The Friday Fish

This week's haul from behind the headlines
OECD Observer

No 23: China’s Manufacturing Takeover; Americans and Europeans Divided; The Case for Cities; Inequality Hurts the Economy; Fed Wary of Brexit

China’s Manufacturing Takeover

The Chinese appliance maker Midea offered €4.5 billion for Germany’s Kuka, a company that makes robots for Audi, BMW, and Boeing, which has Berlin- and Brussels-based lawmakers concerned that the future of European manufacturing could be hanging by a thread. And they have reason to worry: Chinese companies made offers for 25 German companies in 2016, and have paid a total of $9.1 billion for them. But what makes Midea’s offer for Kuka different from other deals is that the German manufacturer is considered a company among those representing “the future of German industry”.

Americans and Europeans Divided

Bruce Stokes, Director of Global Economic Attitudes at the Pew Research Center in Washington, DC visited the OECD this week to present the results of the Center’s most recent survey on how Americans view foreign and economic policy issues in the presidential election season. The report shows that Trump and Clinton supporters are split on most issues including trade, immigration, and the US’s involvement in world affairs. Another of the Pew Research Center’s recent surveys shows that many Europeans believe their country’s influence in world affairs is waning. The report following the survey, “Europeans Face the World Divided”, indicates that although a majority of Europeans wish for the EU to be more active in international affairs, an ideological division has grown between right- and left-wing political parties.

The Case for Cities

OECD Secretary General Angel Gurria visited the Brookings institute in Washington, DC on Thursday as the keynote speaker for a panel on inclusive growth in the US. He highlighted cities and metropolitan areas – where nearly 60% of jobs in OECD countries are created – as key generators of economic opportunity in the present and for the future.

Inequality Hurts the Economy

An OECD report warns that the United States is suffering a slow recovery from the Great Recession in part because it’s still too hard for women and African-Americans to contribute to the economy as much as they could. The United States isn’t the only country where gender roles are holding minorities back. The UK recently ranked last in parents’ division of childcare in a study conducted by the Fatherhood Institute. OECD Secretary-General Angel Gurria says that women “can have babies and bosses at the same time, or be bosses themselves”, reiterating the report’s recommendations to help minorities obtain more skills and better jobs, and for countries suffering from a gender gap to develop family-friendly policies like paternal leave and public access to day care.

Fed Wary of Brexit

The US Federal Reserve has decided to delay raising interest rates despite calls for an increase as soon as this month. With Brexit looming, and along with it, slowed job growth and overseas hazards, Fed chair Janet Yellen now expects to wait and see whether the US central bank needs to worry about how – and whether – the UK referendum will impact US growth. Publicly, the Fed has been careful not to conflate its decision to maintain interest rates and the UK’s vote on whether it remains a member of the EU, but several officials did independently highlight Brexit as a concern for the US and global economies.

Economic data

GDP growth: +0.6% Q1 2019 year-on-year
Consumer price inflation: 2.3% May 2019 annual
Trade: +0.4% exp, -1.2% imp, Q1 2019
Unemployment: 5.2% July 2019
Last update: 8 July 2019

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