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The World
China moved quickly to counter an effort by the U.S., U.K. and Australia to contain its ambitions in the Pacific, saying it would apply to join a regional economic pact the U.S. had eschewed, as Washington and Beijing maneuvered for economic and military position in the theater that will define their great power competition. The U.S. has been amassing a network of alliances, including India and Japan. The latest among the three English-speaking allies will be an effort to provide Australia with nuclear submarines to strengthen deterrence in the Indo-Pacific region China isn’t taking the news sitting down: It sought to increase its own economic influence by announcing that it had applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, known as CPTPP. The U.S. was close to joining the regional trade pact, then known as the TPP, before President Trump withdrew from it in 2017 amid widespread skepticism of multilateral trade agreements. (Wall Street Journal, Sydney Morning Herald)
‘Stab in the back’: France reacted with outrage to the submarine announcement — and that Australia was withdrawing from a $66 billion deal to buy French-built submarines. At its heart, the diplomatic storm is also a business matter — a loss of revenue for France’s military industry, and a gain for American companies. Jean-Yves Le Drian, France’s foreign minister, called the deal a “stab in the back.” Underscoring its fury, France canceled a gala scheduled for Friday at its embassy in Washington to mark the 240th anniversary of a Revolutionary War battle. “This looks like a new geopolitical order without binding alliances,” said Nicole Bacharan, a researcher at Sciences Po in Paris. “To confront China, the United States appears to have chosen a different alliance, with the Anglo-Saxon world separate from France.” (Le Monde, New York Times)
China warned that the nuclear sub deal may spark a Pacific arms race, and that the new three-way partnership will ‘severely damage’ peace and stability. China’s Foreign ministry challenged Canberra to reflect on whether it sees China as a ‘partner or a threat.’ Meanwhile, China slams South China Sea ‘provocation’ after turning away German warship: Beijing said other countries’ patrols in the South China Sea were “provoking incidents” and “creating contradictions” as it rejected a German warship’s port call request. (South China Morning Post, South China Morning Post-2)
Italy is making Covid-19 health passes mandatory for all workers in the private and public sectors, in one of the toughest vaccine-promoting measures adopted by any major Western country. The step reflects the government’s belief that Italy’s fragile economy can’t afford another winter of resurgent coronavirus contagion that forces a return to lockdowns. (Wall Street Journal)
Pfizer CEO says Covid vaccine data for kids under age 5 may come in late October. (CNBC)
‘The situation is dire’: Idaho activates crisis standards statewide over COVID-19. Crisis standards of care were created in June 2020 as a plan to strategically ration health care if hospitals become overwhelmed with the demands in front of them. When crisis standards are implemented, hospital beds may not be available to someone who needs it, or beds could be in repurposed rooms not typically used for medical treatment. (Idaho Statesman)
Overwhelmed with Covid patients, Oregon hospitals postpone surgeries and cancer care. (NPR)
Candidates to become Japan's next prime minister officially launched their campaigns, with popular vaccine minister Taro Kono expected to be the top contender to replace Yoshihide Suga. The winner of a Sept. 29 LDP leadership election will become prime minister by virtue of the party's majority in the lower house of parliament. (Reuters)
None of the world's major economies -- including the entire G20 -- have a climate plan that meets their obligations under the 2015 Paris Agreement. The watchdog Climate Action Tracker analyzed the policies of 36 countries, as well as the 27-nation EU, and found that all major economies were off track to contain global warming to 1.5 degrees Celsius above pre-industrial levels. The countries together make up 80% of the world's emissions. (CNN)
Pounds and ounces return: In 2001 a greengrocer from Sunderland arguably did more than any politician to set Britain on the path towards Brexit when he was convicted for breaching EU rules banning the sale of fruit and vegetables in pounds and ounces. Now, 20 years on, Boris Johnson is to make good on a pledge to vindicate the cause of the “metric martyr” by announcing the return of imperial weights and measures. It will once again become legal for market stalls, shops and supermarkets to sell their goods using only Britain’s traditional weighing system. (The Times)
Of 25 key U.S. business sectors, Americans' views of nine have worsened significantly since 2020 and none of the others have improved appreciably. Six of these nine industries show double-digit decreases in positive ratings: healthcare, oil and gas, electric and gas utilities, internet, retail, and farming and agriculture. The other three -- the grocery, airline, and television and radio industries -- show smaller though still substantial drops in positivity. The decreases in positive ratings for three of these nine business sectors -- healthcare, the internet, and farming and agriculture -- come just one year after each increased by significant margins. Ratings for healthcare and farming and agriculture have now retreated to 2019 levels, while the rating for the internet industry has hit a new low. (Gallup)
