Aurelia Butler

China’s exports and imports fell more sharply than expected in July, adding to a prolonged trade slump that is fuelling concerns over growth prospects for the world’s second-largest economy.Exports declined by 14.5 per cent year on year in dollar terms, official data showed on Tuesday, the steepest fall since the outset of the coronavirus pandemic in February 2020. Imports tumbled 12.4 per cent, the biggest decline since a wave of infections hit the mainland in January and one of the worst in recent years.Economists polled by Reuters had forecast falls of 12.5 and 5 per cent respectively.Weakness in international trade is one of the main sources of pressure for policymakers in Beijing, who are also grappling with a paralysed property sector and flagging domestic demand since anti-pandemic measures were lifted in December.China’s exports helped prop up its economy during three years of closure to the world, but have struggled in 2023 as high global inflation and rising interest rates damped demand for its goods. Exports have declined year on year in each of the past three months, dropping 12.4 per cent in June, when imports also shed 6.8 per cent.

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Manufacturing activity has also contracted for four straight months, according to purchasing managers’ indices, reflecting a weaker export environment and undercutting one of the anticipated engines of China’s economic recovery.July’s unexpectedly severe fall in imports also demonstrated how disappointing domestic consumption was fuelling trade concerns, more than half a year after Covid-19 swept through the country.“The imports data was pretty bad,” said Julian Evans-Pritchard, head of China economics at Capital Economics. “On our estimates, pretty much all the recovery in import volumes since the start of the year was unwound in July, which is concerning, to say the least, and suggests the domestic picture was weakening quite rapidly in the last month or two.”

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In Hong Kong, the Hang Seng China Enterprises index shed 2.2 per cent on Tuesday following the trade data release. “There’s a lot of selling happening today on the back of this export data,” said Louis Tse, managing director of Hong Kong-based broker Wealthy Securities.In a statement, China’s customs administration said imports were down 7.6 per cent to $1.46tn in the first seven months of the year, while exports were down 5 per cent at $1.94tn.

President Xi Jinping’s government has set a cautious growth target of 5 per cent this year, the lowest in decades. In the second quarter, the economy added 6.3 per cent compared with the same period last year, when Shanghai and other big cities were locked down, but growth was just 0.8 per cent in quarter-on-quarter terms.Beijing has not enacted major stimulus but has gradually cut cornerstone borrowing rates and taken steps to encourage activity.Inflation data, which is set to be released on Wednesday, has for months been edging closer to deflation and will provide further evidence on domestic spending. More

