LyrArc Article Gist
The US Senate approves $250 billion in new funding for the US to develop independent supply chains in critical products and materials. Ten new semiconductor plants will be built. The effort is designed to ensure the US is not dependent on outside sources that prove unreliable in a crisis. The pandemic has brought home the lesson as this was experienced in 2020 and 2021 with the US too dependent on supply from overseas.

LyrArc Article Gist
Greg Ip in the WSJ says India is shifting towards  becoming an important partner with the US and the European Union in trade under the Modi government. This report reflects the situation upto 2021 and the changes in Indian and American perceptions during the pandemic. It does not reflect the rapidly evolving situation under president Biden.US president Biden and Jake Sullivan National Security Advisor see rapidly expanding US trade and investment in India. The recent Raisina Dialogue  brings together 26 countries- named after Raisina Hill in New Delhi where India's administration is located- in dialogue with Indian leaders. Finance Minister Sitharaman in an interview at Raisina Dialogue stated that Janet Yellen, US Treasury Secretary, was with her during a G-20 meeting, and Yellen called for friendshoring- foreign investment in democracies that respect the rule of law and provide the right conditions for investment. The right conditions are now being created in India, including infrastructure and logistics, trade practices, and assistance to foreign companies, to invest in Indian manufacturing. The conditions are being created for shifting significant number of manufacturing facilities to India in a complete redesign of the supply chain. A look at the period 1950-2015 in US-EU India relations says little of the newly evolving situation in trade in the way that looking at the US-EU China relations 1950-1990 during the Cold War would tell one little about how that relationship evolved in trade after 1990 in the 1990-2019 period for massive trade with China. The pandemic and the inflation from existing supply chain bottlenecks has led to a realization in US-EU that the existing concentration of manufacturing in one country  was a mistake and is a serious problem that needs correction.  This means an acceleration in the effort to build rapidly over the next 5-10 years a strong US-EU manufacturing presence in India for advanced technologies. India under prime minister Modi is creating the infrastructure and logistics for this to happen with large domestic investment, the help of Denmark's Maersk in port logistics, and from other countries.  Fo India manufacturing and infrastructure building is the only way to create the jobs needed to meet the aspirations of its young population. For the US-EU the redesign of the supply chain is the highest priority to cut inflation, remove potential bottlenecks, and provide a stable supply chain.    ...

LyrArc Article Gist
Following the pandemic and rebuilding of world supply chains Canada is rebuilding its relations with India as a way forward for greater economic engagement. This is accelerating during the G-20 meetings and set on a new framework.

LyrArc Article Gist
The average price of a smartphone in India in 2022 was $206 excluding taxes, Apple's smartphones go for $898. With discounts Apple is now bringing the price down to below $500. In 2019 phones over $500 made up 3% of the market. This has increased to 6% in 2022. Apple is counting on this share of the market going up and prices being brought down below $500 to build a larger share of the market. Its market in 2023 is about 5% in India compared to 22% in China.

In China Apple has its own stores. It is only now opening its first store in Mumbai. This and building manufacturing facilities in India could be the way to increase its share of the market in India to where it provides an alternative comparable to the Chinese market. This is the first time after the pandemic and the supply chain issues, the idea of friendshoring, that Apple is reorienting its policy for making India a key part of its supply chain and market. 

 

LyrArc Article Gist
Indian prime minister says on the lawn of the White House that India does not want to replace China in manufacturing, it wants to see India as the world's manufacturing centre in diversified supply chains where there is no overconcentration in one country which happened before the pandemic. Biden does not favor free trade agreements because in addition to undermining American workers and the environment, it also has the effect of shifting manufacturing to China because of loose agreement clauses about sources of manufacture and because many of the countries in the free trade agreements depend on China for manufacturing. India and the US are at a unique inflection point because both countries are gearing up for  new relationships in manufacturing and in the supply chains.

