🛁 Bursting the Microsoft bubble

What’s going on here?

Chinese banks issued some much-needed tonics on Thursday to stimulate China’s limp economy.

What does this mean?

China’s usual moneymaker is looking listless right now, with unenthusiastic global demand leaving its mammoth export industry unsatisfied, unfulfilled, and maybe a little dejected. And because the country’s population is saving instead of shopping, China needs a little help getting back to its usual spritely, frisky self. Enter, banks: following the government’s call to action, the country’s six biggest state-run banks cut deposit rates on Thursday for the second time in under a year. That should shrink banks’ costs, so they can eventually lend to businesses and regular folks for less and encourage spending. And because lower rates will curb the interest that cash makes in savings accounts, there’s even more reason to take money to the shops. Essentially, just call rate cuts the aphrodisiac of consumer spending.

Why should I care?

Zooming in: Let’s get spicy.

Voyeuristic economists and investors have been eagerly watching the whole debacle, waiting for the right move to spice up the economy. But it’ll take more than rate cuts: China’s population isn’t confident about money, with disposable income growing frustratingly slowly. That’s not helped by the lethargic real estate market. The “wealth effect” suggests folks feel richer when the value of big assets – like homes, Chinese households’ biggest source of wealth – rises, even if their incomes stay the same. But with a tired outlook for the housing market, the sector needs some more stimulation before it can start performing.

The bigger picture: America rules – for now.

Over the years, China’s often been forecast to imminently overtake the US as the world’s biggest economy. But combine China’s recent troubles and dipping productivity with the US’s development-hindering sanctions, and the fight for the crown’s been a longer slog than it might've been. In fact, some economists reckon it’ll be 2030-something before China takes over – if it ever does.

What’s going on here?

Google didn’t mince words on Wednesday, telling workers to swap remote Meets for stiff, hard office seats.

What does this mean?

Google spends a lot of money glitzing up its super-slick offices, even developing a fresh London HQ during the pandemic, but plenty of workers still prefer less glamorous home comforts like the freedom to do laundry at midday. Well, most of Google’s staff have now been forcibly told to work from the office at least three days a week. And instead of subtle encouragement like free snacks or fancy hand creams in the bathrooms, employees will be sent reminders if they’re consistently absent and assessed on presence during performance reviews. There’s no tricking the system either: Google’s using badge data to track which workers are physically clocking in.

Why should I care?

Zooming in: Set the alarm.

A recent Bloomberg survey showed that one in two financial professionals would quit if they had to spend more time in the office. Google’s whizz-kids probably feel the same way, but an exodus wouldn’t necessarily be the worst outcome. See, the firm’s under pressure to slim costs, so if switching working from bed for a morning commute’s too much of a stretch for some, Google probably won’t mind saying sayonara over a Zoom – or, uh, Google Meets.

The bigger picture: Go go, Googlers.

Google’s sudden desire for camaraderie could be down to a number of factors, not least the joy of an after-work pint. But the fact the firm seems to be falling behind in the artificial intelligence race may well have sparked the move, especially because Google proudly states that its best creations were conceived by workers butting heads together in a real-life primary-colored meeting room. Investors will be watching either way, whether it’s for a fresh digital move or more pink slips.