Global Pulse

博客

  • Why the Trump administration will have to accept a Hormuz toll

    Why the Trump administration will have to accept a Hormuz toll

    Weeks after the U.S.-Iran memorandum of understanding fell apart, both Washington and Tehran have been shoring up their strategic positions ahead of any potential resumption of negotiations. The two sides have adopted starkly different posturing: the U.S., led by President Donald Trump, has issued open threats and floated the possibility of expanded bombing strikes against key Iranian infrastructure, while Iran has deliberately cut maritime traffic to a trickle through the strategically critical Strait of Hormuz, the chokepoint that the Islamic Revolutionary Guard Corps (IRGC) has repeatedly proven it can close at will.

    Official statements from both capitals remain deeply contradictory. Trump has repeatedly claimed Iran is desperate to restart talks, but Iranian officials have consistently denied any active negotiations are underway. Even amid this dissonance, both sides acknowledge that any future agreement will revolve entirely around control and access to the strait, which borders Iran and Oman. The two adjacent countries have floated a series of framework proposals for managing traffic through the waterway, and while no final deal has been reached, it is already clear Iran will hold far more sway over shipping than it did before the U.S. preventive war began in February.

    A core sticking point in ongoing discussions over a regional framework is whether Iran will be permitted to charge tolls or fees for commercial vessels passing through the strait. The Trump administration has taken an uncompromising stance against any such arrangement, arguing that it would deliver much-needed new revenue to Tehran and serve as undeniable public proof that its preventive war was a catastrophic strategic error. Secretary of State Marco Rubio reiterated this position in July, warning that allowing a nation-state to unilaterally control an international waterway and charge passage fees would set a dangerous global precedent that could be replicated in other strategic waterways around the world.

    Before the outbreak of war, the strait operated as a free, open international shipping route, with 120 to 150 commercial vessels traversing the waterway daily to move energy and goods to global markets. The U.S. has pushed for a full return to this pre-war status quo, but Iran has zero interest in rolling back its new leverage—a reality that reflects the shifting power dynamics created by the war itself. Trump’s decision to launch conflict gave Tehran a unique opportunity to leverage its geographic position, and Iranian leaders moved quickly to capitalize on it.

    Initially, Iran’s decision to restrict strait access was designed to raise the cost of the war for the U.S. and push regional U.S. partners to pressure Washington into ending hostilities. Over time, however, control over the strait evolved into a far more valuable strategic asset: a bargaining chip Iran can deploy whenever the U.S. threatens to escalate military operations. Today, reopening the strait to full traffic is a higher priority for the U.S. than containing Iran’s nuclear program, but Washington has yet to find a viable path to achieve that goal.

    Trump first turned to military force to break the impasse, betting that heavy U.S. airstrikes would degrade the IRGC’s capacity to target shipping and force Tehran to back down. That strategy failed on two counts: it overestimated the ability of U.S. military power to force a change in Iran’s core strategic calculations, and it drastically underestimated Iran’s capacity to mass-produce and deploy low-cost drones and missiles against shipping. Every U.S. strike only reinforced Tehran’s belief that the war threatened the existence of the Iranian state, and instead of capitulating, Iran escalated: it targeted vessels using the alternative route along Oman’s southern coast and made clear that expanded U.S. bombing would trigger wider attacks on Gulf energy infrastructure.

    All U.S. military efforts to restore the pre-war status quo have failed, and there is little reason to expect future attempts to succeed. Foreign policy analyst Daniel R. DePetris argues that if the Trump administration wants to extract itself from an open-ended unwinnable conflict, its best available option is to accept an Iranian toll and fee structure for strait passage.

    Admittedly, this would face fierce domestic pushback: Capitol Hill hawks would almost certainly condemn the move, and many of Trump’s own political allies would struggle to justify the concession to voters. But when framed as a choice between accepting passage fees or remaining mired in endless conflict, accepting fees is the far more pragmatic option. The Trump administration’s original decision to launch war created the current crisis, and bad policy choices inevitably generate unforeseen negative outcomes that must be managed.

    Critics who warn that an Iranian fee structure would be unprecedented are mistaken. There is already a working model for this kind of arrangement at another critical global trade chokepoint: the Strait of Malacca in Southeast Asia, where shipping companies contribute to a voluntary fund managed by Malaysia, Indonesia, and Singapore that covers navigational support, maritime safety, environmental protection, and search and rescue operations. A similar voluntary system in the Strait of Hormuz would not break new ground, and in fact, shipping firms and their insurance providers may even view predictable fees as a net benefit, if they reduce the risk of far costlier disruptions or attacks.

    It would be disingenuous to ignore the downsides of such a deal: U.S. acceptance of Iranian tolls would be an embarrassing acknowledgment that Tehran is now the primary power broker for the strait, and reports that Iran is demanding fees equal to 7% of a vessel’s cargo value mean Tehran would gain substantial new revenue it did not control before the war. Even so, this scenario is far less catastrophic than many U.S. policymakers claim. Over time, Iran’s new leverage will gradually erode, as Gulf Arab states have already begun adapting to the new status quo by expanding alternative energy export routes that bypass the strait entirely, reducing their vulnerability to Iranian pressure.

    Saudi Arabia has ramped up crude exports through its cross-country east-west pipeline, which delivers oil to Red Sea ports for global shipment. While this route remains vulnerable to attacks from the Iran-aligned Houthi movement in Yemen and cannot fully replace the volume of traffic that previously moved through the Strait of Hormuz, it has still allowed Saudi Arabia to avoid a full shutdown of oil production. The United Arab Emirates has followed a similar path, increasing exports through the Fujairah terminal located outside the strait; by July, Fujairah accounted for 66% of all UAE crude exports, up from 51% just one month earlier. Iran’s aggressive actions during the war have only accelerated these diversification efforts, which will over time reduce Tehran’s ability to disrupt global energy flows by holding the strait hostage.

