“…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
“…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
“…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
“Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
“Unintended Consequences should be read by anyone who takes for granted the superiority of progressive taxation and has not thought carefully about the trade-offs involved.” - The New Republic
“…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
“…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
“…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
“…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
“…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
“There are an amazing number of good ideas and interesting points made in Unintended Consequences. The thinking underlying it, and the obvious depth of understanding of the author, are very impressive.” - Steven Levitt, coauthor of Freakonomics; 2004 John Bates Clark Medal
“…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
Analysis of national security, defense, geopolitical competition, military technology, conflict, alliances, and the economic foundations of state power. Coverage connects strategic developments with trade, industry, energy, and innovation.
AI Summary.Ukraine's population in government-controlled territory has fallen from about 37m to 27m–28m since Russia's 2022 full-scale invasion, with 3m–5m living under occupation and millions emigrated. The fertility rate has dropped from 1.2 children per woman to 0.8–0.9, far below the 2.1 replacement rate, and deaths now outnumber births by more than three to one.
Economist StaffThe Economist
Date Posted:
Ukraine’s fertility rate has fallen from 1.2 children per woman in 2020 to 0.8–0.9—lower than in any other major country except South Korea. A key driver of the fertility decline is the more than 5 million Ukrainians living abroad, mostly children and women under 44.
How severely has war reduced Ukraine's population and birth rate?
Core argument: Ukraine's population in government-controlled territory has fallen from about 37m to 27m–28m since Russia's full-scale invasion in 2022, with 3m–5m Ukrainians living under Russian occupation and millions more emigrated.
Births in Ukraine are falling, in part because there are fewer adults. Since Russia’s full-scale invasion in 2022 the population inside government-controlled territory has fallen from about 37m to 27m-28m. Around 3m-5m Ukrainians now live under Russian occupation, and millions more have emigrated. Ukraine’s president, Volodymyr Zelensky, puts combat deaths at over 50,000; an independent estimate is closer to 150,000. Thousands of civilians have been killed, and Russia has deported over 20,000 children to Russify them. Wartime, moreover, is not good for starting families. The fertility rate has dropped from 1.2 children per woman in 2020 to 0.8-0.9, lower than any big country but South Korea. The replacement rate, needed to keep the population stable, is 2.1. In the first half of 2026 deaths outnumbered births by more than three to one.
Takeaways by Macro Roundup® AI
Ukraine's population in government-controlled territory has fallen from about 37m to 27m–28m since Russia's full-scale invasion in 2022, with 3m–5m Ukrainians living under Russian occupation and millions more emigrated.
Ukraine's fertility rate has dropped from 1.2 children per woman in 2020 to 0.8–0.9, lower than any big country except South Korea and below the 2.1 replacement rate needed to keep the population stable.
Deaths outnumbered births by more than three to one in Ukraine in the first half of 2026, while President Volodymyr Zelensky puts combat deaths above 50,000 and an independent estimate is closer to 150,000.
Related Articles:
The Russian Paradox: So Much Education, So Little Human Capital— Russia is an exception to the global correspondence between educational attainment and human capital, combining an advanced educational profile with strikingly poor health outcomes and only weak contributions to knowledge production and skills-intensive service exports. World Health Organization estimates put male life expectancy at age 15 near that of the world's least developed countries.
Russians Shun Putin’s Plea for More Babies as Population Shrinks— Russia's population decline has accelerated, with births falling 3.4% to 1.22m — the lowest level in roughly 25 years — while deaths rose 3.3% to 1.82m, according to Russia's Federal Statistics Service. The decline is attributed in part to Russia's war on Ukraine, though detailed mortality data has been classified and war deaths enter the statistics with long delays.
How Russia’s Fatalities Compare With Ukraine’s— A model estimates Russian casualties in the full-scale Ukraine war at 1.1m–1.4m, including 230,000–430,000 dead, equivalent to roughly one in 25 Russian men aged 18–49 killed or severely wounded. One estimate puts Ukrainian casualties at 600,000 with 100,000–140,000 dead—lower in absolute terms but a higher share of its population.
AI Summary.Iranian consumer price inflation has reached roughly 90% year-over-year, above prior peaks near 50%, while the rial has weakened to nearly 3m per US dollar on the open market and crude exports have fallen from about 1.8m barrels per day to essentially zero. Lost oil revenue means fewer dollars entering the country, pushing the currency lower and import prices higher.
