Asia Business

Markets were mixed Tuesday as nervous investors sat tight ahead of key US inflation data and a Federal Reserve policy decision but fresh pledges by China to open up from zero-Covid offered support.

The region was given a positive lead after Wall Street’s three main indexes raced out of the traps Monday, with analysts citing a survey by the central bank that showed inflation expectations falling.

The November consumer price index figures later in the day follow Friday’s forecast-beating print on wholesale inflation, which dented hopes the Fed could take a more dovish tilt in its monetary-tightening campaign.

The central bank is then widely expected to lift interest rates 50 basis points on Wednesday — a slowdown from the previous four 75-point hikes — but its post-meeting statement and comments from boss Jerome Powell will be closely followed.

While the general view is that policymakers will stop increasing borrowing costs next year, there is debate about how high they will peak and when they will start to come down.

“I think CPI will be important but not necessarily for this meeting, for which a 50 basis point hike is well flagged, but rather it will help determine the extent of further tightening and give clues to the terminal rate,” Mitul Kotecha, of TD Securities, said.

“However, we think the risks are asymmetric in that a higher CPI print will likely have a bigger impact than a lower print.”

But the Wall Street Journal reported that there were disagreements within the policy board about the way forward, with doves trying to limit the economic pain as they bring inflation down, while hawks want a tougher line on fighting prices by weakening the jobs market.

“In this light, don’t expect clearcut signals from the Fed… on what they expect to be doing at early 2023 (policy) meetings after a widely expected 50 basis points fund rate hike this week,” said National Australia Bank’s Ray Attrill.

Hong Kong rose after authorities announced a further easing of the city’s Covid rules, while Tokyo, Sydney, Singapore, Wellington, Bangkok and Jakarta were all well up.

However, Shanghai dipped along with Seoul, Taipei, Manila and Mumbai.

London, Paris and Frankfurt edged up at the open.

“It’s been a do-nothing day as investors take stock before the onslaught of a series of high-risk events,” said SPI Asset Management’s Stephen Innes.

China’s shift away from its economically damaging zero-Covid policy continued to support sentiment as the world’s number two economy opens up.

Meanwhile, top Chinese officials are meeting this week to draw up their economic blueprint for re-emerging from Covid, with observers predicting more stimulus measures and pledges of support for the troubled property sector.

But there is also a worry among investors that the quick relaxation of containment measures such as mass testing and lockdowns might lead to a massive surge in infections that could overwhelm the healthcare system and weigh on the economy.

Still, the expected pick-up in demand in China boosted oil prices further, with both main contracts extending Monday’s strong gains.

“China’s reopening is coming, it won’t happen overnight, but it will provide a major boost to demand in the outlook next quarter,” said OANDA’s Edward Moya. 

– Key figures around 0820 GMT –

Tokyo – Nikkei 225: UP 0.4 percent at 27,954.85 (close)

Hong Kong – Hang Seng Index: UP 0.7 percent at 19,596.20 (close)

Shanghai – Composite: DOWN 0.1 percent at 3,176.33 (close)

London – FTSE 100: UP 0.1 percent at 7455.50

Euro/dollar: UP at $1.0551 from $1.0539 on Monday

Dollar/yen: DOWN at 137.46 yen from 137.66 yen

Pound/dollar: UP at $1.2274 from $1.2268

Euro/pound: UP at 85.96 pence from 85.87 pence

West Texas Intermediate: UP 1.4 percent at $74.21 per barrel

Brent North Sea crude: UP 1.6 percent at $79.21 per barrel

New York – Dow: UP 1.6 percent at 34,005.04 (close)

Asian markets mostly rose Tuesday, with nervous investors sitting tight ahead of key US inflation data and a Federal Reserve policy decision but fresh pledges by China to open up from zero-Covid offering support.

The gains across the region came after Wall Street’s three main indexes raced out of the traps Monday, with analysts citing a survey by the central bank that showed inflation expectations falling.

