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China goes on a $1 trln apartment-buying spree

China’s national team is going house hunting. State-owned enterprises and local governments are answering Beijing’s call to purchase the country’s vast swathe of unsold apartments. That should help put a floor on plunging property prices. Local authorities in Hangzhou, home to corporate titans Alibaba 9988.HK and Geely Automobile 0175.HK, kicked off the bold initiative by announcing they will buy up to 100,000 square feet of apartments in Linan district at market prices and rent them out at affordable rates. Other regions are set to follow: the ruling Politburo in April ...

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Australian and US economies – a comparison

Australia’s growth profile is weaker The obvious starting point for a comparison like this is growth, and here Australia does stand out with a much weaker growth profile following the post-pandemic surge in activity. GDP has slowed consistently since the fourth quarter of 2022, when quarter-on-quarter growth topped 0.8%. GDP growth has now slowed to 0.2% QoQ, with most of the slowdown coming from household spending. The contrast with the US is stark. Although GDP slowed to just 0.4% QoQ in the first quarter, that is still double that of ...

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Growth of digital economy outperforms overall growth across OECD

The information and communication technology (ICT) sector grew by an average of 6.3% between 2013 and 2023, about three times faster than the total economy across the 27 OECD countries analysed. The first volume of the OECD Digital Economy Outlook 2024 released today also shows the ICT sector maintained this strong performance during 2023 with an average growth rate of 7.6%. In many OECD countries, 2023 was a record year for ICT sector growth, with five OECD countries (the United Kingdom, Belgium, Germany, Austria, and the Netherlands) achieving growth rates ...

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IMF: U.S. should keep open trade, work with China to resolve disputes

The U.S. would be better served by maintaining its open trade system rather than imposing new punitive duties on Chinese goods, the International Monetary Fund said on Thursday, adding that Washington and Beijing should work together to resolve their trade tensions. IMF spokesperson Julie Kozack told a regular news briefing that such trade restrictions as those announced by President Joe Biden on Tuesday can distort trade and investment, fragment supply chains and trigger retaliatory actions. “Fragmentation of this type can be very costly for the global economy,” she said. Kozack ...

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BoE’s Greene says she wants more evidence of waning inflation persistence

The Bank of England should wait for more conclusive evidence that stronginflation pressures in Britain are becoming less stubborn beforeit moves to cut interest rates, BoE policymaker Megan Greene said on Thursday. Greene said in a speech that there was more uncertainty about the degree to which the persistence of inflation – chiefly in the country’s tight labour market – was easing than about how the BoE’s high interest rates were weighing on the economy. “In considering for how long we must retain our restrictive stance before policy should be ...

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ECB’s rates framework may discourage money-market lending – Nagel

The European Central Bank’s new interest rates framework may discourage money-market lending because banks will find it cheaper to tap the ECB, policymaker Joachim Nagel said on Thursday. The ECB wants to wean banks off free cash after 10 years of money printing but it is trying to do so gently enough not to upset the financial system. Under a new framework unveiled in March, the ECB set a 15 basis-point spread between the interest rate that banks earn when they deposit money at the central bank and the one ...

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China’s investment in UAE rose 16% to $1.3bn in 2023 as ties strengthen

Chinese investments in the UAE increased by more than 16 per cent annually in 2023 to $1.3 billion, as economic ties between the countries strengthened, a senior diplomat said. The amount accounted for 60 per cent of the Asian nation’s total investment in Arab countries, Zhang Yiming, China’s ambassador to the UAE, told the China-Arab Entrepreneurs Summit in Abu Dhabi on Wednesday. The UAE boosted its investments in China by 120 per cent last year, accounting for “90 per cent of Arab countries’ investments in China”, Mr Zhang said. The ...

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US’ trade bullying exposes lack of confidence: Chinese FM

Chinese Foreign Minister Wang Yi on Wednesday sharply criticized the US’ latest move to significantly hike tariffs on an array of Chinese goods, including electric vehicles (EVs). He said that the US’ relentless crackdown measures amounted to typical bullying, exposed Washington’s lack of confidence rather than strength, and will not stop China’s development. On the same day, the Chinese Foreign Ministry also urged the US to follow WTO rules and immediately cancel new tariffs on Chinese products and it once again vowed to take all necessary measures to defend Chinese ...