    Negotiations over the future of the Strait of Hormuz remain ongoing. If an agreement requiring passage fees becomes unavoidable, DePetris argues U.S. policymakers should set aside political posturing and accept the deal. Ceding ground on the fee question is the most efficient way for the U.S. to exit a foolish, unnecessary conflict at the lowest possible long-term cost.

    This analysis is by Daniel R. DePetris, a fellow at Defense Priorities, a Washington D.C.-based think tank that promotes realism and restraint in U.S. foreign policy, and a columnist for multiple major U.S. publications. It was originally published by Responsible Statecraft and republished with permission.

  • Detroit knows China’s eating its EV lunch but can’t change course

    Detroit knows China’s eating its EV lunch but can’t change course

    A tourist visiting Oslo last February left with one striking impression: electric vehicles have become completely ubiquitous across the Norwegian capital. Every taxi hailed ran on battery power, a visible sign of a decades-long transition that has positioned Norway as the global trailblazer for electric vehicle adoption.

    Last year, driven by generous government tax incentives and subsidies, new electric vehicle sales captured 95.9% of Norway’s total new car market, jumping from 88.9% in 2024. While EVs already dominate new purchases, two-thirds of the country’s total passenger vehicle fleet still runs on fossil fuels — a gap Norway is rapidly working to close. In 2025, EVs surpassed diesel-powered vehicles for the first time to become the most common powertrain on Norwegian roads, putting the country on track to meet its goal of a fully fossil-free new car fleet.

    Norway’s rapid EV transition is not an isolated trend. Global adoption of electric vehicles has been fueled first by growing urgency around climate change, and more recently by supply chain and price volatility for oil-driven by geopolitical conflicts such as the Iran war, which pushed more nations to prioritize domestic, low-carbon transportation.

    Last year, EVs made up 55% of all new car sales in China and 28% in Europe. The International Energy Agency projects that 28% of all new car sales globally will be electric this year, with 50% growth in EV sales across Asia-Pacific markets outside China and 45% growth in Latin America. By 2035, the IEA forecasts that half of all new cars sold worldwide will be electric.

    The United States stands out as a stark outlier to this global trend. Last year, EVs accounted for less than 10% of new car sales in the U.S., and sales have declined further this year. The current Trump administration, which has prioritized supporting domestic oil production, has rolled back nearly all pro-EV policies enacted by the previous administration.

    Detroit’s Big Three automakers, which had poured tens of billions of dollars into EV development and battery manufacturing, have reversed course after receiving clear signals from the administration. Multiple planned new EV models have been canceled, and billions in EV-related investments have been written off as losses. While the major U.S. automakers still offer EVs and have tentative plans for future models, their enthusiasm and investment in the sector have sharply declined.

    For veteran auto journalist Urban Lehner, the author of this analysis and former Detroit bureau chief for The Wall Street Journal, this pattern of complacency in the face of rising global competition feels familiar. In 1984, when Lehner took up his post in Detroit after three years covering the Japanese auto industry in Tokyo, Detroit’s executives showed almost no curiosity about the competitive threat from Japanese manufacturers that would go on to reshape the global industry. Most dismissed the trend, changing the topic to local sports rather than engaging with the shifting market.

    Today, the rising competitive threat comes from China, which dominates global EV production. The IEA reports that China manufactured nearly 75% of the world’s EVs last year and controls nearly 80% of global battery cell production. Cutthroat domestic competition has pushed Chinese manufacturers up the learning curve rapidly, with vehicle quality and technology improving steadily year over year. In China, many EVs are already cheaper than comparable gas-powered cars, and as battery technology improves, experts expect they will reach price parity globally without relying on government subsidies. EVs already outperform gas-powered cars in acceleration, noise level, and maintenance costs, with driving range continuing to improve rapidly.

    The U.S. currently imposes 100% tariffs on Chinese-made EVs, shielding domestic manufacturers from direct competition in the short term. Still, Ford Executive Chairman recently warned that the U.S. cannot block Chinese EVs from its market forever. Lehner notes that while Detroit’s executives today are far more aware of the Chinese threat than their 1980s predecessors were of Japan, they face structural headwinds: a large domestic market with underdeveloped EV charging infrastructure, and constant policy whiplash from Washington that flips pro- and anti-EV policies every four years with changes in administration.

    Lehner argues that U.S. consumers will not remain insulated forever. While Chinese EVs are blocked from the U.S. market today, their growing success in third markets such as Mexico, Canada, Brazil, and Norway will eventually create spillover. If Chinese EVs capture large market share in Mexico and Canada in the coming years, they will inevitably become more visible to American consumers, who may well prefer their lower prices and better performance.

    As the world rapidly shifts toward mass EV adoption, the U.S. remains an outlier — but how long can that last? For Detroit, repeating the 1980s pattern of complacency in the face of rising global competition would mean playing catch-up in an industry that will define the 21st century automotive market.

  • Trump fires on multiple fronts to break China’s minerals monopoly

    Trump fires on multiple fronts to break China’s minerals monopoly

    Over the course of mid-2025 to 2026, the Trump administration has rolled out a sweeping set of policy and investment measures designed to reshore and diversify U.S. defense critical mineral supply chains, with the explicit goal of breaking China’s long-held dominance over global production and processing of key industrial and defense materials including scandium, tungsten, and rare earth elements.

