HONG KONG, Oct 18 (Reuters) - Mainland Chinese and Hong
Kong equity markets fell on Monday after data showed China's economy grew more
slowly than expected in the third quarter, weighing on regional stocks, athough
losses were capped by hopes of support from policymakers.
Oil prices, meanwhile, hit new
multi-year peaks, continuing their recent surge amid a global energy shortage,
with U.S. crude at a fresh seven-year high and Brent at a three-year high.
China's gross domestic product
(GDP) grew 4.9% in July-September from a year earlier, the weakest pace since
the third quarter of 2020, as China grappled with power shortages, supply
bottlenecks and sporadic COVID-19 outbreaks as well as rising jitters over the
property sector. read
more
BEIJING, Oct 18 (Reuters) - China's economy grew at the
slowest pace in a year in the third quarter, hurt by power shortages, supply
bottlenecks and sporadic COVID-19 outbreaks and raising heat on policymakers amid rising jitters over the property sector .
Data released on Monday showed
gross domestic product (GDP) grew 4.9% in July-September from a earlier, the
weakest pace since the third quarter of 2020 and slowing from 7.9% in the
second quarter.
"The domestic economic
recovery is still unstable and uneven," said National Bureau of Statistics
(NBS) spokesperson Fu Linghui at a briefing in Beijing on Monday.
A Reuters poll of analysts had
expected GDP to rise 5.2% in the third quarter.
----The world's second-largest economy has rebounded
from the pandemic but the recovery is losing steam, weighed by faltering
factory activity, persistently soft consumption and a slowing property sector
as policy curbs bite.
BEIJING
(Reuters) - China’s daily crude steel output in September fell to the lowest
since December 2018, according to Reuters calculations based on official data,
as a power crunch in much of the country and environmental curbs slowed down
factory activity.
The world’s top steel producer
churned out 73.75 million tonnes of the metal last month, compared with August
output of 83.24 million tonnes data from the National Bureau of Statistics
showed on Monday. That is down 21.2% from same month a year earlier.
China’s average daily crude steel
output was 2.46 million tonnes in September, down 8.6% from average output in
August, Reuters calculations showed.
In the first nine months of the
year, China produced 805.89 million tonnes of steel, up 2% on an annual basis,
according to the data.
Industrial
production in the world’s second-biggest economy had declined recently because
of power rationing triggered by coal shortages, impacting sectors such as steel
and aluminium.
Capacity utilisation rates at 71
electric arc furnaces in China have been falling since late August and slipped
to 49.22% in the last week of September, down 21.09% from same period year
earlier, data compiled by Mysteel showed.
Production at long-process steel
plants was also restrained by Beijing’s efforts to reduce smog and carbon
emissions and the pledge that 2021 production cannot exceed last year’s record
1.065 billion tonnes.
The industry ministry and
environment ministry issued a joint statement last week urging more mills in
northern China to keep to those cuts from Nov. 15 to the end of 2021.
Additionally,
from Jan. 1, 2022, to March 15 mills must cut output by at least 30% of their
2021 production to reduce air pollution.
https://www.reuters.com/article/china-economy-output-steel/update-2-china-sept-daily-steel-output-lowest-since-dec-2018-on-power-curbs-idUSL1N2RE03B
China property shares fall even
as PBOC says Evergrande woes manageable October 18, 20214:56 AM
BST
HONG KONG/SHANGHAI, Oct 18 (Reuters) - China's property
shares fell on Monday on signs of slowdown in the sector and even as the
central bank said spillover effects from China Evergrande Group's (3333.HK)
debt woes were controllable.
The CSI300 Real Estate Index (.CSI000952) ,
which tracks China's biggest developers, fell more than 2%, while an index
tracking the broader sector was down roughly 1.7%.
Hong Kong property shares fared
a bit better, with an index tracking mainland property firms (.HSMPI) down
0.3%. The Hang Seng property index (.HSNP) fell 0.7%.
Global financial markets have
been rocked by fears of contagion over a liquidity crisis at China Evergrande
Group, which has more than $300 billion in liabilities.
The People's Bank of China
Governor Yi Gang said on Sunday the economy faces challenges such as default
risks for certain firms due to "mismanagement", and that authorities
are keeping a close eye "so they do not become systematic risks". read
more
On Friday, another PBOC
official said the spillover effect of Evergrande's debt problems on the banking
system were controllable and individual financial institutions' risk exposures
were not big. read
more
Investors reacted favourably to
the PBOC's comments on Friday with the risk premium on the China's 5-year
credit default swaps narrowing 4.8 basis points to 49.4, according to Lucror
Analytics.
