Aurelia Butler

Joe Biden has decided not to send a US government delegation to the Beijing Winter Olympics, in a diplomatic boycott designed to send a strong message to China about the persecution of Uyghurs in Xinjiang.Jen Psaki, White House press secretary, said the administration would not send any officials to the games, which start in February, because of the “ongoing genocide and crimes against humanity” in Xinjiang. But she said the US Olympic team had the “full support” of the president and his administration. The US has taken a strong stance on the situation in Xinjiang where more than 1m Uyghurs and other minorities have been held in detention camps and used as forced labour.Antony Blinken, secretary of state, earlier this year followed in the steps of the Trump administration by describing the repression of the Uyghurs as “genocide”. Biden also raised the issue of Xinjiang and human rights during a virtual meeting with President Xi Jinping last month.Do you agree with Biden’s decision? Tell me what you think at [email protected]. Thanks for reading FirstFT Asia. Here’s the rest of today’s news — EmilyFive more stories in the news1. Evergrande faces another debt payment deadline China Evergrande Group, the world’s most indebted property developer, was again flirting with a formal default yesterday as the end of a 30-day grace period on $82.5m in debt repayments loomed. Shares in the group tumbled by almost a fifth.2. Saudi Aramco warns on energy transition risks ‘social unrest’ The chief executive of Saudi Aramco, the world’s largest oil producer, has called on global leaders to continue investing in fossil fuels in the years ahead or run the risk of spiralling inflation and social unrest that would force them to jettison emissions targets.3. US financial regulator’s newest investigations Lucid Motors, an electric-car group taken public in one of the largest Spac deals in history, is being probed by the US Securities and Exchange Commission over disclosures and forecasts. Separately, the SEC is investigating Digital World Acquisition Corp, the blank-cheque company set to merge with Donald Trump’s social media start-up.4. Aung San Suu Kyi sentenced to 4 years in prison The deposed leader of Myanmar was sentenced to two years in prison for inciting dissent against the military and two years for violating the country’s disaster management law. The 76-year-old politician faces more than 10 criminal charges and has been allowed only limited legal access since her arrest on February 1.

Aung San Suu Kyi was ousted in a military coup in February and faces more than 10 charges © Sakchai Lalit/AP

5. Value of SoftBank’s portfolio companies plummets SoftBank Group shares fell 8 per cent yesterday, their seventh consecutive day of losses, as mounting problems at its portfolio companies Didi Chuxing and Arm revived concerns over the Japanese technology conglomerate’s business model.Elsewhere in Asia tech: Alibaba’s longtime finance chief Maggie Wu is stepping down as the Chinese ecommerce giant shakes up its organisation.Coronavirus digestNew Zealand’s runaway house prices could be brought back to earth by low net migration if the coronavirus pandemic keeps the country’s borders closed, according to the central bank’s deputy governor.New York City will require all private sector workers to be vaccinated against Covid-19, in what would be the US’s strictest vaccine mandate.Pilita Clark: Don’t despair if Omicron wrecks your holiday plans. Vacations are wonderful but a few days off can be just as useful as a weekAfter suffering one of the world’s worst Covid-19 disasters, Brazil is staging a turnround with a steep drop in deaths and a mass inoculation campaign that has brought the death rate per 100,000 residents below the US, EU and UK.The day aheadPutin-Biden phone call US President Joe Biden will seek to cement unity with European powers ahead of a phone call with Vladimir Putin designed to outline punitive measures that would inflict “severe” harm to Russia’s economy in case of an invasion of Ukraine.Commentary: Putin insists that Ukraine is a failed state being led astray by scheming foreigners. This is where his argument takes a truly alarming turn, writes Gideon Rachman.Anniversary of Pearl Harbor Today marks 80 years since Japan bombed Pearl Harbor. Expect substantial analysis of relations between the two countries, which have improved significantly on this key event since Shinzo Abe became the first Japanese prime minister to visit the site of the attack five years ago.Sign up to receive the Week Ahead email every Sunday in your inbox for a preview of what’s coming up in global business, politics and economics.What else we’re readingHonduras is the new front in US-China struggle over Taiwan While Taipei celebrates support from Japan and the west, they worry over Honduras’s allegiance — one of the few countries with whom they maintain diplomatic ties. A tug of war between the US and China for influence in Central America hangs over the shifting relationship.La Niña expected to intensify extreme weather The La Niña phenomenon has developed for the second consecutive year, with the weather pattern expected to intensify rainfall as well as droughts around the world. It’s likely to have a continuing effect on agriculture and water supply.

