The Reign of Spain. Germany’s Internal Combustion. Climate Cold War. What To Do When You Own A Newspaper. #231

Grüezi! I’m Adrian Monck – welcome!

• For those of you who like links, just join the dots… slight format change – links are in the comments below, and there's a link too to the Substack version.
• Spain’s doing well as a bridge to China, China’s cars are crushing German industry, China and India are exploiting Russia’s weakness to improve their own competitiveness, and the BRICS confidence is showing in a climate change dismissing declaration.
• Meanwhile climate change doesn’t care what you think, see Spain’s deadly flash flooding. And the bigger question for the world? The world’s women feel so excluded that global population is plunging into reverse everywhere economies advance.

1️⃣ 🌟 Can’t Rein in Spain

An underdog economic success story.

Even as Spain recovers from deadly torrential rains, Europe’s fourth-largest economy is outperforming almost everyone else.

Spain, population 49 million (about Texas and Florida combined), is a true economic underdog story.

📈 Spain’s numbers?

• Growing faster than the US (2.7% vs 2.4% expected in 2024);
• Economy’s now 5.7% bigger than before COVID (while most of Europe is just 4.2% larger);
• Record 21.8 million people employed;
• Welcoming 85+ million tourists annually (almost double its entire population).

💪 What’s Different This Time?

A decade ago, Spain was an economic basket case. Now it’s beating Germany, and here’s why:

1. Beyond Beach Tourism: Spain banked €90B from tourism in 2023, but it made €100B exporting services like banking, engineering, and tech consulting: sun, sangria, Silicon Valley and solar.

2. Smart Growth Strategy

• FDI: Attracted major foreign investments (ranked 6th globally)
• Renewables: Leading in renewable energy (tied with US for most new projects)
• Immigrants: 700k working-age immigrants in three years

3. Getting the Basics Right

Investors now rate Spanish government bonds safer than French ones – a dramatic turnaround from the debt crisis years.

It’s not all sunshine, though – Spain still faces:

• High unemployment (11.2% - though it’s falling);
• Big government debt (102% of GDP);
• Housing affordability issues.

Spain’s economy (€1.4 trillion) is about the same size of Texas’s, making it a big player in Europe. Its success shows how a country can reinvent itself through diversification and smart policy choices.

This weeks flash floods? Even economic growth can’t outrun climate change – see story #3.

#Economy #Spain #Growth #BusinessStrategy #Europe

2️⃣ China Crisis: Germany’s Economy Is Internally Combusting

Volkswagen’s pain is showing where things could be heading.

I spent decades visiting China hearing top officials endlessly repeat that they wanted to be Germany.

European execs? Publicly diplomatic and privately dismissive.

After all, China was a cash cow. Volkswagen’s Santana was many Chinese drivers’ first motor. China was 40% of VW’s sales and half its profits.

Now China’s capitalist dream is coming true. And Germany’s post-Communist nightmare is just beginning.

📉 The China Effect:

• Chinese market share for foreign manufacturers dropped from 53% to 33% between 2022-2024;
• Chinese manufacturers build EVs 30% cheaper than Europeans;
• Chinese companies develop new cars in ONE year vs FOUR years for European makers.

VW this week announced plans to close three of their ten German plants and cut workers’ pay by 10%.

🏭 14 million European car jobs rely on:

1. Falling domestic demand;
2. Expensive transition to EVs (mandatory by 2035);
3. Rising interest rates hurting sales.

Is this the end of European leadership in Vorsprung durch Technik? Or can the legacy giants reinvent themselves fast enough? Was German machine-making a myth built on cheap Russian gas?

What do you think? Can European automakers catch up, or are we witnessing a historic shift in global automotive power?

3️⃣ The New Climate Cold War

BRICS vs. West in a Deadly Game of Chicken

The just-released BRICS Kazan Declaration is a blueprint for a brave new world that could throw climate action under the bus.

The BRICS nations (Brazil, Russia, India, China, South Africa) are expanding rapidly, adding new members and creating parallel institutions to challenge Western-led global governance.

The climate change confrontation?