But some analysts said the
spillover effect could be bigger than the PBOC stated.
"The PBOC is downplaying
the market impact of Evergrande's default," JPMorgan wrote in a research
note, adding that it thinks Evergrande's problems are not an isolated cases but
represent an industry-wide problem.
More
https://www.reuters.com/world/china/china-property-shares-firm-after-pboc-says-evergrande-woes-manageable-2021-10-18/
Op-ed: Why the U.S.-China duo is
the most significant, and potentially the most perilous, bilateral relationship
in human history Published Sat, Oct 16 2021 5:10 PM EDT
Updated Sat, Oct 16 2021 7:26 PM EDT
The U.S. and China represent the most significant – and
potentially most perilous – bilateral relationship in human history.
Given that reality, neither side is managing their rising tensions with
adequate skill or durable strategy.
That’s the way Stephen Heintz
of the Rockefeller Brothers Fund put it in a conversation with me a couple of
days ago. It is also the subtext of conversations I’ve had with world leaders
visiting Washington, D.C. this week for the IMF and World Bank meetings.
U.S.-Soviet relations defined the Cold War, with both sides
fielding the unprecedented nuclear capability to devastate each other, and much
more. Before that, the Anglo-American relationship was decisive, from intense U.S.-British competition in the 19th
century to an alliance that prevented fascist victory during World War II in
the 20th century.
Yet Heintz’s argument is compelling that U.S.-Chinese
relations have a historically unique significance, based on their
multi-dimensional nature that touches on just about every aspect of global
affairs now and into the foreseeable future.
That’s true whether you’re concerned about world war, the
global economy, climate change, human rights, the contest between democracy and
authoritarianism, the future of space, or the accelerating race for
technology’s commanding heights. Never has so much across the world
rested so heavily on two countries’ ability to manage their relationship across
a dizzying array of domains.
The accuracy of data related to China’s economy, which for
many years has been the biggest driver of global growth, took center stage at
this week’s IMF and World Bank meetings. The controversy focused on allegations
that IMF Managing Director Kristalina Georgieva asked colleagues, when she was
a top official at the World Bank, to find a way to boost China’s standing in
its flagship 2018 Doing Business report.
Georgieva has denied any wrongdoing. The IMF board, which
convened eight times to consider her fate, concluded that its review of the allegations “did not
conclusively demonstrate that the managing director played an improper role.”
The board reaffirmed its confidence in Georgieva’s leadership, but the
controversy is likely to continue.
The subtext is that any international institution leader
must manage the reality that China will increasingly act to influence, lead or
replace the world’s most significant multilateral bodies, in this case, the
world’s lender of last resort.
Meanwhile, senior government officials in D.C. this week,
representing the world’s most important economies, had plenty else to worry
about: an unfolding energy crisis, rising inflation, slowing growth, and
increasing climate concerns ahead of the 2021 United Nations Climate Change Conference , or COP26,
that begins Oct. 31 in Glasgow, Scotland.
A senior official from one of the most significant U.S.
allies, speaking anonymously, said all of this has been made more difficult to
manage due to the growing volatility in U.S.-Chinese relations, generated by
both their differences and their domestic realities.
---- The senior allied official said his country’s greatest medium-term and
longer-term economic risk was that rising tensions between the U.S. and China
boil over into a contest that engulfs his country. “Few of us can afford to
make a decision between the U.S. and China,” he said. “So please don’t ask us
to do so.”
It isn’t that America’s allies are
naïve about the unfortunate course President Xi Jinping is setting for his
country. It’s just that a great many of them have China as their number one
trading partner – including the European Union as a whole, Germany, Japan,
South Korea, Saudi Arabia, and the United Arab Emirates. China represented
nearly 30% of global growth between 2013 and 2018, double that of the
U.S.
More
https://www.cnbc.com/2021/10/16/op-ed-why-the-us-china-duo-is-the-most-significant-and-perilous-bilateral-relationship-in-history.html
In other news, the global energy crisis is still spreading.
