Tag Archives: Global Economy

G20 to show united front on support for global economic recovery, cash for IMF

By Michael Nienaber and Andrea Shalal

BERLIN/WASHINGTON/ROME (Reuters) – The world’s financial leaders are expected on Friday to agree to continue supportive measures for the global economy and look to boost the International Monetary Fund’s resources so it can help poorer countries fight off the effects of the pandemic.

Finance ministers and central bank governors of the world’s top 20 economies, called the G20, held a video-conference on Friday. The global response to the economic havoc wreaked by the coronavirus was at top of the agenda.

In the first comments by a participating policymaker, the European Union’s economics commissioner Paolo Gentiloni said the meeting had been “good,” with consensus on the need for a common effort on global COVID vaccinations.

“Avoid premature withdrawal of supportive fiscal policy” and “progress towards agreement on digital and minimal taxation” he said in a Tweet, signaling other areas of apparent accord.

A news conference by Italy, which holds the annual G20 presidency, is scheduled for 17.15  (1615 GMT).

The meeting comes as the United States is readying $1.9 trillion in fiscal stimulus and the European Union has already put together more than 3 trillion euros ($3.63 trillion) to keep its economies going despite COVID-19 lockdowns.

But despite the large sums, problems with the global rollout of vaccines and the emergence of new variants of the coronavirus mean the future of the recovery remains uncertain.

German Finance Minister Olaf Scholz warned earlier on Friday that recovery was taking longer than expected and it was too early to roll back support.

“Contrary to what had been hoped for, we cannot speak of a full recovery yet. For us in the G20 talks, the central task remains to lead our countries through the severe crisis,” Scholz told reporters ahead of the virtual meeting.

“We must not scale back the support programs too early and too quickly. That’s what I’m also going to campaign for among my G20 colleagues today,” he said.

BIDEN DEBUT

Hopes for constructive discussions at the meeting are high among G20 countries because it is the first since Joe Biden, who vowed to rebuild cooperation in international bodies, became U.S. president.

While the IMF sees the U.S. economy returning to pre-crisis levels at the end of this year, it may take Europe until the middle of 2022 to reach that point.

The recovery is fragile elsewhere too – factory activity in China grew at the slowest pace in five months in January, hit by a wave of domestic coronavirus infections, and in Japan fourth quarter growth slowed from the previous quarter with new lockdowns clouding the outlook.

“The initially hoped-for V-shaped recovery is now increasingly looking rather more like a long U-shaped recovery. That is why the stabilization measures in almost all G20 states have to be maintained in order to continue supporting the economy,” a G20 official said.

But while the richest economies can afford to stimulate an economic recovery by borrowing more on the market, poorer ones would benefit from being able to tap credit lines from the IMF — the global lender of last resort.

To give itself more firepower, the Fund proposed last year to increase its war chest by $500 billion in the IMF’s own currency called the Special Drawing Rights (SDR), but the idea was blocked by then U.S. President Donald Trump.

Scholz said the change of administration in Washington on Jan. 20 improved the prospects for more IMF resources. He pointed to a letter sent by U.S. Treasury Secretary Janet Yellen to G20 colleagues on Thursday, which he described as a positive sign also for efforts to reform global tax rules.

Civil society groups, religious leaders and some Democratic lawmakers in the U.S. Congress have called for a much larger allocation of IMF resources, of $3 trillion, but sources familiar with the matter said they viewed such a large move as unlikely for now.

The G20 may also agree to extend a suspension of debt servicing for poorest countries by another six months.

($1 = 0.8254 euros)

(Reporting by Michael Nienaber in Berlin, Jan Strupczewski in Brussels and Gavin Jones in Rome; Andrea Shalal and David Lawder in Washington; Editing by Daniel Wallis, Susan Fenton and Crispian Balmer)

Biden to press for $1.9 trillion COVID relief plan with governors, mayors

By Andrea Shalal

WASHINGTON (Reuters) – U.S. President Joe Biden will meet with a bipartisan group of mayors and governors on Friday as he continues to push for approval of a $1.9 trillion coronavirus relief plan to bolster economic growth and help millions of unemployed workers.

Biden and Vice President Kamala Harris will also receive an economic briefing from Treasury Secretary Janet Yellen, shortly after she takes part in the first meeting of the Group of Seven rich economies since the new U.S. administration took office.

