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<ul class="summary-list"><li>Pennsylvania has one of the fastest-aging populations in the nation.</li><li>It's a case study of how the US will handle a surge of retirees and fewer younger workers.</li></ul>Maureen, 67, is <a target="_blank" class="" href="https://www.businessinsider.com/harris-trump-presidential-election-swing-state-polls-sun-belt-2024-10">planning to vote</a> for former President Donald Trump in November because she believes he'll be more beneficial to her finances now that she's <a target="_blank" class="" href="https://www.businessinsider.com/how-retirement-of-peak-boomers-could-affect-economy-social-security-2024-4">retired</a>.The northeast Pennsylvania resident, who requested her last name be withheld to protect her privacy, said she approaches each election with an open mind and has previously voted for both Republicans and Democrats. Like many Americans, this time around, Maureen's deciding factor is her <a target="_blank" class="" href="https://www.businessinsider.com/blockbuster-jobs-report-kamala-harris-election-trump-inflation-economy-2024-10">perception of the economy</a>."I'm just looking back over the past eight years, and my 401(k) grew in the four years Trump was in office," Maureen told Business Insider. "Do I like his personality? Heck no, I don't. But my 401(k) went up, interest rates were low, unemployment rates were low."Maureen's view highlights a common theme among American voters, particularly those <a target="_blank" class="" href="https://www.businessinsider.com/older-americans-regret-retirement-savings-taking-social-security-early-investments-2024-10">carefully watching their retirement</a> nest egg: they hold whoever is president accountable for how they feel about their finances. Despite the fact that <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/stock-market-election-impact-outlook-harris-trump-energy-tesla-biden-2024-10">stocks</a> have enjoyed significant gains under both Biden and Trump and even though the Federal Reserve — <a target="_blank" class="" href="https://www.businessinsider.com/interest-rate-cut-trump-fed-powell-reaction-independence-history-2024-9">not the president</a> — dictates benchmark interest rates, Maureen still blames the current administration for her dissatisfaction.Marjorie Klein, 80, lives in Philadelphia and is also retired. Similar to Maureen, she's concerned about financial security for older Americans — but she will be supporting Vice President Kamala Harris."He says that he's going to keep Social Security, but you never know with him," Klein told BI of Trump.Americans like Maureen and Klein may decide the election. A Morning Consult <a target="_blank" href="https://www.nytimes.com/interactive/2024/us/elections/polls-president-pennsylvania.html">poll</a> conducted from October 6 to 15 found Harris leading Trump in the swing state of Pennsylvania by just one point. However, among voters aged 50 and over in Pennsylvania, a recent <a target="_blank" href="https://www.aarp.org/politics-society/government-elections/info-2024/pennsylvania-harris-trump-poll.html">poll</a> from AARP found Trump leading Harris by eight points."We're a pivotal state for this presidency," Bill Johnston-Walsh, state director of AARP Pennsylvania, <a target="_blank" href="https://www.aarp.org/politics-society/government-elections/info-2024/pennsylvania-harris-trump-poll.html">said</a>. "Whoever wants it is going to have to go through us."Pennsylvania is a case study for the role the federal government will play in supporting the US's aging population over the next few decades through programs like <a target="_blank" href="https://www.businessinsider.com/how-retirement-of-peak-boomers-could-affect-economy-social-security-2024-4">Social Security</a> and Medicare. Pennsylvania voters and economists told BI it's vital that the next presidential administration plan for a future when retirees greatly outnumber younger Americans to ensure the economy and workforce can function effectively. As a swing state, it's critical for their campaigns that Harris and Trump listen to older Pennsylvanians' concerns.<h2 id="af5cee7e-b374-4096-b8b8-8442a2e05213">Social Security and Medicare in the hot seat</h2>Pennsylvania is aging rapidly; it has nearly 2.5 million residents over the age of 65, the fifth-highest total in the country. Nationally, the population of adults over 65 is expected to surge by 20 million between now and 2040.The state's residents rely heavily on federal government income, mainly through Social Security and Medicare, with two rural counties — Fayette and Cambria — among the most reliant in the nation, a report from the bipartisan Economic Innovation Group found.Benjamin Glasner, a coauthor of EIG's <a target="_blank" href="https://eig.org/great-transfermation/">report</a>, told BI that the most reliant counties were generally in older, poor, and more rural communities. Cambria, for example, needed more government aid after steel plant closures in the 1980s. Residents' incomes still haven't recovered."You can only receive so much from Social Security. Medicare can only cover so much, and Medicaid can only cover so much," Glasner said, adding that creates "a thin level of economic prosperity" reliant on the program's generosity."Mike Crossey, 73, has seen the limits of government aid firsthand in his work as an advocate for retirees. The Pittsburgh-area resident wants the next president of the US to strengthen Social Security, protect pensions, and expand Medicare. He said he knows too many older Americans who live off Social Security alone, which <a target="_blank" href="https://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/">averaged</a> $1,921 nationally for retirees in September."I run into people every day who are still making decisions about, 'Do I take my prescriptions today or do I have lunch today?' And that just breaks my heart," Crossey said.While Trump has denied that he would cut Social Security and previously criticized GOP lawmakers who proposed raising the retirement age to 70, the Committee for a Responsible Budget <a target="_blank" href="https://www.crfb.org/blogs/what-would-trump-campaign-plans-mean-social-security">said</a> that Trump's policies could force cuts to Social Security benefits in as little as six years. Harris has proposed strengthening Social Security by ensuring the wealthy and big corporations pay what they owe in taxes.With the Social Security and Medicare Board of Trustees report recently projecting that Social Security will only be able to pay out full benefits <a target="_blank" href="https://www.businessinsider.com/when-will-social-security-benefits-run-out-retirement-crisis-boomers-2024-5">for the next 11 years</a>, the issue is growing more pressing, and not only for Pennsylvanians. Richard Fiesta, the executive director of the nonpartisan 4 million-member Alliance for Retired Americans, said that "Congress and the next administration needs to have a serious look at Social Security."Some retirees are <a target="_blank" href="https://www.businessinsider.com/retirement-savings-401k-pension-real-estate-investments-baby-boomers-2024-6">able to live comfortably</a> amid economic headwinds. However, Fiesta said the decline in defined benefit pension plans, or employer-subsidized retirement plans, contributes to a <a target="_blank" href="https://www.businessinsider.com/retirement-crisis-social-security-poverty-older-americans-savings-inequality-2024-3">slump in average retiree savings</a>.This means that more and more Americans rely primarily on Social Security to help keep them financially afloat as they age. The previously mentioned EIG report found that income from government aid is the fastest-growing portion of an American's income, and it is primarily driven by retirees, who make up a rising share of the total US population."And we're just kind of seeing that now over the last 10 to 15 years as that generation ages into retirement," Fiesta said.<h2 id="a2e550dc-625f-4039-8e34-cbb0ecc4d25f">An aging workforce creates job mismatches</h2>The workforce in Pennsylvania is already starting to see imbalances as the younger population dwindles and the number of retirees grows.Kyle Kopko, executive director of the bipartisan legislative agency Center for Rural Pennsylvania, said local business owners complain of labor shortages. CRP research suggests that's due to fewer older adults working traditional jobs and instead pursuing entrepreneurship to supplement their retirement incomes. At the same time, lower birth rates mean younger adults are not filling the open roles either, Kopko said."If you don't have a pool of younger adults in Pennsylvania who can backfill for some of the retirees, that's going to create supply and demand imbalances," Kopko said, referring to the role retirees play in the economy as consumers, but less so as workers.When it comes to the issue of jobs nationwide, Harris proposed tax incentives for small businesses to spur more hiring, while Trump has largely focused on bolstering manufacturing in the US to create more jobs.One possible avenue for job creation — the infrastructure industry — has hardly been mentioned by either candidate in policy discussions. Bill Candelori, a 68-year-old retired commercial painter, sees this as an overlooked opportunity. He says Biden's infrastructure investments, which brought $16 billion to Pennsylvania, was a promising step but wants the next administration to go further."It's not only roads and bridges. It's airports, it's water authorities, it's schools, it's libraries, any public project," Candelori said. "That's work for us. And it's work afterward on maintaining those facilities. It's job creation."<h2 id="485b4799-3267-4ca3-96b7-d90ae5f90405">Political steps being taken</h2>State and local governments have already taken steps to address these mounting issues. Pennsylvania Gov. Josh Shapiro — a Democrat — has worked with members of his administration to create a <a target="_blank" href="https://www.pa.gov/content/dam/copapwp-pagov/en/aging/documents/aging-our-way/documents/AOW%20Final%20PDF%20online%20version%20with%20signature.pdf">10-year strategic plan</a> that outlined eight key priorities for older adults, including housing, transportation, and health and community support.Pennsylvania's Aging Secretary Jason Kavulich said it's a bipartisan issue that has bipartisan support: "There is not a representative or senator who I've ever sat down with that does not care about older adults in their district."JR Reed and Krista Geer, both in charge of county-wide aging agencies, have met with older adults in Pennsylvania to hear their top worries. Geer said that one of the biggest concerns she's heard about is the high cost of living, which has interfered with their ability to afford medications, gas, and groceries. Though inflation has moderated in recent months, it's still historically elevated and putting pressure on consumers."Social security just doesn't quite keep pace with that," Geer said. The program adjusts payouts annually to account for inflation. Critics say it isn't tied to a measure that accurately reflects the spending of older Americans.Reed and Geer agree the solution is for older populations to have a bigger nest egg, but not one that comes from Social Security. Reed said that he hopes Trump or Harris will continue to fund a 1965 federal law that provides funding to states to better support older adults.At the federal level, Harris recently proposed a plan that would allow Medicare coverage for in-home eldercare, which Fiesta said would "go a long way" toward helping both older adults and the family members who typically would take care of them.Trump, to date, has offered minimal details about his plans to address eldercare. Brian Hughes — his campaign's senior advisor — told BI that the presidential hopeful and his running mate, JD Vance, "share the principles of using more choice in the marketplace and efficiency as tools for better, more affordable health care."Overall, the stakes for an aging US population are high, and bipartisan participation is required to ensure the country is properly prepared for a surge in retirees.Kavulich said that the shift needs to be addressed head-on."Older adults really drive our economies," Kavulich said. "They drive our communities, and we have to respect that. And we have to not just think of them as frail and old and vulnerable."

