Scott Bessent accuses China of trying to hurt world’s economy

Good morning and welcome again to FirstFT Asia. In right this moment’s e-newsletter:

• Bessent on Beijing’s export controls

• Israel imposes new limits on Gaza assist

• Bumper earnings for Wall Avenue banks

• Why aren’t Chinese language collectors paying for his or her artwork?

We begin within the US, the place Scott Bessent has accused China of making an attempt to harm the worldwide economic system in an exclusive interview with the Monetary Instances. The US Treasury secretary mentioned that Beijing’s export controls are “an indication of how weak their economic system is,” the FT’s Demetri Sevastopulo and James Politi report. Right here’s what it is advisable to know.

What Bessent is saying: The US Treasury secretary argued that China’s introduction of the controls — three weeks earlier than US President Donald Trump is anticipated to fulfill his Chinese language counterpart Xi Jinping in South Korea — mirrored issues in its personal economic system. “Perhaps there’s some Leninist enterprise mannequin the place hurting your clients is a good suggestion, however they’re the most important provider to the world,” Bessent mentioned. “In the event that they wish to decelerate the worldwide economic system, they are going to be damage essentially the most.”

“They’re in the midst of a recession/despair, and they’re making an attempt to export their method out of it,” he added. “The issue is that they’re exacerbating their standing on this planet.”

Why it issues: US officers had been greatly surprised final week by what they thought of China’s disproportionate transfer to limit important minerals provides, forward of the deliberate Trump-Xi assembly. Trump threatened on Friday to impose extra 100 per cent tariffs on China and cancel his deliberate assembly with Xi. The US president later walked again a few of his feedback and Bessent confirmed yesterday that the 2 leaders would nonetheless meet at Apec.

You can read our full interview with Bessent here.

• China targets US shipbuilding: China has added 5 US subsidiaries of South Korean shipbuilder Hanwha Ocean to its sanctions list, triggering international inventory market falls.

• Export threats: What are the real risks from China’s uncommon earths curbs? Hakyung Kim examines this within the newest version of Unhedged.

• Déjà vu: Edward Luce asks if the US president’s newest commerce brinkmanship is prone to lead to another climbdown.

Right here’s what else we’re preserving tabs on right this moment:

• Outcomes: Third quarter reporting season continues with Morgan Stanley and Financial institution of America. Right here’s a glance from yesterday’s busy day of bank result releases.

• Financial information: China releases its September CPI and PPI inflation charge information. Japan publishes its revised August industrial manufacturing and retail gross sales figures.

• Russia-Ukraine warfare: Nato defence ministers will meet in Brussels to debate the battle in Ukraine, chaired by Nato secretary-general Mark Rutte.

5 extra prime tales

1. Israeli troopers killed a number of Palestinians in northern Gaza, a day after Trump touted the top of the two-year warfare. Israeli authorities introduced they’ve imposed new limits on aid into Gaza, as properly. In a message to assist teams, Cogat mentioned it could permit solely 300 assist vehicles to enter the enclave on Wednesday — half the quantity agreed underneath the delicate ceasefire deal.

2. Russian authorities are opening a recent prison case towards one of many Kremlin’s most outstanding critics. Mikhail Khodorkovsky, the previous Yukos oil tycoon who was as soon as the nation’s richest man, is accused of plotting to overthrow the regime of Vladimir Putin. Twenty-two others, together with a former Russian prime minister and chess grandmaster, have additionally been accused of supporting Ukrainian units to seize power by force.

3. A unit of Madagascar’s navy went on nationwide radio to declare it had seized energy a day after President Andry Rajoelina fled to an unknown “safe location”. In what amounted to a coup d’état, Colonel Michael Randrianirina mentioned the navy would droop the structure and dissolve most main nationwide our bodies.

4. Jay Powell has signalled that he could possibly be able to help one other rate of interest minimize later this month. The Fed chair’s newest feedback counsel he’s turning into extra dovish on financial coverage, whilst many economists fear that the Trump administration’s tariff coverage will spur one other bout of inflation throughout the US economic system. Here’s everything else Powell told reporters on Tuesday.

• New IMF report: It might exaggerate a dismal financial backdrop, however there are valid reasons for policymakers to be glum, writes Chris Giles. Sign up for his e-newsletter on central banks for extra insights.

5. Oil costs have fallen to a five-month low after a report estimated a latest “massive surplus” of crude provide. If a build-up happens within the US or Europe, which play extra of a task in international oil worth formation than China, then this may hit prices even more, the Worldwide Power Company mentioned.

The Massive Learn

Bullion is now up greater than 50 per cent this yr, placing gold on monitor for its finest yr since 1979. The rally has been spurred by central banks, primarily in creating nations, who wish to diversify their reserve belongings away from the US greenback. As traders swarm to purchase the valuable steel, some are asking: Just how long will the gold mania last?

We’re additionally studying . . . 

Chart of the day

Goldman Sachs, JPMorgan Chase and Citigroup have reported bumper earnings throughout their Wall Avenue divisions, comfortably beating analysts’ estimates. Revenues from funding banking and buying and selling increased by at least 12 per cent at all three banks, in an indication that Wall Avenue’s much-anticipated revival underneath the Trump administration is lastly beginning to materialise.

The AI Shift: John Burn-Murdoch and Sarah O’Connor discover how the expertise is remodeling work in our new weekly e-newsletter. Join here.

Take a break from the information . . . 

For many years, the quickly increasing ranks of millionaires and billionaires in China dominated international artwork markets, delivering hefty commissions and large earnings for public sale homes. Now, an overheated market has dropped sharply and buyers are leaving auction houses in the lurch. William Langley goes deep into the slowdown — and why so many successful bidders don’t find yourself paying.