- EU Announces Plan to Cut Foreign Dependency
- RBI Chairman Announces New Economic Stimulus Package
- China Suspends Economic Activities with Australia
EU Announces Plan to Cut Foreign Dependency
The European Union (EU) has prepared a plan to reduce foreign dependency in six strategic areas like raw materials, pharmaceutical ingredients, and semiconductors after the pandemic-induced economic slump. This reliance was painfully exposed during the first months of the coronavirus pandemic.
“Today’s updated Industrial Strategy is about making sure our industries are equipped to drive the digital and green transformations of our economy while ensuring the competitiveness of our industries, also in the context of the recovery from the coronavirus crisis,” European Commission Vice-President Margrethe Vestager told a news conference.
According to the strategy, the EU Commission will propose establishing a “Single Market Emergency Instrument” to ensure the free movement of persons, goods, and services among member countries in preparation for future crises.
Brussels analysis has revealed, of 5,200 products imported into the EU, the bloc is “highly dependent” on 137.
The dependencies include areas like pharmaceutical ingredients and advanced technologies (like cloud computing and semiconductors).
About half of all imported products originate in China, followed by Vietnam, Brazil, Singapore, and South Korea.
While the supply of critical products will be diversified, the supply security will be increased, and the supply of the raw materials required for the industry and the active substances required for the production of pharmaceuticals will be provided.
RBI Chairman Announces New Economic Stimulus Package
Shaktikanta Das, Governor of the Reserve Bank of India, warned of the crisis by making an unplanned statement due to the ongoing Covid-19 case increases in the country.
The second wave of the virus in India has caused hospitals to run out of beds, medical oxygen, and supplies. People died in ambulances and car parks while waiting for beds or oxygen, causing morgues and crematoriums to overflow.
Noting that the situation in the economy has changed after the sharp increases in the number of cases in India, Governor of the RBI Shaktikanta Das said, “We have come to face a new crisis from the threshold of a strong economic recovery.”
Underlining that they will use all the tools they have to support the economy, Das said, “We are closely monitoring the situation. We will take all the steps we need to take for businesses and citizens.”
Das also announced a new incentive package for those affected by the Covid-19 outbreak. With the package, loans of up to 2 years will be provided to small businesses. In addition, a resource of 6.8 billion dollars will be provided to banks to be used as loans for the health sector.
The scheme will allow banks to support vaccine manufacturers, medical facilities, hospitals, and patients.
As some analysts had speculated, Das did not declare a loan moratorium but instead stated that the central bank was still in “battle mode” to meet the economy’s demands.
China Suspends Economic Activities with Australia
China’s National Development and Reform Commission announced that trade relations with Australia were suspended indefinitely.
“Recently, some Australian Commonwealth Government officials launched a series of measures to disrupt the normal exchanges and cooperation between China and Australia out of Cold War mindset and ideological discrimination,” China’s National Development and Reform Commission (NDRC) said in a short statement on the decision.
The commission did not say in the statement what specific measures prompted the action.
Bilateral relations between the two countries were first strained after Australia became the first country to publicly ban Chinese tech giant Huawei from its 5G network in 2018. Relations got worse when Australia called for an independent investigation into the origins of Covid-19 last year, leading to commercial reprisals by China.
Australia exported A$149 billion ($115 billion) worth of products to China in the 12 months to March, except services, with iron ore being by far the most valuable commodity.
Australian Trade Minister Dan Tehan said the decision by the commission was “disappointing” because the economic dialogue was “an important forum for Australia and China to work through issues relevant to our economic partnership.”
“We remain open to holding the dialogue and engaging at the ministerial level,” he said in a statement.