Economy

Life in a changing China

39 min listen

Since 1978, China has changed beyond recognition thanks to its economic boom. 800 million people have been lifted out of poverty as GDP per capita has grown eighty times. Some 60 per cent of the country now live in cities and towns, compared to just 18 per cent before. But you know all this. What’s less talked about is what that does to the people and families who live through these changes. What is it like to have such a different life to your parents before you, and your grandparents before then? How have people made the most of the boom, and what about those who’ve been left behind? A

Life on the margins: how China’s rural deprivation curbs its success

41 min listen

Too often our stories about China are dictated by the urban experience, probably because journalists inside and outside of China are often based in the big cities; Beijing specifically. Those who live in the cities also tend to be more educated, more privileged, and so able to dominate the global attention more.  That’s why I’m particularly keen to hear about the lives of those who still live in the countryside, or at least are still considered ‘rural residents’ by the Chinese government. They make up a sizeable proportion of the population, and you’ll hear that in my first question to my guest today, we discuss just how big this group

My election advice for Starmer? Offer a new Citizen’s Charter

A giveaway Budget in March preceding a general election in May against an improving economic backdrop: that, we’re told, is Downing Street’s favoured scenario. But still the election is Keir Starmer’s to lose, so here’s my start-the-year advice to him. Don’t bang on about Rishi Sunak being too rich; don’t make immigration the issue, because you have no solutions; don’t pretend to admire Margaret Thatcher; but do channel John Major – to whom you bear much closer comparison – and offer a new Citizen’s Charter. What? Isn’t that 1991 exercise in footling managerialism, forever associated with the ‘cones hotline’, remembered as a laughable failure? Maybe, but its intention was good:

Javier Milei’s radical reforms could start to heal Argentina’s economy

Argentina has spent most of its 200-year history in deficit; no other country currently owes the International Monetary Fund a greater sum of money. The new finance minister, who entered government with President Javier Milei earlier this month, has been stark in making the point: ‘Out of the last 123 years, Argentina ran a fiscal deficit in 113… we have come to solve the addiction to fiscal deficits.’  Milei’s government is wasting little time carrying out what it calls ‘shock therapy’. The official value of the peso, Argentina’s currency, has been halved against the US dollar. Why might a government want to weaken its own currency, pushing up the price

Rishi Sunak can’t take the credit for falling inflation

Even the best-run companies have occasional leadership crises. But if you asked ChatGPT to come up with a blockbuster boardroom-bloodbath movie scenario, I doubt it would propose anything as extreme as this week’s events in its own San Francisco-based parent company, OpenAI. Chief executive and co-founder Sam Altman was fired last week for failing to be ‘consistently candid’ with OpenAI’s board, though no one was prepared to say what he had not been candid about. By Monday he had a new job leading AI research at Microsoft, OpenAI’s 49 per cent shareholder. One inside source claimed 743 of OpenAI’s 770 staff had signed a letter supporting him and many of

The beauty of mid-range products

Once or twice, when on a crowded overnight flight, I have taken a sneaky stroll through the different cabins for the purpose of comparison. My reaction on first peering into each cabin goes like this. First class: ‘Gosh, this is fabulous. It’s like a restaurant in the air.’ Business class: ‘Ooh, this is nice; they get flat beds and everything.’ Premium economy: ‘Well this is OK; the seats seem comfy and it’s all pretty civilised.’ Economy: ‘It’s the “Raft of the Medusa”.’ Now here’s the thing. In terms of comfort, the biggest gap between two adjacent flight classes is between economy and premium economy. This improvement is simply achieved with

Will the collapse of councils be the next great scandal?

