Good morning! It’s time to rewatch your favourite Korean shows and practise Hangul. The South Korean government is officially launching a Hallyu visa for those obsessed with the country’s entertainment industry. The visa will provide non-Koreans the opportunity to stay in the country for up to two years as long as they agree to register at a local performing arts academy. The move will provide the government with money to support young artists and writers, making it a perfect example of a circular economy. 🙃

🎧 Why’s Sony vexed with Zee? Also in today’s edition: South Korea is rolling out a visa just for K-Pop fans. Listen to The Signal Daily on Spotify, Apple Podcasts, Amazon Music, Google Podcasts, or wherever you get your podcasts.

Adarsh Singh and Venkat Ananth also contributed to today’s edition.

The Market Signal* 

Stocks & Economy: Asian stocks were a mixed bag in early trade on Wednesday as they awaited Chinese inflation data. Australia reported lower inflation, which might egg on shares. 

Shares in the US were off colour on Tuesday. 

Indian benchmarks began lacklustre and then rose smartly before ending the day at lower levels. Broking firms expect the 50 companies in the Nifty 50 to collectively report revenue growth in single digits for the December quarter. They forecast their collective net profit will grow 13.3%, the Business Standard reports. The GIFT Nifty indicates a flat opening for stocks. 

Bitcoin prices jumped briefly after the US Securities and Exchange Commission’s X, formerly Twitter, account was hacked and a fake post on it said the regulator had approved a much-anticipated plan to allow spot Bitcoin exchange-traded funds. It’s now investigating the cybersecurity incident. 

FOOD

Who Ate My Cereal?

After extensive analysis of public data, two economists have reached an astonishing conclusion: about a third of India’s rice and wheat produce is missing. 

Welfare economist Jean Dreze and United Nations' economist Christian Oldiges have found that there is a massive gap between the reported figures of production and consumption of cereals. While cereal production is about 300 million tonnes, overall consumption, estimated from various national data sets, does not go beyond 200 million tonnes.

The gap between “net availability and household consumption” has widened in the past dozen years. It was 36 million tonnes in 2020-21 and 33 million tonnes in 2021-22, despite 23 million tonnes and 32 million tonnes respectively being exported in the two years, the economists wrote in The Indian Express. 

There is no explanation yet to the mystery of the missing cereals, but it does have significant implications for food policies and prices.

AVIATION

Boeing’s Got A Nut Loose

Literally. As various airlines inspect their Boeing MAX 737s following this week’s Alaska Airlines accident, they’re finding signs of ‘loose hardware’ and ‘installation issues’ in several aircraft. United found loose bolts while a US transport safety agency found that the Alaska Air aircraft panel may have been improperly installed. 

Boeing chief David Calhoun has owned up the mistake. “We’re going to approach this — No. 1 — acknowledging our mistake,” Calhoun told employees. 

Bad reputation: Last April, Boeing’s shares fell as it halted MAX deliveries due to quality issues with a component. Combined with Airbus’ troubles with its Pratt & Whitney engines, 2024 could turn out to be another difficult year for flying. The 737s and A320s are airline workhorses worldwide. 

Damn!: Boeing’s disaster may be Apple’s moment. An iPhone, sucked out from the Alaska Airlines aircraft, was found fully functional after dropping 16,000 feet in the air, screen intact.

WORK

AI Has Begun Eating Up White Collar Jobs

In December 2023, the RBI released its report on state finances, which portrayed a picture of robust economic growth in 2022-23—a first since the pandemic. But as detailed in Mint by data analytics firm How India Lives, the RBI’s numbers look better than they are.

Annual per capita income in India increased to ₹1.15 lakh (~$1,384) in 2022-23, up 6.7% from 2019-20. About 58% of women aged 15 years and above participated in the labour force, an increase of 53.5% from 2019-20. The overall unemployment rate also fell.

But: Unemployment statistics exclude a significant number of working-age Indians who aren’t part of the workforce. The fall in unemployment can also be attributed to people taking up newer jobs for lower pay, which is a bad sign. Women’s labour force participation shot up in rural areas, which typically put more able-bodied people to work in times of distress; conversely, participation in urban India was muted.

The Signal

Worse, the unemployment rate for graduates has increased while the quality of jobs—specifically, the proportion of labour in agriculture versus salaried and manufacturing jobs—hasn’t improved.

The outlook for 2024 also doesn’t bode well for the quality of jobs. According to analysts quoted by The Economic Times, over 50% of (white collar) data analysis and app development roles in tech, IT, healthcare, manufacturing, retail, education, and finance will be automated. Paytm is already cutting <15% employee costs in favour of AI automation, and headcounts in the Big Four IT firms have reduced.

GEOPOLITICS

The $10 Trillion Elephant In The Room

Taiwan goes to the polls on January 13. What will be the global cost if China invades the autonomous region—a scenario expected in 2027—if pro-independence candidate Lai Ching-te becomes President? Over $10 trillion.