Biden’s proposed spending package, coming on top of $4 trillion enacted by his predecessor Donald Trump, will have important consequences for the global economy which is slowly recovering – but very unevenly – after last year suffering its worst downturn since the Great Depression in the 1930s.

Taking part in the Oval Office meeting will be Republican and Democratic elected officials whose states and cities have been hammered by the coronavirus pandemic and its economic fallout. Many have seen tax revenues fall and costs soar as they race to vaccinate their citizens.

The group includes four governors, including New York Governor Andrew Cuomo, a Democrat, and Maryland Governor Larry Hogan, a Republican, and five mayors, including Jeff Williams of Arlington, Texas, a Republican.

Williams, who met with Yellen virtually last week, said his city urgently needed the federal aid earmarked for state and local governments in Biden’s rescue plan. He said cities were crushed when Congress removed similar aid from a previous relief bill that passed in December.

“We’ve been crippled. We haven’t gotten help,” Williams told Reuters. “Our property taxes are down and costs are way up. It doesn’t matter if you’re a Democrat or a Republican, this is the right solution so we can achieve economic growth much faster.”

Arlington, which is home to the largest General Motors plant in the world, is bracing for a 10% drop in the appraised value of its commercial properties, which would cut revenues by some $30 million after an $18 million loss last year, Williams said.

More than 400 mayors wrote to leaders in Congress earlier this month to urge them to pass Biden’s relief package, but Republicans are backing a far less ambitious plan.

Biden on Thursday said the U.S. coronavirus death toll was likely to reach 500,000 next month, but said the United States was on track to have enough vaccine for 300 million Americans by the end of July.

Yellen, a former Federal Reserve Board Chair, will have a mixed message when she briefs Biden on the economy. While economic growth is picking up, unemployment remains high and many communities of color are not expected to recover for years.

(Reporting by Andrea Shalal; Editing by Lincoln Feast.)

Britain prepares for COVID-19 vaccine as Oxford forecasts result this year

By Alistair Smout and Guy Faulconbridge

LONDON (Reuters) – Late-stage trial results of a potential COVID-19 vaccine being developed by the University of Oxford and AstraZeneca could be presented this year as the British government prepares for a possible vaccination rollout in late December or early 2021.

A vaccine is seen as a game-changer in the battle against the coronavirus, which has killed more than 1.2 million people worldwide, shuttered swathes of the global economy and turned normal life upside down for billions of people.

There are more than 200 candidates under development and the vaccine being developed by Oxford and licensed to British drugmaker AstraZeneca is seen as a front-runner.

“I’m optimistic that we could reach that point before the end of this year,” Oxford Vaccine Trial Chief Investigator Andrew Pollard said of the chances of presenting trial results.

Pollard told British lawmakers that establishing whether or not the vaccine worked would likely come this year, after which the data would have to be carefully reviewed by regulators and then a political decision made on who should receive it.

“Our bit – we are getting closer to but we are not there yet,” Pollard, director of the Oxford Vaccine Group, said.

Asked if he expected the vaccine would start to be deployed before Christmas, he said: “There is a small chance of that being possible but I just don’t know.”

The National Health Service (NHS) in England is preparing to start distributing possible COVID-19 vaccines before Christmas in case one is ready by the end of the year.

The Oxford/AstraZeneca vaccine is expected to be one of the first from big pharma to be submitted for regulatory approval, along with Pfizer and BioNTech’s candidate.

“If I put on my rose-tinted specs, I would hope that we will see positive interim data from both Oxford and from Pfizer/BioNTech in early December and if we get that then I think we have got the possibility of deploying by the year end,” Kate Bingham, the chair of the UK Vaccine Taskforce, told lawmakers.

Prime Minister Boris Johnson said there was the prospect of a vaccine in the first quarter of 2021. AstraZeneca is presenting its third quarter financial results on Thursday.

‘GAME CHANGER’

Work on the Oxford viral vector vaccine, called AZD1222 or ChAdOx1 nCoV-19, began in January. It is made from a weakened version of a common cold virus that causes infections in chimpanzees.

The chimpanzee cold virus has been genetically changed to include the genetic sequence of the so-called spike protein which the coronavirus uses to gain entry to human cells. The hope is that the human body will then attack the novel coronavirus if it sees it again.

