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World Feels the Heat as China’s Economy Nears Collapse

China, the world’s second-largest economy, is having a difficult time. For a long time, the Asian behemoth has been under enormous strain, as seen by bad economic data and downgrades by global brokerages.

The entire world is now feeling the effects of China’s economic collapse. But why is the world concerned about the country’s downturn? Here’s everything you need to know.

For starters, China is a dominant global participant in almost every area, with the International Monetary Fund’s (IMF) 2017 World Economic Outlook estimating that the country will contribute more than 22% of world GDP.

Despite its image, China is a key bilateral trading partner for many countries and a large provider of goods, earning it the moniker of the world’s manufacturing hub.

Almost all of the world’s largest corporations, from Tesla to Apple, have their supply chains entrenched in China.

Simply said, China has the world’s largest manufacturing economy and is the world’s greatest exporter of goods. Furthermore, the country is the world’s greatest consumer of a variety of critical commodities, including metals.

It is worth noting that China consumes roughly half of the world’s metals, according to India Today.

As a result, a decline in China’s economic activity can significantly disrupt the global demand-supply balance, which is not a good development at a time when the world is just beginning to recover from an economic slowdown caused by a variety of factors including inflation, the Russia-Ukraine conflict, and extreme weather events.

deflation China

China’s economic collapse

There is no doubting that the Chinese economy is in trouble, and while Beijing has promised to expand the private sector and protect firms, its efforts appear to be falling short. The country’s July economic activity data offers a troubling image, with key measures like as retail sales, industrial output, and investment output falling short of expectations.

This has sparked fears of a deeper and longer-lasting slowdown in GDP.

Data on Chinese economic activity has been underperforming predictions since the beginning of the second quarter, causing major anxiety in global markets.

However, this is not the first time China’s economy has encountered difficulties. China experienced similar shocks during the 2008-09 global financial crisis and the 2015 capital outflow concern. However, the Chinese economy emerged stronger on both occasions, with the government driving infrastructure spending and expanding property markets.

However, it appears that excessive infrastructure spending over the years has come back to haunt Beijing in the form of heavy debt, and the property bubble had already burst during the epidemic, beginning with the Evergrande disaster.

The cumulative impacts have posed major threats to the country’s financial viability, which has been exacerbated by the worldwide downturn caused by the pandemic.

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Beijing faces a difficult problem

Now, China is saddled with massive debt, and exports are declining as a result of the global slowdown. Its only way out of the woods at this point is to increase household consumption.

As a result, the Chinese government faces a difficult problem in convincing households to spend more and conserve less in an economic downturn. Clearly, it is straining to do so, since recent figures indicate that the country is experiencing “deflation.”

Deflation is the inverse of inflation and refers to a general and sustained reduction in the overall price levels of goods and services in the economy.

Economists agree that China’s current economic situation is largely owing to its reliance on debt-fueled investments and the property market, with little regard for increasing domestic consumer spending.

According to experts, China’s weakening domestic demand could be a significant blow to the country’s economy and create an environment of low private-sector investment appetite. If household spending remains low, China’s economic problems may worsen in the future due to a growing imbalance between consumption and investment.

Recent economic activity data has cast a bleak image, and many believe China will struggle to fulfil its 5% growth objective in the current fiscal year without fiscal intervention.

To make matters worse, the Chinese property markets are under increased stress, which is concerning considering that they account for roughly a quarter of the country’s economic activity.

If the situation does not improve, China may be on its path to economic stagnation, which might stifle progress for years. Consumers and small company owners in the country are already suffering the effects of the slowing economy, with unemployment rates growing rapidly.

China's Evergrande Files for Bankruptcy Protection as Economy Implodes

Evergrande Files For Bankruptcy Protection

At the moment, China’s most significant path to addressing the slowdown is to increase the proportion of household consumption in its GDP. However, if this effort falls short in the near future, the continuation of China’s economic upheaval could have worldwide ramifications.

As China’s economic crisis worsens, China’s property conglomerate Evergrande has filed for bankruptcy in the United States. It will assist the heavily indebted firm in protecting its assets in the United States while it negotiates a multibillion-dollar settlement with creditors.

Evergrande declared bankruptcy in 2021, causing global financial markets to tremble. The decision comes as China’s real estate market struggles add to the hardships of the world’s second largest economy.

China Evergrande Group filed for Chapter 15 bankruptcy protection in a New York court on Thursday. According to the BBC, Chapter 15 bankruptcy protects a foreign company’s assets in the United States while it attempts to restructure its obligations.

The group’s real estate unit, according to its website, has over 1,300 projects in over 280 Chinese cities. It also owns a football club and an electric car manufacturing.

After falling behind on payments, Evergrande has been attempting to restructure its debt repayment agreements with creditors. It was the world’s most indebted real estate developer, with debts estimated to surpass $300 billion (£235 billion).

