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Good morning. Today we’re covering:
Beijing’s retaliation against Brussels’ EV tariffs
Vietnam’s incentives for foreign investors
Mushroom’s sculptural, surreal and slightly creepy beauty
But we start with a scoop: PwC China has told clients it expects Chinese authorities to hit it with a six-month business ban that will start as early as September, as part of punishment over its audit of collapsed property developer Evergrande.
The action against PwC comes after China’s securities regulator in March said Evergrande had inflated its mainland revenues by almost $80bn in the two years before the developer defaulted on its debts in 2021, despite PwC’s China unit giving the accounts a clean bill of health.
The business ban, which could come with a large fine, would be the toughest ever action by Chinese regulators against a Big Four firm as Beijing steps up scrutiny over the role played by auditors in financial scandals.
Here’s how the ban and fine would disrupt operations at the firm.
Thanks for reading FirstFT. Do you have any questions about PwC China or Beijing’s crisis-hit property sector? Email us at firstft@ft.com or hit “reply” and remember to include your name and where you’re writing from. We’ll answer as many as possible in a special weekend edition of the newsletter.
Here’s what else I’m keeping tabs on today:
Interest rate announcements: South Korea and Turkey are expected to hold interest rates steady when they meet today.
Jackson Hole Economic Symposium: US policymakers will gather for their annual meeting in Wyoming amid growing concerns about the health of the world’s largest economy.
Results: Corporate earnings are expected from Australia’s Sonic Healthcare, Taiwan’s Fubon Financial Holding Co., and China’s Ping An Insurance Group, among others.
Five more top stories
1. China has launched an anti-dumping investigation into imported European dairy products in the latest escalation of its trade dispute with the EU. The move is Beijing’s strongest retaliation yet against Brussels’ tariffs on Chinese electric vehicle imports.
2. Five bodies have been found by divers searching the wreckage of Mike Lynch’s superyacht Bayesian, which sank off the coast of Sicily. Four bodies were pulled from the sunken yacht on Wednesday, a fifth body was found but not yet removed while a sixth person remains missing. After two days of struggling to find a way through debris, divers gained access to Bayesian’s cabins with an underwater drone.
3. Sephora is cutting back its workforce in China as one of LVMH’s biggest revenue generators struggles to gain traction in the tough mainland beauty market. The cuts represent less than 3 per cent of Sephora’s China-based workforce, but they point to pressure in the country’s highly competitive and price-sensitive beauty market.
4. Walmart sold its entire stake in Chinese ecommerce giant JD.com for $3.6bn, as the world’s largest retailer focuses on expanding its own brands in the country. The US retailer disclosed in a filing to the US Securities and Exchange Commission that it had completely disposed of its nearly 10 per cent holding in the ecommerce company. Ryan McMorrow has the full story here.
5. Federal Reserve officials last month signalled their readiness to start cutting interest rates at their September meeting in the face of slowing job growth and easing inflation. Read more from the minutes of their July meeting.
The Big Read
China has a large footprint in Africa thanks to its $1tn Belt and Road Initiative, which offers to finance and build infrastructure in mostly poorer countries and gives it an advantage in the race for control of critical minerals. But a $10bn US-backed railway illustrates Washington’s desire to compete with Beijing in Africa.
We’re also reading . . .
Chart of the day
Western investors have piled back into gold as they position for US interest rate cuts this year, helping to drive prices to record highs this week. Prices reached $2,531 per troy ounce in trading yesterday, taking gold’s gains for the year to more than a fifth, boosted by purchases by institutional investors and bullish hedge fund bets.
Take a break from the news
Have you ever thought out growing mushrooms for their aesthetic appeal? These pink oyster mushrooms might make you consider it.
Additional contributions from Tee Zhuo and Melody Abike Adebisi
Source: Economy - ft.com
