Edward Conard

Top Ten New York Times Bestselling Author

  • “Unintended Consequences provides a provocative interpretation of the causes of the global financial crisis and the policies needed to return to rapid growth. Whether you agree or not, this analysis is well worth reading.” - Nouriel Roubini, New York University; Chairman, Roubini Global Economics
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Friday, September 18, 2026

AI Summary. Wage gains have trailed inflation for five months, and consumer prices are 27% higher than at the start of 2021. The "misery index," the sum of the inflation and unemployment rates, stands at 7.5, up from 6.7 a year earlier.

David Uberti, Justin Lahart and Aaron Zitner Wall Street Journal
Date Posted:

Over the past five months, real wages as measured by average hourly earnings have declined. Okun’s “misery index” is now 7.5, just above its October 2024 level of 6.7.

Are wage gains falling behind rising consumer prices?

Core argument: Consumer prices are 27% higher than in January 2021, when Biden took office, and wage gains have failed to keep pace with inflation for five months.

For five months, wage gains haven’t kept pace with inflation and, especially with the sharp increase in gasoline prices over the past few weeks, they aren’t likely to keep up this month. University of Chicago Booth School of Business economist Christina Patterson said employees who achieve pay bumps often bear a burden. “You negotiate. You get an outside offer. You switch jobs. You threaten to leave,” she said. “All of those actions are costly. They disturb employer-employee relationships. You lose co-workers. You have to move.” Consumer prices are now 27% higher than they were in January 2021. One long-popular benchmark of economic conditions is the “misery index,” a simple summing up of the inflation and unemployment rate, it now stands at 7.5, higher than the 6.7 it was at in October 2024, just before Harris lost the presidency to Trump.

Takeaways by Macro Roundup® AI

  1. Consumer prices are 27% higher than in January 2021, when Biden took office, and wage gains have failed to keep pace with inflation for five months.
  2. The “misery index,” a summing of the inflation and unemployment rates devised by economist Arthur Okun, stands at 7.5, above the 6.7 recorded in October 2024 before Kamala Harris lost to Trump.
  3. University of Chicago Booth School of Business economist Christina Patterson said workers who win pay bumps often bear a burden through negotiating, obtaining outside offers, switching jobs, or threatening to leave, actions that disturb employer-employee relationships and can require moving.

Related Articles:

  • The Cost of Money is Part of the Cost of Living: New Evidence on the Consumer Sentiment Anomaly — Variation in the University of Michigan consumer sentiment index that inflation and unemployment cannot explain is strongly correlated with growth in consumer borrowing costs, such as mortgage and car loan rates. The authors estimate that including interest payments and homeownership costs in the consumer price index would raise measured inflation from 3% to 9%.
  • Sticky Wage Norms and the Real Wage Cost of Unexpected Inflation — Firms set nominal wage increases by round-number rules—about 42% of increases below 6% fell within 0.01 percentage points of a whole or half number—and these rules rose only from about 2.7% to 3.5% as inflation peaked near 7%, contributing to falling real wages for job stayers.
  • Do Voters Punish Inflation or Pay Cuts? Inflation and Real Wages in U.S. Elections — An analysis of U.S. counties estimates that where wages grew faster than prices, voters supported the incumbent party more, while counties with larger real wage losses than average shifted more toward the opposition. A one-standard-deviation larger real wage loss is associated with shifts of roughly 0.10 and 0.19 percentage points in vote share and margin.

AI Summary. Capital spending by the highest-rated corporate borrowers has grown more than 35% year-over-year for ten straight quarters, with artificial-intelligence-related issuers accounting for a quarter of US investment-grade gross supply and 44% of US convertible bond issuance. Higher capital costs and greater capital intensity have pushed dominant capital-spending hyperscalers' forward price-earnings ratios near the market average.

