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Bessen about Beijing’s export controls
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Israel imposes new limits on aid to Gaza
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Bumper profits for Wall Street banks
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Why don’t Chinese collectors pay for their art?
We start in the US, where Scott Bessent has accused China of trying to damage the global economy in an exclusive interview with the Financial Times. The US Treasury Secretary said Beijing’s export controls are “a sign of how weak their economy is,” according to the FT’s Demetri Sevastopulo and James Politi. Here’s what you need to know.
What Bessent says: The US Treasury Secretary argued that China’s introduction of the checks – three weeks before US President Donald Trump is expected to meet his Chinese counterpart Xi Jinping in South Korea – reflected problems in its own economy. “Maybe there is a Leninist business model where hurting your customers is a good idea, but they are the largest supplier in the world,” Bessent said. “If they want to slow down the global economy, they will be hit the hardest.”
“They are in the middle of a recession/depression and are trying to export themselves out of it,” he added. “The problem is that they worsen their position in the world.”
Why it’s important: US officials were surprised last week by what they saw as China’s disproportionate move to restrict supplies of critical minerals ahead of a planned meeting between Trump and Xi. Trump threatened on Friday to impose additional 100 percent tariffs on China and cancel his planned meeting with Xi. The US president later walked back some of his comments and Bessent confirmed yesterday that the two leaders would still meet in Apec.
You can read our full interview with Bessent here.
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China targets US shipbuilding: China has added five U.S. subsidiaries of South Korean shipbuilder Hanwha Ocean to its sanctions list, triggering falls on the global stock market.
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Export threats: What are the real risks of China’s rare earth restrictions? Hakyung Kim explores this in the latest edition of Unhedged.
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Déjà vu: Edward Luce wonders whether the US president’s latest trade crisis is likely to result in an economic crisis another climb down.
Here’s what else we’re keeping an eye on today:
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Results: The third quarter reporting season continues with Morgan Stanley and Bank of America. Here’s a look from yesterday busy day with publication of bank results.
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Economic data: China releases its September CPI and PPI inflation figures. Japan releases its revised industrial production and retail sales figures for August.
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War between Russia and Ukraine: NATO defense ministers will meet in Brussels to discuss the conflict in Ukraine, chaired by NATO Secretary General Mark Rutte.
Five more top stories
1. Israeli soldiers killed several Palestinians in northern Gaza, a day after Trump touted the end of the two-year war. Israeli authorities announced that they have also imposed new restrictions on aid to Gaza. In a message to aid groups, Cogat said only 300 aid trucks would enter the enclave on Wednesday – half the number agreed in the fragile ceasefire.
2. Russian authorities are opening a new criminal case against one of the Kremlin’s most prominent critics. Mikhail Khodorkovsky, the former Yukos oil tycoon and once the country’s richest man, is accused of plotting to overthrow Vladimir Putin’s regime. Twenty-two others, including a former Russian prime minister and chess grandmaster, have also been accused of backing Ukrainian units to seize power by force.
3. A unit of the Madagascar army announced on national radio that it had seized power a day after President Andry Rajoelina fled to an unknown “safe location”. In what amounted to a coup, Colonel Michael Randrianirina said the military would suspend the constitution and dissolve most major national bodies.
4. Jay Powell has indicated he could be willing to support another rate cut later this month. The Fed chairman’s latest comments indicate he is softening on monetary policy, even as many economists worry that the Trump administration’s tariff policies will fuel a new wave of inflation in the U.S. economy. Here’s everything else Powell told reporters on Tuesday.
5. Oil prices have fallen to their lowest level in five months after a report estimated a recent “large surplus” of crude oil. If a rise occurs in the US or Europe, which play a bigger role in global oil price formation than China, it could hit prices even more, the International Energy Agency said.
The great reading
Bullion is now up more than 50 percent this year, putting gold on track for its best year since 1979. The rally has been fueled by central banks, especially in developing countries, looking to diversify their reserves away from the U.S. dollar. As investors flock to buy the precious metal, some are wondering: how long will the gold mania last?
We are also reading. . .
Chart of the day
Goldman Sachs, JPMorgan Chase and Citigroup have reported huge gains in their Wall Street divisions, easily exceeding analyst expectations. Investment banking and trading revenues rose at least 12 percent at all three banks, a sign that Wall Street’s long-awaited revival under the Trump administration is finally starting to materialize.
Take a break from the news. . .
For decades, China’s rapidly growing ranks of millionaires and billionaires dominated global art markets, generating hefty commissions and big profits for auction houses. Now the overheated market has fallen sharply and buyers are abandoning auction houses. William Langley takes a deep dive into the delay – and why so many winning bidders end up not paying.
