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FirstFT: China has been accused of underestimating the number of Covid deaths

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good morning. The World Health Organization blamed China Underestimating the seriousness of the Corona virus outbreak and the true number of deaths, in the strongest rebuke yet of Beijing’s handling of the pandemic.

“We believe that the current numbers being released from China do not represent the true impact of the disease in terms of hospitalizations, in terms of ICU. [intensive care unit] Mike Ryan, head of the World Health Organization’s emergencies programme, told reporters:

Beijing’s definition of death from Covid-19, which was changed last month, was “very narrow,” Ryan said, as he called on Beijing to provide greater transparency on the extent of the increase in cases since President Xi Jinping brought an abrupt end to the system of controls. Strictly non-Covid.

Internal Chinese government estimates indicate that hundreds of millions of people may have been infected by late December. However, as of Tuesday, China officially reported only 5,258 deaths from Covid nationwide, including 25 since December 1, despite projections of up to 1 million deaths during this wave. Some areas reported no deaths despite an explosion in cases.

An increasing number of China’s celebrities have been lost to Covid-19, from academics to opera singers, whose deaths have complicated government efforts to reduce the scale of the outbreak spreading across the country. Want more about China? Explore our center in China For the latest news and analysis.

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1. The United States sends a delegation of trade and economic officials to Taiwan The Office of the United States Trade Representative announced that Terry McCarten, who is in charge of trade with China, will do so Leading an American delegation to Taiwan From January 14 to 17, as Joe Biden’s administration seeks to strengthen America’s commercial relationship with the island.

2. China and the Philippines undertake “friendly consultations” Chinese President Xi Jinping and his Philippine counterpart, Ferdinand Marcos Jr., agreed Enhancing economic relations and dealing with maritime issues In the South China Sea through consultations, as Beijing seeks to salvage a relationship undermined by their territorial dispute. Following reports that China has begun building uninhabited land features in the South China Sea, the meeting is seen as a test of whether Manila can boost relations with Beijing.

3. McCarthy loses a sixth vote for Speaker of the House despite Trump’s interference As a California congressman, Kevin McCarthy’s dreams of becoming Speaker of the House were fading fast. He lost the sixth ballot amid continuing opposition within his party. Despite former President Donald Trump intervening for 11 hours to encourage Republicans to support McCarthy, 20 Republicans voted against him on the fifth ballot.

House Republican Leader Kevin McCarthy puts his hand to his face as he listens in the House chamber during the second day of the House Speaker election.
Opposition Republican lawmakers denied Kevin McCarthy the simple majority needed to take the gavel of Speaker of the House © Getty Images

4. Salesforce to cut 10% of employees Co-founder and CEO Marc Benioff blamed the retrenchment for the deteriorating working conditions, but he admitted it Misreads demand strength The US software company has become the latest tech group to reverse hiring in the face of slowing demand and mounting turmoil on Wall Street.

5. Japan’s nuclear restart is in jeopardy Japan’s ambitions to restart its nuclear industry risk of relapse Because of a shortage of engineers and manufacturing capacity that had atrophied in the decade following the Fukushima nuclear disaster. Japan got about a third of its electricity from 54 nuclear reactors before the Fukushima disaster. Right now, only nine are working.

next day

economic indicators S&P PMI numbers for Australia, China, Hong Kong and Singapore will be published today. Also today, Singapore’s retail sales figures are due from the Department of Statistics.

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Funeral of former Pope Benedict the funeral The first pope in 600 years to resign from office, who died Saturday at the age of 95, is scheduled to hold his resignation at the Vatican today. Pope Francis will preside over the event.

French inflation figures While inflation is declining elsewhere in the Eurozone, figures released today in France are expected Slight increase in price growth. French inflation is expected to peak in the first quarter of 2023, according to the French central bank.

What else do we read

The prosperity of the new Gulf sovereign wealth fund From Qatar and Saudi Arabia to the United Arab Emirates, the Gulf is increasingly seen as a One of the world’s last remaining sources of abundant capital. For many of those bolting to its door, there is one thing on their mind — making deals with sovereign wealth funds — as the region enjoys its first petrodollar-fueled boom in a decade.

  • Opinion: New world energy order Is formedwrote Rana Forouhar, following President Xi Jinping’s visit to Saudi Arabia last month.

Chinese battery makers are strengthening their grip on global supplies Chinese battery manufacturers have expanded their dominance of global supplies, with the two largest producers reaching a level combined market share of 50 percent, Leaving South Korean and Japanese competitors far behind.

The Russian military is facing a backlash over the killing of conscripts The killing of dozens of Russian conscripts in a Kyiv-led missile attack on their barracks in occupied eastern Ukraine has rekindled accusations in Moscow about the conduct of the war — and raised new questions about the nature of the war. The army’s ability to learn from its mistakes.