Zoom, the video conferencing software firm, has become the latest company to require employees to show up in person at the office.The company that became synonymous with working from home during the coronavirus pandemic yesterday told employees who live within 50 miles of one of its locations that they must come to the office at least two days a week.Zoom, which saw its valuation soar during the pandemic, has not been able to replicate the success of its video software as white-collar workers return to the office. Zoom Rooms — which is designed to improve the experience of online meetings involving people who are in the office with others working remotely — has not caught on.Many companies in the US are becoming increasingly firm with their staff, ordering them to return to the office following the coronavirus pandemic. Finance executives have been some of the most aggressive advocates for a post-pandemic return to the office. Jamie Dimon last month declared himself a work-from-home “sceptic” in an interview with the Economist. In April JPMorgan asked its managing directors to be in the office five days a week. Goldman Sachs and Morgan Stanley were among the earliest businesses to order a return to the office. In other sectors, too, white-collar workers have been told they must spend some of their time in the office as hybrid working practices are adopted across business and the labour market slackens.Senior managers argue that having staff in the office improves collaboration and reinforces workplace culture for new and existing workers by fostering collaboration. There is also the financial cost to having vast offices empty or under used. A recent survey by real estate company Knight Frank found that up to a fifth of executives in charge of property at 350 global companies were planning to reduce office space. But many commercial buildings are not designed for the demands of hybrid working and white-collar workers have resisted a return to the office in the face of a cost of living crisis. Staff at Amazon, Google and Disney have all campaigned this year to retain some of the benefits of working from home.Read more: To keep up with the latest developments in workplace culture sign up to Working It, a weekly newsletter. Here’s what I’m keeping tabs on today:Economic data: US government data is expected to show that the trade deficit narrowed to $65bn in June from $69bn in May.Results: Eli Lilly, UPS, Under Armour, Warner Music, Fox Corporation, Rivian, AMC Entertainment, Duolingo, Lyft and Bumble all report earnings today.Donald Trump rally: The former president holds his first public rally since last week’s court appearance.Amazon rainforest: The leaders of eight Amazon rainforest countries meet in Belém, Brazil to discuss the future of the rainforest.Five more top stories1. Italy’s rightwing coalition has surprised investors with the announcement of a 40 per cent “windfall” tax on banks. Shares in the country’s biggest lenders fell sharply this morning after the government of Giorgia Meloni outlined plans for a relief fund for families hit by high interest rates to be funded by a one-off tax on banks. Read more on the plan. 2. China’s trade slumped in July, with exports and imports falling more sharply than economists forecast, adding to concerns about growth prospects in the world’s second-biggest economy more than six months after Beijing eased pandemic restrictions. Read more on the latest disappointing economic data from China.3. Tesla shares are expected to open lower later today after chief financial officer Zach Kirkhorn announced his departure from the electric vehicle company. Kirkhorn was one of Elon Musk’s closest lieutenants and had overseen a period of rare stability at the company since becoming CFO in 2019. Read more on Kirkhorn’s sudden departure. Another executive exit: Goldman Sachs’ global head of commodities research Jeff Currie is the latest senior departure at the Wall Street bank.4. Meta has axed a team that used artificial intelligence to predict protein structures in a sign that it is shifting away from scientific projects in favour of building moneymaking AI products. About a dozen scientists worked on ESMFold, a project that was disbanded this spring in a previously unreported move. Here’s more on the AI project that was lauded by those involved in the development of new drugs and treatments.5. S&P Global has stopped scoring corporate borrowers on ESG criteria after having graded companies from one to five for each element of environmental, social and governance risks since 2021. The debt rating agency reversed course last week and said it would only use text and not numerical scores for analysing companies’ ESG matters, putting it at odds with rival Moody’s. Here’s why S&P is making the U-turn.The Big Read

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From the Democratic Republic of Congo to Indonesia, the handful of countries that dominate the production of metals critical to the green transition are seeing their fortunes transform. As the world moves from an energy system built on fossil fuels to one powered by renewables, the global demand for materials such as copper, cobalt, nickel and lithium is only going to grow.We’re also reading . . . Religion and politics: Across Europe, a conservative brand of Catholic identity politics coupled with nativist and “sovereigntist” populism has emerged, writes Jonathan Derbyshire. Why Joe Biden is the heir to Trump: The current administration has come to share many of Trump’s basic assumptions — including rivalry with China, writes Gideon Rachman.Disney: Bob Iger’s comeback has been hampered by TV woes and box office flops, leading to questions about the company’s “core” business. Chart of the daySales of cross-border debt denominated in renminbi have boomed this year, as relatively low yields in China’s bond market boost Beijing’s drive to increase the international footprint of its currency. Issuance of renminbi-denominated “panda” bonds by foreign issuers in China so far this year has already surpassed the full-year record set in 2021.Take a break from the newsFrom cornrow updos to colourful peekaboos — here are four brilliant braid styles for Afro-textured hair that look chic for weeks and require lower maintenance in the warmer summer temperatures. Additional contributions from Tee Zhuo and Benjamin Wilhelm More

