Weekend reading links

1. China may be turning to its traditional industrial policy playbook to reduce its current import dependence and achieve self-sufficiency in food, especially animal protein, thereby upending global supply chains. 

Adam Tooze writes, pointing to analysis by the research group Systemiq.

This involves a combination of investment and innovation. Beijing is coordinating central and provincial government, state-owned enterprises and financial institutions around smart agriculture. It has licensed the commercialisation of genetically modified maize and soya. Research clusters are forming around neoproteins, fermentation-derived ingredients, feed additives and agricultural biotechnology. State banks are on hand to provide cheap finance. To channel demand, Beijing is tightening food and feed standards and tweaking procurement requirements. This is the kind of whole-system policy that has given China a commanding lead in the new energy sectors. With all the levers in play, we may, by as early as 2030, see a significant fall in soyabean demand, slashing imports from the US dramatically. By 2040, innovation and efficiency gains could plausibly turn China into a net exporter of poultry, dairy, eggs, fish and seafood. If agriculture follows the industrial policy timeline, by 2050 we should expect to see China emerging as a major source of “cultivated meat”.

2. Indonesia's President Prabowo Subianto has signed a presidential regulation cutting the percentage that ride-hailing platforms like Grab and GoTo can take from each order to a maximum on 8%, down from the current 20%. 

3. The latest on the dominance of the Magnificent Seven (US stocks make up 65% of global stock market capitalisation, up from 40% in 2010).

This is an important data point.

Bloomberg data suggests that almost 80 per cent of the S&P 500 companies that reported first-quarter results this month beat analyst earnings estimates.

4. Chinese ports facts of the week.

Chinese firms now operate or have a financial stake in at least 129 ports outside China (see map), and have spent at least $80bn on port construction from Antigua to Tanzania, with many of the investments tied to bilateral trade and regional shipping agreements. More than a third of China’s overseas ports are near maritime chokepoints, including the Strait of Malacca, the Strait of Hormuz and the Suez Canal, making them indispensable operators in strategic areas. China’s firm grip on global ports has rattled Western governments. MERICS, a think-tank in Berlin, found that after a terminal operating contract is signed, total trade with China rises by more than a fifth, while countries that allow Chinese firms to run all their terminals at one of their ports see a 19% drop in exports to the rest of the world. Operating ports allowed Chinese firms to prioritise their cargo and vessels and speed up customs and logistics...

China’s reach extends beyond physical infrastructure. LOGINK, a Chinese government-run logistics-management software, is used in at least 24 countries and 86 ports (America banned its use in 2023). LOGINK shares data with CargoSmart, another shipping-management software firm owned by COSCO, another Chinese state-owned firm, and in turn gives it access to the whereabouts of 90% of the world’s container ships. It also has a tie-up with CaiNiao, a logistics provider with hundreds of warehouses around the world... Chinese firms are also building industrial parks and manufacturing facilities close to their existing ports in Africa and Europe.

5. Good FT article on how data centres construction is triggering local backlash as residents fear for their water and electricity.

Around two-fifths of all US data centres are located in areas of high water stress, according to S&P Global... In DeKalb, a city of around 40,000 people, water demand averages just over 3mn gallons a day, rising to in excess of 4.5mn gallons at peak. The latter figure is broadly comparable to the needs of a single large AI data centre.

Data centres have already emerged as a significant driver of economic expansion in the US, accounting for 80 per cent of private sector growth in the first half of 2025, according to S&P Global... Researchers at the Lawrence Berkeley Laboratory forecast that so-called hyperscaler data centres will consume anywhere between 60bn and 124bn litres (16bn and 33bn gallons) of water on-site each year in 2028. This figure excludes the indirect water use tied to electricity generation, which the lab previously forecast could be as much as 12 times higher than direct consumption...

Of the roughly 100GW of additional electricity capacity that the US is projected to need at peak times by 2030, roughly half will be used by data centres, according to the Department of Energy... On average, American bill payers — including residential, commercial and industrial customers — paid over 6 per cent more for electricity year on year at the end of 2025. This increase was starkly higher in the mid-Atlantic states which house a large number of data centres such as Pennsylvania and Virginia, where bills rose by 19 and 10 per cent respectively.

6. Indian equities suffer from a high valuation gap with EM peers.

In recent weeks, a string of global brokerages – including Goldman Sachs, Nomura, HSBC, UBS, and JPMorgan – have downgraded Indian equities in their emerging market portfolios. The concerns converge around a common theme: Deteriorating macro conditions amid rising energy prices, weakening earnings visibility and, crucially, more attractive opportunities in other EMs... The relative valuation gap still stands at around 65 per cent—well above South Korea, Brazil, China, Mexico and South Africa. “South Korea is expected to deliver about 180 per cent earnings growth at around 7x P/E. Taiwan offers about 35 per cent growth at 18x. China delivers about 14 per cent at 11x. India, by contrast, offers 8–14 per cent growth but trades at ~19x,” said Amish Shah, head of India Research, BofA Securities. From a global allocator’s perspective, India remains expensive.

The weight of Indian equities in the MSCI EM index has continued to fall since March 2025, from 18.5% to 12.58% in March 2026.

7. India's trade deficit with China continues to grow.

On April 8, Xu Feihong, Chinese ambassador to India, posted on X: “Glad to know that China has become India’s largest trading partner in FY2026 — for the 11th straight month.” This was great news for China but not for India. The $151.1 billion trade between the two comprised $131.63 billion of exports from China to India and a meagre $19.47 billion of imports from India. It was a one-way street. China was flooding Indian markets even as it became India’s “largest trading partner”...

India must import electronics and electrical equipment ($40 billion-50 billion), machinery ($27 billion), organic chemicals ($12 billion-13 billion), plastics, steel, medical equipment, and so on from China every year. These are critical products without which the Indian economy would not be able to function. Alternative sources exist for some, but at a much steeper price. Moreover, China has diversified its supply sources, so even if not directly from it, Chinese goods would still reach India through Southeast Asian and other manufacturing bases.

