Economy

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.An Italian tomato sauce magnate has urged Brussels to protect farmers from the “unfair” competition posed by cheap paste made in China’s Xinjiang region and restore the “dignity” of Italy’s staple red fruit.Francesco Mutti, chief executive of the eponymous maker of ingredients including passata, pulp and canned tomatoes, said an EU ban or high import tariffs on the Chinese products were needed to safeguard Italian farmers. In 2021, the US banned tomato paste imports from Xinjiang citing forced labour concerns, but Brussels has not followed suit.“We should stop the import of tomato paste from China or add a 60 per cent tax on it so that its cost will not be so different from Italian [products],” Mutti told the Financial Times at the headquarters of his 125-year-old family business, which had revenues of €665mn last year.He warned that Italy’s tomato industry risked being undercut by tomato paste made by Chinese state enterprises in Xinjiang, where the UN human rights commissioner has documented widespread rights abuses against the local Muslim Uyghur minority — including forced labour. Beijing has denied the allegations.Francesco Mutti: ‘We have to protect [our farmers] from unfair competition’ More

BEIJING (Reuters) – Apple (NASDAQ:AAPL)’s iPhone sales in China in the third quarter of 2024 fell 0.3%, while Huawei surged 42%, data from research firm IDC showed on Friday.Overall, smartphone shipments rose 3.2% to 68.78 million units in China. More

WASHINGTON (Reuters) -Japanese Finance Minister Katsunobu Kato and U.S. Treasury Secretary Janet Yellen discussed recent exchange-rate moves, among other topics, in a bilateral meeting held on Thursday, a senior Japanese finance ministry official said.”The two sides discussed exchange-rate moves, and confirmed the need for the United States and Japan to communicate closely,” Atsushi Mimura, Japan’s vice finance minister for international affairs, told reporters.A weak yen has become a source of concern for Japanese policymakers as it hurts households and retailers by pushing up the cost of raw material imports.”We have recently seen one-sided, sharp moves in currency rates,” said Mimura, who oversees Japan’s currency policy.”It’s desirable for exchange rates to move in a way that reflects fundamentals. We will be increasingly vigilant to currency moves, including those driven by speculation,” he said in Washington on the sidelines of the G20 and IMF meetings.The dollar climbed above 153 yen for the first time in nearly three months on Wednesday as receding expectations of big interest rate cuts by the Federal Reserve drew renewed attention to the wide rate divergence between U.S. and Japan.The dollar stood at 151.83 yen on Thursday. More

Economic growth is likely to be still higher than the potential growth rate, Minister Choi Sang-mok said in a meeting with reporters in Washington D.C., according to the report.International organisations, such as the International Monetary Fund (IMF) and the Organisation for Economic Co-operation and Development (OECD), estimate South Korea’s annual potential growth rate to be around 2%. South Korea’s economy barely grew in the third quarter as consumer spending showed signs of recovery but exports declined, data showed on Thursday. More

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Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Companies that import critical minerals into Britain for use by manufacturers will be able to obtain financing for the first time from UK Export Finance, Rachel Reeves will announce in the Budget on Wednesday. The chancellor will say that the measure is needed to help Britain in the global race to secure materials such as lithium, graphite and cobalt that are key to making products ranging from phones to electric vehicles. The Treasury said this would be particularly beneficial for manufacturers in industries such as defence, aerospace and making batteries for electric vehicles. Carmakers Nissan and Jaguar Land Rover-owner Tata are building battery factories in the UK, which experts say is one important step towards growing a domestic critical minerals supply chain.The goal of shifting energy systems away from fossil fuels and towards renewable energy sources such as solar and wind will require a huge increase in the use of critical minerals. The UK is part of a coalition of 14 nations and the European Commission called the “Minerals Security Partnership”, which is trying to increase international collaboration and co-financing for the sector. The US and China have been embroiled in a trade war in which Washington has imposed export curbs on semiconductors and other advanced technologies, while Beijing has retaliated by restricting exports of some minerals. The tension has also spilled over into the EU, which this month said it would impose tariffs on imports of Chinese electric vehicles following months of ratcheting tensions between Brussels and Beijing.Chinese companies control 90 per cent of the world’s processing capacity for rare earths and more than half the processing capacity for nickel, lithium and cobalt.Jeff Townsend, founder of the Critical Minerals Association, said it was crucial that the UK develop a domestic critical minerals industry to secure long-term supply, a push that the government would need to support. “There might be projects that don’t work [commercially without government support] but where the strategic value to having your own supply chain far outweighs that,” he said. “You’ve got to build everything all at once,” from mines to processing and refining and battery manufacturing, he said. “We’re in a global race.”The government said the change would make it easier for UKEF, the UK’s export credit agency, to secure finance contracts for critical mineral suppliers in countries such as Australia with large mineral deposits. “This addresses a gap in the UK’s existing financial support for manufacturers looking to secure these key minerals, who previously would not have been able to access government support in order to do so,” a spokesperson said. They added that the decision strengthened “UKEF’s world-leading export finance support”, bringing the country in line with competitors. It comes on the back of the government’s launch of its modern industrial strategy, which will drive “long-term growth that is supportive of net zero, regional growth and economic resilience”, they said. More

