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Travelers Discover Vacationing In a Ghost Town Can Be Grim
KAILYN RHONE A very quiet escape
The Wall Street Journal 17 Jan 2025 Abandoned locales pitch longer stays, but visitors say that’s too spooky
For a vacation to Italy, Ramy Awad wanted an adventure. So he picked Fossa, a town deep in the middle of the country that was abandoned after a 2009 earthquake. But things quickly went sideways for the 35year-old and two friends he brought with him.
It took the group almost three days to find the town, with GPS leading them in circles. When they finally arrived late at night and got ready to settle in, they heard strange voices. They didn’t know if they were real or imagined, but nobody wanted to leave the tent to investigate. In the morning, they woke up to the sound of a drone that followed them for the next three days.
At some point, Awad wondered if he should have settled for the Leaning Tower of Pisa. “My least favorite part was getting chased by drones,” said Awad, a content creator based in New York City. “That’s some
thing I will never forget.”
Americans have been visiting ghost towns for years, but usually for an afternoon. Lately travelers have been planning extended stays in abandoned towns, seeking adventure or an opportunity to disconnect. Some are discovering that ghost towns in heavier doses can be grim.
There are more than 3,800 deserted towns across the U.S., according to Geotab, a company that provides data analytics, including GPS location. While most ghost towns remain vacant, some have restored their remaining hotels, seeking to transform them into more luxurious or familyfriendly destinations.
“We’ve got people that are staying for several days now, instead of just people wandering through, taking pictures and leaving,” said Scott Marrs, general manager of a hotel in ghost town Shaniko, Ore., that reopened in 2023 after being abandoned for 16 years.
Price is a selling point. The cost of a ghost-a-away can be anywhere from $50 to over $300 per night, depending on location. Some travelers say they quickly realized there wasn’t enough to do to fill the time or that the paranormal activity that often is a draw was a little too real.
Cimcie Nichols and her best friend were looking for a fun place to go for the Fourth of July weekend. While listening to a podcast, they heard about renting a cabin in a ghost town called Gunslinger Gulch for around $250 a night. Intrigued, they decided to check it out. “I have not done ghost tourism before but I do love spooky movies,” Nichols, 44, said of trips to locations associated with death or the supernatural. “So we thought, ‘Why don’t we spend the night?’”
When they arrived at the town on the outskirts of Anaconda, Montana, they joined a ghost hunt using a “ghost box”—a device designed to let spirits communicate through FM radio frequencies. The two were having a great time until that night. While sleeping in their 1880s-style cabins, Nichols said she felt something trying to pull her out of bed, but she couldn’t move. When she discovered the next day her friend didn’t have a similar experience, Nichols was ready to go. They stayed another night, but only because they had already paid.
“It’s like immersive theater but there’s no safe word,” said Nichols, owner of a beverage business called Hatchet Granny, from Los Angeles.
Nichols said she probably wouldn’t return because of her experience. “Once you’re in the middle of it, and it’s the real world…you might chicken out,” she said.
The owner of Gunslinger Gulch, Karen Broussard, who bought the 52-acre property with her three children, said they have traced the town’s history back to 1864, when it was a stagecoach stop for miners and prison transports. “Paranormal activity is quite normal around here,” said Broussard, who often hosts overnight investigations for guests at the ranch.
Alex Sarha and his wife, Nicole, had passed through Shaniko, the ghost town in Oregon once known as the wool capital of the world. After the town’s hotel reopened in 2023, they returned for a weekend.
Since then, they have stayed several times. During one trip, they decided to test the paranormal rumors using a ghost-hunting app. At first, Nicole was skeptical, refusing to believe in anything unusual. But when their car keys went missing overnight and later turned up hidden in Alex’s camera case, she became more open to the possibility that something strange could be happening.
“It has the creep factor, but it’s the cool creep factor,” said Alex, 58, who works for a trucking company.
Their most recent visit in October was quieter. There were no paranormal events but dining options were limited. The hotel’s cafe—the only food place in town—is open from 10 a.m. to 5 p.m., so they had to pack their own dinners and snacks. That’s why they haven’t stayed for longer than a weekend.
Still, the couple said they enjoyed the lack of distractions and the opportunity to disconnect as the hotel has no TVs and slow Wi-Fi reception.
Awad, who went to the abandoned Italian town, said he would return in a heartbeat. His friends, however, weren’t so enthusiastic. They couldn’t shake the strange voices, one of them had a nasty encounter with sleep paralysis, and none of them liked being watched by a mysterious drone 24/7. “I would prefer for [spooky] things to happen,” said Awad. “It makes the adventure more fun, more exciting or memorable.”
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Avatars help tennis reach new audiences online
Snape Melbourne
The Guardian 15 Jan 2025
The proposition is compelling: nearlive, commentated coverage of the Australian Open, free to anyone across the world on YouTube, enhanced by a stream of comments from a likeminded online community.
Put like that, it is no surprise a project called AO Animated has taken off at this year’s grand slam tournament at Melbourne Park. The catch? The players, ball and court are all computer-generated.
That has not dissuaded hundreds of thousands of viewers from tuning in to this vision of the Australian Open, featuring video game-like avatars but using realworld data in an emerging category of sports broadcasting aimed at bringing tennis to new fans.
The technology made its debut at the grand slam last year and audiences peaked for the rendering of the men’s final, which attracted almost 800,000 views on YouTube. Interest appears to be increasing this year and matches are attracting roughly four times as many viewers as in 2024.
The director of innovation at Tennis Australia, Machar Reid, said although the technology was far from polished, it was developing quickly. “Limb tracking is complex. You’ve got 12 cameras trying to process the silhouette of the human in real time, and stitch that together across 29 points in the skeleton,” he said. “It’s not as seamless as it could be – we don’t have fingers – but in time you can begin to imagine a world where that comes.”
The data from sensors on the court is fed into a system that creates the graphic reproduction with a two-minute delay. The same commentary and arena noises that would otherwise be heard on TV – as well as interstitial vision direct from the broadcast – are synced with the virtual representation of the match.
“It’s that community that engages with animated or virtual or gaming products, that’s our intuition, right?” Reid said of the target market. “There’s an immediate kind of blending of those two worlds and that’s instinctively where we’re positioning it for the moment.”
Similar projects have been tried in other sports, including an NFL broadcast with an animated Simpsons theme in December. Reid said the motivations were around attracting a new category of fans to sport, supported by a tech-engaged online community.
He hopes broadcasters will one day adopt the technology alongside the live action. The project has been stewarded by Reid and driven by Mark Riedy, an engineer who has worked on video game crossovers in his time at Tennis Australia.