Peter Oppenheimer, Sharon Bell, Guillaume Jaisson, Elena Porfidia, et al. Goldman Sachs
Date Posted:

The surge in hyperscaler capex has “eaten through their free cash flow,” increasing reliance on external financing.  The resultant rise in the cost of capital, combined with higher capital intensity, has reduced the value of the dominant hyperscalers’ future cash flows enough that they now have a forward PE “close to the average of the rest of the market.”

How is AI-driven borrowing reshaping credit markets and tech valuations?

Core argument: Capex for AA-rated issuers grew 65% year-over-year in Q2, the 10th consecutive quarter in which aggregate AA capex growth exceeded 35%.

Capex spending growth for AA-rated issuers has been substantial: the 65% year-over-year growth in Q2 marks the 10th consecutive quarter that aggregate AA capex growth exceeds 35%. They have turned to the convertible bond market where volume has increased year to date reaching $135 billion in the US, with AI-related borrowers driving 44% of total issuance. Our Credit team raised their full-year US IG gross issuance forecast to $2.3 trillion and AI-related issuers account for a quarter of USD IG gross supply this year, pushing overall supply to a year-to-date record. The combination of higher cost of capital and greater capital intensity has reduced the value of their future cash flows and triggered a de-rating. The dominant capex hyperscalers in the US now have a forward PE close to the average of the rest of the market.

Takeaways by Macro Roundup® AI

  1. Capex for AA-rated issuers grew 65% year-over-year in Q2, the 10th consecutive quarter in which aggregate AA capex growth exceeded 35%.
  2. US convertible bond volume reached $135 billion year to date, with AI-related borrowers accounting for 44% of total issuance, while Morgan Stanley’s Credit team raised its full-year US investment-grade gross issuance forecast to $2.3 trillion.
  3. Higher cost of capital and greater capital intensity have reduced the value of future cash flows and triggered a de-rating, leaving the dominant capex hyperscalers in the US with a forward P/E close to the average of the rest of the market.

Related Articles:

  • The Market Is Asking Questions — Markets are weighing whether the trillions committed upfront to AI data centers, chips, and power will generate returns above the cost of capital before those assets depreciate. With the buildout increasingly funded by debt rather than internal cash flow and borrowing spreads widening, financing costs could rise until new data-center spending no longer clears its return hurdle.
  • Making Sense Of The AI Capex Logjam — Cash funded 85% of capital spending at Alphabet, Amazon, CoreWeave, Meta, Microsoft, Nebius, and Oracle in 2024, falling to 70% in 2025 and two-thirds in 2026, with 2026 capital spending guidance of $863bn exceeding their combined operating cash flow for the first time. About $282bn is funded by debt, equity, and leases.
  • Gross and Net US Investment — Net US investment has fallen from roughly 40% of gross investment in the 1970s to about 25% in the past decade, meaning about three-quarters of gross investment now just replaces depreciating capital. The author attributes this gap to modern investment being more information-technology-related, which depreciates faster and requires more frequent replacement.

AI Summary. The cost of insuring large artificial intelligence firms' debt against default has widened while bank spreads have stayed flat near 40 basis points, which the author argues rules out dealer hedging of new bond supply as the cause. Instead, markets are repricing a debt-financed AI investment cycle with rising leverage and negative free cash flow.

Torsten Sløk Apollo
Date Posted:

Noting widening CDS spreads for top AI firms but not for banks, Sløk argues this dynamic is driven not by dealer hedging, but by a repricing of hyperscaler credit fundamentals.

Is widening tech credit risk about fundamentals rather than dealer hedging?

Core argument: Bank CDS spreads have sat flat near 40 bps even though banks remain the single largest source of investment-grade supply, an argument against dealer hedging of new issuance as the driver of hyperscaler CDS widening.

The widening in hyperscaler CDS is not driven by dealer hedging of new issuance. If it were, bank CDS would be widening too, given that banks remain the single largest source of IG supply, and instead bank spreads have sat flat near 40 bps. What the market is repricing is hyperscaler credit fundamentals, namely a debt-financed AI capex cycle with rising leverage, negative free cash flow and uncertain payback on depreciating assets.

