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China deflation pressure mounts as investors seek more stimulus for economy

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China deflation pressure mounts as investors seek more stimulus for economy

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China’s deflationary pressures picked up in September with weaker than expected consumer and factory prices, underlining calls for Beijing to deliver a bigger package of measures to lift the economy.

The softer data comes as China’s volatile markets await more detailed information on Beijing’s stimulus plans, after a Ministry of Finance press conference on Saturday that pledged more spending but gave few new figures.

China’s consumer prices index was up 0.4 per cent year on year in September, the National Bureau of Statistics said on Sunday, weaker than a Bloomberg poll of analysts that forecast a 0.6 per cent gain and down from 0.6 per cent in August.

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The producer prices index fell 2.8 per cent year on year, compared with analysts’ forecasts of a decline of 2.6 per cent. The fall accelerated from 1.8 per cent in August and was the steepest decline in six months.

Goldman Sachs said consumer inflation was supported by rising prices for food, which were affected by adverse weather conditions and seasonal demand before the Golden Week holiday that started on October 1.

The weak inflation readings highlight how China’s economy is suffering from deflationary pressures stemming from a deep property crisis that has hit household demand.

They come ahead of government data scheduled to be released this week that is expected to paint a picture of a two-speed economy, with strong trade numbers set to be offset by weak third-quarter gross domestic product figures on Friday.

Economists expect China’s third-quarter GDP to have grown by less than Beijing’s official target of 5 per cent year on year.

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Analysts cautioned that if growth slows further and China’s export engine begins to hit more roadblocks, such as protectionism from important trade partners, policymakers will have to take more action.

“If the two-speed model [can] not continue, policymakers [will] need to escalate policy stimulus,” said Larry Hu, economist with Macquarie, in a note.

After months of incremental measures, the central bank announced a more forceful monetary stimulus in late September ahead of the national holiday, sparking a rally in China’s long-moribund stock markets.

Investors are waiting for Beijing to detail extra fiscal spending plans to back up the monetary stimulus but have been disappointed by a lack of detail in subsequent government announcements.

Analysts said that while markets want the government to present a more determined front on stimulus, Beijing will try to avoid flooding the market with credit. Past stimulus efforts are blamed for creating a property market bubble.

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Attention is turning to the next leadership meeting of the National People’s Congress, China’s rubber-stamp parliament, which technically has to approve any additional spending plans. A meeting is expected in the coming weeks.

The statistics bureau said weaker producer prices were driven by the “ferrous” metal smelting and rolling industry, down by 11 per cent year on year, and the petrol, coal and other fuel processing industries, down 9.4 per cent. The factory price of consumer goods also fell by 1.3 per cent.

On consumer prices, the bureau said the price of “new energy cars” — electric vehicles — and cars with traditional engines fell by 6.9 per cent and 6.1 per cent respectively.

China’s automotive market is characterised by fierce competition and excess capacity, leading many producers to increase low-cost exports.

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US election briefing: Trump visits Coachella while Harris packs diapers in North Carolina

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US election briefing: Trump visits Coachella while Harris packs diapers in North Carolina

Donald Trump visited California on Saturday, a state he is almost certain to lose, in a bid to link Kamala Harris to her home state’s recent struggles with homelessness, water shortages and a lack of affordability.

“We’re not going to let Kamala Harris do to America what she did to California,” the former president said in the city of Coachella, best known for its music festival of the same name, referring to the state as “Paradise Lost”.

Vice-president Kamala Harris meanwhile helped pack diapers, bandages and pain relief pills among other items into care packages for victims of Hurricane Helene as she visited the swing state of North Carolina, which narrowly backed Trump in 2020.

“You’re exactly right,” she said to Greg Hatem, owner of The Pit Authentic Barbecue restaurant where the aid event was taking place, as he commented that “it takes a village”. Harris also met with Black leaders at the restaurant. It was her second trip to North Carolina since Helene tore through the state last month.

Here’s what else happened on Saturday:

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  • Kamala Harris on Saturday released a report on her health and medical history, which found that “she possesses the physical and mental resiliency required to successfully execute the duties of the presidency” if voters elect her in November. A senior aide to Harris, 59, said the vice-president’s advisers viewed the publication of the health report and medical history as an opportunity to call attention to questions about Donald Trump’s physical fitness and mental acuity.

