Zero-Covid policy is costing China its role as the world’s workshop

Beijing’s endless lockdowns are causing shortages for western firms such as Apple, and it may not be long before they move their supply chains elsewhere

The anti-lockdown unrest gripping China has forced the authorities in Beijing to respond by easing some restrictions in big manufacturing centres, as they map out a “new stage and mission” in the country’s deeply unpopular zero-Covid policy.

There are concerns that more freedom of movement could allow the virus to rip through a population where immunity is lower than in the west. Those health risks mean the “world’s workshop” is heading for a difficult winter, casting a shadow over the prospects for international trade.

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Decline of UK manufacturing accelerates as government ‘abandons’ sector

Amid higher costs and worker shortages, British Chambers of Commerce says Brexit is another factor

When the minor ups and downs caused by the extra bank holiday for the Queen’s funeral are stripped out of the latest GDP figures, it is clear the long decline of Britain’s industrial base has accelerated.

Protected by the government through the coronavirus pandemic, this year, factory owners say ministers have abandoned them to cope with a long recession without so much as a glance in their direction.

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We need to talk about Xi Jinping: G7’s discord over powerful trading partner

Disagreements have opened up about strategy when China is also seen as an existential threat

Western powers in the G7 group of nations are failing to coordinate their China strategies, senior western officials admit, adding that the need to do so has been given sharp impetus by Xi Jinping’s consolidation of power at this month’s Communist party congress.

The G7’s poor coordination reflects a deep disagreement, also reflected within the EU, about whether dialogue and trade with China have a future if Beijing is seen as an existential threat that requires strict strategic controls on economic ties.

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After eight rounds, is there space for further EU sanctions on Russia?

Baltic states and Poland have a long shopping list, but host of others seen as cautious of new measures

Russia-Ukraine war – latest news updates

Since Vladimir Putin launched his invasion of Ukraine, Russia has been subjected to the heaviest sanctions of any country in the world.

A fossil fuel superpower, Russia is no longer able to export coal to the European Union and will soon lose 90% of its oil sales to the bloc. In the other direction, the EU has banned the export of hundreds of goods to Russia, from hi-tech military kit and semiconductors that could aid Russia’s military, to makeup, handbags and clothes that may turn a handsome profit for Russian entrepreneurs.

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Trade from UK to EU 16% lower than if Brexit had not happened, report finds

Economic and Social Research Institute analysis found ‘substantial reduction in number of products traded’

Trade from the UK to the EU is down 16% on the levels anticipated had Brexit not happened, a new report has found.

Meanwhile trade from the EU to the UK has dropped even further, by 20%, relative to a scenario in which Brexit had not occurred, according to research published on Wednesday by the Economic and Social Research Institute.

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Hong Kong launches $3.8bn fund to attract foreign businesses back

Chief executive says territory will ‘trawl world for talent’ after lockdowns and political unrest cause brain drain

Hong Kong has unveiled a HK$30bn ($3.8bn) co-investment fund to attract overseas businesses back to the city after an exodus of talent prompted by strict lockdowns and a tumultuous political climate.

A raft of measures to address the brain drain were announced by Hong Kong’s chief executive, John Lee, in his first policy address on Wednesday – although his plans have largely failed to reassure investors.

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Biden administration angered by Opec+ oil output cut

Senior figures see decision as a slight on the US and a sign that the oil producers club is aligning with Russia

The Biden administration and its supporters have reacted angrily to the Opec+ decision to cut oil production, seeing it as a rebuff to the US president’s efforts to improve relations with Saudi Arabia.

The White House made clear that it viewed the decision by the oil production cartel, in which the plus sign represents the inclusion of Russia, to reduce daily production by 2m barrels, as a geopolitical move, and a slight to Biden who is seeking to cut Russian revenues and keep the petrol price down before November’s congressional elections.