It is part of a push into technology by the sport’s top body in Australia, which includes media and health startup partnerships and in some cases investment.
“We always try and innovate the fan experience,” Reid said. “Here’s a way through the world of broadcast that we can try and personalise the content in different ways, and present a different offering that ultimately we’d love to see the broadcasters pick up.”
Tennis Australia has established a A$30m (£15.2m) venture-capital fund called AO Ventures that has drawn investment from the Wollemi Capital Group of the Tesla chair, Robyn Denholm, and the Gnanalingam family, who own Queens Park Rangers.
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As a UK resident employed in Hong Kong with income below the National Insurance (NI) threshold for the 2023-24 tax year, you generally wouldn’t need to pay UK National Insurance (NI) contributions on your income, provided that your earnings don’t exceed the Lower Earnings Limit (LEL) for NI contributions.
However, there are a few things to consider:
Voluntary Contributions: You can choose to make voluntary NI contributions if you want to protect your State Pension or qualify for certain benefits. This is particularly relevant if you’re earning below the NI threshold and you want to ensure that you continue to build up your National Insurance record. These voluntary contributions are typically paid under Class 2 or Class 3, depending on your situation.
Class 2 contributions are available for self-employed individuals and may be available to you if you meet specific criteria.
Even if your income doesn’t require compulsory contributions, making voluntary Class 3 contributions can help you maintain your entitlement to a full State Pension.
State Pension Impact: If you have low or no NI contributions for an extended period, it could impact your entitlement to the full State Pension in the future. The full State Pension typically requires 35 qualifying years of NI contributions. If you don’t meet this threshold, you may receive a reduced State Pension. Voluntary contributions can help fill any gaps in your NI record, ensuring you maintain a full entitlement.
International Considerations: Since you’re working in Hong Kong, it’s important to check if you’re covered by a social security agreement between the UK and Hong Kong (which typically protects your NI contributions if you were to work abroad). If such an agreement exists, you may be able to continue contributing to the UK system or have your contributions from Hong Kong counted towards your UK State Pension, depending on the terms of the agreement.
In summary, if you are below the NI threshold and are concerned about your State Pension, it could be worth paying voluntary contributions. If you’re unsure, it’s always a good idea to contact HMRC directly or consult with a tax advisor to ensure you're making the right decision for your future pension and benefits.
Yes, you can pay Class 3 voluntary National Insurance contributions at any time, but there are a few important things to keep in mind:
Deadline for Paying: While you can make voluntary contributions at any time, you can usually only pay for up to 6 years in arrears. For example, for the 2023-24 tax year, you could pay contributions for previous years, but you'd typically have until April 5, 2029, to do so. After that, you'd lose the ability to make payments for that tax year.
Payment Method: You can pay Class 3 contributions through various methods, including direct debit, bank transfer, or online payment. It's a good idea to contact HMRC for the most convenient and updated payment options.
Impact on State Pension: The sooner you make contributions, the sooner they will count toward your State Pension and other benefits. If you're concerned about any gaps in your National Insurance record, it’s advisable to make the payments sooner rather than later to avoid missing out on building up a full record.
If you want to ensure you're making the right payments, it's a good idea to check with HMRC to verify your eligibility and confirm the specific steps for making a payment.
The main difference between paying Class 3 voluntary National Insurance (NI) contributions now versus waiting until 2028 is the impact on your State Pension and potentially other benefits. Here's a breakdown of the key points:
Paying Now (2023-2024):
Paying Later (2028):
If you're concerned about having a full State Pension and maintaining your benefits, paying now would be a better strategy, as it locks in the current contribution rate, helps build up your qualifying years, and avoids any potential price increases in future years. Waiting until 2028 might cost you more and could limit the time you have to ensure a full entitlement.
UK property sellers ‘make lowest return in a decade
Butler
The Guardian 13 Jan 2025
Sellers in England and Wales made less than £100,000 profit on the sale of their home last year, or 42% – the lowest return in a decade – according to the estate agent Hamptons.
It was the second annual fall in a row in terms of cash profit after the market reached a peak in 2022 when the average gain hit almost £113,000 compared with £91,820 last year. The average cash return in London fell by the most – dropping below £200,000 for the first time since at least 2015.
Londoners still made the most on their sales at £172,350 on average, according to Hamptons, followed by sellers in the south-east and east of England, while sellers in the northeast gained the least at £38,220.
Aneisha Beveridge, the head of research at Hamptons, said profits on the sale of properties typically funded a step up the ladder but “smaller and slower equity gains over recent years, particularly for flat owners, has made this more challenging”.
Beveridge added: “Sellers in 2024 generally experienced less price growth than those who sold during the pandemic. Property prices rose 43% across the country between 2015 and 2024, compared with 64% between 2013 and 2022, just before mortgage rates spiked. On top of this, households have had to grapple with higher mortgage and transaction costs, such as stamp duty, making it more costly to move.”
Once all those factors were taken into account, 9% of sellers in England and Wales sold for less than they paid, rising to an average 14% in London – putting the capital on a par with the north-east as the most likely location to sell for a loss. In 2016, just 2% of London sellers sold at a loss, compared with 32% in the north-east.
Merthyr Tydfil in southern Wales replaced Barking and Dagenham as the local authority where sellers made the biggest percentage gains in 2024 at 68%. It was followed by Shepway in Kent and Trafford, Greater Manchester, with just two London boroughs appearing in the top 10 list in 2024, compared with all 10 being in the capital in both 2019 and 2020.
High transaction costs are causing households to move less often, with only 34% of sellers having owned the property for less than five years.
House sellers received more than double the gains in percentage terms than those who sold a flat last year. In 2024 the average house sold for 47% (or £102,500) more than its purchase price, having been owned for nine years. The average flat sold for 23% (or £48,050) more, having been bought 8.8 years ago.
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UK may have no choice but to raise tax
Guardian 13 Jan 2025
It seems unlikely that Rachel Reeves would have had “cut back public spending plans” on her list of new year resolutions – but by the end of a rocky week, it is clear she has the red pen ready if bond markets fail to settle down.
At one level, this makes perfect logical sense: the chancellor has promised not to raise taxes in the near future, after a whopping £40bn increase announced in October; and her fiscal rules are, as her chief secretary, Darren Jones, told MPs, “non- negotiable”.
Last week’s market moves, which drove 30-year gilt yields to their highest level since 1998, above 5%, probably had more to do with the chaos to come in the US than Reeves’s budget plans.
But whatever the cause, if sustained, the jump in yields will push up the interest bill on the government’s vast debt pile. And that would jeopardise Reeves’s hopes of meeting her fiscal rules – specifically, the “current budget balance” one – by the end of the five-year forecast period.
