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Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.In March, as a visiting delegation of Swedish investors and bankers passed through China’s factories and shipyards for the first time since the pandemic, what they witnessed was a shock to their systems.Across the mainland, where Sweden’s manufacturers have a long-standing presence, competition from Chinese firms was “ferocious”, even “monstrous”, according to Mattias Sundling, chief equity strategist at Handelsbanken. “The way they have caught up and developed in just two or three years was just stunning to us,” he said. “The cliched image of Chinese competition was one of cheap copies. I think the wake-up call for us when we were on this trip is that this is no longer the case.”From high school examinations to bubble tea franchises, intense domestic competition is pervasive across China. Now, as embodied in expanding electric-vehicle production, that sense of competition poses a growing challenge to international businesses.Autos are just one part of a wider industrial framework within which, for decades, developed economies have relied on China as an inexpensive and collaborative manufacturing hub. The Swedish presence includes giants such as Atlas Copco, the world’s leading provider of air compressors, and Sandvik, which makes mining equipment.An air of collaboration, especially at foreign companies now largely staffed by Chinese nationals, has not disappeared. But it is now accompanied by mounting competitive pressure. “The general take is if you are not a premium product, you are getting absolutely hammered,” said Sundling.Governments in the US and Europe have focused heavily on the need to “de-risk” supply chains away from China after Russia’s invasion of Ukraine and border closures under the pandemic. But the more competitive the mainland becomes, the harder it is for international industrial players to leave. At the end of 2020 Volkswagen opened a research and development centre in Anhui province, and owns a major stake in Guoxuan, a Chinese battery firm.Both old and new industrial companies repeatedly emphasise the need to be in China for research purposes as well as to access its vast market. Windrose Technology, an electric truck start-up that has so far produced 13 vehicles, aims to eventually list in the US but currently relies on mainland China partners, including state-owned Anhui Jianghuai Automobile Group, for manufacturing.“As an EV maker, if you are not linked to China and you pretend to be the world’s best truck in the EV space, no one’s going to believe you,” said Wen Han, Windrose founder. “If I told people I was an Australian EV start-up, people would just probably not believe me. If I told people I’m a British EV start-up, they would also not believe me.”While China is in some respects a hotbed of competition, the nature of its industrial model differs profoundly from the US and Europe. The need for so-called “high quality development” is part of a top-down approach set out in the 2025 “Made in China” policy and has become President Xi Jinping’s main refrain in the past year.This week, the European Commission updated a 2017 policy document on Chinese trade distortions that identifies various areas, such as energy and finance, in which competition is suppressed both domestically and for any foreign firms hoping to expand.But the report also touches on competition with Chinese characteristics. In China, it notes, “the provinces and the main cities appear to be in competition among them to have [electric-vehicle] producers in their area, in order to attract employment, revenues and the attention of the central government”.The role of the state in China is difficult to easily map on to transparently-codified norms in western economies. Chinese companies do not typically engage with questions on their relationship to the government, but, as the EU report establishes over 700 pages, those relationships are widespread.If competition with Chinese companies rises further, so will political scrutiny of China’s relationship with international trade. But, across Europe and the US, businesses are already rushing to upgrade their understanding of the nature of that competition.On the Swedish trip, most of the participants did not even directly invest in China but felt they needed to attend because of their holdings on the domestic stock market.“Nordic companies, particularly in manufacturing, have a huge exposure, directly or indirectly,” says Sundling. “The minute we got back . . . we’ve been absolutely swamped with conversations and meetings.”[email protected] More