Global Energy Crisis Hits
Singapore as Power Provider Goes Bust By Stephen
Stapczynski and Dan Murtaugh
14
October 2021, 03:57 BST
Power retailers
feeling pressure amid power price surge
·
A record-breaking spike in electricity prices is
short-circuiting Singapore’s efforts to liberalize its power sector, in the
latest sign that the global crisis is delivering a blow to both energy
suppliers and their customers.
Electricity supplier iSwitch Energy will cease power
retail operations on Nov. 11 due to “current electricity market conditions,”
the company said on its website Wednesday.
Existing customers will be transitioned to SP Group, Singapore’s state-owned
power provider.
More https://www.bloomberg.com/news/articles/2021-10-14/global-energy-crisis-hits-singapore-as-power-provider-goes-bust
Finally, in cryptocurrency news Tether and Bitfinex
decide to pay $42.5 million dollars to settle CFTC charges, but both claim they
did nothing wrong. Right, got it.
Crypto firms Tether, Bitfinex to
pay $42.5 mln to settle U.S. CFTC charges October 15,
20219:31 PM BST
Oct 15 (Reuters) - Cryptocurrency
Tether and crypto exchange Bitfinex will pay $42.5 million to settle civil
charges from the U.S. Commodity Futures Trading Commission (CFTC) over
allegedly making misleading statements and making illegal transactions.
Firms doing business as Tether
agreed to pay $41 million to resolve CFTC charges they made misleading claims
about Tether's cryptocurrency stablecoin, the CFTC said in a statement on
Friday. According to the regulator, at various times from June 2016 to late
February 2019, Tether made misleading or untrue statements about whether it
held sufficient U.S. dollar reserves to fully back up its U.S. dollar tether
token.
In a separate order, firms doing
business as Bitfinex agreed to a $1.5 million penalty over charges their
controls were not adequate to keep U.S. customers from illegally engaging in
retail commodity transactions on the exchange. This violated U.S. law and a
2016 settlement with Bitfinex over similar allegations, the CFTC said.
Neither Tether or Bitfinex, which
are controlled by the same parent company, admitted nor denied the findings.
In a statement on its website,
Tether challenged the CFTC's statements, saying the agency's findings were that
Tether's dollar reserves were not all in cash in a bank account titled in
Tether's name at all times, rather than that the tokens were not fully backed.
CFTC Commissioner Dawn Stump, a
Republican, affirmed the agency's findings that the "assurance provided to
tether customers was not 100% true, 100% of the time" and that
"wrongdoing occurred", according to a statement published alongside
the CFTC orders.
However, Stump raised concern that
the resolution - the first time the CFTC has applied the definition of
"commodity" to a stablecoin - would sow confusion among
cryptocurrency firms and investors.
https://www.reuters.com/technology/tether-bitfinex-agree-pay-425-mln-fines-settle-us-cftc-charges-2021-10-15/?utm_source=newsletter&utm_medium=email&utm_campaign=technology-roundup&utm_term=Technology%20Roundup%20-%202021%20-%20Master%20List
Global Inflation Watch.
Given our Magic Money Tree central banksters and our
spendthrift politicians, inflation now
needs an entire section of its own.
Goldman Sachs CEO Says Wage
Inflation Is Spreading Through Economy By Daniel Taub
and Sonali
Basak 15 October 2021, 19:10 BST
Goldman Sachs Group Inc. Chief Executive Officer
David Solomon said that inflation, particularly in wages, remains top of mind
among corporate leaders and shareholders.
“Inflation is a topic that is front and center with every
investor that I talk to -- and certainly with every CEO that’s running a
business of any size or any scope,” Solomon said Friday in an interview with
Bloomberg Television. “There is definitely inflation -- we haven’t seen it in a
while, and the question is what choices do we make from here.”
More.
https://www.bloomberg.com/news/articles/2021-10-15/goldman-s-ceo-says-wage-inflation-is-spreading-through-economy?srnd=premium-europe
Bank of England will 'have to
act' to curb inflation Sunday 17 October 2021
8:11 pm
Bank of England Governor Andrew Bailey has signaled that
the Bank of England is gearing up to increase interest rates.
The central bank is considering raising interest rates for
the first time since the onset of the coronavirus crisis due to increasing
inflation risks.
He believes the surge in energy prices raises the risk of
higher inflation expectations.
He told Reuters that the recent jump in inflation will be
temporary, but that the crisis around energy supply will make its climb last
longer.