There is no doubt that the UK’s fiscal position is unenviable. Even before the latest market panic, the Office for Budget Responsibility was expecting the Treasury to be spending more than £122bn on debt interest payments a year by 2029-30.
Take all this into account and it may seem a reasonable response to impose a tougher spending squeeze in the later years of the upcoming spending review than Reeves sketched out in the autumn. It is certainly the action government officials have been pointing to, alongside dark hints about the benefits bill and the need for public sector pay restraint.
Yet as the Resolution Foundation pointed out on Friday, kneejerk spending cuts are not just digits on a spreadsheet but have material implications – see last year’s decision to scrap the winter fuel allowance for the vast majority of pensioners, which was also made with fretful markets in mind.
The thinktank warned Reeves against “taking permanent and concrete policy decisions with real-life impacts on households, in reaction to bond market movements that may turn out to be temporary”, urging her to “keep calm and carry on”.
Doing nothing at all could rile the gods of the bond markets – risky for any chancellor, as Kwasi Kwarteng can attest.
But perhaps there is a sensible halfway house that involves promising action at the autumn budget, should borrowing costs fail to come down, rather than fine-tuning on the basis of a market tantrum.
If there must be an adjustment, it has to be worth asking whether it should happen through taxation rather than spending.
As the Institute for Fiscal Studies never tires of pointing out – to the Treasury’s irritation – the projections for the final years of the spending review period already look eye-wateringly tight, with growth of only 1.3% a year pencilled in after 2025-26.
Reeves is right to focus on the need to drive out government waste and inefficiency and demand higher productivity from public services. There’s nothing wrong with promising what she calls an “iron grip” on the public purse.
Voters have the right to demand their taxes are well spent.
But also: look around you. Schools, hospitals, parks, libraries, potholed roads, crappy bus links – so many aspects of the public realm are broken. Reeves knows about this: in her budget speech, as she set aside extra funding for schools, she talked about being taught in mobile classrooms in the 1990s, after long years of underinvestment by the Tories – an experience I remember, too.
She has changed the way the debt rule is calculated, to make some space for much-needed capital spending, including for crumbling classrooms. But new public infrastructure is no use without the day-to-day spending needed to staff and run it.
Stronger-than-expected growth may yet come through and save the day. But, ultimately, Labour may have to acknowledge that (even more) tax rises are needed. It would be politically painful, but so are all the other options.
If Reeves ends up unable to spend enough to improve the UK’s broken public services in a way that registers with the public as the “change” they voted for, there is a risk that Labour ultimately loses the next election, boxed in by the promises it made to win the last one.
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Fears of radicalisation of older people with no Meta factchecked
Ben Quinn
The Guardian 13 Jan 2025
Experts fear the decision by Meta to drop professional factcheckers from Facebook will exacerbate so-called boomer radicalisation in the UK.
Even before what Keir Starmer described as “far-right riots” in England last summer, alarm bells were ringing amid fears that older people were even more susceptible to misinformation and radicalisation than younger “digital natives”.
Suspects were generally older than those charged in the 2011 unrest, according to a Guardian analysis of hundreds of defendants that found that as much as 35% were aged in their 40s and above. But after Mark Zuckerberg announced last week that Meta would replace factcheckers with a crowdsourced system and recommend more political content, there is new concern about the potential radicalisation risks on Facebook, the social media platform of choice for older people.
“It’s clearly a retrograde step that comes with all sorts of risks,” said Dr Sara Wilford of De Montfort University, a lead researcher on a pioneering European-wide project called Smidge (Social Media Narratives: Addressing Extremism in Middle Age).
“X might be the model for the crowd-sourced ‘community notes’ approach that Meta seems to be embracing, instead of professional moderators, but it just won’t work in the same way with Facebook,” she said. “I’m concerned that, for middleaged Facebook users who risk being exposed to extremist content, it will be even harder to discern the truth.”
The anti-extremism campaign group Hope Not Hate said it feared that Zuckerberg’s announcement was a prelude to far-right figures and groups such as Tommy Robinson and Britain First being allowed back on to Facebook.
In terms of perpetrators of crime, young men still account for the majority of culprits. Yet before the riots, discussion about “boomer radicalisation” had already been sparked by cases such as that of Darren Osborne, who was 48 when he was jailed in 2018 for his lethal terror attack at a mosque in Finsbury Park, north London, after – in the words of the judge – being “rapidly radicalised” online
With regard to the riots, Hope Not Hate says Facebook was used in a particular way by the far right. “Telegram was for whipping up the most extreme hate or sometimes plotting and planning, while X was used to disseminate that message,” said Joe Mulhall, the group’s director of research. “Facebook was then often where you would see a group creating hyper-local targeted content … We’ve also seen over the last three to four years that anti-migrant protest Facebook groups were really fundamental in organising the targeting of asylum centres.”
Wilford said her research suggested some older Facebook users were vulnerable for reasons including a reluctance to factcheck.
Britain’s seismic political events of recent years have transformed the Facebook experience for many. Brexit, Trump’s 2016 win and the Covid pandemic acted as a catalyst for engagement with more extreme forms of rightwing politics via Facebook, according to Dr Natalie-Anne Hall, a lecturer at Cardiff university and author of Brexit, Facebook, and Transnational Right-Wing Populism.
“Facebook is a key site for algorithmically driven encounters with these harmful ideas within people’s everyday practices of social media use,” she said. “Meta should be doing more, not less, to combat this harm.”
When asked to comment, Meta pointed to its recent blogpost that said its “complex systems” to manage content had “gone too far”.
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Cost of housing makes UK’s poor worse off than in western Europe
Sarah Butler
The Guardian 13 Jan 2025
Low-to-middle income families in Britain are much poorer than their counterparts in western Europe because of sky-high housing costs, according to analysis by the Resolution Foundation.
The thinktank said that while prices in the UK are 8% higher than the average in the 38 member countries of the Organisation for Economic Co-operation and Development (OECD), less well off families are more affected by the cost of housing, which is 44% higher in the UK than the OECD average.
Higher housing costs more than offset the benefit in the UK of food, another major area of spending for those on lower incomes, being 12% cheaper than the average in those developed countries.
When lower-income families’ tendency to spend more on necessities and less on luxuries is factored in, German families are 21% or £2,300 a year better off than their UK equivalents and the gap with Dutch families is even wider at 39%.
Simon Pittaway, a senior economist at the Resolution Foundation, said: “Britain’s housing costs crisis is a major driver of child poverty, and contributes to poor families being £2,300 worse off than their German counterparts. The crisis needs to be tackled urgently – from building more affordable homes to providing better support for low-income renters.”