The November consumer price index figures later in the day follow Friday’s forecast-beating print on wholesale inflation, which dented hopes the Fed could take a more dovish tilt in its monetary-tightening campaign.

The central bank is then widely expected to lift interest rates 50 basis points on Wednesday — a slowdown from the previous four 75-point hikes — but its post-meeting statement and comments from boss Jerome Powell will be closely followed.

While the general view is that policymakers will stop increasing borrowing costs next year, there is debate about how high they will end and when they will start to come down.

“It’s all going to depend on CPI numbers, whether the Fed is going to pivot or not,” Xi Qiao, at UBS Group AG, told Bloomberg Television.

“With the current inflation situation, a lot of the fundamental challenges that we have right now are going to go into 2023.”

But the Wall Street Journal reported that there were disagreements within the policy board about the way forward, with doves trying to limit the economic pain as they bring inflation down, while hawks want a tougher line on fighting prices by weakening the jobs market.

“In this light, don’t expect clearcut signals from the Fed… on what they expect to be doing at early 2023 (policy) meetings after a widely expected 50 basis points fund rate hike this week,” said National Australia Bank’s Ray Attrill.

In early Asian business, Hong Kong, Tokyo, Shanghai, Sydney, Seoul, Wellington, Taipei, Manila and Jakarta were all well up.

China’s shift away from its economically damaging zero-Covid policy continued to lift sentiment as the world’s number two economy opens up.

And on Monday, the country’s ambassador to the United States said: “In the near future I believe that measures will be further relaxed and international travel will become easier.”

Meanwhile, top Chinese officials are meeting this week to draw up their economic blueprint for re-emerging from Covid, with observers predicting more stimulus measures and pledges of support for the troubled property sector.

But there is also a worry among investors that the quick relaxation of containment measures such as mass testing and lockdowns might lead to a massive surge in infections that could overwhelm the healthcare system and weigh on the economy.

Still, the expected pick-up in demand in China boosted oil prices further, with both main contracts extending Monday’s strong gains.

“China’s reopening is coming, it won’t happen overnight, but it will provide a major boost to demand in the outlook next quarter,” said OANDA’s Edward Moya. 

– Key figures around 0230 GMT –

Tokyo – Nikkei 225: UP 0.4 percent at 27,946.09 (break)

Hong Kong – Hang Seng Index: UP 0.6 percent at 19,585.54

Shanghai – Composite: UP 0.1 percent at 3,183.39

Euro/dollar: UP at $1.0547 from $1.0539 on Monday

Dollar/yen: UP at 137.75 yen from 137.66 yen

Pound/dollar: UP at $1.2276 from $1.2268

Euro/pound: UP at 85.92 pence from 85.87 pence

West Texas Intermediate: UP 0.9 percent at $73.82 per barrel

Brent North Sea crude: UP 0.9 percent at $78.67 per barrel

New York – Dow: UP 1.6 percent at 34,005.04 (close)

London – FTSE 100: DOWN 0.4 percent at 7,445.97 (close) 

China has filed a dispute with the World Trade Organization over US restrictions on chip exports, Beijing’s commerce ministry said in a statement late Monday, accusing Washington of threatening global supply chains.

The United States in October announced new export controls aimed at restricting China’s ability to buy and manufacture high-end chips with military applications, complicating Beijing’s push to further its own semiconductor industry and develop advanced military systems.

The moves include export restrictions on some chips used in supercomputing as well as stricter requirements on the sale of semiconductor equipment.

The aim is to prevent “sensitive technologies with military applications” from being acquired by China’s military, intelligence and security services, the US Commerce Department said in October.

But China’s Ministry of Commerce on Monday accused the United States of “obstructing normal international trade in products including chips and threatening the stability of the global industrial supply chain”, as well as violating international trade rules and engaging in “protectionist practices”.

