Tag: #crises

Prevailing Semiconductor Crisis.

Already under pressure due to the surging demand for semiconductors amid the COVID-19 pandemic followed by the Russia-Ukraine war and now inflation, the chip industry is now witnessing signs of stress following US House Speaker Nancy Pelosi’s visit to Taiwan.

The effects of the global chip shortage last year, highlighted the world economy’s reliance on Taiwan. The semiconductor shortage had massive knock-on effects for the auto industry, for example, forcing many large firms to halt production. Taiwan Semiconductor Manufacturing Company (TSMC) is the world’s largest chip foundry and it’s Apple’s main producer of chips. During her visit to Taiwan, Pelosi met Mark Liu, chairman of the TSMC.

Cutting TSMC off from the rest of the world would currently be a major threat to the global economy, so tensions are obviously high. If production were to stop at the Taiwanese manufacturer, supply shortages would inevitably occur. These shortages could cause a global recession and stock market crash, which would likely lead to a spike in unemployment numbers at a time when many countries like the UK are currently enduring an ongoing cost of living crisis. 

The negative consequences that dependencies such as these can have are currently being demonstrated more clearly than ever before by the war in Ukraine. To avoid the downside of globalization, countries are therefore increasingly turning to their own chip or semiconductor production. This is not only the case in China. In the USA and Europe, too, there are programs with the Chips Act for America and the European Chips Act, respectively, which are intended to ensure local semiconductor production.

Seeing the situation, the Indian government has launched the ‘Semiconductor Mission’ to establish a self-reliance and give boost to India’s fast-expanding electronics manufacturing and innovation ecosystem. The Union Cabinet has approved the ‘Semicon India’ programme with a total investment of Rs 76,000 crore in the growth of the country’s semiconductor and display manufacturing ecosystem. Through India Semiconductor Mission (ISM), the central government wants to encourage the use of secure microelectronics and the establishment of a reliable semiconductor supply chain, including raw materials, speciality chemicals, gases, and production equipment.

Prevailing Semiconductor Crisis.

Already under pressure due to the surging demand for semiconductors amid the COVID-19 pandemic followed by the Russia-Ukraine war and now inflation, the chip industry is now witnessing signs of stress following US House Speaker Nancy Pelosi’s visit to Taiwan.

The effects of the global chip shortage last year, highlighted the world economy’s reliance on Taiwan. The semiconductor shortage had massive knock-on effects for the auto industry, for example, forcing many large firms to halt production. Taiwan Semiconductor Manufacturing Company (TSMC) is the world’s largest chip foundry and it’s Apple’s main producer of chips. During her visit to Taiwan, Pelosi met Mark Liu, chairman of the TSMC.

Cutting TSMC off from the rest of the world would currently be a major threat to the global economy, so tensions are obviously high. If production were to stop at the Taiwanese manufacturer, supply shortages would inevitably occur. These shortages could cause a global recession and stock market crash, which would likely lead to a spike in unemployment numbers at a time when many countries like the UK are currently enduring an ongoing cost of living crisis. 

The negative consequences that dependencies such as these can have are currently being demonstrated more clearly than ever before by the war in Ukraine. To avoid the downside of globalization, countries are therefore increasingly turning to their own chip or semiconductor production. This is not only the case in China. In the USA and Europe, too, there are programs with the Chips Act for America and the European Chips Act, respectively, which are intended to ensure local semiconductor production.

Seeing the situation, the Indian government has launched the ‘Semiconductor Mission’ to establish a self-reliance and give boost to India’s fast-expanding electronics manufacturing and innovation ecosystem. The Union Cabinet has approved the ‘Semicon India’ programme with a total investment of Rs 76,000 crore in the growth of the country’s semiconductor and display manufacturing ecosystem. Through India Semiconductor Mission (ISM), the central government wants to encourage the use of secure microelectronics and the establishment of a reliable semiconductor supply chain, including raw materials, speciality chemicals, gases, and production equipment.

Real Estate crisis in China.

China’s real estate sector has a debt problem. Large property developers like the embattled company Evergrande have racked up massive amounts of debt, leading to construction stoppages and lots of angry homebuyers.

Amid the turmoil, buyers across China have banded together and threatened to stop paying mortgages on over three hundred unfinished housing projects. Hundreds of thousands of homebuyers have begun a mortgage boycott, refusing to pay their mortgage for unfinished or stalled housing projects.

As of previous month, homebuyers in 80 cities and 200 projects had threatened to stop mortgage payments. Home sales have collapsed by nearly 60% compared to a year ago, and the current constant decline of sales (11 months) is pegged to be the worst in China’s history. Analysts expect property sales to have dropped 25% from January to June, amidst China’s Zero Covid Cases strategy. Numerous developments in China have halted as property developers have run out of capital to finish construction.

Across China, real estate developers are getting desperate – attempting to sell homes by whatever means possible, even going as far as accepting down-payments in wheat, garlic, watermelons and peaches to cater to farmers.

