The EU is to tell China that its €400bn (£343bn) trade deficit is not sustainable long term amid fears that it will flood the bloc with subsidised electric cars, solar panels and medical devices, threatening European manufacturing and jobs. Ursula von der Leyen, the European Commission chief, and Charles Michel, the European Council president, will meet Xi Jinping at a summit on Thursday, the second of its kind this year. They are expected to issue the Chinese president with a veiled warning that unless China does something about the supply…
Tag: Economics
Moody’s cuts China credit outlook to negative as economy slows
China’s ability to repay its government borrowing has been downgraded by the credit rating agency Moody’s, which said the ripple effects from a crisis in the property sector would undermine efforts to revive its flagging economy. Moody’s warned that Beijing would need to bail out local and regional governments and state-owned enterprises that were struggling with rising debts, hampering efforts to boost investment and growth. The rating agency downgraded its outlook for Chinese sovereign bonds from stable to negative on Tuesday, sending a signal to potential lenders that the risk…
UK will not return to close relationship with China of Cameron era, Sunak says
Rishi Sunak has said the UK will not have a return to the close relationship with China pursued under David Cameron, as the prime minister met business leaders in an effort to drum up foreign investment. The government on Monday said £29.5bn of new investment had been earmarked for the UK, including projects by the ScottishPower owner, Iberdrola, and BioNTech, the German company which partnered with Pfizer on its Covid vaccine. Sunak met the heads of multinational firms including Goldman Sachs, Blackstone and JP Morgan at the summit in Hampton…
One shared dream of China and America | Letter
It is symbolic that the Asia-Pacific Economic Cooperation (Apec) summit took place in San Francisco, a place of significance in the history of US-China relations and both nations’ narratives (‘Planet Earth is big enough for two’: Biden and Xi meet for first time in a year, 15 November). From 1848, San Francisco became the first Chinatown, the de facto capital of the Chinese in America. This was the time of the conquest of the west, when, just annexed from Mexico, California became a symbol of the American dream, helped by…
China falls back into deflation territory; UK energy companies pay £10.8m for missing smart meter targets – business live
From 31m ago Introduction: China’s economy falls back into deflation as pork prices tumble Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. China has dropped into deflationary territory for the second time this year, reigniting concerns over its economy. Consumer prices in the world’s second-largest economy fell by 0.2%, compared with the previous year, in October, a larger decline than the 0.1% expected. Chinese producers also cut their prices at a faster rate. The producer price index (a measure of prices…
High interest rates help double HSBC profits
HSBC will hand more than $3bn (£2.5bn) to shareholders, after higher interest rates helped to more than double quarterly profits, despite taking a financial hit on China’s property crisis. The London-headquartered bank said it was launching the share buyback, and pay a dividend worth 10 cents a share, after what its chief executive, Noel Quinn, hailed as “three consecutive quarters of strong financial performance”. The move came as HSBC revealed it had made $7.7bn in pre-tax profits between July and September. While it fell short of average analyst forecasts for…
Have we reached peak China? Inside the 15 September Guardian Weekly
Often depicted as an angry dragon, China’s current circumstances called for a more melancholic take on the Guardian Weekly’s cover this week. Much of the world’s attention towards the world’s second-biggest economy of late has focused on its geopolitical ambitions, but a picture is emerging from within the country that could have equally profound consequences. A Covid-battered economy – tainted by slowing demand and a deepening property crisis – coupled with an ageing population, have left many analysts wondering if China’s economic rise is stalling. Set against increasingly cool relations…
Chinese economy out of deflation but faces threat of relapse
China’s consumer price index rebounded in August as the world’s second-largest economy emerged from deflation, official data released on Saturday suggested, despite sluggish domestic consumption that is complicating its post-Covid economic recovery. Last month’s CPI, the main gauge of inflation, rose 0.1% year on year, the national statistics bureau said. China briefly slipped into deflation in July for the first time in more than two years, with prices falling 0.3% year on year. Analysts surveyed by Bloomberg had anticipated a rebound in August of 0.2% year on year. Deflation indicates…
Global economic fears deepen as service sector dips in China and Europe
Fears about the health of the global economy have intensified following downbeat news about service sector activity in China, the eurozone and the UK. Share prices fell in Asia and the pound dropped to a 12-week low against the US dollar after fresh signs of weakness in China triggered speculation that its post-lockdown recovery was running out of steam. Meanwhile, there were signs the steady rise in interest rates is leading to weaker service sector activity in both the UK and the 20-country eurozone. Markets were particularly rattled by news…
Country Garden shares jump after Chinese developer strikes debt deal
The share price of the ailing Chinese developer Country Garden has jumped by as much as a fifth after its creditors agreed a delay on debt repayments, offering some respite from the country’s crisis-hit property market. The company agreed over the weekend to extend the payment dates on a 3.9bn yuan (£430m) private bond, to the relief of investors who had thought it would default on payments due on Saturday. Country Garden will instead have three years to repay the debt, after it won a narrow vote with the backing…