The WTO dispute is intended to defend China’s “legitimate rights and interests”, the ministry said in its statement, urging Washington to “give up zero-sum thinking”.

The two superpowers have long faced off over a range of issues including technology, trade, Hong Kong, Taiwan and human rights.

Chinese leader Xi Jinping and US President Joe Biden pledged to repair frayed relations at a summit in Bali, Indonesia last month.

Days before the latest chip controls, the Pentagon added 13 more Chinese firms including drone manufacturer DJI and surveillance firm Zhejiang Dahua Technology to a blacklist of military-linked entities.

Wall Street stocks surged Monday while European and Asian markets dropped as investors braced for interest rate decisions this week from major central banks, including the Federal Reserve.

The dollar generally rose against its main rivals, while oil prices rebounded following sharp falls last week.

Analysts expect the Fed and the European Central Bank to announce rate hikes at their meetings this week.

And the Bank of England is on course for a ninth straight increase as policymakers try to bring down inflation from the highest levels in decades.

“Following a softer session in Asia, European markets are on edge, opening the week lower ahead of a critical few days,” said Victoria Scholar, head of investment at Interactive Investor.

“The ECB, the Fed and the Bank of England are expected to raise rates by 50 basis points each as the pace of tightening looks set to slow,” Scholar added.

The half-point jumps will still be steep rises, however, as central banks struggle to cool the pace of price increases, particularly in energy and food.

London, Frankfurt and Paris all closed lower. 

Wall Street stocks ended higher, as bargain hunters moved in following losses at the end of last week.

The Dow Jones Industrial Average jumped 1.6 percent and the S&P 500 closed 1.4 percent up.

Ahead of the Fed’s policy meeting, investors are set to digest US inflation data due Tuesday.

“It will be a fitting hump day on Wednesday, because the (inflation) data and the Fed decision are big humps the market needs to get over if it wants to make a run at a year-end rally,” said market analyst Patrick O’Hare at Briefing.com.

“If either, or both, disappoint in a meaningful way, then a year-end rally becomes a more challenging proposition.”

Traders are also keeping an eye on developments in China as it moves away from a zero-Covid policy that has hammered its economy, the world’s second largest after the United States.

The shift comes after widespread protests following nearly three years of strict controls.

Uncertainty surrounding the strength of China’s demand recovery has hit oil prices hard, with crude futures shedding more than 10 percent last week, but they rebounded on Monday.

“The gradual easing of Chinese Covid restrictions is… expected to lead to a further upswing in demand,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

But investors are wary of whether the relaxation of restrictions will lead to a swift rebound as Covid cases are expected to jump.

“The recent volatility in crude oil highlights the ongoing questions over whether the Chinese economy is truly ready to return or on the cusp of yet another series of restrictions,” said Joshua Mahony, senior market analyst at online trading platform IG.

– Key figures around 2140 GMT –

New York – Dow: UP 1.6 percent at 34,005.04 (close)

New York – S&P 500: UP 1.4 percent at 3,990.56 (close)

New York – Nasdaq: UP 1.3 percent at 11,143.74 (close)

EURO STOXX 50: DOWN 0.5 percent at 3,921.82 (close)

London – FTSE 100: DOWN 0.4 percent at 7,445.97 (close) 

Frankfurt – DAX: DOWN 0.5 percent at 14,306.63 (close)

Paris – CAC 40: DOWN 0.4 percent at 6,650.55 (close)

Tokyo – Nikkei 225: DOWN 0.2 percent at 27,842.33 (close)

Hong Kong – Hang Seng Index: DOWN 2.2 percent at 19,463.63 (close)

Shanghai – Composite: DOWN 0.9 percent at 3,179.04 (close)

Euro/dollar: DOWN at $1.0539 from $1.0546

Dollar/yen: UP at 137.66 yen from 136.57 yen

Pound/dollar: UP at $1.2268 from $1.2262

Euro/pound: DOWN at 85.87 pence from 85.90 pence

West Texas Intermediate: UP 3.0 percent at $73.17 per barrel

Brent North Sea crude: UP 2.5 percent at $77.99 per barrel

burs-rl-bys/bgs

Wall Street pushed higher but European and Asian stock markets dropped Monday as investors looked ahead to interest rate decisions this week from major central banks including the Federal Reserve.