A battle over the future of US retirement is playing out in Pennsylvania as the election looms 

<ul class="summary-list"><li>After months of fighting with the country's courts, Elon Musk abandoned his free speech battle in Brazil.</li><li>But the billionaire hasn't picked the same fight in other countries where the legal risks are higher.</li></ul>After months of refusing to comply with court orders and being slapped with hefty fines, <a target="_blank" class="" href="https://www.businessinsider.com/elon-musk">Elon Musk</a> folded in his <a target="_blank" class="" href="https://www.businessinsider.com/elon-musk-x-brazil-free-speech-battle-over-2024-9">free speech battle in Brazil</a> — and a corporate law expert says he'll have to be choosy about where he picks his fights in the future.Access to Musk's social media platform, X, should be restored in Brazil within the next week once the company appoints a legal representative to respond to government requests to restrict or remove content on the site following local laws, <a target="_blank" class="" href="https://www.nytimes.com/2024/09/21/world/americas/elon-musk-x-brazil.html">The New York Times</a> reported. X had been <a target="_blank" class="" href="https://www.businessinsider.com/brazil-judge-orders-elon-musk-x-stop-operations-2024-8">blocked across the country</a> since late August, and over the last several weeks, Brazil's Supreme Court imposed substantial fines on X and Starlink — a subsidiary of Musk's SpaceX — for refusing to obey the court's demands.Musk framed the months of <a target="_blank" class="" href="https://www.businessinsider.com/elon-musk-brazil-x-ban-feud-content-moderation-free-speech-2024-9">legal back-and-forth</a> as a principled battle for free speech, painting Brazilian Supreme Court judge <a target="_blank" class="" href="https://www.businessinsider.com/x-closes-brazil-office-elon-musk-alexandre-de-moraes-2024-8">Alexandre de Moraes</a> as an overstepping tyrant bent on censoring his political opponents.The Brazilian high court last week <a target="_blank" class="" href="https://www.businessinsider.com/elon-musk-brazil-free-speech-content-moderation-fines-seizure-2024-9">seized over $3 million</a> from X and SpaceX to settle the fines levied against X, and earlier this month telecom regulators in the country threatened to <a target="_blank" class="" href="https://www.businessinsider.com/brazil-starlink-sanctions-amid-feud-elon-musk-x-2024-9">revoke Starlink's license</a> to operate in Brazil. The Times reported that a loss of revenue in one of X's largest markets could have contributed to the company's decision to comply with court orders now.But an expert on corporate law told Business Insider that there's a reason the billionaire isn't taking his <a target="_blank" class="" href="https://www.businessinsider.com/elon-musk-free-speech-argument-brazil-x-twitter-2024-9">battle of free speech principles</a> to, say, France.<h2 id="b512bc7f-5eb3-4cec-a150-50dd314c0f99">Pavel Durov's arrest was a warning</h2>"All you have to see is what happened to Telegram, with Pavel," Anat Alon-Beck, a researcher focused on corporate law and governance at Case Western Reserve University's School of Law, told BI.In August, Telegram CEO <a target="_blank" class="" href="https://www.businessinsider.com/telegram-ceo-pavel-durov-arrested-french-airport-2024-8">Pavel Durov was arrested</a> in France and charged with six crimes related to illegal content being hosted on his messaging platform, including "complicity" in the distribution of child sexual abuse material and drug trafficking on <a target="_blank" rel="" class="" href="https://www.businessinsider.com/pavel-durov-arrest-france-what-is-telegram-explained-2024-8">Telegram,</a> as well as refusing to cooperate with an official investigation into the platform.<a target="_blank" class="" href="https://www.businessinsider.com/telegram-ceo-pavel-durov-charges-questions-free-speech-censorship-2024-8">Durov's arrest</a> raised international questions about tech executives' responsibility for the content hosted on their sites. Telegram, in a statement released shortly after his arrest, said Durov has "nothing to hide" and called the CEO's detainment "absurd."Outside the US, Alon-Beck noted, there's more privacy protection for consumers, more enforcement of content moderation laws, as well as different types of regulation, which forces tech executives to reconsider their approach to content moderation on their platforms to mitigate the risk of overstepping local laws and facing legal consequences — as Musk did in Brazil, and Durov did in France."In those markets, you have to comply. Nobody is above the law — not even Elon Musk," Alon-Beck said, adding that it doesn't matter what Musk feels about international laws, or how they compare to American regulations: "The point is, when you have global businesses and you're operating outside the US, you do have to listen to those laws or pay the price. If Elon wants to be able to travel freely, he'll have to comply, just like others will have to."Musk has previously complied with content moderation requests from other governments, including the increasingly authoritarian nations of <a target="_blank" class="" href="https://www.businessinsider.com/free-speech-censorship-elon-musk-throttled-tweets-turkey-presidential-election-2023-5">Turkey</a> and <a target="_blank" class="" href="https://www.businessinsider.com/musk-twitter-no-actual-choice-censorship-governmental-request-free-speech-2023-5">India</a>. In 2023, he indicated he would abide by the European Union's rulebook on content moderation, known as the Digital Services Act, <a target="_blank" class="" href="https://www.politico.eu/article/musk-twitter-will-respect-eu-content-moderation-rulebook/">Politico</a> reported.Alon-Beck said Durov's arrest served as a warning by French authorities to all tech executives who try to skirt local regulations, especially those related to content moderation on social media."I think that point was very well taken — or should be taken — by others," Alon-Beck said.After the Telegram CEO was arrested, Musk quickly chimed in on the situation with a series of posts on X, including adding a "<a target="_blank" class="" href="https://www.businessinsider.com/elon-musk-telegram-ceo-pavel-durov-arrest-france-free-speech-2024-8">FreePavel</a>" hashtag to a clip of Durov being interviewed by Tucker Carlson.Alon-Beck told BI that, in countries like France with strict laws around content moderation, Musk is no different than Durov, and she would expect he could be arrested if he continues to push the boundaries of local content moderation laws."It doesn't matter whether it's Instagram, or X, or Telegram — they're all platforms in those countries that are doing things differently than what we do here in the US," Alon-Beck said. "It doesn't matter if I agree or disagree. The point is, they have those enforcement systems — and as you can see, they're strict about them."Representatives for X, Telegram, and the Brazilian Supreme Court did not immediately respond to requests for comment from Business Insider.

Elon Musk has to be picky about where he fights for free speech, corporate law  expert says     