Bloomberg Economics (BE) modelled two scenarios—one where mainland China launches a full-blown war that draws in the US too, and another where China imposes an economic blockade against Taiwan from the rest of the world. In the first instance, BE estimates a $10.2 trillion cost to global GDP due to Taiwan’s indispensability in semiconductors, and the cascading effects the disruption will have on everything from manufacturing and logistics to emerging technologies and consumption. That’s far more than the economic costs of the Russia-Ukraine war, Covid-19, and the 2008 financial crisis.

In such a scenario, any hopes of a chip industry recovery this year (ahem, Samsung) would be dashed, and then some more.

DEFENCE

Ferocious Barrel

Hopefully, it is a top gun. The Defence Research and Development Organisation (DRDO) has unveiled a new assault rifle with a Kalashnikov-like rivet-free design. 

The weapon: Called Ugram—ferocious in Sanskrit—the rifle can shoot 7.62X51mm bullets up to 500 metres in single and automatic mode using a 20-round magazine. While DRDO designed the gun, Hyderabad-based private firm Dvipa Armour India made the prototypes. 

The Indian Army just got clearance to buy 73,000 US-made ‘Patrol’ Sig rifles after India’s collaboration with Russia to make the AK-203 rifles here jammed due to the Ukraine war. 

Defence push: The Narendra Modi government has rained incentives on the private sector to boost indigenous defence manufacturing. A Bengaluru automotive spring maker, which has diversified into weapons, recently showed off locally developed sniper rifles. 

India’s arms exports hit a record ₹16,000 crore (~$1.9 billion) to 85 countries in 2022-23. 

FYI

BFD: Tech major Hewlett Packard Enterprise (HPE) is reportedly close to acquiring networking hardware company Juniper Networks for $13 billion. The deal, which HPE expects to propel its artificial intelligence efforts, could be announced this week.

Youngun: 34-year-old Gabriel Attal will be France’s next prime minister replacing the outgoing Elisabeth Borne. Attal, currently France’s education minister, will be the country’s youngest prime minister once he assumes office.

Fresh dough: Former Twitter CEO Parag Agrawal has raised $30 million for his new artificial intelligence venture, per The Information. Open AI-backer Khosla Ventures led the round.

More cuppa: Starbucks is planning to double its stores in India in the next four years to 1,000, according to its CEO Laxman Narasimhan. The company will look to Tier 2 and 3 cities to fuel its expansion, besides formats such as drive-thrus, and 24-hour cafes, among others.

Timed out: Zee Entertainment Enterprises Limited has missed a deadline to pay Disney Star an instalment of $200 million as part of its licensing agreement to broadcast ICC men’s cricket matches on television. Zee also denied reports that its merger with Sony Corp was on the verge of collapse.

Scrutiny: Europe’s competition regulator is mulling a probe of Microsoft’s $13 billion investment into OpenAI under the EU merger rules.

Break-up: Tiger Woods and Nike have decided to call it quits, bringing an end to a mutually beneficial commercial relationship of 27 years, worth over $500 million.

THE DAILY DIGIT

$30 billion

Or Rs 2,40,000 crore. The estimated shortfall in India’s exports due to the Red Sea crisis. The number would represent a 6.7% drop, based on last fiscal’s export numbers: $451 billion  (Bloomberg) 

FWIW

No shame: If you’ve spent your childhood watching History​​ TV, then you probably know a thing or two about aliens and UFOs. And if you’re someone who not only knows about them but believes in their existence, you’ll feel right at home in Mutual UFO Network aka MUFON. MUFON is the largest UFO research group in the USA, with dedicated city chapters spread across the nation. The Network has undergone a massive resurgence ever since the Federal Government admitted sightings of “unidentified aerial phenomena'' by several Navy pilots; the Congressional hearing on the matter has further stoked interest in aliens and UFOs. Today, MUFON is increasingly becoming a haven for UFO hunters who have long had to endure ridicule for their beliefs which, tbh, is kinda bittersweet. 

Time for change: Not all customs are meant to be followed and South Korea just showed that. The country has outlawed the breeding, slaughter, and sale of dogs for human consumption. For the uninitiated, dog meat used to be an important part of the Korean diet and gained popularity especially after the Korean War decimated the country. However, the change in fortunes of the country has led to an increased awareness of animal welfare and pet ownership. This change has also brought a shift in sentiments regarding dog meat, which is what this ban reflects and we’re all for it.

Bon Voyage: Giving the word ‘networking event’ a whole new meaning is the event, Darwin200 Global Voyage. The voyage seeks to recreate the 200-year-old journey taken by Charles Darwin that inspired his theory of evolution. To show just how serious they are, the voyage will be done on a 106-year-old, three-masted sailing ship called “Oosterschelde” along with 200 “Darwin Leaders” chosen for their work and passion for nature conservation. Oh, and the great-great-granddaughter of Darwin, Dr. Sarah Darwin, is also joining the voyage just in case it wasn't obvious what this thing was about. And here we thought LinkedIn was cringe.