Economy

Your browser does not support playing this file but you can still More

$75 per monthComplete digital access to quality FT journalism with expert analysis from industry leaders. Pay a year upfront and save 20%.What’s included Global news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print edition More

BEIJING (Reuters) – A record 3.4 million young Chinese flocked to the civil service exam this year, lured by the prospect of lifetime job security and perks including subsidised housing as an economic slowdown batters the private sector and youth unemployment remains high.Applicant numbers, which surged by over 400,000 from last year and have tripled since 2014, reflect the huge demand for stability from disillusioned Gen Z Chinese and the lack of attractive options in the private sector even though local governments are struggling to pay wages due to a fiscal crisis. Klaire, a master’s student in Beijing, took the notoriously competitive exam in early December, studying for nine hours a day and spending 980 yuan ($134) on online tutoring. She cited social prestige and stability as major factors why she is only applying for government or state-owned enterprise (SOE) jobs. Klaire has also seen colleagues get laid off during a previous tech internship.”I only want to pass the exam and not worry about what happens next,” said the 24-year-old, withholding her surname for privacy reasons.”Despite personally knowing civil servants who haven’t been paid for months, I still applied because I don’t wish to make lots of money.”If she passes the exam, she will have a further interview as well as political background and physical checks, with the final outcome expected around April.Layoffs are rare in China’s civil service, earning it the “iron rice bowl” moniker, though individuals can be dismissed for disciplinary violations. “The current leadership has no intent of reducing the size of public sector workers, who are the backbone of regime stability,” said Alfred Wu, associate professor at National University of Singapore. Most civil service openings have an age limit of 35 and offer subsidised housing and social insurance, a major attraction for graduates disillusioned by the paucity of private sector job opportunities. Youth unemployment rates, which fell slightly in recent months, remain elevated compared to pre-pandemic figures as China’s economy struggles to recover amid a prolonged property sector crisis and frail consumption.Many Gen Z Chinese “feel a strong sense of burnout and don’t know what is meaningful” after having their university years defined by the pandemic and China’s economic slowdown, said a Chinese sociology professor on condition of anonymity. As the present generation of Chinese graduates have not experienced the mass state sector layoffs of the 90s, many have an idealised view of government work, he said, noting an apt summation in a social media meme: “Becoming a civil servant is the endpoint of the universe”.WAGE WOESHowever, rare interviews with ten public sector employees across four Chinese provinces paint a different picture: widespread bonus reductions and pay cuts of up to 30% this year have prompted some to consider resigning, while local government austerity drives have led to sporadic staff cuts. Some civil servants say they have been unpaid for months. Others survive on as little as 4,000 yuan ($550) monthly while supporting families and paying off loans. Many asked for anonymity to avoid retribution.Despite these obvious woes, high nationwide youth unemployment has fed strong demand for civil service roles, which have surged from 2019’s 14,500 to 39,700 this year.Katherine Lin quit her civil service job in the southern megacity of Shenzhen in July after her 15,000 yuan ($2000) salary dropped by a quarter, bonuses were scrapped, and managers hinted at further downsizing. “Some departments chose to either cut salaries by 30% or fire people in response to cost-cutting policies,” she said. At least three Shenzhen district-level bureaux were merged and nine employees dismissed this year, public notices show. In her housing bureau role, she handled an unprecedented number of migrant worker protests last December, when they normally demand wages before Chinese New Year. Another civil servant in rural Guangdong province described his salary of 4,000 yuan ($550) as “stable poverty” after monthly bonuses of 1,000 yuan ($140) stopped in June. In Shandong, civil servants complained on social media in September about being paid only one month per quarter, part of a policy called “guarantee four (months’ salary), strive for six”. The State Council and Shenzhen government did not reply to faxed requests for comment.DOWNSIZING PRESSUREBeijing has long faced calls to reform its bloated state sector. Despite repeated downsizing campaigns, China’s civil service jobs swelled from 6.9 million in 2010 to 8 million currently, with at least a further 31 million public employees such as school and hospital workers who have fewer employment protections than civil servants.Chinese provinces have quietly cut tens of thousands of public sector positions since 2020, mostly through hiring reductions and attrition. Wage arrears are “systematic and universal across the country, and are impossible to solve substantially in the short term,” said a governance professor at an elite Chinese university on condition of anonymity, adding that this could increase corruption as officials supplement their salaries through tips and bribes, as well as increased administrative fines for citizens. “The most pressing issue now is social stability,” said the professor. “Therefore the lesser of two evils will cause the expansion of civil service hiring and the neglect of institutional reform.” More