For technology to change the global balance of power, it needn't be new. It must simply be known.Since 2017, the Chinese Communist Party has laid out careful plans to eventually dominate the creation, application, and dissemination of generative artificial intelligence — programs that use massive datasets to train themselves to recognize patterns so quickly that they appear to produce knowledge from nowhere. According to the CCP's plan, by 2020, China was supposed to have "achieved iconic advances in AI models and methods, core devices, high-end equipment, and foundational software." But the release of OpenAI's ChatGPT in fall 2022 caught Beijing flat-footed. The virality of ChatGPT's launch asserted that US companies — at least for the moment — were leading the AI race and threw a great-power competition that had been conducted in private into the open for all the world to see.There is no guarantee that America's AI lead will last forever. China's national tech champions have joined the fray and managed to twist a technology that feeds on freewheeling information to fit neatly into China's constrained information bubble. Censorship requirements may slow China's AI development and limit the commercialization of domestic models, but they will not stop Beijing from benefiting from AI where it sees fit. China's leader, Xi Jinping, sees technology as the key to shaking his country out of its economic malaise. And even if China doesn't beat the US in the AI race, there's still great power, and likely danger, in it taking second place."There's so much we can do with this technology. Beijing's just not encouraging consumer-facing interactions," Reva Goujon, a director for client engagement on the consulting firm Rhodium Group's China advisory team, said. "Real innovation is happening in China. We're not seeing a huge gap between the models Chinese companies have been able to roll out. It's not like all these tech innovators have disappeared. They're just channeling applications to hard science."In its internal documents, the CCP says that it will use AI to shape reality and tighten its grip on power within its borders — for political repression, surveillance, and monitoring dissent. We know that the party will also use AI to drive breakthroughs in industrial engineering, biotechnology, and other fields the CCP considers productive. In some of these use cases, it has already seen success. So even if it lags behind US tech by a few years, it can still have a powerful geopolitical impact. There are many like-minded leaders who also want to use the tools of the future to cement their authority in the present and distort the past. Beijing will be more than happy to facilitate that for them. China's vision for the future of AI is closed-sourced, tightly controlled, and available for export all around the world.In the world of modern AI, the technology is only as good as what it eats. ChatGPT and other large language models gorge on scores of web pages, news articles, and books. Sometimes this information gives the LLMs food poisoning — anyone who has played with a chatbot knows they sometimes hallucinate or tell lies. Given the size of the tech's appetite, figuring out what went wrong is much more complex than narrowing down the exact ingredient in your dinner that had you hugging your toilet at 2 a.m. AI datasets are so vast, and the calculations so fast, that the companies controlling the models <a target="_blank" href="https://www.nytimes.com/2024/05/21/technology/ai-language-models-anthropic.html">do not know why they spit out bad results, and they may never know</a>. In a society like China — where information is tightly controlled — this inability to understand the guts of the models poses an existential problem for the CCP's grip on power: A chatbot could tell an uncomfortable truth, and no one will know why. The likelihood of that happening depends on the model it's trained on. To prevent this, Beijing is feeding AI with information that encourages positive "social construction."China's State Council wrote in its 2017 Next Generation Artificial Intelligence Development Plan that AI would be able to "grasp group cognition and psychological changes in a timely manner," which, in turn, means the tech could "significantly elevate the capability and level of social governance, playing an irreplaceable role in effectively maintaining social stability." That is to say, if built to the correct specifications, the CCP believes AI can be a tool to fortify its power. That is why this month, the Cyberspace Administration of China, the country's AI regulator, launched a chatbot trained entirely on Xi's political and economic philosophy, "Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era" (snappy name, I know). Perhaps it goes without saying that ChatGPT is not available for use in China or Hong Kong.<div type="image" title="Xi Jinping" height="1359" width="2000" msid="110639288" hostid="261" sizebytes="132198"></div>For the CCP, finding a new means of mass surveillance and information domination couldn't come at a better time. Consider the Chinese economy. Wall Street, Washington, Brussels, and Berlin have accepted that the model that helped China grow into the world's second-largest economy has been worn out and that Beijing has yet to find anything to replace it. Building out infrastructure and industrial capacity no longer provides the same bang for the CCP's buck. The world is pushing back against China's exports, and the CCP's attempts to drive growth through domestic consumption have gone pretty much nowhere. The property market is distorted beyond recognition, growth has plateaued, and deflation is lingering like a troubled ghost. According to Freedom House, a human-rights monitor, Chinese people demonstrated against government policies in record numbers during the fourth quarter of 2023. The organization logged 952 dissent events, a 50% increase from the previous quarter. Seventy-eight percent of the demonstrations involved economic issues, such as housing or labor. If there's a better way to control people, Xi needs it now.Ask the Cyberspace Administration of China's chatbot about these economic stumbles, and you'll just get a lecture on the difference between "traditional productive forces" and "new productive forces" — buzzwords the CCP uses to blunt the trauma of China's diminished economic prospects. In fact, if you ask any chatbot operating in the country, it will tell you that Taiwan is a part of China (a controversial topic outside the country, to say the least). All chatbots collect information on the people who use them and the questions they ask. The CCP's elites will be able to use that information gathering and spreading to their advantage politically and economically — but the government doesn't plan to share that power with regular Chinese people. What the party sees will not be what the people see."The Chinese have great access to information around the world," Kenneth DeWoskin, a professor emeritus at the University of Michigan and senior China advisor to Deloitte, told me. "But it's always been a two-tiered information system. It has been for 2,000 years."To ensure this, the CCP has constructed a system to regulate AI that is both flexible enough to evaluate large language models as they are created and draconian enough to control their outputs. Any AI disseminated for public consumption must be registered and approved by the CAC. Registration involves telling the administration things like which datasets the AI was trained on and what tests were run on it. The point is to set up controls that embrace some aspects of AI, while — at least ideally — giving the CCP final approval on what it can and cannot create."The real challenge of LLMs is that they are really the synthesis of two things," Matt Sheehan, a researcher and fellow at the Carnegie Endowment for International Peace, told me. "They might be at the forefront of productivity growth, but they're also fundamentally a content-based system, taking content and spitting out content. And that's something the CCP considers frivolous."In the past few years, the party has shown that it can be ruthless in cutting out technology it considers "frivolous" or harmful to social cohesion. In 2021, it barred anyone under 18 from playing video games on the weekdays, paused the approval of new games for eight months, and then in 2023 announced rules to reduce the public's spending on video games.But AI is not simply entertainment — it's part of the future of computation. The CCP cannot deny the virality of what OpenAI's chatbot was able to achieve, its power in the US-China tech competition, or the potential for LLMs to boost economic growth and political power through lightning-speed information synthesis.Ultimately, as Sheehan put it, the question is: "Can they sort of lobotomize AI and LLMs to make the information part a nonfactor?"Unclear, but they're sure as hell going to try.For the CCP to actually have a powerful AI to control, the country needs to develop models that suit its purpose — and it's clear that China's tech giants are playing catch-up.The e-commerce giant Baidu claims that its chatbot, <a target="_blank" href="https://www.businessinsider.com/chinas-chatgpt-reportedly-bans-users-from-mentioning-winnie-the-pooh-2023-5">Ernie Bot</a> — which was released to the public in August — has 200 million users and 85,000 enterprise clients. To put that in perspective, OpenAI generated 1.86 billion visits in March alone. There's also the Kimi chatbot from Moonshot AI, a startup backed by Alibaba that launched in October. But both Ernie Bot and Kimi were only recently overshadowed by ByteDance's Doubao bot, which also launched in August. According to Bloomberg, it's now the most downloaded bot in the country, and it's obvious why — Doubao is cheaper than its competitors."The generative-AI industry is still in its early stages in China," Paul Triolo, a partner for China and technology policy at the consultancy Albright Stonebridge Group, said. "So you have this cycle where you invest in infrastructure, train, and tweak models, get feedback, then you make an app that makes money. Chinese companies are now in the training and tweaking models phase."The question is which of these companies will actually make it to the moneymaking phase. The current price war is a race to the bottom, similar to what we've seen in the Chinese technology space before. Take the race to make <a target="_blank" href="https://www.businessinsider.com/china-xi-jinping-crush-tesla-elon-musk-american-ev-industry-2024-2">electric vehicles</a>: The Chinese government started by handing out cash to any company that could produce a design — and I mean any. It was a money orgy. Some of these cars never made it out of the blueprint stage. But slowly, the government stopped subsidizing design, then production. Then instead, it started to support the end consumer. Companies that couldn't actually make a car at a price point that consumers were willing to pay started dropping like flies. Eventually, a few companies started dominating the space, and now the Chinese EV industry is a manufacturing juggernaut. Similar top-down strategies, like China's plan to <a target="_blank" href="https://www.businessinsider.com/china-xi-jiinping-future-tech-global-economy-semiconductors-military-failing-2022-9">advance semiconductor production</a>, haven't been nearly as successful. Historically, DeWoskin told me, party-issued production mandates have "good and bad effects." They have the ability to get universities and the private sector in on what the state wants to do, but sometimes these actors move slower than the market. Up until 2022, everyone in the AI competition was most concerned about the size of models, but the sector is now moving toward innovation in the effectiveness of data training and generative capacity. In other words, sometimes the CCP isn't skating to where the puck's going to be but to where it is.There are also signs that the definition of success is changing to include models with very specific purposes. OpenAI CEO Sam Altman said in a recent interview with the Brookings Institution that, for now, the models in most need of regulatory overhead are the largest ones. "But," he added, "I think progress may surprise us, and you can imagine smaller models that can do impactful things." A targeted model can have a specific business use case. After spending decades analyzing how the CCP molds the Chinese economy, DeWoskin told me that he could envision a world where some of those targeted models were available to domestic companies operating in China but not to their foreign rivals. After all, Beijing has never been shy about using a home-field advantage. <a target="_blank" href="https://www.businessinsider.com/china-xi-jinping-crush-tesla-elon-musk-american-ev-industry-2024-2">Just ask Elon Musk</a>.To win the competition to build the most powerful AI in the world, China must combat not only the US but also its own instincts when it comes to technological innovation. A race to the bottom may simply beggar China's AI ecosystem. A rush to catch up to where the US already is — amid investor and government pressure to make money as soon as possible — may keep China's companies off the frontier of this tech."My base case for the way this goes forward is that maybe two Chinese entities push the frontier, and they get all the government support," Sheehan said. "But they're also burdened with dealing with the CCP and a little slower-moving."This isn't to say we have nothing to learn from the way China is handling AI. Beijing has already set regulations for things like deepfakes and labeling around authenticity. Most importantly, China's system holds people accountable for what AI does — people make the technology, and people should have to answer for what it does. The speed of AI's development demands a dynamic, consistent regulatory system, and while China's checks go too far, the current US regulatory framework lacks systemization. The Commerce Department announced an initiative last month around testing models for safety, and that's a good start, but it's not nearly enough. If China has taught us anything about technology, it's that it doesn't have to make society freer — it's all about the will of the people who wield it. The Xi Jinping Thought chatbot is a warning. If China can make one for itself, it can use that base model to craft similar systems for authoritarians who want to limit the information scape in their societies. Already, some Chinese AI companies — like the state-owned iFlytek, a voice-recognition AI — have been hit with US sanctions, in part, for using their technology to spy on the Uyghur population in Xinjiang. For some governments, it won't matter if tech this useful is two or three generations behind a US counterpart. As for the chatbots, the models won't contain the sum total of human knowledge, but they will serve their purpose: The content will be censored, and the checks back to the CCP will clear.That is the danger of the AI race. Maybe China won't draw from the massive, multifaceted AI datasets that the West will — its strict limits on what can go into and come out of these models will prevent that. Maybe China won't be pushing the cutting edge of what AI can achieve. But that doesn't mean Beijing can't foster the creation of specific models that could lead to advancements in fields like hard sciences and engineering. It can then control who gets access to those advancements within its borders, not just people but also multinational corporations. It can sell tools of control, surveillance, and content generation to regimes that wish to dominate their societies and are antagonistic to the US and its allies.This is an inflection point in the global information war. If social media harmfully siloed people into alternate universes, the Xi bot has demonstrated that AI can do that on steroids. It is a warning. The digital curtain AI can build in our imaginations will be much more impenetrable than iron, making it impossible for societies to cooperate in a shared future. Beijing is well aware of this, and it's already harnessing that power domestically, why not geopolitically? We need to think about all the ways Beijing can profit from AI now before its machines are turned on the world. Stability and reality depend on it.<a target="_blank" rel="" href="https://www.businessinsider.com/author/linette-lopez">Linette Lopez</a> is a senior correspondent at Business Insider.