  • Tightening poll figures triggered nervousness and anxiety in Kamala Harris’s presidential campaign, with Donald Trump making gains in the states where it matters most as the election race enters its climactic final phase. Amid a dramatic news cycle that has seen the US hit by two destructive hurricanes and rising fears of all-out war in the Middle East, the Guardian’s 10-day polling average tracker showed the vice-president and Democratic nominee with a two-point nationwide lead, 48% to 46%, over her Republican opponent as of 10 October – tellingly, down from a 4% advantage she registered two weeks ago.

  • The far-right website the Gateway Pundit acknowledged for the first time on Saturday that there had not been any fraud during ballot counting in Atlanta in 2020 when Donald Trump lost the presidency. It was a significant concession from one of the most influential conservative sites that plays a key role in spreading election misinformation.

  • Tens of thousands of Christians poured on to the National Mall on Saturday in a pre-election event aimed at rescuing America from secularism. The rally was a collaboration organized by multiple far-right Christian leaders affiliated with the New Apostolic Reformation, a movement on the political far right that seeks to establish long-term Christian dominion over government and society as well as get Trump a second presidency in November.

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Moldova’s wineries shift away from Russian gas

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Moldova’s wineries shift away from Russian gas

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Wineries in the small eastern European country of Moldova are increasingly turning to renewable energy as part of the nation’s westward shift and efforts to curb its reliance on Russian gas.

Cricova, founded in 1952 by a Soviet decree that bears the signature of Joseph Stalin, is one of the vineyards that reduced its energy costs by 25 per cent after building solar parks and improving its insulation.

“All of the wine production process has been modernised . . . as we are adapting to today’s consumers and global trends”, said Cricova director Sorin Maslo.

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After Russia’s full-scale invasion of neighbouring Ukraine, Moldova accelerated its westward shift, applying for EU membership and looking for alternative energy sources to the Russian state-owned giant Gazprom.

Winemakers — a significant sector of the country’s economy — followed suit and started installing solar panels and insulating their facilities to reduce energy consumption. Cricova also pulled from public display Vladimir Putin’s wine collection of 607 bottles which the Moldovan government gave the Russian leader when he visited in 2008.

Moldova’s energy ministry estimates that last year households and businesses tripled their renewable energy sources, particularly photovoltaics.

Smaller businesses such as the new vinery Luca have also benefited from state subsidies to go green.

The owner Ion Luca told the Financial Times he avoided gas from the outset, when construction started in 2018, by investing in insulation and an electricity-powered heat pump at his winery in the town of Cricova, near the eponymous state company.

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“We were Gazprom’s hostages and I did not want to depend on them,” Luca said.

Luca, who is part of the fourth generation of winemakers in his family, said that when the Soviets annexed Moldova in 1944, his grandparents lost their house, their vineyards and all other properties. They were labelled “enemies of the people” and sent to Siberia in 1949 as part of one of Stalin’s mass deportations.

After Stalin’s death, his family returned to Moldova, and his father helped set up the wine production at the Soviet winery in Cricova the dictator had ordered, but the Lucas never got their land back. In 2018, Ion Luca purchased his new vineyard which aims to be “the most sustainable winery” in Moldova.

Winemakers, which are a significant sector of Moldova’s economy, started installing solar panels and insulating their facilities to reduce energy consumption after Russia invaded its neighbour Ukraine © Purcari winery/Dreamstime

Purcari, a Moldovan brand that has a strong presence on western markets after turning its back on Russia, is also going green.

Vasile Tofan, chair of the board of Purcari, said the shift was prompted by Russia’s repeated wine embargoes in the 2010s when Moscow sought to squeeze Moldova into cheaper deals.

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“Fool me once, shame on thee, fool me twice, shame on me,” said Tofan. The Russian bans initially put Purcari “on our knees” but eventually proved “a blessing in disguise” as it accelerated the westward pivot.

In 2014, when Russia annexed Crimea, Purcari produced “a liquid manifesto”, Freedom Blend, a wine made from Crimean, Georgian and Moldovan grape varieties. Purcari has since become a staple at festivals in neighbouring Romania and is available in the UK, Germany, Poland, as well as online.