Labour has promised to tackle the housing crisis with a pledge to build 1.5m homes over the parliament, promising to liberalise the planning regime and make it easier to buy land for building. However, experts say the plan will be hard to realise.
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Almost all violent or sexual offences unsolved in crime hotspots last year
Josh Halliday Michael Goodier
The Guardian 13 Jan 2025
Victims are being “let down time and time again” by police, a minister has said, as almost every violent or sexual offence went unsolved in hundreds of Britain’s crime hotspots last year.
Nearly 1.9m violent or sexual crimes in England and Wales were closed without a suspect being caught or charged in the year to June 2024 – about 89% of all offences given an outcome, official figures show.
Less than one in 10 cases were resolved in 611 neighbourhoods with the highest levels of these offences, according to a Guardian analysis, as growing numbers of victims withdraw from investigations after losing faith in securing justice.
Jess Phillips, the minister for safeguarding and violence against women and girls, said: “It is completely unacceptable that fewer and fewer violent and sexual crimes are being solved, with more victims being let down time and time again.
“The severity of these numbers prove why violence against women and girls is a national emergency and that is why we have set out our unprecedented mission to halve it in a decade.”
Only 11% of the violent and sexual offence cases in England and Wales were closed after a suspect was caught or charged in the year to June 2024, about half the proportion seven years earlier.
There were stark differences in the proportion of violent and sexual crimes going unsolved across the country, with big urban forces faring far worse than those parts of England and Wales with fewer offences.
Only 6.9% of violent or sexual crimes were solved in the West Midlands in the year ending in June, and 7% were solved in the Metropolitan police area, according to Home Office figures. That compares with 19.2% in Lancashire and 18% in Cumbria.
About 10% of such offences led to a charge or out-of-court outcome in Greater Manchester and Merseyside in the year to June, compared with about 17% in Cheshire, Durham and Humberside.
Violent and sexual crimes include offences such as grievous bodily harm, sexual assault, stalking, harassment and rape.
The leader of Britain’s police chiefs, Gavin Stephens, has conceded that victims face a “disparity” of policing across the country and backed calls for a “major shake-up” of how the country’s 43 forces operate.
Yvette Cooper, the home secretary, has promised to end a “postcode lottery” of policing, and in November announced a new body that would coordinate functions such as forensics, IT and the use of drones and helicopters. More details are expected within weeks when a white paper is published.
Helen Newlove, the victims’ commissioner for England and Wales, said in response to the Guardian investigation that people were now questioning whether to report even the most serious crimes as so many investigations end without justice.
Lady Newlove, whose husband Garry was killed by a gang of teenagers in 2007, said: “When reporting a crime, victims place their trust in the justice system to seek truth and deliver justice, knowing that their reports are taken seriously no matter who they are or where they live. Yet, too often, investigations are closed with no resolution, leaving victims feeling unheard and unsupported.
“Victim confidence in policing remains frail, with many questioning whether reporting a crime will lead to justice. It is up to police leaders to turn this around.”
Newlove has warned that victims are increasingly withdrawing from investigations as it takes years to bring perpetrators to court. As many as 60% of all rape investigations are closed before prosecution because the alleged victim no longer supports police action, up from 43% nine years earlier, according to official data.
Separate CPS figures show the number of alleged rape victims pulling out of prosecutions before trial has more than doubled in five years. The average rape investigation takes 423 days – compared with 55 days for violence or 28 days for theft.
The proportion of violent or sexual offence crimes solved rose slightly last year, to 11%, compared with 10% a year earlier. But solve rates remain lower than before the Covid-19 pandemic: 16% were solved in 2018 and 13% the following year.
The National Police Chiefs’ Council (NPCC) said it was vitally important that victims of crime felt able to contact police. It said there had been a cultural shift in the way police forces approached sexual offence investigations in the last two and a half years and that there had been a 38% increase in rape suspects being charged in the year to December 2023, compared with the previous year.
The NPCC added: “However, we have much more to do. Through listening to victims, we know that disadvantage, discrimination and contextual incompetence are still being felt. We are determined to make lasting positive change to better protect victims and hold more perpetrators to justice.”
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High cost of groceries
13 Jan 2025
One in six workers are skipping meals to make ends meet – TUC survey
As many as one in six workers in Britain are skipping meals regularly to make ends meet as households remain under pressure from the higher cost of groceries, energy and other essentials.
Highlighting the impact of the cost of living crisis on working households, figures from the Trades Union Congress (TUC) showed 17% of full- or part-time workers had skipped a meal to reduce their spending in the last three months.
According to a survey of more than 2,500 working adults by YouGov in the week before Christmas, carried out on behalf of the trade unions’ umbrella group, as many as one in 10 said they had skipped a meal every day or most days.
The Post Office said separately that cash withdrawals at its branches topped £1bn in December, the first time on record that this has happened in a single month, as people relied on cash to manage budgets. About £979m of personal cash withdrawals were made, and £35m of business cash withdrawals.
“Our figures demonstrate that millions of people clearly still rely on cash to manage their budget on a day-to-day basis,” said Ross Borkett, a banking director at the Post Office.
“We saw significant amounts of cash withdrawn every day in the run-up to Christmas Day, highlighting just how vital it is for people to be able to withdraw the amount of cash that they need, to the penny if they require, at our branches.”
The TUC said its findings showed the legacy of “14 years of Tory stagnation” and highlighted the importance of Labour’s plans to strengthen workers’ rights as part of the most radical shake-up of employment law in a generation.
The intervention comes as Keir Starmer’s government faces mounting pressure to find ways to boost the economy after a week of turbulence in the financial markets sent the UK’s borrowing costs to the highest levels in decades.
The chancellor, Rachel Reeves, has asked her cabinet colleagues to draft plans for improving growth amid concerns that the rise in borrowing costs, alongside a weak outlook for the economy and stubborn inflation, could force her to break her own fiscal rules.
Reeves is understood to have held meetings with business leaders last week to underscore her priority to “work in partnership” with companies. A senior Treasury source said companies had also been asked to submit their growth policy ideas, before the chancellor gives a major speech this month.
Reeves is also believed to be exploring cuts to public spending among options to balance the books, amid warnings that the sharp rise in borrowing costs could sweep away all of a £10bn buffer kept in reserve at the autumn budget.
Union leaders are fearful that the government could face pressure from industry groups to water down the package of workers’ rights reforms as a “cost free” option for helping businesses to navigate a perilous economic outlook.
Business leaders have stepped up their lobbying on the issue in recent weeks, complaining they have been treated like a “cash cow” since Labour came to power.
Companies have warned that jobs and growth will be hit by the chancellor’s £25bn increase in employer national insurance contributions and rise in the minimum wage announced at the budget.