Bailey argued that while monetary policy cannot solve
supply-side problems, the Bank of England will have to act if they see a risk
to both medium-term inflation and to medium-term inflation expectations.
During an online panel discussion organised by the Group of
30 consultative group, he said, “That’s why we at the Bank of England have
signalled, and this is another such signal, that we will have to act. But of
course, that action comes in our monetary policy meetings.”
The Bank of England has forecast that Britain’s inflation
rate will go over four percent, more than double its target, as the world
economy reopens from its COVID-19 lockdowns.
This could cause shortages of supplies and staff, while the
price of energy soars.
Investors are now speculating that the Bank of England
might become the first of the world’s biggest central banks to raise rates,
later this year or early in 2022.
https://www.cityam.com/bank-of-england-will-have-to-act-to-curb-inflation/
Covid-19 Corner
This
section will continue until it becomes unneeded.
Second J&J COVID shot gets
expert backing; FDA looking at lowering age for Pfizer booster October 15,
202110:26 PM BST
Oct 15 (Reuters) - Outside advisers to the U.S. Food
and Drug Administration on Friday unanimously recommended the agency authorize
a second shot of Johnson & Johnson's (JNJ.N)
COVID-19 vaccine for all recipients of the one-dose inoculation.
The agency is also considering lowering the recommended
age for booster shots of the Pfizer (PFE.N) /BioNTech
vaccine to people as young as 40, FDA official Dr. Peter Marks told the
advisory panel.
The FDA's Vaccines and Related Biological Products
Advisory Committee backed the shots for all J&J recipients aged 18 and
older at least two months after their first dose.
The FDA is not bound to follow the recommendation, but
typically does.
After hearing presentations from J&J and FDA
scientists, many members of the advisory panel asked if J&J's single-dose
vaccine should actually be considered a two-dose shot for everyone.
They pointed to the lower levels of virus neutralizing
antibodies it provokes compared to vaccines using messenger RNA (mRNA)
technology from Moderna Inc (MRNA.O) and Pfizer/BioNTech.
"There is a public health imperative. What we're
seeing is this is a group with overall lower efficacy than we have seen with
the mRNA vaccine, and so there is some urgency to do something," said Dr.
Arnold Monto, an epidemiologist at the University of Michigan's School of Public
Health who chaired the meeting.
The FDA authorized boosters of the Pfizer/BioNTech
vaccine last month for Americans aged 65 and older and those at high risk of
severe illness or occupational exposure to the virus.
More
https://www.reuters.com/world/us/us-fda-advisers-vote-jj-covid-19-vaccine-booster-2021-10-15/
Risk of mRNA Covid booster
causing heart inflammation in young adults continues to worry scientists, Dr.
Ofer Levy says Published Fri, Oct 15 2021 7:14 PM EDT
Updated Fri, Oct 15 2021 7:16 PM EDT
The risk of mRNA Covid booster shots causing heart
inflammation in young adults continues to worry top scientists weighing
whether to approve third doses for anyone over 12, Dr. Ofer Levy, a voting
member of the Food and Drug Administration’s advisory panel, said Friday.
Levy, the director of the Precision Vaccines Program at
Boston Children’s Hospital, spoke just hours after the FDA’s Vaccines and
Related Biological Products Advisory Committee unanimously
recommended giving second shots to all recipients of Johnson & Johnson’s
single-dose Covid vaccine over 18 years old.
The panel previously recommended the FDA approve boosters
from Moderna and
Pfizer for all
seniors and other high-risk groups. But some committee members have voiced
concern about authorizing third mRNA doses for people 12 and up due to the risk
of two rare heart inflammation conditions, myocarditis and pericarditis.
“As we go into younger and younger age groups, they’re less
and less at personal risk of severe Covid, and on the other hand, somewhat more
at risk of this inflammatory heart condition with the mRNA vaccine,” Levy told
CNBC’s “Closing Bell .” “So
it’s a risk benefit analysis, and that’s why you’re seeing that deliberation.”
Though uncommon, myocarditis has been found mostly in male
adolescents and young adults who received a vaccine from Pfizer or Moderna,
according to the Centers for Disease Control and Prevention. Cases typically
arise within days of vaccination, usually after the second dose, and subside
with medicine and rest, the CDC said.
Unlike mRNA vaccines from Pfizer and Moderna, J&J’s
Covid shot is not associated with a risk for heart inflammation, the CDC says.
