Good evening. Semiconductor chips, AI and 5G get all the attention these days, but the lithium ion battery is just as crucial to technologies of the future. And it turns out the 50-year-old technology, which powers everything from cell phones to electric vehicles, is reliant on cobalt — a mineral China largely controls. Our cover story this week explores the ramifications of that as well as U.S. efforts to get around it. Elsewhere, we’re looking at the economic data on China’s post-Covid recovery and how its regional neighbors are navigating its growing clout. If you’re not already a paid subscriber to The Wire, please sign up here.
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The Cobalt Empire
Cobalt is the dirty secret of electric vehicles. A crucial ingredient for EV batteries, the mineral is sourced almost entirely in the Democratic Republic of Congo, and it comes with baggage: human rights abuses, a high price tag compared to other metals, and a supply chain that is dominated by China. As Tim De Chant reports for The Wire, China’s control of cobalt raises fears that the country enjoys an insurmountable edge in developing electric vehicles. But what if the U.S. can innovate cobalt — and China — out of the equation?
Books: Neighborhood Watch
This decade will define the alliances and strategies that Asian nations form to deal with — or profit from — China’s growing clout, and having a good understanding of those regional relationships is essential for anyone outside looking to understand contemporary Asia, or do business in it. This month, Alec Ash rounds up the best new books on China’s relationships with its neighbors, highlighting the challenge of negotiating these relations in an era of rising mistrust.
The Big Picture: Evergrande’s Ever-Growing Debt
Evergrande has been in the news for all the wrong reasons with shareholders of the Chinese real estate giant seemingly scared about its ability to repay billions in impending debts. Warning signs about the company’s debt problem came as early as July after Evergrande repurchased hundreds of millions in shares and came up against liquidity limits in Hong Kong. Just this past week, Evergrande issued another 490 million shares, tanking its stock when it raised just a little over half of its $1.09 billion goal. This week, The Wire‘s infographics delve into the ownership, assets, and debt of China’s second largest real estate developer.
A Q&A With Nicholas Lardy
Nicholas Lardy, an expert on China’s economy at Peterson Institute for International Economics, always has the data. In this week’s interview with The Wire’s David Barboza, he talks about how China’s recovery from Covid-19 has resulted in an even more formidable economic power.
Illustration by Kate Copeland
The Logic of Sino-Western Detente
There is good reason to believe that China is experiencing a classic “V-shaped” recovery, putting it on track to register 8 percent growth in 2021. Moreover, China is poised to contribute an additional $1.5 trillion to global GDP just next year, and Chinese consumers will drive close to 40 percent of that. The scale of the economic opportunities on offer, Chatham House Chair Jim O’Neil argues in this op-ed, cannot be overstated. Which is why, he says, those advocating more confrontation with China must weigh the probability that China’s growth could continue while opportunities for the West shrink.
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