    The coordinated push kicked off on July 20, when President Donald Trump signed a landmark executive order tightening restrictions on the Department of Defense’s ability to grant waivers for critical materials sourced from countries classified as U.S. adversaries: China, Russia, North Korea, and Iran. The order mandates that all such waivers will expire permanently on January 1, 2027, unless a contractor holds a formally approved plan to phase out materials from the four listed nations, while actively encouraging defense contractors to qualify new mineral suppliers based in the U.S. and allied partner countries.

    Ten days later, on July 30, Trump issued a formal presidential determination under Section 101 of the Defense Production Act. This designation classified recoverable critical minerals, including tungsten scrap and spent battery material known as “black mass,” as scarce and essential to U.S. national defense, and directed the Secretary of Commerce to implement new restrictions on the export of these materials to preserve domestic supplies.

    The most high-profile step of the initiative came on August 7, during a roundtable meeting with U.S. mining industry leaders. At the event, the administration announced more than $2 billion in new targeted investments to scale up domestic and allied-nation critical mineral production, while the U.S. Treasury formally welcomed the launch of new S&P Global reference prices for six key critical minerals: gallium, germanium, tungsten, antimony, neodymium, and praseodymium. The pricing framework is intended to underpin a broader critical minerals trade agreement with allied partners including Japan, Mexico, and the European Union, which will establish phased, mineral-specific price floors to support diversified, market-aligned supply chains.

    Breaking down the $2 billion investment package, the single largest award is a $1.4 billion Department of Defense grant to California-based battery manufacturer Sila Nanotechnologies. The funding will support the expansion of the company’s silicon-carbon anode production capacity, as well as the construction of a new lithium-ion cell facility dedicated to supplying defense sectors, including satellites, drones, and munitions. The second-largest allocation, $400 million, will go to Australia’s Sunrise Energy Metals to develop the world’s first primary scandium mine. The project will secure a stable supply of high-heat aluminum alloys critical for manufacturing fighter jets and spacecraft components. Additional funding includes $150 million for Minnesota-based Niron Magnetics, a firm developing rare earth-free permanent magnets that eliminate reliance on Chinese processed rare earths, and $85 million for Standard Bauxite to produce refractory-grade bauxite for high-temperature defense components. Smaller grants have been allocated to projects focused on graphite, tantalum, niobium, and boron, alongside $180 million earmarked for mining education programs at U.S. academic institutions to build a skilled domestic workforce.

    The U.S. push for supply chain independence comes in the wake of steadily tightening Chinese export controls on critical minerals over the past 18 months. After China first banned gallium, germanium, and antimony exports to the U.S. in December 2024, it expanded broader rare earth export restrictions throughout 2025, before extending dual-use technology controls to Japan in early 2026. Trade data shows the impact of these measures has been significant: in the first half of 2026, Chinese rare earth exports to Japan plummeted 51% year-on-year, with an 81% drop in June alone, and shipments of key heavy rare earths including dysprosium and terbium fell to zero. Over the same period, Chinese rare earth exports to the U.S. declined 28% year-on-year.

    Chinese analysts and state-affiliated commentators have widely pushed back on the Trump administration’s timeline, arguing that the goal of fully decoupling U.S. defense supply chains from Chinese critical minerals by 2027 is unfeasible in the near term. In a commentary published by Guancha.cn, analysts noted that U.S. mining and processing firms have not yet built out sufficient capacity to replace Chinese supplies, pointing out that it is impossible for U.S. defense contractors to eliminate purchases of rare earths, tungsten, molybdenum, and tantalum from adversary nations in the lead-up to the 2027 deadline. The commentary added that the complexity of mineral refining has slowed progress on U.S. projects, leaving the foundations of Washington’s effort to challenge China’s rare earth supply chain dominance still underdeveloped, citing examples including a scaling challenge for rare earth refining startup ReElement Technologies and ongoing intellectual property litigation between two major U.S. rare earth firms, USA Rare Earth and MP Materials.

    Tianjin-based political commentator Zui Qingfeng expanded on this criticism, noting that China built its dominant position in critical mineral processing over more than two decades, and the U.S. cannot replicate that entire industrial system in just a few years. China currently controls roughly 90% of global rare earth refining capacity, a position built on decades of investment in industrial infrastructure, and the U.S. has outsourced the polluting, long-cycle smelting and processing segment of the supply chain over the past 30 years, leaving gaps in technology, industrial capacity, and skilled labor. Zui Qingfeng estimated that rebuilding a complete, stable domestic supply chain would take the U.S. at least five years, and that American firms cannot avoid relying on Chinese rare earth supplies in the short term.

    In recent weeks, China has also implemented new border control measures to protect its critical mineral technical expertise, with new exit and entry rules set to take effect on September 15 that will restrict travel for Chinese rare earth technicians with access to core technical knowledge, to prevent intellectual property leakage to foreign firms. Chinese commentator Big Octopus documented multiple past cases of foreign actors attempting to recruit Chinese rare earth experts to obtain restricted technical information, including a case where a Singaporean-linked headhunter offered a senior Ganzhou-based rare earth engineer a $300,000 annual salary and family green cards to elicit confidential production details, a 2025 incident where a Cayman Islands-registered firm attempted to obtain the restricted chemical mixing ratio for a common rare earth extraction agent from Inner Mongolian technical staff, and a cracked case involving a U.S.-funded Shenzhen headhunting firm that built a database of more than 1,000 Chinese rare earth and solar engineers to screen for potential recruitment.