Economy
The U.S. economy is proving resilient in the face of the Delta variant. Americans briskly increased spending at retailers last month, while employers have largely resisted the urge to lay off workers, both signs of strong demand in the economy. Sales at the nation’s retailers rose 0.7% in August, rebounding from a drop in July. With many schools, college campuses and offices reopening, consumers shelled out more for groceries and merchandise at big-box stores. Those purchases—along with higher spending on furniture and hardware—offset another big decline in car sales, which have suffered from a global computer chip-shortage that has crimped supply. (Wall Street Journal)
The share of American adults who experienced a loss of pay or income has increased 1.6 percentage points over the past four weeks, confirming that increases in coronavirus cases continue to limit the ongoing employment recovery. Morning Consult’s Lost Pay / Income Tracker captures a downturn in the demand for labor that is unlikely to be spotted by weekly unemployment insurance claims data since millions of workers are no longer eligible for benefits. (Morning Consult)
Ministers aim to secure a multibillion-pound investment from Saudi Arabia to fund renewable energy and infrastructure projects in the UK after yesterday’s announcement of a £10 billion deal with the UAE. Ministers are attempting to persuade Gulf sovereign wealth funds to expand beyond investments in property and blue chip firms in the UK. (The Times)
The European Central Bank expects to hit its elusive 2% inflation target by 2025, according to unpublished internal models that suggest it is on course to raise interest rates in just over two years. This would be at least a year earlier than most economists expect the ECB to raise its deposit rate from a record low of minus 0.5%. However, some investors are pricing in a rate rise by the end of 2023. This scenario appeared to be confirmed by the ECB’s longer term inflation outlook, which its chief economist Philip Lane discussed in a private call with the economists of German banks this week. (Financial Times)
Companies frequently omit information about critical climate-related risks from their financial statements and there are often “considerable” inconsistencies in disclosures reported elsewhere by the same organization, according to new independent research. A review of 107 global companies in carbon-intensive sectors, including energy, cement and transport, found that more than 70% did not indicate whether they had considered climate when preparing their 2020 financial statements. Auditors rarely noted these discrepancies, even in cases of “considerable observable inconsistencies.” (Financial Times)
Coinbase is going even further to distinguish itself from other cryptocurrency exchanges in the U.S. The company plans to offer futures and derivatives trading. It filed an application that day with the National Futures Association to register as a futures commission merchant under the name Coinbase Financial Markets. The move would set Coinbase further apart from competitors Kraken, Binance.US and Robinhood, which don’t offer crypto derivatives trading in the U.S. (The Information)
Technology
China accounts for 40% of 6G patent applications, as the country leads the development race despite U.S. sanctions. China was followed by the U.S. with 35.2%. Japan ranked third with 9.9%, followed by Europe with 8.9% and South Korea with 4.2%. (Nikkei Asian Review)
Digital driving licences will be introduced for the first time as part of post-Brexit reforms designed to make the licensing system more efficient. Provisional licences will initially be made available via a smartphone app before the technology is expanded to cover full licences. The Driver and Vehicle Licensing Agency (DVLA) will attempt to introduce the system within the next three years, initially as a trial. (The Times)
Google is looking to make its Chromecast streaming device more appealing to cord cutters. The company has plans to add free TV channels to Google TV, the Android-based smart TV platform that powers Chromecast as well as select smart TVs from companies including Sony and TCL, Protocol has learned. To achieve this, Google has held talks with companies distributing so-called FAST (free, ad-supported streaming television) channels. (Protocol)
Recorded music revenues in the U.S. grew 27% in 1H21 versus the prior year, from $5.6 to $7.1 billion at retail value. Paid subscriptions continued to be the strongest contributor to growth, comprising nearly two-thirds of total revenue, and more than 80 million paid subscriptions for the first time. At wholesale value revenues rose 25%, from $3.7 billion in 1H20 to $4.6 billion in 1H21. The effects of Covid-19 continued to affect the industry, and year-over-year comparisons are significantly impacted by store closures, tour cancellations, and other disruptions from both 2020 and 2021. (RIAA)
Smart Links
Call for entries: The Americas’ Fastest Growing Companies 2022. (Financial Times)
Pandemic special enrollment period led to record number of ACA enrollees. (Healthcare Dive)
University degrees in England are most expensive in the world. (The Times)
Culture war rages in universities over gender of German nouns. (The Times)
World Bank inquiry finds IMF chief pushed staff to boost China rankings. (Financial Times)
Alphabet’s Project Taara laser tech beamed 700TB of data across nearly 5km. (The Verge)
U.S. to award Newark flights to low-cost carrier to spur competition. (Reuters)