Aurelia Butler

The US and China are close to an agreement to allow US regulators access to audits of Chinese companies that are listed on US exchanges, a potential breakthrough in talks that have languished for more than a decade. Bankers in Hong Kong were informed of a possible deal earlier this week, according to people familiar with the matter. American depository receipts linked to shares in Chinese companies — including Baidu, JD.com and Pinduoduo — started trading higher on Tuesday, suggesting a resolution was in the works. The US has demanded that Chinese companies and auditors make their financial audits available for inspection every three years by the Public Company Accounting and Oversight Board, a US auditor watchdog, or face a ban from Wall Street listings. But China does not allow foreign regulators to inspect Chinese company audits, citing a desire to protect state secrets. Earlier this month, five state-owned Chinese companies said they would voluntarily delist from US exchanges before they were ousted in 2024 as a result of the pending ban.Additional information about the potential deal and the timing of a possible announcement could not be learnt, but the PCAOB has said any agreement would include full US access to Chinese auditors. The PCAOB declined to comment on Thursday.Thanks for reading FirstFT Asia. Have a restful weekend — EmilyFive more stories in the news1. Shelling disconnects nuclear plant from Ukraine’s grid Fears of a catastrophic accident at one of Europe’s largest nuclear power plants escalated after Ukraine’s Zaporizhzhia reactor complex was cut off from the country’s electric grid owing to shelling. Ukraine’s state nuclear power company said the temporary interruption was the first time the plant had been disconnected from the grid. But it added that there were “no concerns” over a full-scale accident after back-up systems kicked in.2. Hedge funds build biggest bet against Italian debt since 2008 Amid turmoil in Rome and the country’s dependence on Russian gas imports, the total value of Italy’s bonds borrowed by investors to wager on a fall in prices hit its highest level since January 2008 this month, at more than €39bn, according to data from S&P Global Market Intelligence.3. China unveils $44bn in aid to bolster battered economy Beijing has announced tens of billions of dollars in stimulus measures in a bid to shore up confidence as China’s economy is battered by a snowballing property sector downturn and President Xi Jinping’s stifling zero-Covid policies.4. Myanmar regime arrests former UK ambassador Vicky Bowman, the UK’s envoy to Myanmar from 2002 to 2006, and her husband, artist and former political prisoner Htein Lin, were arrested yesterday by the military regime, which seized power in a coup against Aung San Suu Kyi’s government in February last year.5. Yen weakness forces unprecedented PlayStation price rise Sony has raised the price of its PlayStation 5 console in Europe, Japan, China and other key markets by as much as 10 per cent, as surging inflation and the plunging yen force the company to break with years of marketing strategy.How well did you keep up with the news this week? Take our quiz.The days aheadJianzhi Education Technology Group to start trading on Nasdaq When the education group filed for a US IPO last year, it was the first Chinese online firm to do so since Beijing tightened rules on overseas listings. (SCMP)Federal Reserve chair Jay Powell in spotlight Powell will be the headline act in Jackson Hole, where central bankers are gathered this week. The audience will be keen to hear guidance on the US rate-setting path. His comments are likely to be hawkish given recent data on the US jobs market and views from the Federal Open Market Committee.Opinion: The Fed’s travails over inflation show that narrative matters at least as much as models, writes Gillian Tett. Asia Cup Twenty20 International The cricket tournament will kick off in the UAE on Saturday and run through to September 11. Afghanistan and Sri Lanka will play in the opener in Dubai. What else we’re reading China’s distressed asset funds struggle to profit from collapsing property sector Almost a dozen distressed investment funds told the Financial Times that they had not increased their exposure to residential and commercial properties, usually the most popular form of collateral in Chinese debt restructurings, despite soaring defaults in the real estate sector.

Higgin Kim: ‘People are genuinely rough. Art works like a tenderiser’ There is a rich recent history of South Korean conglomerates spending big on art in Seoul as part of their philanthropic activities. Conglomerate boss Kim has taken a different tack. The art is all his own, not Byucksan’s, and he has decided against building it a dedicated home.Capital Group: the slow-moving giant in dangerous waters In a sea full of predators, Capital Group is like a whale shark: slow-moving, friendly and enormous. Its collaborative culture, low fees and dedication to active stock picking make it a well-respected outlier in the increasingly cut-throat world of asset management.The budget drone changing global warfare The sleek Bayraktar TB2 is fast, cheap — with a seven-figure price tag — and deadly. Ukraine’s drone of choice has made Turkey one of the world’s top drone powers, pointing to a new era in which the technology becomes accessible to regimes that cannot buy from more established arms producers.Big budget blockbusters land amid ‘peak TV’ fears Audiences can enjoy some of the most expensive programmes ever produced this autumn, from Amazon Prime’s The Rings of Power to HBO Max’s House of the Dragon. But the shows are being served at subsidised prices by streaming platforms making record losses, begging the question: have we finally reached “peak TV”? Reader pollThis week, a group of Apple workers launched a petition as part of efforts to resist an order from chief executive Tim Cook to return to the office. Other Silicon Valley companies are more relaxed. Facebook’s owner Meta has embraced virtual working as a permanent alternative while Dropbox has declared itself a “Virtual First” company. Do you think staff should be forced back to the office? Vote in our latest poll. More

