The social media platform is challenging a potential ban on First Amendment grounds

TikTok is suing the US government in an attempt to stop the enforcement of a bill passed by Congress last month that seeks to force the platform’s China-based owner ByteDance to sell the app or face a complete ban.

In April, US President Joe Biden signed into law a bill that gives ByteDance 270 days to divest from its US business. If it fails to comply, TikTok will be banned from app stores serving American customers.

In the lawsuit, which was filed on Tuesday in the US Court of Appeals for the DC Circuit, TikTok argued that the bill violates constitutional protections of free speech.

The petition describes the ‘Protecting Americans from Foreign Adversary Controlled Applications Act’ as an “unprecedented violation” of First Amendment rights.

“For the first time in history, Congress has enacted a law that subjects a single, named speech platform to a permanent, nationwide ban, and bars every American from participating in a unique online community with more than 1 billion people worldwide,” TikTok claimed in the lawsuit.

The company also argued that invoking national security concerns is not a good enough reason to restrict free speech.

A number of American lawmakers have insisted for years that TikTok poses a “national security threat” due to its Chinese ownership, and have sought to force it to sever ties with its parent company ByteDance. Efforts to rein in the popular video-sharing app have persisted since 2020 under both the Trump and Biden administrations. The federal government and dozens of states have already banned the use of TikTok on government-owned devices.

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Some US lawmakers, however, opposed the bill that could see TikTok banned, calling it a “cure” that is “worse than the disease” and raising concerns that it would give the White House the power to ban other websites and apps.

TikTok has strongly denied that it has ever given Chinese government officials access to US user data, insisting it has taken steps to protect that information by hosting the data on servers owned by US tech giant Oracle.

China has also blasted efforts to ban TikTok in the US, describing such a move as “contrary to the principles of fair competition and international economic and trade rules” and accusing Washington of “bullying behavior” and “leveraging state power” against ByteDance.

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The facility in St. Petersburg has been given to the domestic luxury car brand Aurus

A St. Petersburg-based plant formerly belonging to Japanese automaker Toyota has been handed over to Russian high-end carmaker Aurus, Russia’s acting Minister of Industry and Trade, Denis Manturov, said on Tuesday. The brand is best known for producing limos for the Russian president.

Production at the plant will start before the end of the current year, Manturov added.

Toyota shut down the plant in 2022 and left the Russian market amid Ukraine-related sanctions against Moscow. The facility, which produced the Camry and RAV4 models, was later sold to the Central Scientific Research Automobile and Automotive Engines Institute, abbreviated as NAMI, which owns the Aurus brand. In 2022, the Institute also acquired French car maker Renault’s controlling stake in Russian car manufacturer AvtoVAZ.

Aurus is a line of luxury vehicles that was created a decade ago with the aim of replacing the fleet of mostly foreign-made cars used by top Russian officials. The brand debuted at Russian President Vladimir Putin’s inauguration in May 2018. On Tuesday, Putin used an updated version of the luxury vehicle during his inauguration ceremony in Moscow.

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The cars are assembled at NAMI’s factory in Moscow and at an assembly plant in the Republic of Tatarstan, which used to be a joint venture between Russian company Sollers and American car maker Ford. Last year, Aurus production was launched in the United Arab Emirates.

In January, Manturov said that Aurus was expected to broaden its range of vehicles by adding more affordable and mass-market models. Sales of new large executive and business class sedans will be launched in 2025. The price of currently available Aurus vehicle models is above $500,000.

In February, President Putin gifted an Aurus to North Korean leader Kim Jong-un.

For more stories on economy & finance visit RT's business section

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Members of the bloc can opt out of Brussels’ plan to use the frozen assets to buy weapons for Kiev, the outlet reports

The EU will reportedly allow neutral member states to opt out of its plan to use the revenue generated from frozen Russian central bank reserves to buy weapons for Ukraine and limit themselves to providing non-military aid to the country.

The proposal comes as the bloc seeks ways to unlock funding for Kiev, Politico reported on Monday, citing EU diplomats.

Earlier this year, Brussels suggested seizing the interest earned from the assets to acquire weapons for Ukraine rather than using the funds for reconstruction, as had been initially planned.

The proposed measure has faced resistance from some EU member states that are not part of NATO, including Austria, Ireland, Malta, and Cyprus. They have demanded an exemption from buying arms for Kiev, according to the article. Other vocal critics of the EU plan include Hungary and Slovakia, the outlet reported.

Under the EU’s latest attempt to win over member states, countries which oppose the plan can limit themselves to providing humanitarian aid to Ukraine, the outlet said, citing an EU document.

