Global briefing: Car wars/ Semiconductor decoupling/ Real estate & high rates/ Oil price shock/ Mr Xi’s G20 no-show

In this week’s global briefing:

1. Car wars: China has become the world’s largest car exporter, and is building a dominant position in electric vehicles - creating competitive challenges for European incumbents, as well as complicating the task of decoupling.

2. Semiconductors: China’s imports of semiconductor machinery have surged as Dutch and Japanese export restrictions begin to take effect, imposing costs. But China is investing to develop its own technology, as seen in Huawei’s new phone.   

3. Global housing: Residential real estate prices have been under pressure as interest rates rise, but remain well above pre-Covid levels. This relative resilience partly reflects structurally increased housing demand as well as tight labour markets.

4. Oil price shock: Oil prices rose during the week on extended production cuts by Saudi Arabia and Russia. In addition to the economic pressures this will impose (on growth, inflation), it reflects global political dynamics.

5. Mr Xi’s G20 no show: President Xi’s decision not to attend this weekend’s G20 summit in India reflects strategic rivalry with India, the lack of coherence of the BRICS grouping, as well as pressing domestic challenges in China. 

The full note is available at: https://davidskilling.substack.com/p/global-briefing-car-wars-semiconductor