Aurelia Butler

John Lee, Hong Kong’s second-highest ranking official, has joined the race to succeed Carrie Lam as the Chinese territory’s leader, signalling Beijing’s increasing focus on security after pro-democracy protests rocked the city in 2019. Lee, a 64-year-old former security minister, resigned from his post as the top civil servant on Wednesday and is believed to have Beijing’s backing, according to people familiar with the process. The former police officer would be the first chief executive with a security background since the city’s handover from the UK to China in 1997 and has played a significant role in a crackdown on opposition following Beijing’s imposition of a sweeping national security law in 2020. Almost 200 activists have been arrested and multiple independent media outlets have closed, included the best-selling pro-democracy tabloid Apple Daily. More than 10,000 have been arrested since the 2019 protests.What’s your reaction to Lee joining the race to be Hong Kong’s chief executive? Share your thoughts with me at [email protected]. Thanks for reading FirstFT Asia. — EmilyThe latest on the war in Ukraine: Evacuation: Ukraine’s authorities have urged civilians in the Donbas region and around Kharkiv to evacuate after Russian forces stepped up their offensive in eastern Ukraine.Sanctions: The US has imposed its most severe level of sanctions on Russia’s largest financial institution and its biggest private bank. Italy and Spain led a fresh round of European expulsions of Moscow’s diplomats.Energy: Russian coal producers may struggle to redirect volumes to Asian markets if the EU proceeds with a threatened total import ban, analysts said.Debt: Russia moved one step closer to a potential default on its foreign currency debt after the country’s finance ministry said it was forced to make payments to holders of its dollar-denominated bonds in roubles.Intelligence: Declassifying information at a rapid pace has become a striking feature of the spy community’s response to the invasion of Ukraine.Opinion: Whatever the outcome of Vladimir Putin’s war, geopolitics is now divided between the west and a Chinese-Russian Eurasia, writes Edward Luce.Follow our live blog for the latest news on the conflict and our regularly updated maps are tracking Russia’s invasion of Ukraine. Five more stories in the news1. Scoop: Meta targets virtual currency market with ‘Zuck Bucks’ Meta has drawn up plans to introduce virtual coins, tokens and lending services to its apps, as Facebook’s parent company pursues its finance ambitions despite the collapse of a project to launch a cryptocurrency.

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2. Federal Reserve to slash balance sheet by $95bn a month The US central bank is set to start shedding $95bn of assets a month from its swollen $9tn balance sheet as it steps up efforts to curb soaring inflation in the US. An account of the Federal Open Market Committee’s last meeting showed officials finalising a plan to reduce the central bank’s presence in US government bond markets.3. Toshiba’s second-biggest shareholder pushes take-private deal 3D Investment Partners is pushing for the company to open talks on a possible sale to private equity after it was revealed last week that Bain Capital was poised to submit a buyout proposal for the $17bn Japanese conglomerate.4. Sri Lanka revokes emergency rule President Gotabaya Rajapaksa has ended emergency rule days after it was imposed as the government struggles to contain an economic and political crisis that has led to widespread protests.5. Le Pen’s poll surge rattles French bonds and bank stocks The risk of a victory for Marine Le Pen came into sharp focus yesterday as polls ahead of the first round of voting on Sunday showed the far-right candidate gaining ground on president Emmanuel Macron. Bank stocks fell and bond spreads between French and German government debt widened. Coronavirus digest China’s strict Covid lockdowns are exacerbating serious shortages of fertiliser, labour and seeds.The stake held by the founding family of one of China’s largest traditional medicine groups has rocketed in value to $4.5bn after the latest Covid outbreak.The day aheadWorld Health Day The World Health Organization is set to publish its annual World Health Report.G7 foreign minister’s meeting continues Officials will continue proceedings in Brussels, where Liz Truss, UK foreign secretary, is expected to call for tougher unified action and continued sanctions against Russia.What else we’re readingThe weaponisation of finance The first of a two-part series on the new era of financial warfare examines how the west unleashed “shock and awe” on Russia’s economy, and how sanctions on the country’s central bank wielded the omnipresence of the US dollar to penalise an adversary of Washington.Hong Kong takes aim at boardroom ‘boys’ club’ Xiaomi and Meituan may be world leaders when it comes to smartphones or online shopping, but China’s top companies are falling behind in a global movement to shake up all-male boardrooms. Now, Hong Kong’s stock exchange will require that its more than 2,500 listed companies have at least one female board member by 2024. Related read: In the first edition of our new weekly newsletter Working It, FT’s Sophia Smith looks at the secret — and thriving — world of alumni networks. Expats fleeing Hong Kong meet rising resentment in Singapore As Singapore eases its pandemic measures, it has become the obvious destination for many Hong Kongers. But the city-state’s reputation for openness is being undermined by locals who want to clamp down on immigration.A new kind of media baron charges into Twitter Elon Musk’s investment in the social media platform and subsequent appointment to the company’s board of directors gives the Tesla chief executive a unique position and influence normally associated with traditional press barons. Tech reporters Hannah Murphy and Richard Waters spoke to experts about this week’s surprise developments.Carbon removal ‘unavoidable’ as climate change alarm bells ring Once a fringe idea, carbon capture and storage has become a key part of decarbonisation plans the world over. But does this technology risk providing big polluters a licence to carry on as normal? The FT weighs the pros and cons.