Paul Nowak, the TUC general secretary, has warned Labour to “stick to its guns” on the reforms to workers’ rights, which include banning zero-hours contracts and introducing protections on day one of a job.
Union leaders believe raising employment rights would make Britain’s economy more productive by handing more job security to workers, while also putting more money in their pockets to spend on goods and services.
“After 14 years of Tory chaos and stagnation, we urgently need to boost living standards and to get more money into people’s pockets. This is vital for workers and for local economies too,” Nowak said. “We cannot continue with the same broken status quo.”
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Guardian 13 Jan 2025
The spectre of last week’s bond market sell-off hangs over the government’s artificial intelligence strategy. Investors and voters want to know where the growth is in the UK economy. Keir Starmer and Rachel Reeves believe AI is a significant part of the answer.
The UK has real strengths in AI, which can be loosely defined as computer systems performing tasks that typically require human input (ranging from writing emails and summarising documents to assessing medical symptoms).
Those strengths include highquality research and engineering talent coming from UK universities and the fact that the country hosts a number of leading AI firms, such as UK-founded Google DeepMind.
There are negatives, of which the government is well aware (hence the strategy). Building data centres – the central nervous system of AI systems – is laboriously difficult in the UK. Access to, and the cost of the energy needed for data centres is also a problem. AI companies and talent can also move elsewhere if they get frustrated, and getting regulation right – from safety to copyright – is a difficult balance.
“AI is not a panacea,” says Theo Bertram, the director of the Social Market Foundation thinktank. “But if you are placing bets on a chance for economic growth, this would be the best place to put it.”
Why is the government putting so much hope in the plan drawn up by the tech investor Matthew Clifford? Part of the answer lies in productivity: how much output a worker can produce in an hour. The IMF has predicted that AI will increase UK productivity by up to 1.5% a year.
Low productivity has bedevilled the UK for years, partly because of low investment in technology. AI, it is hoped, will help British workers produce more, which should raise wages and allow spare capital to be invested elsewhere. This is even more important if, with an ageing population, the UK must cope with fewer working-age adults.
“If the working-age population shrinks you need productivity to increase dramatically to see any sort of economic growth,” says James Knightley, chief international economist at banking group ING.
This logic also applies to the public sector, with the plan calling on state bodies to pilot AI services.
Underneath all of this is the implication that efficiency means redundancies. The Tony Blair Institute (TBI) has suggested that more than 40% of tasks performed by public sector workers could be automated partly by AI and the government could bank those efficiency gains by “reducing the size of the public-sector workforce accordingly”.
TBI also estimates AI could displace up to 3m private-sector jobs in the UK, though it stresses the net rise in unemployment will be in the low hundreds of thousands because new jobs will be created, too. Worried lawyers, coders and copywriters will have to take that on faith.
But ensuring that the UK plays a key role in developing AI – and deploys it properly – requires a coordinated industrial strategy. Long-term industrial plans are complex and require cooperation across many fields – from skills to infrastructure and regulation – hence the 50 strategies to which the government is committed. These include setting up a body to support leading domestic AI firms and “AI growth zones” with fast-track planning privileges.
Proposals to create national datasets of public data will have to jump hurdles related to privacy, ethics and data protection, while a move to allow AI firms to train their models on copyrighted work has already been rejected by the creative industry and publishers.
Dame Wendy Hall, a professor of computer science at the University of Southampton, says it is “imperative” for the economy that the government makes the plan work. “It’s not a question of ‘can they deliver it’. They have to.”
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One-fifth of young shun democracy, poll finds
Mason Whitehall
The Guardian 13 Jan 2025
One in five gen Z and millennial Britons prefer the idea of strong leaders without elections to democracy, while voters overall are feeling downbeat about politics, a report has found.
The polling, due to be published next week as part of the FGS Global Radar report, found that overall, 14% of British people agreed with the statement: “The best system for running a country effectively is a strong leader who doesn’t have to bother with elections.” The alternative was: “The best system for running a country effectively is democracy.”
Of those aged between 18 and 45, 21% agreed that the best system was a strong leader without elections. In contrast, only 8% of those polled who were over 55 favoured that system over democracy.
The report’s finding that a sizeable minority of under-45s are not convinced by the need for elections comes in the
shadow of electoral victories by populist strongmen such as Donald Trump. Meanwhile, the billionaire Elon Musk has been wielding power over public debate by shaping what is seen and said on his social media platform, X.
Last week, the Financial Times reported that Musk, who has been appointed by Trump to help overhaul the US public sector, had privately discussed with allies how Keir Starmer could be removed as the prime minister of the UK before the next general election. Any such move would constitute an intervention into British democracy.
The FGS report polling found that men, at 16% of voters, were more likely to lean away from democracy than women at 13%, and Reform voters at 17% were fractionally more likely to do so than voters for other parties, compared with Labour (16%), Conservative (14%), Liberal Democrat (9%) and Green voters (8%).
Despite a UK election last year that brought a Labour landslide and a change of government, and a US presidential election that delivered a second Trump administration, nearly one in four voters said they thought voting did not make a difference. Those most disillusioned with voting were aged 25 to 44, with three in 10 saying it made no difference.
The survey found pessimism about the state of UK politics, with 47% feeling that “none of the current political parties represent my views and values very closely”.
From a poll of 2,000 adults of voting age, 23% agreed with the statement: “The UK is going in the right direction.” But 64% said: “It feels like the UK is in a period of steep decline.” About 17% agreed: “The UK’s best years are behind us.”
The annual Global Radar report, which looks at the big themes of 2025, predicted that this would be the year of Trump and that there would be a period of shock and awe while he delivered his agenda.
In off-record interviews with 70 political experts and opinion formers, the report said they highlighted the fact that the UK was now a beacon of relative stability – compared with both the last parliament and the current state of play in its major European neighbours – enabling business to plan, take decisions and engage.
But many also predicted there would be clashes with business, trade unions and Labour backbenchers, with interviewees questioning whether the cabinet had the stomach for the fight.
The report said even the Labour supporters it spoke to were worried the government was struggling to articulate its strategy and agenda, and concerned about a lack of a clear vision and narrative to explain what the Starmer government was doing, why it was doing it and who it was for.
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From schools to potholes: huge expansion of AI in public sector
Booth UK technology editor
The Guardian 13 Jan 2025 Starmer to announce massive investment in AI, despite fear of effects
Artificial intelligence will be used for everything from spotting potholes to freeing up teachers to teach under a big expansion of the technology in the public sector to be revealed today.
Keir Starmer will launch the sweeping plan to increase twentyfold the amount of artificial intelligence (AI) computing power under public control over the next five years, despite widespread fear about the technology’s effects.