America's tech battle with China is about to get ugly

<ul class="summary-list"><li>Indian Prime Minister Narendra Modi has won a third term as the country's leader.</li><li>His party is now scrambling to find allies to form a government.</li></ul>Narendra Modi claimed victory as India's prime minister for a rare third term in office, but his future hangs in the balance.Modi's Bharatiya Janata Party (BJP) failed to secure an overall majority of its own, according to figures from the election commission. His party is now scrambling to find allies to form a government."People have placed their faith in NDA (National Democratic Alliance) for a third consecutive time," Modi said. "This is a historical feat in India's history."A coalition created by Modi's main rival, the Indian National Congress, performed better than expected, mounting a strong challenge to the incumbent.The opposition leader, Rahul Gandhi, <a target="_blank" href="https://www.bbc.co.uk/news/live/world-asia-india-69072275">said Tuesday</a> his party may hold talks to form its own governing coalition. But Desam Party (TDP) and Janata Dal (United), who were part of a pre-election coalition with the BJP, said they endorsed Modi for a third term Tuesday, <a target="_blank" href="https://www.reuters.com/world/india/two-key-members-modis-alliance-endorse-him-next-india-prime-minister-2024-06-04/">reported Reuters.</a> This was in response to reports that the opposition would seek to prise them away from the BJP.The final votes were cast on Saturday in the seventh phase of the election, which saw people in eight of <a target="_blank" href="https://www.businessinsider.com/india-economy-growth-booming-modi-seize-moment-problems-davos-2024-2">India</a>'s 36 states and territories take their turns at the ballot.<h2 id="9a743ef8-257d-41c5-9c79-619d990e5521">Modi had expected a landslide</h2><a target="_blank" href="https://www.businessinsider.com/modi-india-election-economy-russia-oil-wealth-dimon-cook-musk-2024-5">Modi</a> and the BJP had long been projected to win decisively. Exit polls, though sometimes inconsistent, showed the party extending its control of the lower house.Modi had set a goal for his BJP-led alliance to secure 400 seats, up from about 350 won in 2019.BJP itself won 240 seats; its allies won 53, <a target="_blank" href="https://www.bloomberg.com/graphics/2024-india-election/">according to Bloomberg</a>.<div type="image" title="People carrying cutouts of Narendra Modi and setting off flares." height="683" width="1024" msid="110700935" hostid="261"></div>The incumbent was so assured of being re-elected this year that he declared victory on social media three days before the official results were announced on Tuesday."I can say with confidence that the people of India have voted in record numbers to reelect the NDA government," he <a target="_blank" href="https://twitter.com/narendramodi/status/1796910902983450823">wrote on X</a>.In January, at the World Economic Forum in Davos, Indian officials struck a similarly confident note.Hardeep Singh Puri, India's minister for oil and gas, told Business Insider that Modi would likely get "15 to 20%" more seats than in 2019. "I think we were 303 last time," he said. "So it should be 343-45 but it's a process that is still beginning.""The opposition is in disarray," he added.India's rapid growth has attracted the attention of corporate leaders such as Elon Musk, Jamie Dimon, and Tim Cook."I think most investors have read the tea leaves and have realized that some of the political stability and predictable policies that they expect…when it comes to making investment decisions, is likely to be available in India," said Rajesh Kumar Singh, a top official in India told Business Insider in Davos in January this year.On Tuesday, <a target="_blank" href="https://markets.businessinsider.com/news/stocks/india-stock-market-news-narendra-modi-election-nse-nifty-50-2024-6">Indian stocks had their worst day in more than four years</a> as stability looked less likely. This was a day after the stocks hit record highs following a poll showing Modi's landslide victory.<h2 id="da8c5e8d-5c3a-4ce9-90f1-85c679fb0b39">A bitter battle for power</h2>The six-week election involved a bitter feud between the BJP and its main opposition, the Congress Party.The Congress Party has formed its own bloc with about 20 opposition groups to oust Modi, campaigning on promises to relieve the nation's <a target="_blank" href="https://www.businessinsider.com/india-economy-growth-booming-modi-seize-moment-problems-davos-2024-2">unemployment woes</a>. However, the new alliance is undermined by differences in ideologies and contested leadership.Modi, a polarizing but popular leader, has spent much of the election blasting the Congress and its promised policies in controversial attacks. At one point, he accused the opposition of planning to take India's wealth and <a target="_blank" href="https://www.bloomberg.com/news/articles/2024-05-30/india-s-former-prime-minister-slams-modi-for-hateful-language">redistribute it to the Muslim minority</a>.<div type="image" title="A crowd of men shouting." height="3872" width="5808" msid="110700937" hostid="261"></div>While not specifically criticizing Muslims in his rally speeches, he's used terms such as "infiltrators" that are widely believed to allude to the minority.His party's ideology, <a target="_blank" href="https://apnews.com/article/india-election-narendra-modi-hindu-nationalism-rss-79c30c8ae750a9c037d86b9e2c1b640c">Hindutva</a>, promotes building a Hindu nation and has been criticized as a nationalist movement that foments hate speech and right-wing extremism.BJP's rivals have also accused the party of attempting to stifle opposition leaders. Delhi's chief minister, Arvind Kejriwal of the Aam Aadmi Party, was recently <a target="_blank" href="https://www.reuters.com/world/india/indian-opposition-leader-returns-jail-after-vote-ends-2024-06-02/">arrested on corruption charges</a> related to handing out liquor licenses. Kejriwal was granted bail until the end of the election.India's voting population is the world's largest, with 969 million people eligible to cast their ballots. That's more than twice the entire <a target="_blank" href="https://european-union.europa.eu/principles-countries-history/key-facts-and-figures/life-eu_en">population of the European Union</a>.June 4, 2024, 10:55 a.m. ET: This story has been updated to reflect Narendra Modi's claim of victory.June 4, 2024, 6:29 p.m. ET: This story has been updated to reflect the latest election result numbers.

