Output is contracting as Beijing’s tough pandemic measures force some factories to shut down
Output from China’s manufacturing sector slowed to its weakest in almost two years in January as the country’s tough anti-Covid measures forced factories into temporary shutdowns.
A monthly snapshot of industry in the world’s second biggest economy showed production being hard hit by Beijing’s zero-tolerance approach to the pandemic.
Continue reading...Rolling coverage of the latest economic and financial news
The reopening of hospitality venues, and higher demand for premium spirits, has boosted drinks maker Diageo.
Diageo, whose brands include Johnnie Walker whisky, Smirnoff vodka, Tanqueray gin and Baileys Irish Cream, grew its sales by 15.8% in the second half of 2021.
The positive price/mix benefit was primarily driven by mix, reflecting the strong growth of premium plus brands, particularly in scotch, tequila and Chinese white spirits, as well as the continued recovery of the on-trade channel in Europe and North America and the partial recovery of Travel Retail.
There was also a price benefit, primarily from price increases in Latin America and Caribbean, Africa and North America.
“Diageo has produced a great set of results with a strong increase in sales, margin, and profits over the past six months.
The continuing shift by consumers to spirits consumption has benefited the company, as this is a sector of the drinks market that it dominates.
Continue reading...President signals more cautious approach to climate crisis and says China must ‘overcome notion of rapid success’
China’s ambitious low-carbon goals will not be realised easily and should not come at the expense of energy and food security or the “normal life” of ordinary people, its president, Xi Jinping, has said, signalling a more cautious approach to the climate emergency as the economy slows.
China, the world’s biggest source of greenhouse gas emissions, has been under pressure to “enhance ambition” and take more drastic action to tackle global heating. In the past two years, Beijing has also made a number of pledges to show its commitment.
Continue reading...Lockdown call for NT remote communities as nation records at least 74 deaths from Covid-19; Scott Morrison speaks at Australia Day ceremony in Canberra; Russian ambassador to Australia says country ‘doesn’t intend to invade’ Ukraine; Invasion Day protests begin. Follow all the day’s news
A leading health expert has warned of the potential spread of the virulent Omicron Covid-19 strain during events today as large crowds gather for protest or celebration, AAP reports.
Jane Halton, chair of the coalition for epidemic preparedness and former health department head, says the closer people pack together the more likely it is the virus will spread.
We know it’s highly infectious and the closer everyone gets together, the more the likelihood you’ll be close to someone whose got Covid and therefore the greater the likelihood you’ll contract it.
People should be careful. What we don’t want to see is a big increase in cases.
I don’t think we should be cancelling things. I just think people should be courteous, thoughtful, and a little bit careful.
Continue reading...Our global finance system is failing to rise to the challenges we face. It’s time it was reimagined – and grounded in our shared humanity
“The peoples of the Earth,” Henry Morgenthau said, “are inseparably linked by a deep underlying community of purpose.”
In July 1944, Morgenthau, the US Treasury secretary, was closing the Bretton Woods conference with a reflection on extreme nationalism and the failures of cooperation that had led to war. Cautioning against the pursuit of national interest through “the plan-less, senseless rivalry that divided us”, he outlined an accord for new institutions grounded in an appeal to shared humanity.
Continue reading...Hardline approach to pandemic risks damaging global economy, says Kristalina Georgieva
China, the world’s second largest economy, should review its zero-tolerance approach to the pandemic or risk damaging the global recovery, according to the head of International Monetary Fund.
Kristalina Georgieva said Beijing should reassess the use of lockdowns to limit the spread of the highly contagious Omicron variant since it became clear the harm to human health was less severe than the Delta variant.
Continue reading...Group of 102 wealthy people say tax would help tackle gulf between rich and poor
More than 100 members of the global super-rich called on Wednesday for governments around the world to “tax us now” to help pay for the pandemic response and tackle the gulf between rich and poor.
The group of 102 millionaires and billionaires, including Disney heiress Abigail Disney, said the current tax system is rigged in their favour and needs to be rewritten to make taxation fairer for hard-working people and restore trust in politics.