    Current U.S. Geological Survey data shows that while the U.S. remains heavily import-reliant for many critical minerals, its dependence on China is often overstated for key materials. For example, only 19% of U.S. gallium consumption comes from China, with the remainder sourced from Japan and other allied partners; 30% of U.S. yttrium imports come from non-Chinese suppliers including Germany, Austria, and South Korea; and most U.S. germanium imports are sourced from Belgium and Canada. Only heavy rare earths such as dysprosium and terbium remain overwhelmingly dominated by Chinese processing, a gap the U.S. already targeted with a $400 million investment in MP Materials in 2025. Overall, while the U.S. imports 80% of its rare earth supplies, only 56% of those imports come from China, meaning most can already be sourced from allied nations if needed. A March 2026 report from the U.S. National Association of Manufacturers underscored the scope of the challenge, finding that the U.S. is at least 50% import-reliant for 33 of the 58 minerals classified as critical to domestic manufacturing, with 13 of those minerals entirely supplied by foreign sources. The report called for a combined strategy of domestic capacity building and allied supply chain diversification to protect U.S. economic and national security.

  • Why China’s war on deflation is faltering in real time

    Why China’s war on deflation is faltering in real time

    NEW YORK – Early optimism that China had successfully pulled out of a deflationary slump has been sharply undermined by new government inflation data released this week.

    China’s headline consumer price index rose just 0.5% year-over-year in July, down from 1% in June, marking the slowest pace of consumer price growth in six months and the third consecutive month of deceleration. This cooling comes even amid global energy price spikes driven by shipping disruptions through the Strait of Hormuz, a key global oil chokepoint. Producer price growth also slowed, dipping to 3.5% year-over-year from 4.1% in the prior month.

    Few economic analysts are caught off guard by this slowdown, however. Yale University senior economist Stephen Roach has long warned that deflationary pressures in China are far more persistent than many optimistic forecasts suggest. “However 2026 plays out, hopes that Xi Jinping’s administration has successfully tamed China’s deflation could be in for a rude awakening,” Roach argues. “Japan’s decades-long battle with deflation demonstrates that even when top-line inflation data appears to show reflation taking hold, the entrenched deflationary mindset among households and businesses is extremely difficult to reverse.”

    Roach’s core argument is that deflationary pressures can linger for years after headline inflation turns positive, gradually eroding consumer and business confidence. This dynamic is why global financial markets are increasingly pricing in the possibility of monetary easing from the People’s Bank of China (PBOC) in the coming months. A looser monetary policy stance would likely weaken the yuan, in turn widening China’s already large trade surplus.

    That trade surplus is the unspoken undercurrent of the current policy debate, according to Brad Setser, a senior fellow at the Council on Foreign Relations. “Of course, no official explicitly says they would welcome a larger trade surplus,” Setser notes. “But if the standard policy prescription for China is monetary easing to fight deflation, paired with fiscal consolidation to address off-balance-sheet debt risks and greater exchange rate flexibility, that framework effectively amounts to advocating for China to export its way out of its domestic economic troubles.”

    Yet Beijing has so far resisted allowing the yuan to depreciate significantly. A stable or slowly appreciating yuan serves three core strategic goals for Chinese policymakers: it reduces the risk of offshore default among heavily indebted Chinese property developers; it supports the long-term push for yuan internationalization, which aims to establish the currency as a major global reserve asset; and it helps manage trade tensions with the United States, where the current administration remains highly sensitive to any signs of competitive currency devaluation. A stronger yuan also currently helps China avoid importing additional global inflation from elevated global commodity prices.

    The harder, more intractable challenge, Roach warns, is psychological – and Japan’s 30-year struggle proves just how persistent that deflationary psychology can be. Recent inflation data confirms “stalling reflationary momentum,” according to Carlos Casanova, senior economist at Union Bancaire Privée.

    In the short term, Casanova notes, the data reveals clear signs of broad weakening in domestic demand: retail sales remain in contractionary territory, and commodity cost pressures have faded for the time being. Casanova adds that the PBOC itself has acknowledged growing structural divergence across the Chinese economy, with AI-related sectors outperforming sharply while broader consumer spending remains sluggish. Subdued credit demand has also weakened the transmission of monetary policy, leaving room for the PBOC to cut the reverse repo ratio by 25 basis points to stimulate lending.

    Setser is skeptical that currency policy alone has meaningful impact on China’s deflation trajectory one way or the other. “There is no evidence that the nominal yuan depreciation in 2022-2023 materially slowed deflation in China, and there is also zero evidence that the modest nominal appreciation over the last year accelerated deflation,” he argues. “If anything, the pace of deflation has moderated, though I fully accept that higher global oil prices have played a role in that shift.”

    Even so, many analysts worry the PBOC is moving too slowly to address mounting deflationary pressures. Société Générale economist Michelle Lam notes that “China’s growth likely cooled notably in the second quarter to 4.4%, as weak consumption and sluggish property activity offset resilient export growth and a modest end-of-quarter industrial rebound.” She adds that while producer-led reflation has supported nominal GDP growth, any future policy easing will likely be incremental rather than a precursor to large-scale stimulus.

    The big open question is just how incremental policy action can afford to be. Japan’s decades-long deflation battle offers a clear cautionary lesson: even when consumer and producer prices start rising again, Japanese households still lack the confidence to increase spending enough to drive sustained economic growth or lift long-term business confidence.

    For Xi Jinping’s administration, the most urgent structural reforms are resolving China’s chronic housing market crisis – which increasingly resembles Japan’s 1990s bad loan spiral – and building a robust national social safety net that gives 1.4 billion Chinese citizens the confidence to spend rather than hoard savings. These two priorities are deeply connected: roughly 70% of Chinese household wealth is tied to real estate, so stabilizing property markets across China’s 70 largest cities is a prerequisite for reviving consumer spending and hitting the government’s 4.5% to 5% annual growth target.