The dollar rose against its main rivals, while oil prices rebounded following sharp falls last week.

Analysts are forecasting the Fed and the European Central Bank to announce smaller rate hikes at their meetings this week compared with recent decisions.

The Bank of England is meanwhile on course for a ninth increase in a row as policymakers try to bring down inflation from the highest levels in decades.

“Following a softer session in Asia, European markets are on edge, opening the week lower ahead of a critical few days for central bank action,” noted Victoria Scholar, head of investment at Interactive Investor.

London, Frankfurt and Paris all closed lower. 

Wall Street pushed higher, however, as bargain hunters moved in following losses at the end of last week.

“The ECB, the Fed and the Bank of England are expected to raise rates by 50 basis points each as the pace of tightening looks set to slow,” Scholar added.

The half-point jumps will still be steep rises, however, as central banks struggle to cool the pace of price increases, particularly regarding energy and food.

Ahead of the Fed’s policy meeting, investors were set to digest US inflation data due Tuesday.

“It will be a fitting hump day on Wednesday, because the (inflation) data and the Fed decision are big humps the market needs to get over if it wants to make a run at a year-end rally,” said market analyst Patrick J. O’Hare at Briefing.com.

“If either, or both, disappoint in a meaningful way, then a year-end rally becomes a more challenging proposition,” he added.

Traders were keeping an eye also on developments in China as it moves away from the zero-Covid policy that has hammered its economy, the world’s second largest after the United States.

The shift comes after widespread protests against the near three-year strategy, though there is concern about the expected spike in infections.

Uncertainty surrounding the strength of China’s demand recovery has hit oil prices hard, with crude futures shedding more than 10 percent last week, but they rebounded on Monday.

“The gradual easing of Chinese Covid restrictions is… expected to lead to a further upswing in demand,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

But investors are wary of whether the relaxation of restrictions will lead to a swift rebound as Covid cases are expected to boom.

“The recent volatility in crude oil highlights the ongoing questions over whether the Chinese economy is truly ready to return or on the cusp of yet another series of restrictions,” said Joshua Mahony, senior market analyst at online trading platform IG.

– Key figures around 1630 GMT –

New York – Dow: UP 0.8 percent at 33,742.91 points

EURO STOXX 50: DOWN 0.5 percent at 3,921.82

London – FTSE 100: DOWN 0.4 percent at 7,445.97 (close) 

Frankfurt – DAX: DOWN 0.5 percent at 14,306.63 (close)

Paris – CAC 40: DOWN 0.4 percent at 6,650.55 (close)

Tokyo – Nikkei 225: DOWN 0.2 percent at 27,842.33 (close)

Hong Kong – Hang Seng Index: DOWN 2.2 percent at 19,463.63 (close)

Shanghai – Composite: DOWN 0.9 percent at 3,179.04 (close)

Euro/dollar: DOWN at $1.0531 from $1.0534 on Friday

Dollar/yen: UP at 137.50 yen from 136.57 yen

Pound/dollar: UP at $1.2260 from $1.2262

Euro/pound: DOWN at 85.87 pence from 85.90 pence

West Texas Intermediate: UP 3.8 percent at $73.73 per barrel

Brent North Sea crude: UP 2.7 percent at $78.17 per barrel

burs-rl/pvh

Wall Street pushed higher but European and Asian stock markets dropped Monday as investors looked ahead to interest rate decisions this week from major central banks including the Federal Reserve.

The dollar traded mixed against its main rivals, while oil prices rebounded following sharp falls last week.

