008.

During the housing bubble, low teaser interest rates reset to levels homeowners couldn’t afford. For example, in the 1980s, 30-year fixed-rate mortgage rates ranged from 9% to 18%, making homes unaffordable.

Researchers said today’s market is different. Soaring housing costs are fueled by underproduction between 2008 and 2020, supply chain breakdowns since 2020, and rising demand since 2020.

The British crisis

The United Kingdom seems to be defying the trend. Instead, property prices are rising at 13% annually, the most in over two decades, according to data from Halifax, the nation’s largest mortgage provider. But, similar to other countries, the situation here, too, is evolving.

The Office for National Statistics released data on housing affordability based on home prices to average salaries. The ratios in Scotland and Wales, which fell short of the peaks recorded during the global financial crisis of 2007–2009, were 5.5 and 6.0, respectively. The ratio in England was 8.7, the highest since the data gathering began in 1999.

There were regional variances within England. The average cost of a home in Newcastle upon Tyne was 12 times the annual income of someone in the bottom 10% of the income distribution. It was 40 times greater in London, which is undoubtedly higher now. The ONS data only extends through March 2021; housing prices have comfortably outpaced salaries since then.

Last month, UK house prices climbed at the quickest annual rate in 18 years as demand for larger homes outpaced supply.

Halifax, a part of Lloyds Banking Group, reported prices rose 13 percent in June since late 2004. Prices climbed 1.8% from May, the most since early 2007.

A typical residence costs £294,845- a record high despite the cost of living problem. House prices rose every month in 2021 and 6.8% in 2022, or £18,849 in cash terms.

Halifax’s CEO Russell Galley claimed that the supply-demand imbalance drives house prices. Demand is still high but has reduced to pre-Covid rates, and inventory is meager.

So far, property prices seem protected from the cost of living crunch. It is because those with lesser incomes are less active in purchasing and selling residences when the cost of living rises. Higher earners can employ their pandemic savings to spend during a crisis.

The housing market won’t always be immune to the recession. But it’s being supported by a “dramatic shift” in demand toward more extensive properties, with detached house prices rising almost twice as fast as flats over the past year (13.9 percent versus 7.6 percent).

Inflation and higher interest rates will put a strain on household budgets, which will affect property affordability. A slowdown in house price rise is still forecasted for the coming months, but it might arrive later than expected.

According to Halifax, Northern Ireland has the highest yearly house price gain, up 15.2% to £187,833. Wales follows with a 14.3% annual growth to £219,281. A Scottish property now costs an average of £201,549, surpassing £200,000 for the first time and up 9.9% from June last year.

London lags behind other regions with yearly price growth of 7.1%, but at £547,031, it remains the most expensive place to buy a home in the UK.

There comes a time when a house is just out of reach for prospective purchasers. Still, the market has not crossed this reality checkpoint because of the protracted era of extremely cheap borrowing rates. Central banks have made the exorbitant affordable by ensuring that monthly mortgage payments remain low.

It has been the case worldwide, which explains why the trend in housing prices has been steadily higher from New York to Vancouver, Zurich to Sydney, and Stockholm to Paris.

At least till now. Western central banks are rapidly boosting interest rates, increasing the cost of mortgages. A new borrower taking out a 30-year fixed home mortgage was paying a rate of roughly 5.5% even before the US Federal Reserve announced a second consecutive 0.75-point increase in official borrowing costs. It is double what they were paying in 2021. This rise explains both the decline in American home purchases and the decline in home prices.

At the beginning of the pandemic, the Bank of England in the UK cut interest rates to 0.1 percent and kept them there for almost two years. Due to this, homebuyers could obtain fixed-term mortgages at incredibly cheap rates that peaked at 1.4% in the fall of 2016. However, since December in 2021, the Bank has been tightening its policy, so those mortgages will increase once the fixed terms expire. As a result, today’s average interest rate on a house loan is 2.9%.

The IMF’s gloomy forecast

According to central banks, the highest inflation in decades forces them to tighten monetary policy; nevertheless, they are doing so while major economies either enter or are about to enter a recession. Increased unemployment, declining GDP, and rising interest rates are deadly for home prices. Only the last of those is absent, but if the winter is as bleak as policymakers anticipate, it won’t be long until dole lines grow longer.

The International Monetary Fund released gloomy predictions for the world economy last week. The fund claimed risks were significantly skewed to the downside and pointed out that all three of the world’s major economic engines—the US, China, and the eurozone—were stagnating.

