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US Secretary of State Blinken to hold rare talks with Chinese foreign minister at G20 this week

US Secretary of State Antony Blinken will hold a rare meeting with Chinese Foreign Minister Wang Yi on the sidelines of a regional conference in Bali this week, the State Department said on Tuesday (Jul 5). Wang and Blinken, who last met in October, will meet on the sidelines of a Group of 20 ministerial meeting on the Indonesian resort island, the State Department said, amid high tensions on a range of issues including Taiwan. The meeting comes as US President Joe Biden voices hope for a new conversation in ...

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Euro zone business growth slowed sharply in June -PMI

Business growth across the euro zone slowed further last month, according to a survey in which forward looking indicators suggested the region could slip into decline this quarter as the cost of living crisis keeps consumers wary. S&P Global’s final composite Purchasing Managers’ Index (PMI), seen as a good guide to economic health, fell to a 16-month low of 52.0 in June from May’s 54.8, just ahead of a preliminary 51.9 estimate. Anything above 50 indicates growth. “The sharp deterioration in the rate of growth of euro zone business activity ...

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China services activity expands at fastest in almost a year in June

China’s services activity snapped three months of decline in June and grew at the fastest rate in almost a year as easing Covid-19 curbs revived demand, although firms remained cautious about hiring, a private sector survey showed on Tuesday (July 5). The Caixin services purchasing managers’ index (PMI) rose to 54.5 in June, indicating the fastest growth since July last year and the first expansion since February. That compared with 41.4 in May. The 50-point mark separates growth from contraction on a monthly basis. The upbeat findings are in line ...

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ECB to revamp corporate debt holdings to favour greener firms

The European Central Bank plans to gradually revamp its 344 billion euro ($358 billion) corporate debt portfolio to favour greener firms, it said on Monday, taking another step in aligning monetary policy with climate change goals. The ECB has long said that the fight against climate change is crucial in maintaining financial stability and its bank supervision arm has been pushing the bloc’s biggest lenders to improve risk management and disclosure. In one of its biggest moves yet, the ECB said that starting from October, it will tilt reinvestments of ...

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China’s economic resilience offers hope for global growth — BIS general manager

China’s resilient economy continues to be an engine of global growth, a senior bank official has said. “Unprecedented combination of factors” have generated a spike in global inflation, but China hasn’t had the spike in inflation that other countries have been observing, and that has given some latitude to China’s central bank to adjust its monetary policy constructively, Agustin Carstens, general manager of the Bank for International Settlements (BIS), told Xinhua in a recent interview. The world has been battling high inflation triggered by simultaneous shocks, Carstens said. The oldest ...

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Galvanisers wanted: post-Brexit worker shortages strain UK employers

British manufacturing firm Corbetts the Galvanizers used to rely on a stream of workers from Poland and Romania to fill its shop floor, where steel is dipped into a long vat of molten zinc at temperatures of around 450°C (842°F). But after Brexit and COVID-19, it is resorting to everything from 500-pound ($602) starting bonuses to free fish and chips to entice local workers who shy away from the often gruelling work. Britain’s labour shortages, and the pressure they are putting on pay, are a major worry for employers and ...

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EU lending arm aims to raise 100 billion euros to help rebuild Ukraine

The European Investment Bank, the lending arm of the European Union, is proposing a funding structure previously used during the COVID-19 pandemic to help rebuild Ukraine with up to 100 billion euros ($104.3 billion) of investment, according to a document seen by Reuters. The EU-Ukraine Gateway Trust Fund (E-U GTF) would seek to have an initial 20 billion euros in contributions from EU countries and the EU budget in the form of grants, loans and guarantees. The guarantees in particular would have a multiplier effect, leading to infrastructure projects totalling ...

