1. After all the bluster about "reclaiming the Panama Canal" from Chinese owners, it now emerges that the Chinese authorities have not yet cleared the $23 bn sale from HK-based CK Hutchison and a Blackrock-backed consortium. And apparently, China’s state-owned shipping conglomerate Cosco is now seeking at least a 20-30 per cent stake in the deal.
2. Spain is taking a contrarian path.
Spain is having a moment bucking Western political trends. The country has recently recognized Palestine as a state, resisted President Trump’s demand that NATO members increase their defense spending to 5 percent of gross domestic product and doubled down on D.E.I. programs. But there’s no better example of Spain going its own way than immigration. At a time when many Western democracies are trying to keep immigrants out, Spain is boldly welcoming them in. The details are striking. In May, new regulations went into effect that eased migrants’ ability to obtain residency and work permits, and the Spanish Parliament began debating a bill to grant amnesty to undocumented immigrants. These reforms could open a path to Spanish citizenship to more than one million people. Most of them are part of a historic immigration surge that between 2021 and 2023 brought nearly three million people born outside the European Union to Spain.
3. Domestic Institutional Investors (DIIs) are driving Indian equity markets, having replaced the role of Foreign Institutional Investors (FIIs).
Investments by DIIs grew at a much higher rate of 55.4 per cent from 2014-15 to 2019-20, compared with 37 per cent in the post-Covid period (2021-22 to 2024-25)... In absolute terms, investments by DIIs reached an all-time high of ₹14 trillion at end-March 2025. In contrast to the rapid growth of DII investments over the past decade, FII investments grew at only 4.9 per cent. Consequently, their outstanding investments, at ₹10 trillion at end-March 2025, were about 29 per cent lower than those of DIIs...
The co-movement (correlation) between FII investments and the equity market (BSE Sensex), which was 0.37 from January 2000 to March 2014, fell to a negligible (–) 0.03 from April 2014 to June 2025, implying that over the past decade, FIIs have had virtually no impact on the equity market. In contrast, the correlation between DII investments and the equity market, which was (-) 0.20 during January 2000 to March 2014, rose sharply to 0.59 during April 2014 to June 2025, suggesting that over the past decade, DIIs have predominantly influenced the equity market.
4. DeepSeek further delays the release of its new model after failing to train it using Huawei's chips, exposing the limits of China's indigenous chips.
DeepSeek was encouraged by authorities to adopt Huawei’s Ascend processor rather than use Nvidia’s systems after releasing its R1 model in January, according to three people familiar with the matter. But the Chinese start-up encountered persistent technical issues during its R2 training process using Ascend chips, prompting it to use Nvidia chips for training and Huawei’s for inference, said the people... Training involves the model learning from a large dataset, while inference refers to the step of using a trained model to make predictions or generate a response, such as a chatbot query... Industry insiders have said the Chinese chips suffer from stability issues, slower inter-chip connectivity and inferior software compared with Nvidia’s products. Huawei sent a team of engineers to DeepSeek’s office to help the company use its AI chip to develop the R2 model, according to two people. Yet despite having the team on site, DeepSeek could not conduct a successful training run on the Ascend chip, said the people. DeepSeek was still working with Huawei to make the model compatible with Ascend for inference, the people said.
5. India's wealth and income landscape.
6. GST notices issued by Karnataka Commercial Taxes Department to informal traders who use UPI payments system forces some of them to turn back on UPI.
The trigger was a series of Goods and Services Tax (GST) notices sent to street vendors who have been using the Unified Payments Interface (UPI) to accept payments. The state’s GST department had flagged them as unregistered traders whose turnover exceeded the limit over which GST registration is mandatory—Rs 40 lakh per annum for the supply of goods and Rs 20 lakh for services. These notices have set off a wave of fear rippling through small traders in several states where governments have taken similar action. In Karnataka, over 14,000 street vendors recently threatened to go on strike over the issue. The strike was called off after the state government hit pause on 6,000-odd notices following the backlash, but reports say other states like Andhra Pradesh, Uttar Pradesh, Tamil Nadu, and Gujarat have also begun requesting merchant turnover data. UPI may have brought simple, instant digital payments to India’s streets, but as the country’s small traders are finding out, it’s also brought fully traceable transactions—putting them directly under the lens of tax authorities for the first time.
