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BERLIN, May 31 (Reuters) - Inflation eased in five economically important German states in the month of May, preliminary data showed on Wednesday, suggesting that national price rises are set to slow to their lowest in more than a year. The inflation rate in North-Rhine Westphalia fell to 5.7%, while in Bavaria it slowed to 6.1%, in Brandenburg to 6.3%, in Hesse to 5.9% and in Baden-Wuerttemberg to 6.6%. In April, inflation rates for those five states, out of 16 in Germany, had been between 6.8% and 7.6%. National inflation data will be published at 1200 GMT, with economists surveyed by Reuters forecasting a 6.5% year-on-year rise. Furthermore, the base effects from high energy and food prices in May 2022 will disappear from the year-on-year comparison.

Persons: Luis de Guindos, Maria Martinez, Balazs Koranyi, Matthias Williams, Andrew Cawthorne Organizations: Reuters, European Central Bank, ECB, Thomson Locations: BERLIN, Rhine Westphalia, Bavaria, Brandenburg, Hesse, Baden, Wuerttemberg, Germany, Dutch

☆ China thesis lurches from one lazy extreme to next
▼ + stars: | 2023-05-25 | by ( Pete Sweeney | Thomson Reuters | Asia Economics Editor Pete Sweeney Joined Reuters Breakingviews In Hong Kong In September Previously He Served As Reuters' Chief Correspondent For China Economy | ) www.reuters.com time to read: +4 min

HONG KONG, May 25 (Reuters Breakingviews) - Foreigners that once piled into offshore Chinese equities are evacuating as confidence in the country’s economic recovery sags. The China trade has always been unbalanced towards overseas-listed Chinese consumer and internet firms, and foreigners preferred building factories, acquiring large stakes in companies and the like over portfolio trading. Even at a peak in 2021, they held barely over 8 trillion yuan ($1.1 trillion) of yuan-denominated Chinese stocks and bonds, per official data, compared to $27 trillion of American equivalents. Now the former figure has fallen below 7 trillion yuan. Major Chinese indexes in Hong Kong and New York have also slid, with the Nasdaq Golden Dragon China Index having lost around 15% in the last three months.

☆ G7 says “de-risking”, China hears “containment”
▼ + stars: | 2023-05-22 | by ( Pete Sweeney | Thomson Reuters | Asia Economics Editor Pete Sweeney Joined Reuters Breakingviews In Hong Kong In September Previously He Served As Reuters' Chief Correspondent For China Economy | ) www.reuters.com time to read: +4 min

Irked by the G7 statements, Xi’s government has already called Japan’s ambassador on the carpet. To be sure, China, with a $90 billion monthly trade surplus hovering near record highs, cannot easily retaliate against its opponents. But it is not in Xi’s, or Chinese companies’, interests to sit back and let the G7 “de-risk”, and that makes the euphemism more threatening than it sounds. China firmly opposes the G7 joint statement and has complained to summit organiser Japan, the Chinese foreign ministry said on the same day. The ministry said that the G7, disregarding China's concerns, had attacked it and interfered in its internal affairs, including Taiwan.

☆ Opinion: It’s no accident world leaders are revisiting this site of nuclear devastation
▼ + stars: | 2023-05-17 | by ( Opinion Paul Sracic | ) edition.cnn.com time to read: +6 min

CNN —It’s no accident that Japanese Prime Minister Fumio Kishida selected Hiroshima as the site for the 2023 G7 meeting. Paul Sracic Arne HoelSince World War II, Hiroshima has served as a powerful symbol of the catastrophic consequences of nuclear weapons. Not surprisingly, 78 years later, many Japanese are still haunted by the horrors of nuclear war. The threat of nuclear weapons is one Kishida has both written and spoken about before. The proliferation of nuclear weapons to North Korea, not to mention the ongoing nuclear program in Iran, alongside the ongoing concern that Russia might use nuclear weapons in Ukraine serve as a reminder of the urgent need for global cooperation to mitigate the risk of nuclear war.

☆ ValueAct loses its temper in 7-Eleven
▼ + stars: | 2023-05-10 | by ( Pete Sweeney | Thomson Reuters | Asia Economics Editor Pete Sweeney Joined Reuters Breakingviews In Hong Kong In September Previously He Served As Reuters' Chief Correspondent For China Economy | ) www.reuters.com time to read: +4 min

HONG KONG, May 10 (Reuters Breakingviews) - ValueAct Capital’s chief Mason Morfit prefers to chide undervalued conglomerates behind closed doors. In its latest 151-page presentation, ValueAct took its case directly to shareholders, the second time it has seen fit to do so in its history. That highlights the U.S. fund’s frustration from its two-year long campaign calling for Seven & i to spin off its 7-Eleven convenience stores, among other things. That implies a standalone 7-Eleven could be worth 10 trillion yen, roughly a quarter more than its parent today. He may have a point, and in truth ValueAct has far more experience turning around technology companies than food retailers.

