FirstFT: China’s Politburo pledges more support for economy

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Good morning. We start today with another development in China’s efforts to revive momentum in the world’s second-largest economy.

China’s Politburo, the Communist party’s 24-member leadership body, has pledged more support for the economy, saying it “still faces many challenges” even as high-tech manufacturing helped factory activity expand for a second consecutive month in April.

In a meeting yesterday, China’s leaders laid out measures to shore up growth and announced that a long-awaited important policy gathering, the Third Plenum, would be held in July.

“The economy still faces many challenges as it continues to rebound, mainly due to insufficient effective demand . . . and the complexity, severity and uncertainty of the external environment have significantly increased,” the meeting concluded, according to state-owned news agency Xinhua.

The FT’s Joe Leahy and William Sundland have more on the Politburo measures, plus a closer look at the latest data release.

• Markets Insight: While China and its trade partners continue to clash bitterly over manufacturing overcapacity and global trade, policymakers on either side seem to confuse two issues, writes Michael Pettis.

• More China news: The two largest Palestinian factions, Hamas and Fatah, have expressed “political will” to achieve reconciliation through dialogue during a round of talks in Beijing, according to the Chinese foreign ministry.

Here’s what else I’m keeping tabs on today:

• Economic data: S&P Global manufacturing purchasing managers’ index data is due for Japan, Australia, US, UK and Canada.

• US rate decision: The Federal Reserve is expected to stand pat on interest rates as inflation is not easing as quickly as the central bank was hoping.

• Trade: A free trade agreement between the EU and New Zealand comes into force.

• Results: Mirvac Group, Mitsui, Pfizer and Qualcomm are among the companies reporting earnings.

• Holiday: Financial markets are closed across Asia — including in China, Hong Kong, South Korea and Singapore — for Labour day.

Five more top stories

1. HSBC chief executive Noel Quinn is retiring, setting off a hunt for a successor at the London-headquartered bank. Quinn has overhauled the lender since taking charge in 2019, selling off parts of its global operations to increase its focus on Asia, where it makes the lion’s share of its profits. Here’s why he’s leaving, and what’s ahead for HSBC.

2. Elon Musk has shut down the division that runs Tesla’s Supercharger business, dismissed two senior executives and fired hundreds more staff. Tesla’s supercharger system is among the largest charging networks in the world, and was one of the reasons the company enjoyed such a commanding lead over rival carmakers for so long. Here’s more on the surprising decision.

3. The Japanese government appears to have deployed roughly $35bn supporting the yen on Monday, according to money market data released by the Bank of Japan. The data all but confirmed the market intervention by Japanese authorities shortly after the yen hit a 34-year low of just under ¥160 against the US dollar. The scale of the probable intervention underscores the government’s unease with a sharp slide in the yen this year.

4. Two Société Générale traders in Hong Kong left the group last year after the French bank discovered unauthorised derivatives trades that could have lost it money in a severe market downturn. The person who made the trades in Hong Kong had placed risky bets on options contracts linked to Indian stock market indices that they had not been authorised to carry out, a person familiar with the details said.

• More Hong Kong news: Hong Kong’s first spot cryptocurrency exchange traded funds started trading yesterday, as the Asian financial hub takes on the US in the race to dominate the growing market.

5. Former Binance chief executive Changpeng Zhao has been sentenced to four months in jail after pleading guilty to failing to establish adequate money laundering controls at the world’s largest cryptocurrency exchange. Zhao resigned as head of Binance in November, while the exchange paid $4.3bn for failing to halt transactions that financed terrorist groups Hamas and al-Qaeda and sanctioned entities in Iran and Russia, among other violations.

Tesla-China explainer

Elon Musk appears to be on the cusp of deploying Tesla’s “full self-driving” system in China, the world’s biggest car market. The breakthrough comes after an unexpected visit earlier this week to Beijing, where Musk met Chinese premier Li Qiang before sealing a deal with Chinese tech giant Baidu to use the group’s mapping and navigation systems. Here’s what the billionaire’s trip to China means for Tesla — and why helping the US electric-car maker is important to Beijing.

We’re also reading . . . 

• BHP’s Anglo American approach: Mike Henry, chief executive of the Australian mining company, was prepared for initial rejection by the UK-listed target. People familiar with the £31bn offer said: “Anglo is in play, and the game is on.”

• Work-life balance: Europeans have more time and Americans more money, writes Simon Kuper. Which is better?

• Lost decade: The elimination of extreme poverty is slipping from our grasp after a run of calamities, writes Martin Wolf.

Chart of the day

Apple has poached dozens of artificial intelligence experts from Google and has created a secretive European laboratory in Zurich. According to an FT analysis, the $2.7tn company has undertaken a hiring spree over recent years to expand its global AI and machine learning team — and Google has been its top target.

Take a break from the news

Chinese restaurants have long been the backbone of New York City’s food scene, and today a new generation of restaurateurs is reinventing or playing with American expectations of the cuisine. Here are five of New York’s most exciting new-wave Chinese restaurants.

Additional contributions by Tee Zhuo and Gordon Smith