Chinese shadows on the markets

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Chinese real estate giant Evergrande yesterday urged in New York for bankruptcy protection under Chapter 15 of the US code as reported by US media including CNN and the New York Times. Evergrande seeks recognition of ongoing debt restructuring talks in Hong Kong, the Cayman Islands and the British Virgin Islands. The company specified that it is “a normal procedure for offshore debt restructuring and does not involve a bankruptcy filing” and added that its dollar-denominated obligations are governed by New York law and that it has asked the Court of the United States, “the approval of the arrangement in the context of the restructuring of the offshore debt”. Evergrande, which has accumulated debts of more than $300 billion, is considered one of the most heavily indebted real estate developers in the world. In January 2022, the group announced a restructuring plan and its shares were suspended from trading from the following March. The situation of Country Garden is also worrying the markets, which last Monday was unable to repay two installments of interest on loans and formally risks default in September if it does not pay.

According to the Wall Street Journal, in the event of insolvency, a situation similar to that of 2008 would be created with the crisis and the subsequent sudden closure of Lehman Brothers due to bankruptcy. According to the Wall Street Journal, the Chinese financial company Zhongrong International Trust is also in difficulty and has not paid interest and principal for a total of 14 million dollars to three Chinese companies listed on the stock exchange. News that fueled the fears of the stock exchanges, yesterday in general decline even if without panic. Milan lost 0.44% to 27,757.21 points, Frankfurt 0.65%, Paris 0.94%, Madrid 0.14%. and London 0.65%.

Direct foreign investment in China amounted to 766.71 billion yuan in the first seven months of 2023, with an annual decline of 4%, with a further deterioration on the -2.7% of the first half. According to reports from the Ministry of Commerce, the January-July figure expressed in dollars stood at 106.48 billion. High-tech industries had flows up 3.8%, of which 25.3% went to technology manufacturing. The investment boom continues from France (+213.7%), but also from the United Kingdom (+159.9%), Canada (+113.3%) and Switzerland (+61.2%)

The European Central Bank will send the Italian government a letter on the tax on bank extra profits. The president of the ECB Christine Lagarde is already working on writing it and the sending is expected in a couple of weeks at the latest. It will be a clear censorship, wrote Corriere della Sera yesterday. In fact, the ECB considers the measure adopted by the Italian government to be potentially harmful to the economy. and underlines that the government has not communicated the decision to the Bank of Italy and to the Eurotower. In short, the tax on extra profits risks opening a new front between Rome and Frankfurt. Also because the Italian government has protested on several occasions about interest rate increases by the ECB.

No cut in excise duties and fuel taxes, we don’t even talk about it. The Minister of Enterprise and Made in Italy, Adolfo Urso, protagonist of some speeches to try to keep the price of petrol and diesel under control, yesterday clarified in an interview with Repubblica that the discounts of 30 cents on excise duties introduced by the government of Mario Draghi and canceled twice by the Meloni executive will not return, despite the electoral promises of the center-right, from Fdi to Matteo Salvini’s League. “The excise duties do not touch each other,” said Urso. «President Draghi made that decision at an exceptional moment, but we preferred to use those resources to cut the tax wedge, for lower wages and larger families. The cost of reducing excise duties from March to December 2022 was over 9 billion, one billion a month, 12 billion a year. Figures that the government that is moving towards a difficult budget law cannot afford”. Words that provoked the intervention of the leader of Italia Viva Matteo Renzi, who recalled: «The cost of petrol also increases because the Meloni government has increased excise duties compared to the Draghi government. This is the truth. And he did so while allocating 890 million euros to Serie A clubs. I was the first to report him and I took the insults from the fans. But the truth is that they gave the money to the presidents of the Serie A teams and took it away from the middle class”.

Private wealth in the world fell by 2.4%, in 2022, to a value of 11.3 trillion dollars. This is the first time this has happened since 2008 according to data provided by Credit Suisse. The largest declines are for households in North America and Europe. Despite the impact of the sanctions, Russia instead experienced a sharp increase with 56 new millionaires. Globally the number of millionaires dropped by 3.5 million, to 59 million people. The super-rich, 1% of the population, have seen much of their fortune vanish.

Can’t say he didn’t go looking for it. The general of Folgore Roberto Vannacci, author of the self-produced book The world in reverse in which he expresses opinions and opinions on homosexuals (“You are not normal, convince yourself”), Jews, Families with a capital F and “wealthy singles” who are the only ones able to buy houses in city centers that once belonged to workers and large families, was relieved by the Army General Staff of his post as commander of the Military Geographical Institute. It was Defense Minister Guido Crosetto on Thursday who announced disciplinary measures against Vannacci for his “ravings”. Yesterday, however, the general reiterated his thoughts and made it known: «I will not reply to decisions that come from a hierarchical chain. I will do it in the appropriate places. Whoever wears a uniform plays an institutional role, but freedom of speech is guaranteed by the Constitution. I fight the single thought that forbids criticism of a certain category of people”.

The number of killed or wounded Ukrainian and Russian soldiers since the beginning of the war in Ukraine is almost 500 thousand. The New York Times reports it, citing American sources according to which a precise calculation is difficult to make because Moscow tends to lower its estimates and Kiev does not report official data. Yesterday the Washington Post published some indiscretions from the US secret services according to which the Ukrainian counter-offensive will not achieve its objectives. Circumstance denied by Jake Sullivan, Joe Biden’s adviser for national security: «I do not comment on intelligence indiscretions. In the last couple of years there has been a lot of analysis of how the war would evolve. We are doing everything possible to support the Ukrainians. We don’t make predictions because war, this war, is unpredictable. I have faith in the courage of the Ukrainians.”

Yesterday, the spokeswoman for the Russian Foreign Ministry, Maria Zakharova, appealed to Ukrainian soldiers to “turn weapons against their government or surrender to Russian troops”.

Summit between Biden, the South Korean president, Yoon Suk Yeol, and the Japanese prime minister, Fumio Kishida, to send a signal of unity aimed at China. Tokyo and Seoul are two faithful allies of Washington but relations between the two Asian industrial powers are historically very tense, due to the Japanese domination of the peninsula during the Second World War. However, for the containment strategy pursued by the US against Beijing, it is essential to establish a closer relationship between the two eastern partners.

“On the recommendation of the Prime Minister, Giorgia Meloni, we proceeded to settle the bill left unpaid by a group of Italian tourists in a restaurant in the city of Berat”. This was announced by the Italian embassy in Tirana in a statement, after the episode that occurred when the premier was on holiday in Albania, a guest of premier Edi Rama.

This article is originally published on italiaoggi.it

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