If Oxford’s vaccine works, it could eventually allow the world to return to some measure of normality.

Asked what success looked like, Pollard said: “Good is having vaccines that have significant efficacy – so whether, I mean, that is 50, 60, 70, 80 percent, whatever the figure is – is an enormous achievement.

“It’s a complete game changer and a success if we meet those efficacy end points,” he said, adding it would relieve pressure on the health system.

But Pollard and Bingham agreed that the world would not return to normal immediately. Asked about the chances of a vaccine that would wipe out the coronavirus next year, Bingham said the prospects were “very slim.”

“(But the chances) to get a vaccine that has an effect of both reducing illness, and reducing mortality (are) very high,” Bingham said, adding she was more than 50% confident there would be such a vaccine by early summer.

(Reporting by Alistair Smout and Guy Faulconbridge; Editing by Nick Macfie and Alexander Smith)

U.S. still worried about China’s labs amid coronavirus: Pompeo

WASHINGTON (Reuters) – U.S. Secretary of State Mike Pompeo said on Wednesday the United States remains worried about laboratories in China and the world needs to get to the bottom of how the novel coronavirus began there.

The United States and China have traded insults and accusations during the deadly coronavirus outbreak that has killed more than 200,000 people around the world and brought the global economy to a crawl.

U.S. President Donald Trump said on April 15 that his government was investigating whether the coronavirus pandemic originated in a laboratory in the Chinese city of Wuhan, where the virus emerged. Those claims have no basis in fact, the head of the lab told Reuters on Tuesday.[nL3N2CG18V]

“I can tell you there were real concerns about the labs inside of China,” Pompeo said in an interview with Fox News. “I’m still concerned that the Chinese Communist Party is not telling us about all of what’s taking place in all of the labs.”

A Washington Post opinion column this month said the U.S. State Department in 2018 warned in diplomatic cables about safety and management weaknesses at a Wuhan laboratory.

Pompeo said Chinese authorities are continuing to withhold information about the virus and will not allow U.S. experts access.

“In spite of our best efforts to get experts on the ground, they continue to try and hide and obfuscate. That’s wrong, it continues to pose a threat to the world and we all need to get to the bottom of what actually happened here,” he told Fox.

Most scientists now say the new coronavirus originated in wildlife, with bats and pangolins identified as possible host species.

Yuan Zhiming, a director at the Wuhan Institute of Virology also rejected theories that the lab had accidentally released a coronavirus it had harvested from bats for research purposes.

(Reporting by Doina Chiacu; Editing by Chizu Nomiyama and Jonathan Oatis)

WHO raises global risk of coronavirus from ‘high’ to ‘very high’

By Stephanie Nebehay and Ryan Woo

GENEVA/BEIJING (Reuters) – The rapid spread of the coronavirus increased fears of a pandemic on Friday, with six countries reporting their first cases and the World Health Organization (WHO) raising its global spread and impact risk alert to “very high”.

World shares fell again, winding up their worst week since the 2008 global financial crisis and bringing the global wipeout to $6 trillion.

Hopes that the epidemic that started in China late last year would be over in months, and that economic activity would quickly return to normal, have been shattered.

WHO chief Tedros Adhanom Ghebreyesus said his organization was not underestimating the risk.

“That is why we said today the global risk is very high,” he told reporters in Geneva. “We increased it from ‘high’ to ‘very high’.”

WHO spokesman Christian Lindmeier said the scenario of the coronavirus reaching multiple or all countries “is something we have been looking at and warning against since quite a while.”

Switzerland joined countries banning big events to try to curb the epidemic, forcing cancellation of next week’s Geneva international car show, one of the industry’s most important gatherings.

Tedros said mainland China had reported 329 new cases in the last 24 hours, the lowest there in more than a month, taking its tally to more than 78,800 cases with almost 2,800 deaths.

China’s three biggest airlines restored some international flights and the Shanghai fashion show, initially postponed, went ahead online.

TROOPS DEPLOYED

But as the outbreak eases in China, it is surging elsewhere.

Mexico, Nigeria, Estonia, Denmark, the Netherlands and Lithuania reported their first cases, all with travel history connected to Italy, the worst-affected European country. Mexico is the second Latin American country to register the virus, after Brazil.