LyrArc Article Gist
Angela Merkel left Germany dangerously dependent on Russia for energy supplies that may simply be shut off after maintenance on the Nordstream pipeline. She did even worse on China says this report in The Times that says that it leaves Germany on the hook for billions. There are $200 billion of German investments in China and German business concern is snowballing with new restrictions on operations in China and the deteriorating business sentiment. Worse the entire supply chain for solar energy and other renewable energy products to tackle climate change is dependent on Chinese components. Another failure to prepare for the future under different scenarios. And 46% of German business have supply lines that include components made in China. By grossly underestimating the risks of such dangerous dependence on Russia and on China, and ignoring warnings from the US, Merkel has hit Germany's new elected government of Scholz, Baerbock and Habeck with very serious problems that may take the next five to ten years to sort out. On energy and how to build a whole new supply chain in Asia with the US and its allies Japan, India and other countries. The ultimate irony was that Merkel felt that she was the leader of the free world, and a free world that excluded the US and India. Such is folly. And how she was presented as a good leader in the media is today hard to comprehend. ...

LyrArc Article Gist
For the approaching US midterm elections president Biden seeks to draw a sharp contrast with Republican Senator Rick Scott's Plan which he says would worsen inflation and increase taxes on working class families. Mr. Scott's plan is for sunset on all federal legislation and president Biden says this would include Medicare and Social Security. Mr. Scott also wants all Americans to pay some income tax to have skin in the game. At this time about half of all Americans pay no taxes says Mr. Scott. Former US president Trump continues to lead the Republican party in 2022  yet he faces a very different Democratic party under president Biden. Mr. Biden's focus is on his $2 trillion plan for Workers and Families, rebuilding American manufacturing and renewing supply chains, unlike Hillary Clinton whose lacked such a focus. Leading to Mr. Trump's appeal with working class families and disdain for traditional Republican policies that secured him the presidency in 2018 by defeating Hillary Clinton. The changes with president Biden's focus on workers and families are happening also in the European Union. Scholz and the Greens in Germany, Macron in France with potentially Melenchon as prime minister, and similar changes in Denmark and other EU countries suggest that there is a renewed focus on infrastructure, rebuilding manufacturing and supply chain renewal, rebuilding incomes and lives of workers and families, in Europe and the US. ...

LyrArc Article Gist
The scale and sophistication of a recent cyberattack on U.S. government agencies surprised even experienced security experts. The strategy was zeroing in on a weak link in the software supply chain U.S. businesses and government institutions rely on, the use of a network management software called Orion.

LyrArc Article Gist
Koch Industries which is built on oil is investing heavily in electric batteries. The company has made 10 investments of over 750 million dollars in the US battery supply chain and electric vehicles in 2021-2022. This money is coming at a critical time for many new battery company startups.

LyrArc Article Gist
Prevailing bets in financial markets by investors are that inflation over the next 12 months will be 3.3%. This is also reflected in the way oil, copper and commodities markets prices are declining. Some of the decline comes from sharply slower growth in China of less than 4%. This means inflation is headed in the right direction, and circumstantial driven by the war in Ukraine and supply chain issues, and not embedded or structural, say experts. 

LyrArc Article Gist
Do social value in the way you run the business. That is the intelligent way. On green washing it says just don't do it. With so much that businesspersons are faced with- lack of upward mobility and wages, mental health, climate change needs, supply chain and domestic manufacturing, the need for an honest sincere response on these issues. These points are made at a WSJ event as reported by Ashwell and Siew.

LyrArc Article Gist
Biden says at the APEC Summit that the US is seeking stable and good relations with China, that this is good for the world. He pointed out that the US wanted to be clear -"We are derisking and diversifying our relationship with China, not decoupling." This refers to the excessive dependence that happened in the relationship with China in the supply chain, in manufacturing, and in trade during the last three decades.