Torsten SlokApollo
Date Posted:
Is Database:
Database
Is Important:
Important
Since the start of the US-Iran war, the price level in Iran has risen 90% y/y, the rial has weakened to 3mm per USD, and oil exports have collapsed to essentially zero.
How does an oil export collapse drive currency weakness and inflation?
Core argument: Iranian consumer price inflation has surged to roughly 90% YoY, well above the prior peaks of around 50% reached in 2019–20 and 2022, with the pace of acceleration increasing sharply since the conflict began.
Inflation is at 90%. Iranian consumer price inflation has surged to roughly 90% YoY, well above the previous peaks of around 50% seen in 2019-20 and 2022. Inflation had already been climbing before the conflict, but the pace of acceleration has increased sharply since it began. The rial exchange rate is in free fall. On the open market, the rial has weakened to nearly 3 million per US dollar. The currency spent most of the last decade trending gradually lower, but the move has turned near-vertical since the conflict began. A weaker rial raises the cost of imports, which feeds directly into inflation. Oil exports have collapsed. Crude exports, Iran’s main source of foreign currency, have fallen from roughly 1.8 million barrels per day to essentially zero. Iran has been through a similar episode before when exports dropped from over 2.5 million b/d in 2018 to very low levels through 2019-21 under sanctions, and only recovered gradually afterward. This time the fall is steeper and faster. Lost oil revenue means fewer dollars flowing into the country, which pushes the rial lower, which in turn drives import prices and inflation higher.
Takeaways by Macro Roundup® AI
Iranian consumer price inflation has surged to roughly 90% YoY, well above the prior peaks of around 50% reached in 2019–20 and 2022, with the pace of acceleration increasing sharply since the conflict began.
Iran’s rial has weakened to nearly 3 million per US dollar on the open market, a near-vertical move since the conflict began after a decade of gradual decline, raising import costs that feed directly into inflation.
Iran’s crude exports, its main source of foreign currency, have fallen from roughly 1.8 million barrels per day to essentially zero, a steeper and faster drop than the decline from over 2.5 million b/d in 2018 under sanctions.
Related Articles:
Choking Iran’s Economy Is the Least Bad Way to End the War— Iran's economy is on track for its largest annual contraction since the mid-1980s, with inflation above 50% — the highest in nearly 70 years of records — and food and other necessities costing double a year earlier. Its currency has fallen to a record low of about 1.85m rials per dollar on the black market.
Saudi Budget Deficit More Than Doubles as War Hurts Oil Finances— Saudi Arabia posted a quarterly budget deficit of 84bn riyals ($22.4bn), about 145% larger than the prior quarter, as oil receipts fell almost 40% to roughly 116bn riyals amid disruptions from the US-Iran war. Non-oil revenues fell around 7% and overall spending dipped 8%.
What Millions Of Data Points Reveal About US Inflation— An alternative inflation gauge tracking millions of prices across 87% of the consumer price basket puts headline inflation at 4.4% versus the official 3.7%, but its trimmed mean at 2.2%. The data indicate price increases are concentrated in energy, airfares, and computers rather than broad-based, with tariffs producing one-time increases.
AI Summary.European and Asian buyers pay over $30 per million British thermal units for natural gas while US buyers pay around $3 and Canadian buyers about $1.5, a roughly 12x gap that is the widest on record. US liquefied natural gas exports have not been enough to fully link the domestic market to global prices.
Javier BlasBloomberg
Date Posted:
Is Database:
Database
The price of natural gas in Western Europe and Japan is now a record 12x that of the North American price, as the shale revolution and ample domestic reserves shield North American gas consumers from the fallout of the Iran war.
How wide is the gap between US and overseas gas prices?
Core argument: European and Asian gas buyers pay north of $30 per mBtu while US buyers pay around $3 and Canadian buyers about $1.5, a gap reaching a ratio of 12 times.
While European and Asian consumers are now paying north of $30 per million British thermal unit for their gas, US buyers pay around $3 per mBtu. Last week, US gas prices briefly touched a two-year low of $2.5 per mBut — in the middle of an energy crisis. Canadian costs are even lower, at about $1.5 per mBtu. The price difference between gas in Europe and Asia versus North America, reaching now a ratio of 12 times, has never been wider; not during the 2022 gas shock following the Russian invasion of Ukraine, nor in 2011-2012 after the Fukushima nuclear accident. Today, the US is exporting huge amounts of gas as LNG. But even that isn’t enough to fully connect its domestic market to the global one. As such, America is making a double profit: First, it enjoys ultra-low gas prices; second, it’s paid enormous sums for its exports.