Modi claims a historic 3rd term but he'll have to rely on allies

<ul class="summary-list"><li>This post originally appeared in the Insider Today newsletter.</li></ul>Big BI news: We won our first National Magazine Award last night! It was for our impactful video on <a target="_blank" rel="noopener" href="https://www.businessinsider.com/how-dogs-are-trained-to-attack-us-prisoners-history-2023-10">how dogs are used in prisons</a> — which also recently led to a <a target="_blank" rel="noopener" href="https://www.businessinsider.com/virginia-governor-signs-bill-limiting-use-dogs-attack-state-prisoners-2024-3">new law in Virginia</a>. Congrats to everyone who worked on this important piece of journalism.As for the newsletter, in today's big story, <a target="_blank" rel="noopener" href="https://www.businessinsider.com/bob-iger-nelson-peltz-where-things-stand-disney-proxy-war-2024-4">we're breaking down Disney's big proxy fight</a>.What's on deck:<ul><li>Markets: Billionaire Ray Dalio makes the case for continuing to <a target="_blank" href="https://markets.businessinsider.com/news/stocks/ray-dalio-china-stock-market-cheap-assets-debt-geopolitics-issues-2024-4">invest in China</a>.</li><li>Tech: The psychology <a target="_blank" href="https://www.businessinsider.com/apple-iphone-doj-lawsuit-antitrust-green-bubble-samsung-stigma-2024-4">behind Apple's "green bubble" trick</a> that makes the iPhone feel "cool."</li><li>Business: Elon Musk's <a target="_blank" href="https://www.businessinsider.com/elon-musk-having-terrible-year-tesla-lawsuits-compensation-2024-4">no good, very bad year</a>.</li></ul>But first, who ya got?If this was forwarded to you, <a target="_blank" href="https://www.businessinsider.com/subscription/newsletter/insider-today">sign up here.</a><h3>The big story</h3><h2>House of Mouse showdown</h2><div type="image" title="Bob Iger, Nelson Peltz" height="1080" width="1440" msid="109011153" hostid="261" sizebytes="69798"></div>Disney is all about imagination — dubbing some employees "Imagineers" — but some investors are imagining the iconic company being run differently.Activist investor Nelson Peltz's proxy fight against Disney for two seats on the company's board comes to a head at its annual shareholder meeting today. Business Insider's Madeline Berg has <a target="_blank" href="https://www.businessinsider.com/bob-iger-nelson-peltz-where-things-stand-disney-proxy-war-2024-4">a complete rundown of how we got here</a>.Today's vote is about a lot more than just two board seats. It's about the future of one of America's most iconic companies. It's about the state of the media and entertainment industry, in which Disney plays a pivotal role. And it could reshape how Disney CEO Bob Iger, who's less than two years into his <a target="_blank" href="https://www.businessinsider.com/bob-iger-disney-strong-earnings-taylor-swift-espn-streaming-fortnite-2024-2">second stint at the company</a>, might ultimately be remembered.Such an ambitious battle <a target="_blank" href="https://www.businessinsider.com/disney-proxy-vote-spending-bob-iger-hedge-fund-nelson-peltz-2024-4">doesn't come cheap</a>, as BI's Peter Kafka pointed out. The total amount spent between Disney and its rivals wrangling votes is estimated to be at least $70 million, a record for a proxy fight.One reason it cost so much, and why this vote is so unique, is the makeup of Disney's investor base.Winning the vote isn't just a matter of convincing large investment firms with sizable positions to vote your way. Although, <a target="_blank" href="https://www.businessinsider.com/nelson-peltz-proxy-fight-disney-may-hinge-3-investors-2024-4">big players matter, too</a>, BI's Grace Eliza Goodwin writes.Almost 40% of Disney shares are owned by individuals, which means both sides need to get more creative in their approach. Disney, for example, <a target="_blank" href="https://www.businessinsider.com/disney-stock-pinocchio-iger-peltz-trian-activist-investing-proxy-fight-2024-3">used Pinocchio</a> in one investor presentation.<div type="image" title="The statue of Walt Disney and Mickey Mouse at Cinderella Castle at the Magic Kingdom, at Walt Disney World, in Lake Buena Vista, Florida." height="662" width="1024" msid="109011154" hostid="261" sizebytes="104722"></div>So, where is this all headed?Disney was in good shape earlier in the week, holding a lead with more than half of the votes shared, <a target="_blank" href="https://www.wsj.com/finance/disney-winning-proxy-fight-against-trian-with-more-than-half-of-votes-cast-bf1874a1?st=9rs5t09tu79u67g&amp;reflink=desktopwebshare_permalink">according to a report from The Wall Street Journal</a> on Monday. BlackRock and T. Rowe Price were reportedly both planning on backing Disney.But the fight has been closer than Disney would have liked. And Peltz's Trian Partners reportedly has its own powerful allies (Neuberger Berman, the California Public Employees' Retirement System, and <a target="_blank" href="https://www.reuters.com/business/media-telecom/proxy-advisory-firm-iss-recommends-disney-shareholders-elect-nelson-peltz-board-2024-03-21/">proxy advisor ISS</a>). Peltz previously told the Financial Times that he <a target="_blank" href="https://www.businessinsider.com/disney-activist-investor-nelson-peltz-bully-billionaire-2024-3">wouldn't look to fire Iger if he wins a seat</a>, but also hinted at <a target="_blank" href="https://www.ft.com/content/0a182c97-6af7-42a6-ad9f-ae980562bb45">changing management in some entertainment divisions</a>.It's also unclear what Trian, which controls about a 1.8% stake in Disney, would do if it loses its fight. But even in failure, Trian has elicited change. DuPont defeated Trian in a proxy battle in 2015, but its CEO stepped down later that year and the company sped up cost-cutting plans.It shows the lose-lose situation that proxy battles can sometimes become. Activist campaigns meant to garner support for their cause ultimately expose weaknesses in companies they're invested in.<h2>3 things in markets</h2><div type="image" title="Various graphs and charts overlapping each other." height="1000" width="2000" msid="109011155" hostid="261" sizebytes="131356"></div><ol><li>Stocks keep climbing on the hopes of a rate cut that hasn't come yet, and that's a problem. Stocks have rallied since October on the belief that interest rate cuts were coming, despite delays from the Fed. The growing divide between reality and expectation <a target="_blank" href="https://markets.businessinsider.com/news/stocks/stock-market-outlook-rate-cut-forecast-growing-gap-fed-recession-2024-4">could spell trouble for investors</a>, according to JPMorgan.</li><li>Ray Dalio makes the case for why he's still investing in China. The billionaire founder of Bridgewater Associates <a target="_blank" href="https://markets.businessinsider.com/news/stocks/ray-dalio-china-stock-market-cheap-assets-debt-geopolitics-issues-2024-4">believes it's a good time to buy Chinese equities</a> despite so many market watchers' pessimism. For Dalio, the issues in China are manageable, as long as Chinese leaders are "smart and courageous," he wrote in a LinkedIn post.</li><li>The IPO market is finally starting to warm up. Reddit, Astera Labs, and Arm Holdings have all made successful trading debuts in recent months. That's a sign there's <a target="_blank" rel="noopener" href="https://markets.businessinsider.com/news/stocks/recent-upcoming-ipo-processes-stock-market-impact-outlook-reddit-astera-2024-4">upside in the stock market</a> as a risk-on environment starts to pick up steam, LPL Financial strategists Quincy Krosby and Jeffrey Buchbinder said.</li></ol><h2>3 things in tech</h2><div type="image" title="A worried-looking emoji inside a green text bubble." height="500" width="1000" msid="109011156" hostid="261" sizebytes="109594"></div><ol><li>Why do we even care about green text bubbles? On iPhones, texts from non-Apple phones register in a gray and green color palette that's been derided by Apple fans. It's a clever marketing trick the company has used <a target="_blank" href="https://www.businessinsider.com/apple-iphone-doj-lawsuit-antitrust-green-bubble-samsung-stigma-2024-4">to position its product as the "cool" phone</a>.</li><li>How to land a job at Nvidia. A software engineer at the chip company explains how he got the job, how much he makes, and what prospective employees can do <a target="_blank" href="https://www.businessinsider.com/nvidia-software-engineer-how-landed-job-preparation-culture-interviews-2024-4">to nail the challenging interview process</a>.</li><li>Microsoft's poaching has made hiring tough for Inflection. The tech giant snapped up Inflection's cofounders and most of its staff last month, leaving the AI startup a shell of its former self. One <a target="_blank" href="https://www.businessinsider.com/inflection-hire-spooked-microsoft-poaching-cofounders-greylock-reid-hoffman-2024-4">recent hire was "spooked" by the news</a>, per an internal email obtained by BI.</li></ol><h2>3 things in business</h2><div type="image" title="elon burns" height="900" width="1200" msid="109011157" hostid="261" sizebytes="174716"></div><ol><li>Elon Musk is having a terrible year. Tesla's <a target="_blank" href="https://www.businessinsider.com/tesla-sales-deliveries-q1-elon-musk-disappoint-fsd-2024-4">delivery numbers slumped</a> on Tuesday amid a "nightmare" quarter. The <a target="_blank" href="https://www.businessinsider.com/tesla-sales-miss-ev-slowdown-new-wave-customers-2024-4">EV slowdown</a> is taking a toll on the company — and analysts say Musk's <a target="_blank" href="https://www.businessinsider.com/elon-musk-tesla-reputation-turning-buyers-off-ev-caliber-2024-4">reputation may not be helping</a>. And that's saying nothing of <a target="_blank" href="https://www.businessinsider.com/elon-musk-having-terrible-year-tesla-lawsuits-compensation-2024-4">his troubles with X and OpenAI</a>.</li><li>Inside Y Combinator's new college campus-inspired HQ. Last year, the startup accelerator moved its headquarters from Mountain View to the historic shipyard at Pier 70. Then, in January, <a target="_blank" href="https://www.businessinsider.com/inside-y-combinator-new-headquarters-office-san-francisco-dogpatch-photos-2024-4">it expanded to 60,000 square feet</a> by moving into the building next door.</li><li>It's still not easy to get paid as a college athlete. To learn more about so-called NIL deals, BI sat down with <a target="_blank" href="https://www.businessinsider.com/branden-fiske-how-to-get-paid-college-athlete-nil">Florida State University defensive lineman Braden Fiske</a>, who's projected to make millions if he is drafted into the NFL in April. He advises students to network and learn to say no to offers.</li></ol><h2>In other news</h2><ul><li><a target="_blank" href="https://www.businessinsider.com/surescripts-hires-bank-tripletree-private-equity-buyer-sale-2024-4">Exclusive: Electronic prescribing giant Surescripts is exploring a sale</a>.</li><li><a target="_blank" href="https://www.businessinsider.com/meta-onavo-data-clone-snapchat-unsealed-record-show-2024-4">Meta tried to 'build a clone of Snapchat' using data from Onavo, unsealed court documents show</a>.</li><li><a target="_blank" rel="noopener noreferrer" href="https://www.businessinsider.com/instagram-is-bringing-back-cash-bonuses-reels-photos-paying-creators-2024-4">Instagram is 'testing' new cash bonuses that pay creators to post engaging photos, reels, and more</a>.</li><li><a target="_blank" href="https://www.businessinsider.com/superyacht-etiquette-how-to-behave-on-yacht-2024-4">The unwritten rules of superyachting</a>.</li><li><a target="_blank" href="https://www.businessinsider.com/jeff-bezos-buys-miami-mansion-florida-2024-4">Jeff Bezos snaps up a 3rd Miami-area mansion for $90 million</a>.</li><li><a target="_blank" href="https://www.businessinsider.com/trump-media-truth-social-users-disclose-financials-djt-2024-4">How many users does Donald Trump's social media company have? He won't say</a>.</li><li><a target="_blank" href="https://www.businessinsider.com/leaving-army-not-easy-veterans-how-they-did-it-2024-3">Leaving the army to go corporate is a tough road to take. We asked 3 veterans how they survived and thrived</a>.</li><li><a target="_blank" href="https://www.businessinsider.com/jon-stewart-apple-daily-show-ftc-chair-lina-khan-appletv-2024-4">Jon Stewart says Apple asked him not to let FTC chair Lina Khan appear on his Apple podcast</a>.</li><li><a target="_blank" href="https://www.businessinsider.com/dollar-stores-slowdowns-because-of-economy-inflation-store-issues-2024-4">Dollar stores are supposed to do well regardless of the economy. Turns out, that's not true</a>.</li><li><a target="_blank" href="https://www.businessinsider.com/tesla-cyberbeast-goes-to-sothebys-auction-2024-4">Tesla's bulked-up Cyberbeast truck is about to head for public auction — take a look</a>.</li></ul><h2>What's happening today</h2><ul><li>The Walt Disney Company's annual meeting will be held today.</li><li>Haiti's state of emergency is due to expire.</li></ul>The Insider Today team: <a target="_blank" href="https://www.businessinsider.com/author/dan-defrancesco">Dan DeFrancesco</a>, deputy editor and anchor, in New York. <a target="_blank" href="https://www.businessinsider.com/author/jordan-parker-erb">Jordan Parker Erb</a>, editor, in New York. <a target="_blank" href="https://www.businessinsider.com/author/hallam-bullock">Hallam Bullock</a>, senior editor, in London. <a target="_blank" href="https://www.businessinsider.com/author/george-glover">George Glover</a>, reporter, in London.