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The grey Zara market: how ‘parallel imports’ give comfort to Russian consumers

Western brands that pulled out are still on sale, due to legal changes that have fuelled entrepreneurship

Aleksandr Gorbunov, a property investor from the Siberian city Krasnoyarsk, had a simple solution when Zara, the Spanish clothing giant, closed its stores in Russia over the invasion of Ukraine: import it himself.

“The idea to start selling Zara came from my wife, who said she really wanted the clothes to return,” said Gorbunov, who said he was opening a store called Panika (panic) on Friday that deals exclusively in Zara and Zara Home products.

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Scottish salmon industry urges ministers to act over Dover delays

Action urged over Brexit-related delays of up to 48 hours caused by queues on the UK side of Channel

The Scottish salmon industry has called on ministers to urgently intervene to stop Brexit-related delays to the transportation of fresh fish to France.

It comes after the Brexit opportunities minister, Jacob Rees-Mogg, admitted he was wrong to say there would be no delays at the port of Dover caused by the UK leaving the EU.

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Sunak ruse aims to outmanoeuvre Truss over China

Analysis: claims by ex-chancellor about Foreign Office weakness towards Beijing look like an attempt to head off a similar attack on him

Rishi Sunak’s pre-emptive strike attacking Liz Truss over alleged Foreign Office pusillanimity towards China looks to have been a daring attempt to fend off an imminent assault from his Tory leadership rival.

But it locks the contestants into a potentially uncontrollable dogfight as they seek to prove their credentials as the truer enemy of authoritarianism.

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Ukraine and Russia sign UN-backed deal to restart grain exports

Shipping of millions of tonnes from blockaded Black Sea ports could avert global food crisis

Ukraine and Russia have signed a UN-backed deal to allow the export of millions of tonnes of grain from blockaded Black Sea ports, potentially averting the threat of a catastrophic global food crisis.

A signing ceremony at Dolmabahçe Palace in Istanbul was attended by the UN secretary general, António Guterres, and Recep Tayyip Erdoğan, Turkey’s president, who had played a key role during months of tense negotiations.

A coalition of Turkish, Ukrainian and UN staff will monitor the loading of grain on to vessels in Ukrainian ports before navigating a pre-planned route through the Black Sea, which remains heavily mined by Ukrainian and Russian forces.

Ukrainian pilot vessels will guide commercial vessels transporting the grain in order to navigate the mined areas around the coastline using a map of safe channels provided by the Ukrainian side.

The vessels will then cross the Black Sea towards Turkey’s Bosphorus strait while being closely monitored by a joint coordination centre in Istanbul, containing representatives from the UN, Ukraine, Russia and Turkey.

Ships entering Ukraine will be inspected under the supervision of the same joint coordination centre to ensure they are not carrying weapons or items that could be used to attack the Ukrainian side.

The Russian and Ukrainian sides have agreed to withhold attacks on any of the commercial vessels or ports engaged in the initiative to transport vital grain, while UN and Turkish monitors will be present in Ukrainian ports in order to demarcate areas protected by the accord.

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Concerns that India is ‘back door’ into Europe for Russian oil

Volume of Russian crude bought and then exported by India suggests some of it may end up in European petrol stations

The huge blue and red hull of the SCF Primorye came into port at Vadinar, western Gujarat, India, earlier this month. The 84,000-tonne oil tanker, built in 2009 and sailing under the Liberian flag, had arrived from the port at Ust-Luga, a settlement in Russia near the border with Estonia.

Until 2017, the Vadinar oil refinery was controlled by Essar – the Indian owner of the Stanlow refinery in Ellesmere Port. Since then a consortium including the sanctioned Russian state-owned oil firm Rosneft and the commodities trader Trafigura, which holds a 24.5% stake, have owned Nayara Energy, which runs the refinery.

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Labour unveils plans to seek limited changes to Brexit deal

David Lammy, the shadow foreign secretary, confirms party won’t seek to rejoin single market or EU bloc

Labour has broken its long silence on Brexit, laying out detailed plans to improve, not scrap, the deal Boris Johnson struck with the EU, in a move it concedes will enrage remain supporters.

