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Fresh data showing China on the brink of recession has fueled calls for a stronger stimulus package for the world’s second-largest economy as it continues its post-pandemic recovery.
Consumer price growth in June was flat year over year and fell 0.2 percent from the previous month, while factory gate prices fell at the fastest rate since 2016 as demand for goods weakened, exacerbated by slowing global economic growth. The CPI numbers come after data showing manufacturing activity contracted for the third month in a row.
The situation stands in stark contrast to the US and Europe, where stubbornly high inflation means interest rates are likely to rise further through the summer.
China’s faltering recovery is taking a heavy toll on the country’s youth: more than a fifth of young people aged 16-24 were unemployed in May, the most since records began in 2018 and higher than European countries like France and Italy .
Although jobs continue to be created, many unskilled jobs are unpopular with college graduates. Crackdowns on technology, finance and gaming have curtailed the opportunities young people once sought.
Some blame the skills mismatch on the shoulders of the government as it tries to tilt the economy toward high-tech manufacturing. But with the sector not yet ready to absorb all engineering students coming from universities, there are not enough jobs at the graduate level. Others say the reasons are deeper, with domestic consumption not growing enough to create jobs. “When you build your manufacturing competitiveness on low wages, once low wages become an issue because of weak domestic demand, you’re kind of stuck,” said one analyst.
In response, Beijing recently urged unemployed graduates to “roll up their sleeves” and try manual labour, posting profiles of those who allegedly made a fortune in low-skill jobs such as selling street food or growing fruit, rather than pursuing a career in their field. the chosen. Perhaps unsurprisingly, the message was met with a lot of disdain on social media.
A slower-than-expected economic recovery in China prompted the government in Beijing to seek more foreign investment, but recent tit-for-tat trade sanctions with the United States weighed on sentiment. In this regard, there was progress over the weekend after US Treasury Secretary Janet Yellen’s visit seemed to ease some of the political tensions between the two countries as she spoke about the potential for trade and economic cooperation.
try Global inflation tracker To find out how your country compares to higher prices
Need to know: UK and European economy
Advisor Jeremy Hunt He ruled out deep tax cuts ahead of elections this autumn and told the Financial Times before making a set speech this evening that he was looking to the City of London to boost UK growth by changing rules that stifle investment. Bank of England Governor Andrew Bailey said the British economy had shown “unexpected resilience” in the face of a range of external shocks.
Fears of more UK interest rates rise It has led to a rush of homeowners signing new mortgage deals. “There has been a real shift in borrower behavior over the past month,” said one finance company. It changed to: ‘Oh my God, I have to get one of these deals before they’re gone, even though I don’t like the price.'”
proposals to make UK power grid Greater efficiencies could lead to large price differences depending on the proximity of communities to where the power is generated. “Local pricing” is just one option being considered by regulator Ofgem and the government as part of a plan to decarbonize the grid by 2035.
said chief economic commentator Martin Wolf green energy The UK’s opposition Labor Party’s proposals are unlikely to enable the country to emerge from a long and painful period of economic stagnation.
Representatives of 168 member states International Seabed Authority Gather today to start talks on large-scale deep sea mining. France and Germany worry that a Chinese-backed push to harvest battery minerals from the seabed could lead to permanent damage.
Need to know: The global economy
conversations between we And Mexico On trade issues related to energy and the auto industry, little progress has been made, frustrating business leaders who say neither government is abiding by territorial dispute procedures.
Central banks bring their material gold reserves Return home to avoid any Russian-style penalties for their foreign assets. Gold is in high demand as a haven from high inflation and volatile bond prices.
MozambiqueThe former US Treasury secretary is set to be extradited and prosecuted in the $2 billion “tuna bond” scandal, related to the theft of money from loans for offshore projects, including the government’s tuna fishing fleet, that led directly to the nation’s defaulting South Africa on its debt.
VietnamThe economic moment has arrived, says the Financial Times editorial board, as it has become one of the main beneficiaries of manufacturers’ efforts to “de-risk” in China. Vietnam was the fastest growing economy in Asia last year and one of a handful globally to have achieved two consecutive years of growth since the pandemic.
Need to know: business
the biggest American banks This week is set to mark the biggest jump in loan losses since the start of the Covid-19 pandemic as higher interest rates put more pressure on borrowers. The largest US bank regulator has announced sweeping changes to its capital rules for medium-sized lenders as part of an effort to prop up a financial system that was rocked earlier this year by a series of bank failures.
The rise in interest rates also had a profound impact on the UK pension industry. Explains the new “big read”.
EasyJet 1,700 summer flights, mostly from Gatwick, were cancelled, due to air traffic control problems. Congestion caused by the closure of Ukrainian and Russian airspace means that only about 80 percent of normal airspace is available, just as passenger demand has rebounded from the pandemic.
The hype about “additive manufacturing” has been enabled by 3D printing I started to fade. Leading manufacturers are in the midst of merger talks because they face insurmountable barriers to using technology for mass-produced goods.
A new movie from FT details the story Gautam Adani, the Indian billionaire businessman who saw the value of his listed companies plummet after being targeted by a short seller. The ramifications have rippled into politics: Adani has become closely associated with Prime Minister Narendra Modi’s vision of a new India.
Video: Gautam Adani: Indian Billionaire vs Short Seller
world of work
Employers respect an idea Staff napbolstered by recent research showing that regular napping may slow the pace of brain shrinkage as we age, lowering our risk of dementia and other diseases.
We’ve all been there. Columnist Pilita Clark discusses one of the biggest terrors of office life: writing an email to a friend to groan Hated co-worker and send it directly to the obnoxious co-worker instead of the friend.
Some good news
deforestation in Amazon Brazil It fell by a third in the first six months of 2023 compared to last year, according to government satellite data (which has not been independently verified). President Luiz Inacio Lula da Silva has pledged to end deforestation by 2030.