1. Futures edge lowerU.S. stock futures edged lower Tuesday, suggesting a pullback from gains made in the prior session, as investors awaited the release of a fresh batch of corporate earnings.At 05:10 ET (09:10 GMT), the Dow futures contract dipped by 80 points or 0.23%, S&P 500 futures slipped by 13 points or 0.29%, and Nasdaq 100 futures lost 53 points or 0.35%.The main indices on Wall Street rose on Monday, with the benchmark S&P 500 and Nasdaq Composite rebounding from four consecutive days of declines. The 30-stock Dow Jones Industrial Average also jumped to its best day since mid-June.In individual stocks, big data firm Palantir (NYSE:PLTR) lifted its revenue target, thanks to increasing demand for its artificial intelligence service, while educational tech company Chegg (NYSE:CHGG) quarterly sales beat estimates as concerns eased that ChatGPT would eat into its customer growth.2. Eli Lilly, UPS on tapDrugmaker Eli Lilly (NYSE:LLY) and logistics firm United Parcel Service (NYSE:UPS) are among the biggest brands reporting their latest earnings Tuesday.For Eli Lilly, investors will likely be keen to receive any updates around the regulatory approval process for its treatment for Alzheimer’s disease.Last month, the company announced that a Phase III study had shown that the drug, donanemab, had significantly slowed cognitive decline in patients suffering from mild forms of the disease. Eli Lilly subsequently said it would start filing regulatory approval applications, including with the U.S. Food and Drug Administration.Earnings from UPS will come after the package deliverer reached a tentative deal with 340,000 Teamsters-backed workers to avert a strike that had the potential to disrupt shipments of around a fourth of all U.S. parcel shipments.The Teamsters union said the UPS employees had called for better pay and working conditions, including air conditioning in new models of the group’s famous brown trucks.The quarterly rush of corporate returns is entering its final stages, with about 85% of S&P 500-listed companies having now unveiled three-month earnings, according to FactSet data cited by CNBC.3. SoftBank posts quarterly loss despite Vision Fund recoveryJapan’s SoftBank (TYO:9984) unexpectedly reported its third straight quarterly loss, even though its Vision Fund investment arm improved from a string of declines thanks to a rebound in tech valuations.SoftBank Group, helmed by billionaire investor Masayoshi Son, fell to a loss of ¥477.6 billion, or roughly $3.3B, during the April to June period. Analysts had been expecting a profit of ¥75B. Dropping valuations in big stakes in companies like Alibaba Group (NYSE:BABA) and T-Mobile US (NASDAQ:TMUS) weighed on SoftBank’s overall performance.But its flagship Vision Fund unit, the world’s biggest tech-focused investment fund, returned to the black after five straight quarters of losses following a jump in the valuation of Arm ahead of the chip designer’s planned initial public offering later this year. In the prior quarter, the division, which has previously backed high-profile tech players like ride-hailing firm Uber (NYSE:UBER) and fintech Revolut, slipped to a loss of ¥237B.Investors remain curious to see if hype over AI — a partial source of fuel for this year’s drive higher in Big Tech shares — will also support SoftBank’s returns.4. Tesla shares slip after CFO departureShares in Tesla (NASDAQ:TSLA) inched lower on Monday after Elon Musk’s electric car maker announced that Chief Financial Officer Zachary Kirkhorn would be departing.According to a regulatory filing, Kirkhorn, a 13-year veteran of Tesla and a regular fixture on the company’s earnings call, officially stepped down on Friday. However, he will stay with the business until the end of the year to help assure a “seamless transition,” Texas-based Tesla said.Kirkhorn will be replaced by current Chief Accounting Officer Vaibhav Taneja.The dip in Tesla shares came as part of a broader electric vehicle sector sell-off, with Rivian Automotive (NASDAQ:RIVN) and Lucid Group (NASDAQ:LCID) both declining by more than 3%.Elsewhere on Monday, Musk revealed on X — his social media platform formerly known as Twitter — that he is “getting an MRI of my neck [and] upper back” this week. He noted that he may “require surgery,” potentially taking him away from his multiple corporate responsibilities. Musk added that the operation may also need to happen before his proposed sparring match with Meta Platforms (NASDAQ:META) CEO Mark Zuckerberg.5. Oil falls after weak Chinese dataOil prices slipped on Tuesday, following the release of weak Chinese trade figures ahead of fresh U.S. stockpile numbers.In particular, oil imports in July to China, the top crude importer, were down 18.8% on a monthly basis. Total imports also dropped 12.4% year-on-year, a more severe drop than the 5% forecast, while exports contracted 14.5%, steeper than an expected 12.5% decline.Meanwhile, the American Petroleum Institute, an industry body, is scheduled to release its estimate of U.S. crude inventories later in the session and is projected to show another drawdown after last week’s hefty fall.By 05:10 ET, the U.S. crude futures traded 1.1% lower at $81.02 a barrel, while the Brent contract dropped 1.2% to $84.36. More