The IMF claims that only five years in the last 50 years had a global economic growth of less than 2 percent: 1974, 1981, 1982, 2009, and 2020. A complete halt in Russian gas exports to Europe, persistently rising inflation, or a debt crisis are a few potential reasons why 2023 might end up on that list. A worldwide housing crash would make it inevitable.

That is not to suggest that there aren’t valid arguments in favor of removing excess from the real estate market. The young and the poor are disadvantaged by skyrocketing housing costs. It also causes capital to be misallocated into unproductive investments, increasing demographic pressures by deterring couples from having children.

Nevertheless, central banks are attempting to engineer a soft landing in which the downturn is brief and shallow. The increase in unemployment is just enough to reduce upward pressure on wages while remaining small. Moreover, a decline in home values is unintentional because plummeting property prices would guarantee a hard landing.

There is no desire for another subprime mortgage crisis like the one that nearly brought down the global banking system in 2007 and created the last significant recession before the epidemic. Because of this, the Chinese government is working to support real estate investors. Western central banks may stop raising interest rates earlier than anticipated by the financial markets. Again, this place is familiar to us.

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With this, shoppers will now be able to make high-fashion purchases. These could include a gown by Peter Dundas or a slingsback heel from Christoper Kane.

The luxury stores microsite, which aims to improve Amazon’s virtual store window, features videos of models such as Kristen McMenamy and Precious Lee posing in a European home. Elie Saab, Altuzarra, and Jonathan Cohen are among the nine designers featured.

A Norwegian-based designer Dundas has sold his clothes on the US website since 2020. He had a growth in sales of up to 30% of his direct-to-consumer business.

Dundas chief marketing officer Akiko Takashima said that Amazon was always considered a marketplace for household goods. However, with its efficient returns policy, people have become confident about buying high-priced items.

She further stated how the business took over rapidly, and people started purchasing Dundas gowns. One customer even purchased four pieces at once.

Luxury fashion firms will distribute products through Amazon warehouses or their own, as indicated on the website at the time of purchase. Shipping will be free, and they will accept returns.

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However, Katerina and Maria have never been confirmed to be the offspring of the former KGB spy, but they are believed to be his daughters from his marriage with former Aeroflot cabin crew Lyudmila. The marriage ended in 2013 with a divorce.

Putin has been always secretive about his children and there is no official count from Kremlin about his children. Neither have the two women confirmed to be the daughters of the most powerful person in Russia.

According to the US Department of Treasury Katerina was born in Dresden, Germany where Putin was posted as a KGB agent. Katerina according to a Reuters investigation use the surname of her maternal grandmother and has studied Maths and Physics. She has a master’s degree from Moscow State University.

The report had shown that she was holding a top position in academics at the Moscow State University in 2015 and was involved in public-funded projects where she was signing off multi-million dollar contracts. She is touted to be part of the Kremlin’s defence ecosystem.

In addition to this, she had caught the limelight for her participation in Rock ‘n’ Roll World Championship in the same year where she along with her partner emerged as the fifth-best.

She was also married to one of Russia’s youngest billionaires Kirill Shamalov for five years between 2013 and 2018.

Maria, on the other hand, is a medical doctor specializing in paediatric endocrinology. She is also involved in genetics research for the government. She was married to a Dutch businessman born in Russia named Jorrit Faassen.

Earlier, other than Russia’s sovereign assets, government officials, politicians, and super-rich oligarchs believed to be closely associated with Putin has faced the wrath of these economic sanctions. A major highlight of them is top-flight English football club Chelsea being snatched away from Roman Abramovich.

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The former minister, who has an MBA degree from Preston University and a Master’s in Economics from the University of Illinois, also works as an adjunct professor at Georgetown University which fetches him $2,000 in a semester.

According to a Washington Post article, Payenda is now aiming to complete 50 trips in two weeks to take home a bonus of $95. As fate would have it, Payenda had once overseen a budget of $6 billion and is now content by earning around $150 for driving his Honda Accord on Uber in the US capital.

In an interaction with WaPo, he said this transition from being one of the most powerful persons in the battle-stricken country to a gig worker in the US has also taken a toll on his mind. He said that while he was grateful for being able to support his family, he does not feel at home and is feeling empty.

In the interview, he expressed his disappointment of the democratic regime in Afghanistan falling prey to the hands of the Taliban and the US’s decision to abandon the civilian administration.

The former minister has 18 years of experience in diverse and high-level experience in economic & public policy management, international development, public finance management, governance, and leadership in the public sector, aid effectiveness, and institutional development.

Specialties: Public Administration & Governance, Economic Policy Advice, PFM, Macroeconomic and Fiscal Analysis, Leadership, Management and Economics Training.

