9 December 2018   Leave a comment

There is a high degree of concentration in the global economy.  We are often flummoxed by what appears to be a bewildering number of choices in the market.  But the choices are really an illusion.  Many of the products that we see on the store shelves are produced by a very small number of companies.   The actual number of companies in competitive sectors is actually declining in the US, and The Economist quantifies the decline:

“Revenues in fragmented industries—those in which the biggest four firms together control less than a third of the market—dropped from 72% of the total in 1997 to 58% in 2012. Concentrated industries, in which the top four firms control between a third and two-thirds of the market, have seen their share of revenues rise from 24% to 33%. And just under a tenth of the activity takes place in industries in which the top four firms control two-thirds or more of sales. This oligopolistic corner of the economy includes niche concerns—dog food, batteries and coffins—but also telecoms, pharmacies and credit cards.”

 

 

 

 

US President Trump has blamed the yellow vert protests in France on the Paris climate agreement, but that argument does not really square with the reality of the protests which have been largely focused on broader economic concerns.  Nonetheless, the French have not appreciated Trump’s comments  which they regard as an intrusion in their internal affairs.  Trump tweeted:  “The Paris Agreement isn’t working out so well for Paris. Protests and riots all over France. People do not want to pay large sums of money, much to third world countries (that are questionably run), in order to maybe protect the environment. Chanting ‘We Want Trump!’ Love France.”   The chanters were actually from England a few months ago, not from France.  French President Macron is scheduled to give a speech on Monday which he hopes will address the concerns of the protesters.

 

 

Chinese Vice Foreign Minister Le Yucheng summoned the US Ambassador to China, Terry Branstad, to lodge a strong protest against the actions taken against the CFO of Huawei.  The Canadian Ambassador was also dressed down for agreeing to arrest Meng Wangzhou.   The Global Times articulates the Chinese objection in a broad context:

“Analysts said it is worth noting that the containment of China and the country’s technology comes not only from the US, but also its allies.

“Australia and New Zealand joined the US in banning Huawei from providing technology for their 5G rollout, CNBC reported Wednesday.

“However, not all countries are following the US. French Finance Minister Bruno Le Maire said on Friday that investments by Huawei are welcome in France, Xinhua reported.

“Western media like German publication Der Spiegel also questioned US accusations against Chinese companies, saying that the US never provided any concrete evidence, and that mistrust of Chinese products is limited in Germany despite US claims they are not trustworthy.”

For the Chinese, the trade war with the US is a struggle over hegemony.

Posted December 9, 2018 by vferraro1971 in World Politics

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