The yen was changing hands at 157.71 with only the risk of Japanese intervention preventing another test of the 160 level last seen in July.The dollar index measure against major rivals was flat at 107.98. The euro stood at $1.0429, not far from recent troughs and in a holding pattern in holiday trading. The currency is heading for a calendar-year drop of roughly 5.5% on the dollar.Rising U.S. Treasury yields have been a tailwind for the dollar, with the benchmark 10-year note hitting a more than seven-month high last week. The yield hovered close to that mark on Monday, at 4.625%.”Despite paid forecasters almost universally calling for a weaker U.S. dollar in 2024, the greenback looks set to close the year higher against all major currencies with the buck reigning supreme,” said Chris Weston, head of research at Australian online broker Pepperstone. For the month, the dollar index is up 2.3%, bringing year-to-date gains to 6.6%. It has gained in each of the last three months, helped by expectations President-elect Donald Trump’s policies of looser regulation, tax cuts, tariff hikes and tighter immigration will be both pro-growth and inflationary and keep U.S. yields elevated.The dollar has gained 10 yen since Dec. 3, with much of the decline in the Japanese currency coming after the Federal Reserve’s Dec. 18 message of caution around future rate cuts. That view has weighed heavily on the yen, which hit its weakest level since July 17 last week at 158.09 per dollar and has shed 10.6% so far this year.It came off those lows on Friday after a summary of opinions from the Bank of Japan’s December policy meeting showed some policymakers gaining confidence in an imminent rate increase, while the Japanese central bank also cut its monthly bond purchases.Still, Japanese yields remain notably low, and recent comments have sown doubts about the BOJ’s commitment to lift rates. The BOJ held interest rates steady at 0.25% at this month’s meeting, and governor Kazuo Ueda said the central bank was scrutinizing more data on next year’s wage momentum and clarity on the incoming U.S. administration’s economic policies.A Reuters poll taken earlier this month showed the BOJ could raise rates to 0.50% by end-March, and interest rates markets are pricing in only a 42% chance of a rate rise in January.Pepperstone’s Weston said dollar buyers continued to dominate trading in the dollar-yen pair. Traders are on watch for any potential intervention by Japanese officials to shore up the currency if it continues to weaken, as they have done multiple times this year.Japan Finance Minister Katsunobu Kato on Friday reiterated concerns over a sliding yen, repeating his warning to take action against excessive currency moves.”It rarely sits well buying into any market pushing new run highs, but in my view, any upside break of 158.00 is good for chasing – although yen shorts do run the increasing risk of credible MOF yen jawboning and possible intervention,” Weston wrote in a note to clients.Barring the yen, currency moves in major markets were tepid last week. The yen fell 0.9%, the euro shed 0.2% and sterling rose 0.1% while the dollar index climbed 0.2%. The next interest rate cut by the European Central Bank could be longer in coming after a recent uptick in inflation, ECB Governing Council member Robert Holzmann was quoted as saying on Saturday.Leading cryptocurrency bitcoin too was sluggish around $93,350, and is down about 4% on the month after retreating from a record high of 108,379.28 hit on Dec. 17. It has surged about 115% so far this year. More

SYDNEY (Reuters) – Asian shares edged lower on Monday as high Treasury yields challenged lofty Wall Street equity valuations while underpinning the U.S. dollar near multi-month peaks. Volumes were light with the New Year holiday looming and a rather bare data diary this week. China has the PMI factory surveys out on Tuesday, while the U.S. ISM survey for December is due on Friday.MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.2%, but is still 16% higher for the year. Japan’s Nikkei eased 0.2%, but is sitting on gains of 20% for 2024.South Korea’s main index has not been so fortunate, having run into a storm of political uncertainty in recent weeks, and is saddled with losses of more than 9% for the year. It was last off 0.35%.S&P 500 futures and Nasdaq futures were both off 0.1%. Wall Street suffered a broad-based sell off on Friday with no obvious trigger, though volumes were just two-thirds of the daily average. .