Over 15 million Americans have received their primary vaccine dose from
J&J.
More
https://www.cnbc.com/2021/10/15/heart-inflammation-risk-in-young-adults-caused-by-mrna-covid-booster-continues-to-worry-scientists-dr-levy-says.html
Next, some vaccine links
kindly sent along from a LIR reader in Canada. The links come from a most informative
update from Stanford Hospital in California.
World
Health Organization - Landscape of COVID-19 candidate vaccines . https://www.who.int/publications/m/item/draft-landscape-of-covid-19-candidate-vaccines
NY
Times Coronavirus Vaccine Tracker . https://www.nytimes.com/interactive/2020/science/coronavirus-vaccine-tracker.html
Regulatory
Focus COVID-19 vaccine tracker . https://www.raps.org/news-and-articles/news-articles/2020/3/covid-19-vaccine-tracker
Some other useful Covid links.
Johns Hopkins Coronavirus
resource centre
https://coronavirus.jhu.edu/map.html
Rt Covid-19
https://rt.live/
Centers for Disease Control
Coronavirus
https://www.cdc.gov/coronavirus/2019-ncov/index.html
The Spectator
https://data.spectator.co.uk/city/national
Technology Update.
With events happening
fast in the development of solar power and graphene, I’ve added this section.
Updates as they get reported.
Something a little
different today and quite concerning. A US radar base in the Falklands, next?
I suspect the article
below and the Financial Times article that broke the story, both overstate the
new missile and American surprise and reaction. The missile allegedly missed it
target by about 20 miles.
China tests new space capability
with hypersonic missile October 16, 2021
China tested a nuclear-capable
hypersonic missile in August that circled the globe before speeding towards its
target, demonstrating an advanced space capability that caught
US intelligence by surprise.
Five people familiar with the test
said the Chinese military launched a rocket that carried a hypersonic glide
vehicle which flew through low-orbit space before cruising down towards its
target.
The missile missed its target by
about two-dozen miles, according to three people briefed on the intelligence.
But two said the test showed that China had made astounding progress on
hypersonic weapons and was far more advanced than US officials realised.
The test has raised new questions
about why the US often underestimated China’s military modernisation.
“We have no idea how they did this,”
said a fourth person.
The US, Russia and China are all
developing hypersonic weapons, including glide vehicles that are launched into
space on a rocket but orbit the earth under their own momentum. They fly at
five times the speed of sound, slower than a ballistic missile. But they do not
follow the fixed parabolic trajectory of a ballistic missile and are
manoeuvrable, making them harder to track.
Taylor Fravel, an expert on Chinese nuclear
weapons policy who was unaware of the test, said a hypersonic glide vehicle
armed with a nuclear warhead could help China “negate” US missile defence
systems which are designed to destroy incoming ballistic missiles.
“Hypersonic glide vehicles . . . fly
at lower trajectories and can manoeuvre in flight, which makes them hard to
track and destroy,” said Fravel, a professor at the Massachusetts Institute of
Technology.
Fravel added that it would be
“destabilising” if China fully developed and deployed such a weapon, but he
cautioned that a test did not necessarily mean that Beijing would deploy the
capability.
Mounting concern about China’s
nuclear capabilities comes as Beijing continues to build up its conventional
military forces and engages in increasingly assertive military activity near
Taiwan.
Tensions between the US and China
have risen as the Biden administration has taken a tough tack on Beijing, which
has accused Washington of being overly hostile.
US military officials in recent
months have warned about China’s growing nuclear capabilities, particularly
after the release of satellite imagery that showed it was building more than
200 intercontinental missile silos. China is not bound by any arms-control
deals and has been unwilling to engage the US in talks about its nuclear
arsenal and policy.
---- In August, General Glen VanHerck, head of
North American Aerospace Defense Command, told a conference that China had
“recently demonstrated very advanced hypersonic glide vehicle capabilities”. He
warned that the Chinese capability would “provide significant challenges to my
Norad capability to provide threat warning and attack assessment”.
Two of the people familiar with the
Chinese test said the weapon could, in theory, fly over the South Pole. That
would pose a big challenge for the US military because its missiles defence
systems are focused on the northern polar route.
More
https://nypressnews.com/news/business/china-tests-new-space-capability-with-hypersonic-missile/
They've promised that dreams can come true - but forgot to
mention that nightmares are dreams, too.
Oscar Wilde.
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