Sander Tordoir

Turns out I wasn’t the only one who thought this paper was an excellent x-ray of the UK economy.

It features prominently in Martin Wolfs new FT column

Also try to imagine where things have been if US level of support in the last 3 months of 2024 was there before as well and also not tying Ukraine's hands on what it can use where.

Indeed!

The United States is no longer providing any financial support for Ukraine according to Kiel's tracker - and has not been for a few months now (although I do wonder how one counts the intelligence support).

Europe is footing the bill alone.

A bunch of US firms, including Microsoft, Apple, and Intel, act as Europe’s main intermediaries.

They buy from China and export transformed goods (like semiconductors, precision magnets, chemical inputs) to Europe.

The issue is the upstream I think and the Syndicate piece misses it.

2/2.

Will cite the ECB paper that @tobiasgehrke.bsky.social immediately thought of.

“Over 80% of large European firms are no more than three intermediaries away from a Chinese rare earth producer.”

It will be similar for US firms - even if some are further ‘upstream’.

1/

My hunch is that the trade data cited do not go deep enough to capture the dependencies.

The ECB showed nicely that the eurozone for example imports a lot of REE and REE magnets from US subsidiaries who in turn rely on China.

2/2

China’s Rare-Earth Own Goal Daniel Gros explains why the country does not have nearly as much leverage in the sector as commonly believed.

piece claims China’s hold on rare earths (REE) is overblown because the US supposedly dominates the high end niches.

A simple challenge: If America had the REE upper hand why did Trump fold?

I think it overlooks China’s monopoly on refining.

1/

www.project-syndicate.org/commentary/b...

Are you serious? I’ll report this offensive anti semitic slurring. Morally wrong on all levels.

Take a walk and clear your head.

Sunday Wrap by Erik F. Nielsen | IndependentEconomics | Substack I write about economics, policies and markets - trying to connect the dots. Click to read Sunday Wrap by Erik F. Nielsen, a Substack publication with thousands of subscribers.

Wonderful write-up by @erikfossingnielsen.bsky.social on a fascinating fiery debate at CERs annual economics conference this weekend (so fast Erik!)

Should Europe use incentives to pull some of our capital exports back home rather than fund Americas deficits?

independenteconomics.substack.com

Germany Keeps Doors Open in China But Has Nothing to Show for It Lars Klingbeil’s attempt to reset German ties with China has done little more than showcase the weakness of Europe’s biggest economy in engaging with its Asian counterpart.

There’s little China can offer Germany right now, given that Beijing doesn’t want to rebalance its economy.

Ample supply and a desire to invest in German assets is coming anyway.

Still, good for Klingbeil to dial down tensions - as I told Bloomberg.

www.bloomberg.com/news/article...

I defer to @paullucas.bsky.social on this obviously, but amazing and wonderful Lufthansa has to have the most diverse fleet of four-holers on the planet. Just in this photo you have B747-400, B747-8 and A340-600. They also have A340-300 but I don’t think there’s one in this photo…

In Beijing's vision, Europe's role remains that of a supplier of foodstuffs that keeps its markets open to Chinese products & investments. Premier Li Qiang already fobbed off Olaf Scholz in 2024 with trade concessions for apples and beef, saying: “Moderate overcapacity promotes competition & ensures

Great rundown by @martinsandbu.ft.com on the complex roots of Germany’s economic malaise - plus a very welcome shout-out to our proposal with @sandertordoir.bsky.social and @lucasguttenberg.bsky.social for coordinated Buy European EV clauses as part of the fix.

on.ft.com/4plaPvt

The Economists new cover.

Hear hear

The let-it-die camp also still has to explain to me why politicians aren’t going to intervene anyway when the pressure mounts further.

The realistic choice in my view is do smart policy or wait for a hot mess of bailouts and crappy policy.

It’s not obvious to me why with some industrial policy that levels playing field with China a smaller version of European car manufacturing cannot survive.

If that’s true then the rest of the West for sure has no car future. Japan and Korea maybe…

Why is that the right template? Why is that the right precedent?

As an aside. I’m the economic geek here but I think the assumption that you can just redeploy hundreds of thousands of workers is shaky at best….looks nice in models for sure. Not in reality.

I don’t agree - car industry too important, Europe second largest producer in EVs globally. Gotta catch up rather than give up.

CC @tbenner.bsky.social

Thorsten Benner not mincing his words. Hard hitting piece on China eating Germanys lunch and the woefully inadequate response.

The Scholz-Li Qiang anecdote is stunning.

www.handelsblatt.com/meinung/kolu...

(Bloomberg) -- China is considering new measures to turn around its struggling property market, as concerns mount that a further weakening of the sector will threaten to destabilize its financial system, according to people familiar with the matter. Policymakers including the housing ministry are considering a slew of options, such as providing new homebuyers mortgage subsidies for the first time nationwide, said the people, asking not to be identified discussing a private matter. Other measures being floated include raising income tax rebates for mortgage borrowers and lowering home transaction costs, one of the people said.

China has been trying to put a floor under its four-year real estate downturn, which has weighed on everything from household wealth to consumption and employment. While the housing sector picked up modestly after the government stepped up support about a year ago, the momentum quickly fizzled. Home sales have been falling since the second quarter and fixed-asset investment collapsed last month. The dim outlook for the property market, coupled with households’ weakened ability to repay mortgages and other personal loans, means that banks’ asset quality could deteriorate next year, Fitch Ratings analysts warned last month. Chinese banks’ bad loans surged to a record 3.5 trillion yuan ($492 billion) at the end of September.

Charts of the Hang Seng Property Index and Shanghai Property Index for the past 10 years. Both are indexed to 100 as of 11/23/2025

Charts of China monthly property investment, deposit advances for property purchases, and property sales since 2013.

Death, taxes, and China property stimulus.
www.bloomberg.com/news/article...

Was an den Energie-Subventionen falsch ist Die Wirtschaftspolitik in Deutschland verfolge die falsche Philosophie, schreibt ein Ökonom.

In Kernbereichen der deutschen Wirtschaft, allen voran der Automotive-Sektor, drohen unter einem „zweiten China Schock“ (wie etwa Ökonom @sandertordoir.bsky.social titelte) die Lichter auszugehen.

buff.ly/XfuBRmj

And what is worse is that PHEV also exploit a tax loophole as their actual emissions are much higher than the emissions used for emissions based motor taxes (stick a small electric motor into a large ICE SUV and reduce the motor tax). The result if a loss to the exchequer and higher emissions.

Of course an alternative or flanking policy is equipping Europes sizeable EV and corporate car subsidies with European preferences.

A symmetric response to Chinas policies.

For more on that see our recent paper: www.cer.eu/publications...

I’ve been saying this on panels recently.

Europes EV tariffs are starting to fail. China is simply switching to exporting hybrids which weren’t under the duty.

I’m not convinced the EU can fully avoid a broader duty on all Chinese cars (EV Hybrid and ICE) - who all get subsidised anyway.

This is just such a stunning chart

Of course the crown jewel of gloriously bad ideas is to leave the euro now.

Crippling German exporters even more with a surging new D-Mark just is what the doctor ordered.