Analysts are forecasting the Fed and the European Central Bank to announce smaller rate hikes at their meetings this week compared with recent decisions.

The Bank of England is meanwhile on course for a ninth increase in a row as policymakers try to bring down inflation from the highest levels in decades.

“Following a softer session in Asia, European markets are on edge, opening the week lower ahead of a critical few days for central bank action,” noted Victoria Scholar, head of investment at Interactive Investor. 

Wall Street opened higher, however, as bargain hunters moved in following losses at the end of last week.

“The ECB, the Fed and the Bank of England are expected to raise rates by 50 basis points each as the pace of tightening looks set to slow,” Scholar added.

The half-point jumps will still be steep rises, however, as central banks struggle to cool the pace of price increases, particularly regarding energy and food.

Ahead of the Fed’s policy meeting, investors were set to digest US inflation data due Tuesday.

“It will be a fitting hump day on Wednesday, because the (inflation) data and the Fed decision are big humps the market needs to get over if it wants to make a run at a year-end rally,” said market analyst Patrick J. O’Hare at Briefing.com.

“If either, or both, disappoint in a meaningful way, then a year-end rally becomes a more challenging proposition,” he added.

Traders were keeping an eye also on developments in China as it moves away from the zero-Covid policy that has hammered its economy, the world’s second largest after the United States.

The shift comes after widespread protests against the near three-year strategy, though there is concern about the expected spike in infections.

Uncertainty surrounding the strength of China’s demand recovery has hit oil prices hard, with crude futures shedding more than 10 percent last week.

“The gradual easing of Chinese Covid restrictions is… expected to lead to a further upswing in demand,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

“However, concerns about the rapid spread of the virus remain, and China will have a tough fight on its hands, dealing with an expected explosion of infections while trying to open up the economy.”

– Key figures around 1430 GMT –

London – FTSE 100: DOWN 0.4 percent at 7,446.42 points

Frankfurt – DAX: DOWN 0.5 percent at 14,301.97

Paris – CAC 40: DOWN 0.5 percent at 6,644.94

EURO STOXX 50: DOWN 0.6 percent at 3,918.42

New York – Dow: UP 0.4 percent at 33,597.24

Tokyo – Nikkei 225: DOWN 0.2 percent at 27,842.33 (close)

Hong Kong – Hang Seng Index: DOWN 2.2 percent at 19,463.63 (close)

Shanghai – Composite: DOWN 0.9 percent at 3,179.04 (close)

Euro/dollar: UP at $1.0559 from $1.0534 on Friday

Dollar/yen: UP at 137.04 yen from 136.57 yen

Pound/dollar: UP at $1.2284 from $1.2262

Euro/pound: UP at 85.96 pence from 85.90 pence

West Texas Intermediate: UP 1.2 percent at $71.88 per barrel

Brent North Sea crude: UP 0.4 percent at $76.37 per barrel

burs-rl/imm

Thailand celebrated the arrival of its 10 millionth international visitor of 2022 on Saturday, according to the tourism authority, as the kingdom consolidated the recovery of its Covid-battered travel sector.

Thailand welcomed some 40 million people in 2019, but then the pandemic hit and travel was decimated as nations tightened border controls to contain the coronavirus.

With those restrictions easing worldwide Thailand’s travel numbers have begun a slow recovery and the government expects to generate nearly $16 billion in tourism revenue this year.

Traditional dancers and drummers at Bangkok’s Suvarnabhumi International Airport on Saturday welcomed passengers arriving on a Saudi Arabian Airlines flight that authorities believe clocked the 10-million milestone.

“The sky is open,” Thai Prime Minister Prayut Chan-O-Cha said in a speech at the airport.

“We would like to build confidence that Thailand is still one of the (top) tourist destinations of people around the world.”

Finance minister Arkhom Termpittayapaisith said this week that visitor numbers were expected to grow next year too.