8. One explanation with oil markets are still not rising as much as expected. 

In 1973, the year of the first oil price shock, I calculate from industry sources that about 80 per cent of one barrel of oil was consumed per $1,000 of global GDP in 2025 prices — 131 litres, to be precise. In 1980, the year after the Iranian revolution, this was down to 116 litres. Last year, it was 52 litres. The current level is still a lot, but the average oil burden is 60 per cent less than 50 years ago. If so much less oil is needed, real prices should have much more room to escalate before they cause the economic damage associated with previous disruptions. A simple illustration of today’s diminished oil cost burden to the global economy is to adjust the nominal price of oil not only for inflation but also for the efficiency improvements. If one does, a hypothetical price of $115 per barrel today compares with an average price of $339 in 1980 in today’s dollars. By this measure, prices have plenty of runway before the oil burden resembles 1980.

But it must be balanced against other factors pulling in the opposite direction.

Oil consumption today is more concentrated in high-value uses and in areas where there is no substitute, like road or air freight and maritime shipping. These are load-bearing economic activities, less price sensitive than discretionary or consumption-oriented drivers of growth. Once disrupted they are likely to cascade through the economy... Oil concentrated in high-value uses is a little bit like rare earths, tiny compared with the size of GDP but essential for much of it. If the size of a supply disruption requires demand to come down and prices surge to the required level, the response will be sudden with a potentially unforeseen and disproportionate impact on economic activity.

9. Jakarta's success with mass transit appears exemplary.

In 2014, Jakarta was crowned the world’s most congested city by the Stop-Start Index and a year later was ranked far below other Asian cities on livability by the Economist Intelligence Unit. Ten years later, Jakarta has the world’s largest and one of the most used bus rapid transit (BRT) systems. The old, crowded diesel commuter trains, famous for allowing passengers to ride on the roofs, are now electrified, air conditioned, and run on regular schedules linking the suburbs to the city center. There are multiple subway and light rail lines crisscrossing the city. The transformation has been remarkable: in 2015, less than 20% of residents were within walking distance of transit. Now, nearly 90% of the city has access to BRT or trains... 

The user experience has also been streamlined. All of the new MRT lines are part of an integrated digital fare system. A journey from one end of Jakarta to another is capped at 10,000 rupiah (about 70 US cents). According to WRI Indonesia, as of 2024, 10 percent of trips in Greater Jakarta are now made by public transit, compared to just 2 percent in 2015... While the JICA loans covered the cost of building the MRTS and training local staff, the full cost of operation has now fallen to the city government. So far, this has worked reasonably well, with Jokowi arguing that the cost of running the system — at about 800m billion rupiah (US$50 million) a year — is justified by the estimated 65 trillion rupiah (US$3.5 billion) in annual economic losses due to traffic.

However, much more remains to be done. 

The city has recently overtaken Tokyo as the world’s largest city, with a metro population of over 41 million people, and it is still growing rapidly. It is projected to add another 10 million people in the next 25 years. To serve this population, Greater Jakarta has only six train lines and under 250 miles (400 km) of track. Tokyo, by contrast, has an astounding 158 train lines and 2,930 miles (4,715 kilometers) of track connecting 2,210 stations throughout its massive metro area.

10. Foreign portfolio investors sharply cut exposure to Indian software firms.

Foreign Institutional Investors’ (FIIs) allocation to the Indian technology sector stood at an all-time low of 7.3% at the end of March compared to 10.1% at the end of FY25, according to brokerage Motilal Oswal Financial Services... So far in 2026, FIIs have sold $21.6 billion of Indian equities – more than the $18.9 billion they sold in all of 2025 – of which $2.4 billion worth of net sales have been of Indian IT stocks (until April 15). As a result, FII holdings in the IT sector reduced to $41.4 billion from $59.8 billion at the end of 2025.

11. TIDCO stake in Titan Company.

This state government-owned industrial promotion agency, TIDCO, has a 27.88% stake in Titan Company Ltd. That’s more than the combined 25.02% share of the Tata Group through its holding company and various subsidiaries. It makes TIDCO the main promoter of Titan, which was established in 1984 as a joint venture for manufacturing quartz analog watches at Hosur on the Tamil Nadu-Karnataka border. That company — originally Titan Watches Ltd — has today grown to a premier lifestyle accessories maker with a product portfolio spanning watches and wearables (Titan, Fastrack and Sonata brands), jewellery (Tanishq and CaratLane), eyecare, women’s bags (IRTH) and ethnic wear (Taneira sarees and tops). Titan Company earned a net profit after tax of Rs 3,337 crore on a total income of Rs 60,942 crore during the year ended March 31, 2025... at the share’s closing traded price on May 6... TIDCO’s 27.88% holding in Titan will alone be valued at Rs 1,07,873 crore... if TIDCO were to sell its entire stake in Titan Company, the Tamil Nadu government would be able to mobilise upwards of Rs 1 lakh crore and bring down its outstanding debt by roughly a tenth. The annual savings in interest outgo resulting from it will far exceed the Rs 272 crore that TIDCO received as dividend for 2024-25 from its 27.88% shareholding in Titan Company.

12. Ruchir Sharma makes some very important points about the critical role being played by retail investors in the US equity markets. Some numbers.

The share of US households that own stocks has surged this decade to nearly 60 per cent, the highest proportion in any country. Americans are all in on the market, holding more wealth in stocks than in their homes for the first time. And retail is now the most active class of traders as well. Retail’s share of daily trading in US stocks doubled in the past 15 years to 36 per cent, surpassing that of big banks or hedge funds, and making them the market price-setters. Last year US retail trading topped $5tn, exceeding the pandemic high, only this time Americans weren’t stuck at home or flush with savings.

He points to contributors to the rise of retail investors.

Three forces are encouraging small investors’ deep faith in the stock market: stimulus, bailouts and technology. Record sums of money pouring out of government and central banks, intended to lift the fortunes of the real economy, have instead been used by households (particularly the richer ones) to invest in the stock market. With policymakers rushing to rescue the economy at the slightest hint of trouble, investors have come to believe the government will always bail them out. And low-cost, mobile trading platforms have given everyone easy access to investments of all kinds.

Finally, a very important political economy dynamic arises from this trend. 

The larger the retail community gets, the more pressure builds on politicians to support the market. What was said of Wall Street banks after the crisis of 2008 can now be said of the stock market as a whole: it’s “too big to fail”.

13. The rise and rise of stock market concentration in the US.

Analysts at UBS said that a measure of how many stocks were materially contributing to the index’s performance — so-called “effective constituents” — hit a record low of 42 last week, far below the level of about 100 that has been typical in recent decades.

14. Nice interactive story of how oil from the Gulf reaches Japan, gets refined, and is distributed. 

15. The $725 bn capex spending projected by the Big Tech (Amazon, Alphabet, Microsoft and Meta) is estimated to leave them with their lowest free cash flow since 2014. 

