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To start off, we're looking into:
The end of China’s property crisis?
Chinese real estate has been struggling for a while now – hitting market confidence and weighing on the world's second-largest economy.
On Friday, Chinese regulators issued a 16-point plan to promote the "stable and healthy development" of the property sector, according to people familiar with the matter. It's the biggest effort the government has made so far to ease the property market crisis.
So, what's in the rescue plan? Some key measures include allowing banks more leeway in extending loans to developers, reducing the down payment size and cutting mortgage rates for homeowners to support property sales.
Hong Kong anthem mixup
During the Hong Kong pro-democracy protests in 2019, a song called “Glory to Hong Kong” was the unofficial anthem of the protesters. But, under the current national security law, the song is taboo for its lyrics and association with the protests. In 2020, the local government also passed a law banning insults to the Chinese national anthem, “March of the Volunteers.”
On Sunday, the Hong Kong Rugby Sevens men’s team beat South Korea in the final of the second leg of the Asian Rugby Sevens Series in South Korea. But, a clip on social media showed the Hong Kong team standing before the final while an instrumental version of “Glory to Hong Kong” played instead of the national anthem. The correct song was later played during the prize ceremony. In a statement, Asia Rugby said it “deeply regrets” the incident and that a junior staff member made a mistake by downloading the wrong song.
Biden and Xi meet in Bali
You could say that the relationship between the US and China has been better than it is now. With an ongoing trade conflict, disagreement over Taiwan’s sovereignty and human rights divisions, it’s been difficult for the two countries to find common ground.
On Monday, US President Biden and China’s President Xi met during the G20 summit in Indonesia. Speaking for three hours, the two were able to discuss some of their clashing stances.
On Taiwan, Biden reassured Xi that the US supports both sides sticking to the status quo. And, Biden shared concerns that China would be unable to control North Korea from nuclear testing and military action. Both Xi and Biden are interested in cooperating for international climate negotiations, which is big in the fight against global warming.
To end, we'll look into:
Breaking down the 2022 G20 summit
The Group of Twenty, aka the G20, is a coalition of leaders of the world's largest economies. This bloc meets once a year to discuss important economic developments and issues. The G20 is a relatively new body, only formed in 1999. Its annual summit is even newer, with its first meeting held in 2008. In fact, one of its major accomplishments was its response to the 2008 financial crisis.
In recent years, though, the G20 has kind of declined in effectiveness. The bloc has been criticized for not responding very strongly to the pandemic. More generally, the group has continued to become divided as high and low-income countries have separate interests and views on major issues.
"If the group cannot come together and function at this time of real economic hardship for the advanced economies, emerging markets, low-income countries, then it calls fundamentally into question the effectiveness of the group. So, that's the challenge for the G20 to prove that it's still fit for purpose coming out of these meetings," said Josh Lipsky, senior director of the Atlantic Council's GeoEconomics Center.
Kicking off Tuesday, the summit is themed "recover together, recover stronger." Its official priorities this year are health, sustainable energy and digital transformation. Unfortunately, the summit may be dominated by the ongoing war in Ukraine and the economic chaos that's followed. Some reports have called the it "possibly the most stressful G20 ever." Putin isn't going to attend, but US President Biden is there and has already held productive talks with Chinese President Xi about US-China relations.
Indonesian President Joko Widodo is clearly trying to keep things together over the war. Widodo (also called Jokowi) is the first Asian leader to visit both Russia and Ukraine since the war began. "The G20 is not meant to be a political forum," he said. "It's meant to be about economics and development." But, he still invited President Zelenskiy to join the summit, even though Ukraine is not a member of G20. He's expected to join online.
In other news ...
📉Stocks: MSCI’s global gauge of stocks is down 0.01% to 2653.76 at the time of writing.
- Dow Jones is down 0.63% to 33,536.70.
- Nasdaq Composite is down 1.12% to 11,196.22.
- S&P 500 is down 0.89% to 3,957.25.
- Hang Seng Index is up 1.70% to 17,619.71.
🧠Some quick factors to bear in mind:
- In the US, stocks ended lower on Monday in choppy trade, and US bond yields rose as investors digested the Fed officials' comments to try and determine the central bank's plans for future rate hikes. Equities rallied last week after US consumer inflation data indicated inflation had slowed down, meaning the Fed might slow its tightening policy.