7. The Bola Tinbu administration in Nigeria devalued the Naira sharply after taking charge in 2023, plunging the economy into chaos. Impressively, things seem to be looking up now, especially in manufacturing.
Facing ever-rising input costs and the threat of stock shortages, some companies used last year’s shock as a catalyst to reduce their reliance on imported materials... The use of local raw materials in the manufacturing sector increased to an average of 57.1 per cent last year, up five percentage points from 2023, according to MAN... In instances where some key raw materials are not available domestically, companies are finding other clever ways of keeping costs down... Regulatory uncertainty still bedevils business, although executives are hopeful that a new tax law signed by Tinubu and set to take effect next year would streamline the onerous burdens on them. Even so, the fight to localise supply chains has been worth it for those that succeeded. The naira has also stabilised since last year’s devaluation, as Tinubu’s reform agenda shows signs of bearing fruit.
One more example from recent times of how sharp devaluations have yielded quick wins. Argentina is the other example.
8. From a review of Breakneck, a book by Dan Wang, a Chinese-Canadian tech analyst.
Wang’s central contention is that China is run as an engineering state that excels at construction while the US has become a lawyerly society that favours obstruction. By 2020 all nine members of the Chinese Politburo’s standing committee had trained as engineers. By contrast, the US has turned into a “government of the lawyers, by the lawyers and for the lawyers.” The result is that the country’s legal aristocracy prioritises process over outcomes and systematically favours the well-off, Wang argues. From 1984 to 2020, every single Democratic presidential and vice-presidential nominee had attended law school. The consequences of these differing approaches can be seen in how the two countries have built high-speed railways. In 2008 Californian voters approved funding for an 800-mile rail link between San Francisco and Los Angeles, while China began construction on a similar length railway between Beijing and Shanghai. Three years later the Chinese line opened at a cost of $36bn and carried 1.4bn passengers in its first decade of operation. The first segment of California’s train line may open some time between 2030 and 2033 at an estimated cost of $128bn.
The book has some very striking statistics
For example, in 1990 there were just half a million cars in China. By 2024 there were 435mn, many of them electric. China now has the (over) capacity to build 60mn cars a year out of a total global market of 90mn cars sold. The country has emerged as a world leader in drones, precision manufacturing, industrial robotics and solar and wind energy, and is rapidly deepening its expertise in artificial intelligence, where the US probably still retains an edge. China also has 31 nuclear power stations under construction, compared with just one in the US. By 2030, China will account for 45 per cent of the world’s industrial capacity compared with 38 per cent for all the world’s other high-income states, including the US, Europe and Japan, according to the United Nations Industrial Development Organisation... Although 50 per cent of China’s economy may be dysfunctional, Wang argues 5 per cent performs superbly well with its leading tech companies now challenging the best in the world.
9. Tej Parikh writes that the rise of intangibles (IP, brand value, code, content, talent etc.) is responsible for four major trends in the US equity markets - high concentration, exceptionalism, volatility and bubble-like valuations. American investment in intangible assets surpassed tangible ones and its intangible investment of $4.7 trillion in 2024 is nearly twice that of combined France, Germany, the UK, and Japan.
He also writes that intangible assets make up 90% of the total enterprise value of the 15 largest US companies, considerably higher than that of the broader US corporate sector.
For US stocks, Kai Wu of Sparkline estimates that accounting for intangible assets would cut perceived overvaluation by about 25 to 50 per cent, relative to headline valuation metrics. “While the market is by no means cheap, once firms are given credit for their intangible assets, valuations look far less frothy than the headlines imply,” he says.
This graphic compares the US and European high-tech companies.