16. Fascinating 5km split of Sebastian Sawe's sub-two-hour marathon.

Weekend reading links

1. The world's food supply chain is deeply enmeshed in fossil fuels from the Gulf.

In 2024, for instance, Saudi Arabia, Oman and Qatar together supplied more than three-quarters of India’s ammonia imports and 30 per cent of Morocco’s. As a result, food production in south Asia and north Africa has become deeply dependent on Gulf nitrogen flows... About 70 per cent of the world’s ammonia is used in fertiliser production, and just under30 per cent of global ammonia exports originate in the Middle East... Roughly half of the world’s global seaborne sulphur passes through the Strait of Hormuz, with most of this produced by the Gulf’s state-owned energy companies — above all Adnoc, QatarEnergy, the Kuwait Petroleum Corporation and Saudi Aramco... Gulf countries account for 35 per cent of global urea trade; Saudi Arabia was the world’s largest urea exporter in 2024, while Oman ranked third. Monoammonium phosphate (MAP) and diammonium phosphate (DAP), two of the principal fertilisers used to supply crops with phosphorus, are also closely tied to Gulf production and export routes. In 2024, countries upstream of Hormuz accounted for 18 per cent of global MAP and DAP trade.

As Leiden University’s Christian Henderson has recently shown, Gulf countries have also become deeply enmeshed in cross-border control of large agribusiness companies throughout the Middle East as a whole. Egypt, the world’s second-largest urea exporter, offers a clear example of what this means for the production of fertiliser. A substantial share of Egypt’s export-oriented nitrogen capacity is controlled by Fertiglobe, a company in which the UAE’s Adnoc now holds a controlling stake and that claims to be the world’s largest seaborne exporter of urea and ammonia, according to its 2024 financial results. Fertiglobe’s Egyptian assets include the Egyptian Fertilizers Company, with an annual capacity of 1.7mn tonnes of urea and 0.9mn tonnes of ammonia, alongside Egypt Basic Industries Corporation, which adds another 0.7mn tonnes of ammonia. For comparison, Misr Fertilizers Production Company (MOPCO), which operates Egypt’s largest nitrogen fertiliser plant, reported 1.7mn tonnes of urea and 1.1mn tonnes of ammonia in 2024. About 44 per cent of MOPCO is owned by Saudi and UAE investment funds.

This level of dependence on the Middle East makes claims of food security ring hollow in countries like India. These countries can exercise chokeholds that can expose countries to deep vulnerabilities in their food security system. It is an area that needs to be kept in mind and diversification strategies should be pursued.

2. European luxury houses are struggling.

So far this year, nine leading European luxury stocks have lost at least a collective €140bn in market capitalisation, a bitter blow for an industry that was riding high during the first half of this decade, when LVMH was the continent’s most valuable company... The luxury sector, which supersized between 2019 and 2023, was already grappling with some hard truths before the conflict began. Middle-class shoppers who previously spent tens of billions of dollars on luxury items pulled back once their Covid-era savings and furlough payments ran out and the cost of living rose. Some 50mn luxury consumers exited the market between 2022 and 2024, according to a report by Bain, most of them aspirational shoppers who felt left behind by skyrocketing prices... the Chinese market, the motor of growth until 2023, has been hit by relatively weak consumption in the pandemic’s aftermath.   

And the problems in the Middle East will worsen matters, given that the UAE is an important market. 

3. India's contract manufacturers command much higher PE valuations than their much bigger global counterparts.

Take Dixon Technologies. Over five years, its revenue has grown nearly fivefold to about Rs 18,000 crore, helped along by the PLI scheme and by assembling for companies like Xiaomi and Google... And yet, for all that scale, the economics remain surprisingly thin. Profit margins hover around 2%. A meaningful chunk of profits comes from government incentives. More tellingly, even at this scale, Dixon still depends on imported components, external designs, and global clients. India may now assemble a significant share of the world’s smartphones, but much of the value still sits outside the factory.

What happens when PLI gets phased out?

4. Sobering statistics about higher education in general and specialised fields like Agriculture. 

A 2020 survey at the Tamil Nadu Agricultural University found that less than 12% of students thought of farming as a future career. Nearly 60% of students wanted to be government employees, and more than a quarter of them wanted to get into business and entrepreneurship. Only 3% said they wanted to work for private companies. And it’s not just about the students. Their goals come from practical considerations. Take the case of the University of Agricultural Sciences, Bangalore. Just a little over 16% of its total 882 students of agriculture got placed in 2023–24. It only gets slightly better in the postgraduate courses, where only 37% out of the 287 students were placed. The story is similar in other universities as well.

What does it tell us about the career prospects in specialised fields like agriculture when nearly 60% of students want to be government employees?

5. Some stock market facts on the Adani Group.

Adani Green is trading at a trailing price-to-earnings (P/E) multiple of 1,109X, compared to peer Tata Power’s 47X, according to data from market information provider Screener.in. And Adani Total Gas’s trailing P/E multiple is 473X, compared to Indraprastha Gas’ 18X... the shareholding patterns in Adani group companies... several of them shared common foreign portfolio investors (FPIs). And strangely, several of them had negligible investments in non-Adani companies. As a result, the percentage of shares effectively available for trading by the public was just about 5% in Adani Total Gas and 11% in Adani Green. The comparable figure for Indraprastha Gas is 55%, and for Tata Power, 53%... only one FPI owns more than 1% of Adani Green now, compared to 10 in December 2020. But that FPI—Asia Investment Corporation (Mauritius)—is still heavily invested in the Adani Group, with 93% of its holdings in Adani companies... LIC’s stake in multiple Adani Group companies has gone up over the last few quarters.

See also this and this on the conglomerates in the Indian economy.

6. The New Yorker essay raises the question of whether Sam Altman can be trusted.

Altman has a relentless will to power that, even among industrialists who put their names on spaceships, sets him apart. “He’s unconstrained by truth,” the board member told us. “He has two traits that are almost never seen in the same person. The first is a strong desire to please people, to be liked in any given interaction. The second is almost a sociopathic lack of concern for the consequences that may come from deceiving someone.” The board member was not the only person who, unprompted, used the word “sociopathic.” One of Altman’s batch mates in the first Y Combinator cohort was Aaron Swartz, a brilliant but troubled coder who died by suicide in 2013 and is now remembered in many tech circles as something of a sage. Not long before his death, Swartz expressed concerns about Altman to several friends. “You need to understand that Sam can never be trusted,” he told one. “He is a sociopath. He would do anything.”