- The US producer price index will be released on Tuesday, offering another glimpse at how inflation is doing and some Fed officials are scheduled to speak this week.
- In Hong Kong, stocks rebounded as the market cheered China's policy shift on the property market with a 16-point rescue plan. Chinese property stocks and bonds soared on Monday.
- Hang Seng China Enterprise Index is now up 21% from its recent low on October 31.
- China's biggest property developer Country Garden jumped 45.5% to hit an over three-month high. Dexin China, a Hangzhou-based developer, rallied by 151%. And Logan Group, KWG Group, Agile Group and R&F Properties all rose more than 30%.
👄Some comments and chatter:
- "At the end of the day, the rebound of home sales is still needed for an ultimate industry comeback," said James Wong, portfolio manager at GaoTeng Global Asset Management.
- "The bad news is that in an economic moment that remains so uncertain, the data is more likely than not to be messy and contradictory in the months ahead. The pace of decline will be uneven. Moreover, there's still a long way to go to get to the Fed's target of 2% average inflation. That's why Fed governors have been lining up to talk down any market euphoria that a real pivot is in sight," said Christopher Smart, chief global strategist at Barings and head of the Barings Investment Institute.
🛢Oil: Oil prices settled US$3 lower on Monday as it was dragged down by a stronger dollar and China's surging COVID cases. US crude fell 3.47% to US$85.87, and Brent fell 3% to US$93.14 per barrel.
👛Bitcoin: At the time of writing, Bitcoin is down 0.32% to US$16,537.90.
👩⚖️Iran death sentence: Iran's Revolutionary Court just issued its first known death sentence to someone tied to recent anti-government protests. This person reportedly set a government building on fire and was sentenced for "disturbing public order and comfort, community and colluding to commit a crime against national security." Jail terms between five to 10 years have been handed to five other people, according to the ruling.
🗺Zelenskiy visits recaptured Kherson: Ukrainian President Zelenskiy visited the recently recaptured city of Kherson. While there, he vowed to reclaim control of all Russian-occupied Ukrainian territory. Kherson is the Ukrainian troop's biggest achievement so far.
📢Thousands protest in Mexico: On Sunday, tens of thousands gathered in Mexico City to protest President Andrés Manuel López Obrador's plan to transform electoral authority. This is the largest demonstration against Obrador while he's been in office. The plan includes removing state-level electoral offices and cutting public financing of political parties.
💪US, South Korea and Japan vow unified response: The leaders of Japan, South Korea and the US pledged a unified, coordinated response to North Korea's threatening military programs. All three met at the East Asia Summit in Cambodia.
🤝Germany and China trade: Germany is trying to keep economic ties with China but is also looking to be cautious in any future economic moves, the country's Economy Minister and Vice Chancellor Robert Habeck claim. He pressed that Chinese companies investing in Germany and vice versa is fine, but the war in Ukraine has shown that reliable partners can turn on one another at any moment.
🍏Apple antitrust battle continues: Apple is going to an appeals court against Fortnite, dealing with an antitrust battle over whether the iPhone's app store illegally starves out the competition. This dispute could continue to last years, some say, potentially until 2025.
📦Amazon layoffs: Amazon shares closed down 2% amid swirling reports that the company plans to layoff around 10,000 employees.
😷New COVID rules in China: On Monday, several Chinese cities started to cut routine COVID testing as China itself eased some COVID safety measures. This is a relief to some (especially businesses) and worrying to others as cases continue to rise all over the country.
💳Bezos turns a new leaf: Amazon founder and CEO Jeff Bezos announced plans to give away most of his US$124 billion net worth before he dies. That money will go toward fighting climate change and supporting social and political unification.
🌍8 billion humans: On Tuesday, the UN will certify that there are officially 8 billion people on Earth.
🧔Longest beard chain: A new world record was set for the longest "beard chain" in Wyoming on Friday. Participants met to stand side-by-side and clip their beards together to create a chain of sorts that reached 150 feet long. Previously, the Guinness World Record was 62 feet, 6 inches (over 1,900 cm), set in Germany in 2007.