Takeaways by Macro Roundup® AI

  1. Bank CDS spreads have sat flat near 40 bps even though banks remain the single largest source of investment-grade supply, an argument against dealer hedging of new issuance as the driver of hyperscaler CDS widening.
  2. The widening in hyperscaler CDS reflects a repricing of credit fundamentals, specifically a debt-financed AI capex cycle with rising leverage, negative free cash flow, and uncertain payback on depreciating assets.

Related Articles:

  • Rear Window — Major cloud providers posted annual revenue growth of 37% at Amazon Web Services, 43% at Microsoft Azure and 82% at Google Cloud, with rising revenue backlogs of $514bn and $496bn respectively at Google Cloud and Amazon Web Services. Earnings growth appears highly contingent on continued hyperscaler capital spending and research, which rose from $460bn to $870bn.
  • The Market Is Asking Questions — Markets are weighing whether the trillions committed upfront to AI data centers, chips, and power will generate returns above the cost of capital before those assets depreciate. With the buildout increasingly funded by debt rather than internal cash flow and borrowing spreads widening, financing costs could rise until new data-center spending no longer clears its return hurdle.
  • The Summer I Turned Pretty — A warning sign in a boom cycle is when companies closest to final demand weaken while capital spending beneficiaries keep thriving, as when telecom operators' shares rolled over while communications equipment stocks kept rising. Semiconductor stock prices and free cash flow are soaring while large cloud providers' shares stagnate and their free cash flow plummets.

AI Summary. The Bank of Japan raised its policy rate to the highest level since 1995 and flagged the risk of underlying inflation overshooting its 2% target, but the yen fell 1.3% to nearly ¥158 per dollar as two dissenting votes cast doubt on appetite for further tightening.

Leo Lewis and David Keohane Financial Times
Date Posted:

The yen weakened even as the Bank of Japan raised its policy rate by 25 basis points to 1.25%, a 31-year high. The yen has surrendered ~ half its gain from the US-Japan intervention in July.

Why did the yen fall after a rate increase?

Core argument: The yen sank 1.3% to nearly ¥158 to the dollar after the Bank of Japan raised rates to their highest level since 1995, as two dissenting votes out of seven cast doubt on the appetite for further tightening.

In a signal to markets that further rises in borrowing costs are likely to follow, BoJ governor Kazuo Ueda highlighted the risk to Japan’s economy of underlying inflation overshooting the central bank’s target of 2%. However, the yen sank 1.3% to nearly ¥158 to the dollar following the decision despite Ueda’s comments, as the [two] dissenting votes [out of 7 total] cast doubt on the appetite for further tightening in Japan. Analysts noted that the two dissenting voters on the board were both appointed by Japan’s Prime Minister Sanae Takaichi, who favours reflationary government spending and has in the past been critical of tighter monetary policy. Marcel Thieliant, head of Asia-Pacific at Capital Economics, said that “with the two most hawkish board members set to depart next July, the composition of the board will probably become even more dovish.”

Takeaways by Macro Roundup® AI

  1. The yen sank 1.3% to nearly ¥158 to the dollar after the Bank of Japan raised rates to their highest level since 1995, as two dissenting votes out of seven cast doubt on the appetite for further tightening.
  2. Bank of Japan governor Kazuo Ueda signalled that further increases in borrowing costs are likely, highlighting the risk to Japan’s economy of underlying inflation overshooting the central bank’s 2% target.
  3. Marcel Thieliant of Capital Economics said the Bank of Japan board will probably become more dovish once its two most hawkish members depart next July, while both dissenters were appointed by Prime Minister Sanae Takaichi, who favours reflationary government spending.

