International News 19 September 2025
-
China’s Car Market Faces Crisis Amid Overcapacity and Massive Discounts
China’s auto industry is grappling with severe overcapacity after years of state-driven subsidies and incentives that prioritized production and jobs over profitability. Companies like Zcar are offloading thousands of cars at unprecedented discounts—locally made Audis at 50% off and FAW SUVs at 60% below list price—as dealers struggle with overflowing inventories. Many are forced to sell vehicles below cost or manipulate sales figures, while unsold cars pile up in “auto graveyards,” later resold at a fraction of their original price. Only 30% of dealers remain profitable, with some resorting to selling “zero-kilometer used cars” via livestreams or gray markets. The crisis threatens both domestic stability and global trade. Foreign carmakers’ market share in China has halved since 2020, while Europe and the US fear a flood of cheap Chinese cars undermining their industries. Analysts predict that by 2030, only around 15 of China’s 129 EV and hybrid brands will survive, with giants like BYD and Geely likely to emerge stronger. Despite looming consolidation, local governments are expected to continue supporting unprofitable automakers to prevent mass layoffs, prolonging structural imbalances in the world’s largest auto market.
https://internasional.kontan.co.id/news/industri-otomotif-china-sedang-mengalami-krisis-parah
Thailand Weighs Gold Tax to Curb Baht Surge
Thailand is considering a new tax on physical gold trading as policymakers seek to slow the baht’s sharp appreciation, which has threatened the competitiveness of its exports and tourism sector. The proposed levy, under discussion between the Bank of Thailand (BoT) and the Finance Ministry, would apply to gold transactions settled in baht through online channels but exclude purchases in U.S. dollars, futures trading, and direct retail sales. Officials hope the measure will curb gold exports and raise the cost of domestic gold ownership, thereby easing currency pressures. Gold exports have soared 69% year-to-date, reaching THB254 billion (US$8 billion), fueling a larger-than-expected current account surplus and pushing the baht up about 7%—the strongest currency in Southeast Asia. While higher global gold prices have supported inflows, the stronger baht risks undermining Thailand’s economy, where exports and tourism account for 70% of GDP. Industry groups have voiced concern, urging the government to exclude gold from current account calculations and to stabilize the currency around THB34–35 per dollar to safeguard competitiveness.
UK Inflation Stays Elevated, Limiting BoE’s Policy Flexibility
UK inflation held steady at 3.8% in August 2025, the highest among major advanced economies, reinforcing expectations that the Bank of England (BoE) will pause further rate cuts this year. While core inflation eased slightly to 3.6% and service inflation dropped to 4.7%, price pressures remain well above the 2% target. The BoE, which reduced rates by 25 basis points in August to 4%, is expected to hold steady this week after a narrow 5–4 vote in its last meeting, signaling policymakers’ concern that wage growth at 4.8% is still too strong to ensure a sustainable disinflation path. The persistence of high inflation poses a dual challenge for both the central bank and the government, which faces mounting pressure to support growth without reigniting price pressures. Despite some labor market cooling and slowing wage momentum, the BoE projects inflation will stay above target until at least spring 2027. With the economy expanding just 0.2% in the three months to July, the UK remains stuck between sluggish growth and stubbornly high inflation—a combination that leaves households strained and limits policy space for stimulus.