Friday, 3 March 2023

China, The National People’s Congress Meets. Food Worries.

 Baltic Dry Index. 1145  +46             Brent Crude 84.65

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Coronavirus Cases 01/04/20 World 1,000,000

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Coronavirus Cases 03/03/23 World 680,356,620

Deaths 6,802,911

England has had its driest February in 30 years with experts warning that there could be a potential drought across the country. This month was the eighth driest second month since 1836 with an average of just 15.3mm of rainfall. The south and east of England were the driest in the UK, with only 3.5mm of rain in Essex (8% of the UK average).

This weekend, its all about China. Or in reality, Communist China consolidating Xi Jinping’s near absolute power.

But what’s not to like? Western firms are fawning at the prospect of massive opportunities in Communist China.

Our stock casinos boom on the back of the CCP consolidating its hold on power.


Asia markets rise as private survey shows sharp recovery in China services

UPDATED THU, MAR 2 2023 11:41 PM EST

Asia-Pacific markets mostly rose on Friday, following Wall Street’s gains overnight after Atlanta Fed president Raphael Bostic said he’s “firmly” in favor of sticking with quarter-point hikes.

China’s services sector saw a jump in activity, according to the Caixin/S&P Global services purchasing manager’s index, with a reading of 55 in February from 52.9 in January.

Hong Kong’s Hang Seng index rose 0.7%, while the Hang Seng Tech index gained 1.6%. In mainland China, the Shenzhen Component fell 0.2% and the Shanghai Composite climbed 0.2%.

The Nikkei 225 rose 1.53%, leading gains in the region and the Topix climbed 1.24% as inflation in Japan’s capital showed easing in February from the previous month.

In Australia, the S&P/ASX 200 rose 0.44% and the South Korean Kospi advanced 0.15%, with the Kosdaq rising 1.36%.

Overnight in the US, stocks were initially under pressure as the trading day started, but rallied in the afternoon after Bostic’s remarks. The Dow Jones Industrial Average led gains among the major U.S. indexes, rising 1.05%, while the S&P 500 and Nasdaq Composite closed 0.76% and 0.73% higher respectively.

Asia markets, U.S. Federal Reserve, Tokyo inflation, China Caixin services, India (cnbc.com)

Chinese stocks often gain after the country’s annual congress meeting. Here’s what strategists expect this year

China’s onshore stocks often see a modest rally after the country’s party congress sessions, but economists and strategists are mixed on whether that pattern will carry on this year.

This year’s “Two Sessions” annual parliamentary gathering in Beijing including the National People’s Congress may see smaller gains in the MSCI China index, which captures large and mid-cap stocks – and the CSI 300, which tracks the largest stocks listed in Shanghai and Shenzhen.

“The market tends to have reasonable performance pre- and after-twin sessions,” Hao Hong, chief economist of Grow Investment Group told CNBC. But there’s been fluctuation ahead of this year’s sessions: He pointed to a recent decline after Hong Kong stocks rallied roughly 50% and China’s mainland stocks rose by 15%.

He expects the indexes to move between gains and losses of 3%, “unless there are policies unexpected by the market,” he said.

“It’s a narrow range unless there is a big stimulus announcement,” he said, which he predicted was unlikely given the strength of recent economic data.

China’s latest factory data recently saw the highest reading in more than a decade. Economists have also raised its forecasts for China’s gross domestic product for the year.

“The goal this year will likely be steady growth and stimulate consumption. While many are calling for a consumption coupon, on national scale it is unlikely,” Hong said.

BNP Paribas’ head of East Asia strategy Jason Lui said that over the last decade, markets have seen a modest, average rise of 3% before and a month after the NPC. But that average has been skewed higher by big rallies in 2015 and 2019.

---- Pointing to data that tracks the MSCI China index’s performance between 2011 and 2022, Goldman Sachs economists said the index tends to have positive returns in the month following an NPC meeting.

More

Chinese stocks usually gain after congress meeting – what to expect (cnbc.com)

China is rolling out the red carpet to attract foreign executives

BEIJING — China is pulling out all the stops to keep multinationals like Apple and its supplier Foxconn in the country.

Such efforts to attract foreign investment come as the pandemic and geopolitical tensions push companies to diversify their supply chains away from China.

For the first time in 25 years, the American Chamber of Commerce in China found that less than half the respondents to its annual survey ranked China as a top three investment priority. The number of companies which are considering or starting to relocate their manufacturing and sourcing outside of China rose by 10 percentage points from a year ago, the survey found.

The majority of respondents don’t plan to relocate their supply chains, the AmCham report said.