LyrArc Article Gist
President Biden describes the relationship with India as at an inflection point. Looking back decades from now this point will be where the US developed a new relationship with India, said Biden as he welcomed the Indian prime minister to the US. A closer relationship in manufacturing with new supply chain arrangements, trade, energy and fighting climate change, and increased investment, is planned. The US will jointly manufacture F414 GE jet engines in India.

LyrArc Article Gist
Indian exports to China declined in the covid pandemic years when China experienced little or no growth. This has worsened the trade deficit, yet this is temporary. Imports have worsened with Chinese dumping of products into the country. This should not alter India's policy of building close trade and investment relations with the US and the European Union as its main partners. This is also consistent with the prime minister's Atman Nirbhar Bharat policy. The author of this report in Hindustan Times says policy should integrate India with China and Factory Asia, yet this ignores India's growth trajectory as it is only now building up momentum and will for the next decade see the kind of growth Japan and China made in their peak growth period, even as China slows down and forms a smaller part of the global supply chain. US policy is for India to form the major part of the supply chain replacing China at some point as the leading supplier, even though it is moving gradually to get there. India should make policy as Modi has done for 2030, then 2047, and reach its own potential acting in concert with US and EU. ...

LyrArc Article Gist
President Biden meets newly elected South Korean president Yoon Suk-yeol on his visit to South Korea. During the visit Biden also promoted South Korean investments in Texas and Georgia. He visited a Samsung semiconductor plant with the president of Samsung. Samsung is investing billions of dollars $10 billion for a new electric vehicle plant in Savannah, Georgia. By getting American semiconductor and electric car manufacturers to invest heavily in the US president Biden is changing how America invests for regaining technological leadership by 2030. In an effort to get plants to support unions president Biden called for the plants to hire union workers. Biden called by name two Senate contestants in upcoming Georgia elections for their efforts in getting the Hyundai plant that will hire 8000 workers. In contrast to Mr. Trump who lacked a plan or vision for the future Mr. Biden is keenly focused on getting South Korea, Japan and Germany to invest heavily in the US and help restructure the whole supply chain. Where Mr. Trump called for South Korea and other partners to share the defense burden, Mr. Biden is focused on getting American allies to have their large companies invest in American plants and jobs and a new supply chain. ...

LyrArc Article Gist
Krugman says in NYT that inflation is receding and its causes lie mainly in pandemic related supply chain issues not fiscal efforts to fix dilapidated infrastructure, invest in fighting climate change, or help for needy workers and families.  He looks at Fed chair Jerome Powell’s discussion on inflation and this he says shows that fiscal policy or government spending to fight the pandemic and US needs for infrastructure and science/chips played at most a distinctly secondary role. What Krugman does not say is that this does not mean that inflation is not an issue for many families living from paycheck to paycheck. Harris clearly spelled out a Plan for housing costs and cost of food and this is the kind of effort needed to tackle this issue secondary or not in astatistical sense. Also not given recognition is that the government spending is changing the very nature of the US economy by creating more potential for it to grow till 2030 in a way that would not be possible if this investment by president Biden was not wisely made. One has only to look at Germany to see its crumbling rail system and failing infrastructure to see that what Biden did right and Merkel did wrong. ...

LyrArc Article Gist
In his speech to the Indian  parliament following the Motion of Thanks for the President's address Mr. Modi points to gains in infrastructure, in addressing the pandemic, building India's new role  in the world's supply chain,  Gati Shakti Master plan for development. He says this was a way to make Gandhi's dreams for India to come true by the 100th year of India's independence in 2047.

LyrArc Article Gist
A boost in supply in 2024 after the pandemic squeezed supply chains is likely to increase the US growth rate by summer to 4.9%. This is not expected to increase inflation which is down to 2.8% by November 2023, because of higher productivity and higher labor participation rate. The labor participation rate has reached a high of 83.5% not reached since 2001. The Fed sees this as a temporary jump in the growth rate that does not induce inflation so that no Fed action is necessary.