Takeaways by Macro Roundup® AI
European and Asian gas buyers pay north of $30 per mBtu while US buyers pay around $3 and Canadian buyers about $1.5, a gap reaching a ratio of 12 times.
The price gap between European and Asian gas and North American gas has never been wider, exceeding the spreads during the 2022 shock after Russia’s invasion of Ukraine and in 2011–2012 after the Fukushima accident pushed Japan toward gas.
US gas prices briefly touched a two-year low of $2.5 per mBtu, and large LNG exports have not fully connected the domestic market to the global one, leaving America with low domestic prices and large export earnings.
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.
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.
Power Politics: Energy Self-Sufficiency in a Modern Mercantilist World— China leads in adding power to the grid, with more than 30,000 miles of ultra-high-voltage transmission lines versus zero in the US and lead times for large transformers of 48 weeks against a US average of 143 weeks. This positions China to accommodate new demand sources such as artificial intelligence.
AI Summary.A shortage of domestically produced explosives threatens US efforts to replenish weapons stockpiles and arm troops with drones, with supply concentrated among a few aging producers and imports hard to obtain. A startup, Odin Energetics, is testing a new explosive it says is 30% more powerful than what the military currently puts on drones.
Heather SomervilleWall Street Journal
Date Posted:
The sole source of domestic production of the military explosives HMX and RDX is the Holston Army Ammunition Plant, where orders face a one- to two-year queue. New entrants such as Odin Energetics aim to expand domestic supply, with Odin claiming its formulation has a 30% greater yield than HMX and RDX.
Can a startup ease the domestic explosives shortage limiting drone weapons?
Core argument: Odin Energetics tested an explosive at a range just over an hour outside Houston that its makers say is 30% more powerful than what the U.S. military currently packs onto drones, detonating samples remotely on pedestals.
A chronic shortage of explosives threatens the Pentagon’s agenda to replenish weapons stockpiles and arm troops with the unmanned systems that have come to define conflicts. The country’s domestic supply has withered since World War II, leaving a small number of deteriorated and overburdened suppliers, an industrial base frozen in the 1940s. Imports are increasingly hard to come by. At a range just over an hour outside of Houston, a new company recently was testing a powerful explosive, a novel concoction its makers said is 30% more powerful than what the military is packing onto drones today. Engineers from Odin Energetics placed the explosive material on pedestals and remotely detonated them with an echoing bang, emitting a quick burst of flames followed by clouds of smoke. More energy-dense explosives like this one promise to increase the damage inflicted by smaller weapons. They can also allow a drone to wipe out a target even if its aim is slightly askew.
Takeaways by Macro Roundup® AI
Odin Energetics tested an explosive at a range just over an hour outside Houston that its makers say is 30% more powerful than what the U.S. military currently packs onto drones, detonating samples remotely on pedestals.
A chronic explosives shortage threatens the Pentagon’s plans to replenish weapons stockpiles and arm troops with unmanned systems, with domestic supply withered since World War II, leaving few deteriorated and overburdened suppliers, and imports increasingly hard to obtain.
More energy-dense explosives promise to increase the damage inflicted by smaller weapons and allow a drone to wipe out a target even when its aim is slightly askew.
Related Articles:
Is the Industrial Base on a Wartime Footing? A Progress Report— About 10,000 new firms have entered the US defense market in two years, and nontraditional companies received over $120bn in contract obligations in fiscal 2025, while munitions contract obligations have risen 330% since fiscal 2010. The Defense Department is signing large-scale multiyear munitions agreements and backing a rare earth supply chain outside Chinese control.
The U.S. Wants to Break China’s Drone Dominance. Here’s Where It Will Struggle— Fielding a drone fleet able to compete with China requires the U.S. to break China's monopoly on batteries and motors and to cut the cost of other components, where weak domestic demand is a key obstacle. Chinese producers hold 80% of the U.S. commercial drone market, and experts warn building mass-production infrastructure could take a decade or more.
