Music Video: My Love

Paul McCartney & Wings

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Morgan Stanley Makes Sole Underweight Call on Battery Giant CATL

Shares of Contemporary Amperex Technology Co. slumped as Morgan Stanley slashed its recommendation to underweight, expecting geopolitical tensions to hinder the Chinese battery giant’s expansion into US markets.

Restrictions under the Biden administration’s Inflation Reduction Act — which requires certain materials to be sourced and assembled within the US to receive tax benefits — mean electric vehicle battery exports from China to North America are now unlikely, analysts including Jack Lu wrote in a Wednesday note.

“Potential geopolitical, national security risks may lead to delays in Chinese battery makers’ global expansion plans versus Korean battery makers’ accelerating expansion,” they wrote.

Shares of the Tesla supplier fell for the third day on Wednesday, losing as much as 6.8% in its biggest intra-day drop in a year. CATL is among the day’s worst performers on the CSI 300 Index, which is down less than 0.5%. Turnover during morning trading was more than double the average over the past 20 days.

Morgan Stanley’s underweight call is the only sell-equivalent recommendation among more than 40 ratings tracked by Bloomberg. The brokerage earlier this year raised the rating to equal-weight, only to cut again now. Its price target of 180 yuan — reduced from 213.89 yuan — is also the lowest and compares with analysts’ average of 325.51 yuan.

Lu ranks first among peers for producing the highest relative returns based on the companies he has covered over the past year, according to data compiled by Bloomberg. Investors following his CATL calls would have made 2.9% in the period compared to a drop of 19% in the stock.

Margin Pressure

CATL also faces significant margin pressure as second-tier manufacturers adopt more aggressive pricing strategies to gain market share, the analysts wrote. The fact that some other domestic manufacturers have adopted new battery suppliers also shows risk to CATL’s dominance, they said.

Concerns over exports rose this week as Tesla’s website showed its Model 3 vehicles are eligible for a tax credit of $7,500, suggesting that sourcing and manufacturing requirements may limit CATL’s expansion stateside.

The global battery supply chain is less secure than the fossil fuel ecosystem as China holds a 50%-75% share in shipments for the former, according to Morgan Stanley. “The West will need to become more self-sufficient in the provision of EV batteries” amid potential decoupling from the Chinese supply chain, the analysts wrote.

Source : BNN Bloomberg

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Global Economy on Precarious Footing Amid High Interest Rates

Global growth has slowed sharply and the risk of financial stress in emerging market and developing economies (EMDEs) is intensifying amid elevated global interest rates, according to the World Bank’s latest Global Economic Prospects report.

Global growth is projected to decelerate from 3.1% in 2022 to 2.1% in 2023. In EMDEs other than China, growth is set to slow to 2.9% this year from 4.1% last year. These forecasts reflect broad-based downgrades.

“The surest way to reduce poverty and spread prosperity is through employment—and slower growth makes job creation a lot harder,” said World Bank Group President Ajay Banga. “It’s important to keep in mind that growth forecasts are not destiny. We have an opportunity to turn the tide but it will take us all working together.”

Most EMDEs have seen only limited harm from the recent banking stress in advanced economies so far, but they are now sailing in dangerous waters. With increasingly restrictive global credit conditions, one out of every four EMDEs has effectively lost access to international bond markets. The squeeze is especially acute for EMDEs with underlying vulnerabilities such as low creditworthiness. Growth projections for these economies for 2023 are less than half those from a year ago, making them highly vulnerable to additional shocks.

“The world economy is in a precarious position,” said Indermit Gill, the World Bank Group’s Chief Economist and Senior Vice President. “Outside of East and South Asia, it is a long way from the dynamism needed to eliminate poverty, counter climate change, and replenish human capital. In 2023, trade will grow at less than a third of its pace in the years before the pandemic. In emerging markets and developing economies, debt pressures are growing due to higher interest rates. Fiscal weaknesses have already tipped many low-income countries into debt distress. Meanwhile, the financing needs to achieve the sustainable development goals are far greater than even the most optimistic projections of private investment.”