[.N]The S&P 500 is still up 25% for the year and the Nasdaq 31%, which is stretching valuations when compared to the risk-free return of Treasuries. Investors are counting on earnings per share growth of just over 10% in 2025, versus a 12.47% expected rise in 2024, according to LSEG data.Yet yields on 10-year Treasuries are near eight-month highs at 4.631% and ending the year around 75 basis points above where they started it, even though the Fed delivered 100 basis points of cuts to cash rates.”The continued rise in bond yields, driven by the reassessment of less restrictive monetary policy expectations, creates some concern,” said Quasar Elizundia, a research strategist at broker Pepperstone.”The possibility that the Fed may keep restrictive monetary policy for longer than expected could temper corporate earnings growth expectations for 2025, which could in turn influence investment decisions.” Bond investors may also be wary of burgeoning supply as President-elect Donald Trump is promising tax cuts with few concrete proposals for restraining the budget deficit. Trump is expected to release at least 25 executive orders when he takes office on Jan. 20, covering a range of issues from immigration to energy and crypto policy.Widening interest rate differentials have kept the U.S. dollar in demand, giving it gains of 6.5% for the year on a basket of major currencies.The euro has lost more than 5% on the dollar so far in 2024 to last stand at $1.0429, not far from its recent two-year trough of $1.0344.The dollar held near a five-month top on the yen at 157.71, with only the risk of Japanese intervention preventing another test of the 160.00 barrier.The strength of the dollar has been something of a burden for gold prices, though the metal is still 28% higher for the year so far at $2,624 an ounce. [GOL/]Oil has had a tougher year as concerns about demand, particularly from China, kept a lid on prices and forced OPEC+ to repeatedly extend a deal to limit supplies. [O/R]Brent fell 37 cents to $73.80 a barrel, while U.S. crude lost 17 cents to $70.43 per barrel. More

Under the 2023 budget deal Congress suspended the debt ceiling until Jan. 1, 2025. The U.S. Treasury will be able to pay its bills for several months beyond that deadline, but Congress will have to address the issue, possibly around mid-year.In a post on Truth Social, Trump said, “The extension of the Debt Ceiling by a previous Speaker of the House, a good man and a friend of mine … will go down as one of the dumbest political decisions made in years.”He added, “The Democrats must be forced to take a vote on this treacherous issue NOW, during the Biden Administration, and not in June. They should be blamed for this potential disaster, not the Republicans!”Republicans, however, will control both chambers of Congress beginning on Jan. 3 and at least some of the party’s lawmakers would have to go along with a debt limit increase or elimination in order for it to become law.Without the 2023 debt limit increase, the United States would have seen a historic default on its debt payments that would have roiled financial markets worldwide.A debt default would also likely have brought a downgrade in the U.S. credit rating, raising borrowing costs for businesses and individuals.At the time, several far-right Republicans in the House of Representatives had pushed for deeper federal spending cuts as a condition for raising the debt limit than what had been negotiated.About a week ago, with U.S. government discretionary funding due to expire on Dec. 20, Trump, encouraged by billionaire Elon Musk, demanded the debt limit either be eliminated or extended, possibly to 2029 when his presidency would end.That idea was tacked onto an extension of government funding into March, but it was quickly voted down by a coalition of House Democrats and hard-right Republicans, many of whom represent districts in Trump-leaning states.A government-funding bill without a debt-limit provision was then enacted into law. Next (LON:NXT) month, Republicans in the newly-elected Congress are expected to insist on deep federal spending cuts as a condition for raising the country’s borrowing limit.Democrats earlier this month argued Trump’s call for an immediate increase or elimination of the debt limit was motivated by his desire to make room for a new round of tax cuts that likely would lower revenues and thus add more to the debt.The national debt currently stands at about $36.1 trillion due to federal spending levels and tax cuts that have been enacted into law over several decades. More

