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Gross Domestic Product (GDP) is a key indicator of a nation’s overall economic size and power. GDP is generally defined as the total market value of all the finished goods and services produced within a country’s borders in a specific time period. GDP is by no means a perfect economic indicator. It lacks the complexity needed to provide a richer picture of economic health and productivity, and China’s official economic figures are known to be distorted. Nevertheless, GDP is among the most cited macroeconomic datapoints and warrants tracking. When it comes to GDP, China is a global outlier in many respects. Its economy is far larger than that of developing countries, and it has sustained decades of rapid economic growth. Yet China’s economy also differs in many respects from the world’s leading, advanced economies. This ChinaPower tracker includes 10 charts with up-to-date data to help break down and compare key aspects of China’s GDP. Measuring China’s GDP For centuries, China and India each accounted for between one-fourth and one-third of global GDP, thanks in large part to their sprawling populations. This changed abruptly in the 19th century as industrialization enabled rapid increases in productivity in the United States and Europe. China and India correspondingly saw their relative share of the global economy shrink. This persisted until the late 1970s when China began initiating market-based reforms and opening to the outside world, which helped kickstart and sustain economic growth. Today, China’s share of global GDP stands at over 18 percent when adjusted for price differences—the largest of any country. The methods used to measure and compare GDP can significantly alter the outcomes. One method, nominal GDP, measures the goods and services produced in each country and converts them to a common currency such as the U.S. Dollar. This method is the most straightforward, but it allows for distortions resulting from price and currency fluctuations. Another method measures GDP at Purchasing Power Parity (PPP), which accounts for price level differences between countries. Measuring based on PPP has a large impact when comparing wealthy countries to developing countries. China’s nominal GDP is the second-largest after the United States, but measured at PPP, China’s GDP is larger than that of the United States by a considerable margin.1 In many respects, China is an outlier among the world’s large economies. Most leading economies are in open, democratic societies, but China is an authoritarian state that significantly curtails individual freedoms. One way of showing China’s outlier status is by plotting GDP against Freedom Scores, a measure devised by Freedom House to assess political rights and civil liberties around the world. In 2022, China received a Freedom Score of 9—one of the lowest in the world, indicating “not free.” The other top-five largest economies (the United States, Japan, Germany, and the United Kingdom) all had scores above 80, indicating “free.” The next largest economy to share a similar Freedom Score with China—Saudi Arabia—has a GDP of $1.1 trillion—just 6 percent of the size of China’s. China is also an outlier among many other leading economies in that it still labels itself a developing economy and seeks the accompanying benefits in international organizations. Yet the developing country label belies the more complex reality that development is highly uneven within China. Many of its coastal provinces are far wealthier than inland and western regions. In 2022, China’s wealthiest region, Beijing, boasted a per capita GDP of about $28,300, which is on par with many high income, advanced economies. However, China’s poorest province, Gansu, has a per capita GDP of less than $6,700, which is approximately equal to that of Libya.
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Argentinian President Javier Milei’s controversial “shock therapy” has bolstered the country’s currency in a key foreign-exchange market, performing at levels unmatched across the globe, according to Bloomberg.
The “parallel peso” trading on the blue-chip swap exchange has risen 25% against the US dollar over the past three months, more than any of the 148 other currencies tracked. The outlet called it a “shocking statistic” given that the peso was inflating at an annual rate of 300% when Milei took power last December. Since then, the self-described anarcho-capitalist has managed to slash government spending and “choke off” demand for everything – including dollars – in order to tame runaway inflation. “The great novelty in Argentina is that the person in charge is not worried about paying the political cost that comes with austerity – that’s unusual,” the outlet quoted Javier Casabal, head of research at AdCap Grupo Financiero in Buenos Aires. Milei’s budget cuts may not be “the largest in the history of humankind,” as he described them, but have in percentage terms been more severe than about 90% of austerity programs carried out around the world in the last several decades. The president has slashed almost 4% off Argentina’s GDP. On paper, this has caused a deep recession and layoffs. It has also propelled the peso to steadily rise since January. The standard that gauges Argentina’s actual purchasing power shows it is up by 72%, for example. This has enabled Argentina’s central bank to buy dollars and replenish the previously depleted hard-currency reserves. It is also no longer financing government spending by printing money and has lowered interest rates, for the fourth time since Milei took office. “Under this government, economic policy is starting to become rational,” said Carlos Perez, director of the consulting firm Fundacion Capital. Argentines also appear to have more confidence in their currency, which has lowered the demand for dollars. Perez noted that many people who had bought up the US currency as an inflation hedge are now selling it back, to get the pesos they need for everyday business. Bloomberg has described the peso rally as “an ironic twist” for Milei, given that he called the currency “excrement” on the campaign trail and called for scrapping it entirely in favor of the dollar. The Blog Tags Widget will appear here on the published site.