LyrArc Article Gist
How quickly the wind's direction has changed. For decades since 2000 American companies moved operations to China for manufacturing upto a point where there was over concentration and risks in the supply chain seen during the pandemic and as US- China relations diverged on issues such as Hong Kong, Taiwan, Ukraine. This report looks at the US companies shift to looking for ways to shift operations to India, Vietnam and other locations.

In an annual survey 30% of American Chamber of Commerce in China companies out of 360 respondents are shifting their operations for manufacturing to other countries from China. About 25% of tech and R&D companies said they had already begun moving their supply chains out of China.

LyrArc Article Gist
US trade with Germany now exceeds China's trade with Germany. With the change in supply chains, slower German economy leading to lower imports and a slowing Chinese economy, this is likely to lead to US and Germany having increasing trade relations and two way trade from now on.

LyrArc Article Gist
The new Noida International Airport, Asia's largest when completed in 2024, will be a model for connectivity with connections to high speed rail, bullet trains. It will also be developed as an export hub for the country to provide needed logistics for India as a manufacturing hub in the new world supply chain. As part of the Master Plan for Gati Shakti it will be integrated into the development of the country as a whole over the next two decades.

LyrArc Article Gist
The London based Financial Times says of Nathan Anderson and his NY city based firm Hindenburg short seller's allegations on the Adani Group- that the allegations may indeed prove baseless. Yet it says India's regulators should engage with this issue for the sake of transparency and integrity, to demonstrate the "quality of its governance and the strength of its institutions." Particularly as the US and Europe see India as an alternative to China for the supply chain.

LyrArc Article Gist
Denmark based Maersk is the link that connects Asian exporters to the US and Europe. It measures its container ships in size by TEU's a TEU being  20 foot container boxes, 20 foot equivalent units being standard. The Dali container ship had 4700 40 foot container boxes that was built for 10,000 TEU's. When Japan was the large exporter getting Toyota's into Long Beach it was 6400 TEU's , with China now sending BYD E vehicles it is now as large as 10,000 TEU's. In the future with India sending its exports under a resilient supply chain to the US it is 20,000 TEU's. What we don't see are these ports such as Long Beach and Hamburg (in which China has ownership stake) which are increasing capacity for taking in exports from Asia. It has reached these volumes only in one direction from Asia, which president Biden is trying to reverse by building factories at home for resilient supply chain and for jobs and a future for American workers. The Dali 4700 containers that hit the bridge at Scott Key in Baltimore also were figuratively hitting America's own manufacturing base, and its workers and communties built around factories, across the Nation. ...

LyrArc Article Gist
Nvidia's Head of Engineering, Jonah Alben, is from Schenectady, upstate New York. Here he is credited with exporting the latest US advanced chips to China by reducing their effectiveness. US administrations Biden's and DJT's say this pushes the rules of export controls. It also undermines the US lead in advanced technologies needed for the US to keep the peace in the Pacific and in Europe as new tensions emerge over Taiwan and in Eastern Europe. For years the US egregiously restricted the flow of technologies to democracies such as India and allowed a concentration of semiconductor manufacture in Taiwan, over concentration of manufacturing in China, both of which led to supply chain issues in recent years and pose supply chain issues in the future. Ironically restrictions on technologies sale to India which with 1.4 billon people, and a similar culture in Indonesia forms homogenous culture of 1.7 billion people, is the only place of this size where parliamentary democracy has taken root. With an exercise of legislative assemblies through elections in all Indian states in the 1930's under the British with Mohandas Gandhi's leadership and example. Because of Gandhi and the leaders who preceded him Dadabhai Naoroji and Vivekananda in the 1890's India has older democratic forms than Germany, Japan, Italy, Spain and most of Europe, all of Asia, Latin America and Africa. It also has among the ordinary people a deep respect for Lincon, FDR and his fight to help Gandhi with Sukarno fight the British and Dutch Empires to bring freedom to 1.7 billion people.  ...