Alicia Garcia Herrero, Natixis Asia Pacific Chief Economist, Bruegel Senior Fellow

Abstract

Dual circulation may sound like a buzzword without much relevance, but it is not. It actually enshrines China’s long-standing ambition to become self-sufficient. Such an ambition was made known to the world in 2015 after the launch of China’s industrial policy masterplan, Made in China 2025, even though the world at the time was still in full engagement with China. Since Trump’s push for a trade and technology war against China, the Chinese leadership has been relying on a dual circulation strategy to support China’s growth. This basically…


Alicia Garcia Herrero, Natixis Asia Pacific Chief Economist, Bruegel Senior Fellow

Nearly all global decarbonisation scenarios agree: the future is electric. There are two basic reasons why electrification is the primary and most cost-effective pathway to decarbonisation. First, after decades of subsidy-driven technological innovation, solar and wind have now become the cheapest electricity generation sources in most of the world. Second, rapid technological advances enabling cheaper batteries, heat pumps, electric motors and similar technologies are now allowing electricity to enter sectors traditionally dominated by fossil fuels such as transport, heating and industry.

As global energy systems become electrified, the key…


Alicia Garcia Herrero, Natixis Asia Pacific Chief Economist, Bruegel Senior Fellow

There is a silver lining over the concerns around Asia’s sluggish vaccine rollout. Even though at a low level compared with the rest of the world, the vaccination drive has sped up recently.

Almost 30% of the population in Asia have received at least one dose thus far, which is up significantly from less than 7% at the end of April.

That said, participation varies massively across countries. Southeast Asian economies have lagged substantially behind their Northeast Asian counterparts because of supply constraints.

But there is good news: The…


Alicia Garcia Herrero, Natixis Asia Pacific Chief Economist, Bruegel Senior Fellow

The COVID pandemic has certainly not slowed down Europe’s quest to save the planet from global warming. After further tightening its net emission target by 2030 from 40% to at least 55% compared to 1990 levels to achieve climate neutrality target by 2050, on July 14 the European Commission released its long-awaited Fit for 55 policy. It contains a dozen proposals directed at upgrading existing climate, energy and transport legislation aimed at reaching such targets.

Among the different proposals, a new Carbon Border Adjustment Mechanism, or CBAM, is probably…


Alicia Garcia Herrero, Natixis Asia Pacific Chief Economist, Bruegel Senior Fellow

The future of the dollar as reserve currency has long been discussed, but never as much as recently. There are a number of domestic and external reasons for this. Among the former, the most obvious risk is debt sustainability, especially after the huge COVID-related fiscal and monetary stimuli. Given the large share of U.S. debt in the hands of foreign investors, the risk of a sell-off has direct implications on the dollar reserve currency status.

China’s Economic Rise Strengthens the Renminbi (Yuan)

Past experience shows that a sudden loss…


Alicia Garcia Herrero, Natixis Asia Pacific Chief Economist, Bruegel Senior Fellow

From artificial intelligence (AI) to electric vehicles, the world is heading toward a new era, and semiconductors are central to such development, which is as important as oil was in the previous industrial revolution.

As if this were not enough, chips have taken a critical role in the narrative on supply-chain security in the intensified strategic competition between the US and China. …


Alicia Garcia Herrero, Natixis Asia Pacific Chief Economist, Bruegel Senior Fellow

The extent to which the Asia-Pacific decarbonises will make or break the global fight against climate change. As home to 60% of the world’s population, and as the main engine of global economic growth, the Asia-Pacific has been since the early 2000s the main carbon dioxide emitting region, producing about half of the world’s total emissions.

Source: Bruegel based on BP Statistical Review of World Energy (2021). Note: data refers to carbon dioxide emissions resulting from fossil-fuel combustion, as listed in the IPCC Guidelines for National Greenhouse Gas Inventories


Alicia Garcia Herrero, Natixis Asia Pacific Chief Economist, Bruegel Senior Fellow

After trumpeting victory over an agreement reached between Europe and China for a Comprehensive Agreement on Investment (CAI) only a few months ago, Chinese leaders are probably stunned at the much harsher narrative now coming from European institutions. Beyond the Xinjiang-related sanctions, which could have been read as political and mainly symbolic, the European Commission has just announced two types of defensive measures, first against foreign subsidies hampering the good functioning of the European single market and, second, actions to ensure the resilience of the European supply chain. …


Alicia Garcia Herrero, Natixis Asia Pacific Chief Economist, Bruegel Senior Fellow

Of the 40 world leaders attending today’s virtual White House Summit on Climate Change, the key figure is President Xi Jinping of China. As the world’s largest greenhouse-gas emitter, China will make or break the global quest to achieve climate neutrality by the middle of the century — which will be the only way to limit the global average temperature increase to 1.5 degrees Celsius.

Consequently, President Xi Jinping’s announcement in September 2020 at the United Nations General Assembly of China’s new objective to peak carbon dioxide emissions before…


Alicia Garcia Herrero, Natixis Asia Pacific Chief Economist, Bruegel Senior Fellow

The global economy tumbled into economic crisis over the past year because of the outbreak of Covid-19. As the first country to report the outbreak, China was also the first to feel the trauma, experiencing sharp economic recession in the first half of 2020.

Last year, China’s announced outbound mergers and acquisitions ended lower by nearly one-third in number and more than half in value than in 2019. …

Alicia Garcia Herrero艾西亞

Senior Fellow at Bruegel

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