Related Articles:

  • Where is the Global Debt Crisis Most Acute? — A proxy for strain at the long end of government bond markets — the gap between the 10-year yield expected in 10 years' time and today's 10-year yield, scored against its own history — shows Japan as an outlier among the G10 economies.
  • New Respect in the Land of the Rising Yen — Norway's sovereign wealth fund is reallocating its fixed income portfolio in a way that likely shifts from US Treasuries toward Japanese government bonds, prompting speculation that more international money will return to Japan's newly competitive yields. Japanese overnight interest rates are forecast to rise by a full percentage point over 12 months, to 1.9%.
  • Yen Intervention = US Self-Preservation — Japan's two traditional options for supporting a weak yen — much higher Japanese interest rates or large sales of dollars and US Treasuries — would both pressure US yields, as Japan holds about $1tn of Treasuries. US willingness to back Japan via its exchange stabilization fund and the Federal Reserve's international repo facility suggests officials see that risk.

Monday, September 21, 2026

AI Summary. Estimated sustainable government net debt limits across 25 OECD countries average 234% of GDP under historical interest-rate and growth assumptions (221% for the US) and 214% under current rates (186% for the US). If interest rates rise systematically with debt, the model yields no solution for the US, UK, France, Italy, Greece, and Japan.

Mark Warshawsky American Enterprise Institute
Date Posted:
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Warshawsky calculates the US has a sustainable net debt limit, “the lowest level of debt at which a country can no longer service its sovereign debt and must effectively default,” of 186% of GDP, which he forecasts will be reached in ~15 years under current policy and economic conditions.

How high can government debt rise before it becomes unsustainable?

Core argument: Sustainable net debt limits across the US and 24 other OECD countries average 234% of GDP under historical interest rate–growth differentials and 221% for the US, falling to 214% on average and 186% for the US under current, higher interest rates and growth.

Using historical, current, and dynamic interest rate-to-economic growth differentials, countries’ sustainable debt limits are calculated on a net of central bank holdings of government debt basis. Sustainable net debt limits average 234% of GDP for these countries assuming historical rates and economic growth (221% for the US), 214% assuming (higher) current interest rates and economic growth (186% for the US). If, however, interest rates were to rise systematically with debt according to conservative assumptions, there is no model solution for France, Greece, Japan, Italy, the UK, and the US, given their current high debt levels; the average sustainable limit is 178% for the other countries. A reasonable conclusion to draw for the US is that the fiscal path under current policy and trends with rising interest rates is not sustainable in the short to intermediate term. A major fiscal consolidation package will be needed soon, as interest rates rise, unless significantly higher inflation or capital controls will result.

Takeaways by Macro Roundup® AI

  1. Sustainable net debt limits across the US and 24 other OECD countries average 234% of GDP under historical interest rate–growth differentials and 221% for the US, falling to 214% on average and 186% for the US under current, higher interest rates and growth.
  2. If interest rates rise systematically with debt under conservative assumptions, the model yields no solution for France, Greece, Japan, Italy, the UK, and the US given their current high debt levels, while the average limit for the remaining countries is 178%.
  3. A reasonable conclusion is that the US fiscal path under current policy and trends with rising interest rates is not sustainable in the short to intermediate term, and a major fiscal consolidation package will be needed soon unless significantly higher inflation or capital controls result.

Related Articles:

  • Soaring Bond Yields, Gaping Deficits and Towering Debts: What Could Go Wrong? — An analysis of 22 rich countries estimates that if each refinanced its entire debt at current five-year bond yields, Britain would need the largest primary surplus to stabilize its debt-to-GDP ratio, about 1.5%, followed by Italy at 1.4%, France at 1.2% and America at 1%.
  • How Might Fiscal Policy Respond to the Rise of Artificial Intelligence? — The Congressional Budget Office estimates that a permanent 0.5 percentage point increase in annual productivity growth would lower publicly held federal debt after 30 years by 39% of GDP, offsetting roughly half the projected rise from 101% of GDP to 175%. Higher revenue and slower spending growth outweigh higher interest costs.
  • Can AI Avert the Impending Federal Budget Crisis? — U.S. GDP per capita, about $87,000, is projected to reach $102,000 by 2035 with 1.8% annual productivity growth, or $110,000 with 2.7% growth. Because the healthcare sector has been slow to adopt AI, health spending is projected to rise from 18.3% of GDP to 21% under slower growth and 21.7% under faster growth.

