The G7’s approach to China’s economy is accelerating a new cold war, Nouriel Roubini wrote.
Western commitment to containing China’s economic influence, risks an eventual “violent crack-up.”
Export restrictions of key technology to China may come with economic retaliation.
While the US has voiced hopes for warmer relations with China, the G7’s approach to Beijing is accelerating another cold war, economist Nouriel Roubini wrote in a Project Syndicate piece.
Despite rhetoric at the May summit that suggested de-risking relations with China rather than a more aggressive decoupling, the group shows that “far from thawing, the new cold war is getting colder,” he warned.
“Unlike previous gatherings, when G7 leaders offered mostly talk and little action, this summit turned out to be one of the most important in the group’s history,” he wrote. “The US, Japan, Europe, and their friends and allies made it clearer than ever that they intend to join forces to counter China.”
Roubini pointed to the inclusion of India, South Korea, Indonesia and Brazil in the summit as well as warnings against China’s “economic coercion,” expansion the South and East China Seas, and aggression against Taiwan.
After the summit, Beijing accused Western leaders of trying to contain and suppress China. And Roubini said Beijing could use its dominance in rare-earths metals to retaliate against the US sanctions and trade restrictions.
Meanwhile, the trade standoff around semiconductors is also fueling cooler relations as US export restrictions are joined by more allies — a bid to keep China technologically behind.
“So, while the G7 may have set out to deter China without escalating the cold war, the perception in Beijing suggests that Western leaders failed to thread the needle. It is now clearer than ever that the US and the broader West are committed to containing China’s rise,” he concluded.
He cited also recent interviews with Henry Kissinger, who helped reopen US-China relations in the 1970s, where the veteran diplomat warned that the two countries are on a “collision course” unless they reach a new understanding.
“The deeper the freeze, the greater the risk of a violent crack-up,” Roubini said.
OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.
In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.
The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.
Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.
In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.
It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.
This report by The Canadian Press was first published Oct 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.
The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.
The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.
Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.
Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.
Overall manufacturing sales in constant dollars fell 0.8 per cent in August.
This report by The Canadian Press was first published Oct. 16, 2024.