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Conflict, high borrowing costs clip growth in EBRD regions, report says

Two wars and high borrowing costs have trimmed expected growth in countries covered by the European Bank for Reconstruction and Development (EBRD), the bank said in a semi-annual report released on Wednesday. The EBRD, which covers economic trends across emerging Europe, central Asia, the Middle East and Africa, still expects economic growth of 3% across the 40 or so countries it covers, above 2.5% in 2023. But that forecast is 0.2 percentage points lower than in its September report. “This year is going to be better. But of course there ...

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Japan’s GDP contracts, complicating BOJ’s rate hike plans

Japan’s economy contracted in the first quarter, squeezed by weaker private consumption and external demand and throwing a fresh challenge to policymakers as the central bank looks to lift interest rates away from near-zero levels. Preliminary gross domestic product (GDP) data from the Cabinet Office on Thursday showed Japan’s economy shrank 2.0% annualised in January-March from the prior quarter, versus a 1.5% drop seen in a Reuters poll of economists. It followed a slightly positive reading in the fourth quarter. The reading translates into a quarterly contraction of 0.5%, versus ...

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Euro zone banks face increasing headwinds, ECB warns

Euro zone banks are likely to face a number of headwinds this year that will weigh on profitability and asset quality, European Central Bank Vice President Luis de Guindos said on Thursday. Banks face higher funding costs, weak overall economic growth, deteriorating loan books and an increase in non-performing loans, de Guindos told a news conference as he presented the ECB’s Financial Stability Review. “Our recommendation in terms of potential policy is quite clear: let’s try to take advantage of the good profitability in order to reinforce the capital buffers,” ...

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China tariffs could boost Fed rate cut case

Escalation of the U.S.-China trade war seems unavoidable whoever wins the White House in November, but the equally inevitable inflationary pressures that brings won’t automatically steer the Federal Reserve toward a more hawkish policy stance. If the blows to employment and economic growth from rising tariffs land harder than the hit to import prices, a new phase of the Sino-U.S. trade war will put policymakers in a bind, and under pressure to cut interest rates just as much as raise them. After keeping former President Donald Trump’s 2018-19 levies on ...

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How is China supporting Russia after it was sanctioned for Ukraine war?

Russian President Vladimir Putin and his Chinese counterpart Xi Jinping have praised the deep ties between their countries, during a meeting in Beijing. It was their fourth meeting since Russia invaded Ukraine in February 2022. In that time, Beijing has become a vital partner for Moscow, as it seeks to soften the impact of sanctions imposed by the US and other countries. Is China providing Russia with weapons? China has repeatedly denied allegations that it supplies Russia with weapons. In an interview with BBC News, US Secretary of State Antony ...

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Chinese overcapacity claims by US, Europe are ‘trade protectionism’, ministry says

China said on Thursday that U.S. and European assertions of excess capacity were “naked trade protectionism” and that efforts to constrain new energy exports from the World’s No.2 economy would frustrate global efforts to tackle climate change. Growing alarm over Chinese industrial overcapacity flooding the European Union with cheap products is opening a new front in the West’s trade war with Beijing, which kicked off with Washington’s import tariffs in 2018. “A country cannot be labelled as having excess capacity just because it has more capacity than it needs,” He ...

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Leaders from Western Balkans, EU, meet to discuss growth plan, reforms

The six Western Balkan countries brought together by the European Union met in Montenegro’s Adriatic resort of Kotor on Thursday to see how to speed up reforms, create their own single market and ultimately join the bloc. Having been promised EU membership years ago, the accession process across the region comprising Albania, Bosnia, Kosovo, Montenegro, North Macedonia and Serbia has slowed to a crawl, mainly because of reluctance among the EU’s 27 members and a lack of reform throughout the region. The EU wants to use a common growth plan ...

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