Labour’s plan to “unleash” AI, “mainlining it into the veins of the nation”, includes a personal pledge from the prime minister to make Britain “the world leader” in a sector that has been transformed by a series of significant breakthroughs in the last three years.
The plan features a potentially controversial scheme to unlock public data to help fuel the growth of AI businesses.
This includes anonymised NHS data, which will be available for “researchers and innovators” to train their AI models.
The government insists there would be “strong privacy-preserving safeguards” and the data would never be owned by private companies.
Ministers believe AI can help tackle Britain’s anaemic economic growth and deliver, according to its own forecasts, an economic boost rising to up to £470bn over the next decade.
The action plan represents a shift in tone from the government, which had previously been focused on tackling the most serious “frontier” risks from AI, relating to dangers like cybersecurity, disinformation and bioweapons.
Technology companies including Microsoft, Anthropic and OpenAI welcomed the plan as Starmer said “the AI industry needs a government that is on their side”.
Regulators will be told to “actively support innovation”, setting up a potential clash with people who believe regulators’ primary role should be to protect the public from harm.
But experts in AI’s effects on society, jobs and the environment urged caution.
The three words most associated with AI by the public are “robot”, “scary” and “worried”, according to government research last month.
The prime minister is also aiming to accelerate investment in new miniature nuclear
reactors to power the energy-hungry technology.
Susie Alegre, a barrister specialising in technology and human rights, cited the Post Office scandal “as a reminder of the dangers of putting too much faith in technology without the resources for effective accountability”.
She said “any plan for Britain’s future with AI needs to look at realworld consequences for people and the planet and cannot afford to look away from uncomfortable truths”.
Starmer has instructed every member of his cabinet to make AI adoption a top priority and said: “Artificial intelligence will drive incredible change in our country. From teachers personalising lessons, to supporting small businesses with their record-keeping, to speeding up planning applications, it has the potential to transform the lives of working people.
“But the AI industry needs a government that is on their side, one that won’t sit back and let opportunities slip through its fingers. In a world of fierce competition, we cannot stand by. We must move fast and take action to win the global race.”
The US currently leads the world in AI ahead of China, which is well ahead of the UK in third place, according to rankings from Stanford University.
Under the government’s 50-point AI action plan, an area of Oxfordshire near the headquarters of the UK Atomic Energy Authority at Culham will be designated the first AI growth zone. It will have fast-tracked planning arrangements for data centres as the government seeks to reposition Britain as a place where AI innovators believe they can build trillion-pound companies. Further zones will be created in as-yet-unnamed “deindustrialised areas of the country with access to power”.
Multibillion-pound contracts will be signed to build the new public “compute” capacity – the microchips, processing units, memory and cabling that physically enable AI. There will also be a new “supercomputer”, which the government boasts will have sufficient AI power to play itself at chess half a million times a second.
Sounding a note of caution, the Ada Lovelace Institute called for “a roadmap for addressing broader AI harms”, and stressed that piloting AI in the public sector “will have realworld impacts on people”.
Gaia Marcus, director of the research institute, said it wanted to know how Whitehall would “implement these systems safely as they move at pace” to maintain public trust.
The government confirmed an initiative to gather data held by the public sector in a new National Data Library to “support AI research and innovation”. It did not specify what data would be made available to private companies, but said it would be done “responsibly, securely and ethically”.
The science and technology secretary, Peter Kyle, commissioned the British tech investor Matt Clifford to draw up the AI opportunities action plan nearly six months ago.
At the time the government cited the possibility of 1.5% a year productivity gain for the economy if AI could increase efficiencies for workers.
But there are also fears that it could lead to widespread unemployment, particularly in professional occupations associated with more clerical work and across finance, law and business management roles.
Kyle will lead a new AI energy council with the energy secretary, Ed Miliband, to accelerate investment in sources such as renewables and small modular nuclear reactors, which are being pioneered to fuel AI systems.
Worldwide, some campaigners have raised safety fears about the technology and there are concerns that they could generate greater quantities of radioactive waste.
The overall computing capacity boost will cost taxpayers billions of pounds over the next five years, the Guardian understands. More details of funding are expected in the 2025 spending review. The investment is separate to £14bn announced by private companies to build vast data centres in places such as Loughton in Essex and on the site of a former car engine plant in south Wales.
The news comes after reports Rachel Reeves was considering steep cuts to public services to help repair the government’s finances. The chancellor has told colleagues in the cabinet to be “ruthless” in finding areas for savings, according to a report in the Daily Telegraph.
The shadow secretary of state for science, innovation and technology, Alan Mak, said: “Labour’s plan will not support the UK to become a tech and science superpower. They’re delivering analogue government in a digital age ... AI does have the potential to transform public services, but Labour’s economic mismanagement and uninspiring plan will mean Britain is left behind.”
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China is starting to win the industrial war
D. Atkinson
The New York Times (International Edition) 13 Jan 2025 The country’s goal is to damage the U.S. economy so that it can become the world’s pre-eminent power.
Credit goes to Donald Trump for alerting the world to the dangers posed by China, particularly its efforts to overtake the United States as the world’s most advanced economy. But neither his first administration nor President Biden’s has done enough to combat China’s incursions, which have cost America millions of manufacturing jobs and the closure of tens of thousands of factories, according to data compiled by the Information Technology and Innovation Foundation, the nonpartisan technology policy think tank I lead. That’s because policymakers on both sides of the aisle are only slowly waking up to the reality: We are already in the middle of an industrial war.
Lawmakers need to understand that for China, a desire to make money — the fundamental driver of trade and of capitalism — is secondary. Its primary goal is to damage America’s economy and pave the way for China to become the world’s pre-eminent power. Countries like China are power traders, called such because their policies and programs are designed not only to advance their power but also to degrade their adversaries’, even at a financial cost to their own economies.
China’s rate of progress in production and innovation across a wide range of industries is striking. If our policymakers don’t work fast and smart enough, they will put at risk America’s workers, economy and place in the world.
History has seen other campaigns like this. From the late 1800s to World War II, Germany illustrated how trade could be weaponized into “an instrument of power, of pressure and even of conquest,” wrote the development economist Albert O. Hirschman.
Like China, Germany mostly focused on importing goods needed for its war machine, redirected trade to friendly or subject nations and sought to control oceanic trade routes, all in an effort to limit development of its adversaries. Like China, the German government kept its currency undervalued (making its goods relatively cheaper for consumers in other countries), leveraged the use of tariffs and subsidized its exports to bolster its position in industry goods such as steel, chemicals and machinery.
Like China, German companies sold goods for less than the cost of manufacture to wrest market share from overseas rivals. Like China, Germans engaged in systemic industrial espionage. Engineers were sent overseas with the explicit order to return with trade secrets for German companies.