WASHINGTON (Reuters) -Jimmy Carter, the earnest Georgia peanut farmer who as U.S. president struggled with a bad economy and the Iran hostage crisis but brokered peace between Israel and Egypt and later received the Nobel Peace Prize for his humanitarian work, died at his home in Plains, Georgia, on Sunday, the Carter Center said. He was 100.“My father was a hero, not only to me but to everyone who believes in peace, human rights, and unselfish love,” said Chip Carter, the former president’s son. “My brothers, sister, and I shared him with the rest of the world through these common beliefs. The world is our family because of the way he brought people together, and we thank you for honoring his memory by continuing to live these shared beliefs.”The Carter Center said there will be public observances in Atlanta and Washington. These events will be followed by a private interment in Plains, it said.Final arrangements for the former president’s state funeral are still pending, according to the center.Jimmy Carter, a Democrat, served as president from January 1977 to January 1981 after defeating incumbent Republican President Gerald Ford (NYSE:F) in the 1976 U.S. election. Carter was swept from office four years later in an electoral landslide as voters embraced Republican challenger Ronald Reagan, the former actor and California governor.Carter lived longer after his term in office than any other U.S. president. Along the way, he earned a reputation as a better former president than he was a president – a status he readily acknowledged.His one-term presidency was marked by the highs of the 1978 Camp David accords between Israel and Egypt, bringing some stability to the Middle East. But it was dogged by an economy in recession, persistent unpopularity and the embarrassment of the Iran hostage crisis that consumed his final 444 days in office.In recent years, Carter had experienced several health issues including melanoma that spread to his liver and brain. Carter decided to receive hospice care in February 2023 instead of undergoing additional medical intervention. His wife, Rosalynn Carter, died on Nov. 19, 2023, at age 96. He looked frail when he attended her memorial service and funeral in a wheelchair. Carter left office profoundly unpopular but worked energetically for decades on humanitarian causes. He was awarded the Nobel Peace Prize in 2002 in recognition of his “untiring effort to find peaceful solutions to international conflicts, to advance democracy and human rights, and to promote economic and social development.”Carter had been a centrist as governor of Georgia with populist tendencies when he moved into the White House as the 39th U.S. president. He was a Washington outsider at a time when America was still reeling from the Watergate scandal that led Republican Richard Nixon to resign as president in 1974 and elevated Ford from vice president.”I’m Jimmy Carter and I’m running for president. I will never lie to you,” Carter promised with an ear-to-ear smile.Asked to assess his presidency, Carter said in a 1991 documentary: “The biggest failure we had was a political failure. I never was able to convince the American people that I was a forceful and strong leader.”Despite his difficulties in office, Carter had few rivals for accomplishments as a former president. He gained global acclaim as a tireless human rights advocate, a voice for the disenfranchised and a leader in the fight against hunger and poverty, winning the respect that eluded him in the White House.Carter won the Nobel Peace Prize in 2002 for his efforts to promote human rights and resolve conflicts around the world, from Ethiopia and Eritrea to Bosnia and Haiti. His Carter Center in Atlanta sent international election-monitoring delegations to polls around the world.A Southern Baptist Sunday school teacher since his teens, Carter brought a strong sense of morality to the presidency, speaking openly about his religious faith. He also sought to take some pomp out of an increasingly imperial presidency – walking, rather than riding in a limousine, in his 1977 inauguration parade.The Middle East was the focus of Carter’s (NYSE:CRI) foreign policy. The 1979 Egypt-Israel peace treaty, based on the 1978 Camp David accords, ended a state of war between the two neighbors.Carter brought Egyptian President Anwar Sadat and Israeli Prime Minister Menachem Begin to the Camp David presidential retreat in Maryland for talks. Later, as the accords seemed to be unraveling, Carter saved the day by flying to Cairo and Jerusalem for personal shuttle diplomacy.The treaty provided for Israeli withdrawal from Egypt’s Sinai Peninsula and establishment of diplomatic relations. Begin and Sadat each won a Nobel Peace Prize in 1978.By the 1980 election, the overriding issues were double-digit inflation, interest rates that exceeded 20% and soaring gas prices, as well as the Iran hostage crisis that brought humiliation to America. These issues marred Carter’s presidency and undermined his chances of winning a second term.HOSTAGE CRISISOn Nov. 4, 1979, revolutionaries devoted to Iran’s Ayatollah Ruhollah Khomeini had stormed the U.S. Embassy in Tehran, seized the Americans present and demanded the return of the ousted shah Mohammad Reza Pahlavi, who was backed by the United States and was being treated in a U.S. hospital.The American public initially rallied behind Carter. But his support faded in April 1980 when a commando raid failed to rescue the hostages, with eight U.S. soldiers killed in an aircraft accident in the Iranian desert.Carter’s final ignominy was that Iran held the 52 hostages until minutes after Reagan took his oath of office on Jan. 20, 1981, to replace Carter, then released the planes carrying them to freedom.In another crisis, Carter protested the former