Disney proxy battle is about a lot more than just two board seats

A sixth-grade social science textbook that I read described India as a piece of fabric, with countless threads coloured in a myriad of majestic shades, woven together. This metaphor holds exceptionally well when put into the context of our <keyword id="22706215" type="General" weightage="20" keywordseo="handloom-industry" source="keywords">handloom industry</keyword>. India has a rich history of handlooms and weaving cultures. The culture of handlooms is so intricately woven into Indian culture, that there are whole towns dedicated to the same: <keyword id="248532" type="General" weightage="20" keywordseo="Chanderi" source="Orion">Chanderi</keyword> in Madhya Pradesh to Pochampally in Telangana and a dozen more! Unfortunately, the handloom industry in India is dying. The struggle is multi-faceted, ranging from a declining workforce to fierce competition from <keyword id="20496028" type="General" weightage="20" keywordseo="power-looms" source="keywords">power looms</keyword>. Hence, five years ago, August 7 was proclaimed <keyword id="22677698" type="General" weightage="20" keywordseo="National-Handloom-Day" source="keywords">National Handloom Day</keyword> in response to this crisis and to heighten public awareness. This date holds special historical significance, commemorating the initiation of the Swadeshi Movement in 1905—a pivotal act of defiance against British colonial rule. <h2>When did this industry come into existence?</h2>According to archaeological findings, the origins of handloom in the Indian subcontinent may be traced back to the Indus Valley Civilization. The Mughal Empire was known to support and patronise <keyword id="20258864" type="General" weightage="20" keywordseo="weavers" source="keywords">weavers</keyword>. The support from the royal patrons resulted in the invention of new textiles such as ‘Mulmul’ and ‘Banarasi Brocade’ among others. This era witnessed a heightened worldwide demand for Indian textiles. In the 17th century, India produced 25% of the world’s textiles, with Bengal accounting for more than 50% of textiles and 80% of silks imported by the Dutch from Asia. <h2>What led to the decline of the <keyword id="19934660" type="General" weightage="100" keywordseo="Indian-handloom" source="keywords">Indian handloom</keyword>?</h2>The East India Company's entry fuelled the industry's initial decline, which started in the 1830s. The weavers were obliged to sell only to the British, and that too at exceedingly cheap prices, virtually putting them out of business. On the other hand, Indian cloth was taxed excessively to promote machine-made British clothing. The Industrial Revolution in Britain strengthened their indigenous textile industry, giving rise to new markets for cheaper textiles. In India, the collapse of the Mughal aristocracies meant no access to royal patronage. As a result, textiles like Khadi and muslin had little demand in the market. Circling back to the present, the industry is facing both similar and new challenges. Fabrics made on power looms are cheaper and faster to produce, in comparison to handloom fabrics. The industry is largely unorganised, and the wages are shockingly low. 67% of <keyword id="22706216" type="General" weightage="20" keywordseo="handloom-workers" source="keywords">handloom workers</keyword> are earning less than the minimum wage every month. Faced with economic challenges, the older artisans are thus forced to encourage the newer generation to choose an alternative career path. This migration of the workforce from a traditional sector is evident from the fall in the number of weavers less than 35 years of age- from 26.13 lakh in 2009-10 to 16.07 lakh in 2019-20. The majority of weavers do not have access to banking facilities, let alone institutional credit. Furthermore, if one manages to accumulate credit, there is a mismatch between the supply and demand forces due to the lack of awareness about handwoven textiles in the current generation. <h2>Initiatives for revival</h2>The cultural significance of the Indian handloom isn’t just limited to its beauty and extravagance, but it extends to our independence struggle as well. The Swadeshi movement immortalised the charkha and advocated for the use of indigenous goods. Following independence, the Indian government took many measures to revive the handloom industry. In 1953, India’s Parliament approved the Khadi and Other Handloom Industries Development Act. In 1955, the All India Handloom Fabrics Marketing Cooperative Society was formed to promote the sale of fabrics produced by handloom cooperatives across India. The National Handloom Development Programme (NHDP) aimed to provide financial assistance for marketing and production. The Handloom Weavers’ Comprehensive Welfare Scheme offers health and life insurance to weavers, to ensure social security. The organisation commenced a fortnight-long exhibition, “VIRAASAT” dedicated to celebrating the 10th National Handloom Day began at Handloom Haat in Janpath, New Delhi on Saturday, 3rd August 2024, and will conclude on 16th August 2024. The Handloom Mark scheme was introduced to authenticate handloom products, thus enabling weavers to gain better market access and ensuring that consumers get genuine products. Moreover, the India Trade Portal also mentions that the GOI plans to provide financial assistance of Rs. 30 crore to at least 10,000 handlooms. Various state governments also regularly conduct handloom expos and fairs, providing platforms for weavers to showcase and sell their products directly to consumers. <h2>Contemporary Brands and their love for Indian handloom</h2>Modern, popular designers such as <keyword id="8264" type="General" weightage="20" keywordseo="Sabyasachi" source="Orion">Sabyasachi</keyword> and <keyword id="21493890" type="General" weightage="20" keywordseo="ritu-kumar" source="keywords">Ritu Kumar</keyword> are known to work closely with weavers and have been doing their part by bringing worldwide attention to the handloom industries. Recently, <keyword id="1472101" type="General" weightage="20" keywordseo="Ajrakh" source="Orion">Ajrakh</keyword> was brought into the limelight when Alia Bhatt wore a custom Abu Jani Sandeep Khosla Ajrakh saree to Joy Awards in Riyadh. However, it’s not just the fashion moguls who are working towards the revival of this industry. Contemporary indie brands are partnering with local weavers, and creating awareness about their work. The emergence of such indie brands and their association with local artisans is beneficial for both entities. For instance, Joskai Studio derives its name from ‘Joskai’, a woven piece of cloth worn as a part of the traditional costume of the Tiwa community of Assam. They work with artisans in northeast India, specifically from the weaving village of Saualkuchi in Assam. Rouka by Sreejith Jeevan is a Kerala-based brand that works strictly with weavers from Kerala, specifically Chendamangalam and Kuthampally. <h2>Employment and Exports</h2>According to the Indian Trade Portal, the Indian handloom sector is the country’s second-largest employer after agriculture in rural areas. The Handloom Census 2019-20 mentions that the industry employs about 35,22,512 workers across the country, with women forming 77.29% of the workforce. India is the second largest exporter of handloom products in the world, with exports valued at $ 353.9 million in 2017- 18, as per EXIM bank's working papers. The major handloom export centres are Karur, Panipat, Varanasi and Kannur where handloom products like bed linen, table linen, toilet linen, floor coverings, and embroidered textile materials and curtains etc. are produced for export markets. During April 2021-February 2022, India exported handloom products worth 1693 crore, as per Indian Trade Portal. Indian silk scarves also form a sizable chunk of total handloom exports, in addition to home textiles like carpets, rugs and mats, which constitute over 13.6% of India’s total handloom exports. <h2>The Path Forward</h2>The mere existence of organisations and allocation of funds isn’t enough to sustain the legacy of India’s rich handloom industry. Big corporations working with local weavers ensure employment but don't protect them from exploitation and meagre wages, leaving them vulnerable. The people in power ought to come up with strategies that ensure the trickle-down effect of the schemes and funds. The new generation of buyers has a greater purchasing power than the one before them. Marketing focused on bringing Indian handloom practices into the limelight can do wonders in this case.

Fabric of a nation: Sustaining India's handloom legacy in modern times

The competition between <keyword id="19929098" type="General" weightage="20" keywordseo="Gautam-Adani" source="keywords">Gautam Adani</keyword> and <keyword id="19916798" type="General" weightage="20" keywordseo="Mukesh-Ambani" source="keywords">Mukesh Ambani</keyword> for the title of <keyword id="1919738" type="General" weightage="20" keywordseo="Indias-richest-person" source="Orion">India's richest person</keyword> has navigated a rollercoaster of fortunes. Their rivalry isn't merely a headline-grabbing feud, but a significant force shaping the Indian economic landscape. As of mid-August, Ambani remains the <keyword id="7413735" type="General" weightage="20" keywordseo="richest-person-in-India" source="Orion">richest person in India</keyword>. He is ranked 11th among the world's wealthiest individuals by Forbes, with a net worth of around $113 billion. On the other hand, Adani's net worth has fallen to approximately $84 billion, placing him 20th on Forbes’ real-time global list. Gautam Adani, chairman of the $32 billion (revenue) Adani Group, has witnessed a journey marked by dramatic ups and downs. In 2022, he soared to the rank of the world's second-richest individual before encountering a severe downturn. Allegations of corporate fraud by Hindenburg Research triggered a substantial sell-off in his company's stocks in 2023. Yet, Adani's determined recovery—focused on debt management and core business strengths—has paved the way for a remarkable rebound. By 2024, Adani group's shares also recovered substantially after India's Supreme Court ruled in the group's favour. Meanwhile, Mukesh Ambani—chairman and managing director at the $110 billion (revenue) Reliance Industries—has also experienced some fluctuations in his wealth and business activities this year. However, 2024 has been marked mainly by his personal milestones. The high-profile wedding of his younger son Anant Ambani with Radhika Merchant was attended by some of the most well-known celebrities and figures in the world, highlighting Ambani family's prominence in both business and social spheres. <cmsannotation type="cmsannotation" annotationid="Implications of Adani vs Ambani for the Indian economy" comment="subhead" text="Implications of Adani vs Ambani for the Indian economy">Implications of <keyword id="13480269" type="General" weightage="100" keywordseo="Adani-vs-Ambani" source="Orion">Adani vs Ambani</keyword> for the <keyword id="6356076" type="General" weightage="20" keywordseo="Indian-economy" source="Orion">Indian economy</keyword></cmsannotation> The ongoing competition between Ambani and Adani is not just a personal battle; it has broader implications for the Indian economy. Firstly, heightened competition between these business giants is likely to benefit consumers by driving improvements in pricing and services within sectors they both dominate, including telecommunications, retail and renewable energy. Additionally, as their enterprises grow, they are expected to generate a significant number of job opportunities across diverse fields. This competitive dynamic also fosters a climate of innovation, as both conglomerates invest heavily in emerging technologies and sustainable practices, thereby bolstering India's position as a leader in these areas. Both billionaires represent different paths to success, with Ambani's legacy-driven approach contrasting with Adani's entrepreneurial journey, underscoring the diverse opportunities within the Indian economy. The ongoing race between Mukesh Ambani and Gautam Adani epitomises the dynamic nature of wealth creation in India. With Adani currently in the lead, the competition promises to continue shaping economic trends and consumer experiences in the country.