America’s Fight Back Against China Starts In Los Angeles—In Flip-Flops— El Segundo, California has developed a self-reinforcing entrepreneurial cluster of defense and hardware startups founded by former employees of SpaceX, Palantir and Anduril who cashed in stock options to launch their own firms. One of them, drone maker Neros, says it has America's highest drone production rate and has worked to remove Chinese technology, including circuit boards, from its products.
AI Summary.Cryptographers and regulators warn that artificial intelligence advances in algorithmic design and number theory could break core encryption methods, including some less mature algorithms designed to resist quantum computers, before quantum computing poses a comparable threat. The UK's Financial Conduct Authority is trialling a supervisory tool with 50 large institutions to assess preparedness.
Michael Peel, Martin Arnold and Laith Al-KhalafFinancial Times
Date Posted:
AI performance improvements in algorithmic design and number theory may threaten the cryptography currently used to protect digital data. Australian mathematician Geordie Williamson warns, “I think that we should expect shocks in the future … very unsettling major, major shocks.”
Could AI break encryption before quantum computers do?
Core argument: The UK’s Financial Conduct Authority is trialling a supervisory tool with 50 large institutions to assess preparedness for new technological risks to cryptography, and plans to issue practical guidance to the more than 35,000 financial services firms it supervises.
AI performance improvements in algorithmic design and number theory — relating to the properties of whole numbers — have increased the capacity to solve problems previously considered very hard. One widely used cryptographic method is based on multiplying together two very large prime numbers. This has been an effective process until now, as it is easy for existing computers to do the multiplication, but harder to do the reverse process of working out what the pair of source numbers are. AI developments in maths have also thrown into doubt the previous assumption that the most pressing threat to cryptography is the advent of quantum computers — machines designed to exploit the physics of subatomic particles to achieve results beyond the capability of “classical” computers. “What’s going on in these [AI] systems is a complete kind of restructuring of what difficulty is — and difficulty underlies a lot of modern cryptography,” Australian mathematician Geordie Williamson said in a recent lecture hosted by Imperial College London. “I think that we should expect shocks in the future . . . very unsettling major, major shocks.”
Takeaways by Macro Roundup® AI
The UK’s Financial Conduct Authority is trialling a supervisory tool with 50 large institutions to assess preparedness for new technological risks to cryptography, and plans to issue practical guidance to the more than 35,000 financial services firms it supervises.
University of Manchester cryptomathematics professor Daniel Shiu calls AI cracking encryption a “significant risk” for more mathematical forms of cryptography, including less mature next-generation algorithms designed to resist quantum attacks, and says the US, China and Germany are re-evaluating cryptographic tools.
OpenAI pledged $5mn to a maths-focused foundation after controversy over its publication of hundreds of mathematical papers, including AI-generated proofs for longstanding problems, while BT states it is preparing to migrate to new encryption methods.
Related Articles:
The Hackening Has Begun— Increasingly capable AI systems allow software vulnerabilities to be found and exploited at far greater speed and scale, leaving a vast installed base of old, poorly maintained, interconnected software exposed. Disclosures of common vulnerabilities have accelerated sharply, with monthly reports running several times earlier levels and high-severity and critical flaws increasing rapidly.
The Internet’s Wuhan Moment— The author argues AI agents will reshape the internet into a space built for machine-to-machine interaction, where reaching banks, doctors, or utilities requires proving you are human and critical services connect through narrow, monitored channels. Access to large-scale computing may require more vetting, with formal mathematical proofs of software correctness becoming as routine as testing.
Patchmageddon— The number of reported software vulnerabilities has been rising, with 1.5%–2.0% exploited each year, and the average time from a vulnerability's disclosure to its first confirmed exploitation fell below 100 days, with median times reaching zero. The same AI tools that find and exploit flaws can also propose code fixes.
AI Summary.The author argues AI agents will reshape the internet into a space built for machine-to-machine interaction, where reaching banks, doctors, or utilities requires proving you are human and critical services connect through narrow, monitored channels. Access to large-scale computing may require more vetting, with formal mathematical proofs of software correctness becoming as routine as testing.
Azeem AzharExponential View
Date Posted:
Azhar argues that the offensive cyber capabilities of AI will eventually result in a less open but ultimately safer internet. “If software making starts to favour reliability and security, we might end up with a more robust codebase than we had imagined.”
How will AI agents reshape access to the internet?
