Russia remains the top agricultural supplier, why Americans are more optimistic, Chinese real estate is about to hit bottom

Russia remains the world's leading agricultural supplier, Americans' confidence in growth has become more optimistic, China's real estate market is forecast to hit bottom, Germany depends significantly on immigrants in the long term... are the outstanding world economic news of the past week.

Russia is currently the world's leading supplier of many agricultural products. (Source: Reuters)

World economy

AI's Double Impact on Global Trade

The World Trade Organization (WTO) has just released a report "Trading with Intelligence: How AI Shapes and Is Shaped by International Trade", which analyzes the impacts that artificial intelligence (AI) can have on global trade.

The report highlights the potential of AI to reduce trade costs, reshape trade in services, promote trade in AI-related goods and services, and redefine economies’ comparative advantages.

The WTO points to the role of AI in overcoming trade barriers by automating logistics, streamlining customs processes, assisting with regulatory compliance and predicting risks. These advances could create a more level playing field for developing economies and small businesses, helping them participate more effectively in international trade.

However, the report also warns of challenges, including the risk of a widening “AI gap” between high-income and low-income economies, disparities between large and small companies, data governance issues and the need to ensure AI trustworthiness.

The WTO predicts that widespread adoption of AI will help high-income economies increase productivity the most, while lower-income economies could see significant cost reductions, but the gap between these countries could widen without concerted action.

US economy

* Minutes of the US Federal Reserve's recent meeting released on November 26 showed that Fed officials expected inflation to continue to cool. This forecast signals that the Fed will gradually reduce interest rates if inflation continues to fall and the labor market remains strong.

The minutes said if data support expectations that inflation will move toward the 2% target, while employment remains solid, “a gradual shift to a more neutral policy stance over time may be appropriate.”

* Americans' confidence in economic growth became more optimistic in November 2024 thanks to lower inflation expectations and a vibrant job market.

The Conference Board research organization said the US consumer confidence index rose to 111.7 points from 109.6 points in October 2024.

Rising consumer confidence suggests Americans may spend more in the coming months, which would help boost economic growth. However, Americans have spent at a steady pace for much of the past two years even when confidence measures were low.

Chinese Economy

* Following positive signs in recent months due to a series of support measures implemented by the Chinese government, experts predict that the Chinese real estate market may bottom out and then recover in the first half of 2026.

Wang Tao, China's top economist at UBS Group AG, a Swiss multinational investment bank, said that although there are still many unstable and unsustainable factors, thanks to the continuous support policies applied by the Chinese government over the past two years, the country's real estate market is showing signs of positive change.

* Profits at China's industrial firms fell 10% year-on-year in October, a sign that stimulus measures have yet to reverse a slump in corporate earnings .

This was the third consecutive month of declines in industrial profits, after a 27.1% drop in September 2024, the sharpest decline since March 2020. Industrial profits are a key gauge of the financial health of China's factories.

Profits at Chinese industrial companies fell 4.3% year-on-year in the January-October 2024 period, compared with a 3.5% decline in the period through September 2024.

European Economy

* The European Union (EU) has made limited progress in recent weeks in talks with China on a comprehensive deal to replace tariffs on electric vehicles, according to sources familiar with the matter.

China and the EU are continuing technical talks following discussions in Beijing earlier this month, when both sides said they had made some progress. However, the situation has not changed significantly since then, and contact between the two sides is currently very limited.

* According to a source close to the matter, Russian gas giant Gazprom is planning for 2025 based on the assumption that it will no longer transport gas to Europe via Ukraine after December 31. This plan has not yet been approved by Gazprom's senior management.

The plan foresees that Russian gas exports to “distant countries” – a term that includes Europe, Türkiye and does not include former Soviet states – will fall by 20% by 2025, from more than 49 billion cubic metres expected this year to below 39 billion cubic metres due to the suspension of the pipeline route through Ukraine.

* Russian Deputy Prime Minister Dmitry Patrushev said that the country is currently the leading supplier of many agricultural products to the world .

According to Mr. Patrushev, in 2024, Russia will not only fully meet domestic demand for essential foods, but also maintain its position as a reliable food supplier in the world market, actively participate in international humanitarian programs, and contribute to ensuring global food security. The supply of Russian agricultural products to foreign markets, including India, Bangladesh, the United Arab Emirates (UAE), Indonesia, etc., will continue to grow.

* According to a study commissioned by the Bertelsmann Foundation, the German labor market needs around 288,000 immigrant workers per year between now and 2040, indicating a "significant degree of dependence" on immigrants in the long term to ensure adequate labor supply.

Currently, the number of migrant workers entering Germany is significantly lower than the demand. Susanne Schultz, immigration expert at Bertelsmann, believes that barriers need to be reduced and conditions for immigrants improved in order to attract more foreign workers to Germany.

Economy of Japan and South Korea

* The Korea Chamber of Commerce and Industry (KCCI) held a meeting with its Japanese counterpart on November 25 and agreed to strengthen ties in the fields of energy, supply chains and advanced technology.

The 13th meeting of the KCCI and the Japan Chamber of Commerce and Industry (JCCI) leaders was held in Osaka, Japan. Their most recent meeting was held in Busan, South Korea, in June 2023. Discussions focused on identifying promising areas for private-sector-led economic cooperation, including energy, supply chains, and advanced technology, as well as exploring cooperation models between local chambers of commerce.

* The South Korean government will invest a total of 4 trillion won (US$2.86 billion) to build a national AI computing center as part of efforts to boost the country's competitiveness in the rapidly growing AI technology sector, the Ministry of Science and ICT said on November 27.

The decision aims to enhance the global competitiveness of Korean industries and support Korean companies and researchers in the field of advanced graphics processing units (GPUs), which play a key role in AI.

* A survey by the Bank of Korea (BoK) showed that South Korean consumer sentiment fell in November due to growing concerns about slowing exports and uncertainty stemming from expected policy changes by the new US administration.

Notably, the impact of President-elect Donald Trump's "America First" stance on the economic and industrial sectors in general, when he announced that he would impose high tariffs on imported goods and implement a series of protectionist measures, significantly worsening the sentiment of Korean consumers.

ASEAN Economy and Emerging Economies

* At the meeting of the Malaysia-Singapore Joint Committee on the Environment (MSJCE), the two sides exchanged and discussed the progress made in cooperation to promote sustainable environment. One of the key issues in the discussion was the control of emissions from vehicles.

The two sides agreed to increase information exchange to improve air quality and pledged to strengthen cooperation in monitoring water quality in Johor state.

* Chairman of the Indonesian National Economic Council Luhut Binsar Pandjaitan said on November 27 that the government may suspend the implementation of the plan to increase value-added tax (VAT) to 12% before January 1, 2025.

He emphasized that the government will develop and implement measures to stimulate the economy for the middle class, then consider the possibility of implementing a VAT increase policy.

* The Thai government is promoting the construction of a bridge connecting Chanthaburi province in the east of the country with Pailin province in Cambodia, at a cost of about 15 million baht (more than 435,000 USD).

Deputy Prime Minister and Interior Minister Anutin Charnvirakul said the new bridge will be a concrete bridge about 40 meters long. The bridge, once completed, will be called the Chanthaburi-Pailin Friendship Bridge, replacing the temporary steel bridge currently connecting the two provinces, thereby promoting cross-border trade and tourism between the two countries.

Source: https://baoquocte.vn/kinh-te-the-gioi-noi-bat-nga-vung-ngoi-dau-nha-cung-cap-nong-san-ly-do-nguoi-my-lac-quan-hon-bat-dong-san-trung-quoc-sap-cham-day-295374.html