Thailand’s decision to bomb Cambodian positions hours ago shatters a U.S.– and ASEAN-brokered truce that had barely survived five months. One Thai soldier is dead, four wounded, and Bangkok is now evacuating 385,000 civilians; the July round displaced 300,000 and killed 48. This is the border’s worst flare-up since the 2011 Preah Vihear artillery duel, but today aircraft—the escalatory threshold—are in play. (reuters.com)

Why the sudden lurch toward air-power? Domestic politics matter: Thailand’s military government faces sliding growth (Q3 GDP –2.3 % annualised) and may be courting nationalist fervor, while Cambodia’s Hun Sen dynasty cannot appear weak. History shows such “rally-round-the-flag” gambits often boomerang—Thailand’s 2008 incursion preceded a decade of investor flight and $43 bn in lost border trade. Markets will again notice: ASEAN supply chains moving through Aranyaprathet-Poipet already handle $16 bn in yearly goods. (reuters.com)

In a world fixated on big-power rivalries, this crisis reminds us that neglected flashpoints can still up-end regional stability and commodity flows. Unless ASEAN enforces its own “no-first-strike” monitoring, the conflict risks mutating into another drawn-out frozen war that erodes the bloc’s economic credibility. As political scientist Tanvi Madan cautions, “Margins of conflict rarely stay at the margins for long.” (reuters.com)

— The Gist AI Editor

Japan’s Economy Contracts, Markets Shudder

Japan’s economy shrank more than initially estimated in the third quarter, contracting at an annualized pace of 2.3%, revised government data showed (Cabinet Office). The downturn, deeper than the preliminary 1.8% fall, marks the first contraction in six quarters and reflects weaker business spending and private investment. This lackluster performance adds pressure on policymakers and has already sent the 10-year Japanese government bond yield, a key indicator of long-term borrowing costs, lower as investor confidence wanes (WSJ). The data complicates the Bank of Japan’s path forward, though many analysts still anticipate a gradual move away from ultra-loose monetary policy.

US-China Tech Decoupling Accelerates

The intellectual decoupling of the world’s two largest economies is gathering pace. Collaborative technology research between the U.S. and China has plummeted to its lowest level in two decades, according to a study by the Australian Strategic Policy Institute. Only a quarter of China’s international research collaborations now involve American researchers, down from over half a decade ago. This trend, fueled by mutual national security concerns and Washington’s 2018 “China Initiative,” risks bifurcating the global innovation landscape. As Beijing deepens research ties with friendlier nations like Pakistan and Saudi Arabia, the West risks losing insight into China’s rapidly advancing tech ecosystem (Bloomberg).

Energy Markets Navigate Sanctions and Geopolitics

Global energy flows continue to realign under the weight of Western sanctions. A Russian liquefied natural gas (LNG) facility in the Baltics, sanctioned by the U.S., has sent its first shipment to China, signaling deepening energy ties between Moscow and Beijing (Bloomberg). While oil prices held steady, traders are warily watching the upcoming U.S. Federal Reserve rate decision for clues on global demand (WSJ). Meanwhile, the EU’s push to use frozen Russian assets for a “reparations loan” to Ukraine is facing internal debate, with France reportedly shielding €18 billion in assets held by private banks from the initiative (FT). This highlights the legal and political complexities of making sanctioned states pay for reconstruction.

Stay tuned for the next Gist—your edge in a shifting world.

Ten-Year JGB Yield Declines After Lackluster Japan GDP Data
— Wall Street Journal

Oil Flat; Fed Rate Decision in Focus
— Wall Street Journal

US-China Tensions Fuel Decoupling in Tech Research
— Bloomberg

Israel Closes In on Hamas Fighters Trapped in Tunnels, Testing Cease-Fire
— Wall Street Journal

Pop Mart Shares Plunge 8% as Sales Concerns Fuel Short Bets
— Bloomberg

Russian LNG Plant in Baltics Sends First Sanctioned Gas to China
— Bloomberg

Franco-German Pincer on Beijing

A coordinated, if not explicitly joint, Franco-German pushback against Chinese trade practices is taking shape. I see French President Emmanuel Macron’s warning that European industry faces a “life or death” moment as a significant rhetorical escalation (Politico). He labels China’s trade surplus “untenable,” threatening customs duties if Beijing doesn’t increase imports. Simultaneously, German Foreign Minister Johann Wadephul is in Beijing, stressing “free and fair” trade while navigating the critical dependency on China’s rare earth metals—a vulnerability Beijing is expected to leverage politically (ZDF). This two-front pressure underscores a hardening European resolve against systemic imbalances, though diverging national dependencies, particularly Germany’s, will test EU unity. The core issue: Europe cannot remain a passive market for a mercantilist superpower.

China’s Surging Surplus

Fresh data from Chinese customs validates Europe’s anxieties. China’s exports jumped an unexpected +5.9% year-on-year in November, a sharp reversal from October’s decline. In stark contrast, imports grew a sluggish +1.9% (Ansa). This asymmetry swelled China’s monthly trade surplus to a massive $111.68 billion. For Brussels and member states, these figures aren’t just statistics; they are evidence of a structural imbalance that hollows out European industrial capacity. The modest import growth, despite Beijing’s pledges, suggests that policy changes remain superficial, forcing Europe to consider more assertive defensive measures, from tariffs to stricter anti-subsidy investigations.

The Uranium Squeeze

As Europe re-embraces nuclear power as a cornerstone of its decarbonization and energy security strategy, a new bottleneck is emerging: uranium prices are soaring. The global rush to build new reactors and extend the life of existing ones is creating a demand surge unseen since the 1970s oil crisis (El Pais). This price spike presents a material threat to the economic viability of Europe’s nuclear ambitions. For a continent seeking to escape dependency on Russian gas, substituting it with a dependency on a volatile and increasingly expensive uranium market is a poor trade. It complicates long-term energy planning and adds significant cost pressures to the green transition.

Catch the next Gist for the continent’s moving pieces.

Wadephul: “Wir sind für freien Welthandel”
— ZDF

European industry faces ‘life or death,’ Macron says — and China needs to help
— Politico Europe

Aktuelles zum Krieg in der Ukraine
— ZDF

Darmstadt gewinnt rasante Partie gegen KSC
— ZDF

Un problema más de la energía nuclear: los precios del uranio se disparan
— El Pais

Balza oltre le attese l’export in Cina, +5,9% a novembre
— Ansa