• Western nations push for rapid decarbonisation;
• BRICS want to develop using fossil fuels;
• The planet keeps heating up.

This isn’t just about climate – it’s about power. BRICS aren’t just refusing Western climate demands. They’re building an alternative global system. China and India suddenly have a damaged resource giant – Russia –  with their own:

• Payment systems (goodbye, SWIFT?);
• Development banks;
• Environmental standards.

The tragic irony? While both sides fight over who should move first on climate, we’re all moving rapidly toward climate tipping points that won’t care about geopolitical squabbles.

4️⃣ What To Do When You Own a Newspaper

Nothing. Just do nothing.

This line from Jeff Bezos’ Washington Post editorial nails the very problem it identifies.

“We must be accurate, and we must be believed to be accurate.”

Being right isn’t enough if your actions undermine belief in that rightness.

Bezos torpedoes his case in four ways:

• ❌ Claiming “principle” whilst blaming “inadequate planning.”
• ❌ Advocating transparency but providing minimal detail on the decision process.
• ❌ Acknowledging he’s “not an ideal owner” whilst making unilateral editorial decisions.
• ❌ Arguing against perceived bias whilst creating a larger perception problem through your own intervention.

What should he have done?

Leave the Post alone.

As a former war reporter, I can assure you that signalling your neutrality and waving a handkerchief as you walk across a battlefield will only end in disappointment.

5️⃣ Marrying Down

Chinese women are having to choose less educated partners.

An academic study has gone viral on Chinese social media revealing a dramatic shift in the country’s marriages.

For the first time in history, Chinese women born after 1990 are more educated than their husbands on average.

The numbers tell an interesting story:

• 1950s cohort: Only 6.9% of women ‘married down’ educationally
• 1990s cohort: Over 25% of women have higher education than their spouses

Since 2009, women have been outpacing men in undergraduate and graduate education.

This has big social and demographic implications:

1. Family dynamics: More educated women exercising greater influence in family planning decisions.

2. Demographics: These couples are less likely to have multiple children.

3. Careers: Women are prioritising professional development alongside traditional roles.

There’s a problem though. Not just in China, but in every advanced economy.

Traditional gender roles in household responsibilities, workplace opportunities, and public life still haven’t caught up.

Also China’s approach to boosting birth rates might need a rethink. The study suggests that addressing gender equality in household responsibilities might be more effective than just paying people to have more kids.

6️⃣ Tariffs! Tax Imports – Stay Rich!

Except it doesn’t work.

“Tariffs will bring back manufacturing!” Sound familiar? Here’s what history actually tells us about protection and prosperity.

New research studying America’s Gilded Age (1870-1909) – protectionism’s heyday – reveals some uncomfortable truths for tariff enthusiasts:

The results?

• High tariffs REDUCED manufacturing productivity;
• Protected industries became LESS efficient, not more;
• Small, inefficient firms survived rather than modernising;
• Consumers paid higher prices;
• Political lobbying, not economic logic, drove tariff policies.

America became a manufacturing powerhouse despite high tariffs, not because of them. The true drivers were:

• Massive domestic market;
• Abundant natural resources.

Protection preserves the status quo, not competitiveness. Political promises about tariffs rarely match economic reality. Real industrial strength comes from fundamentals.

When politicians promise that tariffs will restore industrial glory, they’re selling a solution that failed even in the “good old days.”

#Economics #TradePolicy #Manufacturing #EconomicHistory #IndustrialPolicy

7️⃣ Internet Lessons From Stevie Nicks

Log off a little.

Stevie Nicks has a monster interview out with Rolling Stone. My favourite bit?

About 10 years ago, Katy Perry was talking to me about the internet armies of all the girl singers, and how cruel and rancid they were.

I said, “Well, I wouldn’t know because I’m not on the internet.”

She said, “So, who are your rivals?”

I just looked at her. It was my steely look.

I said, “Katy, I don’t have rivals. I have friends. All the other women singers that I know are friends. Nobody’s competing. Get off the internet and you won’t have rivals either.”

Don’t get Stevie’s steely look.

Thanks for reading, this week’s links are in the comments.

Best,

Adrian