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People lay flowers at a memorial to soldiers killed in an attack on their barracks in Donetsk Province, Ukraine
People lay flowers near the Eternal Flame Monument in Samara, Russia. © Albert Dzen/Reuters

Israel’s shift to the right raises concerns about the stability of the West Bank Israeli proposals for far-reaching changes in the administration of the occupied West Bank raised warnings even before Benjamin Netanyahu’s official return as prime minister last week. But an intervention by the Israeli army commander confirmed the extent of those fears It reached the highest echelons of the Jewish state’s army.

Active Chinese travel will restore the image of the global nation On top of the direct financial impact, the return of Chinese travelers to the world stage could have a significant impact on business and Contribute to a subtle geopolitical alert. It’s not just the purchasing power of tourism that matters — views of China will change, Leo Lewis writes.

Take a break from the news

London-based Korean-American chef, restaurateur, and author Judy Joo shares it Gastronomic guide To New York, including the Jazz Club at the new Aman Hotel and some old favourites.

Inside Tuscan Fresco Restaurant
The Tuscan Fresco by Scotto is a longtime favorite in Joo © Eric Stiffler

Thank you for reading and remembering that you can Add FirstFT to myFT. You can also choose to receive a FirstFT push notification every morning on the app. Send your recommendations and feedback to firstft@ft.com

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Economic

We need to pay more attention to skewed economic signals

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The writer is chair of Queen’s College, Cambridge and advisor to Allianz and Gramercy

Inflation was the dominant economic and financial issue of 2022 for most countries around the world, especially for advanced economies that have a consequential impact on the global economy and markets.

The effects have been seen in declining living standards, increasing inequality, increasing borrowing costs, stock and bond market losses, and occasional financial mishaps (fortunately small and so far contained).

In this new year, recession, both actual and feared, has joined inflation in the driving seat of the global economy and is likely to replace it. It’s a development that makes the global economy and investment portfolios subject to a wide range of possible outcomes — something that a growing number of bond investors seem to be aware of more than their equity counterparts.

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International Monetary Fund iYou will likely review soon Her economic growth forecasts again, predicting that “a third of the world will be hit by recession this year”. What is particularly notable to me about these worsening global prospects is not only that the world’s three major economic regions – China, the European Union and the United States – are slowing down together, but also that this is happening for different reasons.

In China, a chaotic exit from the wrong Covid-19 policy is undermining demand and causing more supply disruptions. Such headwinds to domestic and global economic well-being will continue as long as China fails to improve the coverage and effectiveness of its vaccination efforts. The strength and sustainability of the subsequent recovery will also require that the country more vigorously renew a growth model that can no longer rely on greater globalization.

The European Union continues to deal with energy supply disruptions as the Russian invasion of Ukraine continues. Strengthening inventory management and reorientation of energy supplies is well advanced in many countries. However, it is not yet sufficient to lift immediate constraints on growth, let alone resolve long-term structural headwinds.

The United States has the least problematic view. The headwinds to growth are due to the Fed’s struggle to contain inflation after mischaracterizing rate increases as fleeting and then initially being too timid to adjust monetary policy.

The Fed’s shift to an aggressive front-load of interest rate hikes came too late to prevent the spread of inflation in the services sector and wages. As such, inflation is likely to remain stubborn at around 4 percent, be less sensitive to interest rate policies and expose the economy to greater risk for accidents from additional policy errors that undermine growth.

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The uncertainties facing each of these three economic areas suggest that analysts should be more careful in reassuring us that recessionary pressures will be “short and shallow”. They need to be open, if only to avoid repeating the mistake of prematurely dismissing inflation as transient.

This is especially important because these diverse drivers of recessionary risk make financial fragility more threatening and policy shifts more difficult, including potentially Japan. Get out of interest rate control Policy. The range of possible outcomes is extraordinarily large.

On the one hand, a better policy response, including improving the supply response and protecting the most vulnerable populations, can counteract the global economic slowdown and, in the case of the United States, avert a recession.

On the other hand, additional policy errors and market turmoil can lead to self-reinforcing vicious cycles with rising inflation and rising interest rates, weakening credit and compressed earnings, and stressing market performance.

Judging by market prices, more bond investors are better understanding this, including by refusing to follow the Fed’s interest rate guidance this year. Instead of a sustainable path to higher rates for 2023, they believe recessionary pressures will lead to cuts later this year. If true, government bonds would provide the yield and potential for badly missed portfolio risk mitigation in 2022.

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However, parts of the stock market is still weakly bearish pricing. Reconciling these different scenarios is more important than investors. Without better alignment within markets and with policy signals, the positive economic and financial outcomes we all desire will be no less likely. They will also be challenged by the risk of more unpleasant outcomes at a time of less economic and human resilience.