BERLIN, May 8 (Reuters) - German industrial production fell more than expected in March, partly due to a weak performance by the automotive sector, spurring again recession fears in Europe's largest economy. Production decreased by 3.4% on the previous month following a slightly revised increase of 2.1% in February, the federal statistical office said on Monday. "After a buoyant performance by industrial production at the beginning of the year, there was an unexpectedly sharp decline in March," the economics ministry said. In the first quarter, production was 2.5% higher than in the last quarter of 2022, according to the statistics office. GDP was unchanged quarter on quarter in adjusted terms in the first quarter, following a 0.5% contraction in the fourth quarter of 2022.

☆ Beijing expects foreigners to trust, not verify
▼ + stars: | 2023-05-05 | by ( Pete Sweeney | Thomson Reuters | Asia Economics Editor Pete Sweeney Joined Reuters Breakingviews In Hong Kong In September Previously He Served As Reuters' Chief Correspondent For China Economy | ) www.reuters.com time to read: +4 min

In recent months, Chinese investigators have detained employees of U.S. due-diligence firm Mintz Group, visited consultancy Bain & Company and suspended auditor Deloitte’s Beijing operations for three months. Security watchdogs have restricted overseas access to financial data providers like Wind Information, as well as academic database China National Knowledge Infrastructure. Local banks loaned 3.9 trillion yuan ($560 billion) in March alone while corporations issued 328 billion yuan of bonds. Besides Wind, other Chinese data providers including company databases Qichacha and TianYanCha have stopped opening to offshore users, according to three of the sources. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

SummarySummary Law Firms Naomi Moore joins from Akin Gump to head DLA Piper's APAC restructuring practiceMoore will split her time between the firm's Hong Kong and Sydney officesMay 2 (Reuters) - Law firm DLA Piper has hired a partner from U.S.-founded rival Akin Gump Strauss Hauer & Feld in Hong Kong to serve as its new restructuring practice leader for the Asia Pacific region, the firm said Tuesday. Naomi Moore, who has been on sabbatical since she left Akin Gump in January, will divide her time between DLA Piper’s Sydney and Hong Kong offices, the firm said in a statement. In Hong Kong, Moore joins Trinh Hoang, DLA Piper’s only other restructuring-focused partner in the office, who joined the firm from Linklaters in October last year. Linklaters added a restructuring head in Hong Kong from Allen & Overy in October. An Akin Gump spokesperson wished Moore well on her new role.

"The German economy remained stuck in the mud at the start of 2023, only barely avoiding recession," Pantheon Macroeconomics' chief eurozone economist Claus Vistesen said. The German economy shrank by a revised 0.5% in the fourth quarter of 2022 compared with the previous three months, reviving fears of a technical recession, defined as two consecutive quarters of contraction. "A gradual recovery is underway, despite a persistently difficult environment," German Economy Minister Robert Habeck said in the presentation of the forecasts. "The recent renaissance in industrial production could very well carry the economy through the second quarter," ING's global head of macro Carsten Brzeski said. "However, we are afraid that looking into the second half of the year, the German economy will continue its flirtation with recession."

☆ Hong Kong’s dollar stress gets more fundamental
▼ + stars: | 2023-04-24 | by ( Pete Sweeney | Thomson Reuters | Asia Economics Editor Pete Sweeney Joined Reuters Breakingviews In Hong Kong In September Previously He Served As Reuters' Chief Correspondent For China Economy | ) www.reuters.com time to read: +4 min

HONG KONG, April 24 (Reuters Breakingviews) - Hong Kong’s currency peg to the greenback is stuck between a rock and a hard place. In the past 12 months, the de-facto central bank has stepped in to buy Hong Kong dollars from the market roughly 40 times. Some foreign financiers, including Pershing Square boss Bill Ackman, argue Hong Kong’s financial system can’t sustain the peg and question its rationale. But in the long run, demand for Hong Kong dollars depends on confidence in its economic strategy. Hong Kong’s peg is durable enough for now, but its future is in doubt nevertheless.

