China’s Population Falls for First Time in 60 Years

What is a polycrisis?

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January 17, 2023 09:09 AM

What is a polycrisis?

In Today’s Digital Newspaper

Abbreviated report/different format today as the woes of my traveling continue. Did you ever try to get a taxi from downtown Ft. Wayne? Waited 1.5 hours to get one. I would have made by flight but alas, Delta delayed my trip to Minneapolis by two hours (at least). The joys of traveling nowadays.

USDA daily export sales:

150,000 metric tons corn to Colombia during 2022-2023 marketing year.
19,000 metric tons soybeans to unknown destinations during 2022-2023 marketing year.

A U.S. recession seems more likely as fourth-quarter earnings showed a mixed bag of results among big banks, with some seeing profits gutted in half and others doing better than expected. Meanwhile, JPMorgan economists think a recession could push the unemployment rate up to 4.9%, basically wiping out more than one year of job growth with millions of Americans losing jobs. Of note: Goldman Sachs and Morgan Stanley recorded lower fourth-quarter profits on a big slowdown in dealmaking.

Polycrisis is a word frequently being heard at the World Economic Forum in Davos. The word now refers to the swirl of global emergencies that include economic slowdowns and rising inflation, the war in Ukraine and more.

U.S. Treasury Secretary Janet Yellen sent up a warning Friday that the government could run out of cash as soon as mid-June if lawmakers don’t soon lift the roughly $31.4 trillion debt limit. If the nation’s debt hits that marker — it’s on track to do so by this Thursday — the Treasury will need to take “extraordinary measures” to help pay for the government’s operations and ward off a historic default. Some hardline House conservatives want to use “leverage” they think they have relative to the topic to garner reforms in the budget and spending process.

House Republicans face an internal fight on where to cut federal spending. The dispute pits GOP lawmakers who want to protect military spending against those who see such expenditures as fair game in any negotiations alongside cuts to domestic programs. Republicans must also decide whether to pursue money-saving changes to Medicare and Social Security, which many would like to consider, despite being politically perilous. Rep. James Comer (R-Ky.), who leads the House Oversight Committee, told CNN’s “State of the Union” that Republicans in the House “won’t budge” on their demands for spending cuts in exchange for raising the federal debt ceiling, noting that the GOP’s midterm campaign promises included getting “serious about spending cuts.” Rep. Ro Khanna (D-Calif.), appearing separately on CNN, agreed that debates on future spending are “legitimate,” but “you don’t debate whether you pay your debts” and “you don’t debate the prestige of the United States.”

House Republicans are preparing a plan that would provide direction to the Treasury Department on how to prioritize the payment of U.S. debt should Congress and the White House fail to come to an agreement on raising the debt ceiling, according reports. The early draft of the plan would instruct the Treasury to make only the most critical federal payments; Rep. Chip Roy (R-Texas) said House Republicans would pass the plan by the end of the first quarter of the year.

The U.K. will send hundreds of armored vehicles to Ukraine after Russia ramped up rocket attacks over the weekend. A nine-story residential building in Dnipro was destroyed Saturday in the deadliest attack on Ukrainian civilians in months. Ukraine’s wealthiest man, soccer star Mykhaylo Mudryk, also announced he would donate $25 million to war efforts.

Chinese vice premier invited foreign investors to participate in economic program. Chinese Vice Premier Liu He said the country is open to global cooperation after three years of Covid isolation and said foreign investors had a role to play in Chinese leader Xi Jinping‘s signature “common prosperity” program.

Meanwhile, U.S. Treasury Secretary Janet Yellen will meet with senior Chinese official Liu He this week to rekindle a relationship that accounts for much of the world’s economic activity but has grown tense over technology access, trade policy and Taiwan. The pair will meet Wednesday in Zurich, where Yellen is stopping ahead of a multicountry tour through Africa that is aimed in part at countering China’s influence on the continent. Liu, who is expected to step down from his post in March but is close to Chinese President Xi Jinping, is expected to attend the World Economic Forum in Davos, Switzerland. The two sides arranged to meet in a third country while they are both abroad.

China’s population falls for the first time in 60 years. Mainland China’s overall population declined to 1.4118 billion in 2022, with the official data illustrating how widespread shifts toward pronatalist policies are not producing the intended results. The declining population aggravates China’s long-term structural challenges, including the costs of managing an aging population while not producing enough new workers; Beijing’s growing scrutiny of private enterprise; a crisis in the property sector, a longtime pillar of growth; and rising pressure from the U.S. and the West on matters like semiconductors and A.I.