WASHINGTON (Reuters) -Two tech groups on Monday backed TikTok in its lawsuit seeking to block enforcement of a Montana state ban on use of the short video sharing app before it takes effect on Jan. 1.NetChoice, a national trade association that includes major tech platforms, and Chamber of Progress, a tech-industry coalition, said in a joint court filing that “Montana’s effort to cut Montanans off from the global network of TikTok users ignores and undermines the structure, design, and purpose of the internet.” TikTok, which is owned by Chinese tech giant ByteDance, filed a suit in May seeking to block the first-of-its-kind U.S. state ban, arguing it violates the First Amendment free speech rights of the company and users.A hearing on TikTok’s request for a preliminary injunction is set for Oct. 12.TikTok, which is used by more than 150 million Americans, has faced growing calls from U.S. lawmakers for a nationwide ban over concerns about possible Chinese government influence.TikTok says it “has not shared, and would not share, U.S. user data with the Chinese government, and has taken substantial measures to protect the privacy and security of TikTok users.”The tech groups said “if allowed to take effect, the ban will usher in a balkanized internet where information available to users becomes regionally divided based on local politicians’ whims or preferences.” They added “the internet, as a whole, will become fragmented and its value to humanity diminished.”Montana could impose fines of $10,000 for each violation by TikTok. The law does not impose penalties on individual TikTok users.TikTok estimates 380,000 people in Montana use the video service, or more than a third of the state’s 1.1 million people.Former President Donald Trump in 2020 sought to bar new downloads of TikTok but a series of court decisions blocked the ban from taking effect. More

SYDNEY (Reuters) – Australia’s third largest pension fund will stay active in Japanese markets in the coming months and is neutral about China despite growing investor aversion to the country’s markets, a senior executive said on Tuesday.The A$160 billion ($104 billion) Aware Super made “good money” recently due to an overweight position in Japanese equities, Head of Investment Strategy Michael Winchester said in an interview with Reuters.”Japan has been such an incredible story,” said Winchester.”[Tactically] I think we’ll be very active. We don’t currently have a position on, but it’s a market which is moving. It’s been historically pretty cheap. It screened pretty attractive for us to have a small overweight position… I expect we’ll be reengaging with that market over the coming months.”Aware Super’s allocation to Japanese stocks via its equity investment managers is currently “about market weight,” Winchester added.Japan is Asia’s best performing stock market this year thanks to a mix of cheap valuations, corporate reforms, outflows from China, low rates and, not least, optimism from billionaire U.S. investor Warren Buffet.Projected to grow to A$250 billion by 2026, Aware Super is among the homegrown pension giants outgrowing Australia and increasingly looking overseas to deploy capital. Aware is on track to open its first office in London later this year, Winchester said.As global investors concerned about faltering post-COVID growth and Sino-U.S. tensions increasingly bypass Chinese markets, Winchester said Aware remained broadly neutral about a country that was a large part of the global growth story.”We don’t have a top-down view that we should be overweight or underweight China at the moment… We’re happy to let our investment managers buy attractively priced Chinese companies with good prospects,” he said.Aware Super’s exposure to China-listed equities fell from around A$420 million to near the A$230 million mark over the final six months of 2022 according to portfolio disclosures reviewed by Reuters.($1 = 1.5316 Australian dollars) More