China moves to revive stricken property sector
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The first humanitarian aid arrived in Gaza by sea via a US-built floating pier. The new supply route has drawn criticism from aid groups, however, saying it is costly and limited in capacity to help Gazans facing acute food shortages, compared with more efficient land routes.
Tesla’s chair told the Financial Times that the carmaker needed to climb “Mount Everest” as it faces shareholder votes on relocating to Texas and Elon Musk’s $56bn pay deal.
The UK’s main political parties entered full campaigning mode even though a general election date has yet to be set. Conservative chancellor Jeremy Hunt signalled a pre-election tax cut while Labour leader Sir Keir Starmer unveiled his six “first steps” should he become prime minister. If you’re a Premium subscriber, we highly recommend signing up for our relaunched newsletter: The State of Britain.
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Good evening.
China today announced some of its strongest moves so far to revive its debt-stricken property sector, which has been at the heart of concerns over the strength of the world’s second-largest economy.
Local government will be allowed to buy some residential projects and turn them into public housing to help put a floor under falling prices as well as purchase land from struggling developers. China’s central bank meanwhile, which announces its next decision on interest rates on Monday, has relaxed lending requirements for first-time housebuyers.
There have been mixed signals on the country’s economy in recent months. Official data this morning showed retail sales rising less than forecast but industrial production growing more than expected, especially in high-tech areas. Attempts to stimulate the economy include the creation of the world’s largest duty-free zone in the tropical island province of Hainan, to persuade the country’s avid luxury shoppers to buy at home.
The industrial focus on high-tech — highlighted in recent trade data by a surge in imports for developing artificial intelligence — is however feeding tensions with the US and the EU, China’s most important export markets. US President Joe Biden this week slapped new tariffs on China’s clean tech exports including electric vehicles and solar parts (you can read our explainer here) in a bid to court blue-collar votes in swing states ahead of November’s general election.
China’s President Xi Jinping is being urged to respond with caution to the tariffs lest a new tit-for-tat battle could further hinder the country’s faltering recovery and escalate tensions during a politically charged US election campaign. For its part, China strongly denies accusations of creating overcapacity and says western accusations are “hype” and aimed at justifying protectionism.
Another concern for the west is China’s growing relationship with Russia, as this Big Read details. Russian businesses have turned to China to plug gaps after western sanctions blocked their traditional European suppliers. Bilateral trade rose 26 per cent last year to $240bn as China shipped cars, industrial machinery and smartphones and bought billions of dollars of Russian energy exports.
Of even greater concern to the west are the deepening military ties between the two countries and a ramping up of joint rhetoric against a “destructive and hostile” US.
Need to know: UK and Europe economy
The UK’s Tory and Labour parties are putting pressure on the City watchdog over allegedly excessive regulation. The rare alignment reflects rising concerns over the Financial Conduct Authority’s contentious plan to “name and shame” companies it is investigating.
Axing the northern leg of the High Speed 2 rail line will stunt growth in the UK’s biggest regional cities unless alternative capacity is built, the government’s top infrastructure adviser warned. It estimated that passenger arrivals in Britain’s second city of Birmingham alone could be up to 61 per cent above pre-pandemic levels by 2045.
The European Central Bank warned that high levels of debt were putting countries at risk of “adverse shocks” and higher interest rates.
With European parliamentary elections coming up next month, the EU is coming under pressure from business groups over its Green Deal. They argue that industry is being strangled by bureaucracy, high energy prices, global trade tensions and the cost of transitioning to cleaner energy.
Need to know: global economy
Wildfires are raging in Canada’s oil sands region and putting petroleum production at risk. The area has enabled the country to become the world’s fourth-largest oil producer, producing 6 per cent of global supply.
Prices of nickel, a crucial element in electric vehicle batteries and steelmaking, jumped to the highest level in nine months after political violence in New Caledonia hit production in the French territory that holds some of the world’s biggest deposits of the mineral.
Japan’s economy shrank in the first quarter as consumer spending continued to fall, raising a challenge for the Bank of Japan’s plans to tighten monetary policy.
Cyril Ramaphosa, South Africa’s president, is a frontman for an ANC that has lost its moorings, writes FT foreign editor Alec Russell. Opinion polls suggest the party could go below 50 per cent of the vote for the first time in the upcoming general election, forcing it to enter a coalition to stay in office.
Need to know: business
The FT revealed that UK engineering group Arup had lost HK$200mn ($25mn) after fraudsters used a digitally cloned version of a senior manager to order financial transfers in one of the world’s biggest deepfake scams.
Brussels launched a probe into Meta over concerns it is failing to protect children from becoming addicted to social media platforms such as Instagram. Columnist Gillian Tett delves into the strange tale of the “people’s bid” for TikTok.
Sony Music is sending warning letters to more than 700 artificial intelligence developers and music streaming services in the latest music industry salvo against tech groups ripping off artists.
Walmart, the world’s largest retailer, raised its full-year outlook after a bumper first quarter as bargain-hunting shoppers flocked to its stores.
Thames Water’s biggest shareholder has written off its investment in the utility in a sign of the escalating financial crisis at the UK’s largest water company.
The US push for clean energy is expected to generate almost $50bn in green tax credits. President Joe Biden’s landmark climate law hinges on tax credits to drive new investment and has also opened the door for these credits to be bought and sold, enabling energy projects with little to no tax liability to swap them for cash from investors seeking to offset tax burdens.
Chevron is joining other oil companies in winding down operations in the UK’s ageing North Sea basin.
How are law practices dealing with heightened fears among investors and business leaders from the rising geopolitical tensions across Asia? Read our Special Report: Asia-Pacific Innovative Lawyers.
The tussle for the 98-year old Paramount studio could help decide who survives in the streaming era. Our Big Read explains the battle gripping Hollywood.
Science round-up
The UK’s attempt to continue collaborating in the world’s largest nuclear fusion experiment has been rebuffed by the EU, which wants Britain to rejoin its civil atomic programme as part of the deal. Brussels has told London it will be locked out of the Iter project, based in France, within months unless it affiliates to Euratom, which it quit when it left the bloc.
Skywatchers’ delight at witnessing the Northern lights highlights an ongoing debate over whether the system of classifying geomagnetic storms needs resizing, says commentator Anjana Ahuja.
The global fight against the menace of drug-resistant “superbugs” got a new boost with funding from the UK government and pharma company GSK. Excessive use of antibiotics in medicine and agriculture has accelerated the problem in recent years.
New medical technologies combining biology, data science and sociology are here, but when will they reach your doctor? Read more in our Special Report: Future of Healthcare.
There has been a big rise in diseases linked to ageing and lifestyle, according to new data that highlights the shift from a previous era in which infectious diseases and poor maternal and child health were the world’s biggest threats.
Some good news
Although non-communicable diseases are now the leading cause of death worldwide, progress is being made against some of the biggest killers. Cancer mortality for example has declined in many countries, thanks to the drop in smoking but also through advances in medicine and public health.
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