The latest forecasts indicate that the overlapping shocks of the pandemic, the Russian invasion of Ukraine, and the sharp slowdown amid tight global financial conditions have dealt an enduring setback to development in EMDEs, one that will persist for the foreseeable future. By the end of 2024, economic activity in these economies is expected to be about 5% below levels projected on the eve of the pandemic. In low-income countries—especially the poorest—the damage is stark: in more than one-third of these countries, per capita incomes in 2024 will still be below 2019 levels. This feeble pace of income growth will entrench extreme poverty in many low-income countries.

“Many developing economies are struggling to cope with weak growth, persistently high inflation, and record debt levels. Yet new hazards—such as the possibility of more widespread spillovers from renewed financial stress in advanced economies—could make matters even worse for them,” said Ayhan Kose, Deputy Chief Economist of the World Bank Group. “Policy makers in these economies should act promptly to prevent financial contagion and reduce near-term domestic vulnerabilities.”

In advanced economies, growth is set to decelerate from 2.6% in 2022 to 0.7% this year and remain weak in 2024, the report says. After growing 1.1% in 2023, the U.S. economy is set to decelerate to 0.8% in 2024, mainly because of the lingering impact of the sharp rise in interest rates over the past year and a half. In the euro area, growth is forecast to slow to 0.4% in 2023 from 3.5% in 2022, due to the lagged effect of monetary policy tightening and energy-price increases.

The report also offers an analysis of how increases in U.S. interest rates are affecting EMDEs. Most of the rise in two-year Treasury yields over the past year and a half has been driven by investor expectations of hawkish U.S. monetary policy to control inflation. According to the report, this particular type of interest rate increases is associated with adverse financial effects in EMDEs, including a higher probability of financial crisis. Moreover, these effects are more pronounced in countries with greater economic vulnerabilities. In particular, frontier markets—those with less developed financial markets and more limited access to international capital—tend to see outsized increases in borrowing costs; for instance, sovereign risk spreads in frontier markets tend to rise by more than three times as much as those in other EMDEs.

In addition, the report provides a comprehensive assessment of the fiscal policy challenges confronting low-income economies. These countries are in dire straits. Rising interest rates have compounded the deterioration in their fiscal positions over the past decade. Public debt now averages about 70% of GDP. Interest payments are eating up a rising share of limited government revenues. 14 low-income countries are already in, or at high risk of, debt distress. Spending pressures have risen in these economies. Adverse shocks such as extreme climate events and conflict are more likely to tip households into distress in low-income countries than anywhere else because of limited social safety nets. On average, these countries spend just 3% of GDP on their most vulnerable citizens—well below the 26% average for developing economies.

Source : The World Bank

Chart: Which Countries Export & Import Plastic Waste?

Source : Statista

Video: Introducing Battery Tanker

The world’s first Battery Tanker X is a 140-meter-long electric propulsion vessel capable of transporting electricity across oceans. Renewable energy can be safely sent across the sea, connecting grids, islands, and offshore wind farms.

Marine-grade batteries installed on the ship have a total capacity of 240MWh and are designed and built by PowerX, a Japanese battery startup.

This unique ship is planned to be fully certified by international standards, including DNV and Class NK.

Watch video at You Tube (5:18 minutes) . . . .

習近平警示國家安全面臨「驚濤駭浪」 親信蔡奇任國安委副主席受矚目

仇佩芬 wrote . . . . . . . . .

中共官方媒體30日晚間報導，中共總書記習近平30日下午主持二十屆中央國家安全委員會第一次會議，為新一屆中共國安委首次公開活動。根據報導內容，出席會議者包括習近平與三名國安委副主席，分別是中共中央政治局常委李強、趙樂際與蔡奇。這也證實習近平在新一屆國安委增設一名副主席，由已身兼多職中央書記處書記蔡奇擔任，同時掌握黨建、領導人維安及國家安全等多項實權。

