Tuesday, February 18, 2025

Polaris of Enlightenment

Ad:

China reaches 5 percent growth target

Published 20 January 2025
– By Editorial Staff
Images from Yanta, an urban district of Xi'an in Shaanxi province in northern China.

China has achieved its stated goal of 5% growth for 2024, despite reported challenges such as falling government bond yields and weak domestic demand.

Donald Trump’s planned new tariffs are described as a significant risk to the country’s export-dependent economy by BNP Paribas economist Jacqueline Rong, while Hong Kong-based analyst Louis-Vincent Gave argues that China’s resilience is underestimated in international coverage.

China has reached its target of 5% GDP growth for 2024, according to the country’s official statistics agency. This is despite several reported challenges, including falling interest rates on Chinese government securities and weak domestic demand. International media coverage has often emphasized these signals as signs of an emerging crisis.

Jacqueline Ron, China economist at BNP Paribas, points out that the planned new tariffs by former US President Donald Trump pose a particular threat to China’s export-dependent economy.

– The biggest problem this year will be the US tariffs, Ron told Bloomberg.

Meanwhile, China is grappling with a still-challenging real estate market and fierce competition in the global market, which has contributed to some uncertainty about the country’s economic future.

Hong Kong-based analyst critical of “crisis narrative”

At the same time, there are voices among experts against interpreting the economic situation as a crisis. Hong Kong-based analyst Louis-Vincent Gave argues that falling yields on Chinese government securities are not a sign of economic collapse but rather part of a broader global trend.

– Historically, when emerging markets collapse, bond yields tend to go up, not down. I do not believe in the narrative of a Chinese implosion. Moreover, if we did, we would see a stock market collapse, which is not happening, says Gave.

He also speculates that the falling rates could be the result of policy decisions in China in response to Trump’s tariff threats.

I’m not saying that’s what happened, but if Chinese institutions were instructed to sell US bonds in response to political tensions, we would see just that: falling Chinese bond yields and rising US ones, he explains.

Gave also points to some positive indicators that are often overlooked in international coverage, highlighting that China’s stock market outperformed the US last year and that the country’s economy has also made progress in strategic sectors such as electric car manufacturing.

– If China really imploded, Chinese stocks would collapse. And they are not, he says.

TNT is truly independent!

We don’t have a billionaire owner, and our unique reader-funded model keeps us free from political or corporate influence. This means we can fearlessly report the facts and shine a light on the misdeeds of those in power.

Consider a donation to keep our independent journalism running…

Price explosion in the Baltics after disconnection from the Russian grid

The energy crisis in Europe

Published 14 February 2025
– By Editorial Staff

The Baltic countries have recently disconnected from the Russian electricity grid and joined the European system. Electricity prices in the countries are now skyrocketing.

Over the weekend, Estonia, Latvia and Lithuania disconnected from the Russian grid and connected to the grid in Finland, Sweden and Poland. Shortly afterwards, electricity prices rose sharply, Euronews reports.

Last week, the price of electricity in Estonia stood at €126 per MWh. After the switch, it has risen to €191 per MWh, the highest recorded so far in 2025.

However, the Estonian electricity and gas network operator says that the price increase is mainly due to weather conditions and the market situation.

Less wind this week, higher electricity consumption due to colder weather and a slight increase in gas price”, it states.

Gas prices have reached record levels on the Dutch TTF market in recent years, but are expected to fall. Meanwhile, the Lithuanian-Swedish Estlink 2 submarine cable has recently been damaged by an anchor, which has negatively affected electricity prices.

North American trade war underway – Canada and Mexico respond with countermeasures

Donald Trump's USA

Published 2 February 2025
– By Editorial Staff
Claudia Sheinbaum, President of Mexico.

Both Canada and Mexico have responded to Donald Trump’s recent tariffs by imposing 25% punitive tariffs on US goods themselves. The decision was taken overnight and marks the start of a trade war in the region.