OTTAWA (Reuters) -The Bank of Canada is revamping its fourth deputy governor role in an effort to bring “fresh and diverse perspectives” to its governing council, seeking out an external candidate to help set monetary policy on a part-time basis.The new deputy governor will join the Bank of Canada’s six-person governing council, which is responsible for setting interest rates.The central bank on Thursday launched the process to find a replacement for Deputy Governor Timothy Lane, whose Sept. 16 retirement was announced in June. The Bank of Canada did not give a timeframe for finding a new hire. The new deputy governor will be hired on a two-year contract, with an option for a third, and will work 50-70% of full-time hours, the bank said. Lane, by contrast, worked full-time for the central bank in the role for more than 12 years.The change comes as the central bank is facing rising public criticism after it misjudged inflation and was seen as having acted too slowly to respond to fast-rising prices, forcing it to then hike interest rates sharply to catch up. “In a context of increasingly complex and interconnected Canadian and global economies and financial systems, it’s vital that we as an organization constantly adapt and evolve,” Governor Tiff Macklem said in a statement.”This change provides an opportunity … to bring fresh and diverse perspectives into the Bank’s consensus-based policy decision-making framework.” The bank said it conducted a review prior to posting the role to assess the current balance of responsibilities and “the need to continually encourage and ensure a diversity of perspectives, thought and experience when formulating policy.”The new deputy governor will focus on the central bank’s monetary policy and financial stability mandates. More

WASHINGTON (Reuters) – U.S. President Joe Biden’s move to waive college loan payments for millions of Americans drew criticism from some of his fellow Democrats, especially members of Congress facing the toughest re-election contests on Nov. 8.The White House may have thought the plan would provide a nice election-year gift to those grappling with monthly loan payments while also boosting the prospects for Democrats in November, when Republicans are favored to win back control of the U.S. House of Representatives. Senate control also is at stake.Many Democrats embraced the $10,000 loan forgiveness plan, including some in close races, such as Senator Raphael Warnock of Georgia. Yet Biden has managed to anger some of his party’s most embattled lawmakers.”We should focus on making higher education and technical schools more affordable in the first place and expose students to trades and apprenticeships that help them get good-paying jobs… without a mountain of debt,” Representative Sharice Davids, the lone Democrat in Kansas’ congressional delegation and one of the most endangered of this election season, said in a statement to Reuters. That was one in an unusual series of rebukes to a president from lawmakers in his own party, complaining that Biden’s program is both poorly targeted and plays into Republican accusations of being a “big-spending” party.The White House has dodged questions about the cost, citing unknowns like how many borrowers would take advantage of the program.Some non-governmental groups, however, have placed the total price tag at $300 billion to $600 billion.”We should be focusing on passing my legislation to expand Pell Grants for lower income students, target loan forgiveness to those in need, and actually make college more affordable for working families,” said Democratic Senator Catherine Cortez Masto, a first-term senator from Nevada, one of a handful of battleground states that will decide the Senate’s fate for the next two years.’BAND-AID’ SOLUTION”I’m happy for the folks who will get relief from this policy,” said Representative Elissa Slotkin, of Michigan. “But this is a one-time Band-Aid that doesn’t get to the root of the problem.”Instead, Slotkin said, the administration should pursue reforms such as including a cap on interest rates on student loans.Those on the left wing of the Democratic party applauded Biden’s move while calling for even more robust initiatives, such as free higher education.Congressional Progressive Caucus Chair Pramila Jayapal had urged Biden to cancel $50,000 in student loan debt per borrower, though she said his move was a step in the right direction.In recent weeks, Democrats have been energized by a series of legislative wins, including a bill addressing climate change and lowering some prescription drug costs for senior citizens, allowing them to claim progress in the war against inflation.The non-governmental Committee for a Responsible Federal Budget, which describes itself as non-partisan, said that its initial review suggested Biden’s student loan plan was likely to increase inflation.The plan, which will have to withstand a likely court challenge, gave Republicans a new opening as they argued it would stoke inflation while helping many wealthy borrowers.”Thanks to Tim Ryan and Joe Biden, Ohio workers are paying off the loans of Harvard Law students. If this seems unfair and illegal, it’s because it is,” Republican U.S. Senate candidate J.D. Vance said on Twitter (NYSE:TWTR).But Ryan, a Democrat who is running against Vance, was similarly critical. “Instead of forgiving student loans for six-figure earners, we should be working to level the playing field for all Americans, including an across-the-board tax cut for working- and middle-class families,” Ryan said.Larry Sabato, the director of the University of Virginia’s Center for Politics, saw a silver lining for the Democratic party, however.In an interview, he said Biden’s move could motivate young Democrats to show up at the polls in November, adding to the energy created by the U.S. Supreme Court’s June decision to eliminate a nationwide right to abortion.”The abortion decision is 10 times more important than student loans, but student loans may augment the level of enthusiasm among young people,” he said. More

