Even at the entry level, graduate unemployment has been rising since 2015, pointing to factors beyond AI.
China’s total population peaked at 1.4 billion in 2021 and is now falling by three to four million people per year—roughly equivalent to losing one Los Angeles each year. By the 2040s, if China continues to follow East Asia’s descent to ultralow fertility rates, it will shed around one percent of its population annually—roughly ten million people, more than the population of New York City. At the same time, the proportion of China’s population aged 65 and older will surge, doubling from 15 percent today to around 30 percent in the 2040s, and then rising to well over 40 percent by the late twenty-first century. The size of that cohort in the United States, by contrast, is projected to rise far more gradually, from around 19 percent of the population today to just over 23 percent in 2060.
The essay by Carl Minzner talks of how the centralisation, a paranoid state, and suppression of dissent is creating the conditions for discontent and social instability. Sample this.
In 2023, Beijing created the Central Social Work Department and charged it with monitoring those suffering from any of the “four lacks” (no spouse or children, no job or stable income, no normal social interactions, or no financial assets, such as a house or car) or any of the “five losses” (failed investments, career or life setbacks, emotional imbalances, mental illness, or failed personal relationships). Beijing views such individuals as potential security threats capable of mass attacks, such as the November 2024 rampage in which a 62-year-old man, dissatisfied with the property settlement after his divorce, drove his car into a crowd and killed dozens.
3. Only 6.6% of Indians earn a middle class monthly salary of Rs 25,000. Even this is likely on the higher side, and I am not even talking about the low baseline.
4. China and EU agree tacitly on an arrangement whereby EU will impose a quota ceiling on Chinese hybrid car imports without any retaliatory action by China.
The agreement would more than halve projected exports over the next four years, reducing the number of hybrids shipped by China by “several millions”. On the current trajectory, Chinese exports to the EU would hit 800,000 this year. In 2027 alone, the deal would reduce imports by between 500,000 and 700,000 vehicles, cutting the EU’s expected trade deficit by between €10bn and €14bn, according to an EU official. The 2027 annual quota was expected to be initially about 350,000 vehicles, increasing by 6 per cent a year for the following three years, the official said. The EU’s trade deficit in goods with China hit €360bn in 2025 and has increased since. In the second quarter of 2026, it was €103bn, up from €93bn in the same period last year. Vehicles and machinery were the biggest contributors... The share of the EU market for plug-in hybrid electric vehicles controlled by Chinese imports rose to 25 per cent in the first half of this year and for other hybrid electric vehicles to 14 per cent, both up from 2 per cent in 2024.
Debt servicing payments alone are expected to account for 19.2 per cent of the central government’s general public budget this year, up from 12 per cent in 2014, according to a new study from the Conference Board. The problem is especially acute at the local government level, where debt interest payments have risen 16 per cent annually over the same period. Together, central and local government debt interest payments are projected to amount to Rmb1.4tn ($209bn) in 2026, up from about Rmb348bn in 2014... Public debt-to-GDP is set to hit 122 per cent by the end of 2026, up 48 percentage points from its pre-pandemic level, according to Morgan Stanley analysts... Economic growth slipped to 4.3 per cent in the second quarter, below the official full-year target range of 4.5 to 5 per cent, on the back of weakening retail sales and sharp falls in fixed-asset investment... While the central government runs a fiscal deficit of about 4 per cent, the augmented deficit, a wider measure of state spending, is running at about 10 per cent of GDP, according to Goldman Sachs... “Spending on debt interest payments rose 341 per cent” between 2013 and 2025, according to the Washington-based Center for Strategic and International Studies, “faster than any other major budget category”. The think-tank noted that about 14 per cent of US government spending went towards interest payments this year while Japan, one of the world’s most indebted governments, spent almost 26 per cent.
6. The remarkable stability of occupations.
Long-established ones are far more durable — more than 70 per cent of workers today are employed in occupations that existed in the late 19th century. Rather than eliminating these occupations, technology has transformed them.
7. Forward guidance (among other things) wins Nobel Prize precisely in the year the new Fed Chairman is taking steps to reverse it.
8. China clocks a 36.3% growth in dollar terms in its exports in September over the same month last year, the biggest increase since January-February 2021. Trade surplus for the first nine months was $938.1 bn, compared to $875 bn last year.
This comes even as economic growth slows, reporting 4.3% in the second quarter, one of the lowest quarterly growth rates in decades and below the full year target band of 4.5-5%.
9. While subsidies were a major contributor to Chinese companies becoming dominant in manufacturing, they have been far sighted enough to sharply increase their R&D spending and move up the value chain and become global manufacturing leaders across the value chain.
10. Richard Waters puts the AI investment in perspective.
To take one recent estimate, from the Brookings Institution: Spending on the AI services produced by all those data centres would need to account for an astounding 9.2 per cent of US GDP by 2032 for their operators to make a decent economic return... The five biggest hyperscalers — Alphabet, Amazon, Meta, Microsoft and Oracle — have raised their capex budgets throughout the year and currently expect to spend $800bn, nearly twice as much as last year. That is set to eclipse their combined forecast cash flow of around $700bn... according to the Brookings report, it will take an extraordinary jump in AI demand to justify the construction boom. By 2032, customers would need to spend $3.7tn a year (the 9 per cent of US GDP). Tech research firm Gartner came up with a similar calculation this week, estimating that $8.5tn of AI revenue will be needed between now and 2030 to produce decent investment returns on all the new data centres. The actual AI revenue Gartner forecasts over that period: $3.6tn.
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