AI Summary. The authors estimate that more than half of the rise in the top 1% income share since 1985 — 5.8 of 10.5 percentage points — flowed through pass-through businesses, counting roughly 3m wealthy private business owners with average net worth near $25m running law firms, dealerships, and medical practices.

Torsten Sløk Apollo
Date Posted:
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More than half the increase in the top 1% income share since 1985 flowed through pass-through businesses to ~ 3mm private business owners with a mean net worth of ~$25mm.

Did most of the top 1% income gain come from private businesses?

Core argument: Owen Zidar and Eric Zwick find that 5.8 of the 10.5 percentage-point rise in the U.S. top 1% income share since 1985 flowed through pass-through businesses, more than half of the increase.

The income that lifted America's top 1% did not come mainly from tech or Wall Street, according to Owen Zidar and Eric Zwick. More than half of the rise in the top 1% income share since 1985, 5.8 of 10.5 percentage points, flowed through pass-through businesses. Zidar and Zwick, counted roughly 3 million wealthy private business owners, with average net worth near $25 million, running law firms, car dealerships, medical practices, commercial contractors and regional restaurant chains, the kind of businesses that make their owners wealthy and well known in their own communities without ever making them nationally famous.

Takeaways by Macro Roundup® AI

  1. Owen Zidar and Eric Zwick find that 5.8 of the 10.5 percentage-point rise in the U.S. top 1% income share since 1985 flowed through pass-through businesses, more than half of the increase.
  2. Zidar and Zwick count roughly 3 million wealthy private business owners with average net worth near $25 million, running law firms, car dealerships, medical practices, commercial contractors and regional restaurant chains.
  3. The income that lifted America’s top 1% did not come mainly from tech or Wall Street, according to Zidar and Zwick, but from businesses whose owners are well known locally without becoming nationally famous.

Related Articles:

  • What’s Missing in the Fed’s Data about Ultrarich Portfolios — The Federal Reserve's Distribution of Financial Accounts defines "private business" narrowly as proprietor's equity in noncorporate, nonfinancial businesses, excluding S-corporations, other private corporations, and private equity and hedge fund partnerships, which are lumped into "corporate equities." The Survey of Consumer Finances instead shows private business is roughly 45–50% of top 0.1% wealth.
  • They’re Rich but Not Famous—and They’re Suddenly Everywhere — An analysis of Federal Reserve data estimates about 430,000 U.S. households are worth $30m or more, including roughly 74,000 worth at least $100m, with growth in the number of very rich households outpacing overall population growth over recent decades. Nearly 72% of the top 0.1%'s wealth consists of corporate equities, mutual fund shares, and private businesses.
  • Capitalists in the Twenty-First Century — Most income at the top of the US distribution is non-wage income, primarily profits from closely-held, mid-market firms in skill-intensive industries owned by working-age individuals. The authors find private business profit falls by three-quarters after an owner retires or dies prematurely, indicating most top earners are "working rich" deriving income from human capital.

AI Summary. The cost of hiring the largest crude oil tankers from the Persian Gulf to Asia has risen 12-fold in months to a record $1.1m a day, reflecting the danger of crossing the Strait of Hormuz. Rates on routes far from the Middle East have also climbed 400–500%.

Javier Blas Bloomberg
Date Posted:

The cost of hiring a VLCC from the Gulf to Asia has risen to $1.1mm a day, up from ~$100,000 at the start of the year. Costs on other routes not directly impacted by the US-Iran war, such as the Gulf of Mexico to Asia, have also surged 400–500% y/y.

Are soaring oil tanker rates driving the next inflation shock?

Core argument: Hiring a Very Large Crude Carrier from the Persian Gulf to Asia has risen 12-fold in a few months to a record $1.1 million a day, against the $100,000 a day shipowners earlier this year considered a superb price.