Government figures suggest Thailand would welcome roughly 23 million tourists in 2023, while some analysts believe a full recovery in tourist numbers could happen in 2024.

Thai hotel owners and restauranteurs have breathed a sigh of relief as business has slowly picked up.

Marisa Sukosol, president of the Thai Hotels Association, welcomed the 10 million travellers milestone “after two years and a half of pain”.

“I think next year we will see continuous momentum of growth,” she said, pointing to the return of tourists from Russia and across the Asia-Pacific region.

But she cautioned against over-optimism — economic stagnation as well as lingering pandemic threats continue to impact the tourism sector.

While Thailand has benefited from the loosening of travel restrictions by other nations, its tourism industry has also been affected by the global economic slowdown and persistent inflation.

Recovery in the tourism sector is also heavily dependent on China relaxing international travel rules, Thai officials have said.

China was previously the biggest source of foreign tourists for Thailand. 

Global stocks had a mixed showing Friday, with hotter-than-expected US wholesale prices renewing concerns that the Federal Reserve will push on with aggressive policies against inflation.

Investors have been poring over economic data as they try to anticipate if the US central bank will shift to a softer approach to interest rate hikes at a regular meeting next week.

While inflation has shown signs of easing, government data released Friday showed that producer prices still remained elevated, sending key US indices into the red.

Meanwhile, markets welcomed China’s easing of its zero-Covid restrictions, which have hammered the world’s second biggest economy.

China’s consumer inflation slowed further in November as well, falling below two percent and giving authorities room to unveil fresh stimulus measures.

Hong Kong shares closed sharply higher Friday, building on big gains for the week while Chinese mainland markets were also higher.

European markets also ended the day higher.

Wall Street stocks finished lower, with the S&P 500 and Nasdaq Composite Index both shedding 0.7 percent, while the Dow Jones Industrial Average fell 0.9 percent.

This came after the producer price index — a gauge of inflation — rose by 0.3 percent in November, more than analysts expected.

“Wall Street had a somewhat mixed day of economic data,” said Edward Moya of the OANDA trading platform.

“A hot PPI report was then countered by a University of Michigan report that showed inflation expectations are coming down quickly,” he added in a note.

For now, markets are keeping a close eye on consumer price data due next week, which in turn could have a bearing on the Fed’s monetary policy path.

The Fed has raised rates by 0.75 percentage points in each of its last four meetings, but is widely expected to slow the pace after central bankers gather next week.

However, investors are concerned that a strong jobs market and other data might convince the Fed to tighten monetary policy longer than hoped.

The European Central Bank and the Bank of England also have rate decisions due next week after hiking their rates sharply this year.

“The hotter-than-expected PPI print called into question the ‘peak inflation’ narrative, although traders know that it is too late for the Fed to change its mind about a 50 (basis points) hike next week,” said Fawad Razaqzada, market analyst at Forex.com and City Index.

Elsewhere, oil prices jumped by more than one percent as Russian President Vladimir Putin threatened to cut production after Western nations imposed a $60 price cap on Russian crude.

“Today’s modest rebound however doesn’t change the fact that oil prices are now well below the levels they were at the time of the Russian invasion of Ukraine,” noted market analyst Michael Hewson at CMC Markets.

– Key figures around 2130 GMT –

New York – Dow: DOWN 0.9 percent at 33,476.46 (close)

New York – S&P 500: DOWN 0.7 percent at 3,934.38 (close)

New York – Nasdaq: DOWN 0.7 percent at 11,004.61 (close)

EURO STOXX 50: UP 0.5 percent at 3,942.62 (close)

London – FTSE 100: UP less than 0.1 percent at 7,476.63 (close)

Frankfurt – DAX: UP 0.7 percent at 14,370.72 (close)

Paris – CAC 40: UP 0.5 percent at 6,677.64 (close)

Tokyo – Nikkei 225: UP 1.2 percent at 27,901.01 (close)