    The longer Beijing allows deflationary pressures to fester without decisive action, the more deeply a deflationary mindset becomes entrenched – and the harder it is to reverse. Japan’s experience bears this out: even as the Bank of Japan recently lifted short-term rates to 1%, the highest level in more than three decades, deflationary undercurrents still persist across the economy, most notably in wage growth, which continues to lag far behind inflation. The result has been a slow-burn stagflation, and Tokyo has yet to implement the structural reforms needed to close the gap between rising prices and stagnant household incomes.

    Toshihiro Nagahama, an economist at the Dai-ichi Life Research Institute, argues that for Japan to fully break free of its decades-long deflationary mindset, “it is imperative for the government and the central bank to align their policy frameworks, clearly articulate their risk assessments, maintain honest and transparent dialogue with financial markets, and resolutely execute bold, long-term growth investments.”

    Nagahama echoes a widespread view that today’s global economy is being rapidly reshaped by the war in Ukraine, Middle East tensions, and a series of historic shifts in global central bank policy, all against a backdrop of persistent global inflation and a strong U.S. dollar. Amid this widespread uncertainty, governments cannot anchor their strategies to best-case scenarios – they must plan for worst-case risks, including the possibility of multi-year shipping disruptions through the Strait of Hormuz that would upend global energy flows and inflation dynamics.

    “While these shifts present a formidable trial for Japan, they also represent a historic opportunity,” Nagahama notes. “As the country sheds its decades-long deflationary mindset and restores nominal growth, these external shocks serve as a critical test for fully escaping the paradigm of contracting equilibrium.”

    Back in China, the gap between accelerating producer price growth and muted consumer price expansion is now the widest it has been since June 2022. This divergence indicates that Chinese manufacturers are struggling to pass higher input costs on to end consumers, putting increasing pressure on corporate profit margins. If this margin squeeze persists, it could lead to slower wage growth across the world’s second-largest $21 trillion economy, undermining household spending and complicating Beijing’s reflation goals.

    This risk of China getting stuck in a “deflation trap” worries geopolitical analysts such as Ian Bremmer, CEO of risk consulting firm Eurasia Group. Bremmer’s concern is that Xi’s administration continues to “prioritize political control and technological supremacy over the consumption stimulus and structural reforms that could break the deflationary cycle. Beijing has the financial resources to prevent a full-blown economic crisis, but living standards will deteriorate, the economic fallout will spread to other countries, and the world’s second-largest economy will remain stuck in a trap of its own making.”

    Bremmer warns that the steady decline in Chinese home prices since 2020 has already erased household wealth on a scale comparable to the 2008 U.S. housing crash, and the decline is still accelerating. Consumer confidence, business investment, and domestic demand have all plummeted alongside falling property values. “Beijing bet big that high-tech manufacturing would fill the economic gap left by a shrinking property sector,” Bremmer adds. “Instead, state-driven investment has created massive overcapacity, and weak domestic demand means there are not enough buyers to absorb that excess production.”

    The one bright spot is that Beijing is working to restructure its $28 trillion domestic stock and bond markets to better fund its semiconductor rivalry with the United States. This shift marks a move away from blanket state subsidies and backing toward a model that aligns more closely with Xi’s pledge to let market forces play a “decisive role” in economic decision-making.

    The core worry remains that deep vulnerabilities in China’s “old economy” and underlying financial system will limit the growth of the new, technology-focused economy that Xi aims to build. Roach argues that Xi’s focus on a growth model centered on “new quality productive forces” driven by innovation and new technology relies on unsustainable support, and that Beijing is only paying lip service to boosting consumer spending while refusing to implement the large-scale reforms needed to shift to a consumer-led growth model.

    As Japan demonstrated to the world, Roach says, “the problem was not so much its technological successes but the long-term sustainability of its growth model. The same lesson might be very much applicable to China” at a moment when the country’s growth model is “showing unmistakable signs of sputtering.”

    For now, Beijing’s immediate priority is halting capital outflows from mainland Chinese stock markets. In recent weeks, the government reactivated the so-called “national team” of state-owned investment funds that is mobilized to support sagging equity markets. But analysts broadly agree that what is really needed to turn the tide is bold, long-term action to revive economic confidence – a policy response that remains in short supply as of mid-2026.

  • Tata Group Chairman N Chandrasekaran to step down in February

    Tata Group Chairman N Chandrasekaran to step down in February

    One of India’s most iconic industrial conglomerates, Tata Group, is facing unprecedented uncertainty after its chairman N Chandrasekaran announced he will step down when his current term concludes in February, ending months of speculation over behind-the-scenes boardroom tensions.

    The 63-year-old industry leader, who has spent nearly four decades with Tata Group, revealed that his decision to exit stems from an ongoing deadlock on the Tata Sons board over a proposed five-year extension of his leadership. The proposal, which was first raised months ago, has failed to earn the unanimous approval required to move forward. Chandrasekaran noted that when the extension was initially tabled in February, at least one board member withheld support. When no consensus had emerged half a year later, he opted to step down rather than leave a leadership vacuum.

    “Tata Sons is a very large institution and there are many strategic projects that are under critical stages of execution,” Chandrasekaran said in his official statement. “It is not only necessary to have a leader in place to lead the Group beyond Feb 2027, but also clarity on leadership is important for employees, investors, partners and other stakeholders.”

    The news of Chandrasekaran’s impending exit sent share prices of all publicly traded Tata Group subsidiaries plummeting, as investors reacted to the sudden wave of uncertainty over the future of the $300 billion salt-to-steel conglomerate, whose holdings range from the national carrier Air India to global automaker Jaguar Land Rover and steel giant Tata Steel.