There was also the theft of intellectual property, including chemical formulas and machinery plans to give German manufacturers a leg up. “Trademarks are to be pirated,” declared a 1919 New York Tribune article on Germany — a declaration that could have been written today about China.
In short, Germany sought to gain technoeconomic power, especially over its European adversaries, then use that power to dominate the continent. As the French economist Henri Hauser wrote in 1915, “Germany made war in the midst of peace with the instruments of peace. Dumping, export subsidies, import certificates, measures with respect to emigration, etc., all of these various methods were used not as normal methods of economic activity but as means to suffocate, to crush and terrorize Germany’s adversaries.”
For a while, it was successful. Without American intervention in World War I and II, it is quite possible that Germany would have taken over much of Europe, in large part because its industries and hence military were so much stronger than those of other European nations. While America’s industrial revolution continued through the early 20th century, insulated by high tariffs initiated by Abraham Lincoln during the Civil War, the German trade shock stopped many Eastern and Southern European economies from fully industrializing and spurred the deindustrialization of nations like Britain. Many have not fully recovered.
It seems all the trade lessons from that fraught period have been forgotten. In the postwar glow of American dominance, U.S. legislators and business leaders embraced an idealistic vision of an increasingly wealthy free world. Countries would embrace capitalism and, thus incentivized by selfinterest, would trade fairly and freely with the United States, enriching their citizens and naturally leading to a democratic order. Because American companies were so strong, this was seen as a path to expanded U.S. global economic leadership.
As we now know, that vision was never fully realized. Today it is China that is weaponizing its roughly $18 trillion economy, using a vast array of policy tools to distort trade and increase its relative economic power. Wielding such weaponry as export financing and subsidies — almost four times as much as a share of G.D.P. as the United States, according to a study by the Center for Strategic and International Studies — China has already gained global leadership in telecommunications equipment, effectively destroying North America’s industry. It has done the same in solar panels and commercial drones and is close in high-speed rail and batteries.
The Information Technology and Innovation Foundation found that in 10 advanced industries — including semiconductors, robotics, artificial intelligence, quantum computing, space and chemicals — China is making progress toward the global leading edge of innovation, backed by extensive intellectual property theft, enormous government subsidies and closed domestic markets. And in some industries, such as electric vehicles and commercial nuclear power, Chinese companies now lead.
China installed more industrial robots last year and has more nuclear power plants under construction than the rest of the world combined. It spent almost $50 billion on subsidies to catch up on semiconductors before the U.S. Congress responded with the CHIPs Act. It is seeking to flood the world with electric vehicles, as well as gasoline-powered models. It has spent as much as three times as much on semiconductor subsidies as the United States. And it is spending billions of dollars more on the development of quantum technology than any other government, according to an analysis
by the consulting firm McKinsey. Sales of the C919 by COMAC (a state-owned company) are on pace to make it the top-selling jet aircraft in the world this year, contributing even further to Airbus’s and Boeing's travails. And China accounts for 44 percent of the world’s chemical production, according to my research.
China has demonstrated time and again a willingness to lose money to gain power — decisions that would make little sense under the regular dynamics of profit and loss. Look at the LCD display and OLED display industry (high-definition electronic screens), which are critical to smartphone and television production. In 2023, China’s leading producer, BOE, received more in government subsidies ($532 million) than the company generated in profits. That could explain why, for displays like those used in smartphones, Chinese suppliers are charging just $20 to $23 while rivals charge more than twice that. This is why China accounted for 72 percent of LCD production in 2024, up from virtually nothing in 2004.
U.S. policymakers are starting to wake up. Rush Doshi, formerly the deputy senior director for China on the National Security Council under Mr. Biden, titled his 2021 book “The Long Game: China’s Grand Strategy to Displace American Order.” And Marco Rubio, the former chair of the U.S. Senate Committee on Small Business and Entrepreneurship and Mr. Trump’s choice for secretary of state, issued a report concluding that China was doing more than “breaking the rules” to dominate highvalue industrial sectors. This helps explain why, despite a highly polarized political climate, Congress managed to pass the CHIPS and Science Act, which invested billions of dollars to support new semiconductor factories in the United States. Nothing promotes unity like a common and frightening enemy.
But these measures are not enough. America must expand its competitiveness in a range of other industries — including aerospace, biopharmaceuticals and machinery — and lead in emerging ones such as A.I., quantum computing and nuclear fusion.
Instead of across-the-board tariffs, the new administration should take a page from Ronald Reagan and negotiate a major decline in the value of the U.S. dollar vis-à-vis its trading partners, and if that does not work, the Treasury Department should take unilateral steps to drive down the value of the dollar. That would make American exports less expensive and imports pricier without the risk of trade retaliation. Congress should also update U.S. trade law, such as by eliminating the requirement of harm to U.S. companies from foreign unfair trade practices before remedies can be enacted.
America needs closer collaboration among allied nations to push back on China’s predatory power trade practices, including increasing foreign aid to help developing nations avoid their dependency on Beijing. And the United States needs to take advantage of its being a magnet for the best and the brightest globally by making it much easier for scientists and engineers to work here.
America should respect free-trade ideals and hold them dear. But that should not blind us to the harsh reality that the world now is distorted by its strongest power trader. The answer is not deglobalization or protectionism. America depends on too many industries — like aerospace, biopharmaceuticals, software and semiconductors — that cannot thrive without access to global markets.
And it is not holding on naïvely to the hopes that free trade could yet prevail if the United States simply ended the trade war. China will not end its power trade regime until it has gained dominance across a wide range of advanced industries. Rather, we need to understand the adversary we face and respond bravely, strategically and expeditiously.
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China is starting to win the industrial war
D. Atkinson
The New York Times (International Edition) 13 Jan 2025 The country’s goal is to damage the U.S. economy so that it can become the world’s pre-eminent power.
Credit goes to Donald Trump for alerting the world to the dangers posed by China, particularly its efforts to overtake the United States as the world’s most advanced economy. But neither his first administration nor President Biden’s has done enough to combat China’s incursions, which have cost America millions of manufacturing jobs and the closure of tens of thousands of factories, according to data compiled by the Information Technology and Innovation Foundation, the nonpartisan technology policy think tank I lead. That’s because policymakers on both sides of the aisle are only slowly waking up to the reality: We are already in the middle of an industrial war.
Lawmakers need to understand that for China, a desire to make money — the fundamental driver of trade and of capitalism — is secondary. Its primary goal is to damage America’s economy and pave the way for China to become the world’s pre-eminent power. Countries like China are power traders, called such because their policies and programs are designed not only to advance their power but also to degrade their adversaries’, even at a financial cost to their own economies.
