1. The Ken has a story which writes that the UPI has now become an oligopoly involving two companies - Phone Pe and Google Pay, who together make up nearly 85% of the UPI transactions. The NPCI had announced a 30% cap for any one company in 2020, and the deadline has since been extended to end of 2024.
2. Chinese local governments are raising tariffs and fees on various utility and other services.
China is taking the rare step of sharply increasing fares for riders on four major bullet train lines, in its broadest move to address rising costs and heavy debts since construction of the system began nearly two decades ago. The higher prices for train tickets are part of a push to raise prices for public services. Earlier this year, water and natural gas bills started going up in some cities. Public services in China are heavily subsidized by local governments. But huge municipal debts mean that these governments have less money on hand to keep prices down... China has already pushed up electricity charges considerably since 2021 for many factories, although residential customers continue to pay low, subsidized electricity rates...The bullet trains... infrastructure has been paid for with enormous borrowing, which has reached $870 billion just for China State Railway Group, the state-owned enterprise that runs the rail network... Many of its lines are owned by joint ventures with provincial and municipal governments that helped pay for construction and are becoming less able to subsidize transportation... China has opened 28,000 miles of bullet train routes since 2008. Routes connect every major city and hundreds of smaller cities and towns. To put its size in perspective: The system is long enough to span the continental United States more than 10 times from New York to Los Angeles. The first line opened right before the Beijing Summer Olympics. China’s bullet trains typically run at either 186 or 217 miles per hour, depending on the route. Because the tracks are straight, the trains run for long distances without slowing down... With the price increases, the peak fare of a second-class high-speed train ticket from Wuhan to Guangzhou, a nearly 600-mile trip that takes less than four hours, will soon be $78. A ticket in first class, which has two seats on either side of the aisle like economy class on American trains but more leg room, will cost $125, and a lie-flat business class seat will cost $273.
3. In pursuit efficient management of their times, couples are taking to using work-management tools like Slack and Notion. This is one more example of efficiency maximisation taken to its extremes.
4. The optimal currency area benefits that the richer South India gets over the poorer North India.
The more industrialised, richer countries get a huge captive market in the EU in which they can sell their products. Those that have adopted the euro as their currency also get a huge competitive advantage as their labour becomes cheaper (relative to labour productivity), while that of the relatively poor countries in the euro — such as Spain, Greece, and Portugal — more expensive. The Bertelsmann Stiftung Foundation showed that German growth was 0.5 per cent per year higher due to the euro — largely because its national currency the D-Mark would have been stronger, and, as a result, exports were lower. Similar benefits also accrue to Austria and the Netherlands, and even to Denmark, which is not in the EU but keeps its krone pegged to it. So, while the richer parts of the EU subsidise the poorer parts through fiscal transfers, they also gain by having a captive market and an undervalued currency that improves their competitiveness across the world.
5. Fascinating account in NYT about the evolution of road usage in New York City.
New York City’s streets were laid out before anyone knew how they would ultimately be used — long before cars were even invented. The first city planners could not have anticipated Uber vehicles, let alone Amazon deliveries or commuters on electric scooters. In New York’s earliest days, the streets were a free-for-all. People walked or rode horses. There were no crosswalks or stoplights; if you had to cross the street, you simply walked across the street. Soon, horse-drawn vehicles used the streets alongside pedestrians, and people dashed between them. (Later, New Yorkers dodged streetcars in much the same way, giving the Brooklyn baseball team its name.) The arrival of bicycles neatly encapsulated the city’s ever-shifting debate over how the streets should be used — and by whom. By the 1890s, the streets were full of bikes. Men and women took to cycling through the city so quickly — and dangerously — that it was called “scorching.” About 100 years later, in 1987, speeding bike messengers were deemed so dangerous that bicycles were banned from Midtown — temporarily. Today, the city encourages residents and visitors to ride bikes. New York has bike lanes and a flourishing bike share program, plus an explosion of food delivery powered by e-bikes. The renewed popularity has also come at a grave cost: Last year 30 cyclists were killed on city streets, and 395 were severely injured...“At the end of the Gilded Age, right before World War I, suddenly, there were motor vehicles everywhere,” said James Nevius, an author and New York historian. The development meant people could move around faster — but it also put more people in danger. In 1920, there were about 200,000 registered vehicles in New York City; by 1925 that number had more than doubled. A century later, that figure is two million. And yet New Yorkers are still using the same streets that were laid out generations ago. In Manhattan, the rigid street grid was designed in 1811. Avenues are 100 feet across. Cross streets are 60 feet wide, including the space for sidewalks on both sides. That’s 720 inches in which to fit not just cars but also pedestrians, baby strollers, trash, compost, scaffolding, bicycles, e-bikes, scooters, skateboards, package delivery trolleys, garbage trucks, delivery trucks, food carts, 5G towers, dining sheds, trees, CitiBike docks, buses, taxis, ambulances and on-street parking. It’s like a giant game of Tetris — except all the pieces just won’t fit. In fact, some of the pieces are growing larger: In the past decade, the average vehicle got 12 percent longer and 17 percent wider. (Cars’ blind spots have also gotten larger.) And the number of pieces just keeps expanding. New York City’s population reached 8.8 million in 2020, and the New York region is now home to nearly 19 million people. The city’s population has dropped some in the past few years, but city officials believe that recent population estimates have significantly underestimated the number of newly arrived migrants, which, by some counts, is over 180,000...