Countries other than China now account for about three-quarters of new infections.

Bulgaria said it was ready to deploy up to 1,000 troops and military equipment to the border with Turkey to prevent illegal migrant inflows as it steps up measures against the coronavirus. It has not reported any cases.

Mongolia, which has yet to confirm a case, placed its president, Battulga Khaltmaa, in quarantine as a precaution after he returned from a trip to China, state media reported.

A Chinese official said some recovered patients had been found to be infectious, suggesting the epidemic may be even harder to eradicate than previously thought.

Lindmeier said the WHO was looking very carefully into reports of some people getting re-infected.

In addition to stockpiling medical supplies, some governments ordered schools shut and canceled big gatherings to try to halt the flu-like disease.

U.S. President Donald Trump’s administration was considering invoking special powers to expand production of protective gear.

In Europe, Germany warned of an impending epidemic and Greece, a gateway for refugees from the Middle East, announced tighter border controls.

The death toll in Italy rose to 17 and those testing positive rose to 655. Germany has nearly 60 cases, France about 38 and Spain 23, according to a Reuters count.

OLYMPIC DOUBTS

South Korea has the most cases outside China. It reported 571 new infections on Friday, bringing the total to 2,337, with 13 people killed.

The head of the WHO’s emergency program, Dr Mike Ryan, said Iran’s outbreak may be worse than realized – its toll of 34 dead is the highest outside China. Tedros said he expected a WHO team to be in Iran by Sunday or Monday.

U.S. intelligence agencies are monitoring the spread of the coronavirus in Iran and India, where only a handful of cases have been reported, sources said.

U.S. Secretary of State Mike Pompeo said the United States had offered to help Iran, raising doubts about its willingness to share information.

Japan is scheduled to host the 2020 Olympics in July but Ryan said discussions were being held about whether to go ahead.

Organizers will decide next week on the ceremonial torch relay, due to arrive on March 20 for a 121-day journey. Confirmed cases in Japan have risen above 200, with four deaths, excluding more than 700 cases on a quarantined cruise liner, Diamond Princess.

A British man infected on the ship had died, bringing the death toll among passengers to six, Kyodo newswire reported.

Prime Minister Shinzo Abe had called for schools to close and vowed to prevent a severe blow to an economy teetering on the brink of recession.

In Moscow, authorities were deporting 88 foreigners who violated quarantine measures, the RIA news agency cited Moscow’s deputy mayor as saying.

Chinese-ruled Hong Kong, where the coronavirus has killed two and infected more than 90, quarantined a pet dog of a coronavirus patient after it tested “weak positive”, though authorities had no evidence the virus can be transmitted to pets.

Interactive graphic tracking global spread of coronavirus: https://graphics.reuters.com/CHINA-HEALTH-MAP/0100B59S39E/index.html

(Reporting by Stephanie Nebehay in Geneva, Ryan Woo, Yingzhi Yang in Beijing, Lisa Lambert and Mark Hosenball in Washington, Sangmi Chai in Seoul, Leika Kihara in Tokyo, Kate Kelland in London, Tsvetelia Tsolova in Sofia, Michael Shields and Brenna Hughes Neghaiwi in Zurich, Daina Beth Solomon in Mexico City; Writing by Robert Birsel, Giles Elgood and Nick Macfie; Editing by Simon Cameron-Moore, Jon Boyle and Timothy Heritage)

Dow sheds 800 points as pandemic fears grip Wall Street

By Medha Singh

(Reuters) – The Dow Jones Industrials shed 800 points on Monday as investors scurried to safer assets after a sharp rise in coronavirus cases outside China fueled fears of a bigger impact to global growth.

Gold rose to a seven-year high and the inversion between the 3-month and 10-year U.S. Treasury yields deepened as a rise in cases in Iran, Italy and South Korea over the weekend fanned fears of a pandemic. An inversion of the curve is a classic recession signal. [US/]

All of the Dow’s 30 blue-chip members, as well as the 11 major S&P sectors were in the red. Technology stocks dropped 3.1% and were the biggest drag on the benchmark index. Defensive utilities and real estate posted the smallest declines.

Apple Inc slid 3.5% as data showed sales of smartphones in China tumbled by more than a third in January.