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Economic

Macro hedge funds end 2022 higher, investors say, while many others take big losses By Reuters

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© Reuters. FILE PHOTO: Traders work on the trading floor of the New York Stock Exchange (NYSE) in New York City, US, January 5, 2023. REUTERS/Andrew Kelly

By Svea Herbst Baylis

NEW YORK (Reuters) – Some hedge funds betting on macroeconomic trends have boasted of double and even triple-digit gains for 2022, while other high-profile companies that have long been on technology stocks have suffered heavy losses in volatile markets, investors said.

Rokos Capital, run by Chris Rokos and one of a handful of so-called global macro companies, gained 51% last year. Fund investors this week, who asked not to be identified, said Brevan Howard Asset Management, the company where Rokos once worked, posted a gain of 20.14% and Caxton Associates returned 16.73%.

Haider Capital Management’s Haider Jupiter Fund rose 193%, an investor said.

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Data from hedge fund research showed that many macro managers have avoided crumbling stock markets that have been rocked by rapid interest rate increases and geopolitical turmoil, including the war in Ukraine, to rank among the best performers in the hedge fund industry. The company’s macro index rose 14.2% while the general index of hedge funds fell 4.25%, its first loss since 2018.

Equity hedge funds, where the bulk of the industry’s roughly $3.7 trillion in assets are invested, fared worse with a loss of 10.4%, according to HFR data. And while that beat the broader stock market’s loss of 19.4%, some high-profile funds posted even bigger losses.

Tiger Global Management lost 56% while Whale Rock Capital Management ended the year with a 43% loss and Maverick Capital lost 23%. Coatue Management ended 2022 with a loss of 19%.

But not all companies that bet on technology stocks suffered. John Thaler JAT Capital finished the year with a 3.7% gain after fees after a 33% increase in 2021 and a 46% gain in 2020.

Sculptor Capital Management (NYSE::), where founder Dan Och is fighting the company’s current CEO in court over his salary increase, posted a 13% drop.

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David Einhorn’s Greenlight Capital, which bet that Elon Musk would be forced to buy Twitter, ended the year up 37% while Rick Sandler’s Eminence Capital rose 7%.

A number of so-called multi-manager companies where teams of portfolio managers bet on a variety of sectors also boast positive returns and have been able to deliver on their promise that hedge funds can deliver better returns in distressed markets.

Balyasny’s Atlas Fund (NYSE: Enhanced) gained 9.7%, while Point72 Asset Management gained 10%. Millennium Management gained 12% while Carlson Capital ended the year with a 7% gain.

Representatives for the companies either did not respond to requests for comment or declined to comment.

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German automakers point to easing supply chain problems

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Sales at BMW and Mercedes-Benz jumped in the final months of 2022 as the German premium auto brands indicated supply chain problems plaguing the industry were abating.

Automakers around the world have experienced parts shortages since the pandemic, especially semiconductors, leaving many of them with large fleets of incomplete vehicles that can’t be delivered to customers.

BMW and Mercedes each said their full-year vehicle deliveries fell last year by 4.8 percent and 1 percent, respectively, due to Suppliers Bottlenecks as well as lockdowns in China and the war in Ukraine.

But supply pressures eased in the last quarter of the year, as BMW recorded a 10.6 percent jump in sales, with 651,798 vehicles delivered, and Mercedes fulfilling 540,800 orders, up 17 percent from the same period in 2022.

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BMW He said the main effects of supply chain bottlenecks and continued lockdowns were felt in the first six months of the year, adding that “sales were steadily picking up in the second half.”

Mercedes boss Ula Kallenius told the Financial Times last week that the list of problems in the auto supply chain was declining, but added that long waits for cars would continue into 2023.

“One chip is enough to be vital [ . . .] Missing, and then you can’t finish the car, even if you have everything else.

Both brands recorded strong sales growth electric car. Mercedes, which last week announced a plan to build 10,000 charging docks, said EV shipments grew 124 percent to 117,800 last year compared with its predecessor.

Similarly, BMW reported strong growth in electric vehicle sales, with deliveries of fully electric vehicles doubling last year to 215,755.

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Analysts at Bank of America said that sales of electric vehicles, including hybrid cars, reached a historic peak last November, with 1.1 million units sold. They attributed this largely to the upcoming phase-out of customer subsidies in Germany.

Participate in Mercedes BMW and BMW prices held steady Tuesday morning as investors priced in an image of an improving showing.

Rolls-Royce, a subsidiary of BMW, announced Monday that sales have hit a 119-year record, driven by strong demand in the United States, its largest market.

The luxury brand has been largely unaffected by the semiconductor pressure, mainly because it makes relatively few compounds and therefore needs fewer chips.

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