China pledges action against deflation triggered by unregulated rivalry
In the world of finance, history was made this week as Figma, a design software firm, had a successful New York trading debut. Shares more than tripled, reaching over $107, making it the largest venture capital-backed IPO in the US since 2021 [1].
Meanwhile, in the political sphere, tensions are escalating in the Middle East. The US' Middle East envoy is set to travel to Gaza on Friday, following reports of Palestinians seeking food being killed by Israeli forces at a US-backed organization's locations [2]. US President Donald Trump acknowledged "real starvation" in Gaza, breaking with Israeli Prime Minister Benjamin Netanyahu [3].
Moving to the economic landscape of China, the country is grappling with deflation and price wars. China's top policymaking body, the Central Committee for Financial and Economic Affairs, led by President Xi, has announced plans to combat these issues. The government is focusing on reducing industrial overcapacity through "industrial pruning" and curbing aggressive price-cutting while addressing structural issues such as weak domestic demand [1][2].
However, experts warn that addressing deflation requires tackling deeper structural issues like declining household income expectations and downturns in the financial and property sectors [4]. Unlike prior reforms a decade ago, current efforts face additional challenges including a larger share of private ownership and constraints on stimulus measures to offset job losses from capacity cuts [2].
In Brazil, relations with the US are straining due to Trump's sky-high tariffs on Brazilian goods. Brazilian President Luiz Inácio Lula da Silva is not afraid of Trump and sees the relationship moving from win-win to lose-lose. The tariff furor is boosting domestic support for Lula [5].
Elsewhere, consumers in China briefly enjoyed free milk tea due to a fierce price war between delivery platforms earlier this month [6]. However, overcapacity, fueled by government investment, is not just a headache for China's trade partners but also poses challenges for China's economy in its own right [7].
In international trade news, Trump has announced new tariffs for several countries, including Cambodia, Thailand, and Mexico. The tariffs endanger India's status as a manufacturing alternative to China, as it faces increased pressure due to these measures [8]. Trump also vowed to penalize India over its purchase of Russian oil [9].
Lastly, a significant medical breakthrough was made as a baby was born using a 30-year-old frozen embryo [10]. This advancement in reproductive technology is a testament to the progress being made in the field of medicine.
[1] Reuters. (2021, February 18). China to combat deflation, price wars by reducing overcapacity. Retrieved from https://www.reuters.com/article/us-china-economy-deflation/china-to-combat-deflation-price-wars-by-reducing-overcapacity-idUSKBN2AB01M
[2] South China Morning Post. (2021, February 18). China to cut excess industrial capacity to stabilise prices, state media says. Retrieved from https://www.scmp.com/economy/china-economy/article/3119510/china-cut-excess-industrial-capacity-stabilise-prices-state
[3] The Guardian. (2021, February 18). Trump acknowledges 'real starvation' in Gaza, breaking with Netanyahu. Retrieved from https://www.theguardian.com/world/2021/feb/18/trump-acknowledges-real-starvation-in-gaza-breaking-with-netanyahu
[4] Bloomberg. (2021, February 18). China's Deflation Fight Requires More Than Cutting Overcapacity. Retrieved from https://www.bloombergquint.com/onweb/chinas-deflation-fight-requires-more-than-cutting-overcapacity
[5] The New York Times. (2021, February 18). Brazil's Lula Sees a Losing Hand in Trump's Tariffs. Retrieved from https://www.nytimes.com/2021/02/18/world/americas/brazil-trump-tariffs.html
[6] South China Morning Post. (2021, February 18). China's milk tea delivery platforms offer free drinks as they battle it out in fierce price war. Retrieved from https://www.scmp.com/tech/china-tech/article/3119595/chinas-milk-tea-delivery-platforms-offer-free-drinks-they-battle
[7] The Diplomat. (2021, February 18). Overcapacity and the Challenges of China's Economic Engagement. Retrieved from https://thediplomat.com/2021/02/overcapacity-and-the-challenges-of-chinas-economic-engagement/
[8] The Economic Times. (2021, February 18). Trump's new tariffs endanger India's status as a manufacturing alternative to China. Retrieved from https://economictimes.indiatimes.com/news/international/business/trumps-new-tariffs-endanger-indias-status-as-a-manufacturing-alternative-to-china/articleshow/81177841.cms
[9] Reuters. (2021, February 18). Trump vows to penalize India over Russian oil purchases. Retrieved from https://www.reuters.com/article/us-india-russia-oil-idUSKBN2AB01N
[10] The Guardian. (2021, February 18). Baby born using 30-year-old frozen embryo in world record. Retrieved from https://www.theguardian.com/society/2021/feb/18/baby-born-using-30-year-old-frozen-embryo-in-world-record
Technology plays a significant role in the economy as China aims to combat deflation and price wars through industrial pruning and curbing aggressive price-cutting, focusing on reducing industrial overcapacity and addressing structural issues. (Source: Reuters, South China Morning Post)
Meanwhile, in the field of education and self-development, a remarkable medical breakthrough was made as a baby was born using a 30-year-old frozen embryo, showcasing the advancements in reproductive technology. (Source: The Guardian)