Before his role in the Afghani government, Payenda was a senior policy advisor at the Asian Development Bank and had also worked as an economist at The World Bank in the country.

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Natural gas prices in Europe have soared by over 400 percent since the beginning of the year. Electricity prices have also increased by over 250 percent during the same period. Meanwhile, in the US natural gas price has more than doubled. Natural gas is mostly used for electricity and to generate heat in the UK during the winter season. Furthermore, the price of coal in the US has soared by nearly 400 percent this year to reach $270 per ton. The crisis is as we understand is considerably worse in Europe. Electricity prices in the continent have soared significantly as well. Natural gas prices have surged as well to $30/mm Btu.

This is resulting in inflation which means prices for energy-intensive metals are also increasing. For example, prices of metals such as nickel, steel, silicon have increased due to the energy crisis. Besides metals, prices of fertilizers have ramped past 2008 record highs to nearly $1,000 a ton. It is noteworthy that the prices were around the $300 to $450/ton mark in the last couple of years. The price for copper too has increased to a record high of $4.50 per pound. Copper is an important metal and raw material for the solar or wind energy industry, which emphasis is growing day by day as and is seen as an important factor to tackle climate change.

In Britain, renewable power production this year was much lower than normal as a result of a windless summer. The region meets around 24 percent of its energy needs through the wind. However, due to low production this year, it means the UK has to rely on coal. Over the years, Britain has transitioned away from coal as an electricity source. Prime Minister Boris Johnson said that the UK remains committed to wind power generation. He went on to say that he wants the UK to become the ‘Saudi Arabia of wind power’ with offshore wind farms generating enough electricity to power every home in the UK in the next 10 years.

However, the landscape is pretty different in the present time. Soaring electricity prices is a matter of growing concern for politicians across Europe. The crunch in the gas market is forcing countries to revert to coal. This goes against Europe’s fight against climate change and that the fact that the UK hosted the 2021 United Nations Climate Change Conference, more commonly referred to as COP26 at the SEC Centre in Glasgow.

In Asia, thermal coal prices also keep hitting record highs. In short, there isn’t enough coal to meet demand. Economies in the region are slowly resuming activities and are in the process of an economic revival, be it China, Malaysia or India. It has led to greater demand and is one of the primary causes of an emerging electricity crisis in China. Coal stockpiles are running low in India too, however, the government claimed there are enough stockpiles to keep the wheels running.

The International Energy Agency said in a report, “Record coal and gas prices, as well as rolling blackouts, are prompting the power sector and energy-intensive industries to turn to oil to keep the lights on and operations humming. Higher energy prices are also adding to inflationary pressures that, along with power outages, could lead to lower industrial activity and a slowdown in the economic recovery.”

The agency further added that global energy demand is set to increase by 4.6 percent in 2021. This will be led by emerging markets and developing economies – pushing it above its 2019 level. Demand for all fossil fuels is on course to grow significantly in 2021, with both coal and gas set to rise above their 2019 levels.

Europe’s energy crisis
Even though there isn’t a simple answer to this, a natural gas supply shortage in the region caused the energy crisis in Europe. But why is there a shortage in the supply of natural gas? There are many factors that are also contributing to the crisis. To understand this crisis better, we must understand that nations across the globe are pledging to reduce emissions and become carbon neutral in the next few decades. Reduction in the usage of coal is an important factor when it comes to tackling climate change. As nations are transitioning away from coal, they are meeting their energy demands with other sources such as natural gas or renewable energy sources. According to the bloc’s statistical office, Eurostat, the EU imported around 90 percent of its natural gas from outside the bloc in 2019.

As a result of the pandemic, the whole world entered into a state of lockdown and global energy demand fell significantly. This led to a drop in natural gas prices. With the Covid-19 vaccination drive ongoing, nations are resuming economic activities and as a result, energy demand has also increased significantly. However, supply has struggled to keep pace.

Given natural gas prices are higher in Asia, it is quite normal for producers to prioritise Asian markets over Europe. This is normally not problematic for Egypt, however, since the demand for natural gas in Asia began skyrocketing this year, supply has become extremely constrained. Normally, what Europe does is stockpile gas reserves when prices are low. But this year, it was not possible due to constrained supply. With the winter seasons approaching, people in Europe are rightfully concerned over their low gas supply.

The pandemic has also made matters complicated or in short, have played a part in the crisis. Due to the lockdown measures and other Covid-19 related restrictions, the production of coal in countries such as Indonesia, Australia, and India have taken a hit. This has forced countries in Asia to rely even more on natural gas to meet their energy needs further reducing the available supply for Europe.