Core argument: AI agents will reshape the internet into a place built for agents talking to agents, with users required to prove they are human to reach banks, doctors or utilities, and critical services connecting only through narrow, closely monitored channels.
Agents will reshape the internet. The open internet will survive, but as a place built for agents talking to agents. To reach your bank, your GP or your water company, you will have to prove you are human. Critical services will talk to the internet only through narrow, closely monitored channels. Openness at machine speed will be hostile to humans. We don’t, after all, take afternoon strolls down the middle of the freeway. We didn’t eradicate Covid. It became another flu. There is more spam email than ever, and we probably see less of it. Cyber attacks will follow the same path. You’ll get hit. What matters is how quickly you can recover. Software will get better. Formal verification has been such a headache until now. It will become essential. Proofs will become as routine as testing. Ultimately, bugs in today’s software are finite. Today attackers are finding them first. There is a plausible path to defenders getting the rest.
Takeaways by Macro Roundup® AI
AI agents will reshape the internet into a place built for agents talking to agents, with users required to prove they are human to reach banks, doctors or utilities, and critical services connecting only through narrow, closely monitored channels.
Cyber attacks will follow the path of Covid and spam email, becoming endemic rather than eradicated, so what matters is how quickly a victim can recover rather than avoiding being hit.
Compute may become increasingly controlled, with renting serious compute requiring much more paperwork, sellers carrying out checks, and possibly paying up when their customers misbehave.
Related Articles:
Patchmageddon— The number of reported software vulnerabilities has been rising, with 1.5%–2.0% exploited each year, and the average time from a vulnerability's disclosure to its first confirmed exploitation fell below 100 days, with median times reaching zero. The same AI tools that find and exploit flaws can also propose code fixes.
Misanthropic: On Mythos, Bad Human Behaviors and Systems Vulnerabilities— Anthropic reports that its Mythos model has detected thousands of high-severity cyber vulnerabilities, including ones found by chaining multiple obscure software weaknesses, and that these hacking skills are emergent rather than a designed capability. Mythos completed a corporate network attack simulation estimated to take an expert over 10 hours, which no other frontier model had solved.
Emerging Details of Chinese Hack Leave U.S. Officials Increasingly Concerned— U.S. intelligence and national security officials have told major telecommunications companies to find a permanent way to expel Chinese hackers from the deepest parts of the nation's communications networks. Critical parts of the system date to the late 1970s or early 1980s and are too old to upgrade with modern cybersecurity protections.
AI Summary.Increasingly capable AI systems allow software vulnerabilities to be found and exploited at far greater speed and scale, leaving a vast installed base of old, poorly maintained, interconnected software exposed. Disclosures of common vulnerabilities have accelerated sharply, with monthly reports running several times earlier levels and high-severity and critical flaws increasing rapidly.
Paul KedroskyApplied Complexity
Date Posted:
Kedrosky warns “The Hackening” is underway as the diffusion of AI enables sophisticated cyberattacks at scale. 5.2% of all critical software vulnerabilities ever reported were disclosed in October, and ~ half the critical software vulnerabilities ever found were found in 2026.
Is AI accelerating the discovery and exploitation of software vulnerabilities?
Core argument: Disclosures of common vulnerabilities and exposures (CVEs) accelerated sharply in 2026 after years of steady increases, with monthly reports running at several times their 2025 levels, and high-severity and critical vulnerabilities rising rapidly as well.
We are entering what some call The Hackening, a period of radical technological instability where systemic frailties are everywhere. You can see it everywhere. For example, the Port of Los Angeles recently reported more cyberattacks per month than it saw in entire years before 2020. This might be less worrisome if the number of reported software vulnerabilities was not exploding. But it is. After years of steady increases, disclosures of common vulnerabilities (CVEs) accelerated sharply in 2026, with monthly reports now running at several times their 2025 levels. This is not simply an explosion in AI helping detect minor software defects. High-severity and critical vulnerabilities are increasing rapidly as well. Sure, there are caveats about changing reporting practices and the role of AI in these numbers (detection slop?). But the broader picture is deeply unsettling, as the PHP security disclosure made clear.
Takeaways by Macro Roundup® AI
Disclosures of common vulnerabilities and exposures (CVEs) accelerated sharply in 2026 after years of steady increases, with monthly reports running at several times their 2025 levels, and high-severity and critical vulnerabilities rising rapidly as well.
