Economic Digest – January 2018

DRONES

One of China’s biggest online companies wants to deploy a fleet of drones in Canada to airlift seafood from East Coast processing plants to the airport, cutting out land-haul costs in its bid to deliver more Atlantic lobster, prawns and clams to Chinese consumers. The company is also developing plans for a drone network for the Canadian West Coast that could be used to carry local blueberries to cargo aircraft headed for China. It wants to replicate plans for similar drone networks in China, where it believes unmanned aircraft can slash logistic costs by 50 percent to 70 percent.

YAMS

Africa’s biggest economy is hoping to swap its addiction to oil for the starchy tubers that millions line their bellies with each day. The global slump in oil prices has hit the West African nation hard, where oil exports make up more than 70 percent of government revenues. Yam production meanwhile is thriving, in fact, Nigeria produces more than 60 percent of the entire world’s yams. Despite this, Nigeria is not one of the world’s top exporters. It is hoped that exporting yams will diversify Nigeria’s oil-dependent economy which has plunged into its worst recession in 25 years. The government also wants to provide young people in particular with jobs in agriculture.

GPS

In 2018, the new Silk Road will get a digital dimension. China will extend coverage of its homegrown satellite-navigation system to the 60-plus countries along the belt and road. By 2020, China aims to compete directly with America’s Global Positioning System (GPS) and expand its services globally with a network of 35 satellites. By the start of 2018 what China is calling BeiDou (Big Dipper) will have nearly 30 satellites, narrowing its accuracy to well below 10 metres. That still leaves it behind GPS which can pinpoint positions to a metre or less. China is spending an estimated US$25-biillion on BeiDou.

GAS

Global natural-gas production is set to increase by 46 percent in the years to 2040, according to the International Energy Agency. Oversupply in the market is likely to continue as 140-billion cubic metres of liquefaction capacity that is under construction comes on-stream, mostly in Australia and the US. Conventional gas currently makes up 80 percent of global gas production: unconventional sources, such as shale, should account for more than half of the addition to output. American natural-gas output should increase by 41 percent over the forecast period: shale production should grow by 80 percent. The rise in shale production from 2008 to 2023 is likely to represent the biggest jump by a single source in the history of the gas market.

SHOPPING

Last fall, Singles Day in China reaped US$25-billion in sales for Alibaba, surpassing last year’s total of $1-billion. At its peak, customers bought 325,000 items a second. The e-commerce giant hopes to make Singles Day a truly global affair so that consumers elsewhere can participate in the orgy of shopping online. In the US on Cyber Monday a new record was set for shopping with consumers spending $6.6-billion, the most on any day over the Thanksgiving break. $1.6-billion of the orders came over mobile phones

ANIMALS

Consumers Union, the policy and mobilization division of Consumer Reports has criticized the US Department of Agriculture for once again delaying the implementation of its rule requiring producers to abide by strong animal welfare standards. The USDA’s Organic Livestock and Poultry Practices rule was set to go into effect in March but was delayed earlier last year until November 14. Now the agency has decided to put off implementation even further until May 14, 2018. The USDA has spent more than a decade studying this issue and developing the rule.

WINE

The world’s production of wine will fall this year to its lowest level since 1961, according to the International Organization of Vine and Wine, because of bad weather that has damaged the grape crop in Italy, France and Spain. Global output will drop by 8 percent compared with 2016, which leaves some 3-billion fewer bottles of wine to sip. The recent wildfires in northern California will probably not have too much effect on American production as most of the state’s wine is grown in the Central Valley.

BOOKINGS

New data from Concur, a travel-software company, compares flight-booking trends in five countries. Researchers have found that the penalty for booking at the last minute is far greater in the US. For domestic flights in the US, tickets booked fewer than eight days in advance of travel tended to cost 39 percent more last year than those purchased at least 15 days ahead of time. The equivalent figure in France was 27 percent, 19 percent in Canada and 16 percent in Germany. In Britain, where there are comparatively few domestic flights, waiting to buy a ticket until the final eight days actually saved travellers an average of three percent.

TARIFFS

China is cutting tariffs on 187 consumer goods from whisky to cashmere clothing to help spur spending and economic growth. The Finance Ministry said tariffs will drop from an average 17.3 percent to 7.7 percent on products, including pharmaceuticals, food, health supplements and clothing. The move is designed to encourage consumers to spend

more at home rather than on trips overseas. This is thought to be part of a shift towards creating a consumer-driven economy and signalling to the world, especially the US, that it is opening up its economy.

SHIPPING

Seaborne trade rose by 2.6 percent in 2016 and volumes are expected to grow by 3.2 percent a year until 2022. The industry, which handles 80 percent of global trade by volume, has struggled with overcapacity in recent years, but improvement in the global economy has helped reverse the decline in freight rates. Despite five years of slowing capacity growth, supply still outstrips demand. In 2016, the container-shipping market’s operating losses were US$3.5-billion.