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The so-called 'halving' of the cryptocurrency bitcoin was completed during the night from Friday to Saturday. This halving takes place once every four years and is intended to combat bitcoin inflation by making the currency scarcer.
With the halving, fees for creating a new bitcoin (also called mining) are reduced. This has a slowing effect on the pace at which new bitcoins come onto the market. It makes the cryptocurrency scarcer, which drives up the price. In the past, halvings caused the value of the currency to rise significantly. Crypto investors were therefore looking forward to the fourth halving. A bitcoin is now worth about 59,600 euros. The value of the cryptocurrency has more than doubled in the past six months. There are now 19.6 million bitcoins mined. Ultimately, there should be a total of 21 million bitcoins on the market. This distinguishes the digital currency from fiat money such as the euro, of which an unlimited number can be printed. The Blog Tags Widget will appear here on the published site.
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Rolex’s Watches and Wonders 20244/21/2024
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The share of the euro currency in global cross-border settlements via the SWIFT messaging system last month declined to an all-time low, transaction data compiled by the global financial service showed.
The portion of transactions involving the European single currency amounted to 21.93% in March, marking a month-over-month decline by 1.32 percentage points and dropping well below the 24.4% level logged when SWIFT introduced the new scale. The data has been collected since 2010, but since July the figures reflect a technical adjustment by SWIFT to trade-reporting standards. Over the past year, the euro’s share in international payments has nearly halved. In January 2023, settlements with the currency stood at 37.88%, while figures for December 2023 registers a drop to 22.41%. The US dollar ranked first, gaining 0.81 percentage points from February to reach 47.37% and marking the highest level since December 2023. It was followed by the euro, pound and yuan currencies. The share of the UK national currency in transactions conducted by SWIFT amounted to 6.57%, while the portion of settlements with Chinese yuan saw another increase, reaching 4.69%. The dominance of the euro, a distant second after the US dollar, as a global currency, has been shaken by the rise of China, as well as by the deterioration of ties with Russia and the notable efforts to attain financial independence pursued by emerging economies from India to Brazil. In Russia, major banks controlling over 80% of country’s banking assets were cut off from SWIFT as part of Ukraine-related sanctions. This, according to financial experts, has propelled the increase of China’s national currency in global trade and finance, as Beijing hasn’t joined the sanctions, opting to strengthen trading ties with Russia. The use of yuan has been enlarged after China developed its own international-payments network CIPS, separate from SWIFT. CIPS has been welcomed not only by banks in sanctions-hit Russia, but also by financial institutions operating across emerging economies. The move has boosted the rise of the yuan as one of the world’s most used currencies. SWIFT, or the Society for Worldwide Interbank Financial Telecommunication, provides financial transaction and payment services for more than 11,000 global financial organizations. The tracked data doesn’t blanket the entirety of the $7.5 trillion-per-day foreign-exchange market, but the reports commonly span the vast pools of currency flows that drive global trade over time. The Blog Tags Widget will appear here on the published site.
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The history of the first bank in the world is a narrative intertwined with the rise of the Rothschild family, a dynasty synonymous with banking prowess and financial influence.