TOKYO (Reuters) – The dollar stood just off its highest since early November against a handful of peer currencies on Tuesday, raising intervention worries as the yen languished at its lowest level since 1990 following hotter-than-expected U.S. retail sales.Market focus was also on the Chinese yuan, with a slew of top-tier economic data due out of China later in the Asian morning expected to show the world’s second-largest economy slowed in the first quarter. In the U.S., retail sales rose 0.7% last month, compared with the 0.3% rise that economists polled by Reuters had forecast. Data for February was also revised higher to show sales rebounding 0.9%, which was the largest gain in just over a year, instead of the previously reported 0.6%. The latest data has raised more questions about when the Federal Reserve could begin cutting interest rates, following robust employment gains in March and a pick-up in consumer inflation. Markets are now pricing in a 41% chance of the Fed cutting rates in July, compared with around 50% before the data, according to CME FedWatch tool. The likelihood of the first cut coming in September has bumped up to nearly 46%.”I just see no chance of a July hike, assuming we’re all looking at the same data,” said Matt Simpson, senior market analyst at City Index.”Add into the mix of safe-haven flows from Middle East headlines and the apparent reduction of Fed cut bets, the U.S. dollar was again the strongest FX major on Monday.”The U.S. dollar index touched 106.27, the highest since Nov. 2, after the data. It last hovered around 106.23.The Japanese yen languished under the dollar’s continued strength and large interest rate differential between the two countries, breaching 154 to hit a fresh 34-year low against the dollar on Monday.Traders were on high alert for signs of yen-buying intervention from Japanese authorities. With hedge funds building up their largest bets against the currency in 17 years, a rebound in the yen could trigger a significant rally. Japanese Finance Minister Shunichi Suzuki said on Tuesday he was closely watching currency moves and will take a “thorough response as needed” after the dollar surged to a fresh 34-year high.The yen last hovered around 154.29 per dollar, not far from the new resistance level of 155. Despite verbal warnings, “the test of 155 seems too tempting,” and market forces are likely to drive the currency pair higher, said City Index’s Simpson. “How it reacts around that level should provide a good indication of whether (Japanese authorities) have thrown in the towel with intervention.”Elsewhere, the euro brushed $1.06018, the weakest since Nov. 3, as it continued to slump after the European Central Bank last week left the door open to a rate cut in June.The Australian dollar also hit a fresh low against the greenback on Tuesday, dropping to its lowest since Nov. 14 at $0.6429.The kiwi fell 0.12% to a new five-month low of $0.593.The offshore Chinese yuan was mostly unchanged at 7.2620 per dollar ahead of the key economic data releases out of China.In cryptocurrencies, bitcoin last rose 0.05% to $63,171.00. More

The Fed is increasingly expected to hold its policy rate steady in the 5.25%-5.5% range until mid-September, more than a year past its last rate hike, and to then cut rates just twice before year-end. As recently as March most Fed policymakers saw at least three rate cuts by year’s end.But inflation in the first three months of the year was higher than most forecasters had anticipated, raising doubts about the wisdom of beginning to ease policy without greater progress toward the Fed’s 2% goal.Meanwhile consumer spending has been strong and so has the labor market, with unemployment at 3.8% last month, hardly cause for concern that the current stance of policy is too tight.Daly said on Monday she does not want to end up with a too-strong, or a too-weak, policy response, and that she needs to be confident that inflation is headed toward 2% before she would want to easy policy. More

The dollar hovered around 154.15 yen after breaching the 154 yen level in Asia late Monday, the highest since June 1990. In a press conference, Suzuki said he was not aware that foreign exchange will be explicitly addressed at the G20 finance minister meeting in Washington this week, but the subject would be brought up as a topic of conversation.”On international issues, including foreign exchange, Japan will seize various opportunities, not only at the G20, to firmly communicate its position as necessary,” Suzuki said. More

