Aurelia Butler

UK shop price inflation reached its highest rate for at least 18 years in May, despite the pace of food price growth marginally easing, according to new sector data.The cost of shop items rose at an annual rate of 9 per cent last month, up from 8.8 per cent in April, marking the fastest increase since the British Retail Consortium (BRC) records began in 2005, the trade body said on Tuesday.However, food inflation decelerated slightly to 15.4 per cent in May, falling from an all-time record high of 15.7 per cent the previous month. Consumer price growth has accelerated since Russia’s invasion of Ukraine in February 2022 which resulted in spiralling energy and food prices globally. Helen Dickinson, BRC chief executive, said that “while overall shop price inflation rose slightly . . . households will welcome food inflation beginning to fall”.She added that the slowdown in food price rises was largely driven by lower energy and commodity costs starting to filter through supply chains and reduce inflation on some staples including butter, milk, fruit and fish. But the price of chocolate and coffee rose off the back of the high global costs for these commodities. These pushed inflation for ambient food — items that can be stored at room temperature — to 13.1 per cent in May, from 12.9 per cent in the previous month.Food inflation affects the poorest households hardest as they tend to spend a larger proportion of their budget on essentials.Mike Watkins, head of retail and business insight at NielsenIQ, which helps compile the data, said that to mitigate the rising cost of living, shoppers were looking out for seasonal promotions and supermarket loyalty scheme offers.Data published last week showed that food sales volumes were down 2.7 per cent from their pre-coronavirus levels in March as consumers cut back on purchases in response to higher prices. The BRC also reported that non-food inflation rose to 5.8 per cent in May, up from 5.5 per cent in the previous month, despite outlets offering heavy discounts on footwear, books and home entertainment.The BRC data suggested that the price growth of food and non-alcoholic beverages remained high.In April, official food inflation was 19.1 per cent, only marginally down from a 45-year high of 19.2 per cent registered in the previous month, according to the Office for National Statistics data released last week. Overall inflation fell less than expected to 8.7 per cent from 10.1 per cent in the previous month, boosting expectations that the Bank of England will raise rates further to curb inflation. More

Beijing has declined the Pentagon’s request for a meeting between US defence secretary Lloyd Austin and China’s defence minister Li Shangfu at a security forum in Singapore in June, the latest sign of the difficulties the countries are having trying to stabilise their turbulent relationship.The overture had been made for a meeting to take place at the Shangri-La Dialogue, an Asia security event hosted annually by the International Institute for Strategic Studies. “The People’s Republic of China informed the US that they have declined our early May invitation,” the Pentagon said.The Financial Times reported this month that China had told the US there was little chance of a meeting as long as Washington maintained sanctions on Li, which had been imposed by the Trump administration in 2018 in connection with Chinese purchases of Russian fighter jets and missiles.The Pentagon had previously informed China that the sanctions did not prohibit a meeting in Singapore, but Beijing signalled that it would be inappropriate to meet as long as they remained in place.“This is far from the first time that the PRC has rejected invitations to communicate from the secretary, the chairman of the joint chiefs of staff, or other [defence] department officials,” said a senior US defence official. “Frankly, it’s just the latest in a litany of excuses.”The official added that, since 2021, China had declined or failed to respond to more than a dozen request for senior-level meetings in addition to multiple requests for working-level meetings.The Chinese embassy in Washington did not immediately reply to a request for comment. “It’s worrisome that the Chinese fail to see the inherent risks in the prolonged suspension of US-China military-military dialogue,” said Bonnie Glaser, a China expert at the German Marshall Fund.The Shangri-La Dialogue has frequently served as one of the few forums for US defence secretaries to meet their Chinese counterparts. Austin last year met Wei Fenghe, then defence minister. China’s defence ministry on Monday confirmed that Li would attend the event.

China’s refusal comes less than two weeks after President Joe Biden said at the G7 in Japan that he expected an imminent “thaw” in relations, which are at their lowest point in decades. Biden said he was considering lifting sanctions on Li, but the state department later said that was not the case.US national security adviser Jake Sullivan recently met Wang Yi, China’s top foreign policy official, in Vienna, in a rare positive sign. Last week, Chinese commerce minister Wang Wentao met US commerce secretary Gina Raimondo in Washington, in what was the first senior-level Chinese visit to the US capital since 2020. He also met US trade representative Katherine Tai at an Apec trade meeting in Detroit.But China has not agreed to reschedule a visit to Beijing from US secretary of state Antony Blinken, who cancelled a previous trip in February over the alleged Chinese spy balloon incident.“The Chinese continue to cherry pick who they want to engage with,” said Glaser, adding that they were more inclined towards economic officials such as Raimondo or Janet Yellen, the Treasury secretary. “If the Chinese are serious about stabilising bilateral ties, they need to resume the military-military dialogues.” More

