Headlines

Chinese consumer spending is buckling under the country’s dual campaigns against rising property prices and Covid-19 outbreaks, flashing a warning for global companies that have pinned their hopes on a more free-spending Chinese customer, the Wall Street Journal reported. Retail sales unexpectedly dropped last month and are expected to continue to struggle as Chinese authorities launch wide-ranging lockdowns to contain the latest fastest-spreading Covid outbreaks, and as easing measures do little to reverse a worsening property market meltdown.
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The rejection of grinding factory work by Chinese in their 20s and 30s is contributing to a deepening labour shortage that is frustrating manufacturers in China, which produces a third of the goods consumed globally, Reuters reported. Factory bosses say they would produce more, and faster, with younger blood replacing their ageing workforce. But offering the higher wages and better working conditions that younger Chinese want would risk eroding their competitive advantage.
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Western countries must be careful not to create new dependencies on China as they are weaning themselves off Russian energy supplies amid Moscow's war on Kyiv, NATO chief Jens Stoltenberg warned on Monday, Reuters reported. "We see growing Chinese efforts to control our critical infrastructure, supply chains and key industrial sectors," he said on a visit to Spain. Stoltenberg urged allies to increase the resilience of their societies and infrastructure. "Chinese rare earth minerals are present everywhere, including in our phones, our cars, and our military equipment," he said.
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European traders are rushing to fill tanks in the region with Russian diesel before an EU ban begins in February, as alternative sources remain limited, Reuters reported. The European Union will ban Russian oil product imports, on which it relies heavily for its diesel, by Feb. 5. That will follow a ban on Russian crude taking effect in December. Russian diesel loadings destined for the Amsterdam-Rotterdam-Antwerp (ARA) storage region rose to 215,000 bpd from Nov. 1 to Nov. 12, up by 126% from October, Pamela Munger, senior market analyst at energy analytics firm Vortexa, said.
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British Prime Minister Rishi Sunak pushed back on Monday against calls from companies to improve trade ties with the European Union and liberalise immigration to help boost growth, saying Brexit had already benefited the country, Reuters reported. Sunak told business leaders at a Confederation of British Industry (CBI) conference he was "unequivocal" that Britain should pursue its own agenda on regulation and migration.
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Greece's economy should grow by 1.8% next year, at a slower pace than initially expected, as soaring energy costs and higher inflation are seen hurting tourism and curbing domestic demand, the government's 2023 final budget projected on Monday, Reuters reported. Next year's growth estimate was downwardly revised from the draft budget submitted to parliament in October. Authorities expect economic output to increase by 5.6% in 2022, better than forecast in the draft budget due to stronger tourism revenues.
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The Bank of Israel is still in the process of front-loading interest rates and will likely raise rates to above 3.5%, Deputy Governor Andrew Abir said on Monday after a half-point rate increase to 2.75%, Reuters reported. Abir told Reuters that the central bank preferred "to err on the side of making sure we get inflation down" with its monetary policy. That means, he said, that the benchmark rate would likely go above the bank's own economists' forecast of 3.5%. Read more.
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More sovereign defaults are "probable" next year among small emerging market countries, ratings agency Fitch said in its 2023 outlook on Monday, citing a likelihood of sudden jumps in borrowing costs, loss of market access and urgent funding needs, Reuters reported. Meanwhile the Group of 20 leading economies' debt restructuring process, the Common Framework, which is underway in Zambia and Ethiopia and has concluded in Chad, has proven ineffective at faciliating restructurings and is unlikely to improve next year, the ratings agency added.
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The board of a Swiss-based trust fund managing some $3.5 billion in frozen assets seized after the Taliban took power last year is meeting in Geneva for the first time on Monday, a Swiss government spokesperson confirmed, Reuters reported. The frozen central bank reserves were recently transferred from Washington into the 'Fund for the Afghan People' where U.S. officials say it will be shielded from the Taliban. The latter has condemned the transfer, calling it a violation of international norms. The agenda of the meeting is not yet public.
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