Stay informed with free updates
Simply sign up to the Global Economy myFT Digest — delivered directly to your inbox.
Good morning. We start today with China’s economy, which beat expectations to grow 5.3 per cent in the first quarter against a year earlier.
The strong gross domestic product growth rate, which exceeded a Reuters poll of analysts that forecast 4.6 per cent and an expansion of 5.2 per cent for the full year in 2023, follows mixed economic data in recent weeks.
“Generally speaking, the national economy got off to a good start in the first quarter . . . laying a good foundation for . . . the whole year,” the National Bureau of Statistics said.
It added that the “external environment is becoming more complex, severe, and uncertain, and the foundation for economic stability . . . is not yet solid”. Take a closer look at the latest Chinese data.
Xi warns Germany’s chancellor: During a meeting with Olaf Scholz, Xi Jinping hit back at western criticism of Chinese oversupply, arguing that the country’s exports are helping to ease global inflation and support a clean energy transition.
And here’s what else I’m keeping tabs on today:
Economic data: New Zealand publishes its first-quarter consumer price index, while the UK reports inflation figures for March.
Meetings: US Treasury secretary Janet Yellen will meet finance ministers from South Korea and Japan on the sidelines of the joint IMF/World Bank spring meetings in Washington. Meanwhile, G7 foreign ministers will meet in Italy.
Reports: The IMF releases the first of its twice-yearly fiscal monitor report.
Elections: The Solomon Islands holds parliamentary elections. The outcome could impact China’s influence in the Pacific. (Associated Press)
Five more top stories
1. Asian emerging market currencies are coming under pressure from a surging dollar, as tensions escalate in the Middle East following Iran’s attacks on Israel and expectations grow that the Federal Reserve will delay rate cuts. Indonesia’s central bank intervened to support the rupiah yesterday, while the Indian rupee slumped to a record low. Here’s how policymakers are responding.
Related: US Federal Reserve chair Jay Powell has said it is likely to take “longer than expected” for inflation to return to the central bank’s 2 per cent target and justify cuts to interest rates.
2. US defence secretary Lloyd Austin has spoken to his Chinese counterpart for the first time, in the latest effort to ease tensions between the militaries since President Joe Biden held a summit with Xi Jinping last year. The Pentagon said Austin had stressed the importance of freedom of navigation in a call yesterday with China’s Dong Jun, who became defence minister in December.
3. US House Speaker Mike Johnson’s aid plan for Ukraine and Israel faced a growing threat as members of his Republican party revived a bid to remove him from office. The “motion to vacate” Johnson from the speakership came after he unveiled a plan to hold votes on funding for Ukraine and Israel, a potential breakthrough after months of Republican opposition to new aid for Kyiv.
4. Andreessen Horowitz has raised $7.2bn to invest in tech start-ups including those at the forefront of the generative artificial intelligence revolution. The Silicon Valley-based group bucked a trend across VC firms, which have struggled to bring in money from their backers since a downturn in the tech sector began about two years ago.
5. LVMH reported its weakest quarterly sales growth since the pandemic recovery supercharged luxury revenues at the start of 2021, as Chinese demand subsided and champagne sales fell. First-quarter revenues grew 2 per cent at the group’s fashion and leather goods division, against an 18 per cent jump a year ago when China emerged from its Covid lockdowns.
The Big Read
The collapse of Silicon Valley Bank, the forced sale of Credit Suisse and repeated turbulence in the US Treasury market are all recent disruptions that can be explained as the product of particular circumstances. Yet they all reflect profound long-run changes in the role and structure of the world’s financial system from the postwar era. The old financial certainties are vanishing, and new ones are yet to replace them.
We’re also reading . . .
Manufacturing: A new wave of Chinese competition is a wake-up call for western companies, writes Thomas Hale.
War in Ukraine: “There is no confidence in tomorrow,” a resident in the eastern city of Myrnohrad says, as Russia’s forces slowly advance.
Abortion: Democrats are trying to capitalise on Arizona’s ruling to uphold a 160-year-old law by blaming Donald Trump.
Chart of the day
After a boom in the mainland, Chinese bubble tea chains are looking to expand overseas, with groups such as ChaPanda, Mixue and Guming eyeing stock market listings in Hong Kong.
Take a break from the news
$800 for a haircut? Such prices are now commonplace in New York and other US cities, as Hannah Marriott discovered at her recent hair appointment. She investigates how inflation has hit salons, and why the pandemic was a turning point for many in the industry.
Additional contributions from Nora Redmond and Tee Zhuo
Recommended newsletters for you
Working It — Everything you need to get ahead at work, in your inbox every Wednesday. Sign up here
One Must-Read — The one piece of journalism you should read today. Sign up here
Source: Economy - ft.com