Last week, Wall Street’s main indexes notched record highs, partly on optimism that the global economy would be able to snap back after an initial hit, supported by central banks.

“Some people are re-assessing the extent to which China is being damaged by the spread of the virus and, more broadly, whether other parts of world will get contagion effects of that,” said Nitesh Shah, director of research at WisdomTree.

Chipmakers, which heavily rely on China for revenue, were among the worst performers, with the Philadelphia SE Semiconductor index down 4.2%.

Interest rate-sensitive banks shed 2.7%, while the CBOE Volatility Index, a barometer of expected near-term market volatility, jumped to a six-month high.

At 9:55 a.m. ET, the Dow Jones Industrial Average was down 764.01 points, or 2.64%, at 28,228.40, the S&P 500 was down 83.88 points, or 2.51%, at 3,253.87. The Nasdaq Composite was down 280.96 points, or 2.93%, at 9,295.63.

Health insurers such as UnitedHealth Group Inc, CVS Health Corp and Cigna Corp dropped between 3% and 4.8% as Bernie Sanders, who supports the elimination of private health insurance, strengthened his position for the Democratic presidential nomination with a decisive victory in the Nevada caucuses.

In a rare bright spot, Gilead Sciences Inc, whose antiviral remdesivir has shown promise in monkeys infected by a related coronavirus, rose 5.8%.

Declining issues outnumbered advancers for a 8.29-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 9.47-to-1 ratio on the Nasdaq.

The S&P index recorded six new 52-week highs and 17 new lows, while the Nasdaq recorded nine new highs and 112 new lows.

(Reporting by Medha Singh in Bengaluru; Editing by Saumyadeb Chakrabarty and Arun Koyyur)

Coronavirus infects hundreds in China’s prisons as global markets take hit

By Pei Li and Se Young Lee

BEIJING/SEOUL (Reuters) – The coronavirus has infected hundreds of people in Chinese prisons, authorities said on Friday, contributing to a jump in reported cases beyond the epicentre in Hubei province, including 100 more in South Korea.

The 234 infections among prisoners outside Hubei ended 16 straight days of declines in new mainland cases excluding that province, where the virus first emerged in December in its now locked-down capital, Wuhan.

State television quoted Communist Party rulers as saying the outbreak had not yet peaked, and more than 30 cases in a hospital in Beijing highlighted a sharp jump in the tally there.

FILE PHOTO: Doctors look at a screen that shows the ward where patients who are infected with the coronavirus are treated at the First People’s Hospital in Yueyang, Hunan Province, near the border to Hubei Province, which is under partial lockdown after an outbreak of a new coronavirus, in China January 28, 2020. REUTERS/Thomas Peter

Total cases in the capital of the coronavirus – known as COVID-19 – were at 396 with four deaths, out of an official mainland toll of 75,400 cases and 2,236 deaths

U.S. stock index futures lurched downwards as the rise in infections sent investors looking for safer assets such as gold and government bonds.

Adding to the gloomy mood, data showed Japan’s factory activity suffered its steepest contraction in seven years in February, underlining the risk of a recession there as the impact of the outbreak spreads. Asian and European stocks also fell.

With finance leaders from the Group of 20 major economies set to discuss risks to the world economy in Saudi Arabia at the weekend, the International Monetary Fund said it was too early to tell what impact the virus would have on global growth.

“COVID-19 anxiety has risen to a new level amid concerns of virus outbreaks in Beijing and outside of China,” said Rodrigo Catril, a senior FX strategist at NAB.

Chinese Vice Science and Technology Minister Xu Nanping said China’s earliest vaccine would be submitted for clinical trials around late April. That timetable is in line with research in other countries, and a World Health Organization estimate of a vaccine reaching the market in about 18 months.

As international authorities seek to stop the virus from becoming a global pandemic, public health officials are hoping for signs that the arrival of warmer weather in the northern hemisphere might slow its spread.

A couple wear masks at a main shopping area as the country is hit by an outbreak of the new coronavirus in downtown Shanghai, China February 21, 2020. REUTERS/Aly Song

PUBLIC GATHERINGS

The spike in cases in two jails outside Hubei – in the northern province of Shandong and Zhejiang in the east – made up most of the 258 newly confirmed Chinese infections outside the epicentre province on Friday.