在會議內容方面，報導特別提及當前中國國家安全問題的複雜、艱難程度明顯加大，國安委必須「準備經受風高浪急，甚至驚濤駭浪的重大考驗」。儘管新聞稿並未提出具體說明，但從近來中國陸續強化《反間諜法》執法作為，且加強「習思想」宣傳教育，顯示會議所指涉的「安全」考驗主要來自國內政局的動盪。

國安委成立後僅3次公開報導　蔡奇任第三副主席受矚目

中共官媒中央電視台《新聞聯播》30日晚間報導，習近平以中共中央總書記、國家主席、中央軍委主席、中央國家安全委員會主席等多重身份，主持二十屆中央國家安全委員會第一次會議。

《新聞聯播》以字卡搭配讀稿方式報導此一會議，並未出現任何會議畫面可以一窺與會成員。報導特別提到，中央國家安全委員會副主席李強、趙樂際、蔡奇出席會議。意即過去在由國務院總理及全國人大委員長擔任的副主席之外，增設第三名副主席，由蔡奇出任。

根據《北京青年報》負責說明中共黨務政情的「政知」系列分析，習近平主政後正式運作的國安委，成立後公開報導極少；除了2014年4月成立後召開第一次會議、2018年4月第十九屆國安委第一次會議之外，此次為國安委的第三次公開報導。

從意識型態到習近平安全都歸他管　蔡奇身兼多職擁實權

儘管從未有過正式宣佈，但根據過去兩屆國安委分工，國安委辦公室主任一向由中央辦公廳主任擔任，亦即蔡奇原本就是新一屆國安委辦主任。蔡奇在新一屆國安會出任第三名副主席，除了過去兩屆國安委辦主任栗戰書與丁薛祥當時並不像蔡奇一樣具有政治局常委身分的體制原因之外，習近平賦予蔡奇極大實權更是主要因素。

在二十大中「入常」，出掌中共中央書記處書記的蔡奇，目前同時身兼中央辦公廳主任、中央和國家機關工委書記，意謂擁有國安委的實權，能夠調動政法委、國安、軍隊武警和外交等組織之外，蔡奇早已主掌意識形態和黨建、黨務與行政組織，同時擁有指揮中央警衛局這支小規模武力的權力。

另外，在中共各種疊床架屋的機構中，蔡奇同時擔任中央深改委副主任、依法治國委副主任、中央宣傳思想工作領導小組組長、中央黨建工作領導小組組長。近期最為外界熟知的，就是今年4月啟動的「習思想」主題教育運動，同樣也由蔡奇擔任領導小組組長。

習近平要國安委迎驚濤駭浪　政局動盪須強化「習思想」

在蔡奇的新身分之外，此次國安委會議的內容同樣引起外界關注。根據報導，習近平在會議上發表重要講話強調，指示必須深刻認識「國家安全面臨的複雜嚴峻形勢」。

報導特別點出，會中提及國安會必須發揚「鬥爭精神」，持續發展總體國家安全觀，堅決捍衛國家主權、安全、發展利益。會議特別指出，中國當前面臨國家安全問題的複雜程度、艱巨程度明顯加大，必須堅持底線思維和極限思維，「準備經受風高浪急甚至驚濤駭浪的重大考驗」。

截至目前，北京各項分析並未說明會議中所稱的「重大考驗」具體內容為何。從報導來看，習近平在會中要求加快國家安全體系和能力現代化，「突出實戰實用鮮明導向」，實施實時監測、及時預警，打好組合拳。而所謂國家安全工作的目標，則是維護「政治安全」，因此必須提升網絡數據人工智能安全治理水平、加快建設國家安全風險監測預警體系、推進國家安全法治建設、加強國家安全教育等。

事實上，在去年的中共二十大報告中，習近平首度將「國家安全」單列為獨立章節，提及「安全」一詞多達數十次。綜合二十大之後，中共從嚴執行《反間諜法》，針對個人、外國企業加強監控，並大力推動學習「習思想」等文革式運動，顯示新一屆國安委的優先任務為防範中國國內政情變化。

Source : Up Media

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Read also at Nikkei (Japanese)

中国「序列5位」蔡奇氏に要職集中 習近平氏1強象徴 . . . . .