Family-friendly leave policies are key to staff retention The pandemic has encouraged many professionals to reconsider their working patterns. Employers who support paternity breaks and promote flexible working are likely to stand out in a competitive labour market.Facebook’s fractious relationship with academia A growing number of researchers who are seeking to understand the potentially harmful social effects of Facebook say their work is being stifled, feeding a narrative that Meta operates on a growth-at-all-costs mentality.China is faltering, but the world is not feeling the effects Beijing is locking down to contain the pandemic, and cracking down on economically critical sectors and high corporate debt with an aggression unmatched by any other government. This goes a long way to explain why China is slowing so fast now, argues Ruchir Sharma.WealthAs part of the FT Financial Literacy and Inclusion Campaign, musician Courtney Love shares her story about making — and losing — a fortune. “My family has been the victim of every single financial crime there is,” she writes.

© Celina Pereira More

“This week, we also anticipate we will be able to reach a final conference agreement on the NDAA,” the Democratic leader said as he opened the Senate.The NDAA, which normally passes with strong bipartisan support, is closely watched by a broad swath of industry and other interests because it determines everything from how many ships or missiles are purchased to pay increases for soldiers and how to address geopolitical threats.This year’s bill authorizes $770 billion in military spending. It has been delayed amid disputes over matters ranging from the size of the defense budget to whether to force President Joe Biden to impose sanctions over a Russian natural gas pipeline or how to punish China for alleged mistreatment of Uyghur Muslims in its Xinjiang region. More

NEW YORK (Reuters) – Cryptocurrency products and funds received $184 million in net inflows as of last week, data from digital asset manager CoinShares showed on Monday.Friday’s price weakness, however, did lead to $40 million outflows that day, CoinShares said. For the year, total inflows amounted $9.1 billion, slightly below the record peak of $9.5 two weeks ago.Bitcoin, meanwhile, attracted $145 million net, its 12th straight week of inflows. It did see outflows of $42 million on Friday, as it bore the brunt of investor jitters amid sharp price declines. Traders said the weekend fall in prices was connected to a broad move away from riskier assets in traditional markets on worries about the Omicron coronavirus variant. As prices fell, investors who had bought bitcoin on margin saw exchanges close their positions, causing a cascade of selling. A range of retail-focused exchanges closed more than $2 billion of long bitcoin positions on Saturday, according to Coinglass.”The crypto markets have become very volatile. The Omicron variant and pressure on the TradFi (traditional finance) markets also seem to affect bitcoin,” said Ruud Feltkamp, chief executive officer at automated trading bot Cryptohopper.”In contrast, in the bull market of 2017, you also saw several crashes of sometimes up to 38% of its value … Often, the more afraid you are to step in, the better. And when you’re feeling too confident, it’s often a good moment to step out.”Bitcoin was last down 0.8% at $49,093. Since a record peak of $69,000 hit on Nov. 19, bitcoin has plunged 32%.CoinShares also noted that bitcoin volume rose to $15 billion last Friday, higher than the typical $8 billion per day average for November and December.Ethereum saw inflows as well totalling $25 million, but, like bitcoin, saw minor outflows of $4.7 million last Friday.Polkadot, the coin that facilitates different blockchains to inter-operate, saw outflows of $3 million last week, with the majority of those outflows coming in the latter half of the week. More

The booming UK labour market poses significant risks for the future path of inflation, even if the current surge in global goods prices is likely to abate, a senior Bank of England official said on Monday. Ben Broadbent, a BoE deputy governor, gave no clear steer on whether he was inclined to vote for a rise in interest rates when the central bank’s Monetary Policy Committee meets this month.Other MPC members have recently underlined the risks of persistent inflation but also held back from providing any clear indication of when they will vote to tighten monetary policy.Economists expect a majority of MPC members will decide to keep interest rates at their historic low of 0.1 per cent on December 16, as they wait to assess the implications of the new Omicron variant of coronavirus.Broadbent told an audience in Leeds that the BoE faced an “extremely challenging period for monetary policy”, with inflation set to climb “a long way north” of the central bank’s 2 per cent target despite a two-year period of weak global and UK economic growth.

The October consumer price index rose 4.2 per cent in the UK from one year earlier, as inflation reached its highest level in almost a decade.Broadbent said the BoE could not have done anything to shield British households from the ongoing rise in living costs, because it was driven by a global surge in demand for goods, combined with disruption to supply chains as lockdowns in Asian countries hit production.Even though some shifts in spending, linked to new homeworking habits, now looked likely to endure, the pricing pressures on traded goods were “more likely to subside than intensify” by the time any changes in monetary policy could take effect, he added.But Broadbent struck a much more hawkish note on the risks to inflation posed by an unexpectedly tight UK labour market, with unemployment barely above its pre-pandemic rate and job vacancies at record levels even after the end of the government’s furlough scheme.Higher public sector employment could be part of the explanation, he said. Even if some of this was temporary recruitment, government spending plans suggested that permanent hiring in the public sector was set to continue.