Authorities said officials deemed responsible for the outbreaks had been fired and the government had sent a team to investigate the Shandong episode, media reported.

Hubei also reported 271 cases in its prisons. Provincial officials did not say when they had been diagnosed.

Data showed mainland China had 889 new confirmed cases and 118 deaths, with the most in Wuhan, which remains under virtual lockdown.

The virus has emerged in 26 countries and territories outside mainland China, killing 11 people, according to a Reuters tally.

South Korea is the latest hot spot with 100 new cases taking its total to 204, most in Daegu, a city of 2.5 million, where scores were infected in what authorities called a “super-spreading event” at a church, traced to an infected 61-year-old woman who attended services.

South Korean officials designated Daegu and neighbouring Cheongdo county as special care zones where additional medical staff and isolation facilities will be deployed. Malls, restaurants and streets in the city were largely empty with the mayor calling the outbreak an “unprecedented crisis”.

Another centre of infection has been the Diamond Princess cruise ship held under quarantine in Japan since Feb. 3.

Japan reported the deaths of two elderly passengers on Thursday, the first fatalities from aboard the ship where more than 630 cases account for the biggest cluster of infection outside China.

A plane carrying 129 Canadians evacuated from the ship has landed in Ontario, Canadian Foreign Minister Francois-Philippe Champagne said on Friday. All repatriated passengers on the chartered flight had tested negative, CBC News said.

In the Iranian city of Qom, state TV showed voters in the parliamentary election wearing surgical masks.

The country confirmed 13 new cases, two of whom had died. Most have been in Qom, a Shi’ite Muslim holy city where health officials on Thursday called for all religious gatherings to be suspended.

Fears of contagion triggered violence in Ukraine, where residents of a town clashed with police, burned tires and hurled projectiles at a convoy of buses carrying evacuees from Hubei to a quarantine centre.

(Additional reporting by Ryan Woo, Lusha Zhang and Huizhong Wu in Beijing, Cynthia Kim and Joori Roh in Seoul, Tetsushi Kajimoto, Elaine Lies, Chang-Ran Kim and Tim Kelly in Tokyo, Colin Packham in Sydney, Donny Kwok in Hong Kong, Ahmed Eljechtimi in Rabat; Writing by Stephen Coates & Robert Birsel; Editing by John Stonestreet and Nick Macfie)

Coronavirus poses risks to fragile recovery in global economy: IMF

By Andrea Shalal

WASHINGTON (Reuters) – The coronavirus epidemic has already disrupted economic growth in China and a further spread to other countries could derail a “highly fragile” projected recovery in the global economy in 2020, the International Monetary Fund warned on Wednesday.

In a note prepared for G20 finance ministers and central bankers, the global lender mapped out a plethora of risks facing the global economy, including the fast-spreading coronavirus and a renewed spike in U.S.-China trade tensions, as well as climate-related natural disasters.

Finance ministers and central bankers from the top 20 advanced industrialized economies will gather in Riyadh, Saudi Arabia, later this week amid continued uncertainty about the impact of the coronavirus, known as COVID-19.

The IMF said it was sticking to its January forecast for 3.3% growth in the global economy this year, up from 2.9% in 2019, already a downward revision of 0.1 percentage points from its forecast in October.

But it said the recovery would be shallow and risks remained skewed to the downside. “The recovery could be derailed by a sharp rise in risk premia, triggered for example by a re-escalation of trade tensions, or a further spread of the coronavirus,” the Fund said.

Chinese state television quoted President Xi Jinping as saying China could still meet its economic growth target for 2020 despite the epidemic. But the IMF note cast doubt on that.

“The coronavirus, a human tragedy, is disrupting economic activity in China as production has been halted and mobility around affected regions limited,” the Fund wrote in the note. “Spillovers to other countries are likely — for example through tourism, supply chain linkages, and commodity price effects.

It said the impact of the virus was still unfolding, and while the current scenario assumed a quick containment of the virus and a bounce-back later in the year, the impact of the epidemic could be larger and longer-lasting.

“A wider and more protracted outbreak or lingering uncertainty about contagion could intensify supply chain disruptions and depress confidence more persistently, making the global impact more severe,” the Fund said in the note.

