China protests offer hope to offshore investors
The world witnessed unprecedented scenes across China last weekend as thousands took to the streets to protest Beijing’s zero-Covid policy. The mostly peaceful demonstrations were sparked by an apartment fire in the Chinese city of Urumqi, which killed ten people and was widely blamed on coronavirus restrictions.
The protests triggered
a rush of buying from offshore investors in China’s mainland stock market as investors bet that opposition to the country’s Covid-19 policies will prompt President Xi Jinping to accelerate the reopening of the economy.
While analysts predict China will indeed scrap lockdowns sooner than expected,
the economic damage has already been done, writes Asia Lex editor June Yoon. China still has an extremely low vaccination rate. A sudden rise in coronavirus cases after reopening will exacerbate labour shortages and hit already fragile supply chains.
So how easy is it for companies to protect themselves and diversify away from China? Most are already
too entrenched in the country’s manufacturing ecosystem to make significant changes to operations, writes June Yoon.
Chinese companies meanwhile are setting up in Singapore to
hedge against the geopolitical risk presented by escalating tensions between Beijing and Washington. In the last year, as many as 500 companies have quietly redomiciled or registered in Singapore.
Europe moves to wean itself off Russian gas
Since the outbreak of war in Ukraine shook Europe’s energy market, the continent has been racing to rapidly reduce its reliance on Russian fossil fuels while keeping a lid on prices. But proposed measures have triggered deep divisions in EU capitals. FT reporters ask
why Europe can’t agree on an energy price cap.
EU member states have started weaning themselves off Russian pipeline gas by cutting deals with Algeria, Azerbaijan, Egypt and the US. In a significant development,
Qatar will send Germany approximately 2mn tonnes of LNG annually for at least 15 years.
More UK energy suppliers could fail this winter
In an interview with the FT, the head of British Gas-owner Centrica warned that
more UK retail energy suppliers will probably go bust this winter. 30 suppliers have already collapsed in just 18 months, despite government support for household bills.
The largest to have collapsed, Bulb Energy, is forecast to have cost taxpayers as much as £6.5bn after it was placed into special administration late last year, in the biggest state bailout since the financial crisis.
The UK government plans to sell Bulb to Octopus Energy, but rivals ScottishPower, Eon and Centrica have all opposed the move, warning that the government would
endanger the “future stability” of the UK energy market if it proceeded. On Wednesday, the High Court gave the government the go-ahead to complete the sale.
Outlook for post-Brexit Britain remains gloomy
Almost two years after Britain left the EU, economists agree:
Brexit has significantly worsened the country’s economic performance. In a series on the next phase of the UK’s exit from the EU, the FT’s economics editor Chris Giles demonstrates the extent of the damage to growth, wages, productivity and to the currency.
In his column this week, Janan Ganesh explains how, since Brexit, cheaper currency, higher taxes and messier politics have made
Britain a more European country.
Similarly gloomy, chief executive of Lloyds Banking Group Charlie Nunn warned at
FT’s Global Banking Summit this week that political uncertainty, regulatory costs and a lack of focus on competitiveness in the UK are
holding back international investment in the country’s banks.
Prime minister Rishi Sunak may be encouraged by our story that his plan to attract investment to the UK with the freeports scheme, which allows parts of the UK to benefit from tax breaks and simplified customs controls, has been met with anxiety in Brussels. The
EU fears the freeport regime could lure investment away from the bloc.
London’s financial sector told to tackle class prejudice
The City of London Corporation published a surprising report this week, in which it recommended that at least half of their senior leaders should come from a working-class or lower socio-economic background by 2030.
The report found 36 per cent of senior leadership positions were held by staff from a working-class or lower socio-economic background - a statistic which perhaps warrants further scrutiny.
Cryptosphere feels the first effects of FTX collapse
Warnings that the collapse of cryptocurrency exchange FTX would trigger a wave of bankruptcies across the industry appear to be justified.
Crypto lender BlockFi became the first casualty when it filed for Chapter 11 this week. FTX had bailed out the Peter Thiel-backed lender after it suffered losses on loans to collapsed crypto hedge fund Three Arrows Capital earlier this year.
The complex relationship between the FTX and BlockFi has
exposed the crypto industry’s sheer interconnectedness, writes the FT’s Lex columnists. There is little to suggest that the ecosystem can become sustainable.
Finally, don’t miss our account of
FTX’s lavish pre-collapse spending: The exchanges twenty and thirty-something senior executives splashed millions of dollars on everything from travel to sport sponsorship deals and luxury homes.
