From the top nations to AI making oxygen and much more ...
This week we look at the top economic blocks of the world (China, US, Europe) before delving into the hottest years of history. By the way, AI is making oxygen now!
$1 trillion needs to be paid to China
According to a recent report, China is the world’s largest debt collector, with more than a trillion dollars owed to it through its Belt and Road project.
The project has received support from an estimated 80% of loans to countries in financial distress.
More than half of those loans have now entered their principal repayment period, and that figure is set to hit 75% by the end of the decade.
Beijing claims that over 150 countries stretching from Uruguay to Sri Lanka have signed up to the Belt and Road initiative.
According to AidData, Chinese financing of almost 21,000 projects across 165 countries has committed aid and credit “hovering around $80 billion a year” to low and middle-income nations.
The total outstanding debt, including principal but excluding interest, from borrowers in the developing world to China is at least $1.1 trillion.
Beijing is now seeking to de-risk the Belt and Road Initiative by bringing its lending practices more in line with international standards.
At a major summit in Beijing last month marking the project’s tenth anniversary, Xi said China would inject more than $100 billion of new funds into the Belt and Road Initiative.
US credit rating reduced to “negative”
Moody’s Investors Service revised the US credit rating outlook to “negative” from “stable” on October 10, citing concerns over the rising costs of interest rates and increasing political polarization in Congress.
US is already carrying a $33.7 trillion debt and around $1.7 trillion in deficit in fiscal year 2023.
The decision was met with swift criticism from President Joe Biden’s administration.
One view suggests that the market has already absorbed downgrades from other agencies, suggesting that Moody’s downgrade may not significantly impact the US market.
The longer-term impact depends on how inflation and fiscal policies unfold.
In the short term, a slowdown in the US economy is anticipated.
“Friend-shoring” and its impact
The European Central Bank (ECB) found that almost four times as many European multinationals said they would shift production to politically friendly countries, a phenomenon known as “friend-shoring,” as have done so in the past five years.
Multinational companies are increasingly signaling plans to move production into countries that are politically closer to their final markets due to geopolitical tensions.
42% of the 65 companies polled by the ECB claimed they would increasingly produce more in politically friendly markets
60% of these companies flagged that changes to their supply chains and production locations have pushed up prices over the past five years.
Many of the businesses polled expressed concern about their reliance on sourcing critical supplies from China.
Most companies said it would be “very hard” to find these critical inputs elsewhere. But many said they were trying to diversify their supplies, while others said they were holding more inventory, changing their product composition or monitoring risks more closely.
AI making oxygen from water!
A robot has used meteorite extracts from Mars to produce oxygen from water, combining the power of artificial intelligence with chemical discovery to explore and potentially colonize the red planet.
The robot used rock samples to create a catalyst, which is a substance that speeds up chemical reactions, to produce oxygen from water.
The researchers estimated that it would have taken 2,000 years of human labor to achieve the same result by trial and error.
The multidisciplinary team at the University of Science and Technology of China in Hefei, China, conducted the work, which taps into the rapidly growing interest in colonizing the cosmos and exploiting extraterrestrial resources.
Within six weeks, the robot analyzed 243 experimental data sets and almost 30,000 theoretical simulations to select and synthesize a viable six-metal catalyst from 3,764,376 possible formulas.
The researchers successfully conducted the experiment at Martian temperatures of minus 37C.
They demonstrated they could run the operation remotely, by setting up and controlling similar laboratories in three Chinese cities hundreds of kilometers apart.
2023 was the hottest year?
The Copernicus European Earth observation agency has reported that October 2023 was the hottest October on record, with temperatures 0.85C above the long-term average for the month. This has led to predictions that 2023 will be the hottest year on record for the Earth.
The latest UN report shows that governments plan to produce more than double the amount of fossil fuels in 2030 than would be consistent with limiting warming to 1.5C.
Development plans for fossil fuels by each country around the world indicate that coal production would increase until 2030, while oil and gas production would rise until at least 2050.
The UN has recommended that countries aim to:
phase out coal production and use by 2040
cut oil and gas production and use by three-quarters by 2050 compared with 2020, due to questions about the effectiveness of deploying carbon capture technologies at wide scale.