FirstFT: China warns of economic uncertainty

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The pace of China’s economic recovery rose modestly in the second quarter after signs of sluggishness in the world’s second-biggest economy had stoked expectations of greater policy support.

On a quarter-on-quarter basis, China’s gross domestic product grew 1.3 per cent in the three months to the end of June, up from a revised 0.4 per cent expansion in the previous quarter, the National Bureau of Statistics said on Thursday.

Economists had predicted growth of 1 to 1.2 per cent, according to polls by Bloomberg and Reuters. Second quarter GDP was 7.9 per cent higher than a year earlier, compared with year-on-year growth of 18.3 per cent in the first quarter. The high growth in the first quarter reflected the halt in economic activity in early 2020 after the Covid-19 pandemic erupted in central China and forced the government to impose a nationwide lockdown.

The NBS data release comes at a tense juncture for China’s economic planners as they try to balance financial stability with growth.

Five more stories in the news

1. Morgan Stanley trading dip offset by deals and wealth unit The Wall Street bank became the latest US lender to report that higher fees from investment banking had helped to pick up some of the slack from a slowdown in trading as it posted an increase in revenues and profits for the second quarter.

• More banking news: Wells Fargo, Citigroup and JPMorgan together closed more than 250 branches in the first half of the year, as US banks bet that much of the foot traffic that went digital during lockdowns will never return.

2. US regulator under fire for delays to delisting Chinese stocks Pressure is building on the US Securities and Exchange Commission to finalise regulations to de-list Chinese companies that fail to comply with American auditing rules, after lawmakers discovered the agency might not begin enforcement until 2025 at the earliest.

3. Israel’s Candiru sold states spyware The cyber warfare group weaponised vulnerabilities in Microsoft and Google products, allowing governments to hack more than 100 journalists, activists and political dissidents globally, new research has found.

4. Democrats eye carbon border tax US lawmakers are drawing up plans for a tax on imports from carbon-polluting countries to help pay for a $3.5tn package in new government spending on everything from universal childcare to an expansion of public healthcare benefits.

• Climate policy around the world: The US carbon border tax plan follows the EU’s bid to move towards zero emissions — the importance of which was underscored as Germany reels from deadly flooding linked to climate change.

5. South Africans reel from riots In the past few days, South Africa has come closer to social breakdown than at any point since the end of apartheid almost three decades ago. Rioting, triggered by last week’s arrest of former president Jacob Zuma, has left more than 70 dead and devastated Africa’s most industrialised economy.

Coronavirus digest

• Carmakers can expect a sharp upturn in chip supplies in the coming weeks, Taiwan Semiconductor Manufacturing Company said, signalling that a global shortage may have moved past its most crippling stage.

• Malaysia reported 13,215 new Covid-19 cases yesterday, hitting a new record for the third day in a row as the Delta variant fuels the disease’s spread.

• Covid-19 has led to falls in childhood vaccinations, the WHO has warned.

• As the UK and other countries face a new wave of Covid infections, scientists are racing to find out what causes long Covid. (FT, Straits Times)

Follow the latest with our coronavirus live blog and sign up for our Coronavirus Business Update newsletter for more Covid-19 news.

The day ahead

Bank of Japan’s monetary policy decision Japan’s central bank is expected to keep its monetary policy unchanged today, and will turn its attention to fresh efforts to combat climate change. (Bloomberg)

Unesco World Heritage Committee annual session Unesco World Heritage Committee gathers in Fuzhou, China, today to consider requests for additions to the World Heritage list.

Zomato IPO subscription period closes Zomato’s offer, which closes today, includes a fresh share issue worth Rs90bn ($1.2bn), priced at Rs72-Rs76 per share. As one of India’s most high-profile tech, the Indian food delivery group is set to lead a wave of tech IPOs in the country this year.

What else we’re reading

A private members’ club throws open its doors to the public Twenty-six years and more than 119,000 members after Soho House first launched, the company has 30 locations in 12 countries and secured a valuation of $2.8bn on Wednesday — without ever making a profit. The company hopes the $420m it raised through Thursday’s initial public offering will allow it to pay down debt and continue a breakneck expansion.

A transatlantic inflation surge The quickening pace of price growth has revived economists’ concerns about the risk of overheating, piling pressure on policymakers to consider a faster withdrawal of their unprecedented pandemic-era stimulus policies. Our economics teams in the US and Europe explain what’s driving the price increases.

• Plus, my colleague Robert Armstrong chews over the latest comments from Jay Powell, Federal Reserve chair, in the latest edition of his Unhedged newsletter. Sign up here.

BJP turns to coercion to limit India’s population growth India has made strides in promoting smaller families as access to education expanded and rapid growth lifted millions out of poverty. But experts say Uttar Pradesh’s plan to cut benefits to those with more than two children will hurt the country’s poorest.

What Utoya massacre survivors know 10 years on “22 Juli” has become as infamous as 9/11 is in the US. Because of the tight-knit nature of Norway, one newspaper estimated as many as one in four Norwegians knew somebody affected. Here’s how the attacks, Norway’s deadliest violence since the second world war, changed their lives.

The former plastic surgeon behind ‘stablecoin’ Tether As the world’s largest cryptocurrency pegged to other assets, Tether is a lubricant for investors moving in and out of more volatile crypto money — but it is also deeply controversial. At its centre is a man named Giancarlo Devasini.

Beauty

Five eco sunscreens How do you curb your plastic use? Take sunscreen — 72 per cent of which contains microplastics. And that’s not including the packaging. Here’s how to soak up the sun — without a hint of plastic.