Brussels is now pressing ahead with the idea of creating two different tracks, according to officials – one in which the profits would be used for non-military aid, and a second aimed at buying weapons, from which neutral countries can opt out.

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The West has frozen roughly $300 billion in Russian sovereign funds since the start of the Ukraine conflict. Brussels-based clearinghouse Euroclear holds around €191 billion ($205 billion) of the funds and has accrued nearly €4.4 billion in interest over the past year.

In March, EU foreign policy chief Josep Borrell proposed taking 90% of the revenues from Russian assets frozen in the bloc and transferring them to an EU-run fund that finances weapons for Ukraine.

The EU is aiming to give Kiev €2-3 billion in revenue generated by the assets this year. A first tranche of the money could be disbursed as early as July if Brussels can secure the approval of all member states.

The opt-out, however, may not appease Germany, France, and Italy, which are the least enthusiastic about the proposal due to the legal and financial risks, an EU diplomat told the outlet.

Russia has said that any actions taken against its assets would amount to theft, stressing that seizing the funds or any similar move would violate international law and undermine Western currencies, the global financial system, and the world economy.

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The leader has held talks with French President Emmanuel Macron and EU Commission chief Ursula von der Leyen amid growing tensions

Chinese President Xi Jinping met with his French counterpart, Emmanuel Macron, and EU Commission chief Ursula von der Leyen on Monday to resolve economic disagreements between Brussels and Beijing, various media outlets have reported.

Xi arrived in France on Sunday for a two-day state visit, embarking on his first trip to Europe in five years. The Chinese leader will next head to Serbia and Hungary.

“The world today has entered a new period of turbulence and change,” Xi stated at the start of the trilateral meeting in Paris.

“As two important forces in the world, China and Europe should... continuously make new contributions to world peace and development,” the leader added.

The Paris meeting mainly focused on trade disputes between Beijing and the EU.

According to Macron, Europe and China must resolve structural difficulties, in particular on trade.

“The future of our continent will also very clearly depend on our capacity to further develop in a balanced way our relationship with China,” the French president said during the meeting at the Elysee Palace.

Macron has been pushing Brussels to get tough with China, accusing it of flooding the market with cheap electric vehicles. The EU launched an investigation last year into Chinese subsidies, while Beijing has threatened to slap tariffs on French-made brandy imports.

Von der Leyen echoed Macron’s remarks, claiming the EU and China want good relations. “We have a substantial EU-China economic relationship... But this relationship is also challenged, for example, through state-induced overcapacity, unequal market access and overdependencies,” the EU commissioner stated.

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After the meeting, she told reporters that the EU “cannot absorb massive over-production of Chinese industrial goods flooding its market.”

“Europe will not waver from making tough decisions needed to protect its market,” von der Leyen cautioned.

The EU commissioner has been pushing for “de-risking” trade with China as the bloc has accused Beijing of abusing the EU’s economic hospitality by dumping products.

In the last several weeks, the EU authorities have launched investigations into alleged unfair Chinese trade practices, including restrictions on the supply of European medical devices to the Asian nation’s market and subsidies for Chinese firms producing wind turbines, electric vehicles, and trains.

Meanwhile, China has opened an anti-dumping probe into brandy imported from the EU, which affects French exporters in particular. The mutual investigations are seen as a mounting tit-for-tat stand-off over protectionism.

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The bloc chief intends to discuss “current imbalances” with Xi Jinping

European Commission President Ursula von der Leyen intends to talk to visiting Chinese President Xi Jinping about policies that she claims pose a threat of de-industrialization in the bloc.

The Chinese leader arrived in France on Sunday as part of a six-day, three-country trip to Europe, his first since 2019. The head of the EU executive branch said she would discuss “current imbalances” in Chinese trade during talks with Xi on Monday.

”China is currently manufacturing, with massive subsidies, more than it is selling due to its own weak domestic demand. This is leading to an oversupply of Chinese subsidized goods, such as EVs (electric vehicles) and steel, that is leading to unfair trade,” she claimed.

”Europe cannot accept such market-distorting practices that could lead to de-industrialization in Europe,” von der Leyen added.

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In the last several weeks, the EU authorities have launched investigations into alleged unfair Chinese practices, including restrictions on the supply of European medical devices to the Asian nation’s market and subsidies for Chinese firms producing wind turbines, electric vehicles, and trains.

Meanwhile, China has opened an anti-dumping probe into brandy imported from the EU, which particularly affects French exporters. The mutual investigations are perceived as a mounting tit-for-tat stand-off over protectionism. Von der Leyen has pushed for “de-risking” trade with China, but has not gone as far as to advocate decoupling from the economic powerhouse.

