AXA Investment Managers' Bigos on Market Sentiment
AXA Investment Managers CIO for Asia Ex-Japan Core Investments Ecaterina Bigos discusses market sentiment following a pause in tariffs on China. She speaks with Haslinda Amin on Bloomberg TV. (Source: Bloomberg)
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Forbes
30 minutes ago
- Forbes
Fusion Energy May Be The Key To World Hegemony
What would it take for the United States to lose its hegemony to a rising power like China? Right now, America appears to be ahead economically and militarily. However, there is a stark difference between America's national strategy (insofar as one exists) and China's. The US under President Trump calls for regression. It seeks to restore a manufacturing economy that peaked in the 1950s—like an elderly man trying to restore hair where it hasn't grown for decades. It is doubling down on domestic oil, gas and coal. Through tariffs, disparagement of NATO and aggression towards allies like Canada and Denmark, the administration has alienated partners that long supported a US-led world order. China, meanwhile, has a tremendous lead in developing the economy of the future. It has a near monopoly on rare earth minerals, which are needed for electronics, renewable energy systems, defense technologies and more. China leads in solar, wind and batteries, the energy systems growing at the fastest rate. It is ahead in electric vehicles, industrial robotics and drones as well. It probably has achieved parity in artificial intelligence and may surpass the US soon. If China were to take Taiwan, it would control the global market for advanced chip manufacturing. In the background, but probably most importantly, China may be on track to commercialize fusion energy before the US or its disgruntled allies. Unlike the US, China has no domestic energy industry with vocal lobbyists (and purchasable politicians) to slow progress. It is funding fusion as a national strategy while private fusion companies in the West are at the mercy of investors that, for the most part, chase low risk and quick returns. Fusion promises cheap, plentiful, baseload energy without carbon emissions. AI, data centers and industrial robotics powered by fusion would produce goods and services at much lower costs than value chains dependent on fossil-fired electricity. Militaries built on swarms of small, cheap, electronic drones and robots—powered by small, distributed fusion facilities deep underground, safe from attack—would have an edge over competitors using large, expensive, petroleum-powered vehicles with vulnerable supply chains. I cannot overstate the ramifications of China developing fusion first. As an analogy, imagine if Japan and Germany had uncovered vast reserves of oil at home in the 1920s. American and Soviet oil gave the Allies a strategic advantage over the Axis powers. Had the situation been reversed, World War II could have ended differently. While private fusion companies in the West have raised about $8 billion total, China is investing at least $1.5 annually into fusion projects—double what the US government spends. Japanese and German investments in fusion don't even come close. Canada, for the record, has no fusion funding strategy. Moreover, the government of British Columbia, home of industry leader General Fusion, seems not to understand the value of this crown asset.* On all fronts nuclear, China is leaping ahead. In April, its scientists added fresh fuel to an operational thorium molten salt reactor—a first. The thorium reserves found in Inner Mongolia, an autonomous region of China, could theoretically meet Chinese energy demand for thousands of years. The kicker: this reactor design originated in the US. As project lead Xu Hongjie put it, 'The US left its research publicly available, waiting for the right successor. We were that successor." Moreover, in January, China's Experimental Advanced Superconducting Tokamak (EAST) sustained a fusion reaction for 1,066 seconds, setting a new record. Its Burning Plasma Experimental Superconducting Tokamak (BEST) fusion reactor could come online by 2027 and is expected to produce five times the amount of energy it consumes. When BEST announces this milestone, Western fusion companies may be announcing that they've run out of funding. To China, fusion is not a startup project—it's a matter of national interest and security. Its scientists are patenting more fusion-related technologies than any other single country and graduating more doctorates in fusion-related fields. And because China is the top refiner and exporter of the critical minerals needed in fusion reactors (e.g., for magnets), no external force is going to slow their progress. In the meantime, China has a cheap gas station next door—Russia—supplying all the fossil fuels China could need in exchange for support in its war with Ukraine. That support includes critical minerals needed by Russian arms manufacturers. Is fusion energy, along with other Chinese-dominated technologies, enough to end US hegemony? In 1988, historian Paul Kennedy published The Rise and Fall of the Great Powers, a book that tried to explain the relative success (and failure) of powerful states. According to Kennedy, their rise and fall '…shows a very significant correlation over the longer term between productive and revenue-raising capacities on the one hand and military strength on the other.' Essentially, states must balance economic prosperity with strategy. Technological breakthroughs are vital to both. Innovation creates wealth, which enables the state to invest in defense and win wars. While underinvestment in defense leaves the state vulnerable to other powers, overextension and overspending on defense can run an economy into the ground, leaving it unable to sustain a strong military. Now, picture a great power—China—with a military to rival the US and fusion reactors that provide virtually unlimited energy. Imagine the clout China would have in establishing ports, military bases and consumer markets around the world if it could license that fusion technology. A China that exceeds the US in energy, industry, intelligence, mobility and defense is positioned to usurp it. Of course, China could bungle its advantage. Authoritarian regimes have a habit of mismanaging internal dissent, falsifying reality and making preventable mistakes. The rise of China is inevitable, but the self-inflicted decline of the US and its allies isn't. Rather, it's a choice reflecting how societies invest their resources and envision their future. *Disclosure: The author is an investor in General Fusion and sits on its board of directors.