Hong Kong – Hang Seng Index: UP 2.3 percent at 19,900.87 (close)

Shanghai – Composite: UP 0.3 percent at 3,206.95 (close)

Euro/dollar: DOWN at $1.0534 from $1.0560 on Thursday

Dollar/yen: DOWN at 136.57 yen from 136.61 yen

Pound/dollar: UP at $1.2262 from $1.2239

Euro/pound: DOWN at 85.90 pence from 86.24 pence

Brent North Sea crude: DOWN 0.1 percent at $76.10 per barrel

West Texas Intermediate: DOWN 0.6 percent at $71.02 per barrel

Chinese President Xi Jinping on Friday touted close security and energy ties with Gulf nations during summits in Saudi Arabia that have highlighted tensions with Washington.

On the third and final day of his visit, Xi attended a gathering of the six-member Gulf Cooperation Council and a broader China-Arab leaders’ meeting.

It was only Xi’s third journey outside China since the coronavirus pandemic began.

Friday’s talks followed bilateral sit-downs on Thursday with Saudi royals that yielded a joint statement stressing “the importance of stability” in oil markets — a point of friction with the United States, which has urged the Saudis to raise production.

“China will continue to firmly support the GCC countries in maintaining their own security… and build a collective security framework for the Gulf,” Xi said on Friday at the start of the China-GCC summit.

“China will continue to import large quantities of crude oil from GCC countries on an ongoing basis,” he said, also vowing to expand other areas of energy cooperation including liquefied natural gas imports.

Additionally, Xi said China would make full use of a Shanghai-based platform “to carry out RMB [yuan] settlement of oil and gas trade” — a move that, if Gulf countries participate, could weaken the global dominance of the US dollar.

Asked at a press conference, as the summits came to close Friday evening, if Riyadh would agree to such a scheme, Saudi Foreign Minister Prince Faisal bin Farhan said he had “nothing to add”.

Oil from Saudi Arabia alone accounted for 17 percent of China’s imports last year, and last month Qatar announced a 27-year natural gas deal with China.

– Rejecting ‘polarity’ – 

Xi’s visit comes amid persistent rancour between Saudi Arabia and the US, its long-time partner and security guarantor, over oil production, human rights issues and regional security. 

It follows US President Joe Biden’s trip to Jeddah in July, before midterm elections, when he failed to persuade the Saudis to pump more oil to reduce prices.

Xi’s arrival in the kingdom on Wednesday earned a rebuke from the White House, which warned of “the influence that China is trying to grow around the world”. 

Washington called Beijing’s objectives “not conducive to preserving the international rules-based order”.

Saudi officials have repeatedly stressed that they value deep ties with Washington but will not hesitate to explore relationships elsewhere.

“We are very much focused on cooperation with all parties and I think competition is a good thing,” Prince Faisal said on Friday, adding that Riyadh will also continue to have strong relations with the US “across the board”. 

“We will continue to work with all of our partners and we don’t see it as a zero-sum game by any means,” he added.

“We don’t believe in polarity.”

– Trade talks –

Crown Prince Mohammed bin Salman, Saudi Arabia’s 37-year-old de facto ruler, addressed both summits on Friday, promising “continuing Arab-Chinese cooperation to serve our common goals and aspirations of our peoples”.

The Gulf countries, strategic partners of Washington, are bolstering ties with China as part of an eastward turn that involves diversifying their fossil fuel-reliant economies. 

At the same time China, hit hard by its Covid lockdowns, is trying to revive its economy and widen its sphere of influence, notably through its Belt and Road Initiative which provides funding for infrastructure projects around the world. 

One area of focus for the China-GCC summit was a free trade agreement under discussion for nearly two decades. 

Drawing those negotiations to a close would be “a matter of prestige for Beijing”, said Robert Mogielnicki of the Arab Gulf States Institute in Washington.