The real estate industry has an oversized impact on the economy. When related sectors like construction and property services are included, real estate accounts for more than a quarter of Chinese economic output, by some estimates. About 70 per cent of household wealth is stored in property, along with 30-40 per cent of bank loan books, while land sales account for 30-40 per cent of local government revenues, according to sources. The worsening crisis will test authorities’ ability to minimise the fallout. In case the situation is not being handled strategically by Chinese authority, then the consequences of such crises may spread all across asia and globe as well.

Real Estate crisis in China.

China’s real estate sector has a debt problem. Large property developers like the embattled company Evergrande have racked up massive amounts of debt, leading to construction stoppages and lots of angry homebuyers.

Amid the turmoil, buyers across China have banded together and threatened to stop paying mortgages on over three hundred unfinished housing projects. Hundreds of thousands of homebuyers have begun a mortgage boycott, refusing to pay their mortgage for unfinished or stalled housing projects.

As of previous month, homebuyers in 80 cities and 200 projects had threatened to stop mortgage payments. Home sales have collapsed by nearly 60% compared to a year ago, and the current constant decline of sales (11 months) is pegged to be the worst in China’s history. Analysts expect property sales to have dropped 25% from January to June, amidst China’s Zero Covid Cases strategy. Numerous developments in China have halted as property developers have run out of capital to finish construction.

Across China, real estate developers are getting desperate – attempting to sell homes by whatever means possible, even going as far as accepting down-payments in wheat, garlic, watermelons and peaches to cater to farmers.

The real estate industry has an oversized impact on the economy. When related sectors like construction and property services are included, real estate accounts for more than a quarter of Chinese economic output, by some estimates. About 70 per cent of household wealth is stored in property, along with 30-40 per cent of bank loan books, while land sales account for 30-40 per cent of local government revenues, according to sources. The worsening crisis will test authorities’ ability to minimise the fallout. In case the situation is not being handled strategically by Chinese authority, then the consequences of such crises may spread all across asia and globe as well.

Zero probability of recession in India.

Amid global pandemic accompanied by Russia-Ukraine crises and rising prices of fuels, the major economies across the globe are facing economic slowdown majorly in the form of peaked inflation, unstable government, industrial slowdown, low supplies and much more consequences. Some of the economies have slipped into crises, while some are struggling through the worst phase of slowdown. Industry experts have been showing aspersions that a global recession is just around the corner.

The recent survey by Bloomberg has attempted to gauge the percentage probabilities of various countries slipping into recession. The survey by Bloomberg said that risk of recession in a handful of Asian economies is rising as higher prices spur central banks to accelerate the pace of their interest rate hikes. Sri Lanka, which is in the midst of its worst economic crisis ever, has an 85% probability of falling into recession in the next year, up from a 33% chance in the previous survey by far the highest increase in the region. Economists see a 20% chance that China will enter recession, and a 25% likelihood that South Korea or Japan will enter one. Bloomberg economists also raised their expectations for a chance of recession in New Zealand, Taiwan, Australia and the Philippines to 33%, 20%, 20% and 8%, respectively. Central banks in those places have been raising interest rates to tame inflation.

India being one of the major and growing economy, also have been facing the consequences of global crises, particularly inflation. The survey report by Bloomberg for India is that it mentions that India has zero probability of slipping into recession. India literally has 0 percent chances of recession as against economic giants US and China which has 40 percent and 20 percent respectively. Although for India, surging domestic prices of key commodities is mainly on account of imported inflation, retail inflation based on consumer price index stood at 7.01%. In April, it had jumped to 8-year high of 7.79% have feared the economist about a probable recession but the case for India is much better compared to other economies.

Zero probability of recession in India.

Amid global pandemic accompanied by Russia-Ukraine crises and rising prices of fuels, the major economies across the globe are facing economic slowdown majorly in the form of peaked inflation, unstable government, industrial slowdown, low supplies and much more consequences. Some of the economies have slipped into crises, while some are struggling through the worst phase of slowdown. Industry experts have been showing aspersions that a global recession is just around the corner.

The recent survey by Bloomberg has attempted to gauge the percentage probabilities of various countries slipping into recession. The survey by Bloomberg said that risk of recession in a handful of Asian economies is rising as higher prices spur central banks to accelerate the pace of their interest rate hikes. Sri Lanka, which is in the midst of its worst economic crisis ever, has an 85% probability of falling into recession in the next year, up from a 33% chance in the previous survey by far the highest increase in the region. Economists see a 20% chance that China will enter recession, and a 25% likelihood that South Korea or Japan will enter one. Bloomberg economists also raised their expectations for a chance of recession in New Zealand, Taiwan, Australia and the Philippines to 33%, 20%, 20% and 8%, respectively. Central banks in those places have been raising interest rates to tame inflation.

India being one of the major and growing economy, also have been facing the consequences of global crises, particularly inflation. The survey report by Bloomberg for India is that it mentions that India has zero probability of slipping into recession. India literally has 0 percent chances of recession as against economic giants US and China which has 40 percent and 20 percent respectively. Although for India, surging domestic prices of key commodities is mainly on account of imported inflation, retail inflation based on consumer price index stood at 7.01%. In April, it had jumped to 8-year high of 7.79% have feared the economist about a probable recession but the case for India is much better compared to other economies.