This is a good portrait.

Altman is not a technical savant—according to many in his orbit, he lacks extensive expertise in coding or machine learning. Multiple engineers recalled him misusing or confusing basic technical terms. He built OpenAI, in large part, by harnessing other people’s money and technical talent. This doesn’t make him unique. It makes him a businessman. More remarkable is his ability to convince skittish engineers, investors, and a tech-skeptical public that their priorities, even when mutually exclusive, are also his priorities. When such people have tried to hinder his next move, he has often found the words to neutralize them, at least temporarily; usually, by the time they lose patience with him, he’s got what he needs. “He sets up structures that, on paper, constrain him in the future,” Wainwright, the former OpenAI researcher, said. “But then, when the future comes and it comes time to be constrained, he does away with whatever the structure was.” “He’s unbelievably persuasive. Like, Jedi mind tricks,” a tech executive who has worked with Altman said.

7. Guyana's dramatic oil-led economic transformation.

Guyana, a former British colony on the north-eastern flank of South America with a population of about 800,000, is undergoing rapid change following ExxonMobil’s 2015 discovery of about 11bn barrels of oil, one of the largest finds in decades. Crude production has since risen to more than 900,000 barrels per day, with consultancy Wood Mackenzie projecting that the government’s share of oil profits will total $41bn over the next five years. Between 2019 and 2024, Guyana’s GDP almost quintupled to $25bn.

8. India's trade balance sheet.

The cumulative exports (merchandise and services) during FY26 (April-March) are expected to be $860.09 billion, as compared to $825.26 billion in FY25 (April-March), an estimated growth of 4.22 per cent. A closer look reveals stagnation in merchandise exports over the last four years, with a negative CAGR (compound annual growth rate) of 0.42 per cent, while total export figures have been lifted by services exports, which grew at a CAGR of about 8.9 per cent over the same period... in April 2015, the government said that the objective of the Foreign Trade Policy 2015-20 was to double India’s share in global merchandise exports in five years. The reality is that since 2014, India’s merchandise exports have grown from $314 billion to $441 billion, a CAGR of 2.9 per cent, and India’s share in global merchandise exports has remained stuck at about 1.8 percent.

9. Ruchir Sharma points to the spectacular boom in South Korean and Taiwanese equity markets led by three semiconductor stocks - TSMC, Samsung, and SK Hynix.

Over the past year, these two nations accounted for 75 per cent of emerging market returns, and most of those gains came from just three stocks — all big makers of semiconductors... Together their profits are on track to top those of Apple, Amazon and Alphabet combined. Samsung is expected to increase operating profit more than sixfold this year to around $185bn, surpassing every member of the “Mag Seven” American companies other than Nvidia... TSMC is the most widely held stock, owned by 92 per cent of global equity funds. In comparison, Microsoft, the most widely owned US stock, is held by 84 per cent of those funds... Today, by some measures, emerging markets have grown even more concentrated than the US, with the leading five stocks accounting for a greater share of the index. While the top US stock (Nvidia) represents 8 per cent of the US index, the top EM stock (TSMC) accounts for a record 13 per cent of the EM index. In fact, based on MSCI methodology, TSMC now constitutes a larger share of the MSCI EM index than all the stocks in India put together.

10. China could boost consumption by cutting its high payroll taxes.

China levies European-level payroll taxes, creating a large wedge between the cost of employing a worker and their after-tax income — around 38 per cent. These taxes are also highly regressive, applied to income below a ceiling of three times the average wage. Payroll taxes raised 6.5 per cent of GDP in 2024, against just 1.1 per cent for personal income taxes. A dramatic, permanent payroll tax cut would therefore significantly boost consumption. It would put more money in workers’ pockets, especially lower-income workers with the highest propensity to spend. It would raise employment by lowering labour costs. And it would reduce informal labour by giving workers stronger incentives to participate in the social security system.

11. Striking facts about India's gold ownership.

Between 2011 and 2025, India imported approximately 12,670 tonnes of gold at a cumulative cost of roughly $609 billion. At the current spot price of $4,677 per ounce (as of 4 April 2026), that gold is now worth approximately $1.905 trillion. The $1.3 trillion appreciation alone exceeds India’s entire stock of foreign exchange reserves. No other asset class, government scheme, or financial product has generated comparable wealth for Indian households over this period. Data shows there is not a single year between 2011 and 2025 in which holdings have not at least doubled in value... Gold imported in 2015 for $35 billion is now worth $157 billion—a 350% gain... Even the pandemic year of 2020, when India imported just 430 tonnes at $22 billion, has returned $65 billion at today’s prices... Estimates from the World Gold Council suggest Indian households hold between 25,000 and 34,600 tonnes of gold. At today’s prices, that equates to a holding worth between $3.8 trillion and $5.2 trillion—roughly equivalent to India’s entire GDP.

12. Norway's brand equity of democracy and humanitarianism comes up against allegations of being a war profiteer due to rising oil prices, as it adds billions to its $2.2 trillion sovereign wealth fund. 

The country has earned about $140bn more in 2022 and 2023 from petroleum following Russia’s full-scale invasion of Ukraine than it did in 2021. Now, Nordea credit investment director Robert Næss has forecast Norway has earned at least an additional $8bn from the conflict in Iran, which shows no immediate signs of ending...

Norway was something of a regional laggard in terms of support to Kyiv in the early days of the Ukraine conflict, behind the Baltic states and on some metrics neighbouring Sweden and Denmark relative to the sizes of their economies. It has since somewhat caught up but its support as a percentage of GDP is still behind Estonia and Lithuania, according to the Kiel Institut’s Ukraine Support Tracker.

13. AI bests humans in table tennis.

An AI-powered robot has beaten expert table tennis players in a landmark machine-over-human triumph in a major competitive sport. The mechanical maestro, known as Ace, uses a network of cameras and AI to achieve the rapid planning and reaction times needed to compete. The invention made by Japanese tech group Sony highlights how researchers are using AI to improve robots’ ability to adapt to physical tasks they have struggled with, particularly those involving people... Ace beat three out of five elite table tennis players who had more than ten years of training, and scored 48 points versus 70 in two defeats to professionals, according to a paper published in Nature on Wednesday. The robot had improved further, Sony said: since the paper’s submission, it had played four further matches against humans, beating two elite players and winning one out of two matches against professionals. The robot handled spin and unexpected changes in trajectory caused by the ball clipping the net on its way over, the researchers said. It outscored the elite players in aces — points won directly from serve — by 16 to eight.