Broadbent said some of the strains in the labour market could be due to “the sheer speed of hiring”, in which case they would ease over time.But there was also “an upside risk to wage costs from currently high inflation”, if workers demanded increased pay to offset the rising cost of living.Broadbent said a temporary rise in the cost of imported goods rarely had much bearing on monetary policy, because usually the shock had passed before changes in interest rates had time to work.But “the risks to future inflation from the tight labour market may well be more significant”, he added. More

LONDON (Reuters) -Bank of England Deputy Governor Ben Broadbent said on Monday that inflation in Britain might “comfortably exceed” 5% in April and that the country’s tight labour market risked becoming a more persistent source of inflation.The BoE, which is trying to steer the economy through its recovery from a pandemic slump, said last month that inflation would hit about 5% in the second quarter of 2022 before falling.Speaking to Leeds University Business School, Broadbent suggested that forecast would probably have to be raised further above the central bank’s 2% target.”The aggregate rate of inflation is likely to rise further over the next few months and the chances are that it will comfortably exceed 5% when the Ofgem (regulator) cap on retail energy prices is next adjusted in April,” Broadbent said.Asked about the Omicron variant of COVID-19 and how it would affect his vote on interest rates next week, Broadbent said he had not decided how he would vote, and that his decision would not be driven by a single factor.There were reasons to think the recent jump in inflation for goods, which has been aggravated by a global supply chain squeeze, was likely to fade – and in some cases, reverse – before a BoE rate rise would have time to have an impact.”It’s more likely than not – looking a couple of years ahead as we should – that these pressures on traded goods prices are more likely to subside than intensify,” Broadbent said.Although unemployment is higher than before the pandemic, the jobs market could still prove a source of inflation, especially as the end of the furlough programme in September did not appear to have made hiring easier for employers. Broadbent said it was unclear if record job vacancies reflected “sand in the wheels” of the economy as employers ramped up staffing levels, or if there was a longer-term mismatch in skills that would push up inflation.He said he did not believe the coronavirus pandemic would lead to a lasting drop in labour force participation, as falls in rates so far had been similar to other downturns.Sterling edged up and British government prices fell slightly after the comments by Broadbent.He was one of the seven members of the BoE’s nine-strong Monetary Policy Committee who voted to keep interest rates on hold last month – a decision that shocked financial markets which had been betting on a hike.Investors are now pricing in a 50% chance of the BoE raising rates from 0.1% to 0.25% on Dec. 16 because of the recent emergence of the Omicron variant. On Friday, Michael Saunders, one of the two MPC members who voted for a rate hike last month, said there might be a case for waiting for more information about Omicron’s impact before pressing ahead with rate hikes.Broadbent used his speech on Monday to stress how moves such as a change to interest rates could take two years to have an effect on the economy.”What we can do – and what is the best possible approach – is to think at every meeting about the level of interest rates that will maximise our chances, a couple of years from now, of hitting the inflation target exactly,” he said. More

Hans-Werner Sinn, the forever Ordoliberal former head of influential Munich-based think-tank Ifo, has made a career out of warning about inflation. So, with prices rising at north of 5 per cent here in Germany, it’s not surprising that he’s back on our screens.Fans will be pleased to know that he’s lost neither the beard, nor the belligerence. Here he is on TV. Berlin last week vigorously shaking a bottle of Heinz’s finest to prove he was right all along that monetary policymakers’ low rates and bond buying “binges” were going to trigger spiralling inflation. (The bottle clip is around the 14 minute mark for those of you who can’t quite stomach the full 50 minutes.)

What he’s getting at is clear enough. Policymakers have been shaking the bottle so hard that soaring prices are now being unleashed like big red blobs, creating havoc on the white plate of calm that characterised our lives in those bygone days when the European Central Bank was merely a glint in a French bureaucrat’s eye. The end result is, as the German commentator — borrowing from one of Sinn’s tracts — puts it, “Erst kommt gar nichts, und dann kommt ganz viel.” The theory doesn’t stand up to the reality that most of the inflation in the eurozone right now has its roots in supply chain bottlenecks. But we’re not quite sure how you counter Sinn through the medium of food. Empty supermarket shelves perhaps? Or even a ketchup bottle with an extraordinarily narrow end?While those of a dovish bent were quick to have a laugh at Sinn’s expense, he is not the first to turn to condiments to prove an economic point. Back in 2010, The Economist’s Buttonwood column delivered its take on the ketchup theory of inflation, quoting Tim Lee of pi Economics, who described it thus: “The central bank keeps ‘shaking the bottle’ (ie monetising debt) but no ketchup (ie inflation) comes out — so it shakes even harder.” More recently, the FT’s Martin Sandbu did what all right-thinking people do and turned the bottle on its head and waited, using the theory to explain why he thinks that the ketchupy nature of price pressures right now might actually lead to deflation once supply chain snags disappear. To be fair to Sinn, inflation’s clearly not a nothingburger. At the very least the theory underlines the, erm, pickle policymakers face in gauging just how pent up price pressures are. More