The story of the Rothschild bank is not merely about the establishment of a financial institution but also about the ingenuity, shrewdness, and determination of its founders, who revolutionized the landscape of international finance. The origins of the Rothschild banking dynasty can be traced back to the late 18th century, when Mayer Amschel Rothschild, born in 1744 in Frankfurt, Germany, laid the foundation for what would become one of the most powerful banking houses in history. Mayer Amschel, a shrewd businessman with a keen understanding of financial markets, started his career as a dealer in rare coins and antiquities. Through astute investments and strategic alliances, he gradually amassed a significant fortune and gained prominence in the banking circles of Frankfurt. In 1769, Mayer Amschel established a banking business in Frankfurt, which served as the precursor to the Rothschild banking empire. However, it was his five sons—Amschel Mayer, Salomon Mayer, Nathan Mayer, Carl Mayer, and James Mayer—who would propel the Rothschild name to international acclaim and reshape the financial landscape of Europe. The Rothschild brothers were not only astute bankers but also visionaries who recognized the potential of international finance. They capitalized on the political upheavals and economic transformations of the time, leveraging their extensive network of contacts and their expertise in finance to facilitate trade, fund infrastructure projects, and finance wars. One of the key strategies employed by the Rothschilds was their adeptness in international communication and transportation, allowing them to transmit information and capital across borders with unprecedented speed and efficiency. Perhaps the most significant contribution of the Rothschild family to the financial world was their role in the development of government bonds and the establishment of a secondary market for sovereign debt. During the Napoleonic Wars, the Rothschilds played a pivotal role in financing various European governments, providing loans and purchasing government bonds. Their expertise in evaluating credit risk and their willingness to take calculated risks allowed them to profit immensely from these ventures while simultaneously assisting governments in funding their war efforts. The Rothschilds' influence extended far beyond the realm of banking and finance. They wielded considerable political power, often acting as intermediaries between rival governments and playing a behind-the-scenes role in diplomatic negotiations. Their network of agents and correspondents spanned the major capitals of Europe, giving them unparalleled access to valuable information and insights into geopolitical developments. Moreover, the Rothschilds' philanthropic endeavors left a lasting impact on society, with contributions to education, healthcare, and cultural institutions. Their patronage of the arts and sciences helped foster intellectual and cultural advancements, leaving an indelible mark on the societies in which they operated. Despite facing occasional setbacks and challenges, such as anti-Semitic sentiment and political opposition, the Rothschild banking dynasty persevered and thrived, expanding its influence and diversifying its business interests across continents. Today, the Rothschild name remains synonymous with wealth, power, and influence, embodying the legacy of innovation and entrepreneurship that defined the early days of modern banking. In conclusion, the history of the first bank in the world is inseparable from the story of the Rothschild family and their indelible impact on the financial markets. Through their vision, expertise, and entrepreneurial spirit, the Rothschilds transformed the world of banking and finance, leaving a legacy that continues to shape the global economy to this day. The Blog Tags Widget will appear here on the published site.
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Colombia wants to join BRICS4/18/2024 Colombia is seeking to become a full-fledged member of the BRICS group as soon as possible, and Brazil will promote its candidacy, according to a joint statement from the leaders of Brazil and Colombia, published after their meeting in Bogota.