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Google’s Search Dominance Is Unwinding, But Still Accounting 48% Search Revenue

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Google is so closely associated with its key product that its name is a verb that signifies “search.” However, Google’s dominance in that sector is dwindling.

According to eMarketer, Google will lose control of the US search industry for the first time in decades next year.

Google will remain the dominant search player, accounting for 48% of American search advertising revenue. And, remarkably, Google is still increasing its sales in the field, despite being the dominating player in search since the early days of the George W. Bush administration. However, Amazon is growing at a quicker rate.

google

Google’s Search Dominance Is Unwinding

Amazon will hold over a quarter of US search ad dollars next year, rising to 27% by 2026, while Google will fall even more, according to eMarketer.

The Wall Street Journal was first to report on the forecast.

Lest you think you’ll have to switch to Bing or Yahoo, this isn’t the end of Google or anything really near.

Google is the fourth-most valued public firm in the world. Its market worth is $2.1 trillion, trailing just Apple, Microsoft, and the AI chip darling Nvidia. It also maintains its dominance in other industries, such as display advertisements, where it dominates alongside Facebook’s parent firm Meta, and video ads on YouTube.

To put those “other” firms in context, each is worth more than Delta Air Lines’ total market value. So, yeah, Google is not going anywhere.

Nonetheless, Google faces numerous dangers to its operations, particularly from antitrust regulators.

On Monday, a federal judge in San Francisco ruled that Google must open up its Google Play Store to competitors, dealing a significant blow to the firm in its long-running battle with Fortnite creator Epic Games. Google announced that it would appeal the verdict.

In August, a federal judge ruled that Google has an illegal monopoly on search. That verdict could lead to the dissolution of the company’s search operation. Another antitrust lawsuit filed last month accuses Google of abusing its dominance in the online advertising business.

Meanwhile, European regulators have compelled Google to follow tough new standards, which have resulted in multiple $1 billion-plus fines.

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Pixa Bay

Google’s Search Dominance Is Unwinding

On top of that, the marketplace is becoming more difficult on its own.

TikTok, the fastest-growing social network, is expanding into the search market. And Amazon has accomplished something few other digital titans have done to date: it has established a habit.

When you want to buy anything, you usually go to Amazon, not Google. Amazon then buys adverts to push companies’ products to the top of your search results, increasing sales and earning Amazon a greater portion of the revenue. According to eMarketer, it is expected to generate $27.8 billion in search revenue in the United States next year, trailing only Google’s $62.9 billion total.

And then there’s AI, the technology that (supposedly) will change everything.

Why search in stilted language for “kendall jenner why bad bunny breakup” or “police moving violation driver rights no stop sign” when you can just ask OpenAI’s ChatGPT, “What’s going on with Kendall Jenner and Bad Bunny?” in “I need help fighting a moving violation involving a stop sign that wasn’t visible.” Google is working on exactly this technology with its Gemini product, but its success is far from guaranteed, especially with Apple collaborating with OpenAI and other businesses rapidly joining the market.

A Google spokeswoman referred to a blog post from last week in which the company unveiled ads in its AI overviews (the AI-generated text that appears at the top of search results). It’s Google’s way of expressing its ability to profit on a changing marketplace while retaining its business, even as its consumers steadily transition to ask-and-answer AI and away from search.

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Google has long used a single catchphrase to defend itself against opponents who claim it is a monopoly abusing its power: competition is only a click away. Until recently, that seemed comically obtuse. Really? We are going to switch to Bing? Or Duck Duck Go? Give me a break.

But today, it feels more like reality.

Google is in no danger of disappearing. However, every highly dominating company faces some type of reckoning over time. GE, a Dow mainstay for more than a century, was broken up last year and is now a shell of its previous dominance. Sears declared bankruptcy in 2022 and is virtually out of business. US Steel, long the foundation of American manufacturing, is attempting to sell itself to a Japanese corporation.

Could we remember Google in the same way that we remember Yahoo or Ask Jeeves in decades? These next few years could be significant.

SOURCE | CNN

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2024 | Supreme Court Won’t Hear Appeal From Elon Musk’s X Platform Over Warrant In Trump Case

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Washington — Trump Media,  The Supreme Court announced Monday that it will not hear an appeal from social media platform X about a search warrant acquired by prosecutors in the election meddling case against former President Donald Trump.

The justices did not explain their rationale, and there were no recorded dissents.

The firm, which was known as Twitter before being purchased by billionaire Elon Musk, claims a nondisclosure order that prevented it from informing Trump about the warrant obtained by special counsel Jack Smith’s team violated its First Amendment rights.

The business also claims Trump should have had an opportunity to exercise executive privilege. If not reined in, the government may employ similar tactics to intercept additional privileged communications, their lawyers contended.

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Supreme Court Won’t Hear Appeal From Elon Musk’s X Platform Over Warrant In Trump Case

Two neutral electronic privacy groups also joined in, urging the high court to hear the case on First Amendment grounds.