Pay for the Health and Social Care Levy twice over every year – eliminating the need to raise national insurance on working people.
Cover the salaries of an additional 50,000 new nurses.
Pay for the permanent increase of universal credit.
Build 35,000 affordable houses and retrofit the UK’s draughtiest homes to reduce the cost of energy bills and help fight the climate crisis.
Continue reading...We bring you Not the World Economic Forum, where monetary hawks fly and bankers explain why China is all right, really
The purpose of this column is usually fairly clear: to look ahead at the biggest event in the coming week. But this time we are breaking with tradition to bring you the week’s biggest non-event: Davos.
Every year the great and the good gather in the Swiss Alps at the grandly titled World Economic Forum to give their answers to the big questions. But Covid-19, running now into its fourth calendar year, has seen it called off again.
Continue reading...GDP expanded by 0.9% before impact of Omicron as Christmas shopping began early
The UK economy surpassed its pre-pandemic level for the first time in November after growing by 0.9% over the month, partly driven by an unexpected surge in early Christmas shopping.
The Office for National Statistics (ONS) said a jump in restaurant bookings and a rapid turnaround in construction output were also behind the growth that took the size of the economy 0.7% above its level before March 2020.
Continue reading...Make UK says two-thirds of companies fear customs delays and red tape from new rules will further hamper supply chains
Manufacturers have warned that Brexit will add to soaring costs facing British industry, amid concerns that customs delays and red tape will rank among the biggest challenges for firms this year.
Make UK, the industry body representing 20,000 manufacturing firms of all sizes from across the country, said that while optimism among its members had grown, it was being undermined by the after-effects of the UK’s departure from the EU.
Continue reading...Jonathan Powell says PM and Brexit ministers risking fragile peace in Northern Ireland and ‘don’t seem to care’
One of the architects of the Northern Ireland peace deal has said Boris Johnson and the former Brexit minister Lord Frost have risked “all the work” the previous generation of politicians put into the Belfast Good Friday agreement by putting their hard ideological beliefs ahead of people.
Jonathan Powell, Tony Blair’s former chief of staff and chief negotiator on Northern Ireland, said he was concerned that neither the prime minister nor the recently resigned Brexit minister seemed to understand or care about the fragility of the political settlement in Northern Ireland in 1998.
Continue reading...Half a million people have sunk into poverty since the pandemic struck, with rising costs forcing many to cut back on food
Sri Lanka is facing a deepening financial and humanitarian crisis with fears it could go bankrupt in 2022 as inflation rises to record levels, food prices rocket and its coffers run dry.
The meltdown faced by the government, led by the strongman president Gotabaya Rajapaksa, is in part caused by the immediate impact of the Covid crisis and the loss of tourism but is compounded by high government spending and tax cuts eroding state revenues, vast debt repayments to China and foreign exchange reserves at their lowest levels in a decade. Inflation has meanwhile been spurred by the government printing money to pay off domestic loans and foreign bonds.
Continue reading...Analysis: issues of governance, rising debt, Covid and property market turmoil will delay Beijing’s quest to become the global economy’s No 1
“The east is rising, the west is declining”, according to the narrative propagated by the Chinese Communist party (CCP). Many outside China take its “inevitable rise” as read. On the way to becoming a “modern socialist country” by 2035, and rich, powerful, and dominant by 2049, the centenary of the People’s Republic, China wants to claim bragging rights as its GDP surpasses the United States, and project its power based on its expanding economic heft.
There is, however, a critical flaw in this narrative. China’s economy may fail to overtake the US as it succumbs to the proverbial middle-income trap. This is where the relative development progress of countries in relation to richer nations stalls, and is normally characterised by difficult economic adjustment and often by unpredictable political consequences.
Historically, China’s growth miracle has been remarkable. In the 30 years to 1990. The money GDP (the market value of goods and services produced in an economy) for China and the US in American dollar terms grew more or less in tandem at just over 6% and 8% per annum, respectively. . But in the next three decades, China’s GDP growth doubled to over 13%, while America’s halved to 4.5%. That pushed China’s GDP up from 5% of American GDP to 66%.