Since 2021, Purcari has managed to cover a third of its energy consumption using solar panels. Tofan told the FT that the shift was bound to happen because Russia had been throttling Moldova’s gas supply and imposing price rises long before invading Ukraine, with the war just the latest catalyst for this transition.

Cricova, Luca and Purcari are also trying to make their business more sustainable by investing in lighter bottles, given that the biggest share of the industry’s carbon footprint is generated by producing and transporting heavy glass bottles. Luca also exports bag-in-box wines to Scandinavian markets.

A focus on wine quality and the revival of local varieties, which were lost in the Soviet era, can also boost exports, said Diana Lazăr, senior wine director at the international development company Chemonics.

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Russia’s squeeze on the Moldovan economy “galvanised the transition to a more sustainable business model which does not just use cheap resources and can become a competitive advantage in the long run”, said Lazăr. “This way, the Moldovan winemakers are aligning themselves to the global trend.”

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Harris releases her medical report — and uses it to raise questions about Trump

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Harris releases her medical report — and uses it to raise questions about Trump

Vice President Harris takes questions from reporters at Joint Base Andrews in Maryland on Oct.12, 2024.

Brendan Smialowski/AFP


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Brendan Smialowski/AFP

Vice President Harris on Saturday released a medical report — a document that her campaign is using to draw a contrast with her older rival — and dared former President Donald Trump to do the same.

This is the first time Harris, 59, has released results of a physical. Similar to reports released by previous commanders-in-chief, the two-page letter says that Harris is in excellent health and has “the physical and mental resiliency required to successfully execute the duties of the presidency.”

Harris told reporters traveling with her that every candidate for president had released medical information “except Donald Trump in this election cycle.”

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“It is clear to me that he and his team do not want the American people to really see what it is that he is doing and whether or not he actually is fit to do the job of being president of the United States,” she said.

Trump released a three-paragraph letter about his health a year ago

This medical disclosure come as Harris and Trump seem locked in a tie, less than a month before Election Day — each looking for ways to shake up the race and win over the small number of undecided or persuadable voters in swing states.

Harris’ campaign has been raising questions about whether Trump, 78, is up to the job, drawing attention in particular to his rambling and disjointed speeches as a sign that he has slipped.

“He talks at his rallies about fictional characters. He constantly is in a state of grievance about himself,” Harris said on Saturday, rhyming off a list of failings. “He is quite unfit to do the job,” she said.

Trump in Nov. 2023 released a three-paragraph letter from a doctor about his health. It said Trump’s “overall health is excellent” and that his “cognitive exams were exceptional.”

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On Saturday, Trump spokesperson Steven Cheung said that the former president had voluntarily released information over the years that showed “he is in perfect and excellent health to be commander in chief.”

Trump’s health has been a subject of speculation since he first released a short statement as a candidate in 2015 that said he would be “the healthiest individual ever elected” to the office — a letter that his then-doctor later said that Trump himself had dictated. The veracity of subsequent reports were also widely questioned.

When President Biden, 81, was still running for a second term, stumbles, mumbles and mistakes drew headlines and his age became his greatest political liability with voters, while Trump’s age and acuity came under less scrutiny.

After he was seemingly overwhelmed during his June debate with Trump, Biden was pressured by his party to bow out and pass the torch to a younger leader.

Here are some highlights from Harris’ medical report

Dr. Joshua Simmons, a White House Medical Unit physician who has been Harris’ doctor since Jan. 2021, wrote the three-page report. He said.

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  • Harris has seasonal allergies and has been on allergen immunotherapy to reduce her symptoms. She occasionally uses Atrovent but has never experienced severe symptoms, angioedema or anaphylaxis, her doctor said.
  • She is nearsighted and wears contacts, but can read comfortably without contacts or glasses.
  • Her most recent physical exam was in April 2024. She is up-to-date on preventive care like colonoscopy and annual mammograms. She takes a Vitamin D3 supplement.
  • She is at low risk for atherosclerotic cardiovascular disease.
  • She works out daily and eats healthy; does not smoke and drinks only occasionally and in moderation.
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