Economy

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TAIPEI/BEIJING (Reuters) -Taiwan’s defence ministry said on Sunday that Chinese warplanes and warships had carried out another “combat patrol” near the island, after Beijing threatened to take countermeasures in response to a $2 billion arms sale package by the United States.The United States is bound by law to provide Chinese-claimed Taiwan with the means to defend itself despite the lack of formal diplomatic ties, to the constant anger of Beijing.The Pentagon said on Friday the United States had approved a potential $2 billion arms sale package to Taiwan, including the delivery for the first time to the island of an advanced air defence missile system battle-tested in Ukraine.Taiwan’s defence ministry said it had detected 19 Chinese military aircraft, including Su-30 fighter jets, carrying out a “joint combat readiness patrol” around Taiwan in conjunction with Chinese warships starting on Sunday morning.It said the Chinese aircraft flew in airspace to the north, centre, southwest and east of Taiwan, and that Taiwanese forces were dispatched to keep watch.China’s defence ministry did not answer calls seeking comment outside normal office hours.China stages such patrols around Taiwan several times a month, but this was the first since Beijing held a new round of full-blown war games near the island this month. In a statement late on Saturday, China’s foreign ministry said it strongly condemned and firmly opposed the latest U.S. weapons sales and had lodged “solemn representations” with Washington.China urges the United States to immediately stop arming Taiwan and stop its dangerous moves that undermine peace and stability in the Taiwan Strait, it added.”China will take resolute countermeasures and take all measures necessary to firmly defend national sovereignty, security and territorial integrity,” the ministry said, without elaborating.China has over the past five years stepped up its military activities around democratically governed Taiwan, whose government rejects Beijing’s sovereignty claims.Taiwan’s government has welcomed the new arms sale, the 17th to the island under U.S. President Joe Biden’s administration.”In the face of China’s threats, Taiwan is duty-bound to protect its homeland, and will continue to demonstrate its determination to defend itself,” Taiwan’s foreign ministry said on Saturday, responding to the arms sale. More

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TOKYO (Reuters) – Japan’s voters decide the fate of Prime Minister Shigeru Ishiba’s government on Sunday in an election expected to punish his coalition over a funding scandal and inflation, potentially ending a decade of dominance for his Liberal Democratic Party.The LDP and its longtime partner Komeito will suffer a drubbing from voters, with the coalition possibly losing its parliamentary majority, opinion polls suggest, as Japan struggles with rising costs of living and increasingly tense relations with neighbouring China.Losing the majority in the lower house would force Ishiba, in office just a month, into power-sharing negotiations with smaller parties, bringing uncertainty in some policy areas, although no polls forecast the LDP being ejected from power.Political wrangling could roil markets and be a headache for the Bank of Japan, if Ishiba chooses a partner that favours maintaining near-zero interest rates when the central bank wants to gradually raise them.”He’ll be considerably weakened as a leader, his party will be weakened in the policies that it particularly wants to focus on, because bringing in a coalition partner will cause them to have to make certain compromises with that party, whatever party it may be,” said Jeffrey Hall, an expert on Japanese politics at the Kanda University of International Studies.The LDP could lose as many as 50 of its 247 seats in the lower house and Komeito could slip below 30, giving the coalition fewer than the 233 needed for a majority, a survey by the Asahi newspaper suggested last week.”That’s basically the scenario for ‘sell Japan’,” as investors ponder how the outcome could affect fiscal and monetary policy, said Naka Matsuzawa, chief macro strategist at Nomura Securities. Japanese shares fell 2.7% last week on the benchmark Nikkei index.The LDP will remain easily the biggest force in parliament, polls indicate, but it could lose many votes to the number two party, the opposition Constitutional Democratic Party of Japan, which toppled the LDP in 2009, the Asahi said, estimating he CDPJ could win as many as 140 seats.COALITION HEADACHESNine days before U.S. voters choose a new president, Japan’s general election appears likely to show Ishiba miscalculated in going to the voters for a verdict on the LDP’s scandal over unrecorded donations at fundraisers.After purging some LDP members, Ishiba says he considers the case closed and has not ruled out giving government posts to disgraced politicians, possibly angering voters, experts say.Potential coalition partners could be the Democratic Party for the People (DPP) and the Japan Innovation Party, but both propose policies at odds with the LDP line. The DPP calls for halving Japan’s 10% sales tax until real wages rise, a policy not endorsed by the LDP, while the Innovation Party has pledged tougher donation rules to clean up politics.The Innovation Party opposes further rate hikes, and the DPP leader has said the central bank may have been hasty in raising rates, while the BOJ wants to gradually wean the world’s fourth-largest economy off decades of monetary stimulus.Almost 40% of voters say their top concern is the economy and cost of living, according to a poll by public broadcaster NHK. It found 28% want a tax cut and 21% hoped to see a continued rise in their wages. Various parties have pledged to raise wages in a move that may win votes but also threatens smaller businesses that are struggling to keep up with rising costs. More