Cyber attacks, an escalation of geopolitical tensions in the Middle East or a breakdown in trade negotiations between China and the United States could also impede the short-term global recovery, it said. And climate-related disasters, rising protectionism and social and political unrest triggered by persistent inequality posed further economic risks.

The Fund urged policymakers to maintain fiscal and monetary policy support. Low inflation required monetary policy to stay accommodative in most economies, it said.

(Reporting by Andrea Shalal; Editing by Tom Brown)

World’s richest 2,000 people hold more than poorest 4.6 billion combined: Oxfam

By George Obulutsa

NAIROBI (Reuters) – The world’s richest 2,153 people controlled more money than the poorest 4.6 billion combined in 2019, while unpaid or underpaid work by women and girls adds three times more to the global economy each year than the technology industry, Oxfam said on Monday.

The Nairobi-headquartered charity said in a report released ahead of the annual World Economic Forum of political and business leaders in Davos, Switzerland, that women around the world work 12.5 billion hours combined each day without pay or recognition.

In its “Time to Care” report, Oxfam said it estimated that unpaid care work by women added at least $10.8 trillion a year in value to the world economy – three times more than the tech industry.

“It is important for us to underscore that the hidden engine of the economy that we see is really the unpaid care work of women. And that needs to change,” Amitabh Behar, CEO of Oxfam India, told Reuters in an interview.

To highlight the level of inequality in the global economy, Behar cited the case of a woman called Buchu Devi in India who spends 16 to 17 hours a day doing work like fetching water after trekking 3km, cooking, preparing her children for school and working in a poorly paid job.

“And on the one hand you see the billionaires who are all assembling at Davos with their personal planes, personal jets, super rich lifestyles,” he said.

“This Buchu Devi is not one person. I in India encounter these women on a daily basis, and this is the story across the world. We need to change this, and certainly end this billionaire boom.”

Behar said that to remedy this, governments should make sure above all that the rich pay their taxes, which should then be used to pay for amenities such as clean water, healthcare and better quality schools.

“If you just look around the world, more than 30 countries are seeing protests. People are on the street and what are they saying? – That they are not to accept this inequality, they are not going to live with these kind of conditions,” he said.

(Reporting by George Obulutsa; Editing by Hugh Lawson)

China warns of retaliation after Trump threatens fresh tariffs

By Andrea Shalal, Alexandra Alper and Huizhong Wu

BEIJING/WASHINGTON (Reuters) – China on Friday said it would not be blackmailed and warned of retaliation after U.S. President Donald Trump vowed to slap a 10% tariff on $300 billion of Chinese imports from next month, sharply escalating a trade row between the world’s biggest economies.

Trump stunned financial markets on Thursday by saying he plans to levy the additional duties from Sept. 1, marking an abrupt end to a truce in a year-long trade war that has slowed global growth and disrupted supply chains.

Beijing would not give an inch under pressure from Washington, Chinese Foreign Ministry spokeswoman Hua Chunying said.

“If America does pass these tariffs then China will have to take the necessary countermeasures to protect the country’s core and fundamental interests,” Hua told a news briefing in Beijing.

“We won’t accept any maximum pressure, intimidation or blackmail. On the major issues of principle we won’t give an inch,” she said, adding that China hoped the United States would “give up its illusions” and return to negotiations based on mutual respect and equality.

Trump also threatened to further raise tariffs if Chinese President Xi Jinping fails to move more quickly to strike a trade deal.

The newly threatened duties, which Trump announced in a series of tweets after his top trade negotiators briefed him on a lack of progress in talks in Shanghai this week, would extend tariffs to nearly all Chinese goods that the United States imports.

The president later said if trade discussions failed to progress he could raise tariffs further – even beyond the 25 percent levy he has already imposed on $250 billion of imports from China.

Senior Chinese diplomat Wang Yi told reporters on the sidelines of an Association of Southeast Nations event in Thailand that additional tariffs were “definitely not a constructive way to resolve economic and trade frictions”.

U.S. Secretary of State Mike Pompeo, who was also in Bangkok, decried “decades of bad behavior” by China on trade and said Trump had the determination to fix it.

The news hit financial markets hard. On Friday, Asian and European stocks took a battering and safe-haven assets such as the yen, gold and government bonds jumped as investors rushed for cover.