14. EVs make up half of car sales in China. Of the 27.8 m cars sold in China in 2025, 13.9 m were EVs accounted for 13.9 m, a steep increases from just 1.3 m five years back.

The government aims to have 28mn public charging facilities installed by the end of next year, up from 21mn at the beginning of this year. This would be enough to power about 80mn EVs (there are already more than 50mn on China’s roads). The plan targets underserved areas such as rural communities, as well as expressway service stations and public parking lots. State media estimated the three-year investment period would drive about $28bn in spending on equipment and construction. Chinese companies are also pouring billions of dollars into research aimed at improving EV range and charging speed. CATL, the world’s biggest battery maker, on Tuesday unveiled cells that power a car for 1,500km on a single charge. As battery technology and access to charging infrastructure improves, analysts expect consumers in lower-tier cities — who number in the hundreds of millions — will favour EVs.

15. India rural-urban income facts of the week.

According to the Institute for Competitiveness’ 2025 report on Income Inequality and Labour Markets in India, in 2023-24, the top 10 per cent urban income threshold of ₹44,000 was more than double the rural equivalent of ₹21,500. The top 1 per cent urban threshold of ₹90,000 was 80 per cent higher than its rural counterpart, up from 68 per cent in 2017-18. At the bottom, the urban floor of ₹6,000 was double the rural equivalent of ₹3,000, a figure that has remained flat in nominal terms over seven years.

16. Some striking graphics from a16z. The combined market cap for the 10 largest companies in the S&P is about six times larger than it was in 2015. 

Since 2023, Tech has been responsible for more than 60% of earnings growth.

While tech is big today, it’s still not nearly as big (relatively) as Transport (or Real Estate and Finance) ever were at their peaks in the 19th Century.

Finally, about 70% of today's market is in industries that were tiny or non-existent in 1900. While in 1900, the economy was basically textiles, iron, coal, steel, and tobacco, the rails to transport them, and the banks to finance them, today those sectors are a tiny fraction of the overall pie.

Weekend reading links

1. Agriculture terms of trade facing Indian farmers

Such export controls and anti-market policies inflict a large “implicit tax” on farmers, despite significant budgetary support through fertiliser and other subsidies, including loan waivers. In this context, it is useful to look at the OECD’s producer support estimates (PSEs) that it generates for more than 50 major countries in the world. They adopt a common methodological framework to estimate the impact of various agricultural policies, mainly budgetary support and market price support. The comparative results may shock some policymakers in India. For the triennium ending 2023, OECD countries supported their agriculture to the tune of about 14 per cent of gross farm receipts (PSE 13.8 per cent). Interestingly, China also supports its agriculture to the tune of 14 per cent (PSE 14 per cent), while India’s PSE is negative (-) 15.5 per cent. That happens due to the negative market price support that results from export controls, dumping in the domestic market to push prices down, putting stocking limits on private trade, banning futures markets, and so on.

2. India's banking sector in 2024 

The gross non-performing assets (NPAs) of the banking system, which stood at 3.2 per cent in September 2023, dropped further to 2.8 per cent in March 2024. After provisioning, the net NPAs dropped from 0.8 per cent to 0.6 per cent during this period. The capital adequacy ratio, meanwhile, remained unchanged at 16.8 per cent. Meanwhile, the gross NPAs of the non-banking financial companies (NBFCs) dropped from 4.6 per cent to 4 per cent, and return on assets rose from 2.9 per cent to 3.3 per cent. There was a marginal drop in their capital adequacy ratio, from 27.6 per cent to 26.6 per cent.

3. Lego facts of the day

Over the past 20 years the company’s revenue has grown ten-fold, reaching DKr66bn ($9.7bn) in 2023. A decade ago it became the world’s largest toymaker by revenue. Today its sales are greater than those of its two biggest rivals—Mattel, creator of Barbie, and Hasbro, maker of Nerf guns—combined. In 2023 it opened 147 shops around the world, taking its total to 1,031, and built factories in America and Vietnam. Sales in the first half of 2024 were up by 13%, year on year, even as the global toy market shrank. In 2004 the company was loss-making; in 2023 its net profit was DKr13bn, implying an enviable margin of nearly 20%... A foundation owns a quarter of the firm; the Kristiansen family owns the rest.

4. PE investors who flocked into China faces their reckoning.

Among the 10 largest global private equity groups with operations in China, there is no record of any having listed a Chinese company this year or fully sold their stake through an M&A deal, figures from Dealogic show. It is the first year for at least a decade where this has been the case, though the pace of exits has been slow since Beijing introduced restrictions on Chinese companies’ ability to list in 2021. Buyout groups rely on being able to sell or list companies, typically within three to five years of buying them, in order to generate returns for the pension funds, insurance companies and others whose money they manage. The difficulties in doing so have in effect left those investors’ funds locked away, with future returns uncertain... Many private equity groups expanded their presence in the world’s second-biggest economy as it grew rapidly over the past two decades. Global pension funds and others ploughed capital into the country, hoping to gain exposure to its economic boom. The 10 firms invested $137bn over the past decade, but total exits amount to just $38bn, Dealogic data shows. New investment by those groups has collapsed to just $5bn since the start of 2022...

The data covers Blackstone, KKR, CVC, TPG, Warburg Pincus, Carlyle Group, Bain Capital, EQT, Advent International and Apollo, the 10 largest buyout groups by funds raised for private equity over the past decade... Foreign buyout groups used to rely on taking Chinese companies public in the US or other countries in order to exit their investments after a few years. But Beijing has introduced new restrictions on offshore listings since cracking down on the ride-hailing app DiDi, in the wake of its New York IPO in 2021. Listings have slowed significantly since. In total this year, there have been just $7bn of domestic IPOs in China as of late November, compared with $46bn last year, which was already the lowest total since 2019.

China's troubles come even as India emerged as the top market for IPO listing in the world in 2024 by numbers and the second highest (after the US) by value.

The NSE of India has emerged as the number one venue for primary listings by value, ahead of Nasdaq and HK SE. 