SL Naturenergie's predicament is common in the renewables sector where companies, from startups to medium sized and blue-chip firms, are competing for a limited pool of labour with appropriate skills. Currently it faces a shortage of around 216,000 skilled workers needed for the expansion of the solar and wind energy sectors, a study by German organisation KOFA, or the Competence Centre for securing skilled labour, showed. In many jobs in the renewable energy sector, pay is above average, he said, citing a renewable energy wage premium of more than 10% in construction and installation activities, as well as architectural and engineering services. Volker Quaschning, a professor of renewable energy systems at HTW university in Berlin, says a third of places on these courses at HTW are unfilled. Last month Germany also unveiled draft reforms on skills training accreditation and promoting immigration in a bid to plug labour shortages in the economy.

☆ China’s GDP beat looks a tad too reassuring
▼ + stars: | 2023-04-18 | by ( Pete Sweeney | Thomson Reuters | Asia Economics Editor Pete Sweeney Joined Reuters Breakingviews In Hong Kong In September Previously He Served As Reuters' Chief Correspondent For China Economy | ) www.reuters.com time to read: +3 min

The risk is the shopping recovery gets bifurcated between luxury purchases and basic needs, leaving out big-ticket middle-class items. Meanwhile, Chinese savers added another 10 trillion yuan ($1.4 trillion) to their household deposits in the first quarter, reinforcing concerns that they will keep hoarding instead of splurging. Bank loans hit an all-time high of 10.6 trillion yuan in the first quarter, yet that did not appear to translate into private investment in fixed assets, which is barely growing. In a speech in March, Cai Fang, a member of the central bank’s monetary policy committee, suggested transferring 4 trillion yuan directly to households to compensate for weak income growth. If the first quarter’s print turns out to be misleadingly rosy, China’s reopening boom could quiet down quickly.

☆ China reluctantly keeps sanctions powder dry
▼ + stars: | 2023-04-12 | by ( Pete Sweeney | Thomson Reuters | Asia Economics Editor Pete Sweeney Joined Reuters Breakingviews In Hong Kong In September Previously He Served As Reuters' Chief Correspondent For China Economy | ) www.reuters.com time to read: +4 min

Yet most trade measures Xi has taken so far are best seen as defensive tactics to protect market share from aspirant rivals in the West and India. The easiest option is picking on America’s $120-billion-plus of direct investment stock in China. Of course, that is no way for China to revive the decaying quantity and quality of the investment it receives. Chinese officials consistently say they welcome U.S. trade and investment and there is no reason to doubt them. The move comes after the United States implemented multiple restrictions on sales of chipmaking tools and components to China.

☆ Google giggles at China tech’s shrinking act
▼ + stars: | 2023-03-31 | by ( Pete Sweeney | Thomson Reuters | Asia Economics Editor Pete Sweeney Joined Reuters Breakingviews In Hong Kong In September Previously He Served As Reuters' Chief Correspondent For China Economy | ) www.reuters.com time to read: +3 min

HONG KONG, March 31 (Reuters Breakingviews) - As an $18 trillion economy home to 1.4 billion people, China is a natural font of statistical superlatives. The country’s internet giants, however, are dwarfed by American colossi like the $1.3 trillion Google owner Alphabet (GOOGL.O). Access to cheap capital helped founders like Alibaba’s Jack Ma quickly diversify and build sprawling empires with global ambitions. Meanwhile, the top eight U.S. tech names, led by Apple (AAPL.O), Microsoft (MSFT.O) and Alphabet, are worth $8 trillion today. The American tech giants already generate three times more revenue and nearly five times more free cash flow than their aspirant Chinese challengers, Refinitiv Eikon data shows.

☆ US corporates and China hug awkwardly in Beijing
▼ + stars: | 2023-03-27 | by ( Pete Sweeney | Thomson Reuters | Asia Economics Editor Pete Sweeney Joined Reuters Breakingviews In Hong Kong In September Previously He Served As Reuters' Chief Correspondent For China Economy | ) www.reuters.com time to read: +4 min

The final quarter saw a slight rebound, but American FDI into China has been slowing for years. Despite their suspicions of the U.S. government, Chinese officials don’t want American capitalists to stop investing in the country because their firms create jobs, bring technology and best practices. Anecdotal evidence suggests even in harmless industries like textiles and market research, decoupling is becoming the default American investment thesis. If China surprises by dramatically boosting internal demand, U.S. executives and their shareholders will be placated. Cook is in Beijing to attend the China Development Forum, a flagship investment conference organised by the government and held March 25-27.

