Hey readers,
It's been a heavy work week. Yes, I missed the Friday piece - but you did get an extra Sunday one last week, so that counts, right? By "heavy," I don't mean the number of articles published; I mean the kind of work they required: deep research, careful writing, and plenty of back-and-forth.
Let's start with the Sunday piece you might have missed. It was about how India risks missing the driverless car opportunity. We are viewing it through just one lens: employment. The worry is that our drivers will become unemployed. But there's another side to this story - one that is far more interesting and growth-oriented. At the very least, we should allow large-scale R&D investment in this space. Selling these cars on Indian roads is one thing; testing and building them here and selling abroad is quite another. I just hope someone forwards my article to the concerned ministry soon. Send this link: India Risks Missing Driverless Car Revolution.
The IMF and many Western institutions say geoeconomics has returned. But for the Global South, this was never surprising; economics and geopolitics were always intertwined. The West has long used the language of democracy, human rights and free-market reforms while relying on the dollar, sanctions and pressure to open economies. That, too, was geoeconomics. What has changed is China's rise. Older hegemons now feel threatened, so they are using geoeconomics more bluntly and openly. Read more: Geoeconomics Was Always The Rule. We Just Forgot.
I've spent months writing about China's manufacturing strength, technology ambitions, and geopolitical rise. But There Are Two Sides To China's Economy — Both Need An Overhaul. China has become exceptionally good at building factories, infrastructure, batteries, EVs, and solar panels. Unfortunately, households haven't benefited to the same extent. Consumption remains weak, wage growth has slowed, property values have fallen, and companies are increasingly fighting each other for market share.
From one China story to another. China still exports too many low-skilled goods, the kind it should make less of as it grows richer. That leaves poorer countries with fewer chances to industrialise. Worse, China imports less from them, too. When today's advanced economies were as rich as China is now, they exported fewer goods and imported more low-skilled goods, helping other developing countries grow. That's why I say, unlike the US, which allowed others to grow, including China,China Is Crushing Developing World's Manufacturing Dream.
While we are discussing geoeconomics, hegemons, the US, and its dominance, here's some food for thought: Is the US Treasury really a risk-free asset? No, I don't want to diss it. Personally, it has never hurt me directly. But perhaps it's time to Rethink Risk-Free Assets and a risk-free rate. I recently came across an interesting argument: there isn't really a single risk-free rate. Instead, it is a bundle of different functions - reserve asset, liquidity buffer, collateral, store of value, settlement asset, and more. For decades, US Treasuries managed to perform all these roles so well that we bundled them into one number and treated it as the safest benchmark in the world. Isn't that an interesting thought?
Looking back, all five stories are really about power. Who will dominate the next generation of technologies? How do powerful countries use economics to advance strategic goals? Can China continue its rise despite growing internal problems? Should a hegemon leave enough room for others to grow? And why does the entire world still benchmark itself against a US government bond? Different topics, same question: how is power created, maintained, and challenged in the modern world?
That's what this week's reading list ended up exploring. And because of this work-heavy week, I'm going to take it easy next week.
You may not see new articles. There is one piece that's currently half-finished. But considering I'm writing this newsletter at 2 a.m. on a Saturday, I don't think it could make it. But yes, I will try. This also means there may not be a newsletter next Saturday either.
Which raises an interesting question: what exactly should I write in a newsletter if there are no articles to discuss? Would you enjoy something different? Maybe a few thoughts on books I'm reading, ideas I'm exploring, stories that didn't make it into articles, or just random observations on economics, policy, and life?
Let me know.
That's the week.
If you made it this far, I'd love to hear from you.
Which of these stories stayed with you? What stories can you share around these topics? And more importantly, what should I dig into next?
An everyday object, a policy, a price that suddenly changed, a trend that's growing around... send it my way. Just hit reply. I read everything.
See you next Saturday.
Cheers, Swapnil
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