Probably the most significant event of the past week, for the longer term, was China’s test of a hypersonic missile that apparently has the ability to defeat any existing US defense system. The missile itself is of little interest in that, like the nuclear weapons of the Cold War era, they are unusable. To launch one guarantees a response and therefore MAD—mutually assured destruction. But what the missile DOES do is point to the growing strength that China has in a wide range of high tech areas, of which the hypersonic missile is a result. How is China doing vs the US on AI in military contexts? Just a couple of weeks ago, the Pentagon’s former software chief said that the US has already lost that race. Other officials came out immediately to deny that was the case, but China’s central and focused command system is having an impact, and that has all sorts of potential economic flow-ons in the medium term.
How about property? Well, the crisis percolates along. Embattled Evergrande paid back some of its debts to avoid a default for the second time in a month, but Modern Land missed a bond payment, and it was announced that land sales nationwide fell again in September for a second month in a row—down 11% year-on-year.
In other news, the US FCC announced it would revoke China Telecom’s operations license, and the Senate passed a bill putting more curbs on Huawei and ZTE.
Have a great weekend.