☆ What would a federal expansion of deposit insurance look like?
▼ + stars: | 2023-03-22 | by ( Ramishah Maruf | ) edition.cnn.com time to read: +7 min

That’s the Federal Deposit Insurance Corporation’s standard limit, meaning any bank deposits up to that amount are protected by the independent government agency. But now there’s growing support for raising that insurance cap. A higher insurance cap doesn’t automatically mean banks will be subject to tighter regulations, Dollar noted, but there could be some call for it. The FDIC insurance limit has been raised seven times since 1950 — and $250,000 also isn’t a calculated number, Collins said. In 2008, the FDIC used the same system for temporary unlimited deposit insurance guarantee on certain accounts.

☆ Credit Suisse reinforces Japan’s offshore anxiety
▼ + stars: | 2023-03-21 | by ( Pete Sweeney | Thomson Reuters | Asia Economics Editor Pete Sweeney Joined Reuters Breakingviews In Hong Kong In September Previously He Served As Reuters' Chief Correspondent For China Economy | ) www.reuters.com time to read: +4 min

HONG KONG, March 21 (Reuters Breakingviews) - The crisis at Credit Suisse has traders wondering who’s next. Japanese lenders, with their staid depositor bases, look like unlikely targets for bank runs. Yet the rising cost of short-term dollar and euro credit, combined with extreme yen volatility, have made hedging much more expensive. Domestic commercial lenders alone held $600 billion of international debt securities at the end of 2022, and some look overexposed. Take Japan Post Bank (7182.T), a $32 billion institution whose parent is partly owned by the Ministry of Finance.

☆ Bad news salvo gives Bank of Japan some cover
▼ + stars: | 2023-03-16 | by ( Pete Sweeney | Thomson Reuters | Asia Economics Editor Pete Sweeney Joined Reuters Breakingviews In Hong Kong In September Previously He Served As Reuters' Chief Correspondent For China Economy | ) www.reuters.com time to read: +3 min

HONG KONG, March 16 (Reuters Breakingviews) - Incoming Bank of Japan (8301.T) Governor Kazuo Ueda can breathe a sigh of relief; things aren’t going very well. Ripples from the collapse of Silicon Valley Bank have shoved down sovereign bond yields, inadvertently driving off an attack by traders who believed global inflation made rate hikes unavoidable. This year, however, spiking energy costs have pushed the core consumer index excluding fresh food over 4%, double the BOJ’s target. Consumer price inflation including energy but excluding fresh food touched 4.2% in January, a 41-year high. Core consumer inflation has now exceeded the Bank of Japan's 2% target for nine straight months.

☆ China gives itself easy GDP homework
▼ + stars: | 2023-03-06 | by ( Pete Sweeney | Thomson Reuters | Asia Economics Editor Pete Sweeney Joined Reuters Breakingviews In Hong Kong In September Previously He Served As Reuters' Chief Correspondent For China Economy | ) www.reuters.com time to read: +4 min

HONG KONG, March 6 (Reuters Breakingviews) - China aims to grow GDP by “around 5%” in 2023, which might seem low given last year’s 3% marked the country’s weakest performance in decades. Chen Long of Plenum China notes that the annual work report, usually an important window into the economy and official priorities for the year ahead, dedicates only six pages to discussing the future, compared to 22 pages last year. That may be because Premier Li Keqiang, who gives the work report, is on his way out along with other reformers. By keeping goals conservative and methods vaguer than usual, the government makes it harder for newcomers to fail. The government is aiming for a 2023 budget deficit target of 3% of gross domestic product, according to the report, widening from a deficit goal of around 2.8% last year.

☆ Open-source software braces for trade war
▼ + stars: | 2023-02-27 | by ( Pete Sweeney | Thomson Reuters | Asia Economics Editor Pete Sweeney Joined Reuters Breakingviews In Hong Kong In September Previously He Served As Reuters' Chief Correspondent For China Economy | ) www.reuters.com time to read: +6 min

HONG KONG, Feb 27 (Reuters Breakingviews) - The open-source software movement has been an unprecedented driver of global innovation and productivity growth. As with most Chinese handset makers, founder Ren Zhengfei relied on Android’s open-source code to run his company’s smartphones. Beijing has reciprocated, per a Nikkei report, by instructing its own tech companies not to incorporate ChatGPT into their platforms - a rare example of a mutual firewall. Dividing the world into competing open-source camps would mark another reverse for free trade. Follow @petesweeneypro on TwitterCONTEXT NEWSRegulators have told major Chinese tech companies not to offer ChatGPT services, the Nikkei news service reported on Feb. 22 citing sources with direct knowledge, causing shares in Chinese companies building chatbots to fall.