The survey was conducted last fall, and results hadn’t changed significantly since China ended its stringent Covid controls, AmCham said. China’s Commerce Ministry didn’t respond to a request for comment.

After such a drop in sentiment, China is working hard to keep foreign businesses investing — and supporting domestic growth. The Commerce Ministry said Thursday that for the first time, it would launch events for an “Invest in China Year.”

In a sign of how hard local governments are trying to attract foreign dollars, top officials from Henan province in central China personally welcomed Foxconn Chairman Young Liu last week during his visit to his company’s factory there, the province announced.

Foxconn operates the world’s largest iPhone manufacturing facility in Henan’s capital, Zhengzhou.

The party secretaries of both Zhengzhou city and Henan province met with Foxconn — along with the mayor and governor, state media said. In China, the ruling Chinese Communist Party takes the lead in decision making, and such high-level participation in the meeting with Foxconn indicates any matters discussed can be implemented more quickly.

During a Covid outbreak and subsequent lockdown last year, Foxconn’s factory in Zhengzhou became a hotspot of attention when some of its roughly 200,000 workers decided to leave and walk home.

Apple later said the Zhengzhou factory disruptions would delay deliveries of some iPhone 14 models.

China ended its stringent Covid controls in December. By February, Foxconn’s Zhengzhou factory was producing at full capacity, with staff working two shifts to meet high client demand, factory manager Wang Xue told local media.

More

China is rolling out the red carpet to attract foreign executives (cnbc.com)

Xi Jinping to tighten Communist party’s grip with overhaul of China’s government at key meeting

The NPC, China’s rubber-stamp parliament, will gather this weekend to approve far-reaching changes, and Xi’s unprecedented third term as president

Fri 3 Mar 2023 01.53 GMT

Xi Jinping is preparing a profound overhaul of China’s government and party institutions at this year’s National People’s Congress (NPC), China’s rubber-stamp parliament, which begins its annual session on Sunday.

 

On Tuesday, the Chinese Communist party (CCP) trailed changes of “far-reaching significance” that are expected to include a reorganisation of the bodies tasked with managing the financial and technology sectors, as well as state security. The changes will all have one goal in mind: to strengthen the party’s control.

Xi is China’s most powerful leader since Mao Zedong. At the CCP congress in October, he was anointed as party secretary and head of the military commission for a third term, after abolishing the two-term limit in 2018, paving the way for him to rule for life. That will be reaffirmed at this year’s NPC when Xi is granted his third term as president.

 

For posts not held by Xi, the two-term limit still applies. Li Keqiang, the premier, is expected to be replaced by Li Qiang, who was elevated to the number two position of the Standing Committee of the CCP in October. Li Qiang, a close ally of Xi and his former chief of staff, was the party secretary for Shanghai during the gruelling lockdown that was imposed on the city for two months in 2022.

 

The sudden promotion of a cadre who did not previously hold a senior government position is indicative of the extent to which Xi values loyalty above convention and experience.

He Lifeng, another Xi ally, is expected to be appointed as vice-premier responsible for economic policy, as well as being considered for the role of party chief of the People’s Bank of China. One of the rumoured changes is the establishment of a new party committee that would oversee the central bank and other financial institutions. Such a change, with He at the helm of the government and the central bank, would centralise decision-making under Xi.

 

“Under Xi the party and government have been pushed together. The government has become less distinct and less effective,” said Richard McGregor, a senior fellow at the Lowy Institute thinktank, and author of a book about the CCP.

Another rumoured change is that the Ministry of Public Security and the Ministry of State Security could be removed from the State Council’s portfolio, and placed under the oversight of a newly created, party-controlled, internal affairs committee. “By moving so many of these core functions away from the oversight of the state, it would arguably weaken the state while greatly strengthening the power of the party’s Central Committee and, of course, Xi Jinping himself,” said Patricia Thornton, a professor of Chinese politics at Oxford University.

 

Last week the CCP and the State Council published a joint opinion on legal education. The document calls on state institutions to “persist in following Xi Jinping Thought” on the rule of law and that schools should “oppose and resist western erroneous views” such as “constitutional government” and “independence of the judiciary”.

More

Xi Jinping to tighten Communist party’s grip with overhaul of China’s government at key meeting | China | The Guardian

Finally, after the driest February in 30 years, add England to Europe’s drought problems. More food price inflation to come probably.

Italy, France confront 2nd year of western Europe drought

Italy, France and other nations in western Europe are grappling with a second year of too little rain and snow

March 1, 2023, 6:41 PM

ROME -- Bracing for Italy's second consecutive year of drought for the first time in decades, Premier Giorgia Meloni huddled with ministers Wednesday to start mapping out an action plan, joining France and other nations in western Europe grappling with scant winter rain and snow.