Adani vs Ambani: Mukesh Ambani has overtaken Gautam Adani in race to become richest person in India

<ul><li>Wadia who manages various businesses from biscuits-to-textiles-to-airlines, sued his childhood friend, <keyword id="6360722" type="UNKNOWN" weightage="20" keywordseo="ratan-tata">Ratan Tata</keyword> after Tata group removed him as the independent director of <keyword id="42747" type="DOMAIN" weightage="20" keywordseo="Tata-Motors">Tata Motors</keyword> for supporting Mistry. </li><li>Wadia, who was once called as the epitome of South Bombay’s old money and genteel respectability, has been a part of many corporate brawls during 1970s and 1980s. </li><li>One of the many first corporate fights was with his father, <keyword id="71087" type="PERSON" weightage="20" keywordseo="Neville-Wadia">Neville Wadia</keyword>, who was the chairman of <keyword id="55359" type="COMPANY" weightage="20" keywordseo="Wadia-Group">Wadia Group</keyword>. </li><li>Then the next battle was against the Ambanis. </li></ul>The infamous exit of Cyrus Mistry as the chairman of the $103 billion Tata group had unfolded a lot of drama in Tata boardrooms. One of its many offshoots was that it angered billionaire <keyword id="6500654" type="PERSON" weightage="20" keywordseo="nusli-wadia">Nusli Wadia</keyword> who was caught in the crossfire which culminated into a court case. Wadia who manages various businesses from biscuits-to-textiles-to-airlines, <a href="https://www.business-standard.com/article/companies/ratan-tata-steps-down-as-bombay-dyeing-s-director-113020800565_1.html">sued his childhood friend, Ratan Tata</a>. While the Mistry-Tata war was at its zenith, <a href="https://economictimes.indiatimes.com/news/company/corporate-trends/independent-directors-of-tata-chemicals-support-cyrus-mistry-management/articleshow/55355584.cms">Wadia threw his weight behind Mistry</a>. As a result, the Tata group removed him as the independent director of Tata Motors. Wadia filed a defamation case against Ratan Tata and his Tata group. He claims that <a href="https://qz.com/india/835001/corporate-gladiator-and-jinnahs-grandson-nusli-wadia-has-entered-the-tata-battle-and-hes-going-after-his-childhood-friend/">he “never entered any dispute unless he felt wrong”.</a> And, for three years the case went on during which time his net worth doubled from $3.5 billion to $7billion in 2019, according to Forbes. Here’s how things unfolded for Nusli Wadia , who stood against Ratan Tata: 
	<div type="Slideshow" msid="73264318" hostid="261" title="Nusli Wadia could be one of the rare men who battled Ambanis and Tatas and lived to tell the take" firstImageMsid="73264426" slideCount="3"></div>

Billionaire Nusli Wadia could be one of the rare men who battled Ambanis and Tatas and lived to tell the tale

Amid questions on the depleting <keyword id="20776807" type="General" weightage="100" keywordseo="loan-to-deposit-ratio" source="keywords">loan-to-deposit ratio</keyword> in <keyword id="19895091" type="General" weightage="20" keywordseo="Indian-banks" source="keywords">Indian banks</keyword>, a recent report by <keyword id="19896146" type="General" weightage="20" keywordseo="Motilal-Oswal" source="keywords" meta.keywordsubtype="org" meta.entityname="Motilal Oswal" meta.hostid="269" meta.entityid="Motilal Oswal">Motilal Oswal</keyword> suggests that the loan-to-deposit (LD) ratio is likely to subside on its own in the coming months. The debate on loan-to-deposit ratio (LD), particularly concerning sluggish <keyword id="19998084" type="General" weightage="20" keywordseo="deposit-growth" source="keywords">deposit growth</keyword> and potential risks to <keyword id="20089808" type="General" weightage="20" keywordseo="financial-stability" source="keywords">financial stability</keyword> is raised by even the finance minister and the <keyword id="20151998" type="General" weightage="20" keywordseo="RBI-governor" source="keywords">RBI governor</keyword>. However, the report notes that on closer examination, the situation may not be as alarming as it seems. As of 9th August, 2024 the Indian <keyword id="19964544" type="General" weightage="20" keywordseo="banking-sector" source="keywords">banking sector</keyword>'s loan-to-deposit (LD) ratio stood at 77.2 %, which is slightly below its recent peak of 78.2 % on 22nd March 2024, and its all-time high of 78.8 % in September 2013. The report stated that typically a rising LD ratio is indicative of a tightness in the banking sector, potentially indicating overheating. A lower LD indicates that the bank is aggressive in its credit disbursement practises, which could be risky. It highlighted that an analysis of the sector's transactions with the Reserve Bank of India (RBI) through the liquidity adjustment facility (LAF), along with recent trends in the weighted average call rate (WACR), suggests that the current rise in the LD ratio does not indicate tightness, which is why there is no immediate cause of concern. In fact, the report added that the concern over weak deposit growth may be overstated. Historical data show that bank deposits grew at an average rate of 9.5 % during the pre-COVID period (January 2015 to February 2020) and 10.4 % in the post-COVID period (March 2020 to August 2024). Earlier, Finance Minister Nirmala Sitharaman also urged state-run banks to enhance deposit mobilization through attractive offers and focusing on Tier-2 and Tier-3 cities. Loan-to-deposit ratio pegs the total deposits received by the bank against the loans it has offered. It helps in understanding how liquid the bank is. The loan-to-deposit ratio (LDR) is a financial metric that compares a bank's total loans to its total deposits. It's used to assess a bank's liquidity and credit risk, and to inform lending and deposit-taking decisions The report said while the exact measures are unclear, the deposit growth could potentially be increased by making other asset classes less attractive through taxation or interest rates, or by boosting fiscal spending to increase net credit to the government. In its forecast, the report noted that private banks will witness a moderation in their <keyword id="19998083" type="General" weightage="20" keywordseo="credit-growth" source="keywords">credit growth</keyword>, while public sector banks will maintain a healthy credit growth rate. "Our analysis suggests that deposit growth could be raised by either making other asset classes unattractive (through taxation and/or interest rate) or increasing the growth in net credit to the government by pushing fiscal spending higher" the report added. Alternatively, policymakers might consider curtailing loan growth to lower the LD ratio. However, this could slow deposit growth, particularly if corporate credit growth remains weak. Encouraging savers to shift investments from other assets to bank deposits could also be an option, but this carries risks of overreach and potential damage to economic confidence. Das had also flagged the excessive growth, or froth developing in the personal loan space. Notably, while credit growth in unsecured personal loans like credit cards continues to decline, it remains elevated at 23.3% as of June 2024. However, this is a significant reduction from 34.2% witnessed in November 2023. As fiscal spending increases, bank credit to the government is likely to grow, which should elevate deposits and broad money supply. The report said "However, the extent of foreign capital inflows and the RBI's policy for managing these inflows remain uncertain". Last month, RBI governor Shaktikanta Das had also addressed this issue in the 50th meeting of MPC (Monetary Policy Committee). Per him, deposit mobilisation has been lagging credit growth for some time now. This may potentially expose the system to structural liquidity issues. "While there could be a debate regarding ‘deposits funding loans’ vis-à-vis ‘loans funding deposits’, the current regulatory concern stems from the fact that there could be structural changes happening which banks need to recognise and, accordingly, devise their strategies. Households and consumers who traditionally leaned on banks for parking or investing their savings are increasingly turning to capital markets and other financial intermediaries", Das said. Per him, while bank deposits continue to remain dominant as a percentage of financial assets owned by households, their share has been declining consistently, since households are now increasingly allocating their savings to mutual funds, insurance funds, pension funds and other avenues.

Loan-to-deposit ratio will subside on its own in coming months, notes Motilal Oswal report

Mumbai (Maharashtra) [India], August 8 (ANI): <keyword id="64190" type="General" weightage="100" keywordseo="RBI-Governor" source="Orion">RBI Governor</keyword> <keyword id="6359111" type="General" weightage="20" keywordseo="Shaktikanta-Das" source="Orion">Shaktikanta Das</keyword> says <keyword id="19895000" type="General" weightage="20" keywordseo="inflation" source="keywords">inflation</keyword> will moderate from July onwards as the monsoon has improved and <keyword id="489239" type="General" weightage="20" keywordseo="Global-food-prices" source="Orion">global food prices</keyword> have shown signs of easing in July. Das said, "Global food prices showed signs of easing in the month of July after registering an increase since March 2024." A degree of relief in food inflation is expected from the pickup in southwest monsoon and healthy progress in Kharif sowing. Buffer stocks of cereals continue to be above the norms, according to RBI Governor Shaktikanta Das. Das added, "Assuming a normal monsoon and taking into account the 4.9 per cent inflation print, Q1 CPI inflation for the current financial year (2024-25) is projected at 4.5 per cent, with q2 at 4.4 per cent, Q3 at 4.7 per cent and Q4 at 4.3 per cent. CPI inflation for the first quarter of next financial year (Q1 2025-26) is projected at 4.4 per cent." The inflation landscape reflects mixed signals, to which Das said, "<keyword id="21258540" type="General" weightage="20" keywordseo="headline-inflation" source="keywords">Headline inflation</keyword> eased up to 5.1 per cent in June 2024 due to higher than expected food inflation. Fuel remained in deflation for the 10th consecutive month. Core inflation moderated to a historic low in the months of May and June." RBI Governor Shaktikanta Das, outlined the <keyword id="19900794" type="General" weightage="20" keywordseo="economic-growth" source="keywords">economic growth</keyword> with real <keyword id="19972825" type="General" weightage="20" keywordseo="GDP-growth" source="keywords">GDP growth</keyword> of 7.2 per cent for the fiscal year 2024-25 and headline inflation eased to 5.1 per cent in June, on Thursday. Das said, "Real GDP growth for 2024-25 is projected at 7.2 per cent with Q1 at 7.1 per cent, Q2 at 7.2 per cent, Q3 at 7.3 per cent and Q4 at 7.2 per cent. Real GDP growth for Q1 2025-26, this is something which we are giving for the first time, is projected at 7.2 per cent. The risks are evenly balanced." He added, "We have slightly moderated the <keyword id="387719" type="General" weightage="20" keywordseo="growth-projection" source="Orion">growth projection</keyword> for the first quarter of the current financial year in relation to the projection we gave in the previous MPC in June. This is primarily due to updated information on certain high-frequency indicators which show lower than anticipated corporate profitability, general government expenditure and core industries output." This forecast marks a slight moderation from previous estimates provided in the Monetary Policy Committee (MPC) meeting in June, attributed to recent updates on high-frequency indicators such as corporate profitability, general government expenditure, and core industries output. The inflation landscape reflects mixed signals, to which Das said, "Headline inflation eased up to 5.1 per cent in June 2024 due to higher than expected food inflation. Fuel remained in deflation for the 10th consecutive month. Core inflation moderated to a historic low in the months of May and June." Balancing robust growth projections with a nuanced understanding of inflation dynamics Governor Das stated, "Food inflation which has a weight of around 46 per cent in the CPI basket, contributed to more than 75 per cent of headline inflation in May and June. Vegetable prices increased sharply and contributed about 35 per cent to inflation in June. High inflation pressures persisted across other major food items also." Governor Das mentioned softening in core inflation continues to be broad-based with core services inflation touching a new low in the current CPI series during the month of May and June 2024. Das stated, "The high food price momentum likely to have continued in the month of July also. Large favourable base effects may however push headline inflation downwards in July. The Impact of the revision in milk prices mobile tariffs also needs to be carefully monitored." A degree of relief in food inflation is expected from the pickup in south west monsoon and healthy progress in Kharif sowing. Buffer stocks of cereals continue to be above the norms, according to RBI Governor Shaktikanta das. Das anticipates some relief in food inflation due to the expected pickup in the southwest monsoon and healthy progress in Kharif sowing. Buffer stocks of cereals remain above the normative levels, contributing to a more stable food price environment. Global food prices, which have been on an upward trajectory since March 2024, showed signs of easing in July.