On the sixth anniversary of the Brexit referendum, the shadow foreign secretary, David Lammy, confirmed the party would seek only limited changes and would not seek to rejoin the single market which would bring the return of free trade and free movement of people.

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Brexit is making cost of living crisis worse, new study claims

EU withdrawal fuelling higher import costs and costing British workers nearly £500 a year, says Resolution Foundation

Britain’s cost of living crisis is being made worse by Brexit dragging down the country’s growth potential and costing workers hundreds of pounds a year in lost pay, new research claims.

The Resolution Foundation thinktank and academics from the London School of Economics said the average worker in Britain was now on course to suffer more than £470 in lost pay each year by 2030 after rising living costs are taken into account, compared with a remain vote in 2016.

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UK ramps up gas and oil exports to EU amid Russia’s war in Ukraine

Britain’s goods exports to EU a record £16.4bn in April despite impact of Brexit

The UK has drastically increased the volume of natural gas being pumped to the EU amid Russia’s war in Ukraine, powering a record monthly rise in goods exports to the continent despite Brexit.

Figures from the Office for National Statistics show EU goods exports rose for the third consecutive month to £16.4bn in April, the highest monthly level in current prices since comparable records began in 1997.

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‘Same nightmare week after week’: UK firms fed up with post-Brexit EU trade

Exporters fear Northern Ireland protocol row will spur trade war with Brussels, making an already difficult job even harder

Mark Brearley is still frustrated by Brexit. More than a year from Britain’s formal withdrawal from the EU, on terms agreed by Boris Johnson’s government, exporting the goods his company produces hasn’t got any easier for the London-based manufacturer.

Describing it as “the same nightmare week after week”, he says: “A lot more time is spent with things going wrong. The EU really feels like the hardest place in the world to ship things to sometimes.”

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M&S chair attacks ‘pointless’ post-Brexit rules for Northern Ireland

Archie Norman backs UK plans to scrap parts of protocol, saying lorries require ‘700 pages of documents’

The chairman of Marks & Spencer has backed government plans to override parts of the Northern Ireland protocol, saying that some food exported south of the border now requires 700 pages of customs documents, partly written in Latin.

Archie Norman, a former Conservative MP, called on the UK government and EU to come to an agreement, saying the rules for sending food between them were “highly bureaucratic and pretty pointless” given that British food standards were in line with or higher than those of Brussels.

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India and UK to press ahead with talks on free trade deal

Narendra Modi hails ‘good progress’ as Boris Johnson signals he is willing to make concessions on immigration

India and the UK will press ahead with talks on a bilateral free trade agreement, Boris Johnson and the Indian premier, Narendra Modi, have said, after the UK made clear it was willing to make immigration part of any deal.

The pair appeared to differ on how rapidly an agreement could be made – Johnson suggested it could be ready by the festival of Diwali in late October, but Modi pointed to the end of the year.

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India is a huge – but elusive – trade prize for Boris Johnson

Analysis: Deal is seen by some as single most important UK negotiation, but agreement will take time

Of all the deals that Boris Johnson could sign with countries outside the EU to lift UK trade, one with India is the among the biggest prizes.

After landing in the country on Thursday morning, the prime minister must be hoping his two-day trip – taking in his Indian counterpart Narendra Modi’s home state of Gujurat and then New Delhi – will add impetus to talks already under way to reach a free trade agreement (FTA) between the two countries.

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Russia ‘preparing legal action’ to unfreeze $600bn foreign currency reserves

Elvira Nabiullina says lawsuits aim to release gold and foreign currency frozen amid Ukraine invasion sanctions

Russia is preparing to take legal action to challenge the freeze on its $600bn (£462bn) foreign currency war chest put in place by western governments after the invasion of Ukraine, the head of the country’s central bank has said.

Elvira Nabiullina said plans were being made to launch lawsuits after governments including the US, UK and EU froze the Russian central bank’s foreign currency reserves held within their jurisdictions.

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