Aurelia Butler

(noun) a sustained rise in the level of pricesInflation regained its position as the enemy of economic progress this year after a 40-year absence. With the rate of price increases hitting peaks close to 10 per cent in the US, eurozone and UK, a generation has had to worry about a rapidly rising cost of living for the first time in their working careers. They have hated it. US president Joe Biden classed inflation as “the bane of our existence”, making its defeat his top economic priority. He released the US strategic petroleum reserves in a bid to bring oil prices down. In Europe, leaders first blamed Vladimir Putin’s invasion of Ukraine and then, realising they had to do more, subsidised energy bills to take the sting out of a cost of living crisis. Central banks could no longer claim to have given birth to a “great moderation” in inflation and instead have joined together in battle against the beast. They have done this with some of the sharpest and most synchronised rises in interest rates across the world for two decades. The unspoken effect of tighter monetary policy, of course, is to make households and companies suffer even more because they are too frightened to keep asking for higher wages or to expect their customers to accept higher prices. High prices in 2022 are therefore likely to be the catalyst for recessions in 2023 even as headline rates of inflation start to fall. For the future, economists have relearnt the need to fear inflation and prevent its emergence. Those arguing that central banks should target higher inflation rates of about 4 per cent have (partially) recanted. While it is impossible to stop every surge in prices, especially after a pandemic or a major war, the rise in general inflation in 2022 has once again highlighted the benefits of price [email protected] More

TOKYO (Reuters) – Japanese retail sales rose for a ninth straight month in November, data showed on Tuesday, as the lifting of COVID-19 border controls and the government’s domestic travel subsidy helped consumer demand. But from the previous month, sales fell from October, with price increases in daily necessities weighing on Japanese households as the nation’s core consumer inflation rate hit a fresh 40-year high, indicating price hikes were broadening. A recovery in private consumption, which makes up more than half of Japan’s economy, is key to driving growth in the economy, which unexpectedly shrank in the third quarter. Retail sales grew 2.6% from the year earlier but short of a median forecast of 3.7%. The pace of annual growth in sales, a barometer of private consumption, slowed from 4.4% in October and 4.8% in September. On a seasonally adjusted basis, retail sales slipped 1.1% in November from the previous month, down for the first time in five months. Data showed last week that visitor arrivals to Japan jumped to nearly 1 million in November, the first full month after the country scrapped COVID-19 curbs that effectively halted tourism for more than two years. A government domestic travel subsidy campaign to help the pandemic-hit tourism industry, which started in mid-October, also encouraged people to spend on travel and travel goods. Separate data showed Japan’s jobless rate fell to 2.5% in November, in line with a forecast in a Reuters poll, and down from 2.6% in October. The jobs-to-applicants ratio, a key gauge of job availability, was at 1.35, unchanged from October and holding at the highest level since March 2020.Bank of Japan Governor Haruhiko Kuroda on Monday voiced hope that intensifying labour shortages would prod firms to raise wages, while he brushed aside the chance of a near-term exit from ultra-loose monetary policy.A higher inflation rate could also prompt firms to shift towards wage increases. Canon Inc plans to raise its base salary for the first time in 20 years, the Nikkei business daily reported on its website on Monday. Japan’s economy unexpectedly shrank in the third quarter, as global recession risk, China’s faltering economy, a weak yen and higher import costs hurt consumption and businesses. The government last week revised up its growth forecast for the next fiscal year to 1.5%, from a 1.1 % expansion in the previous forecast from July. More

Apple plans to move some MacBook production to Vietnam for the first time next year as the US tech group continues diversifying its production base away from China amid escalating tech tensions between Washington and Beijing.Apple has tapped its top supplier, Taiwan’s Foxconn, to start making MacBooks in the south-east Asian nation as early as around May, sources briefed on the matter said. Apple has been working to add production sites outside China for all its big product lines, but doing so for the final one, the MacBook, has taken longer due to the complex supply chain needed for making laptop computers.“After the MacBook production shifts, all of Apple’s flagship products basically will have one more production location beyond China . . . iPhones in India and MacBooks, the Apple Watch and iPads in Vietnam,” one person with direct knowledge of the matter told Nikkei Asia. “What Apple wants now is an ‘out of China’ option for at least part of production for all of its products.”The company has been working on plans to move some MacBook manufacturing to Vietnam for nearly two years, and has set up a test production line in the country, Nikkei Asia reported earlier. Apple makes between 20mn-24mn MacBooks annually, with production spread between bases in the Chinese cities of Chengdu, in Sichuan province, and Shanghai.The shift to Vietnam comes amid not only rising geopolitical tensions but also production disruptions caused by China’s zero-Covid policies and uncertainty from their sudden loosening in recent weeks.For China, the loss of its lock on MacBook production symbolises the broader weakening of its position as the world’s factory. Top electronics makers from Apple, HP and Dell, to Google and Meta have all made at least some plans to shift production and sourcing away from China since former US president Donald Trump started a tariff war against the country.Production of most US-bound data centre servers made for Google, Meta, Amazon and Microsoft, for example, has moved to Taiwan, Mexico or Thailand.“Overall, China’s benefits in terms of low-cost manufacturing are fading and many US clients now want some production location alternatives outside of China,” said an executive at Inventec, a crucial supplier to HP and Dell. “This is already an accelerating trend for almost all global brands and it will not likely change.”For decades Apple counted China as its most important assembly base, but that winning formula reached a crisis point this year. In the spring, critical MacBook and iPhone production sites in Shanghai faced massive disruptions due to a months-long Covid lockdown. In November, Apple warned of delays in deliveries of its premium iPhone 14 Pro and 14 Pro Max for the holiday season, citing pandemic-related labour shortages at its most important production base in Zhengzhou, Henan province.Chiu Shih-fang, a supply chain analyst with the Taiwan Institute of Economic Research, says the changes to the tech supply chain are irreversible.“In the past, most people in the industry always hoped that the situation could ease and things could go back to the good old days,” Chiu told Nikkei Asia. “But this time, they realise there is no way of turning back and no matter what they need to prepare alternatives beyond China.”China’s strict Covid policies have accelerated the shift, and it is now happening faster than industry executives and market analysts thought a few years ago, Chiu said, adding that intensifying US-China tensions were also playing a role.“No one wants their businesses to be trapped and hit badly just because their production is too concentrated in one place. From big to small, suppliers now need to have some solutions for facing this new global reality.”Apple’s diversification to Vietnam started with AirPods, which went into mass production there in 2020. The company also shifted some iPads and Apple Watch production to the south-east Asian country this year, Nikkei Asia first reported, and in October it announced it had started producing the iPhone 14 in India, only a few weeks after the release of the latest flagship phone.Sources have told Nikkei Asia that Apple aims to significantly increase iPhone output from India this year and next, with the aim of turning the country into another significant production base for the devices. Apple also aims to move some AirPods and Beats earphone production to India, Nikkei Asia earlier reported.Apple did not respond to Nikkei Asia’s request for comment. Foxconn declined to comment.A version of this article was first published by Nikkei Asia on December 20, 2022. ©2022 Nikkei Inc. All rights reservedRelated storiesTaiwan to fine Apple supplier Foxconn over China chip investmentGeopolitical rivalries distorting chip market: TSMC CEOSony plans sensor factory in Japan near new TSMC fabFoxconn unit to sell entire equity stake in Tsinghua Unigroup More