Global nuclear power capacity has reached a record high, Russia has caught up with Japan in the number of nuclear reactors, China has risen to lead the gold market, cybercrime has caused huge losses to businesses in Germany... are the outstanding world economic news of the past week.
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| Rostov Nuclear Power Plant in Russia. (Source: TASS) |
World economy
China-Russia push global nuclear power capacity to record high
Global nuclear power capacity has hit a record high, with China and Russia accounting for the majority of the world's new reactors.
According to the Japan Atomic Industry Forum and other sources, there will be 436 reactors operating worldwide as of June 2024. The total capacity of the reactors will reach nearly 416 GW, surpassing the previous record of 414 GW in 2018.
New reactors coming online in China, the US, South Korea and India in the year to June 2024 total 4.53 GW. Only one 1 GW reactor in Russia will be shut down during this period.
China has been growing rapidly in both capacity and technology. China and Russia account for 60% of the nearly 70 reactors built in the past decade, with China building 39. Its 56th reactor went online in May 2024 at the Fangchenggang nuclear power plant in the Guangxi Zhuang Autonomous Region.
Nuclear power is part of efforts to cut emissions and air pollution in China, a country that relies on fossil fuel-fired power plants for 70% of its electricity.
Meanwhile, Russia has caught up with Japan in the number of reactors. Of Russia’s 33 reactors, nine have come online in the past decade. Russia has 10 more reactors under construction and more than 20 in the planning stages, as it seeks to reduce its consumption of natural gas, its main export.
America
* US technology giant IBM is closing most of its research and development (R&D) operations in China , becoming one of several US companies to exit the market amid the escalating trade dispute between Washington and Beijing. More than 1,000 jobs have been lost, mostly at several offices in mainland Chinese cities and two research-focused units.
Some affected IBM employees in China have been given the option to relocate to other countries, while many are being offered severance pay based on their tenure if they agree to leave incentive packages within three weeks, two sources said. Chinese corporate filings show IBM has more than 7,500 employees in the country, with a major office in the city of Dalian.
China
* According to World Gold Council (WGC) CEO David Tait, China's gold market has risen from being a laggard to a leader and is expected to play a larger role globally in the coming years.
Mr. Tait said that thanks to strong economic growth in recent decades, China has gained a leading position in the world gold market. For 10 consecutive years, China has been the world's largest gold consumer. And for 15 consecutive years, this country is the world's leading gold producer.
* According to Boeing's China Commercial Market Outlook (CMO) 2024 report, the Northeast Asian country will double the size of its commercial fleet by 2043 as the aviation industry expands and modernizes to meet growing demand for air passenger and cargo transportation.
According to CMO, China's commercial aircraft fleet will grow 4.1% annually, from 4,345 aircraft to 9,740 aircraft by 2043, and its annual passenger traffic growth rate is 5.9%, exceeding the global average of 4.7%.
Europe
* The European Union (EU) announced on August 22 that it will send an additional 122 million Euros (135 million USD) in humanitarian aid to three countries in the Horn of Africa: Ethiopia, Somalia and South Sudan.
Of the additional aid, €42 million will go to Ethiopia, €40 million to Somalia and €40 million to South Sudan, bringing the total EU aid to these countries to more than €421 million to date, the statement said. According to the European Commission, more than 70 million people in the Horn of Africa are in need of immediate humanitarian assistance.
* The results of a survey released on August 28 showed that cybercrime and other acts of sabotage cost German businesses about 267 billion euros ($298 billion) in the past 12 months, up 29% from the previous year.
German digital association Bitkom surveyed about 1,000 companies across all sectors and found that 90% expect to experience more cyberattacks in the next 12 months. About 70% of targeted companies said the attacks were caused by organized crime, while 81% reported data theft, including customer data, login data and passwords, as well as intellectual property such as patents.
* Swedish automaker Volvo announced on August 23 a plan to invest $700 million in a heavy-duty truck manufacturing plant in the northern Mexican state of Nuevo León to increase its presence in the North American market.
Volvo said in a statement on the same day that the plant will be built on an area of 160,000 square meters in the city of Ciénega de Flores, 30 kilometers from the capital Monterrey of Nuevo Leon. The plant is expected to begin operations in early 2026, attracting 2,500 direct workers and thousands of indirect workers working in the supply chain and logistics.
* Unite, Britain's second-largest trade union, is calling on the government to impose an emergency 1% wealth tax on the fortunes of the super-rich to pay for a 10% pay rise for public sector workers.
Unite’s proposal is to impose a 1% wealth tax on those with assets of more than £4 million ($5.28 million). This, Unite says, would raise £25 billion a year to fund investments in public services and avoid a return to austerity.