5. 2025 is expected to be an inflexion point for EVs in China, as it's estimated to overtake ICE cars in sales.

China is set to smash international forecasts and Beijing’s official targets with domestic EV sales — including pure battery and plug-in hybrids — growing about 20 per cent year on year to more than 12mn cars in 2025, according to the latest estimates supplied to the Financial Times by four investment banks and research groups. The figure would be more than double the 5.9mn sold in 2022. At the same time, sales of traditionally powered cars are expected to fall by more than 10 per cent next year to less than 11mn, reflecting a near 30 per cent plunge from 14.8mn in 2022. Meanwhile, EV sales growth has slowed in Europe and the US, reflecting the legacy car industry’s slow embrace of new technology, uncertainty over government subsidies and rising protectionism against imports from China... China's adoption of battery electric vehicles (BEVs) is projected to grow to 80% by 2035... HSBC estimated about 90 new car models had been planned for release by manufacturers in China in the fourth quarter of 2024 — about one a day — and nearly 90 per cent were EVs. 

This has important implications.

The forecasts suggest Beijing’s official target, set in 2020, for EVs to account for 50 per cent of car sales by 2035, will be achieved 10 years ahead of schedule. Norway leads the world in EV sales as a share of the market, with more than 90 per cent of new cars battery-powered... They imply that over the coming decade, factories set up in China to produce tens of millions of cars with traditional engines will have almost no domestic market to serve. They also highlight how the rapid rise of the Chinese EV industry now threatens the national manufacturing champions of Germany, Japan and the US. As China’s EV market tracked towards year-on-year growth of near 40 per cent in 2024, the market share of foreign-branded cars fell to a record low of 37 per cent — a sharp decline from 64 per cent in 2020, according to data from Automobility, a Shanghai-based consultancy. In this month alone, GM wrote down more than $5bn of its business value in China; the holding company behind Porsche warned of a writedown in its Volkswagen stake of up to €20bn; and arch rivals Nissan and Honda said they were responding to a “drastically changing business environment” with a merger.

6. The long-term performance of a UK local government pension fund that invests over half its portfolio in index funds raises more questions on the value created by the asset management industry. 

Quentin Marshall, chair of Kensington and Chelsea’s £1.9bn pension scheme, has delivered the best performance of any UK local authority fund over the past decade by parking half of its assets in a global equity index tracker. Marshall, who has chaired the fund since 2014, said individual stock or fund selection hinders rather than helps drive returns and he avoids tactical decision-making when his team meets to review its investments... “The whole asset management industry is built on the premise that they have value,” Marshall said. 

He is withering in particular about consultants who advise pension funds on investment decisions and “rely on backward looking data which is definitely shown to be completely and utterly useless as a source of prediction”. Over the past decade, the 51-year-old Conservative party councillor and banker has delivered average annual returns of 10.8 per cent for the pensions of workers at Kensington and Chelsea’s council, which provides services to both the wealthiest parts of the UK and neighbourhoods with significant deprivation. The performance, driven by a heavy equity exposure, outstrips other local authorities, according to shareholder advisory group PIRC. Marshall’s fund was the only local authority to achieve double digit annual returns over the past decade. The second best was Bromley council, which trailed him with 9.3 per cent... Marshall attributes his performance in part to making few decisions. His team meets formally to review its strategic asset allocation once a year but it has been “broadly unchanged for many years”. Half of the fund follows the BlackRock MSCI world index tracker...

His rejection of fund and stock selection makes him sceptical that the UK government’s decision to pool all of the assets of England and Wales’s £391bn local government pension scheme will help boost pension returns, although he supports the government’s attempts to professionalise the investment process. Last month Labour chancellor Rachel Reeves set out plans for a series of “megafunds” to run local council pension assets, a move the government hopes will drive billions of pounds of investment into British infrastructure and fast-growing companies. The reform programme was supported by her Tory predecessor Jeremy Hunt. But Marshall does not buy their argument that the reforms will lead to better pension returns for cash-strapped councils.

7. Good oped on the implications of the events in the Middle East over the year.

8. Junk food and children health in UK

While the price of healthy, whole foods — such as fish or staple vegetables such as carrots — has soared, unhealthy processed foods are more likely to be placed on enticing promotions and cost significantly less than fresh alternatives. Per calorie, healthy food is almost three times as expensive as unhealthy options, says the Food Foundation. The most deprived fifth of the population would need to spend half of their disposable income on food if they stuck to the government-recommended healthy diet, the charity found. This compares to just 11 per cent for the highest earners. To put together a children’s packed lunch that meets healthy eating guidelines, typically involving fresh fruit and vegetables, unsweetened yoghurt and brown bread, costs up to 45 per cent more than a lunchbox filled with chocolate, flavoured yoghurt and processed snacks marketed at children, according to the charity. The imbalance in grocery baskets between whole foods and junk foods has contributed to higher levels of obesity in lower-income groups, with poorer families becoming more reliant on less-healthy diets, data shows.

The trend has also been exacerbated by food inflation. Between 2021 and 2023, healthier foods increased in price by £1.76 per 1,000 calories compared with £0.76 for less healthy foods, according to the Food Foundation. Fruit and vegetables are the most expensive grocery category, costing an average of £11.79 per 1,000 calories, while food and drink high in fat and sugar costs £5.82... Children are constantly tempted by brightly coloured packaged food placed strategically in shops and advertised on TV and social media platforms. Young people are also influenced by what their friends are eating. Soft drinks, confectionery, snacks and desserts account for about a third of food and soft drink advertising spend, compared with just 1 per cent on fruits and vegetables, says the Food Foundation. Brand advertising, which accounts for about 40 per cent, also contributes to unhealthy eating as consumers tend to associate companies with their products, such as snacks, even if they are not directly promoted... Researchers have also found that some companies deliberately market junk food to deprived communities... According to research by Impact on Urban Health, which mapped food availability in London boroughs, unhealthy food outlets were significantly more concentrated in deprived neighbourhoods.

The same story is repeated across the world. 

9. About corporate churn rate. 

Just over 1 per cent of the 1,513 UK-listed companies in 1948 still existed 70 years later, according to an analysis by two Cambridge professors. Roughly half of US public companies traded for 10 years or fewer over the past century, says Morgan Stanley.