The population update comes days after China reported that 60,000 people, mostly senior citizens, died from the coronavirus since early December, as the country eased its “zero-Covid” policy.

Upshot: This may mean China has already lost its position as the world’s most populous country to India, a change that had not been expected until later this year. The shift will fuel fears of a demographic crisis, with too few young Chinese to support an ageing population.

Meanwhile, the country’s economy grew 3% last year — well short of Beijing’s 5.5% target — as lockdowns under a “zero-Covid” policy hit manufacturing and consumer spending. Aside from 2020, when the economy grew only 2.2%, 2022 marked the worst year for gross domestic product growth in China since 1976, the year that Mao Zedong’s death ended the decade of strife known as the Cultural Revolution, according to World Bank data. Economists expect a consumer-led recovery in China this year — after the country ditched almost all of its Covid restrictions — to buttress global growth as the U.S. and Europe flirt with recession. China’s reopening from pandemic restrictions could drive global growth beyond expectations and help avoid a broader recession even as some of the world’s largest economies struggle to overcome a downturn, top finance officials at the World Economic Forum said.

Kerry provides details on carbon offset initiative. During a speech at the Atlantic Council Global Energy Forum in Abu Dhabi, U.S. climate envoy John Kerry offered new details on the Energy Transition Accelerator, which aims to launch a carbon offset market to raise more money for developing nations to speed up the energy transition. Kerry said companies would only be able to buy a carbon credit if they are shutting down or transitioning existing fossil fuel facilities, or for the deployment of renewables that would replace fossil fuel facilities.

The U.S. Inflation Reduction Act will drive investment into cleaner energy and represents the most important climate deal since the landmark 2015 Paris Agreement, International Energy Agency head Fatih Birol said.

Wyoming lawmakers propose a ban on electric cars. A group of state legislators are seeking to end sales of new electric vehicles there by 2035 in an effort to protect Wyoming’s oil and gas industries. The bill is the inverse of efforts by other states to eventually ban gas-powered cars, and comes as electric vehicle sales are becoming a bigger part of overall global car sales. Wyoming state Sen. Jim Anderson (R) said he doesn’t have a problem with EVs despite introducing a resolution in the legislature that aims to phase out new EV sales in the state by 2035, adding that he used the measure as a way to symbolically counter California’s phaseout of new gas-powered vehicle sales by 2035, a proposal that was adopted last summer. “I have a problem with somebody saying, ‘Don’t buy any more petroleum vehicles,’” Anderson told the Washington Post.

Drone boats are the U.S. Navy’s latest unmanned artificial-intelligence technology. A Navy team in Bahrain known as Task Force 59 has created a test bed for the cutting-edge marine drones, which are loaded with radios, cameras, radar and other sensors to help expand the military’s eyes and ears in the ocean.

NOPA crush expected to be up from November but below year-ago. Traders expect members of the National Oilseed Processors Association (NOPA) to report they crushed 182.9 million bu. of soybeans in December, based on a Reuters survey. That would be up 2.1% from November but 1.9% less than last year and the smallest December crush figure in three years. Soyoil stocks are expected to total 1.630 billion pounds.

Mexico adds temporary duty to white corn exports. The Mexican government announced on Monday a temporary 50% tax on white corn exports, saying it is necessary to guarantee domestic supply and price stability. The export duty will be in force through June 30.

China’s 2022 pork production hits eight-year high. China’s pork production increased 4.6% last year to the highest since 2014, official data showed. Pork output reached 55.41 million MMT in 2022, up from 52.96 MMT in 2021 and the highest since 56.71 MMT eight years ago. Pork production totaled 13.91 MMT during the final quarter of last year. China’s beef output increased 3% to 7.18 MMT in 2022, the data also showed, while poultry production rose 2.6% to 24.43 MMT and lamb and mutton output increased 2% to 5.25 MMT.

Electric vehicles made up 10% of all new cars sold last year. While EVs accounted for less than 6% of all car sales in the U.S., their share of the total market is becoming substantial in Europe and China, and they are increasingly influencing the fortunes of the car market there as the technology goes mainstream. Global sales of fully electric vehicles totaled around 7.8 million units, an increase of as much as 68% from the previous year, according to preliminary research from LMC Automotive and EV-Volumes.com. The surge in EV sales also contrasted with the broader car market that suffered from economic worries, inflation and production disruptions.

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