Meloni and her ministers decided to appoint an “extraordinary commissioner with executive powers” to carry out the government's drought battle plan once it's devised. Italy appointed someone to a similar position to implement strategies against the COVID-19 pandemic.

Experts say the last time the nation experienced two back-to-back years of drought was 1989-90 but that conditions are more severe now.

With scant winter snowfall translating into vastly insufficient snowmelt to supply streams and tributaries that flow into Po River, farmers in Italy's Emilia-Romagna region worry they might have to abandon traditional crops like corn and soy and plant sunflowers instead.

The region is one of Italy’s most productive agricultural areas. The lack of water could also affect the supply of animal feed for Emilia-Romagna's cows and pigs, whose milk and meat are essential to producing Parmigiano Reggiano cheese and prized prosciutto.

France recorded 32 days without rain this winter — the longest such winter drought since record-keeping began in 1959. Snow levels in the French Alps, the Pyrenees and other French mountain ranges are also much lower than usual for this time of year, according to the national weather service.

Since snowmelt is crucial to filling rivers and reservoirs, weather watchers are worried about depleted water supplies later this year. Around France, residents are sharing images of dried-up riverbeds and shrunken lakes — shocking sights in the depths of winter.

French President Emmanuel Macron promised his government would devise an urgent “water plan” in mid-March.

The last two summers in France also were exceptionally dry, prompting some farmers to consider switching to new crops.

Italy last year reeled under its worst drought in 70 years, and the Po, its longest river, turned into a long stretch of sand. The drought battered the rice plants that supply the main ingredient for risotto.

More

Italy, France confront 2nd year of western Europe drought - ABC News (go.com)

England has driest February in 30 years and is 'one hot dry spell' from drought

2 March, 2023

England has had its driest February in 30 years with experts warning that there could be a potential drought across the country.

This month was the eighth driest second month since 1836 with an average of just 15.3mm of rainfall.

The south and east of England were the driest in the UK, with only 3.5mm of rain in Essex (8% of the UK average).

England is one hot dry spell away from widespread drought conditions, according to the National Drought Group which issued the warning.

Its chair John Leyland told Sky News: ‘While most water levels have returned to normal across much of the country, low rainfall in recent weeks highlights the importance of remaining vigilant.

‘We cannot rely on the weather alone, which is why the Environment Agency, water companies and our partners are taking action to ensure water resources are in the best possible position both for the summer and for future droughts.’

Some agricultural areas are already under drought status including East Anglia, Devon and Cornwall.

More

England has driest February in 30 years and is 'one hot dry spell' from drought (msn.com)

Global Inflation/Stagflation/Recession Watch.

Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.

Surprise jump in German inflation after surge in food prices

2 March 2023

German inflation surprisingly accelerated in February amid rising food and service costs.

Consumer prices advanced 9.3pc from a year ago, up from January's 9.2pc gain.

Food prices showed above-average growth of 21.8pc compared with the same month of the previous year, according to federal statistics agency Destatis.

Energy prices eased slightly after the German government brought in a third relief package to limit household heating bills that have rocketed because of Russia's war in Ukraine. 

However, energy prices were still 19.1pc higher in February than in the same month in 2022.

The readings for Europe's largest economy puts more pressure on the European Central Bank after French inflation hit a euro-era record this week and Spanish price growth defied estimates.

KfW chief economist Fritzi Koehler-Geib said prices for goods and services "still have room to rise", suggesting the ECB should "stay on course" with its rate rises.

Bruno Schneller, managing director at Invico Asset Management, said: "The surprises in January inflation releases have challenged hopes for a smooth return to target inflation."

Markets have for the first time to price a 4pc peak in the ECB's deposit rate, which currently stands at 2.5pc.

Surprise jump in German inflation after surge in food prices (msn.com)

India braces for another heatwave amid concerns over wheat exports

March 1, 2023

India is set to face yet another heatwave this year after record-breaking temperatures in 2022, raising concerns not just about the country’s preparedness to tackle extreme weather but also the global implications for wheat crops and energy supplies.

India’s weather office raised an alert on Tuesday warning that the country would likely experience heatwaves between March and May this year after recording its hottest February since records began in 1901

A similar alert was sounded in 2022 sounded for a heatwave that struck with unprecedented temperatures in March, but this year it the alarm has been raised considerably earlier.

The alert comes amid a new study warning that there is a higher possibility of an El Nino phenomenon taking place this year, which could increase global temperatures even beyond what was witnessed in the last few years.