10. On industry concentration in banking in the US

JPMorgan Chase, Bank of America, Citigroup and Wells Fargo, the four largest US banks by deposits and assets, collectively reported about $88bn in profits in the first nine months of 2024, according to Financial Times calculations based on figures from industry tracker BankRegData. Together they account for 44 per cent of the US banking industry’s profits — the highest share for the first nine months of the year since 2015 — despite the pool taking in more than 4,000 of the country’s other banks. Including US Bank, PNC and Truist, the seven largest banks by deposits generated almost 56 per cent of all banking profits in the first nine months of the year, up from 48 per cent for the same period in 2023.

11. Finally, a snippet on structural transformation in the US, from an excellent oped by Martin Wolf.

In 1810, 81 per cent of the US labour force worked in agriculture, 3 per cent worked in manufacturing and 16 per cent worked in services. By 1950, the share of agriculture had fallen to 12 per cent, the share of manufacturing had peaked, at 24 per cent, and the share of services had reached 64 per cent. By 2020, the employment shares of these three sectors reached under 2 per cent, 8 per cent and 91 per cent, respectively. The evolution of these shares describes the employment pattern of modern economic growth.

He points to an important challenge in manufacturing

Initially, two positive forces — cheaper food and higher incomes — shift spending towards manufactures and drive up the share of manufacturing in employment. But two negative forces — the decline in prices of manufactures relative to services and the higher income elasticity of demand for the latter — do the reverse. Initially, the positive effects on manufacturing dominate, because the agricultural revolution is so huge. Yet there comes a time when agriculture is too small to provide a positive impulse to manufacturing. Then forces operating within manufacturing and the service sector dominate. Employment shares in manufacturing start to fall. In the US, these have been falling for seven decades. The idea that this process is reversible is ridiculous. Water flows downhill for a good reason.

Wekend reading links

1. Niall Fergusson points to some interesting divergence between the elites and the working class.

To see the extent of the gulf that now separates the American nomenklaturafrom the workers and peasants, consider the findings of a Rasmussen poll from last September, which sought to distinguish the attitudes of the Ivy Leaguers from ordinary Americans. The poll defined the former as “those having a postgraduate degree, a household income of more than $150,000 annually, living in a zip code with more than 10,000 people per square mile,” and having attended “Ivy League schools or other elite private schools, including Northwestern, Duke, Stanford, and the University of Chicago.” 

Asked if they would favor “rationing of gas, meat, and electricity” to fight climate change, 89 percent of Ivy Leaguers said yes, as against 28 percent of regular people. Asked if they would personally pay $500 more in taxes and higher costs to fight climate change, 75 percent of the Ivy Leaguers said yes, versus 25 percent of everyone else. “Teachers should decide what students are taught, as opposed to parents” was a statement with which 71 percent of the Ivy Leaguers agreed, nearly double the share of average citizens. “Does the U.S. provide too much individual freedom?” More than half of Ivy Leaguers said yes; just 15 percent of ordinary mortals did. The elite were roughly twice as fond as everyone else of members of Congress, journalists, union leaders, and lawyers. Perhaps unsurprisingly, 88 percent of the Ivy Leaguers said their personal finances were improving, as opposed to one in five of the general population.

2. Interest payments take up a staggering 57% of central government revenues in Pakistan.

India's 28% is a matter of concern. Compare with Indonesia's 15%. 

India's high public debt will appear fine as long as the economy grows by 7-8%. Once it slows down to 4-5%, the debt-to-GDP ratio will balloon, as also the interest payments as a share of revenue. Then we are set for the perfect storm.

3. The formal-informal sector wage gap in India is significant, in excess of 70%.

4. China has been the standout beneficiary from globalisation over the 1990-2018 period.

India's GDP per capital gain from globalisation has been less than one-third of that of China over the same period.

5. It's surprising how much of Blackstone's assets centre around real estate. The latest is data centres. 

After its $10 billion takeover of data center operator QTS in 2021, the world’s largest private equity firm is fueling rapid growth at one of the top landlords for tech giants. It’s bankrolling the development of massive structures that will handle crucial computing needs, while also reshaping communities across America. It’s part of the classic Blackstone playbook for real estate, the largest piece of its $1 trillion empire. The firm identifies where there’s a rising need for properties but too few to meet demand. It then directs billions of investor dollars to build giant landlords poised to capture big rents and market share, a move it has deployed in everything from warehouses to suburban homes...

Blackstone now says QTS could be one of the best investments in its history. The company has parlayed its land reserves to profit on a short supply of space and power in key markets. QTS has $15 billion of properties in development, up from $1 billion at the time of its acquisition. It’s become North America’s largest provider of leased data center capacity based on megawatts under contract, after ranking No. 4 just three years ago, according to research firm datacenterHawk... Blackstone President Jon Gray, the firm’s former real estate chief and now heir apparent as CEO, has corralled the company into the thematic bets where demand is running up against constraints. He now sees AI making a data center shortage all the more acute — and said those with land and capital will be at an advantage.

6. Long read on how the RN moved from the far-right fringes to the mainstream right in France. 

Long a fringe opposition party with little local presence, the RN has gradually stitched together a national network — initially helped by a dozen or so mayorships in small cities and towns like Hénin-Beaumont, Perpignan, and Fréjus... The effort was turbocharged in 2022 by an unprecedented election of 89 deputies to the National Assembly. With the MPs came money from the state funding system for political parties, a change for the usually cash-strapped RN, allowing them to hire more staffers. Le Pen then told her troops to fan out every weekend in their districts to attend local events to be what she called the “advocates of citizens” who often feel neglected amid the perceived retreat of public services, such as post offices or hospitals... Le Pen’s own election as the local constituency MP in 2017, her third attempt to enter the assembly. The following year, having lost the presidential election to Macron, she rebranded the Front National party to the Rassemblement National, aiming to make voters forget the racist and antisemitic excesses of her father and his contemporaries...

Such local presence has furthered Le Pen’s decade-long mission to “detoxify” the far-right movement co-founded in 1972 by her father, Jean-Marie Le Pen, and Pierre Bousquet, a journalist and former soldier in the French unit of the Waffen-SS during the second world war. Kévin Pfeffer, RN party treasurer, says... “Officials like the prefect, deputy prefect, police chief, and head of the unemployment office — they wanted to meet us,” ... whereas before the RN was largely shunned by local bigwigs. Slowly RN support evolved to cover a wider swath of the electorate allowing them to rack up more votes: women, white-collar workers and older people. The RN vote has evolved from one previously made out of protest or anger to one of confidence in the party’s agenda and its leaders Le Pen and her 28-year-old lieutenant Jordan Bardella... Studies have shown that people back the RN for multiple reasons, some ideological and rational, and others that are more subjective, such as a sense that the French “way of life” is in danger or that they do not “feel at home” in France anymore.  