    Chandrasekaran’s announcement, coming just days before Tata Sons’ annual general meeting, brings long-simmering internal tensions into the public eye. A bitter boardroom power struggle has played out between trustees for months, centered on a range of contentious issues including future board nominations, large-scale funding approvals, and the long-debated question of whether to take Tata Sons, the group’s parent holding company, public.

    Tata Group’s unique corporate structure sets it apart from most global conglomerates: Tata Trusts, the group’s charitable arm, holds a 66% controlling stake in Tata Sons. This structure gives Tata significant tax and regulatory benefits, and allows the group to direct a large share of its profits toward wide-ranging philanthropic initiatives across India. However, governance experts have long warned that the overlapping of non-profit charitable objectives and large-scale commercial operations creates inherent structural frictions that can lead to governance gridlock. Currently, Tata Trusts holds three seats on the Tata Sons board, giving it outsized influence over group leadership decisions. The conglomerate has not issued any formal public comment confirming the internal discord reported in local media.

    This is not the first time Tata Group has been rocked by public leadership upheaval. Chandrasekaran was appointed chairman in 2017, replacing Cyrus Mistry, whose abrupt removal from the post triggered a years-long bitter legal battle that dominated headlines across India’s corporate sector. Before taking the top job, Chandrasekaran built his four-decade Tata career at Tata Consultancy Services, the group’s world-leading IT services arm, where he rose to the roles of chief executive officer and managing director. A 2017 press release announcing his appointment described him as a “Tata lifer,” highlighting his deep institutional ties to the group.

    The leadership chaos comes at a particularly challenging time for Tata Group, which is already navigating significant business headwinds across multiple divisions. Most notably, the group is still in the early stages of turning around Air India, the loss-making national carrier it purchased from the Indian government in a 2022 privatization deal.

    Independent market analyst Ambareesh Baliga noted that the negative market reaction to Chandrasekaran’s departure was inevitable given his decades of experience and standing in the industry. However, he added that the group still has a six-month window to identify and confirm a successor, and most industry observers expect the new leader will be promoted from within Tata’s existing executive ranks.

    As stakeholders across the globe wait for clarity on the next chapter of one of Asia’s largest industrial empires, the leadership deadlock has cast a spotlight on the long-term governance challenges embedded in Tata Group’s one-of-a-kind corporate structure.

  • Indian labourers dream of striking it rich after ‘$52,400’ diamond find

    Indian labourers dream of striking it rich after ‘$52,400’ diamond find

    In the impoverished diamond mining region of Panna, central Madhya Pradesh, a remarkable stroke of luck has fallen on seven working-class laborers, who have uncovered a 17.96-carat gem-quality diamond that stands to reshape their financial futures in ways they never thought possible.

    Two years ago, the group — led by Akhilesh Pal — secured a lease for the mining plot in Sarokha village for an extremely low sum. Like most small-scale prospectors in the region, their work had yielded little reward for months on end, forcing them to shutter the old mine a full year ago and shift their efforts to a new adjacent site. It was only during a routine inspection of the area following recent heavy monsoon rains that Pal made the stunning discovery: the large, precious stone sitting exposed on the mine floor.

    Local diamond industry officials have confirmed the stone meets the highest standard of “gem quality”, a classification reserved for the rarest and most valuable natural diamonds. Ravi Patel, a senior Panna diamond official, described the find as exceptionally precious, noting that it will go up for public auction in the first half of October, with registered domestic and international buyers eligible to place bids. Early valuations peg the stone’s minimum market value at 5 million Indian rupees, equivalent to roughly $52,400 or £38,800.

    Panna district, which holds the majority of India’s proven diamond reserves, is one of the country’s least developed regions. Decades of underdevelopment have left local residents grappling with systemic poverty, persistent water scarcity, and widespread chronic unemployment. For generations, small-scale prospectors have held out hope for a life-changing diamond find, drawing thousands of amateur diamond hunters to the area each year. But unlike most finds in the region, where daily wage laborers work for wealthy leaseholders who claim all profits from any discoveries, this find will directly benefit the seven men who uncovered it.

    Under Indian mining regulations for small leaseholders, the state government will only deduct a 12% royalty from the final auction proceeds. The remaining 88% of the revenue will be split equally between all seven members of the group. For three of the laborers, who told local media they have long been too poor to afford marriage, the unexpected windfall will finally let them achieve the life milestone they had long been denied. The auction scheduled for October will mark the culmination of years of thankless work, turning a lifetime of hardship into an opportunity for long-term financial stability.

  • Spain prepares for rare solar eclipse against backdrop of heat and wildfires

    Spain prepares for rare solar eclipse against backdrop of heat and wildfires

    A once-in-a-century celestial event is bringing unprecedented excitement — and significant public safety challenges — to parts of Western Europe this week, as Spain prepares to welcome hundreds of thousands of eclipse chasers while grappling with an ongoing extreme heat and wildfire crisis.

    The rare total solar eclipse, the first to cross mainland Spain in more than 100 years, will cast a shadow of darkness across a wide stretch of northern and central Spain on Wednesday, with these regions set to offer some of the best viewing positions for the spectacle across mainland Europe. When the sun, moon, and Earth fully align around sunset, portions of the Iberian Peninsula, along with small parts of Greenland and Iceland, will be plunged into temporary darkness, with the period of complete totality — when the moon fully obscures the sun — lasting less than two and a half minutes across most viewing spots. The maximum duration of totality will occur off the west coast of Iceland, before the eclipse finishes its trajectory over the Mediterranean Sea.