BRICS – which previously comprised Brazil, Russia, India, China, and South Africa – has seen a major wave of expansion. Four more countries – Ethiopia, Iran, Egypt, and the United Arab Emirates – joined the group at the start of this year, and further additions are expected in the future. “President [Petro expressed Colombia’s interest in joining BRICS as a full member as soon as possible, and President Lula welcomed this initiative and promised to promote Colombia’s candidacy,” the statement from Luiz Inacio Lula da Silva and Gustavo Petro reads. Several other nations have expressed an interest in joining the group of non-Western economies, and some have already formally submitted applications, including Venezuela, Thailand, Senegal, Cuba, Kazakhstan, Belarus, Bahrain, and Pakistan. In February, Venezuela announced it is hoping to secure BRICS membership at the group’s next summit in Russia in October. Venezuelan President Nicolas Maduro has stated that the emergence of a new multipolar world is “irreversible,” describing the group as the “future of humanity.” Nigeria in March announced its plans to join BRICS within the next two years, viewing membership as a way to make its voice heard on the global stage. Some 25 countries are expecting to apply for membership during the group’s summit in the Russian city of Kazan in October, the South African ambassador to Russia, Mzuvukile Jeff Maqetuka. According to the International Monetary Fund (IMF), BRICS currently accounts for as much as 36% of global GDP in terms of purchasing power parity (PPP), compared to just over 30% for the G7 group. The head of the New Development Bank (NDB), Dilma Rousseff, said in February that the BRICS member states will overtake the G7 in their share of nominal global GDP within the next four years. According to her, the group’s share of global economic output will rise to 40% by 2028, while that of the G7 group of developed nations will decline to 27.8%. The Blog Tags Widget will appear here on the published site.
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Google lays off Employees4/18/2024 Alphabet-owned Google is laying off an unspecified number of employees, a company spokesperson said on Wednesday, marking the latest cuts at the technology giant as it cracks down on costs.
The Google spokesperson said the layoffs are not company-wide and that affected employees will be able to apply for internal roles, but did not specify the number of employees impacted nor the teams involved. A small percentage of the impacted roles will move to hubs the company is investing in, including India, Chicago, Atlanta and Dublin. The layoffs follow a slew of job cuts across Google, and the tech and media industry this year, adding to fears that layoffs may continue as companies grapple with economic uncertainty. "Throughout the second half of 2023 and into 2024, a number of our teams made changes to become more efficient and work better, remove layers and align their resources to their biggest product priorities," the spokesperson added. Employees across several of Google' teams in its real estate and finance departments have been affected, according to a Business Insider report on Wednesday. The finance teams affected include Google's treasury, business services, and revenue cash operations, it added. Google's finance chief, Ruth Porat, sent an email to staff saying the restructuring includes expanding growth to Bangalore, Mexico City, and Dublin, according to the Business Insider report. Google let go of hundreds of workers across multiple teams in January including its engineering, hardware and assistant teams as the company ramps up investment and builds its artificial intelligence offerings. Company CEO Sundar Pichai reportedly told employees at the start of the year to expect more job cuts. - The Blog Tags Widget will appear here on the published site.
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The International Monetary Fund (IMF) has significantly improved its growth forecast for the Russian economy in 2024 in its latest World Economic Outlook.
The Washington-based institution has once again upgraded its estimate, and now expects Russia’s GDP to grow 3.2% this year, a sharp increase from its January projection of 2.6% and from its October prediction of 1.1% growth. The forecast for 2025 was also increased to 1.8% from the January estimate of 1.1%. Oil export volumes have “held steady” and government spending has “remained high”, contributing to the uptick, the IMF said. The current revision also reflects strong corporate investment, including by state‑owned enterprises, according to the report. “We have also seen a lot of robustness in private consumption that has underpinned growth,” the IMF added. Russian economic growth continues, and according to the IMF report, is expected to outpace that of a number of major Western economies this year, including the US (2.7%), UK (0.5%), France (0.7%) and Germany (0.2%). The IMF’s projection for 2024 is higher than the Russian Economy Ministry’s preliminary reading, which forecast earlier in April that the country’s GDP will expand 2.3% this year, following 3.5% growth in 2023. Last week, President Vladimir Putin said that the Russian economy had expanded 3.6% last year, more than previously estimated. Earlier, he described the country’s economic performance as an “amazing” success, given that Russia has had to operate under unprecedented Western sanctions. The IMF left unchanged its projection for China’s 2024 growth to fall to 4.6% from 5.2% in 2023, with a further decline to 4.1% projected for 2025. Meanwhile the organization increased India’s GDP growth forecast for this year by 0.3 percentage points to 6.8%, maintaining its 2025 estimate at 6.5%. The Blog Tags Widget will appear here on the published site.
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