“It’s not as simple for the GCC states, which seem to be more invested in advancing bilateral ties and are engaged in varying degrees of regional economic competition with their neighbouring member states.”  

No breakthrough was announced on Friday.

rcb/jsa

Global economic leaders on Friday hailed China’s move away from its hardline zero-Covid policy, with the IMF chief saying the “decisive actions” would help revive growth both in the country and globally.

The relaxation would help to shore up a world economy struggling with the impact of the pandemic and Russia’s invasion of Ukraine, the head of the World Trade Organization said after a conference in the eastern Chinese city of Huangshan hosted by outgoing Premier Li Keqiang. 

Beijing on Wednesday announced a loosening of its zero-tolerance approach to coronavirus outbreaks, ending large-scale lockdowns and allowing some positive cases to isolate at home following widespread protests against the restrictions.

The decision indicated that the world’s second-largest economy is finally shifting towards living with Covid after years of grinding curbs stifled growth.

“We welcome very much the decisive actions taken by the Chinese authorities… to recalibrate the Covid policies so as to create a better impetus for the revival of growth in China,” International Monetary Fund managing director Kristalina Georgieva said at a press briefing with the heads of other major economic institutions.

The effort to boost vaccination rates and anti-viral treatments “is very good for the Chinese people, but also important for Asia and the rest of the world”, Georgieva added.

“China’s performance matters (not just) to China — it matters to the world economy as well.”

The global economy has been rocked this year, with Russia’s invasion of Ukraine adding to a stuttering post-pandemic recovery and a cost of living crisis in many countries.

The retreat from zero-Covid “will help remove one set of uncertainties” in a world reeling from the impacts of the pandemic, the war in Ukraine and climate change, said WTO Director-General Ngozi Okonjo-Iweala at the same briefing.

Secretary-general of the Organisation for Economic Co-operation and Development, Mathias Cormann, said the “adjustments will support the strength of the recovery both in China and globally”.

Beijing’s step back from zero-Covid has helped to prop up global stock markets fearful of a looming recession in the United States, but analysts have warned that China’s route to a full reopening remains bumpy.

– Further relaxations –

Long criticised for disrupting business operations and global supply chains, the zero-Covid policy has acted as a constraint on China’s economy, with analysts expecting Beijing to miss its stated annual growth target of 5.5 percent.

Public frustration with snap lockdowns and mass testing boiled over last month as protesters took to the streets in cities around the country, with some calling for greater political freedoms in China’s most widespread demonstrations since 1989.

On Friday, China rolled back more restrictions, with the culture and tourism ministry announcing that visitors will no longer be required to show “health codes” when entering a range of venues.

A spokesperson for the National Health Commission (NHC) said at a press briefing that hospitals must not refuse care to coronavirus-positive patients, state broadcaster CCTV reported.

The move marks a further pivot away from China’s longstanding strategy of isolating all those who test positive and treating them in state-run quarantine facilities.

Some of those facilities will now be transformed into “sub-designated hospitals… equipped with certain treatment faculties” including 10 percent of berths reserved for “observation and care”, CCTV quoted the NHC’s Jiao Yahui as saying.

Demand for home treatments and personal protective gear has surged along with concerns over possible large-scale outbreaks, even though official statistics have reported a decline in new cases in recent days.

China’s market regulator said Friday that it would crack down on price gouging after the retail price of a traditional flu treatment as much as quadrupled in the first few days of December.

Meanwhile, an iPhone megafactory in central China announced it was ending months of a virus-secure “closed loop” system that had hit production of the Apple gadgets.

The Foxconn facility in Zhengzhou was in effective lockdown for 56 days, with workers only allowed to travel between their dormitories and the factory floor on shuttle buses after infections were discovered in October.

Foxconn said in a social media post that employees could now return to work with a negative Covid test taken in the last 48 hours, in line with the “further lifting of China’s epidemic control measures”.