☆ A typical home in Vail, Colorado, is over $1 million, leaving workers with few living options. 4 people take us inside their housing crisis as home prices in tourist towns across the country spike.
▼ + stars: | 2023-02-20 | by ( Robert Davis | ) www.businessinsider.com time to read: +12 min

Vail is among the most expensive Colorado housing markets, with a median home price over $1 million. Weibel's struggle to find affordable housing in Vail speaks to similar issues playing out in other ski towns like Jackson, Wyoming, and Park City, Utah. In her spare time, Weibel works part time as a babysitter, a summer-school tutor, and a ski instructor at Vail Resorts. Getty ImagesSam Stevens, 25, has seen firsthand how Vail's expensive housing market is straining the town's budget for important infrastructure projects. He eventually moved in with one of his friends in Eagle-Vail, about 8 miles west of the Vail Ski Resort.

☆ Bank of Japan’s new governor starts on back foot
▼ + stars: | 2023-02-14 | by ( Pete Sweeney | Thomson Reuters | Asia Economics Editor Pete Sweeney Joined Reuters Breakingviews In Hong Kong In September Previously He Served As Reuters' Chief Correspondent For China Economy | ) www.reuters.com time to read: +3 min

HONG KONG, Feb 14 (Reuters Breakingviews) - Academic Kazuo Ueda faces a rocky time as the new governor of the Bank of Japan (8301.T). He is stepping down just as his signature yield curve control (YCC) policy is becoming increasingly unsustainable as domestic inflation rises. The Nikkei news service reported that officials had approached Deputy Governor Masayoshi Amamiya and were rebuffed. It seems likely Ueda will have to modify or abandon YCC given how much damage it is doing to the bond market and the BOJ’s balance sheet. Follow @petesweeneypro on TwitterloadingCONTEXT NEWSJapan's government on Feb. 14 named academic Kazuo Ueda as its pick to become the next governor of the country’s central bank.

☆ Japan’s next central bank chief may rue promotion
▼ + stars: | 2023-02-13 | by ( Pete Sweeney | Thomson Reuters | Asia Economics Editor Pete Sweeney Joined Reuters Breakingviews In Hong Kong In September Previously He Served As Reuters' Chief Correspondent For China Economy | ) www.reuters.com time to read: +7 min

In fact, it has spent an average of 1.3 trillion yen per trading day since the band widened: nearly 50 trillion yen in total, per Refinitiv data, and still counting. The central bank already owns over half of Japan’s sovereign bonds and is sure to suffer large losses when their prices fall, which they eventually must. The central bank chief must also work to put the country’s vast stack of inert money back to work. Kuroda effectively put the central bank at the service of former Prime Minister Shinzo Abe’s “Abenomics” stimulus programme. Fumio Kishida, the current leader, is having popularity problems and will want the central bank to support his aggressive agenda, which includes hiking defence spending, promoting innovative startups and redistributing wealth.

☆ Rise in Canadian shareholder activism faces test next month with new rules in place
▼ + stars: | 2023-02-12 | by ( Maiya Keidan | ) www.reuters.com time to read: +4 min

The country has lagged the rising trend of activism seen globally, but that could be about to change, lawyers say. Some 53 Canadian companies faced activism campaigns in 2022, a 17.8% rise over the previous year, compared with a 10.6% rise in the U.S to 511, showed data from Insightia, a Diligent brand. Previously, shareholders could only vote 'for' a candidate or 'withhold' their vote, meaning a majority was not legally a necessity. While not enshrined in law, majority voting was often adopted by companies in their policy, prior to the change. And oil and mining companies could continue to be the sector that faces activism, say market participants.

☆ U.S.-China rewarming trade is half-full of hot air
▼ + stars: | 2023-02-03 | by ( Pete Sweeney | Thomson Reuters | Asia Economics Editor Pete Sweeney Joined Reuters Breakingviews In Hong Kong In September Previously He Served As Reuters' Chief Correspondent For China Economy | ) www.reuters.com time to read: +4 min

Enter a literal ball of hot air in the form of a Chinese spy balloon that the United States military is tracking in its home skies. The balloon’s brazen appearance augurs ill for Secretary of State Antony Blinken’s expected visit to Beijing next week. However, it is important to put the balloon in the context of Beijing’s habitual good cop, bad cop negotiating routine. In financial terms, Beijing still largely has its good-cop hat on. U.S. investors may fret about Chinese eyes in the sky, but in financial terms they have more to fear from the flaming gas jets in their own legislature.

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