Until around 2010, India held the second spot in global apparel exports, but its slow growth through the 2000s allowed Bangladesh to overtake it... During this period, many large Indian companies, too, expanded their manufacturing ecosystem to Bangladesh. Trade-policy analyst S Chandrasekaran indicates that roughly 25 per cent of textile manufacturing units in Bangladesh are Indian-owned — including brands like Shahi Exports, House of Pearl Fashions, Jay Jay Mills, TCNS, Gokaldas Images, and Ambattur Clothing. As they grew in size and faced labour issues here, they moved to a place where this problem could be addressed, said Kumar of Premier Agencies. While the average salary of employees in Tiruppur is over $180-200 (about ₹15,500-17,500) a month, in Bangladesh, it is around $100-115 (about ₹8,500-10,000). Despite these challenges, industry players believe India retains an edge due to its strong raw material base. The country is the world’s largest cotton producer and has an abundant supply of polyester, silk, jute, and man-made fibres, while Bangladesh relies on imports from India and China.
12. Peter Navarro takes aim at India for its Russian oil and arms purchases.
13. SpaceX survives on government contracts and pays no taxes.
SpaceX has most likely paid little to no federal income taxes since its founding in 2002 and has privately told investors that it may never have to pay any, according to internal company documents reviewed by The New York Times... SpaceX can seize on a legal tax benefit that allows it to use the more than $5 billion in losses it racked up by late 2021 to offset paying future taxable income. President Trump made a change in 2017, during his first term, that eliminated the tax benefit’s expiration date for all companies. For SpaceX, that means that nearly $3 billion of its losses can be indefinitely applied against future taxable income... In 2020, federal contracts generated about $1.4 billion, or 83.8 percent, of the company’s total revenue that year. The next year, federal contracts brought in about $1.7 billion, or 76 percent, of the total revenue.
14. A summary of Indonesia's economy.
Official figures suggest annual GDP growth is still close to 5 per cent, a number that has remained largely stable over the past decade other than during the Covid-19 pandemic. But more granular economic data indicates that Indonesia’s once-burgeoning middle class is shrinking, the economy is creating more informal jobs than formal jobs, underemployment is rising, car and motorcycle sales are plummeting, and credit growth is at a three-year low... The economy is growing more slowly and creating fewer quality jobs, both of which are eroding the purchasing power of the country’s 280mn citizens. Manufacturing’s share of GDP has slid from a peak of 32 per cent in 2002 to 19 per cent last year, though it remains the biggest contributing sector to GDP... At the heart of the problem is Indonesia’s focus on developing its cyclical and capital-intensive commodities sector over labour-intensive manufacturing, which generates more employment and higher wages. Although the resource-rich archipelago is the world’s top exporter of nickel products, palm oil and coal, it is the country’s factories that have created more high-paying jobs and underpinned middle-class employment...
Indonesia was once home to a thriving manufacturing industry that created millions of stable jobs and formed the foundation of the country’s aspiring middle class. For years it ranked among the world’s top producers of apparel, footwear and furniture. Its success came despite a late start relative to its south-east Asian neighbours. Modernisation only began in earnest during the 1960s as a result of the industrial policies of former dictator Suharto. The industrial sector grew by an annual average of 10.7 per cent in the three decades starting from 1967, when he took office. In 1993, the World Bank described Indonesia as one of the “east Asian miracles” for its rapid growth, and declining inequality and poverty. But the glory days ended in 1997, when Indonesia and several of its neighbours suffered rapid capital flight during the Asian financial crisis and had to be bailed out by the IMF. Suharto was toppled in 1998. Growth plummeted, and between 2000 and 2024, the manufacturing sector averaged 4.3 per cent a year, less than half the previous rate. That period coincided with an increased focus on boosting Indonesia’s resources sector amid a global commodities boom driven by industrialisation and urbanisation in China. Successive governments introduced protectionist policies such as the local content rule, which requires manufacturers to source a certain percentage of products from the domestic market, to support domestic companies.
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