Soviet Union’s 1979 invasion of Afghanistan by boycotting the 1980 Olympics in Moscow. He also asked the U.S. Senate to defer consideration of a major nuclear arms accord with Moscow.Unswayed, the Soviets remained in Afghanistan for a decade.Carter won narrow Senate approval in 1978 of a treaty to transfer the Panama Canal to the control of Panama despite critics who argued the waterway was vital to American security. He also completed negotiations on full U.S. ties with China.Carter created two new U.S. Cabinet departments – education and energy. Amid high gas prices, he said America’s “energy crisis” was “the moral equivalent of war” and urged the country to embrace conservation. “Ours is the most wasteful nation on earth,” he told Americans in 1977. In 1979, Carter delivered what became known as his “malaise” speech to the nation, although he never used that word.”After listening to the American people I have been reminded again that all the legislation in the world can’t fix what’s wrong with America,” he said in his televised address.”The threat is nearly invisible in ordinary ways. It is a crisis of confidence. It is a crisis that strikes at the very heart and soul and spirit of our national will. The erosion of our confidence in the future is threatening to destroy the social and the political fabric of America.”As president, the strait-laced Carter was embarrassed by the behavior of his hard-drinking younger brother, Billy Carter, who had boasted: “I got a red neck, white socks, and Blue Ribbon beer.” ‘THERE YOU GO AGAIN’Jimmy Carter withstood a challenge from Massachusetts Senator Edward Kennedy for the 1980 Democratic presidential nomination but was politically diminished heading into his general election battle against a vigorous Republican adversary.Reagan, the conservative who projected an image of strength, kept Carter off balance during their debates before the November 1980 election.Reagan dismissively told Carter, “There you go again,” when the Republican challenger felt the president had misrepresented Reagan’s views during one debate.Carter lost the 1980 election to Reagan, who won 44 of the 50 states and amassed an Electoral College landslide.James Earl Carter Jr. was born on Oct. 1, 1924, in Plains, Georgia, one of four children of a farmer and shopkeeper. He graduated from the U.S. Naval Academy in 1946, served in the nuclear submarine program and left to manage the family peanut farming business. He married his wife, Rosalynn, in 1946, a union he called “the most important thing in my life.” They had three sons and a daughter.Carter became a millionaire, a Georgia state legislator and Georgia’s governor from 1971 to 1975. He mounted an underdog bid for the 1976 Democratic presidential nomination, and out-hustled his rivals for the right to face Ford in the general election.With Walter Mondale as his vice presidential running mate, Carter was given a boost by a major Ford gaffe during one of their debates. Ford said that “there is no Soviet domination of Eastern Europe and there never will be under a Ford administration,” despite decades of just such domination.Carter edged Ford in the election, even though Ford actually won more states – 27 to Carter’s 23. Not all of Carter’s post-presidential work was appreciated. Former President George W. Bush and his father, former President George H.W. Bush, both Republicans, were said to have been displeased by Carter’s freelance diplomacy in Iraq and elsewhere.In 2004, Carter called the Iraq war launched in 2003 by the younger Bush one of the most “gross and damaging mistakes our nation ever made.” He called George W. Bush’s administration “the worst in history” and said Vice President Dick Cheney was “a disaster for our country.”In 2019, Carter questioned Republican Donald Trump’s legitimacy as president, saying “he was put into office because the Russians interfered on his behalf.” Trump responded by calling Carter “a terrible president.” Carter also made trips to communist North Korea. A 1994 visit defused a nuclear crisis, as President Kim Il Sung agreed to freeze his nuclear program in exchange for resumed dialogue with the United States. That led to a deal in which North Korea, in return for aid, promised not to restart its nuclear reactor or reprocess the plant’s spent fuel.But Carter irked Democratic President Bill Clinton’s administration by announcing the deal with North Korea’s leader without first checking with Washington.In 2010, Carter won the release of an American sentenced to eight years hard labor for illegally entering North Korea.Carter wrote more than two dozen books, ranging from a presidential memoir to a children’s book and poetry, as well as works about religious faith and diplomacy. His book “Faith: A Journey for All,” was published in 2018.(Reporting and writing by Will Dunham; Additional reporting by Jasper Ward; Editing by Bill Trott, Diane Craft and Lisa Shumaker) More

$75 per monthComplete digital access to quality FT journalism with expert analysis from industry leaders. Pay a year upfront and save 20%.What’s included Global news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print edition More