Retail associations in the United States predicted a spike in consumer prices, hitting consumer stocks on Thursday on Wall Street, where Target Corp tumbled 4.2%, Macy’s Inc fell 6% and Nordstrom Inc was down 6.2%.

Asked about the impact on financial markets, Trump told reporters: “I’m not concerned about that at all.”

Moody’s said the new tariffs would weigh on the global economy at a time when growth is already slowing in the United States, China and the euro zone.

The tariffs may also force the Federal Reserve to again cut interest rates to protect the U.S. economy from trade-policy risks, experts said.

CHINESE RETALIATION?

One Chinese official told Reuters it was not the first time Trump had “flip-flopped”, and that though the time between the talks being declared constructive and Trump’s threat of new tariffs was short, officials in Beijing were already prepared.

“Discussion followed by a fight has become the normal pattern,” the official said.

Possible retaliatory measures by China could include tariffs, a ban on the export of rare earths that are used in everything from military equipment to consumer electronics, and penalties against U.S. companies in China, analysts say.

So far, Beijing has refrained from slapping tariffs on U.S. crude oil and big aircraft, after cumulatively imposing additional retaliatory tariffs of up to 25% on about $110 billion of U.S. goods since the trade war broke out last year.

China is also drafting a list of “unreliable entities” – foreign firms that have harmed Chinese interests. U.S. delivery giant FedEx is under investigation by China.

“China will deliver each retaliation methodically, and deliberately, one by one,” ING economist Iris Pang wrote in a note.

“We believe China’s strategy in this trade war escalation will be to slow down the pace of negotiation and tit-for-tat retaliation. This could lengthen the process of retaliation until the upcoming U.S. presidential election,” Pang said.

FRUSTRATED

U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin briefed Trump earlier this week on their first face-to-face meeting with Chinese officials since Trump met Xi at the G20 summit at the end of June and agreed to a ceasefire in the trade war.

“When my people came home, they said, ‘We’re talking. We have another meeting in early September.’ I said, ‘That’s fine, but until such time as there’s a deal, we’ll be taxing them,” Trump told reporters.

A source familiar with the matter said Trump grew frustrated and composed the tweets shortly after Lighthizer and Mnuchin told him China made no significant movement on its position.

Previous negotiations collapsed in May, when U.S. officials accused China of backing away from earlier commitments.

American business groups in China expressed disquiet over the latest round of U.S. tariffs. The U.S.-China Business Council said on Friday it was concerned the action “will drive the Chinese from the negotiating table, reducing hope raised by a second round of talks that ended this week in Shanghai”.

“We are particularly concerned about increased regulatory scrutiny, delays in licenses and approvals, and discrimination against U.S. companies in government procurement tenders,” said the U.S.-China Business Council’s President Craig Allen in an e-mail.

Ker Gibbs, the president of the American Chamber of Commerce in Shanghai, said that as market access in China “remains unnecessarily restricted”, the United States should continue its dialogue with Beijing, and “also work with like-minded countries to persuade China that fair and reciprocal trade and investment benefits all.”

CROPS AND DRUGS

Trump said Beijing had failed to fulfill promises to stop sales of the synthetic opioid fentanyl to the United States, which U.S. officials say was to blame for most of more than 28,000 synthetic opioid-related overdose deaths in the United States in 2017.

He also said Beijing had not followed through on a goodwill pledge to buy more U.S. agricultural products.

The U.S. Department of Agriculture on Thursday confirmed a small private sale to China of 68,000 tonnes of soybeans in the week ended July 25.

The United States also has yet to ease restrictions on U.S. companies’ sales to Chinese telecommunications giant Huawei, which Trump had pledged as a goodwill gesture to Xi after meeting at the G20 in Osaka.

(Reporting by Andrea Shalal, Alexandra Alper, Steve Holland, David Lawder, Tim Ahmann, Susan Heavey, Makini Brice, Nandita Bose and Jonathan Landay in Washington; and Huizhong Wu, Xu Jing, Stella Qiu, Se Young Lee, and Min Zhang in Beijing; and Brenda Goh in Shanghai; Writing by Ryan Woo and Michael Martina; Editing by Grant McCool, Shri Navaratnam and Alex Richardson)