WSJ: “China’s rise in biotech has been years in the making, but it is now impossible to ignore. In 2020, less than 5% of large pharmaceutical transactions worth $50 million or more upfront involved China. By 2024, that number had surged to nearly 30%, according to DealForma. A decade from now, many drugs hitting the U.S. market will have originated in Chinese labs. China’s biotech boom mirrors its rise in tech. In both cases, China has moved up the value chain, from manufacturing goods to becoming a more sophisticated hub for innovation, competing in industries once dominated by the U.S. There are several reasons for the industry’s growth. For one, many top scientists trained in the U.S. have returned to China over the past decade, fueling the emergence of biotech hubs around Shanghai. And just as DeepSeek built a formidable chatbot—allegedly on a lean budget with limited access to semiconductors—Chinese biotech companies are also scrappier, capitalizing on a highly skilled, lower-cost workforce that can move faster.”
Douglas Irwin paper: “In July 1991, India began to dismantle its long-standing, highly restrictive import control regime and move toward a more open economy. How were policymakers able to dislodge and replace an entrenched system with powerful vested interests behind it? Standard reasons for policy change—pressure from domestic producer interests, shifts in political power, or conditionality by international financial institutions—fail to explain why the shift in trade policy took place. Instead, reform-minded technocrats persuaded political leaders to reject what had been a standard response to balance of payments pressure (import repression to avoid a devaluation) and embrace a new approach (exchange rate adjustment and a reduction of import restrictions). This paper explores the economic and political context behind the country’s dramatic policy transformation. India’s experience highlights the crucial link between exchange rate policy and trade policy.”
FT: “Microsoft, Alphabet, Amazon and Meta have reported combined capital expenditure of $246bn in 2024, up from $151bn in 2023. They forecast spending could exceed $320bn this year as they compete to build data centres and fill them with clusters of specialised chips to remain at the forefront of AI large language model research.” WSJ: ““We think virtually every application that we know of today is going to be reinvented with AI inside of it,” Amazon Chief Executive Andy Jassy said.”
Biju Dominic: “One look at the click-through rates (CTRs) of e-commerce websites, however, makes it clear that all is not well in the world of digital marketing. Over the years, CTRs have reduced to a hundredth of their original level—to a mere 0.35% in 2023. Even if the consumer clicks on a product tile and places it in his or her digital shopping cart, it need not translate to a sale. According to recent figures, the cart abandonment rate is over 73%. Even if a product is bought, it may not be the end of the transaction. According to reports, 17% of the goods sold in the US in 2023 have been returned by their buyers. On a rough estimate, only one in every 500 people who enter an e-commerce site ends up buying a product. These findings support the argument that with an abundance of choice in the digital world, the need for businesses to deploy the art of persuasion is actually going up.”
Aswath Damodaran: “I believe that DeepSeek does change the AI story, by creating two pathways to the AI product and service endgame. On one path that will lead to what I will term the “low intensity” AI market, it has opened the door to lower cost alternatives, in terms of investments in computing power and data, and competitors will flock in. That said, there will remain a segment of the AI market, where the old story will prevail, and the path of massive investments in computer chips and data centers leading to premium AI products and services will be the one that has to be taken.” [via Arnold Kling]