They also agreed on the need to speed up reform of the World Trade Organization to achieve a “faster, more agile and effective,” conflict resolution system, Brazil’s Vice President and Trade Minister Geraldo Alckmin told reporters.The proposals agreed by G20 trade ministers meeting in Brasilia will be proposed to the group’s leaders at the annual summit hosted by Brazil in November in Rio de Janeiro and be annexed to their joint statement.It is the first time the G20 has addressed the issue of increased inclusion of women in international trade, Alckmin said, adding that Brazilian President Luiz Inacio Lula da Silva had insisted on it becoming a G20 principle.Brazil, which will host the COP30 climate talks next year, also gave priority to the need to fight climate change and proposed that the G20 should call for trade and investments that encourage environmentally sustainable economic development.Lula has also made reform of global governance institutions a priority and the ministers agreed to support WTO reform and the strengthening of a multilateral trading system, a Brazilian government statement said.”We stressed the importance of a rulesbased, non-discriminatory, fair, open, inclusive, equitable, sustainable and transparent multilateral trading system, with the WTO at its core. We will work to ensure a level playing field and fair competition to foster a favorable trade and investment environment for all,” the statement said.The one-day meeting avoided divisive issues, though members expressed their views on Russia and Ukraine and the situation in Gaza, with some wanting them discussed in the G20 and others saying it was not the right forum, the Brazilian statement said.”There were disagreements in drafting the texts and things were dropped, but at the end there was consensus on everything, including the proposal on women in international trade,” said an Asian diplomat who attended the meeting. More

TOKYO (Reuters) -Japan’s political parties are promising to raise the minimum wage, a step that may win votes in Sunday’s general election but could squeeze the small and midsize firms that form the backbone of the world’s fourth-largest economy.The wage-hike pledges particularly threaten small businesses, which account for two-thirds of jobs and over half of economic output, as they are already struggling to manage rising costs.Prime Minister Shigeru Ishiba’s Liberal Democratic Party – which polls show may struggle to retain its parliamentary majority – has pledged to raise the average minimum wage by 42% to 1,500 yen ($9.80) per hour by the end of the decade. The LDP had previously aimed to reach that goal by the mid-2030s.The main opposition Constitutional Democratic Party of Japan and other parties have pledged to raise the minimum wage at least that high, without specifying a time frame.The politicians have given scant details about how they would help firms offset the cost of a higher minimum wage, prompting Japan’s main business federation, Keidanren, to sound the alarm this week.”We must aim for challenging goals as a whole, but I feel uneasy about pushing something that is utterly impossible,” lobby head Masakazu Tokura told a press conference, adding that the pace of wage hikes needed to hit the LDP’s goal may be hard for many small companies to follow.Inflation, a top election issue, is pinching both households and companies, especially smaller firms, with bankruptcies forecast to hit an 11-year high this year due to a combination of high prices and interest rates, and a labour shortage.To help lower-income workers, major companies this year offered raises of 5.1%, the most in three decades, and the government decided to raise the hourly minimum wage by about 5% to 1,055 yen ($6.90).”It’s been a long time coming, but it is good to see that political parties are converging on minimum wages,” said Koichi Kurosawa, secretary general of National Confederation of Trade Unions. The union has called for an immediate hike to a 1,500 yen minimum wage.Nearly half the workforce, or some 28 million people, earn less than 1,500 yen an hour, so the labour force would benefit from the higher minimum wage, according to the Japan Research Institute of Labour Movement.The average annual salary in Japan is $39,000, well below the $49,000 average across OECD developed economies. Bankruptcies jumped 18.6% in the six months to September from the same period last year to 4,990 cases, with a record number caused by inflation, according to credit research firm Teikoku Databank. The LDP and other parties have said they will help companies offset costs with steps such as tax breaks or subsidies but have offered few details.”It’s already hard to cope with minimum wages of 1,000 yen,” said Takeshi Nishimura, a manager at Big Yosan supermarket in Yokohama. “If it rises to 1,500 yen, that would make life even tougher for us small firms.”($1 = 152.4100 yen) More