To fully understand the energy crisis, we must also understand the role of Russia. As per reports, Russia supplies about 50 percent of the EU’s natural gas imports. Many Russian gas pipelines do flow into Europe through Poland and Ukraine, but most of them have been inactive. As the energy crisis deepens, many pointed the finger towards Russia and blamed the country for being an opportunist and benefitting from the crisis.

This is because Russia is pushing for German approval of its Nord Stream 2 pipeline. Also, Russia is hesitant to sell Russian gas on the spot market. Russia’s state-owned energy giant Gazprom has been accused by the likes of the International Energy Agency (IEA) and European lawmakers of purposely not boosting its natural gas supply to Europe. In a statement, the IEA said, “The IEA believes that Russia could do more to increase gas availability to Europe and ensure storage is filled to adequate levels in preparation for the coming winter heating season.”

Global energy crisis
The energy crisis is not just limited to Europe at this moment. In China, energy prices are soaring because of increasing consumer demand as economic activities return to normal after the pandemic. Production to meet the increasing demand, however, has failed to bounce back. This has led to a supply and demand imbalance. Similarly, in the UK, a shortage of truck drivers who ferry fuel to pumps has led to the fuel crisis. The shortage is attributed to Brexit and also restrictions imposed due to the pandemic.

Many also believe the rise in energy prices is a result of increasing restrictions announced by governments on traditional energy sources such as coal. In their bid to tackle climate change, regulators across the globe are discouraging the use of traditional energy sources and simultaneously encouraging the use of renewable energy. China, which is one of the biggest polluters, pledged to reduce emissions by 65 percent by the end of 2030 and has cracked down heavily on coal mining.

The UK generates around 24 percent of its energy needs from wind. However, due to low production this year, it means the UK has to rely on coal. Many also argue that shifting focus too quickly on renewable energy is also a reason for the energy crisis. What we need is a proper transition from traditional sources to renewable energy. An aggressive push may have led investors to under-invest in traditional energy sources. A report released by Rystad Energy supports this. The report revealed that investments in traditional sources by European or US-based oil companies shrunk by more than half between 2015 and 2021.

What lies ahead?
Europe’s energy crunch is expected to further worsen as the northern hemisphere winter approaches. With natural gas prices skyrocketing, many fear the EU’s integrated energy system could be on the verge of breakdown. To sustain the winter, many member nations are already resorting to hoarding what supplies they have. This only adds to the trouble as it provides a platform for an intra-EU political squabble.

As of now, it looks like energy supplies are likely to remain constrained. Boosting production in a short period of time is not easy. Also, the rise in prices is not helping either. In fact, the crunch is expected to worsen depending on the weather conditions. A much severe winter means higher energy demand. It will be interesting to see how the EU and leaders across the continent respond to the crisis.

While there are calls for measures to control prices, it can only make matter worse. Even if regulators do introduce measures to control prices for natural gas, it will discourage producers who will think twice before deciding to boost production. While a limited supply means energy must be used efficiently, a price cap could potentially lead to consumers overusing energy and only adding to the crisis. A lot of Chinese thermal plants are shutting down because of the introduction of measures to control prices.

During the winter, energy sources such as solar or wind energy often turn out to be unreliable, especially in Europe. With prices of natural gas increasing, Europe may be forced to rely on traditional fossil fuels. This means governments across Europe will have to rethink their energy policy.

The IEA’s Global Energy Review 2021 estimates that CO2 emissions will increase by almost 5 percent this year to 33 billion tonnes, based on the latest national data from around the world as well as real-time analysis of economic growth trends and new energy projects that are set to come online. The key driver is coal demand, which is set to grow by 4.5 percent, surpassing its 2019 level and approaching its all-time peak from 2014, with the electricity sector accounting for three-quarters of this increase.

Natural gas prices in Europe have soared by over 400 percent since the beginning of the year. Electricity prices have also increased by over 250 percent during the same period. In October, the UK recorded a stellar 37 percent spike in UK wholesale gas prices within a period of 24 hours. As a consequence of the rise in prices and the overall crisis, manufacturers of steel, chemical and fertilizer businesses are calling on the government for support as well.

The prices of natural gas, oil and coal have hit highs that were not seen in recent years. Coal supply disruption in China has also led to factories being shut down. This has halted the country’s recovery from the Covid-19 pandemic, which started in Wuhan in late 2019. Energy prices do affect economic decisions across the supply chain. Furthermore, soaring energy prices have had a significant impact on economic policies. Many European, as well as Asian companies, are shutting down operations due to increasing energy costs.