Canadian Prime Minister Justin Trudeau announced at a press briefing that the Canadian countermeasures will be comprehensive and include everyday products such as beer, wine, fruit, vegetables and clothing. According to Canadian Global News, Trudeau emphasized that Canada has tried to avoid this situation, but is now forced to act.

He also urged Canadians to support domestic products and consider staying in the country for their summer vacations.

– It might mean changing your summer vacation plans to stay here in Canada and explore the many national and provincial parks, historical sites and tourist destinations our great country has to offer, he added.

Mexico has also responded with punitive tariffs, according to a post by President Claudia Sheinbaum on the X platform. However, further details on the scope and design of the Mexican tariffs have not yet been made public.

Meanwhile, China, the third country targeted by Trump, has sharply criticized the US measures. In a statement issued by the Chinese Ministry of Commerce, China said it plans to complain to the World Trade Organization (WTO) and take “corresponding countermeasures”.

China believes that Trump’s 10% tariffs are unfair and violate international trade rules.

Czech central bank wants to build Bitcoin reserve

The new crypto economy

Published 1 February 2025
– By Editorial Staff
The Czech Republic could become the first EU and Western country to actively invest in Bitcoin.

The Czech central bank is considering including bitcoin in its reserves, according to Governor Ales Michl. It is the first Western central bank to consider buying cryptocurrency.

In an interview with the Financial Times, Michl revealed that he plans to submit a proposal to include bitcoin in the central bank’s reserves. However, he later wrote on X that the proposal requires further analysis and discussion before a decision can be made.

No decision is imminent”, he writes. “Bitcoin has significant volatility, which makes it harder to take advantage of its current low correlation with other assets”, Michl continues.

If approved, up to 5% of the central bank’s reserves, equivalent to €140 billion, could be invested in bitcoin. This would make the Czech central bank the first Western central bank to hold cryptocurrency in its reserves.

Since Michl took over the leadership of the Czech central bank in 2022, he has focused on diversifying the bank’s reserves. This has included gradual gold purchases and an increased share of equities in the portfolio.

Bitcoin reached a new record high after Donald Trump took office. Meanwhile, financial giant BlackRock’s CEO Larry Fink predicts that the cryptocurrency could reach $700,000.

In January, Italy’s largest bank, Intesa Sanpaolo, invested over €1 million in bitcoin.

EU may resume Russian gas imports

The war in Ukraine

Published 31 January 2025
– By Editorial Staff

The possibility of resuming Russian gas imports via pipelines could be part of a potential peace deal with Russia, according to the Financial Times. Proposals backed by Germany and Hungary, among others, would aim to lower energy prices in Europe while bringing Moscow to the negotiating table.

There is pressure from some big member states on energy prices and this is one way to bring those down, of course, what is described as an anonymous EU official told the Financial Times.

The idea, meanwhile, is facing strong criticism in some quarters, including concerns in Brussels that a resumption of imports would increase Russia’s export revenues and counter previous efforts to reduce dependence on Russian energy.

From 40 to 10 percent

The EU’s direct gas imports from Russia have fallen dramatically since the start of the war in Ukraine in 2022. Before the war, Russian gas accounted for around 40% of the EU’s total gas supply, but in 2024 this share has dropped to around 10% as a result of sanctions, diversification of energy sources and the Nord Stream pipeline terror attack.

To compensate for the shortfall, the EU has increased imports of liquefied natural gas (LNG), particularly from the United States and Norway, while imports of liquefied gas also from Russia have increased through gaps still left in the sanctions.

Overall, the situation has led to a sharp increase in energy prices in Europe and has had a very negative impact on the European economy, with the EU’s largest economy Germany, for example, experiencing economic contraction for two years in a row.

In the end, everybody wants lower energy costs, said a senior EU official, according to the Financial Times.

Growing opposition

Some EU countries, such as Slovakia and Hungary, have expressed open concern about their energy supply, arguing that the political leadership in Ukraine has jeopardized their energy security by stopping gas transfers through the country from Russia.

In Germany, the leader of the opposition party Alternative for Germany, Alice Weidel, recently pledged to restart the Nord Stream project if the party comes to power.