The news outlet reported that Musk arrived in Palo Alto, California, in 1995 to attend Stanford University but never enrolled in his graduate studies program there. Instead, he developed software company Zip2, which sold in 1999 for around $300 million, according to the outlet.Two immigration law experts quoted by the Post said Musk would have needed to be enrolled in a full course of study in order to maintain a valid work authorization as a student.Musk did not respond to requests for comment sent to four of his companies – SpaceX, Tesla (NASDAQ:TSLA), the social media company X and The Boring Company – nor did Musk’s lawyer Alex Spiro.Musk in a 2020 podcast cited by the Post said: “I was legally there, but I was meant to be doing student work. I was allowed to do work sort of supporting whatever.”The Washington Post cited two former Musk colleagues who recalled Musk receiving his U.S. work authorization in or around 1997.Musk has endorsed Republican presidential candidate Donald Trump in the Nov. 5 U.S. election. Trump has for years portrayed migrants as invaders and criminals, and during his 2017-2021 presidency took stringent steps to curb legal and illegal migration. He is promising the biggest deportation effort in U.S. history if he is reelected. More

WASHINGTON (Reuters) – The Bank of England is reluctantly pressing on with work to create a form of digital money accessible to the general public, as commercial banks risk failing to keep up with less-regulated tech firms, Governor Andrew Bailey said on Saturday.Bailey’s remarks build on his longstanding concerns that he does not want to see day-to-day payments or banking-type services shift to cryptocurrencies or services from tech companies that are less safe or private than banks.The BoE and Britain’s finance ministry have said they will not make a final decision before 2025 at the earliest whether to go ahead with a state-backed digital pound or central bank digital currency (CBDC), following a consultation which drew widespread concerns about privacy.”That (CBDC) is not my preferred option, but it’s one we can’t rule out,” Bailey said at the Group of Thirty in Washington, a forum for central banks and commercial bankers.While Britain’s electronic payment infrastructure already provides fast transfers with no upfront costs for the public, future forms of digital currency could offer more options in areas such as automatic payments.”Commercial bank money, i.e. the banking system, is the best home for that innovation,” Bailey said.”But … are they the only game in town? At the Bank of England we’re continuing to prepare for a retail CBDC, because to be frank we are not yet seeing enough evidence that innovation will happen in the commercial banking system.”Commercial banks might be avoiding innovation because they made too much profit from the current system, Bailey said.”To be particularly frank about this, if the rents that are being earned from the ‘rails’ (payment systems) act to inhibit innovation and act to inhibit competition, that is why … we need a retail CBDC on the table,” Bailey said. More

WASHINGTON (Reuters) – Asian Infrastructure Investment Bank (AIIB) President Jin Liqun on Saturday criticized advanced economies for creating trade barriers including for renewable energy goods, saying there was “no longer free trade” in the global economy.The United States last month locked in steep tariff hikes on Chinese imports, including a 100% duty on electric vehicles, to strengthen protections for strategic domestic industries from China’s state-driven excess production capacity.The European Union and Canada also have announced new import tariffs on Chinese EVs, the latter matching the 100% U.S. duties.Jin, who heads the China-led development bank, said trade spats between advanced and emerging economies have increased partly because manufacturers in the latter have boosted their competitiveness.Emerging economies that build up capacity for trade and become competitive could be accused for over-capacity “no matter how much benefit you can bring to your trade partners,” he said.”It’s no longer free trade, because you cannot rely on the WTO rules,” Jin told the Group of Thirty (G30) International Banking Seminar.”What worries us even more is the barriers to trade in low carbon and renewable energy products, which are rising even more faster, just when we need more of these green products to save the planet,” he said.AIIB was set up by President Xi Jinping in 2016 as a Chinese alternative to the World Bank and other Western-led multilateral lenders.”I’m dismayed to see this spat over trade. Free trade has brought huge benefits to so many countries since the end of second World War,” he said.Jin also said the series of stimulus measures China’s government has recently announced were different from those deployed during 2008-2009 in the aftermath of the global financial crisis, in that they were now “more focused.”China had more scope to expand fiscal stimulus, and so has been more proactive in expanding spending and issuing special bonds to help local governments and businesses, he said. More

WASHINGTON (Reuters) -The European Central Bank should keep its options open regarding future interest rate moves, Dutch central bank chief and ECB Governing Council member Klaas Knot said on Saturday, pushing back against market bets that a December cut is a done deal.Last week the ECB cut interest rates for the third time this year and four sources close to the decision told Reuters a fourth cut was likely in December unless data turned around in the coming weeks.However, on Thursday three ECB officials tried to cool speculation about rate cuts, and Knot added his voice to theirs at a meeting of the Group of Thirty – a gathering of central bankers, commercial banks and academics – in Washington on the sidelines of the International Monetary Fund and World Bank annual meetings. “It is important that we keep all options open. Retaining full optionality would act as a hedge against the materialization of risks in either direction to the growth and inflation outlook,” Knot said. “We believe that our meeting-by-meeting and data dependent approach has served us well,” he added.Asked about the market’s expectations for rate cuts, Knot said they had increased “quite dramatically” following weak purchasing managers’ index and consumption data.”We will have to see whether that was a little bit over-enthusiastic or not. We will only know once we do our own calculations again in December,” he said.Knot likened the current economic situation in the euro zone to the weather in Amsterdam at this time of year: “It’s not as bad as some people would have you believe, but it’s definitely not great,” he said.Incoming data since September had increased the ECB’s confidence that inflation would return to its 2% target and increased the risk of disappointing growth in the short and medium term, but did not point to a recession, Knot said.But the euro zone still needed to see services price inflation cool further and a “significant easing” in wage growth to ensure that inflation returned durably to target, he added.”On the one hand, policy restriction may be reduced more quickly if incoming data indicates sustained acceleration in the speed of disinflation or a material shortfall in the economic recovery,” Knot said. “On the other hand, policy restriction may be taken away more slowly, should upside risks to inflation materialize or incoming data share the opposite picture regarding growth and inflation.” More