China’s rate of progress in production and innovation across a wide range of industries is striking. If our policymakers don’t work fast and smart enough, they will put at risk America’s workers, economy and place in the world.
History has seen other campaigns like this. From the late 1800s to World War II, Germany illustrated how trade could be weaponized into “an instrument of power, of pressure and even of conquest,” wrote the development economist Albert O. Hirschman.
Like China, Germany mostly focused on importing goods needed for its war machine, redirected trade to friendly or subject nations and sought to control oceanic trade routes, all in an effort to limit development of its adversaries. Like China, the German government kept its currency undervalued (making its goods relatively cheaper for consumers in other countries), leveraged the use of tariffs and subsidized its exports to bolster its position in industry goods such as steel, chemicals and machinery.
Like China, German companies sold goods for less than the cost of manufacture to wrest market share from overseas rivals. Like China, Germans engaged in systemic industrial espionage. Engineers were sent overseas with the explicit order to return with trade secrets for German companies.
There was also the theft of intellectual property, including chemical formulas and machinery plans to give German manufacturers a leg up. “Trademarks are to be pirated,” declared a 1919 New York Tribune article on Germany — a declaration that could have been written today about China.
In short, Germany sought to gain technoeconomic power, especially over its European adversaries, then use that power to dominate the continent. As the French economist Henri Hauser wrote in 1915, “Germany made war in the midst of peace with the instruments of peace. Dumping, export subsidies, import certificates, measures with respect to emigration, etc., all of these various methods were used not as normal methods of economic activity but as means to suffocate, to crush and terrorize Germany’s adversaries.”
For a while, it was successful. Without American intervention in World War I and II, it is quite possible that Germany would have taken over much of Europe, in large part because its industries and hence military were so much stronger than those of other European nations. While America’s industrial revolution continued through the early 20th century, insulated by high tariffs initiated by Abraham Lincoln during the Civil War, the German trade shock stopped many Eastern and Southern European economies from fully industrializing and spurred the deindustrialization of nations like Britain. Many have not fully recovered.
It seems all the trade lessons from that fraught period have been forgotten. In the postwar glow of American dominance, U.S. legislators and business leaders embraced an idealistic vision of an increasingly wealthy free world. Countries would embrace capitalism and, thus incentivized by selfinterest, would trade fairly and freely with the United States, enriching their citizens and naturally leading to a democratic order. Because American companies were so strong, this was seen as a path to expanded U.S. global economic leadership.
As we now know, that vision was never fully realized. Today it is China that is weaponizing its roughly $18 trillion economy, using a vast array of policy tools to distort trade and increase its relative economic power. Wielding such weaponry as export financing and subsidies — almost four times as much as a share of G.D.P. as the United States, according to a study by the Center for Strategic and International Studies — China has already gained global leadership in telecommunications equipment, effectively destroying North America’s industry. It has done the same in solar panels and commercial drones and is close in high-speed rail and batteries.
The Information Technology and Innovation Foundation found that in 10 advanced industries — including semiconductors, robotics, artificial intelligence, quantum computing, space and chemicals — China is making progress toward the global leading edge of innovation, backed by extensive intellectual property theft, enormous government subsidies and closed domestic markets. And in some industries, such as electric vehicles and commercial nuclear power, Chinese companies now lead.
China installed more industrial robots last year and has more nuclear power plants under construction than the rest of the world combined. It spent almost $50 billion on subsidies to catch up on semiconductors before the U.S. Congress responded with the CHIPs Act. It is seeking to flood the world with electric vehicles, as well as gasoline-powered models. It has spent as much as three times as much on semiconductor subsidies as the United States. And it is spending billions of dollars more on the development of quantum technology than any other government, according to an analysis
by the consulting firm McKinsey. Sales of the C919 by COMAC (a state-owned company) are on pace to make it the top-selling jet aircraft in the world this year, contributing even further to Airbus’s and Boeing's travails. And China accounts for 44 percent of the world’s chemical production, according to my research.
China has demonstrated time and again a willingness to lose money to gain power — decisions that would make little sense under the regular dynamics of profit and loss. Look at the LCD display and OLED display industry (high-definition electronic screens), which are critical to smartphone and television production. In 2023, China’s leading producer, BOE, received more in government subsidies ($532 million) than the company generated in profits. That could explain why, for displays like those used in smartphones, Chinese suppliers are charging just $20 to $23 while rivals charge more than twice that. This is why China accounted for 72 percent of LCD production in 2024, up from virtually nothing in 2004.
U.S. policymakers are starting to wake up. Rush Doshi, formerly the deputy senior director for China on the National Security Council under Mr. Biden, titled his 2021 book “The Long Game: China’s Grand Strategy to Displace American Order.” And Marco Rubio, the former chair of the U.S. Senate Committee on Small Business and Entrepreneurship and Mr. Trump’s choice for secretary of state, issued a report concluding that China was doing more than “breaking the rules” to dominate highvalue industrial sectors. This helps explain why, despite a highly polarized political climate, Congress managed to pass the CHIPS and Science Act, which invested billions of dollars to support new semiconductor factories in the United States. Nothing promotes unity like a common and frightening enemy.
But these measures are not enough. America must expand its competitiveness in a range of other industries — including aerospace, biopharmaceuticals and machinery — and lead in emerging ones such as A.I., quantum computing and nuclear fusion.
Instead of across-the-board tariffs, the new administration should take a page from Ronald Reagan and negotiate a major decline in the value of the U.S. dollar vis-à-vis its trading partners, and if that does not work, the Treasury Department should take unilateral steps to drive down the value of the dollar. That would make American exports less expensive and imports pricier without the risk of trade retaliation. Congress should also update U.S. trade law, such as by eliminating the requirement of harm to U.S. companies from foreign unfair trade practices before remedies can be enacted.
America needs closer collaboration among allied nations to push back on China’s predatory power trade practices, including increasing foreign aid to help developing nations avoid their dependency on Beijing. And the United States needs to take advantage of its being a magnet for the best and the brightest globally by making it much easier for scientists and engineers to work here.
America should respect free-trade ideals and hold them dear. But that should not blind us to the harsh reality that the world now is distorted by its strongest power trader. The answer is not deglobalization or protectionism. America depends on too many industries — like aerospace, biopharmaceuticals, software and semiconductors — that cannot thrive without access to global markets.
And it is not holding on naïvely to the hopes that free trade could yet prevail if the United States simply ended the trade war. China will not end its power trade regime until it has gained dominance across a wide range of advanced industries. Rather, we need to understand the adversary we face and respond bravely, strategically and expeditiously.
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