Prosecutors, however, claim that the corporation never shown that Trump utilized the account for official purposes, therefore executive privilege is not a problem. A lower court also determined that informing Trump could have compromised the current probe.

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Trump utilized his Twitter account in the weeks preceding up to his supporters’ attack on the Capitol on January 6, 2021, to spread false assertions about the election, which prosecutors claim were intended to create doubt in the democratic process.

The indictment describes how Trump used his Twitter account to encourage his followers to travel to Washington on Jan. 6, pressuring Vice President Mike Pence to reject the certification, and falsely claiming that the Capitol crowd, which battered police officers and destroyed glass, was peaceful.

musk trump

Supreme Court Won’t Hear Appeal From Elon Musk’s X Platform Over Warrant In Trump Case

That case is now moving forward following the Supreme Court’s verdict in July, which granted Trump full immunity from criminal prosecution as a former president.

The warrant arrived at Twitter amid quick changes implemented by Musk, who bought the company in 2022 and has since cut off most of its workforce, including those dedicated to combating disinformation and hate speech.

He also welcomed back a vast list of previously banned users, including Trump, and endorsed him for the 2024 presidential election.

SOURCE | AP

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The Supreme Court Turns Down Biden’s Government Appeal in a Texas Emergency Abortion Matter.

Supreme Court

(VOR News) – A ruling that prohibits emergency abortions that contravene the Supreme Court law in the state of Texas, which has one of the most stringent abortion restrictions in the country, has been upheld by the Supreme Court of the United States. The United States Supreme Court upheld this decision.

The justices did not provide any specifics regarding the underlying reasons for their decision to uphold an order from a lower court that declared hospitals cannot be legally obligated to administer abortions if doing so would violate the law in the state of Texas.

Institutions are not required to perform abortions, as stipulated in the decree. The common populace did not investigate any opposing viewpoints. The decision was made just weeks before a presidential election that brought abortion to the forefront of the political agenda.

This decision follows the 2022 Supreme Court ruling that ended abortion nationwide.

In response to a request from the administration of Vice President Joe Biden to overturn the lower court’s decision, the justices expressed their disapproval.

The government contends that hospitals are obligated to perform abortions in compliance with federal legislation when the health or life of an expectant patient is in an exceedingly precarious condition.

This is the case in regions where the procedure is prohibited. The difficulty hospitals in Texas and other states are experiencing in determining whether or not routine care could be in violation of stringent state laws that prohibit abortion has resulted in an increase in the number of complaints concerning pregnant women who are experiencing medical distress being turned away from emergency rooms.

The administration cited the Supreme Court’s ruling in a case that bore a striking resemblance to the one that was presented to it in Idaho at the beginning of the year. The justices took a limited decision in that case to allow the continuation of emergency abortions without interruption while a lawsuit was still being heard.

In contrast, Texas has been a vocal proponent of the injunction’s continued enforcement. Texas has argued that its circumstances are distinct from those of Idaho, as the state does have an exemption for situations that pose a significant hazard to the health of an expectant patient.

According to the state, the discrepancy is the result of this exemption. The state of Idaho had a provision that safeguarded a woman’s life when the issue was first broached; however, it did not include protection for her health.

Certified medical practitioners are not obligated to wait until a woman’s life is in imminent peril before they are legally permitted to perform an abortion, as determined by the state supreme court.

The state of Texas highlighted this to the Supreme Court.

Nevertheless, medical professionals have criticized the Texas statute as being perilously ambiguous, and a medical board has declined to provide a list of all the disorders that are eligible for an exception. Furthermore, the statute has been criticized for its hazardous ambiguity.

For an extended period, termination of pregnancies has been a standard procedure in medical treatment for individuals who have been experiencing significant issues. It is implemented in this manner to prevent catastrophic outcomes, such as sepsis, organ failure, and other severe scenarios.

Nevertheless, medical professionals and hospitals in Texas and other states with strict abortion laws have noted that it is uncertain whether or not these terminations could be in violation of abortion prohibitions that include the possibility of a prison sentence. This is the case in regions where abortion prohibitions are exceedingly restrictive.

Following the Supreme Court’s decision to overturn Roe v. Wade, which resulted in restrictions on the rights of women to have abortions in several Republican-ruled states, the Texas case was revisited in 2022.

As per the orders that were disclosed by the administration of Vice President Joe Biden, hospitals are still required to provide abortions in cases that are classified as dire emergency.

As stipulated in a piece of health care legislation, the majority of hospitals are obligated to provide medical assistance to patients who are experiencing medical distress. This is in accordance with the law.

The state of Texas maintained that hospitals should not be obligated to provide abortions throughout the litigation, as doing so would violate the state’s constitutional prohibition on abortions. In its January judgment, the 5th United States Circuit Court of Appeals concurred with the state and acknowledged that the administration had exceeded its authority.

SOURCE: AP

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