The Port of Los Angeles reported more cyberattacks per month than it recorded in entire years before 2020.
Increasingly capable AI systems make it possible to discover and exploit software vulnerabilities at speeds and scales previously unimaginable, leaving an enormous installed base of old, poorly maintained, and deeply interconnected software as a soft target.
Related Articles:
Patchmageddon— The number of reported software vulnerabilities has been rising, with 1.5%–2.0% exploited each year, and the average time from a vulnerability's disclosure to its first confirmed exploitation fell below 100 days, with median times reaching zero. The same AI tools that find and exploit flaws can also propose code fixes.
Misanthropic: On Mythos, Bad Human Behaviors and Systems Vulnerabilities— Anthropic reports that its Mythos model has detected thousands of high-severity cyber vulnerabilities, including ones found by chaining multiple obscure software weaknesses, and that these hacking skills are emergent rather than a designed capability. Mythos completed a corporate network attack simulation estimated to take an expert over 10 hours, which no other frontier model had solved.
Emerging Details of Chinese Hack Leave U.S. Officials Increasingly Concerned— U.S. intelligence and national security officials have told major telecommunications companies to find a permanent way to expel Chinese hackers from the deepest parts of the nation's communications networks. Critical parts of the system date to the late 1970s or early 1980s and are too old to upgrade with modern cybersecurity protections.
AI Summary.China is expanding export controls to cover additional types of drones and their parts and technologies, components of dredgers such as mud pumps and cutterheads, and some tunnel boring machines. China's Commerce Ministry classified the items as having an obvious military-civil dual-use nature, and China accounts for roughly 70% of the global digger market.
Josh XiaoBloomberg
Date Posted:
China is expanding export controls to cover more drones and machinery, such as components of dredgers and tunnel boring machines, which have “an obvious military-civil dual-use nature.”
Is China extending export controls to more drones and heavy machinery?
Core argument: China’s Ministry of Commerce will impose export controls from November 18 on additional drone types, parts and technologies, dredger components including mud pumps and cutterheads, and some tunnel boring machines not previously covered.
China is imposing export controls on more drones and machinery. [The expanded] curbs include new types of drones — plus parts and technologies — as well as components of dredgers including mud pumps and cutterheads. Also added to the list are some types of tunnel boring machines, which hadn’t previously been subject to export controls. Boring machines can be used to construct underground tunnels for hardened military infrastructure. China accounts for some 70% of the global market in diggers, and is home to leading producers like China Railway Engineering Equipment Group, whose shield products are used in 36 countries including Denmark and France. Its top competitors include Germany’s Herrenknecht AG. Dredgers are useful for building naval facilities and China is also a major producer in that industry. Rivals in the market include Netherlands-based Royal IHC NA.
Takeaways by Macro Roundup® AI
China’s Ministry of Commerce will impose export controls from November 18 on additional drone types, parts and technologies, dredger components including mud pumps and cutterheads, and some tunnel boring machines not previously covered.
China’s Commerce Ministry classified the restricted items as “having an obvious military-civil dual-use nature,” and said it notified in advance countries with which Beijing maintains an export control dialogue.
China accounts for some 70% of the global digger market and is home to China Railway Engineering Equipment Group, whose shield products are used in 36 countries, with competitors including Germany’s Herrenknecht AG.
Related Articles:
EU to Remove Sanctions on Chinese Firm to Save ASML Supplier— The European Union plans to lift sanctions on a Chinese entity to secure the removal of Chinese countersanctions on Sindlhauser, a small German precision-manufacturing and coating firm in ASML's supply chain that depends on Chinese rare earths and critical minerals and is at risk of closing if the measures remain.
China Found World’s Pain Point on Trade – and Will Use It Again— China's export permitting system for rare earths and other critical minerals is detailed enough that Beijing is developing a granular understanding of where every kilogram it produces ends up and why. Bottlenecks emerged as China slowed approvals for magnets containing even minuscule amounts of seven rare earths, alongside limits on sales of the raw elements.
How to Fight an Economic War— China earned about $3.4bn from exporting rare-earth elements and magnets in a year, while the U.S. Geological Survey estimates a 30% disruption to U.S. supply of the rare-earth element neodymium alone would cut U.S. GDP by 2.2%, over $600bn. This asymmetry gives Chinese export controls their leverage.