Video: Carbon capture: the hopes, challenges and controversies | FT Film

FitnessBoost your ride with investment-worthy cycle hacks from 3D-printed saddles to Tour de France-tested wheelsets, Fergus Scholes rounds up the 14 best bike upgrades. More

(Reuters) – U.S. Treasury Secretary Janet Yellen said on Wednesday that Russia should be expelled from the Group of 20 major economies forum, and the United States will boycott “a number of G20 meetings” if Russian officials show up.Her comments at a U.S. House Financial Services Committee hearing raised questions about the G20’s future role in the wake of Russia’s invasion of Ukraine.Since 2008, the club has served as a key international forum for issues from COVID-19 relief to cross-border debt and also includes China, India, Saudi Arabia and other countries that have been reluctant to condemn Russia’s actions.Yellen told lawmakers that Russia’s invasion of Ukraine and the killings of civilians in Bucha “are reprehensible, represent an unacceptable affront to the rules-based global order, and will have enormous economic repercussions in Ukraine and beyond.”The United States and its key allies have placed greater emphasis in recent months on the G7 grouping of industrial democracies, whose interests are more aligned, using G7 meetings to coordinate their response to Russia’s war in Ukraine.Yellen said that the Biden administration wants to push Russia out of active participation in major international institutions, but acknowledged that it was unlikely that Russia could be expelled from the International Monetary Fund given its rules. “President Biden’s made it clear, and I certainly agree with him, that it cannot be business as usual for Russia in any of the financial institutions,” Yellen said in response to a question. “He’s asked that Russia be removed from the G20, and I’ve made clear to my colleagues in Indonesia that we will not be participating in a number of meetings if the Russians are there,” Yellen said.Indonesia holds the presidency this year and will host a finance meeting in July and a leaders summit in November.A Treasury spokesperson later said that Yellen was referring to an April 20 G20 finance ministers and central bank governors meeting on the sidelines of the IMF and World Bank Spring Meetings in Washington and associated deputies meetings.The April finance meeting will be held both in-person and virtually and Russia’s participation is unclear at present.Russia has said that President Vladimir Putin intends to attend the G20 summit in Bali this year and has received China’s backing to stay in the group.ENERGY FLEXIBILITY Yellen’s testimony came as the Biden administration announced a new round of sanctions to punish Russia, including banning Americans from investing in Russia and locking Sberbank, Russia’s largest lender and holder of a third of its bank deposits, out of the U.S. financial system, along with other institutions.But transactions allowing European allies to purchase Russian oil and natural gas were exempted through special Treasury licenses.Yellen said that flexibility on Russian energy transactions was needed because many European countries “remain heavily dependent on Russian natural gas, as well as oil, and they are committed to making the transition away from that dependence as rapidly as possible.”But she acknowledged that this would take time. A complete ban on oil exports from Russia, the world’s third-largest producer after the United States and Saudi Arabia, would likely prompt “skyrocketing” prices that would hurt both the United States and Europe, Yellen said.She added that she hoped that currently high prices would entice oil companies in the United States and elsewhere to ramp up production in the next six months, which, along with the Biden’s release of oil from the U.S. Strategic Petroleum Reserve, may allow for tougher restrictions on Russian oil.CHINA WARNINGYellen also issued a warning to China that Treasury was prepared to turn its sanctions tools against Beijing in the event of Chinese aggression against Taiwan, which China claims as a wayward province. Asked if the United States would take such steps if Taiwan was threatened, she said: “Absolutely. I believe we’ve shown that we can. In the case of Russia, we threatened significant consequences. We’ve imposed significant consequences. And I think that you should not doubt our ability and resolve to do the same in other situations.” More