    Spanish officials estimate the event will draw at least 500,000 additional visitors to the country’s rural, sparsely populated interior, a region widely known as “Empty Spain.” This influx comes against a grim backdrop: just weeks ago, the most destructive wildfire in modern Spanish history burned through 500 square kilometers of central Spain, forcing tens of thousands of residents to evacuate. Multiple smaller blazes still burn across other parts of the country, and a late-July wildfire in Ávila, west of Madrid, has already underscored how quickly a single spark can escalate into a disaster amid current conditions.

    To balance public enthusiasm for the eclipse with wildfire prevention, Spanish authorities have rolled out an extensive public safety and preparedness campaign. The country’s Interior Ministry confirmed that 350 designated official viewing sites have been established across high-visibility regions, while 123 other popular potential viewing spots have had access restricted or limited entirely due to elevated fire risk or barriers that would slow emergency evacuation if a blaze broke out. More than 33,500 law enforcement officers will be deployed across viewing zones and access points to enforce safety rules and manage crowds.

    Speaking on the need for strict preventive action, Interior Minister Fernando Grande-Marlaska noted: “High temperatures, the accumulated dryness of vegetation, and the intense pressure on natural areas due to projected travel necessitate extreme preventive measures.” Spain’s national weather agency AEMET has forecast temperatures climbing above 35 degrees Celsius (95 Fahrenheit) across a swathe running from the northwest to the southeast of the country, covering most of the prime eclipse viewing areas, leaving vegetation tinder-dry and highly flammable. Officials have issued urgent warnings to visitors: no open flames, no littering, and no parking vehicles on areas covered by dry vegetation, as even a small spark from a car exhaust can ignite a major wildfire.

    Amid the safety preparations, excitement over the rare event has sparked a nationwide rush for essential viewing equipment. Specialized eclipse glasses, fitted with unique filters that block harmful solar radiation to prevent permanent eye damage, are flying off shelves across the country. Telmo Fernández Castro, director of the Madrid Planetarium, emphasized that proper eye protection is non-negotiable even when only a small portion of the sun remains visible, stating “To look at the sun, you must always use proper protection, and the most suitable protection is eclipse glasses.” For months, retailers including supermarkets, department stores, museums, and planetariums have sold or distributed the glasses, and most pharmacies have already sold out of their stock ahead of Wednesday’s event. By Tuesday evening, eager shoppers who had missed out were queuing for blocks outside a downtown Madrid photo shop that announced it still had supplies, with one happy customer emerging to tell waiting crowds the store still had “boxes and boxes of them.”

    The eclipse frenzy is not limited to Spain. In Iceland, which is hosting its first total solar eclipse since 1954 and the first visible from its capital Reykjavík since 1433, tourism and accommodation prices have hit unprecedented levels. Average room rates in Reykjavík for Wednesday night now exceed $1,000, roughly double typical 2025 peak season prices, according to data from Lighthouse Intelligence. Authorities expect up to 20,000 extra international visitors to descend on the country of just under 400,000 people, adding to crowds during an already busy summer travel period. For hoteliers along the path of totality, demand has been extraordinary: the 70-room Hotel Keflavík in Reykjanesbaer municipality, which offers viewing of roughly one minute 45 seconds of totality (weather permitting), was fully booked more than a year in advance. Hotel owner and manager Steinþór Jónsson said the eclipse surge is the biggest event the property has seen since it opened in 1986, the year of the historic Reagan-Gorbachev Reykjavík summit. “When I opened the hotel, we had Reagan and Gorbachev meeting. It was very hectic here. Besides Reagan and Gorbachev, the eclipse is the biggest,” Jónsson said with a smile. In Spain’s prime viewing zones including the northern cities of A Coruña, Bilbao, and Santiago de Compostela, hotel demand has also soared ahead of the event.

  • Landslide in Mumbai kills 6 as India is drenched by monsoon rains

    Landslide in Mumbai kills 6 as India is drenched by monsoon rains

    In the early hours of Wednesday, a devastating landslide triggered by extreme monsoon downpours swept through a crowded residential neighborhood in Mumbai, India’s financial and commercial hub, leaving at least six people dead and four others injured, local authorities confirmed.

    The disaster struck before sunrise, when a fractured segment of a steep hillside gave way and crashed onto a cluster of informal homes in Ghatkopar, a densely populated suburb of the megacity. According to civic official Tanaji Kambli, between two and three residential structures were fully buried under the mud and debris when the slope collapsed.

    Emergency response teams including municipal workers, local police, firefighters, and personnel from the National Disaster Response Force were deployed to the site immediately after the collapse to launch search and rescue operations. However, their life-saving efforts were significantly slowed by the area’s extremely narrow access lanes, which make it impossible to bring in heavy excavation equipment to clear debris efficiently.

    By the latest update, rescue workers have managed to extract 10 people from the rubble. All of those pulled from the debris were transported urgently to a public city hospital. Kambli confirmed that six of those patients, including two young children and two teenagers, were pronounced dead on arrival at the medical facility. The remaining four injured people remain in the hospital receiving ongoing care for their injuries.

    Mumbai Mayor Ritu Tawde traveled to the affected neighborhood within hours of the landslide to meet with survivors and local residents. During her visit, she announced that the city government would provide formal monetary compensation to the families of those killed in the disaster to help them cover funeral costs and other expenses.

    India’s national weather department has issued a forecast warning of more intense monsoon activity across the entire western region of the country in the coming days. Local authorities have already issued repeated urgent calls for residents living in areas known to be at high risk of floods and landslides to stay on high alert and evacuate to safer locations if instructed.

