Turning tables
Written by Li-Ann Chin, associate
Edited by Adam Shaw, associate partner
19 January 2021
Good morning,
According to official data released on Monday, China’s gross domestic product expanded by 6.5% in the final quarter of 2020, making it one of the few countries in the world to register positive growth for the year.
The new figures underline a rapid turnaround in the world’s second largest economy, which declined in early 2020 for the first time since the sweeping political, economic and cultural changes Beijing implemented post-1980, after health authorities brought the country to a halt in a desperate bid to tackle the coronavirus outbreak.
China’s rebound from the pandemic is reportedly powered by higher industrial production, which experienced a seven per cent year-on-year increase in November, allowing China to play a dominant role in global trade when other developed economies foundered. Its standout economic growth in 2020’s pandemic-battled global economy has led analysts to bring forward their forecasts for when China will overtake the US as the world’s largest economy – from 2030 to 2026.
The country’s influence and reputation, however, appears to be on a downward spiral. Last week, China was blasted for its “appalling year” for human rights in 2020, with advocacy group Human Rights Watch lambasting the authoritarian regime’s crackdown on dissent in Hong Kong, repression of Muslim Uighurs and the silencing of people reporting on the coronavirus outbreak. Furthermore, the belligerence Beijing has displayed towards countries such as India, Taiwan and Australia has not done it any favours.
And yet, 2020 has been a mixed bag for China on the international front. In December, a landmark trade deal was agreed upon between the EU and China, bringing seven years of negotiations to a successful close. In addition, the Regional Comprehensive Economic Partnership (RCEP), signed in November, is the first trade deal to simultaneously involve rival East Asian powers – China, Japan and Korea.
China may not be much loved overseas. However, economically, it looks relatively confident and stable compared to many in the developed world.
The Prince’s Trust annual survey of young people’s happiness and confidence has returned the worst findings in its 12-year history. The report reveals that one in four young adults have felt “unable to cope” during this pandemic, with more than half stating they always or often felt anxious.
Russian opposition activist Alexei Navalny has has been imprisoned just a day after returning to his home country, despite demands from the US and the EU to release him and calls from two EU member states for the bloc to impose new sanctions against Moscow if he is not swiftly released.
Head of the World Health Organisation, Tedros Adhanom Ghebreyesus, has warned that the world is on the brink of a “catastrophic moral failure” because of the unequal distribution of Covid vaccines, as richer countries prioritise distribution to their own populations, leaving poorer countries with limited supply. The organisation has called for a full commitment to Covax, the global vaccine-sharing scheme, which is set to launch next month.
President Donald Trump’s approval rating has dropped to 34% in a Gallup poll released on Monday, a low point of a presidency that already had the weakest average approval rating of any of his predecessors since the survey began in the 1940s. The figures indicate a significant loss of support in the final two weeks of his presidency, as a result of the Capitol riot and unprecedented second impeachment. (£)
Business and economy
Foreign secretary Dominic Raab announced yesterday that the governor of the British Virgin Islands, Augustus Jaspert, has called for a federal investigation into claims of widespread corruption and misuse of taxpayer money in the overseas territory. High Court judge Sir Gary Hickinbottom will lead a commission that will investigate and is expected to report back in six months.
The UK government has unveiled a £23 million fund to compensate the fishing industry for losses caused by red tape as Scottish seafood hauliers descended on Downing Street to complain they were being “tied in knots with paperwork” by the post-Brexit fishing deal. Exporters have said they face possible bankruptcy following a suspension of road deliveries last week due to border delays.
Chancellor Rishi Sunak has been urged by the Confederation of British Industry (CBI) to extend the government’s furlough and business rates holiday schemes before March’s budget and allow firms to plan for the months ahead. The CBI’s intervention comes as the chancellor faces questions over how long to continue the government’s support for business and when and how to begin repairing public finances.
Columns of note
The post-Brexit trade deal finally brokered by UK and EU negotiators before Christmas was celebrated by the government with great fanfare. And yet, the agreement barely touches on financial services, a sector worth £132 billion a year to the UK. Writing in City A.M, Catherine McGuinness advocates for a collaborative partnership to be established between the EU and UK, arguing that both parties have much to gain from closer cooperation on financial and professional services.
The UK has now recorded more than 100,000 deaths from coronavirus, according to some figures. Writing in The Guardian, John Harris slams the government’s hasty and irresponsible handling of the pandemic. The British public have been careful and calm. The problem, her argues, is that the government is not.
What happened yesterday?
The FTSE 100 ended the session down 0.22% at 6,720.65, while the FTSE 250 made a marginal gain of 0.12% to close at 10,639.34. Sterling was also mixed, last trading 0.07% lower against the dollar at $1.3581, while gaining 0.02% on the euro at €1.1247.
In the US, Wall Street’s S&P 500 index dipped by 0.72% to 3,768.25, while the tech-heavy Nasdaq composite declined 0.87% to 12,998.5.
In company news:
British Airways parent International Airlines Group (IAG) was down 0.83%, budget airlines easyJet and Wizz Air lost 1.92% and 1.78% respectively, and tour operator TUI was 1.26% weaker.
BT fell 1.53% following reports over the weekend that it is facing a class action lawsuit and Centrica lost 2.17% after it was revealed that chief financial officer Johnathan Ford had left abruptly.
What’s happening today?
Finals
Watkin Jones
Interims
Knights Group
Time Finance
U and I Group
AGMs
C4x Discry Hdgs
Tracsis
Int. economic announcements
(07:00) Consumer Price Index (GER)
(09:00) Current Account (EU)
(10:00) ZEW Survey (GER) – Economic Sentiment
(10:00) ZEW Survey (GER) – Current Situation
(10:00) ZEW Survey (EU) – Economic Sentiment
While wild salmon are naturally pink due to the large amount of shrimp in their diet, farm-raised salmon eat differently. In order to achieve that pleasing pink colour, salmon farmers add carotenoids to the fish feed to mimic the natural hue of wild salmon.
Parliamentary highlights
House of Commons
Oral questions
Foreign, Commonwealth and Development Office
Ten Minute Rule Motion
Freedom of Speech (Universities) – Mr David Davis
Consideration of Lords amendments
Trade Bill
High Speed Rail (West Midlands – Crewe) Bill
Adjournment
Animal charities and the covid-19 outbreak
– Sir David Amess
House of Lords
Oral questions
Estimated reduction in the use of diesel oil if railways connecting ports and quarries to inland distribution centres were electrified – Lord Bradshaw
Support of those with eating disorders after ‘The Health Survey for England’ finding that 19% of women aged sixteen and over screened positive for a possible eating disorder – Baroness Parminter
Research into the causes and treatment of brain tumours – Lord Hunt of Kings Heath
European Union offer to the UK for visa-free touring for musicians in EU member states – Lord Berkeley of Knighton
Legislation
Pension Schemes Bill [HL] – consideration of Commons amendments – Baroness Stedman-Scott
Scottish Parliament
Scottish Government Debate: Covert Human Intelligence Sources (Criminal Conduct) Bill – UK Legislation
Stage 1 Debate: United Nations Convention on the Rights of the Child (Incorporation) (Scotland) Bill
Stage 3 Proceedings: Protection of Workers (Retail and Age-restricted Goods and Services) (Scotland) Bill
Financial Resolution: United Nations Convention on the Rights of the Child (Incorporation) (Scotland) Bill
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