Wall Street Journal
36 minutes ago
- Wall Street Journal
U.S. Hiring Slowed in May Amid Tariff Uncertainty - Minute Briefing
Full Transcript This transcript was prepared by a transcription service. This version may not be in its final form and may be updated. Zoe Kuhlkin: Here's your Midday Brief for Friday, June 6th. I'm Zoe Kuhlkin for The Wall Street Journal. The US added 139,000 jobs in May, the Labor Department reported today. The figure was above economists' expectations, but the slower growth serves as a sign employers remained cautious amid all of the tariff uncertainty. The employment rate, which is based on a separate survey from the jobs figures, remained at 4.2%. Federal government employment shrank by 22,000 jobs, the fourth consecutive month of such declines. Industrial production in the Eurozone's two largest economies has declined in the first month of President Trump's global tariff blitz. German and French industrial output both contracted 1.4% in April. A sign that an economic slowdown is underway after a start to the year that was even stronger than first estimated. Trade data published today showed goods exports to the US from Germany sank 10.5% as companies adapted to the new trade reality. And Switzerland has proposed some of the strictest capital rules in the world on banking giant UBS in an attempt to prevent another Credit Suisse style meltdown, protect taxpayers, and restore the country's reputation as a haven for rich people. The proposal would require UBS to hold around $26 billion in additional equity capital and reduce its reliance on hybrid bonds that can convert to equity. UBS has openly opposed this proposal and today's reforms are a blow to their arguments. The government said the main measures could take six to eight years to fully take effect. We'll have more coverage of the day's news on the WSJ's What's News Podcast. You can add it to your playlist on your smart speaker or listen and subscribe wherever you get your podcasts.
TechCrunch
36 minutes ago
- TechCrunch
Clean energy investment hits new highs and shows no sign of slowing
The world is set to invest nearly twice as much in clean energy as fossil fuels this year, according to a new International Energy Agency report. While fossil fuel outlays are still significant — about $1.15 trillion this year — they'll be dwarfed by clean energy, which is expected to receive $2.15 trillion in 2025. But the real takeaway is that the energy transition doesn't show signs of slowing. Plotting the two investments trends is revealing. Over the last decade, fossil fuel investment has been relatively steady, if declining slightly. There has been an uptick since a drop that coincided with the pandemic, but even that shows signs of softening this year. But clean energy investment follows a different path, a far more aggressively positive trend: The curve is up and to the right. Global clean energy investment has outpaced fossil fuel outlays for the last decade. Image Credits:Tim De Chant/TechCrunch For data nerds: A second-order polynomial fit to the fossil fuel investment does a reasonable job of explaining the variance (R2 = 0.74), suggesting the world might be extracting a bit more oil, coal, and gas in the near future. But the same type of equation applied to clean energy figures fits the data far better (R2 = 0.94). Unless the world takes a U-turn — something that hasn't happened in the 10 years the IEA has collected this data, pandemic included — expect bigger clean energy numbers next year. The big question is whether it'll be too little, too late. Techcrunch event Save $200+ on your TechCrunch All Stage pass Build smarter. Scale faster. Connect deeper. Join visionaries from Precursor Ventures, NEA, Index Ventures, Underscore VC, and beyond for a day packed with strategies, workshops, and meaningful connections. Save $200+ on your TechCrunch All Stage pass Build smarter. Scale faster. Connect deeper. Join visionaries from Precursor Ventures, NEA, Index Ventures, Underscore VC, and beyond for a day packed with strategies, workshops, and meaningful connections. Boston, MA | REGISTER NOW To hit net zero by 2050, the world has to invest an average of $4.5 trillion annually, according to a report from the World Economic Foundation. That's double this year's investment, which sounds like a lot. But analysts have previously issued overly cautious clean energy investment forecasts. The trend in the new IEA data suggests that the goal is within reach. Clean energy's exponential growth won't last forever; the trend is likely to taper off in the coming years, just like it did in the mid-2010s. But as I've written before, these sorts of fits and starts are not unusual, and adoption of new technologies is never continuous. Instead, it's influenced by global economic trends and the learning curve that companies face when incorporating them into their businesses. Ultimately, by 2050, I suspect average annual investment will probably meet or exceed the $4.5 trillion annual rate that the World Economic Forum calls for. Clean energy technologies are cheaper by the year, which makes them more accessible. Indeed, 85% of electricity demand growth in the next two years is going to come from developing and emerging economies, and while cheap coal has driven the narrative in many of those, solar and wind shouldn't be counted out. The wildcard, of course, is data centers. In the U.S., at least, utilities are confronting demand forecasts with enormous error bars. Those forecasts may fall short, but utilities tend to err on the side of caution, which means finding more power. Some will turn to gas turbines, others will bet on nuclear. But in the next few years — and likely over the long term — renewables paired with energy storage will have the upper hand. They're probable winners not just because they're getting cheaper, but because they're modular. They can be deployed at a range of scales and prices. It's easy for them to be everywhere, and that's something investors love to see.