Over the past 10 to 15 years, sweeping pedestrian plaza initiatives — detouring cars and encouraging space for sitting and strolling — have gradually changed the landscape, from the Jackson Heights neighborhood in Queens to Times Square. The Open Streets program restored pedestrian-first streets, free of cars and safe enough for strolling, chatting and letting kids ride bikes... And there are plenty of other places to look for inspiration: In Bogotá, Stockholm, London and Paris, certain streets are being closed to cars. There is an effort in Europe to avoid the oversize pickup trucks and SUVs that make American roads so deadly. Paris has designated “school streets” where cars have been removed to make way for children. Cycling is flourishing in Europe; emissions are down.
6. The investment-side story of the Indian economy over the last few years is nicely captured in this table.
Underlining the weakness in private investments throughout recent years, the value of completed projects has mostly stayed the same in real terms from 2017-18.
The most recent National Accounts Statistics (NAS) show a drop in the annual rate of growth of consumption from around 7 per cent between 2011-12 and 2018-19 to a little over 4 per cent in the past five years.(Table 1.1 NAS 2024). In fact, the second advance estimate for 2023-24 shows only a 3 per cent growth in private consumption. In a large country like India, a slowdown in private consumption growth will affect corporate investment. That is why the recent NAS shows a drop in the annual rate of growth of private corporate investment from a little over 10 per cent between 2011-12 and 2015-16 to under 5 per cent in the years since then until 2022-23. (Table 1.11 NAS2024).
Countries have other interests besides the climate, of course. They can harbor legitimate concerns about the consequences of other countries’ green-industrial policies for jobs and innovative capacity at home. If they judge that these costs outweigh the climate and consumer benefits, they should be free to impose countervailing tariffs on imports, as trade rules already allow. It would be better for the world overall if they didn’t react that way, but nobody can or should stop them.
The problem is with the last line. While the Chinese green power subsidies have achieved tremendous success in mainstreaming green technologies, it has come at the cost of destroying local green industries elsewhere and making all countries chronically dependent on China for green technologies. Given green technologies are a major share of today's and future manufacturing, the destruction of the domestic manufacturing bases across countries due to cheap Chinese exports is a prohibitive and unacceptable price to pay. It becomes a serious, almost existential, national security risk when there's a Cold War raging and the near-certain weaponisation of its dominance in these frontier technologies by the Chinese government.
The manufacturing trends in green technologies are an encore of what has happened across the manufacturing sectors in the last two decades. Thanks to the cheap Chinese imports, the manufacturing base that's essential to create the good jobs that Dani Rodrik frequently writes about has been seriously weakened across developed and developing countries. Besides, the world has become excessively dependent on China for even basic manufacturing, as the Covid 19 painfully exposed.
Economists should consider this trend in manufacturing as a failure of comparative advantage. If there's a strong Matthew Effect, whereby the dominant producer is able to strengthen their position with economies of scale and subsidies, then comparative advantage and trade end up leaving the world economy worse off.
8. Among advanced economies, the Germans work the least and the Americans the most.
According to the OECD, the average annual hours worked by Germans are down 30 per cent in the past 50 years, falling a quarter below US levels, reflecting Europeans’ growing preferences for longer periods of leave and more leisure time.
By this measure, annual global fossil-fuel subsidies are a massive $7tn, nearly three times as much as worldwide spending on defence. This has caused considerable consternation in policy circles: old subsidy hands correctly point out that these estimates of implicit subsidies are highly uncertain and hence cannot practicably form the basis of international rules. They also often lead to a misleading idea — unfortunately propagated by the fund itself, its sister organisation the World Bank and the UN — that trillions of dollars are being spent on fossil-fuel subsidies and could be redirected elsewhere. In reality, the public money that supposedly funds implicit subsidies does not yet exist: it’s notional revenue from a tax the IMF thinks ought to be levied but isn’t.
Such subsidies are clearly defined by value systems and preferences of certain groups of countries. It raises several questions. What should be an acceptable level of internalisation? Why should only certain kinds of social costs be considered (labour standards, pollution etc.), whereas certain others are not considered (labour displacing technologies, cross-border capital flows)?
10. Rahul Jacob in Livemint has some stats about India's trade figures
A Federation of Indian Export Organisations report says that apparel, knitted garments, marine products, plastics, and gems and jewellery had grown at just 1 % to 2%. In fact, during 2023-24, while goods exports contracted by 3%, exports of textiles, leather, gems and jewellery and marine products declined 9%... A report earlier this year by Global Trade Research Initiative, a think-tank, contains alarming data-points on India’s decline in the global garments market. It states, “In 2023, China exported $114 billion worth of garments, followed by the EU with $94.4 billion, Vietnam with $81.6 billion, Bangladesh with $43.8 billion, and India with just $14.5 billion… From 2013 to 2023, Bangladesh’s garment exports grew (cumulatively) by 69.6%, Vietnam’s by 81.6%, but India’s grew by only 4.6%."
11. Finally, via Kyle Chan, some interesting graphics on the iPhone in the Nikkei Asian Review. The prices of iPhone components have been rising.
Apple has been largely absorbing a significant part of the price increases.
The share of China in the components cost is tiny.
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