(Reuters) – A look at the day ahead in Asian markets.Asian markets open on Tuesday against an extremely challenging backdrop of slumping global equity and bond prices, a rising dollar, and the yen’s slide to lows that many analysts reckon will prompt direct intervention from Japanese authorities. U.S. and world stocks fell to two-month lows – the S&P 500 chalked up its biggest two-day decline in over a year – as the 10-year U.S. Treasury yield and dollar index made fresh 2024 highs.That’s a tightening of financial conditions that will only weigh on Asian markets. Goldman Sachs’ aggregate emerging market financial conditions index hit a five-month high on Friday, and almost certainly rose further on Monday.It is the backdrop against which China releases top-tier economic data including March industrial production, retail sales, fixed asset investment and house prices, which will all be wrapped up in first quarter GDP growth figures.Chinese stocks rallied on Monday after the securities regulator on Friday issued draft rules to improve the market and protect investors’ interests, but that momentum is unlikely to last.Recent economic data have fallen short of expectations, most notably trade, which saw a sharp contraction in exports, and credit growth, which hit a record low on a broad basis.China’s property crisis remains front of mind too, after state-backed developer China Vanke said it was facing short-term liquidity pressure and operational difficulties. The firm’s Hong Kong-listed shares hit a record low on Monday.Tuesday’s official figures are expected to show China’s growth slowed to 4.6% year-on-year from 5.2% in the previous three months, maintaining pressure on policymakers to unveil more stimulus measures.That would be the slowest rate of expansion since the first quarter of 2023.China’s growth will figure highly in discussions between U.S. Treasury Secretary Janet Yellen and Chinese officials on the sidelines of the International Monetary Fund and World Bank spring meetings in Washington this week.China’s central bank on Monday fixed the yuan at its weakest level against the dollar since March 25. The onshore yuan hit a five-month low close to 7.24 per dollar, just inside its daily trading band limit. There are no such overt limits on Japan’s yen, of course, and even if there were, the currency’s relentless slide this year would probably have smashed them anyway. Once again, FX traders will be on high alert for yen-buying intervention from Japanese authorities after the yen slumped to a new 34-year low through 154.00 per dollar on Monday. It is the worst-performing G10 and main Asian currency this year.Tokyo hasn’t acted yet, but if it does, the yen’s reversal could be powerful – hedge funds are sitting on their largest net short yen position in 17 years. Here are key developments that could provide more direction to markets on Tuesday:- China GDP (Q1)- China industrial production, retail sales, investment, house prices (March)- Indonesia consumer confidence (March) (By Jamie McGeever; editing by Josie Kao) More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Just 1 per cent of UK primary schoolteachers believe the majority of their pupils possess an “adequate” level of financial literacy, according to a study that will add to pressures on the government to ensure children are educated in how money works from an early age.The survey by the Social Market Foundation also found that 42 per cent of primary schoolteachers said none of their pupils had adequate financial skills.Financial education was added to the curriculum for local authority-run secondary schools in 2014 but it is largely incorporated in non-core subjects, such as citizenship, which are less of a priority for students’ academic progression. The subject is also optional for academies and free schools.The report said that as a result, young people from more advantaged backgrounds were “more likely to have received some form of financial education”. It called on the government to adopt a “whole school approach”, which would bring the UK in line with countries such as Finland and New Zealand.Campaigners have warned that confidence in basic numeracy is at a low level among young people, which only compounds pressure on them during a cost of living crisis.“Financial literacy has documented links to better physical and mental health, supports accumulation of wealth, and may also reduce the likelihood of people falling victim to fraud and being in debt,” said Dani Payne, a senior researcher at the SMF and one of the report’s authors. “Unfortunately, the UK currently has low levels of financial literacy compared to other developed countries, and levels of financial understanding tend to track existing socio-economic inequalities.”FT Survey on UK investmentHave you found a great British bargain? Tell us the UK stocks that you think are worthy of including in your Isa – and why via a short surveyThe report said financial education should be incorporated into the initial teacher training curriculum along with a “digital central hub of quality assured training programmes and classroom resources”.In the foreword to the report, Lord David Blunkett, the former Labour cabinet minister who is now one of the party’s policy advisers, wrote: “By placing financial education more prominently in the primary school curriculum, and committing to appropriate investment in teacher training and support and funding for schools’ provision, we can ensure that we are setting up our children for a successful future.”Several charities, including the FT’s Financial Literacy and Inclusion Campaign, have pressed the government for proper provision of financial education.Labour has pledged a curriculum review that is expected to give added priority to real-life maths skills should it win the next general election. Last year, Prime Minister Rishi Sunak pledged to extend maths teaching until the age of 18.A report due soon by the House of Commons education select committee is expected to recommend how financial education could be better incorporated into the national curriculum. The government said in a statement that the mathematics curriculum in primary schools “already provide[d] an important foundation for understanding finances”, adding: “Many primary schools also follow the non-statutory curriculum, which covers skills such as how to save for the future and how to spend money.” More

NEW YORK (Reuters) -A key Federal Reserve facility that takes in cash from money market funds and others saw inflows drop sharply on Monday.The U.S. central bank’s reverse repo facility took in $327.1 billion, down $80.2 billion from Friday, marking the lowest level of inflows since the facility took in $293 billion on May 19, 2021. The Fed’s reverse repo facility exists to put a floor underneath short-term rates, taking in cash from eligible firms in loans collateralized with Treasuries held by the central bank. Inflows have been contracting for some time as the Fed withdraws liquidity from the financial system by allowing its holdings of bonds to shrink. Monday is the deadline for most U.S. tax returns and a key settlement date for Treasury debt auctions, which can influence activity at the reverse repo facility. Scott Skyrm, executive vice president at money market trading firm Curvature Securities, says money is coming out of reverse repos to deal with financing the Treasury’s debt issuance. More