* British Prime Minister Sir Keir Starmer has signalled that the government will raise taxes in October in the Autumn Budget. Previously, the government had ruled out raising income tax, national insurance and VAT, which account for the bulk of government revenue.
Specifically, in his recent speech at Downing Street, Prime Minister Starmer also reaffirmed: "When it comes to workers - income tax, national insurance, VAT - we will not raise taxes." In addition, Prime Minister Starmer also reiterated the message before the election that the government must move away from the idea that the only levers are to raise taxes and increase spending. So far, Mr. Starmer has not specified which taxes could be raised in the Autumn Budget.
Japan and Korea
* Wholesale prices for Wagyu beef in Japan have fallen to their lowest since June 2020 as demand has plummeted. While prices have yet to recover, farmers are struggling amid rising costs. Demand for premium Wagyu beef has weakened sharply during the inflationary period, prompting some supermarkets to stop selling it altogether.
The average wholesale price of A5 grade Wagyu beef fell to 2,377 yen ($16.13) per kilogram on the Tokyo market in July 2024, down 7% from a year earlier. This has been a five-month decline and the lowest in four years.
* Japan's core consumer price index (CPI) rose 2.7 percent year-on-year in July , marking the third straight month of gains, data from the Internal Affairs Ministry showed on August 23, as energy costs rose after the government ended subsidies.
The increase in the national core consumer price index, which excludes volatile fresh food, extended the 2.6% increase in June 2024. The inflation rate has remained at or above the Bank of Japan’s (BoJ) 2% target since April 2022. The core CPI, which excludes both energy and fresh food, rose 1.9%.
The results highlight ongoing inflation, which has weighed on Japanese households. A weaker yen has also pushed up the prices of imports from food to energy.
* The Ministry of Trade, Industry and Energy of South Korea said on August 26 that South Korea's export growth rate reached the highest level among the world's top 10 exporting countries.
Since October 2023, South Korea's exports have maintained steady growth, driving growth in the entire economy.
The World Trade Organization (WTO) said that in the first five months of this year, South Korea's exports increased by 9.9% compared to the same period last year, outperforming China's 4.7% increase and the US's 1.8%.
* A recent report found that artificial intelligence (AI) technology is a useful tool in the workplace for a majority of young people in South Korea , and the country's youth top the list of AI preferences compared to other countries.
Samsung Electronics released the “AI-Preneur Effect 2024” report to explore how Generation Z is using advanced technology to enhance their work. The research found that 80% of young people in South Korea rely on AI as a useful resource for their work. Following South Korea are 61% of young people in Germany, 59% in the UK, 56% in the US, and 55% in France.
The survey involved 5,048 people in five countries, including 1,021 in South Korea.
ASEAN and emerging economies
* The Indonesian government and the House of Representatives in the Draft National Budget 2025 (RAPBN) have agreed to partially reduce the fuel subsidy budget with the aim of ensuring more efficient allocation of national resources.
The volume of subsidized fuel, including kerosene and diesel, will fall to 19.41 million kilolitres (kl), down from the 2024 target of 19.58 million kl. The reduction is part of a broader plan to distribute subsidies more targeted and effectively by 2025.
The government wants to ensure that these fuel subsidies benefit the poor.
* On August 27, Director of Thailand's Trade Policy and Strategy Office, Mr. Poonpong Naiyanapakorn, said that the country's exports in July 2024 increased by 15.2% over the same period last year, to 25.7 billion USD, the highest growth rate since March 2022.
Meanwhile, imports in July 2024 were worth about 27 billion USD, up 13.1% over the same period last year, leading to a trade deficit of 1.37 billion USD.
Excluding imports of oil, gold and strategic goods, Thailand's exports in July 2024 still increased by 9.3%.
* The Malaysian government is facing many challenges in implementing its plan to increase salaries for 1.6 million civil servants. According to Dr. Goh Lim Thye, lecturer at the Faculty of Economics, University of Malaya (Malaysia), although the salary increase is necessary to address the situation of lower salaries in the public sector compared to the private sector, this policy will certainly put more pressure on the national budget and the government's target of reducing the financial deficit.
However, Dr Goh also noted that it is important that not all 1.6 million civil servants will automatically benefit from the pay rise. The funds will be distributed selectively, ensuring that only high-performing civil servants benefit.
In addition, the government has also implemented a number of measures such as expanding the tax base, reducing subsidies, and cutting unnecessary spending to have more financial resources, aiming to achieve a budget deficit of 4.3% in 2024 and 3% in 2025.
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