7.  Graphic that shows how solar generation has continuously kept exceeding expectations.

8. Important point about the problem of slow deposit growth rate in banks.

Banks, influenced by societal hype about the primacy of digital outreach, halted the expansion of brick-and-mortar branches. Many bank chief executives, who had their bonuses linked to margin growth and market cap increases, also went slow on branch expansion to lower costs and boost bottomlines. There is now a belated realization that physical branches play a critical role in customer acquisition and deposit growth. Many leading banks are now making amends by setting aside capital expenditure to aggressively expand their physical footprint, to go hand-in-hand with increased investments in direct marketing and digital outreach... Within the banking system, the nature of the deposit mix is changing and moving towards high-cost deposits. Banks have traditionally relied on cheaper current-account-savings-account (CASA) deposits as a source of perennial low-cost funds. However, RBI data shows that CASA’s share has been shrinking in the overall mix, which has been compensated by some growth in costlier term deposits. The resulting pressure on margins may have also impelled bank management to revive CASA’s share by focusing on branch networks.

9. China does not have a KGB or Stasi but still maintains the most effective surveillance state in history.

A more significant secret-police agency lurks within the Ministry of Public Security, China’s regular police service, Mr Pei writes. This force-within-a-force is known as the political-security protection unit (zhengbao for short). The total number of Chinese police officers is not made public, but is thought to be over 2m. Drawing on provincial, municipal and county yearbooks and publications, Mr Pei estimates that 3-5% of all police work for the zhengbao at the national and local level. That equates to 60,000-100,000 zhengbao officers, or one for every 14,000-23,000 citizens. They are complemented by the wenbao, a police unit that watches cultural and educational establishments, especially universities. Another elite outfit is the Political and Legal Affairs Commission, a party body. It runs surveillance operations and “stability-maintenance offices" tasked with smothering strikes and protests before they start. A powerful agency, it oversees security policy generally, and vets police and legal officials for political reliability... 

its surveillance state rests on other pillars that offer part-time but invaluable help. The first is rank-and-file officers in neighbourhood police stations. In Chinese propaganda, there is nothing sinister about such police. They are hometown heroes who battle crime and keep the public safe. But tracking political dissent or public discontent is their job, too... Police stations also watch millions more “key individuals", a group that includes rights activists, religious believers and people petitioning the government for legal redress. All of that involves a second pillar of the surveillance state: informants.

10. An Indian Express editorial makes the case for maintaining buffer stocks on important food grains.

Last year, in February-March, dairies were paying farmers Rs 37-38 per litre for cow milk. The same dairies have today slashed procurement prices to Rs 26-27 because of SMP realisations crashing to Rs 200-210 per kg, from their February-March 2023 peaks of Rs 315-320. These low prices, discouraging dairies from procuring and farmers from feeding their animals properly, could be a precursor to milk shortages and inflation next year.

But the editorial could not have been more wrong in its conclusion.

A buffer stocking policy in food items will also do away with the need for regressive anti-farmer measures such as banning exports or imposing stock limits on private traders and processors.

India sits on a rapidly growing pile of excess rice buffer stock that it's now desperately seeking to liquidate. This did not prevent the government from banning exports!

11. Interesting snippet about the thicket of regulations in India to get permission to sell fertiliser.

Registering a new fertiliser product takes an average of 804 days in India, according to the World Bank’s ‘Enabling the Business of Agriculture 2019’ report. This is against 570 days in Russia, 528 in Brazil, 356 in Pakistan, 270 in China, 225 in Canada, 210 in Argentina, 100 in Thailand, 90 in the US, 30 in Japan, and zero in the European Union countries. The sheer time taken — from the filing of application and field-testing at multiple locations for one or more cropping seasons, to the final notification under the Fertiliser Control Order as suitable for use by farmers and state-level approvals — hinders the introduction of new nutrient products into the country.

The article also suggests the liberalisation option

“The government should grant automatic registration for any new product meeting two requirements — a minimum content of total plant nutrients, and a maximum limit of heavy metals and other contaminants. This, along with mandatory label claims [open for testing by enforcement agencies], is what most advanced countries follow. They do not have agronomic or bio-efficacy trial requirements,” Sanjiv Kanwar, managing director, Yara Fertilisers India Pvt. Ltd, said. This procedure of automatic registration, subject to the product confirming to basic quality parameters and truthful labeling, is already being implemented in water-soluble fertilisers (WSF)... The specifications required WSFs to have a minimum 30% content of total nutrients — 25% primary (NPK), and the balance secondary (S, calcium, magnesium) and micro (zinc, boron, manganese, iron, copper, molybdenum) — and maximum prescribed limits for contaminants (lead, cadmium, arsenic, total chloride and sodium). Companies can market any WSF meeting these specifications (with legible labeling on bags/containers) after 30 days of intimating the relevant government authorities about “the details of the product and their intention to sell”.

12.  Judicial activism in the US triggered by their ideological preference for deregulation.

In the US... late last month, six conservatives on the Supreme Court handed corporate America a scythe. The high court majority shredded a 40-year-old precedent known as the “Chevron deference” that required judges to defer to government experts when laws were ambiguous. They also ruled in a separate case that even long-settled rules can be challenged by new industry players. But CEOs should be careful what they wish for. Those decisions, known as Loper Bright and Corner Post, are already reverberating across the country. The justices sent nine cases about wetlands, renewable energy and a range of other regulations back to lower courts to be reconsidered. A federal judge in Texas said last week that plaintiffs seeking to invalidate a Biden administration ban on non-compete agreements were likely to win now that judges rather than agencies have the final word on regulations. Then on Tuesday, a federal appeals court asked how the Loper decision should affect the future of a different Biden rule that allows pension plans to use environmental, social and governance factors when choosing among investments with similar financial profiles. Environmentalists, and investor and consumer groups are despairing, while lawyers predict that US regulators will have to become more cautious about imposing new rules on everything from money managers to social media platforms and pharmaceutical groups. That is just the start. Hospitals, utilities and even gun rights advocates are already lining up to use the decisions as a club to beat back new rules and challenge existing ones. Some corporate law firms are putting together kill lists of regulations they want to attack.