The cost of hiring the largest tankers, Very Large Crude Carriers (VLCC), from the Persian Gulf to Asia — a benchmark route — has risen 12-fold in just a few months to a record high of $1.1 million a day. Earlier this year, most shipowners would have considered $100,000 a day a superb price and $50,000 a good one. The $1-million-a-day price tag reflects the danger of crossing the Hormuz waterway and the fact that few shipowners are willing to take the risk. But costs elsewhere, even far from the Middle East, have also ballooned. The route from the Gulf of Mexico to Asia is about $338,000 a day, up 400% from a year ago; from West Africa to China stands at about $486,000 a day, an increase of nearly 500%.

Takeaways by Macro Roundup® AI

  1. Hiring a Very Large Crude Carrier from the Persian Gulf to Asia has risen 12-fold in a few months to a record $1.1 million a day, against the $100,000 a day shipowners earlier this year considered a superb price.
  2. The $1-million-a-day rate reflects the danger of crossing the Hormuz waterway and the fact that few shipowners are willing to take the risk.
  3. Tanker rates far from the Middle East have also ballooned, with the Gulf of Mexico to Asia route at about $338,000 a day, up 400% from a year earlier, and West Africa to China at about $486,000 a day, up nearly 500%.

Related Articles:

  • U.S. Economy Less Vulnerable To Geopolitical Oil Price Shocks Than In The Past — The United States became a net oil exporter in late 2019, and oil and oil product spending fell from near 8% of GDP in 1980 to 3% in 2024. The authors estimate a 15% global oil supply disruption would now cut annualized U.S. real GDP growth by 0.3pp, versus 1.7pp in the rest of the world.
  • Goldman Says Gulf Oil Exports at Two-Thirds of Pre-War Level — Goldman Sachs estimates Persian Gulf crude and oil product exports have recovered to about 15–16m barrels a day, roughly two-thirds of pre-war levels and above a trough of 5–6m barrels a day, limiting the Iran war's impact on global crude prices. Transits through the Strait of Hormuz are likely close to US officials' estimates of 8–10m barrels a day.
  • Fighting Words: The Energy Transition in 2026 — Estimates based on primary energy overstate how much electricity is needed to replace oil in passenger cars, since electric motors convert 80%-90% of electricity into motion versus about 18% for gasoline cars. Measuring useful final energy net of waste heat avoids this "primary energy fallacy": the US consumed 45 exajoules of useful final energy versus 95 exajoules of primary energy.

AI Summary. China's urban unemployment rate for 16- to 24-year-olds excluding students reached 18.9%, the highest since the statistics agency revised its methodology to exclude students. A record influx of university graduates is entering a job market weighed down by weak domestic demand and growing adoption of artificial intelligence.

Xinyi Wu South China Morning Post
Date Posted:

China’s youth unemployment (16–24) climbed to 18.9% in August, a level which it had previously hit last summer. 12.7 million new university graduates entered the workforce this summer, ~4% more than last year.

Is a record wave of graduates pushing China's youth unemployment higher?

Core argument: China’s urban unemployment rate for 16–24-year-olds excluding students rose to 18.9% in August from 17.9% in July, according to the National Bureau of Statistics.

China’s urban youth unemployment rose last month, as a record influx of university graduates struggles to find work in a job market weighed down by weak domestic demand and the growing adoption of artificial intelligence. The jobless rate for those aged 16 to 24, excluding students, rose to 18.9% in August from 17.9% in July, according to data released by the National Bureau of Statistics. This figure, as well as the identical number from August last year, represents the highest reading since Beijing revised its calculation methodology to exclude students in 2023, following a peak of 21.3% under the old rubric reported in June of that year.

Takeaways by Macro Roundup® AI

  1. China’s urban unemployment rate for 16–24-year-olds excluding students rose to 18.9% in August from 17.9% in July, according to the National Bureau of Statistics.
  2. A record influx of university graduates is struggling to find work in a Chinese job market weighed down by weak domestic demand and the growing adoption of artificial intelligence.
  3. The 18.9% reading, matching August of the previous year, is the highest since Beijing revised its methodology in 2023 to exclude students, after a 21.3% peak under the old measure in June of that year.