When Pin Ni arrived in Washington, he mentioned to his taxi driver how cold it felt. The driver told him that it wasn’t the temperature, but the wind that made it feel so chilly.Ni, president of Wanxiang America and vice chair of the China General Chamber of Commerce (CGCC) USA, drew a parallel between the blustery weather in the US capital and worsening Washington-Beijing relations.“That’s interesting for our business. The temperature is still there, the business logic is still there, and the business opportunities are still there,” Ni said. The chill, he argued, was coming from political rhetoric. “The best way to deal with wind is to try not to deal with it . . . If you focus on what you’re supposed to do, then you should survive well.”Ni aired his views as a panellist at the CGCC’s reception at the recent SelectUSA event in Washington. His cautious optimism is shared by many Chinese companies and their American counterparts who are still bullish on expanding in the US market.Attendance at the SelectUSA 2023 conference, an event that brings together US state officials and foreign investors, set a record of more than 4,400 people. China had the third-largest delegation, at 80 members, behind India and Taiwan.More Chinese companies would have attended if acquiring a US visa had been easier, according to people familiar with the matter.

Ni’s positive outlook was reflected in the results of the CGCC’s annual survey of Chinese companies in the US, released to coincide with the event. Over half the respondents said they had met or exceeded their goals last year, while more than 80 per cent said they were satisfied with or neutral regarding all aspects of the US business environment. About 67 per cent of Chinese companies said they expanded their business and investments in the country. All companies in the consumer discretionary sector reported they had expanded their US operations and increased investment.Many Chinese companies who participated in this year’s trade event are looking for manufacturing sites in US states, often to serve an existing customer base in the country. It is not all sunny skies, however, with geopolitics and local US issues both clouding the horizon.About 81 per cent of Chinese companies cited bilateral relations as the top challenge in the near future, followed by inflation and uncertainty in the US economy in second, according to CGCC’s survey.Benjamin Yin, executive director of building hardware maker Trigo Enterprises, is one of those facing the dilemma of wanting to expand in the US but not knowing where.Yin told Nikkei Asia that his company ships 80 per cent of its products to customers in the US, but only has factories in China and Vietnam. Sales to US customers have increased over the past three years, he said, but rising shipping costs and other logistics problems have made it barely profitable. For example, in 2020 his company spent $300,000 to book a plane to ship goods worth $300,000.“We’re looking to establish a factory here, move some production over to mitigate our risks, be closer to our customers and hopefully gain more customers,” said Yin. “In the long run, maybe instead of being an [original equipment] manufacturer, we can sell our own products under our own brand name.”Yin said he is looking at several possible locations but feels torn between “red” Republican-controlled states and “blue” Democrat-led ones.“The red states are more pro-business, lower taxes, but the challenge is, if you look at the polls, 60 per cent of the people in red states see China as an enemy, we don’t want to go to a state to establish a factory and people think we [are] the enemy or spy,” Yin said. “The blue states are much friendlier to Chinese, but [have] higher taxes, more worker unions, overall high costs and possibly more safety issues.”“Maybe we need to find these purple states,” Yin added.Some red states are moving to shut their doors on Chinese investment: Florida, South Carolina and Oklahoma are among those that have recently barred or restricted Chinese nationals from buying property.Others, however, are more welcoming. Kelly Anthon, Republican Senate Majority Leader of Idaho, said the state still has an office in China to help promote Idaho’s exports and attract foreign direct investment.“At the state level, we’re just trying to make sure that we do right by Idaho,” said Anthon. “Some of those geopolitical things that are out there [are] probably above our pay grade.”In the middle are states like Oklahoma. Governor Kevin Stitt told Nikkei Asia that the state will follow the federal government’s lead on treating Chinese companies warily.“There’s already a law that foreigners can’t buy farmland [in Oklahoma], it’s something that we’re concerned about and we’re monitoring,” Stitt said. “Obviously we’re not stopping those [Chinese] investments from coming in, but we’re not going to go out and pursue [them].”A version of this article was first published by Nikkei Asia on May 24, 2023. ©2023 Nikkei Inc. All rights reserved.Related StoriesWarren Buffett’s shifting Asian portfolioBans on Chinese land purchases in US crop up in Republican-held statesBiden and Kishida meet, seeking unified G7 policies on ChinaChips at centre of G7 discussion of how to counter China’s rise More