    Home to more than 20 million residents, Mumbai receives the bulk of its annual rainfall during the June-to-September monsoon season. Torrential seasonal downpours have long created major disruptions for the city, routinely flooding major roads and railway lines, halting air and rail travel, and triggering destructive landslides and building collapses. These risks are concentrated especially in crowded informal settlements built onto steep, geologically unstable hillsides, where most of the city’s low-income population resides.

    Climate and disaster experts have warned for decades that Mumbai’s growing vulnerability to deadly monsoon disasters is driven by multiple manmade factors: unplanned rapid urbanization, unregulated construction of housing on geologically fragile hillside terrain, and a severely underbuilt and inadequate urban drainage system. These longstanding risks are now amplified by human-caused climate change, which is bringing heavier, more erratic, and more unpredictable rainfall patterns to the region every monsoon season.

  • Singapore and S Korea pull Trader Joe’s seasoning over poppy seeds

    Singapore and S Korea pull Trader Joe’s seasoning over poppy seeds

    A beloved seasoned blend from U.S. grocery giant Trader Joe’s has become the center of a cross-Asian regulatory action, after authorities in Singapore and South Korea ordered the removal of the product from all online retail platforms due to its inclusion of poppy seeds, an ingredient that falls under strict narcotic control rules in both nations.

    Launched back in 2017, Trader Joe’s Everything But the Bagel seasoning has developed a global cult following among home cooks and food enthusiasts, prized for its savory, versatile flavor profile. Alongside its core ingredient poppy seeds, the blend also includes sesame seeds, flaky sea salt, minced garlic, and minced onion. While poppy seeds themselves do not naturally produce opiates, agricultural experts note they can easily become cross-contaminated with opiate compounds from the poppy plant’s latex sap during the harvesting process.

    This contamination risk has led both Singapore and South Korea to classify poppy seeds as a controlled prohibited substance. On Wednesday, Singapore’s Central Narcotics Bureau (CNB) confirmed that more than 20 separate online listings of the popular seasoning have already been taken down from local e-commerce sites. CNA reported that the agency has issued a clear public advisory urging anyone who currently owns a bottle of the product to dispose of it immediately, emphasizing the city-state’s uncompromising zero-tolerance stance on controlled drugs.

    “The possession, consumption, importation, exportation, manufacturing and trafficking of any controlled drug, even in trace amounts, is an offence under the Misuse of Drugs Act,” a CNB spokesperson stated in a press briefing.

    The regulatory action follows a similar move by South Korean authorities just one week prior, when Seoul officials announced that official testing on the seasoning had detected trace amounts of morphine and codeine, two naturally occurring opiate compounds derived from poppy plant sap. Investigators in South Korea found that most of the product listed for resale online had been brought into the country by travelers as personal souvenirs from trips abroad, before being resold by third-party sellers. The Korea Herald reports that while some of these sellers had no idea the product contained a prohibited controlled substance, others intentionally listed it for sale despite knowing the regulatory status.

    “Even if a product is legally sold overseas, it may be classified as a narcotic substance or a prohibited import in Korea, so particular caution is required,” a South Korean police official told local media, reminding travelers to check local import regulations before bringing food products back from international trips.

    The incident highlights how differing national food and drug regulatory frameworks can create unexpected compliance issues for popular international food products, even when those products are completely legal in their country of origin.

  • One dead, 172 rescued as second ferry in days catches fire in Indonesia

    One dead, 172 rescued as second ferry in days catches fire in Indonesia

    Indonesia has been struck by another deadly maritime disaster, after a passenger ferry traveling from the popular tourist island of Bali to neighboring Lombok caught fire in the early hours of Wednesday, leaving one young woman dead and prompting a large-scale rescue operation that pulled 172 people to safety. This incident marks the second fatal ferry fire in the Southeast Asian archipelago in less than a week.

    Muhamad Hariyadi, a search and rescue official based in Lombok, confirmed to Agence France-Presse (AFP) that a navy ship and multiple other civilian vessels responded to the emergency, evacuating all 172 people from the burning vessel. Among those rescued were two Australian tourists, who were among the passengers on the inter-island route popular with both locals and international travelers. The sole fatality was identified as a 19-year-old Indonesian woman, whose body was brought to shore at Lembar port on Lombok’s west coast in a body bag, witnessed by an AFP photographer on the scene.

    One 25-year-old survivor, Kiky Okta Pradika, described the chaotic scene to reporters at Lembar after arriving ashore. Pradika said he had managed to grab a life jacket before jumping overboard alongside several other passengers as flames spread across the ferry. He added that passengers waited several hours before the first rescue vessels arrived at the remote location off the coast.

    Hariyadi noted that multiple vessels — including a military navy ship and a nearby commercial ferry that diverted to assist — coordinated the evacuation effort in the early morning. By mid-morning, search and rescue crews confirmed that no passengers or crew remained trapped on the burning ferry, with search and rescue boats stationed at the scene and a helicopter conducting aerial surveillance to support the operation. As of the latest update, officials have not released any information about injured or unaccounted-for people beyond the confirmed fatality.

    This ferry fire comes just one week after another ferry blaze off the coast of Indonesia’s Java island killed five people. Maritime accidents are a persistent, common issue across Indonesia, a nation made up of more than 17,000 islands where inter-island boat travel is a foundational part of both daily domestic transport and the country’s massive tourism industry. Industry observers and safety officials have long cited chronically lax safety standards for passenger vessels and the archipelago’s unpredictable tropical weather as the two leading causes of repeated maritime disasters.

    Just last month, another major incident underscored the risks: a ferry carrying more than 70 passengers sank near Selayar, a small island off the southern coast of Sulawesi. Rescuers recovered four bodies from that incident, but the search operation was called off with 14 people still officially listed as missing.