The top news of the week had nothing much to do with economics directly–the US came from behind at the last minute and pipped China to the post for the biggest medal haul at the Tokyo Olympic Games. But there is no doubt that this will have a psychological impact. Think about how the state media would have reacted to China at number one in the medals tables. They pointed out that with the addition of Taiwan and Hong Kong medals they were still in the lead, but that doesn’t quite work. If Olympic medals are to be aggregated, then why not COVID cases and many other stats? Also, the US did it without the intensely systemic approach, shall we say, of training athletes from a young age.
The repercussions of the crackdown on entrepreneurs and private companies in the tech and education sectors continues to be felt and considered, not least of which, no doubt, by the would-be entrepreneurs who want to replace Jack Ma and the others at the top of the China money heap. How will those people react to all this, given the tight parameters for business wealth creation now defined by Those in Command? The answer, we surmise, is that they will still be interested in making the run for the company launch, the company surge and the rise into the ranks of the unicorns. But Plan B, the exit strategy, becomes a central and essential part of Plan A–that is, how to flip the business and walk away with the money as soon as possible, because who knows when there will be new regulations that will upturn the entire concept. This is obviously not a recipe for stable and healthy business growth.
Meanwhile in other news, auto sales fell overall while EV cars posted gains, and inflation is still out there as a threat. But the economy continues to feel solid.
Have a great weekend.