(Reuters) – A look at the day ahead in Asian markets from Jamie McGeever.Global trading volumes return to more normal levels on Tuesday as U.S. and UK markets re-open after their one-day holidays, with optimism over a U.S. debt ceiling agreement set to support risk assets and lift bond yields and the dollar.The dollar on Monday held firm around its strongest level in over two months against a basket of major currencies and a six-month peak against the Chinese yuan, and strengthened to a new six-month high against the Japanese yen.The onshore yuan traded weaker than 7.00 per dollar for the eighth straight day, as markets position for another hike in U.S. interest rates and potential policy easing from Beijing.The dollar nudged 141 yen before closing slightly lower on the day, with traders’ hawkish Fed forecasts relative to the Bank of Japan’s policy outlook again keeping dollar bulls on the front foot.If U.S. implied rates and bond yields rise on Tuesday, there is reason to believe the dollar’s recent bull run will continue, especially against currencies in Asia where many central banks have signaled their hiking cycles are over.More detail and clarity around the tentative agreement in Washington to suspend the $31.4 trillion federal debt ceiling should be forthcoming on Tuesday.It is still subject to approval in both Houses of Congress but leaders on both sides of the aisle say they are confident it will pass. This should boost markets, but they will soon have to face the prospect of Treasury potentially issuing over $1 trillion in bills in the coming months.But that is for another day. Relief that an unprecedented and probably catastrophic default will be avoided should still be the overriding emotion for now.Japan’s benchmark Nikkei 225 index rose 1% on Monday to a new 33-year high, while Chinese stocks were mixed and the MSCI Asia ex-Japan and MSCI World indices essentially closed flat.At the time of writing, U.S. stock futures pointed to gains on Wall Street of up to 0.5% on Tuesday. The Asian economic calendar on Tuesday is light, with Japanese unemployment figures the only major release due. The unemployment rate, which jumped to 2.8% in March, the highest in over a year, is expected to ease back to 2.7% in April.Here are three key developments that could provide more direction to markets on Tuesday:- Japan unemployment (April)- Fed’s Barkin speaks- Germany state CPI inflation (May) (By Jamie McGeever; Editing by Deepa Babington) More

Good morning. The Nvidia, world’s most valuable semiconductor group, has unveiled a new supercomputer platform to stay at the forefront of the artificial intelligence revolution.The platform, DGX GH200, will assist tech companies in building generative AI models akin to OpenAI’s ChatGPT. Meta, Microsoft and Google Cloud are among the first clients expected to access the supercomputer. Speaking at the Computex conference in Taipei, Nvidia chief executive Jensen Huang said AI is creating a new era of computing in which “everyone is a programmer”, and warned that the traditional tech industry would not keep pace with AI’s advances. The technology had dramatically lowered the barrier to entry to computer coding, he added. “We have reached the tipping point of a new computing era,” Huang said yesterday. Huang’s speech comes days after Nvidia revealed forecasts of rapid sales growth, fuelling a share price surge that put it on course to become the world’s first trillion-dollar semiconductor stock. The chipmaker’s share price has risen 172 per cent since the start of the year.Go deeper: How Nvidia created the chip powering the generative AI boomHere’s what I’m keeping tabs on today:Japan employment data: April’s labour force survey is due to be published. New Development Bank: The Shanghai-based lender better known as the “Brics bank” will begin its annual meeting.Theranos founder: Elizabeth Holmes begins her prison sentence for one count of conspiracy and three counts of wire fraud.Five more top stories1. India’s top investigative agency has accused Rolls-Royce and BAE Systems of engaging in corruption over historic deals to supply fighter jets to the country. The Central Bureau of Investigation alleged that the companies engaged in a “criminal conspiracy” to “cheat the government of India”. Here’s what we know about the accusations.2. PwC has suspended nine partners following a scandal over leaked emails in Australia. The accountancy firm has pledged to release an internal review this year after emails leaked in February showed how the firm used confidential information about changes to Australia’s tax law to win new business. 3. Japan’s defence ministry said it has put its ballistic missile defences on alert and was preparing “destructive measures” after North Korea made a rare notification through the International Maritime Organization of a satellite launch planned between May 31 and June 11.4. Turkey’s lira weakened in the aftermath of Recep Tayyip Erdoğan’s re-election, as analysts warned that the next big test for the victorious president would be addressing the country’s shaky $900bn economy. The lira hovered around record lows yesterday after breaching TL20 to the US dollar late last week.5. Democrats and Republicans are confident they can pass a deal to avert US default after securing the backing of crucial mainstream lawmakers on a proposed agreement that was reached over the weekend. The first critical test will be a vote in the House expected on Wednesday.Explainer: FT’s Washington bureau chief James Politi breaks down what’s in the deal.The Big Read

The announcement of oil executive Sultan al-Jaber as COP28 president in January sparked anger from civil society groups

A growing number of western politicians are concerned this year’s UN climate summit in the UAE will be too beholden to the oil and gas industry. Experts say it is too early to write off COP28, but time is running out.We’re also reading . . . Japan’s complicated companies: Japan’s economy could be set to gain from investment abandoning China, but its web of company holdings is complicating matters, writes Leo Lewis. The right to disconnect: Employees could ignore emails and messages from their bosses at night and on the weekend under a new UK policy proposal. Managers told the FT what they really think about the legislation. Boosting Britain’s suburbs: In a break from the past, the UK’s newest generation of Hongkongers are eager to assimilate into British society. Chart of the day

Five years ago, China’s economy was growing fast enough that graduates were able to snap up good jobs. Now, their prospects are less certain, as the country’s economic recovery is failing to pick up pace six months after authorities began to roll back President Xi Jinping’s tough zero-Covid regime. Take a break from the news. . . and listen to the most recent episode of the FT Weekend podcast. Bestselling author Curtis Sittenfeld joins host Lilah Raptopoulos to talk about the state of romantic comedies today: how they’ve changed, and where they could go next.Additional contributions by David Hindley and Tee Zhuo More