Related Articles:

  • The Year of the Trojan Fire Horse: China’s Imbalanced Economy and Unrelenting Mercantilism — About 30% of Chinese industrial companies are unprofitable "zombies" kept alive by subsidies far larger than those elsewhere, rather than exiting amid falling industrial producer prices. Countries with large increases in manufactured imports from China also saw slowdowns in domestic manufacturing, including declining manufacturing shares of output across most of Southeast Asia.
  • Social Media in China Is Getting Really Dark — Posts across Chinese social media platforms including RedNote, Douyin and Weibo describe low wages, scarce jobs, falling property values and fear about the future, with some users turning hardship into dark humor or mocking official propaganda. The volume of pessimistic and sarcastic posts is striking given that China's internet censorship has grown more ruthless over the past decade.
  • China’s Great Jobs Squeeze — China's "flexible employment" — a loosely defined official category spanning part-time work, self-employment, and new work forms — is estimated at 320mn people, up from 280mn a year earlier, with more than 53mn working as food delivery or ridesharing drivers. Analysts argue this reflects broad labour-market weakness, as low aggregate demand weakens workers' bargaining power.

AI Summary. China's Communist Party accused two former top military leaders, Zhang Youxia and Liu Zhenli, of forming cliques, being disloyal to the party, and corruption involving "exceptionally large" sums as it moved to expel them. The Center for Strategic and International Studies counted 36 generals and lieutenant generals officially purged.

Edward White Financial Times
Date Posted:

The CCP formally moved to expel two generals who had been the last two professional officers on China’s Central Military Commission and were purged at the start of the year.

Is China purging its top military leaders for disloyalty?

Core argument: China’s Communist Party accused former Central Military Commission first vice-chair Zhang Youxia and fellow former CMC member Liu Zhenli of forming “cliques and factions” and being “disloyal and dishonest to the party” as it moved to expel them.

China’s Communist Party accused two of Xi Jinping’s former top generals of disloyalty as it moved to expel them from its ranks on Monday, underlining the political nature of Xi’s purge of the military. Zhang Youxia, the former first vice-chair of the Central Military Commission and fellow former CMC member Liu Zhenli, “formed cliques and factions, and were disloyal and dishonest to the ⁠party,” official media said on Monday. The Center for Strategic and International Studies said in February that 36 generals and lieutenant generals had been officially purged since 2022, while a further 65 officers were missing or potentially purged.

Takeaways by Macro Roundup® AI

  1. China’s Communist Party accused former Central Military Commission first vice-chair Zhang Youxia and fellow former CMC member Liu Zhenli of forming “cliques and factions” and being “disloyal and dishonest to the party” as it moved to expel them.
  2. State news agency Xinhua and Chinese state television reported that Zhang Youxia and Liu Zhenli were involved in corruption involving “exceptionally large” sums.
  3. The Center for Strategic and International Studies said 36 generals and lieutenant generals had been officially purged since 2022, with a further 65 officers missing or potentially purged.

Related Articles:

  • Xi the Destroyer — China's leadership overhauling the senior ranks of its military signals relative comfort with the country's external environment, including cross-strait dynamics, as US commitments to Taiwan appear uncertain and Taiwanese politics shift in Beijing's favor. The author argues the purge shows Xi using cross-strait calm to prepare the military for possible conflict over Taiwan.
  • The Sinister Disappearance Of China’s Bosses — China's liuzhi detention system operates alongside normal policing, requiring no court approval and denying detainees lawyers, with windowless cells, constant lighting and round-the-clock supervision. Stock-exchange filings show 39 executives at listed companies disappearing into the system by the end of September, exceeding the prior year's record.
  • China’s Military Says Top General Undermined Xi Jinping’s Authority — China's military newspaper has accused two top generals — the vice chair of the Central Military Commission and the People's Liberation Army's chief of staff — of trampling the "chairman responsibility system" that gives China's leader supreme decision-making power over the armed forces, alongside corruption charges.