Levi Strauss does not expect to be able to reopen in Russia this year, its chief executive said on Wednesday, a month after the California jeans maker suspended operations there “temporarily” in response to Vladimir Putin’s invasion of Ukraine. “The way things are going now, I’m not optimistic we’ll be back in business in full force any time soon,” Chip Bergh told the Financial Times, adding that its forecasts now assumed no further revenues in 2022 from a market that contributed about 2 per cent of sales last year. Levi’s is still paying more than 800 employees in Russia, and has kept a couple of outlet stores open “to flush inventory”, he said, but “every day when you open the newspaper the situation looks worse”.Conditions for western companies in Russia were “really difficult”, Bergh said, noting authorities had assumed powers that could allow them to nationalise the operations of businesses that stop supplying Russian customers. “They could literally take our trademark,” he warned, echoing a concern other executives have voiced privately.A Boston Consulting Group survey, released this week, found that two-thirds of investors expected it would take at least two years before western companies were willing to operate in Russia again, including 39 per cent that said it would be five years or more. Few CEOs have made any public projections of how long they might be frozen out of Russia’s market, however.Despite the question hanging over Russia, Levi’s reaffirmed its full-year guidance after delivering first-quarter revenues and earnings per share that beat consensus estimates. “We grew the old fashioned way, by generating lots of demand and lots of full-price selling,” Bergh said, pointing to a 22 per cent jump in revenues to $1.59bn for the three months to February, above the $1.55bn Wall Street had expected. Record operating profit margins, up from 13.3 per cent to 14.7 per cent, boosted adjusted earnings per share more than a third to 46 cents, or 4 cents above expectations. Levi’s had increased average prices 10 per cent in a year to try to offset “across the board” inflationary pressures, Bergh noted. “We are planning for more [price rises] later this year because we know costs are going to continue to go up,” he said, adding that running businesses in high-inflation periods of the 1980s had taught him that “you’ve got to get in front of [inflation], because if you don’t you just can’t catch up”.Levi’s had offset much of the higher costs of cotton, shipping and wages by renegotiating leases and using its scale to agree better terms with vendors, said Harmit Singh, chief financial officer. Bergh expressed confidence in the outlook for US consumer demand, saying: “Despite the pandemic and everything we’ve been through, despite consumers seeing inflation hitting them at the gas pump and the grocery store, the confidence level is still quite high.”That said, he added, the fact that it was maintaining full-year guidance after beating expectations for the first quarter “infers we are maybe expecting the second half to be a little bit softer”. More

Global stocks and government bonds sold off on Wednesday as minutes from the latest Federal Reserve meeting highlighted officials’ willingness to aggressively raise interest rates to combat inflation.The US central bank raised its benchmark interest rate by 0.25 percentage points last month, but the minutes showed several participants would have preferred a sharper 0.5 percentage point increase were it not for the uncertainty caused by Russia’s invasion of Ukraine. “Many” of them said at least one 0.5 percentage point increase would be appropriate later in the year.The minutes also showed officials refining plans to start shedding assets from the Fed’s balance sheet at a much faster pace than its previous effort in 2017. Lael Brainard, a Fed governor, on Tuesday said the central bank could rapidly reduce its $9tn balance sheet from May. Markets initially dipped early on Wednesday in the wake of Brainard’s speech, and maintained most of their losses after the Fed minutes were released later in the day. The S&P 500 stock index closed 1 per cent lower, while the tech-dominated Nasdaq Composite lost 2.2 per cent. The declines followed what had already been a bruising day for investors in Europe and Asia. The Europe-wide Stoxx 600 index dropped 1.5 per cent, its worst daily decline in almost a month, while Hong Kong’s Hang Seng index dropped 1.9 per cent and Japan’s Topix fell 1.3 per cent. Government debt also came under pressure, with the yield on the benchmark 10-year US Treasury note adding 0.06 percentage points to a fresh three-year high of over 2.60 per cent. In Europe, the 10-year German Bund rose 0.03 percentage points to 0.6 per cent, while yields on 10-year Italian debt rose 0.04 percentage points to 2.3 per cent. Government bond yields, which underpin the rates banks charge companies and households for loans, rise as prices fall.

Investors are grappling with a difficult combination of rising inflation in the US and Europe, conflict in Ukraine and an escalating coronavirus outbreak in China. On Wednesday, the US and British governments both toughened sanctions against Russian banks in response to atrocities committed by Russian forces.“There are many things to worry about,” said Maarten Geerdink, head of European equities at NN Investment Partners, “But the one thing that matters the most is that we had a very accommodative Federal Reserve and we now have one that is on the tightening side.” Juliette Cohen, strategist at CPR Asset Management, said: “By removing these asset purchases and selling bonds that are on the balance sheet, it says we don’t need so much [monetary] accommodation due to the high level of inflation and reinforces the idea they will be hiking interest rates.“We expect a more rapid monetary tightening, not only in the US but also in the eurozone,” she added, after the annual pace of inflation in the currency bloc hit a record high of 7.5 per cent in March. More