Last month India managed to land a spacecraft on the moon for a third of the price of refurbishing Hammersmith Bridge. This startling fact captures both New Delhi’s efficiency and the staggering incompetence of our local councils. It took two years and £9 million (in real terms) to build the bridge. It is set to cost almost £200 million to spruce it up and the work may not be complete until 2030. Hammersmith Bridge has become the perfect metaphor for what’s gone wrong with government: the carelessness, inertia and lack of concern for public money that is rife across the country. The bill for doing up Croydon council’s headquarters was

Matthew Parris

Britain has an entitlement problem

An Institute for Fiscal Studies paper, published at the end of last month, makes grim reading. Through the prism of the media reports it generated (‘One in 11 workers in England could be NHS staff by 2036,’ said the Guardian; ‘NHS staff will make up 49 per cent of the public sector workforce in 2036,’ said the Times), the most sensational finding was that our health service will be eating up an ever-increasing share of public spending. But, as so often, this particular cuckoo in the nest of public provision is only the most newsworthy of so many indications of Britain’s long, slow slide into insolvency. The gap grows between

Martin Vander Weyer

The economy isn’t as sick as we thought

It would be churlish not to celebrate revisions from the Office for National Statistics that tell us the UK is not, after all, the post-Covid invalid of the G7. Contrary to previous figures suggesting we had struggled to regain pre-pandemic levels of economic output, it turns out that our gross domestic product passed that benchmark in late 2021 and our performance has been in line with France and ahead of Germany. Large sectoral revisions for agriculture and manufacturing tell us that statistical reporting is almost as much of a mug’s game as forecasting. But the brighter overall picture accords with the anecdotal sketch of ‘definite warming’ in consumer spending and

Sunak can’t blame landlords for not stopping illegal immigration

Small companies will face massive fines for not checking the papers of everyone they hire. Landlords will be put out of business for renting rooms to anyone without permission to be in the UK. With its Rwanda policy stalled, and with the numbers of illegal immigrants still at record highs, the government has a big new idea for trying to stem the numbers of people coming into the country. It will get small businesses to police the system. The only trouble is, that will damage the economy, and we will all suffer from that.  The government’s latest big idea for controlling immigration is to make it a lot harder for

Cindy Yu

Does China need a new economic playbook?

41 min listen

At the end of last year, some thought that the Chinese economic recovery after three years of zero Covid could happen just as fast as zero Covid itself ended being government policy. I admit, that included me. And yet, more than halfway into 2023, that recovery looks increasingly elusive. The Chinese economy has failed to shake off its own long Covid while other structural problems have reared their heads. What does the future hold for the Chinese economy? Is this the new normal? And if so, is that really a problem? I’m joined on this episode by the economist Keyu Jin, author of The New China Playbook: Beyond Socialism and

Save our railway ticket offices!

‘Always be cheerful’ – a motto to which I’ll return in the final item – speaks to my natural demeanour. But when asked whether I see grounds for optimism in the UK business scene, I’ve struggled lately to find anything positive in the near-certain advent of a Labour government, the agonisingly slow retreat of inflation and the damage of still-rising interest rates. Nevertheless, let me take a step back. In an ONS survey this month, four times as many respondents (36 per cent) thought their business performance would improve over the next 12 months compared with those who thought it would decline (9 per cent). There were also upticks in

Jonathan Ashworth: ‘We are at risk of a lost generation’

Jonathan Ashworth has started carrying a card in his shirt pocket. It’s the licence his father was given when he got a job in the 1970s at the Playboy casino in Manchester. ‘It’s silly, really. But it’s just a reminder that my dad was able to start a job as a croupier from a very poor working-class background in Salford and that completely changed his life,’ the shadow work and pensions secretary says when we meet in his Commons office. It was at the casino that his father met Ashworth’s mother – a Playboy bunny girl working as a waitress. ‘Every week, the Playboy bunny girls had to queue up