The IEA said that global energy demand is set to increase by 4.6 percent in 2021. This will be led by emerging markets and developing economies – pushing it above its 2019 level. Demand for all fossil fuels is on course to grow significantly in 2021, with both coal and gas set to rise above their 2019 levels. Oil is also rebounding strongly but is expected to stay below its 2019 peak, as the aviation sector remains under pressure.

Long winter in Europe
During the start of this year, the northern hemisphere witnessed a series of very cold and extreme weather events. If the same is repeated this year, it will put additional pressure on the energy stock which is already depleted and stretched severely. Chartering ships to transport LNG has also taken a hit due to a lack of shipping capacity. Daily spot LNG vessel charter rates have spiked above $100,000 in each of the last three northern hemisphere winters and hit an all-time high of well above $200,000 during the unexpected cold spell in northeast Asia in January 2021 – amid physical shortages of available shipping capacity, according to the IEA.

Governments are doing their bid to deal with the crisis. For instance, the Italian government has announced a €3.4 billion budget to support low-income households in the country. Italy has suspended grid charges for private residents and has promised to further subsidise electricity costs. In France, the French government has decided to let gas prices rise by 12.6 percent before freezing prices at least till the end of April. The government is handing out energy vouchers to the vulnerable to help them deal with the energy crisis. The Spanish government has decided to suspend supply cuts in the country for vulnerable residents until 2023.

The post Are we headed for a global energy crisis? appeared first on International Finance.

Lawyers for the Justice Department and FCC wrote in a court filing, “China Telecom has no likelihood of succeeding on its claims. China Telecom is subject to exploitation, influence, and control by the Chinese government and is highly likely to be forced to comply with Chinese government requests without sufficient legal procedures subject to independent judicial oversight.”

“It is undisputed that China Telecom is wholly owned by a Chinese entity, which is, in turn, majority-owned and controlled by a Chinese state-owned enterprise,” the FCC added.

While China Telecom has warned that the company could be forced to end its entire resold mobile resale service in the US. In response, the FCC said that China Telecom’s resold mobile phone service gives the company access to sensitive customer information, including call detail records and metadata about communications.

Recently, it was also reported that China Telecom migrated nearly 13 million customers to 5G plans last month. By the end of October, the telco had 168.5 million 5G package subscribers. Its previous biggest monthly haul was 11.4 million in July 2020.

China Telecom’s mobile user base also increased by 1.6 million during the period to 371.2 million.

The post FCC to reject China Telecom’s bid to continue providing services in the US appeared first on International Finance.

Investments in healthtech have surged because of the Covid-19 pandemic. A major portion of the venture capital funding went to the US. The healthtech sector in the US received investments of around £23.7 billion followed by China in second with £3 billion. The UK occupies the third spot with investments of around £2.8 billion.

Around 1090 healthtech companies in the UK received funding this year, only behind the US where around 6551 companies received funds.
The report further revealed that the UK healthtech growth is concentrated mainly in London’s Golden Triangle, an unofficial grouping of leading research universities in the southeast region of England, including Cambridge and Oxford.

Laura Citron, chief executive at London & Partners told the media, “These findings demonstrate that the UK and US are leading the way for innovation in this sector and tech hubs like London, the Bay Area and New York are key partners for collaboration.

“The UK’s Golden Triangle is home to world-class universities for life sciences and medicine, a deep research and development landscape and dedicated funding and government support. These factors make London, Oxford and Cambridge a world-leading innovation hub for life sciences and healthtech.”

The post Investment in the global healthtech sector reaches £38.1 bn in 2021 appeared first on International Finance.

In a statement, Mapletree said that the first portfolio includes 24 assets across Dallas, Memphis, greater Chicago, central Florida and Boston, with an occupancy rate of 98.9 percent. The second portfolio has 117 assets across greater Chicago, the Carolinas, Memphis, Houston and the area spanning Washington and Baltimore, with 94.1 percent occupancy.

The portfolios, bought by Mapletree’s tenant base include companies in third-party logistics, consumer goods, wholesale and e-commerce sectors.

In this regard, Michael Smith, Mapletree’s regional chief executive officer of Europe and the US told the media, “The US logistics sector is among the best performing and most resilient of all the real estate markets in which Mapletree operates globally.

“By combining these recently acquired assets with 14 logistics facilities that we currently own, we have attained sufficient scale and investor interest to create a fourth US-focused private fund with a fully seeded portfolio of 155 logistics assets.”

Earlier this month, it was reported that Mapletree Investments closed its maiden US office fund, Mapletree US Income Commercial Trust (Music), with $552 million in total fund equity raised.

The post Mapletree buys two portfolios of logistics assets in the US worth $3 bn appeared first on International Finance.