Economics in the News – Oct. 30 – Nov. 5, 2023
Economics impacts our lives every day. Below are some of the top storylines from this past week related to economics.
o Electric technologies are moving its way to the skies. A recent 16-day test flight in a CX300 aircraft that was powered by battery technology showcased the future of aviation with aircrafts that do not emit greenhouse gases that are often cited as a major cause to climate change. The plane was built by Beta Technologies and was flown by Chris Caputo, a veteran pilot who had racked up a resume of thousands of hours in the sky, but never in a battery-fueled plane.
Electric aircraft has long been little more than fantasy, but technological advancements and large investments have helped make a short-distance electric-powered flight available. Beta, a privately held company, boasts investors such as Fidelity, Amazon’s Climate Pledge Fund, and private equity firm TPG Capital. The CX300 aircraft has a 50-foot wingspan and is designed to carry roughly 1,250 pounds of cargo. Beta has said that it will eventually carry passengers. Beta isn’t the only aviation company focused on electric aviation. More established manufacturers such as Airbus, Boeing and Embracer are also working on electric aircraft. [The New York Times]
o In recent years, tensions with China have increased over trade, technology, security, among other issues. While traditionally, countries such as the United States, have sought to make China a partner and a customer, with China playing a critical part in manufacturing goods to be shipped to the United States. But recent years the United States and Europe have been less reliant on Chinese supply chains, which have created more jobs for Americans and Europeans.
China’s trade with Southeast Asia surpassed its trade with the United States in 2019. Trade with Russia is greater than its trade with Germany. Many of its investments go to places such as Indonesia or the Middle East, instead of the United States. Even multinational companies that have long done business in China, such as Apple, Stellantis, and HP are looking to move production from China. One major downfall for reduced trade with China in the Western World is a slower-growing economy. The International Monetary Fund believes that fragmentation between China and the West was weighing on the world’s economic recovery. [The Wall Street Journal]
o The threat of a government shutdown continues to loom, as federal appropriations will lapse at 12:01 a.m. on Nov. 18. The shutdown would impact a wide array of the government’s two million civilian and military workers.
Led by newly appointed House Speaker Mike Johnson, House Republicans have not decided their course of action to keep the government funded. Johnson’s predecessor Kevin McCarthy was ousted as Speaker of the House after relying on Democratic votes to fund the government until mid-November. Johnson and the Republicans are also challenged by the international crisis, with The House approving a $14 billion aid package for Israel. [The Washington Post]
o What did your dog dress up as for Halloween this year? Americans were expected to spend $700 million on costumes for their pets this Halloween, according to the National Retail Federation. The top pet costumes choices include a pumpkin, hot dog, bat, bumblebee, and spider.
It is estimated that the average shopper spends $108 on Halloween essentials such as candy, costumes, and decorations. Halloween spending was actually on decline prior to the COVID-19 pandemic but the lockdown motivated people to decorate their homes for the holidays. [NPR]
o In recent years, China has shifted its lending to focus on bailing out countries from piles of debt. Previously, they lent $1.3 trillion to developing countries for large infrastructure projects. China’s initial loans were handed out as early as 2013 as part of Chinese leader Xi Jinping’s Belt and Road Initiative. It helped build stronger transportation, communication and political links in 150 different countries.
Now China’s two main banks have reduced lending. But much of the recent lending has come from China’s central bank to central banks of countries that took out Belt and Road Initiative loans. China is shifting its lending focus, while the United States tries to match China’s early successes in establishing ties in developing countries. The US plans to announce new loans of $125 million for shipyard modernization in Greece, as well as up to $553 million in lending for port expansion to Sri Lanka. Part of the motivation for the two anticipated US loans are the success of China’s Belt and Road Initiative and its eroding American influence. [The New York Times]