Beitrag von Zhi-Lin Liu

Biden’s Inflation Reduction Act seeks to eliminate “foreign entities of concern” — which include companies with close ties to Beijing — from the US EV supply chain, with restrictions due to come into force on January 1 2025. But Chinese companies control more than 99% of the global market for battery-grade graphite and 69% of the market for synthetic graphite used in battery anodes, according to consultancy Benchmark Minerals Intelligence. Without an exemption to the FEOC rules for battery makers to secure graphite from Chinese suppliers, it is possible that no vehicles will qualify for the generous tax credits that the Biden administration is offering EV buyers South Korean companies have already committed to investing tens of billions of dollars in advanced technology facilities in the US in order to take advantage of expansive subsidies for semiconductor and battery manufacturing. Battery makers LG Energy Solution, SK On and Samsung SDI, which have all received billions of dollars under the IRA, are projected to account for 44% of North America’s total battery capacity by 2030. There are also concerns that #SouthKorea could lose the status as a chipmaking powerhouse if companies continue to build plants abroad, but the industry minister said extra capacity outside was required to meet booming future demand for artificial intelligence-related hardware, as the country has “a small population and a small territory, … cannot produce everything here, and some of our companies need to go [overseas] to major markets” Reorientation of #supplychains amid intensifying US-China tensions would benefit South Korea’s traditional strength of trade diversification, as other countries seek to reduce their dependence on China and Taiwan.

China's exports in March decelerated sharply after four months of growth. Total overseas shipments declined 7.5% on the year in dollar terms, reversing the 7.1% gain in the first two months of 2024. A downturn in demand for mechanical and high-tech products, as well as garments, contributed to March's export deterioration, the steepest since an 8.8% plunge last August. The result is partly a correction, as exports had surged 10.9% in March last year, and export prices have stabilized recently. The reversal in export growth left overall first-quarter shipment growth at just 1.5%. Exports to the EU dropped 5.7% in the quarter, while those to the U.S. slipped 1.3%. Exports to Southeast Asian economies grew 4%. Dollar-denominated imports, meanwhile, dropped 1.9% in March, mainly caused by softer demand for agricultural products and crude oil. Growth was sustained in major commodities, including mechanical and electrical products. For the first three months, inbound shipments grew by 1.5%, led by imports from Southeast Asian countries, India and Russia. Imports from the U.S. plunged 10.7%, while those from the EU were down 8%.

The Port of Baltimore was the country’s second-largest gateway for coal exports last year, after the Port of Virginia in Norfolk, accounting for about a third of outbound shipping volumes in the first quarter of 2023, according to S&P Global. Logistics experts say a broader economic impact would likely be limited because of the large number of alternate highways and seaports along the densely-populated Eastern Seaboard. Importers will largely be able to route their shipments through Norfolk and the Port of New York and New Jersey instead. The Port of Baltimore is the busiest port in the country for autos and light trucks and for heavy farm and construction machinery, according to a state report. It handled about 847,000 cars and light trucks last year, according to the Maryland Port Administration. Coal, liquefied-natural gas and waste paper ranked among the top exports from the port, while vehicles, salt, gypsum and sugar have been the biggest imports. It was the No. 10 port in the country last year for container imports, according to the Pacific Merchant Shipping Association.

South Korea’s exports kept up its recovery momentum, growing for a sixth consecutive month in March on strong demand overseas for semiconductors, ships and other Korean goods. Exports rose 3.1% from a year earlier to $56.56 bn, following a 4.8% gain in February Imports fell 12.3% from a year earlier to $52.28 billion in March Semiconductors continued to drive South Korea’s export growth, as memory-chip exports climbed 36% in March—the fifth consecutive month of growth. Exports of vessels doubled in March, maintaining growth for eight straight months. Overall shipments to the U.S. and China rose 12% and 0.4%, respectively

Import-dependent Nigeria’s weaker currency is pushing the annual inflation rate towards a three-decade high at almost 30% Last year 23 African currencies hit record lows against the dollar. The naira, which is moving towards being fully floated, has been devalued twice in attempts to close the gap with a parallel market rate. That makes it the second-worst-performing currency in the world, after the Lebanese pound. The currency volatility is eroding confidence, sparking protests from unions and deterring much-needed investment. Oil production has slumped over the past 20 years and no other big source of export earnings has replaced it. With hard currency in short supply, Nigerians are panic-buying dollars, putting further pressure on the naira. In a bid to curb inflation and attract foreign investment, the central bank increased interest rates to 22.75% last month. Foreigners bought four-fifths of the short-term debt the central bank issued after the increase. The bank also says it has cleared $2.3bn of backlogged foreign-exchange transactions, which had been frustrating airlines and prompting multinationals to leave because they could not get money out of the country. However, so great is the demand for dollars that higher interest rates have not moved the needle much. Taming the naira will take more than quick fixes and tweaks to monetary policy A steep new tax on firms that hire expatriates (costing $10,000-15,000 a year per foreign employee) is bound to discourage investment. And efforts to curb currency speculation are a distraction from the bigger reforms needed to make Nigeria an attractive place to do business Only when the country can sell more of its own goods and services abroad, or win the confidence of foreign investors to fill the gap, will it solve its chronic shortage of dollars. https://econ.st/3PFQIcj

The wealthy south is where you will find the slick new India, with its startups, it campuses and gleaming iPhone-assembly plants. Understanding India’s divide begins with economics. The south has long been richer and more urban. The southern five of India’s 28 states (Andhra Pradesh, Karnataka, Kerala, Tamil Nadu and Telangana) contain 20% of the population, but account for 30% of its loans and for 35% of the flow of foreign investment in the past three years. Better government, education and property rights help explain this outperformance and have fostered enterprise and a more sophisticated financial system. A gap that has existed since independence in 1947 has widened over the decades. In 1993 the south contributed 24% of India’s GDP. The latest figure is 31%.   Consider the shift in global supply chains from China to India: 46% of India’s electronics exports are from the south. In India’s famous startup scene, 46% of tech “unicorns” are southerners, coming especially from Bangalore. The five southern states provide 66% of the it-services industry’s exports. The latest craze is for “global capability centres”, where multinationals assemble their global auditors, lawyers, designers, architects and other professionals: 79% of these hubs are in the south. https://econ.st/3PF694j