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The Ascent of APAC in the Global Economy

Over the past two decades, the Asia-Pacific (APAC) region has played an increasingly important role in the world economy. The weight of APAC in global GDP has risen from around 27% in 2000 to around 37% by 2021. This has resulted in a substantial rebalancing of the global economy from West to East, driven heavily by the rapid increase in the size of China’s economy. By 2040, the economic weight of the APAC region is forecast to rise further to around 42% of world GDP, driven mainly by the further ...

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China casts giant shadow over emerging nations’ chase for debt relief

From a $360 million project to expand Zambia’s international airport in Lusaka to a $1.4 billion city port in Sri Lanka’s capital of Colombo, China is the missing piece in the puzzle of a number of debt talks under way in developing markets. The second-largest economy and the biggest bilateral creditor in the world is a dominant lender to many smaller, riskier developing nations. But Beijing has kept a low profile, not only on lending conditions but also on how it renegotiates with borrowers in distress. That became more evident ...

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India to drop windfall tax if oil prices fall $40 a barrel

India will only withdraw its windfall tax introduced last week for oil producers and refiners if global prices of crude fall as much as $40 a barrel from present levels, Revenue Secretary Tarun Bajaj told Reuters on Monday. The tax on firms that have increased product exports to gain from higher overseas margins took effect on July 1, as the government moves to boost domestic supply and revenue. The taxes, and some accompanying export curbs, will hit the earnings of companies such as Reliance Industries, Nayara Energy, which is partly ...

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India’s record trade deficit in June adds pressure on currency

India’s June trade deficit widened to a record $25.63 billion, pushed by a rise in crude oil and coal imports, from $9.61 billion a year ago, adding to fears of further pressure on the rupee. New Delhi is worried about rising imports after a surge in global crude and commodity prices following the Ukraine war, and rising demand for coal and other goods fuelled by the domestic economic recovery. India’s rupee has plunged 6% against the dollar this year, weighed down by broad strength in the greenback and as investors ...

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Stronger policies key to economic growth

China’s economic growth in the second quarter may have slowed to below 2 percent year-on-year due to COVID-19 outbreaks, underlining the necessity of beefing up policy adjustments to achieve this year’s growth target of around 5.5 percent, economists in and out of the country said. With stronger support for infrastructure investment, lower market lending rates and refined COVID-19 containment measures, the Chinese economy is expected to stage a strong rebound in the third quarter and strengthen the appeal of renminbi-denominated assets, they said. Financial markets are closely watching China’s second-quarter ...

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German exports dip slightly in May as EU demand weakens

German exports fell slightly in May, decreasing by 0.5% on the previous month, while imports beat forecasts, rising by 2.7%, according to Federal Statistical Office data on Monday. A Reuters poll had predicted a month-on-month rise in exports of 0.9%. The surprise fall in overall exports was due to weaker demand from European Union countries, which saw a decrease of 2.8% in exports compared with April 2022. Thomas Gitzel, chief economist at VP Bank, said the fall in exports should not be overemphasised. “But the number of negative reports is ...

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China’s business profitability improves in Q2: central bank survey

Profitability of Chinese enterprises improved in the second quarter (Q2) of the year, a central bank survey showed. The profitability index stood at 51.2 percent in the second quarter, up 2 percentage points from the previous quarter, staying above the 50-mark separating expansion from contraction, according to the People’s Bank of China. Among the surveyed enterprises, some 31.6 percent said they believe they earned more profits or pared losses in the April-June period, while 39.3 percent said that profits or losses of their firms remained unchanged from the first quarter. ...

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ECB’s top shareholder Germany objected to aid for indebted states-sources

Bundesbank President Joachim Nagel objected to the European Central Bank’s promise of fresh support for the bloc’s indebted south at an emergency meeting last month, reviving a divide between the ECB and its biggest shareholder, sources familiar with the matter told Reuters. ECB policymakers pledged to buy more bonds from debt-laden countries at an unscheduled meeting on June 15 to contain a widening spread between their borrowing costs and Germany’s as the central bank prepares to raise interest rates. But Nagel disagreed with that decision, arguing that the ECB’s focus ...

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