WEALTH

According to the World Wealth Report, the number of high-net-worth individuals (HNWIS) grew by 7.5 percent to 16.5-million last year. HNWI have at least US$1-million in investible assets, excluding their main home, its contents and collectible items. Total HNWI wealth came to $63.5-trillion last year, with the highest proportion concentrated in the Asia-Pacific region. For global HNWI to reach over $100-trillion by 2025, Asian wealth (the biggest source of new futures) will need to increase by about 9.4 percent a year.

JOBS

Data from America’s Bureau of Labour Statistics show workers aged 25 and over now spend a median of 5.1 years with their employers, slightly more than in 1983. Men between the ages of 25 and 34 now spend a median of 2.9 years with each employer, down from 3.2 years in 1983. It is middle-aged men whose relationship with their employers has changed most dramatically partly because of a collapse in the number of semi-skilled jobs and the decline of labour unions. The median job tenure for men aged 45-54 in America has fallen from 12.8 years to 8.4. That decline has been offset by women staying longer in their jobs and higher retirement ages.

SHARING

In the Chinese city of Xiamen, there is a pile of bikes covering an area roughly the size of a football pitch and so high that cranes are needed to reach the top. These are the cast-offs from the boom and bust of China’s bike-sharing industry. Just two days after China’s number three bike sharing company went bankrupt the pile of bikes were discovered containing thousands of bikes from the top three companies. There is concern that there are too many bikes and insufficient demand. Customers are charged just pennies for a 30-minute ride but competing companies have flooded cities with bikes to ensure cycles are always available.

POWER

A Swedish power plant is now burning H&M clothing instead of coal. By converting old plants to burn biofuels and garbage, the biggest Nordic economy is hoping to edge out the last of its fossil fuel units by the end of this decade. This means burning recycled wood and trash, and clothes that H&M can’t sell. One plant burned 15 tonnes of discarded clothes from H&M in 2017, compared with 400,000 tonnes of trash and supplies power to 150,000 households.

PLAGUE

Scientists have discovered that plague was present in Europe during the late Stone Age according to a study of ancient remains. Researchers suggest that the deadly bacterium entered Europe with a mass migration of people from further east. They screened more than 500 ancient skeletal samples and recovered the full genomes of plague bacteria from six individuals. The plague-positive samples come from Russia, Germany, Lithuania, Estonia and Croatia.

DRILLING

Decades after the Soviet Union fell, Russia embarked on a mission to drill deep into the Arctic seabed, sending a fleet of underwater robots and unmanned submarines into the Earth’s harshest waters. The Arctic Ocean is estimated to hold billions of barrels of oil, and trillions of cubic feet of natural gas, accounting for 16-26 percent of the Earth’s undiscovered reserves. After years of drilling in the area, the country, which saw oil and gas account for 68 percent of its exports in 2013, plans to use never-before-seen technology to take its mission to the next level. The global community is keeping a close eye on Russia as it seeks to expand its grip and influence on Arctic waters.

VEGGIES

According to the Centers for Disease Control, only a few Americans eat enough fruit and vegetables. Just 12 percent of Americans eat the minimum daily fruit recommendations of one and a half to two cups per day and only 9 percent consume the minimum daily vegetable recommendation of two to three cups per day. Because a poor diet is linked to cancer, obesity, heart disease and diabetes, public health authorities have long endorsed a diet rich in fruit and vegetables.

CHARGERS

According to Electrical Safety First a UK company, counterfeit iPhone chargers may be a cheaper alternative to Apple, but customers may suffer severe injuries or be risking their lives by using them. The company conducted a series of safety tests on fake chargers and of the 50 brands tested, all but one failed one or more of the tests and more than one in three chargers failed every part of the safety screening. 98 percent of the chargers tested could cause a fire or deliver a lethal electric shock.

NUTS

The lush Limpopo Valley region of South Africa is known as a haven of exotic wildlife and fruit trees. But the traditional guava and avocado are making way for more popular produce: macadamia nuts. South Africa has swiftly become one of the world’s leading producers of the nut. Production rose from 3,000 tons in 1996 to over 40,000 tons in 2015, and almost 4,000 hectares of new trees are added each year. The majority of the nuts are exported, and increasingly it is China that is fueling the boom, buying up 40 percent of total production.

SMART

The world’s first “smart ship” embedded with an intelligent navigation system recently made its debut in Shanghai. The ship is 179-metres long, 32 metres wide and 15-metres high, with a maximum loading capacity of 38,800 tonnes. The ship is installed with SOMA a China-developed marine system with autonomous learning ability and intelligent operating system. It can analyze real-time navigation and meteorological data, pick the best routes and alert the crew to hidden dangers in advance.

RULES

The Government of Canada has built a skating rink on Parliament Hill in Ottawa for its grateful citizens. However, The legal department of Heritage Canada has stipulated that there be no sticks, no pucks, no games of tag, no figure skating, no yelling because the ice surface “may be slippery.”