RBI Governor Shaktikanta Das projects 7.2% GDP growth for 2024-25, reports eased inflation to 5.1% in June

India's <keyword id="20884491" type="General" weightage="20" keywordseo="cement-industry" source="keywords">cement industry</keyword> is heating up faster than a kiln! If one’s tracking the sector, the war-like situation between the existing and emerging cement giants is pretty evident. For the uninitiated, Aditya Birla Group-backed <keyword id="19963567" type="General" weightage="100" keywordseo="Ultratech-Cement" source="keywords" meta.keywordsubtype="org" meta.entityname="Ultratech Cement" meta.hostid="261" meta.entityid="Ultratech Cement">Ultratech Cement</keyword> and <keyword id="19955648" type="General" weightage="20" keywordseo="Adani-Group" source="keywords">Adani Group</keyword> have been at loggerheads for increased market share in recent years. And now, JSW Cement also seems to be gearing up to challenge the potential duopoly. As conglomerates aggressively acquire smaller players to achieve market domination, the cement industry in India right now resembles an eighteenth-century battlefield. The battle has significantly escalated this year, but this trend of acquiring regional cement companies can be traced back to 2018 when Ultratech acquired Binani Cement. Since then, both Adani Group and Birla Group have been capturing checkposts all over India, one by one. Ultratech acquired Binani Cement to strengthen its base in the western region and this week, India Cement, for the southern states. Adani has also acquired the Hyderabad-based Penna Cement this year, after acquiring majority stakes in Ambuja Cements and ACC in 2022. But why the obsession with cement? <h2>Why are the Titans clashing for…cement?</h2>India's infrastructure boom is in full swing, and whoever controls the cement supply holds the key to this construction kingdom. Adani Group has been known to follow an acquire &amp; dominate strategy for capturing market segments. <keyword id="19907441" type="General" weightage="20" keywordseo="Aditya-Birla-Group" source="keywords">Aditya Birla Group</keyword>, however, has dominated the cement industry in India through Ultratech for a while now. The answer to the above question may simply lie in establishing the leadership moat for themselves. With even-growing public and private spending on infrastructure, both players want to capture the majority share to dominate the supplies of cement, which is essential for construction. <h2>Where is the sector heading?</h2>While both Adani and Aditya Birla groups have locked horns to acquire CK Birla’s Orient Cement for a while now, a new hurdle threatens their dominance. As per an Economic Times report, Sajjan Jindal-led JSW Cement has now started to evaluate the acquisition of the promoter stake in Orient Cement. As an emerging front, JSW Cement also aims to reach 50 MT per annum by 2030. However, two other major players, Shree Cement and Dalmia Bharat, already have 53 MTPA and 43 MTPA capacity. <div type="image" title="Birla Vs Adani" msid="112196675" hostid="261" sizebytes="284160" caption="&amp;lt;p&amp;gt;Look back at major acquisitions in the cement sector&amp;lt;/p&amp;gt;"></div> However, with over a dozen acquisitions over the last decade, both Ultratech and Adani Group are by far the largest players in the sector eyeing over 200 MT per annum by 2030. <h2>What about the prices?</h2>Will consumers benefit from this cutthroat competition to industry domination? In the short term at least, yes! While lower prices might sound appealing, it's essential to keep an eye on quality as consolidation in the manufacturing sector is always tricky. We don't want to end up with buildings crumbling like cookies. And let's not forget about the little guys. This consolidation of power into a few mega-corporations could squeeze out smaller players, reducing competition and potentially leading to higher prices in the long run. <h2>I think I’ve seen this film before….</h2>The current atmosphere of the cement industry feels reminiscent of what happened in the telecom industry in India in 2016 i.e. the infamous tussle of tariffs. As Reliance Industries launched Jio, it disrupted the entire segment and forced other telecom companies to compete on their terms. As a result, the tariffs fell sharply, companies shut and brands merged, but Jio still claims 40% of the market share in India in terms of subscriber count. Moreover, experts feel that the change in power dynamics in both these industries, cement and telecom, have direct ties to the current government’s industrial policy. Government policies seem to favour companies that have acquired a dominant position in distinct sectors of the economy, which in India’s case are led by two of the richest men in Asia — Gautam Adani and Mukesh Ambani. This strategy of adopting ‘<keyword id="1327299" type="General" weightage="20" keywordseo="national-champions" source="Orion">National Champions</keyword>’ is seemingly inspired by South Korea’s <keyword id="4933297" type="General" weightage="20" keywordseo="Chaebols" source="Orion">Chaebols</keyword> and Japan’s Zaibatsu conglomerates that came into existence decades ago. <h2>From corporate drama to k-drama: Chaebols</h2>The term Chaebol might ring a bell if you've watched K-dramas. They are family-owned business conglomerates in South Korea. This business structure originated in the 1960s and got so popular that it made its way into Korean pop culture. While chaebols have fueled the rapid growth of the Korean economy, concerns about their opaque governance and controlling shareholder interests often deter external investors. Japan’s zaibatsu were also similar financial and industrial conglomerates that were major forces in Japan during World War II. Korea’s Hyundai and Japan’s Mitsubishi are some prime examples of this structure. <h2>Growth of the Goliaths</h2>Viral Acharya, the former Deputy Governor of the RBI, highlights the decade-old trend of the central government achieving economic growth outcomes by working with large conglomerates in part, rather than with state governments. In his conference paper for the Brookings Papers on Economic Activity in March 2023, he demonstrates this pattern with examples from multiple sectors. “By way of specific examples, the share of the Top 5 groups by sales in Civil Engineering and Construction rose from 31% in 2016 to 42% in 2021, in Telecommunications from 65% to over 84%, and in the Retail trade sector from under 44% to over 65%. Similarly, the share of Top-5 groups by Assets rose sharply by 2021 to 68% in the Manufacturing of Basic Metals, 26% in the Manufacturing of Chemicals, 90% in the Manufacturing of Refined Petroleum and Coke, and 47% in the Manufacturing of Non-metallic Mineral Products (including cement and other building materials),” writes Acharya. While this strategy of ‘National Champions’ has benefitted the telecom sector, it has its caveats. The acceleration in the growth may lead to an oligopolistic economy, thereby restricting the entry of new players and stifling innovation. Additionally, a multi-dimensional concentration of power poses the threat of crony capitalism. <h2>National champions: checks and challenges</h2>There’s more to this debate. Arvind Subramanian and Josh Felman, in their paper titled ‘India’s Stalled Rise’ note that the collective impact of this strategy could be more adverse in India, more than anywhere else. They explain that the two big conglomerates — Adani Group and Ambani-led Reliance “have interests that extend throughout the economy, in defence production, ports and airports, energy, natural gas, petroleum, digital platforms, telecommunications, entertainment, media, retail, textiles, financial payments, and education.” Chaebols and Zaibatsu have/had their demerits that range from autocratic decision-making dubbed as ‘imperialistic management’ to the slow inclination of the market towards an oligopolistic structure. However, they weren’t shielded from international competition, nor was this strategy of creating ‘national champions’ shaped using government regulation. They were prevalent in sectors that faced competition internationally, like Hyundai in automobile manufacturing, keeping them in check. The lack of a similar system of checks and balances in India may lead to deeper implications of this strategy of ‘national champions.’ Viral Acharya further notes that they “grew not just at the expense of the smallest firms, but also of the next largest firms” and empirically established a causal link between market power and markups (broadly, profit). At a point when India has seen a monumental shift in infrastructure and looks to capture the market share that China could evacuate, the implications of a tilted policy could prove detrimental. While consolidation can improve performance and catalyse growth, we need to be very careful as a country of the direction we will set ourselves in at this crucial juncture. <h2>Also read:</h2> <div type="Article" hostid="261" msid="112159576" title="India Cement employees to lose jobs after UltraTech acquisition? Chairman Srinivasan answers" mstype="2" mssubtype="0"><payload><![CDATA[seealso]]></payload></div> <div type="Article" hostid="261" msid="112163130" title="Ambuja Cements Q1FY25 profit at Rs 789.63 crore; revenue at Rs 8,311.48 crore" mstype="2" mssubtype="0"><payload><![CDATA[seealso]]></payload></div>

You Searched For "historical battles in corporate India" and got 11 results

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Fabric of a nation: Sustaining India's handloom legacy in modern times

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Loan-to-deposit ratio will subside on its own in coming months, notes Motilal Oswal report

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Cementing dominance: Birla vs Adani, of Chaebols, conglomerates, and National Champions

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