Liz Truss is considering plans to trigger “Article 16” proceedings against the EU over the Northern Ireland protocol within days of entering Downing Street if she succeeds Boris Johnson as prime minister next month, according to several government insiders.The UK and Brussels are locked in a fractious legal stand-off over implementing the deal covering post-Brexit trading arrangements in Northern Ireland, which has soured EU-UK relations since it came into force in January 2021.Officials close to Truss have consulted legal and trade experts over the plans in recent weeks. Allies said triggering Article 16 would provide a stop-gap while the legislation to unilaterally rewrite the Northern Ireland protocol passes through the Commons, which is not expected until the end of this year at the earliest.The British government tabled legislation in June to rip up the deal, prompting the European Commission to relaunch legal proceedings against the UK for failing to properly implement Irish Sea border checks. Triggering Article 16 would effectively exhaust legal options before the UK government followed through on its threat to unilaterally junk the protocol.The UK has until September 15 to respond to the EU legal action — only 10 days after the Tory leader enters Downing Street. But insiders with knowledge of Truss’s plans said if she became prime minister she could trigger Article 16 before that deadline in order to protect UK business. Truss’ campaign said her preference was for “a negotiated solution” but acknowledged “there are serious problems with the Northern Ireland protocol which need fixing”. Allies of Truss insist she was not “pushing” to trigger Article 16 but that it remained an option on the table if she became prime minister. One official close to the foreign secretary said: “Some government officials have raised concerns about issues coming down the track and have presented many options to ministers to deal with them.” The planned move risks ratcheting up tensions with Brussels early in a Truss premiership, but campaign insiders argued that the action would be essential to preserve the trading status quo in Northern Ireland.Under the terms of the protocol all goods going from Great Britain to Northern Ireland must follow EU rules, creating a trade border in the Irish Sea that the UK government has declared “unworkable”.The EU has warned that if the UK rips up the protocol it risks sparking a trade war with Europe and potentially even suspending the entire Trade and Cooperation Agreement that was negotiated between the two sides.

Until relations broke down in June, both had agreed to a “standstill arrangement” that required lighter-touch implementation of the deal. However, Truss allies said the EU legal action had effectively ended that agreement by reverting to a demand for full implementation. The UK said in July 2021 that the conditions had already been met to justify using Article 16, which can be triggered if either side believes the protocol has led to “serious economic, societal or environmental difficulties”.Once triggered, the two sides enter into “immediate consultation” in the joint committee that governs the deal, but either side can take “proportionate rebalancing measures” if agreement cannot be reached.Truss’s plans come after HM Revenue & Customs notified British steel producers this week that they will have to pay a 25 per cent tariff to sell certain construction products into Northern Ireland because of the protocol. Steel industry representatives described the situation as “farcical”, while a UK government spokesman said the tariffs were an example of how the protocol is “needlessly damaging” trade within the UK and “why it needs to be urgently fixed”.The tariffs move was cited by a Truss ally as to why she intends to act. “We can’t go on like this and something needs to break the deadlock.”The European Commission said the UK had not provided the data it needed to resolve the tariffs issue, which was triggered as a result of changes to overall import quotas for the EU in July.It declined to comment on the potential triggering of Article 16.Earlier this month the UK government started a separate legal proceeding against Brussels after the commission blocked the UK’s associate membership of the EU’s €95.5bn Horizon Europe science programme. Participation in Horizon was negotiated in 2020 as part of the EU-UK trade deal but has been withheld because of the UK’s failure fully to honour the deal over Northern Ireland, EU officials have confirmed. More