‘We’ve got to hold our nerve’: Rishi Sunak’s BBC interview

As mortgage rates surge and a new Opinium poll finds Labour’s lead has jumped to 18 points, Rishi Sunak appeared on Laura Kuenssberg’s BBC show to insist that his plan is the right one. The interview was pre-recorded in the Downing Street garden yesterday, with Sunak commenting on the – now failed – attempted coup by Russian mercenary leader Yevgeny Prigozhin and previewing his government’s long-term NHS workforce plan. However, the main portion of the at times, scrappy interview was spent on inflation and the consequences for mortgage holders. Despite all the current problems, Sunak insisted that he would win the next election Kuenssberg repeatedly asked Sunak whether he would

Red Rishi: the Prime Minister’s political makeover

What kind of conservative is Rishi Sunak? This time last year, there was a clear answer: he was a fiscal hawk who was worried about how much the government had to borrow to fund the Covid crisis. As chancellor, he was always fighting with the prime minister over high spending. When Sunak tried to raise the national insurance rate, he did so partly to send his party an important message: the borrowing and spending has to stop. Now Sunak is in No. 10 and Boris Johnson isn’t around to demand more spending. There has been a Budget and a list of priorities – and Sunak’s agenda is starting to emerge. It

The scourge of London’s ‘American candy’ stores

Should US regulators ban short-selling of bank stocks? That’s a hot topic as investors refuse to accept reassurance from the Fed chairman Jerome Powell that the recent banking crisis-that-wasn’t is over. Following JPMorgan’s rescue of First Republic, shares in other regional banks such as PacWest in Los Angeles, Western Alliance (Phoenix) and First Horizon (Memphis) have fluctuated wildly and fingers have pointed at short-sellers – who borrow shares they think are about to fall in order to sell, buy back cheaper and pocket a profit. That’s bad, say critics, in the broad sense that it’s a negative form of investment, the reverse of backing companies you believe in; and much

The UK’s treatment of Activision shows it is closed for business

It was, admittedly, not quite as thrilling as an action sequence from Call of Duty. Even so, the statement put out by Bobby Kotick, chief executive of US video game publisher Activision, following the UK’s bizarre decision to block the company’s acquisition by Microsoft was about as bloodthirsty as any ever put out by a major corporation. The ruling ‘contradicts the ambitions of the UK to become an attractive country to build a technology business,’ he argued. Even worse, ‘it does a disservice to UK citizens, who face increasingly dire economic prospects’, and, to cap it all off, it shows that Britain is ‘closed for business’. Of course, it would

What Miriam Cates gets right – and wrong – about declining fertility

Fulfil your civic duty. Get married. Have children. That was the message from Miriam Cates, the increasingly prominent Conservative backbencher, to guests at a drink reception earlier this week. In what even her fiercest critics would have to concede was an impressively bold speech, Cates suggested that many of her female constituents want to work less and spend more time with their children. She claimed that politicians belonged to a class that had been protected by marriage and family, insulated from family breakdown to such a degree that they fail to realise how important it is. Few politicians can ride out a Twitterstorm without some sort of retraction, and Cates is no

The £5.4 billion government surplus masks a larger economic issue

There have been celebrations this morning about a government surplus of £5.4 billion last month, and people are even talking about a ‘windfall’ for Chancellor Jeremy Hunt in next month’s Budget. But all this shows is how conditioned we have become to appalling economic news – and that we will grab at anything which seems to indicate a shaft of light. Nevertheless, any talk of a government ‘surplus’ masks the very real problem the government still has While any surplus is to be welcomed – and last month’s borrowing figures are far better than the Office for Budget Responsibility predicted – we would be in serious trouble if the government had not

Government borrowing hits £27.4 billion

Rishi Sunak ruffled his own party’s feathers last week when – in reference to last autumn’s market turmoil – he told an audience in Lancashire: ‘You’re not idiots, you know what’s happened.’ This was quickly interpreted as the Prime Minister branding the MPs and business leaders calling for immediate tax cuts as ‘idiots’, sparking not only backlash but also another round of debates on a topic that has been dividing the Tory party since last summer. Just how quickly and aggressively can the party start to cut the tax burden down from its 72-year high? Today’s public sector finance update for the month of December certainly doesn’t settle this debate,