The world has been inching closer to the 1.5C heating threshold and India is one of the hottest places on Earth. Recent studies caution that the country could be one of the first ones to see unsurvivable temperatures.

While India is highly vulnerable to climate crisis-induced extreme weather events, back-to-back heatwaves have raised concerns about its ability to cope.

More

India braces for another heatwave amid concerns over wheat exports (msn.com)

Covid-19 Corner

This section will continue until it becomes unneeded.

One of the deadliest Covid-19 variants can be transmitted between dogs, scientists find

March 2, 2023

Certain variants of Covid-19, including the severe Delta, can be transmissible between dogs, a study by a South Korean research team has found more than two years after the pandemic crippled the world.

The SARS-CoV-2 pandemic has been driven mainly by human-to-human transmission, however, zoonotic viral infections from animals to humans have been reported worldwide.

The joint study led by professor Song Dae-sub of Seoul National University’s College of Veterinary Medicine and researcher Yoo Kwang-soo of Jeonbuk National University, is the first that found transmission among dogs.

The team infected Beagle dogs with the Delta and Omicron variants of the virus by introducing it through their noses. After 24 hours, the infected dogs were kept with virus-naive dogs in large animal isolators.

The researchers couldn't detect any visible symptoms in either of the infected and virus-naive dogs after observing them for over a week.

After 10 days of cohousing, the lung tissue of the dogs was collected for histopathologic examination and viral load measurement. An analysis of the lungs showed microscopic lesions were in both the infected and transmission canines.

"Among the blood chemistry parameters, creatine kinase levels were markedly increased in Omicron-infected dogs," the study found.

It also found that proliferative viruses can be spread through dogs’ nasal discharge.

"Our results demonstrate that the dogs were susceptible to infection with and could transmit both strains to other dogs through direct contact," the study found.

According to the study, Sars-CoV-2 or Middle East respiratory syndrome (Mers-CoV) can be transmitted to other species. The research team has suggested that pet vaccinations should be actively considered to prevent animal-to-human infection.

“If infection between species and individuals is repeated, the possibility of another variant increases,” professor Song was quoted by the Korean Herald as saying.

“It is time to consider the use of animal vaccines to prevent the reverse zoonosis of pets.”

The early release of the study, funded by the Korea Centres for Disease Control and Prevention, was published by the United States Centre for Disease Control and Prevention.

One of the deadliest Covid-19 variants can be transmitted between dogs, scientists find (msn.com)

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

Centers for Disease Control Coronavirus

https://www.cdc.gov/coronavirus/2019-ncov/index.html

The Spectator Covid-19 data tracker (UK)

https://data.spectator.co.uk/city/national

Technology Update.

With events happening fast in the development of solar power and graphene, among other things, I’ve added this section. Updates as they get reported.

Tata demands £500m from UK to build battery factory

March 1, 2023

The government will have to cough up £500m in taxpayer funds if it wants Jaguar Land Rover owner Tata Motors to build a new battery factory in Britain.

The Indian car giant is close to choosing between Spain and the UK for its new plant and has given ministers just weeks to make a decision, according to the Financial Times. 

The £500m in public funds would include grants, assistance for energy costs and research funding. 

Tata’s demands reflect the challenge the government faces over how much support to give the industry, as the UK scrambles to make the transition from petrol and diesel cars to mass-market electric vehicles.

JLR is the largest employer in the UK car manufacturing sector, and it would be a huge blow for the UK’s burgeoning battery ambitions if it opted against sourcing batteries in the country.

The industry is still recovering from the collapse and resale of Britishvolt to Aussie group Recharge, which has scrapped plans to produce hundreds of thousands of lithium-ion batteries every year for mainstream motor vehicles, and will instead use the plant to develop clean energy storage and batteries for luxury, high-end sports cars. 

Tata is weighing up a partnership with Chinese battery maker Envision – which would involve the Asian group building and running a factory in Somerset to supply JLR’s new range of electric cars.

Despite new investments by Nissan, Stellantis and Ford in electric vehicle technology, the UK has struggled to attract big battery companies to set up factories.

More

Tata demands £500m from UK to build battery factory (msn.com)

Another weekend and a Spring weekend in the northern hemisphere. Normally a time of the planting of Spring crops. Food prosperity ahead. But this year a second year of war in Ukraine, sky high fertiliser costs and a western Europe drought, cast major concerns on the chance of food prosperity in 2023.

But continued food price inflation risks global social disorder or worse. A year of worry lies ahead. Have a great weekend everyone.

The urge to save humanity is almost always a false front for the urge to rule.

 H. L. Mencken.

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