Yet, China’s growth spurt is now over, and the huge disparity in GDP growth has been eliminated. In the last few quarters, China’s GDP has been growing at half the rate of the US. Although that discrepancy is probably unsustainable, America’s $9tn GDP margin over China means that comparable rates of GDP growth in the future will sustain and even widen the margin. A Japanese thinktank has recently extended the date when it expects China to overtake the US, from 2029 to 2033. Deferrals like this are now a feature, and there will be more.
The issue though is less about the maths and more about why China is at a turning point.
Events in the run-up to Christmas have conspired like twists in a novel to reveal the true character of Tory Brexiters
There was a moment last year when Boris Johnson was reported to have gone awol (absent without leave) from governing the country in order to work on a book about Shakespeare.
At the time, many commentators blamed his absence for a crucial delay in decision-making which contributed to thousands of avoidable, Covid-related deaths. Be that as it may, or was, he returned to the helm of state, brushed off many a criticism, and managed to persuade gullible members of the media and electorate that he possessed Teflon qualities and was invincible.
Continue reading...As the value of the lira plummets and inflation soars, Turkish citizens are struggling to adapt and survive
In a jewellery shop close to Istanbul’s Taksim Square, Seda unzips an elegant black leather pouch and piles her gold jewellery on the counter to discuss selling it all. The shop owner gently places gold chains, rings and a pendant on a small scale, before immediately calling a trader to discuss the latest rates.
“I used to look at the price of gold once a week. Now I look roughly 50 times a day,” says the owner, who asks that his name is withheld. He advises Seda to wait – perhaps the price will stabilise.
Continue reading...Xi Jinping’s mission is not only to control the housing bubble, but rein in untethered industries and foreign capital
China’s economy has become heavily dependent on property development over the last decade. High-rise apartments have mushroomed across hundreds of cities to house a growing white-collar workforce, while glass and steel office blocks are dominating city centres, mimicking Shanghai’s glittering skyline.
Valued at more than $50tn after 20 years of rapid growth, Chinese real estate is worth twice as much as the US property market and four times China’s annual income.
Continue reading...Beijing to increase business lending and build more affordable housing as post-Covid recovery falters
China’s politburo has signalled measures to kickstart the faltering economy as the crisis gripping the country’s debt-laden property sector continued to play havoc with growth forecasts.
Amid a warning from the International Monetary Fund (IMF) that a slowdown in the world’s second-biggest economy could hurt the global recovery from Covid-19, President Xi Jinping’s senior leadership committee rubber-stamped a plan from the central bank on Monday for more targeted lending to businesses. They also outlined support for the housing market.
Continue reading...From piercing studies of colonialism to powerful domestic sagas, our panel of writers, all of whom had books published this year, share their favourite titles of 2021
Author of Klara and the Sun (Faber)
Continue reading...RBNZ says homeowners must be ‘incredibly wary’ of rising costs, as focus shifts to policymakers in US, UK and Europe
New Zealand’s central bank has lifted interest rates for the second time in as many months to 0.75%, with many forecasters expecting borrowing costs to rise to at least 2% by next year and possibly higher.
In a warning signal for central banks around the world as they struggle to contain inflationary pressures, the Reserve Bank of New Zealand (RBNZ) raised the official cash rate by 25 basis points to 0.75% as expected in its final policy meeting of the year on Wednesday.
Continue reading...In case you missed it yesterday: the House select committee investigating the Capitol insurrection issued five more subpoenas to right-wing political operatives, including former Trump associate Roger Stone and conspiracy theorist Alex Jones.
Hugo Lowell reports:
The subpoenas demanding documents and testimony expand the select committee’s inquiry focused on the planning and financing of the rally at the Ellipse, by targeting operatives who appear to have had contacts with the Trump White House.
House investigators issued subpoenas to the veteran operatives Stone and Jones, Trump’s spokesperson Taylor Budowich, and the pro-Trump activists Dustin Stockton and his wife, Jennifer Lawrence.
Continue reading...