EU members have largely decoupled their economies from Russia in an attempt to penalize Moscow over the Ukraine conflict. The loss of access to cheap Russian natural gas has hit energy-intensive industries in Western Europe, forcing businesses to move manufacturing to other locations. The US was among their primary destinations, as the government offered subsidies to certain producers under the Inflation Reduction Act of 2022.

READ MORE: Blinken threatens China over Russia ties (VIDEO)

In an op-ed published in the French press ahead of his visit, Xi said Beijing was committed to reaching “new vistas” in its relationship with the country. He wrote: “France is advancing re-industrialization based on green innovation, whereas China is accelerating the development of new quality productive forces.”

After France, the Chinese president is scheduled to visit EU member Hungary and Russia-friendly non-member Serbia.

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Foreign bondholders paused Kiev’s debt payments in 2022, but their patience is reportedly running out

A group of foreign bondholders have taken steps to force Ukraine to begin repaying its debts as soon as next year, the Wall Street Journal reported on Sunday. If they succeed, Kiev could hemorrhage $500 million every year on interest payments alone.

The group, which includes investment giants Blackrock and Pimco, granted Kiev a two-year debt holiday in 2022, gambling that the conflict with Russia would have concluded by now.

With no end to the fighting in sight, the lenders have now hired lawyers at Weil Gotshal & Manges and bankers from PJT Partners to meet with Ukrainian officials and strike a deal whereby Ukraine would resume making interest payments next year in exchange for having a significant chunk of its debt written off, anonymous sources told the Wall Street Journal.

READ MORE: World Bank issues Ukraine bankruptcy warning

The group holds around a fifth of Ukraine’s $20 billion in outstanding Eurobonds, the newspaper reported. While this figure represents a fraction of Ukraine’s total external debt of $161.5 billion, servicing the interest on these bonds would cost the country $500 million annually, the bondholders said.

Should the bondholders fail to strike a deal with Kiev by August, Ukraine could default. This would damage the country’s credit rating and restrict its ability to borrow even more money in the future.

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According to the newspaper, Ukrainian officials are hoping that the US and other Western governments will take its side during talks with the bondholders. However, a group of these countries have already offered Ukraine a debt holiday on around $4 billion worth of loans until 2027, and are reportedly concerned that any deal with the bondholders would see private lenders being repaid before them.

Ukraine already relies on foreign aid to keep government departments open and state employees paid. The country’s military is almost entirely dependent on foreign funding; officials in Kiev and the West were predicting imminent defeat until the US Congress approved a foreign aid bill last month which included $61 billion for Ukraine and US government agencies involved in the conflict.

The bill provides almost $14 billion to Ukraine for the purchase of weapons, and includes $9 billion in new “forgivable loans.”

According to the Wall Street Journal, some bondholders have suggested that the US and EU could use frozen Russian assets to pay off Ukraine’s debts. While around $300 billion in assets belonging to the Russian central bank have been frozen in American and European banks since 2022, the US only passed legislation allowing for their seizure last month, and no similar legal mechanism exists in Europe, where the vast majority of these assets are held.

The International Monetary Fund (IMF) and European Central Bank (ECB) have both urged governments not to steal this money, with ECB chief Christine Lagarde warning last month that doing so would risk “breaking the international order that you want to protect.”

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Saudi Arabia and Indonesia have reportedly been raising concerns over their own reserves held in the West

The confiscation of frozen Russian assets could set a dangerous precedent in international law, Indonesia and Saudi Arabia warned the EU at a recent meeting of G20 finance ministers, the Financial Times reported on Friday.

The US and its allies have blocked around $300 billion in Russian central bank assets as part of sanctions imposed on Moscow over the Ukraine conflict. Most of the funds are held in the EU and, while Washington has insisted that international law allows for the appropriation of the funds, some EU members, including Germany and France, have been reluctant to take that step.

Concerns were raised again during the recent G20 finance ministers’ meeting in Brazil, the FT reported, citing EU officials. Saudi Arabia’s Minister of Finance Mohammed al-Jadaan and his Indonesian counterpart Sri Mulyani Indrawati, were reportedly among those particularly alarmed by the potential seizure of Russian funds.

Both nations are “very worried” about the future of their own reserves held within the West, an unnamed European official told the outlet, adding that the main concern was whether their money was “still safe” there.

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While the US has been pressing its allies to seek ways of tapping into frozen Russian reserves, opponents claim that such a move risks setting a dangerous precedent in international law, with far-reaching implications.

According to FT, Japan, France, Germany, and Italy remain “highly cautious” on the issue, leading to a stalemate. The outlet noted that some of the most prominent skeptics are G7 central bankers like European Central Bank president Christine Lagarde, who has previously warned that taking the step from freezing assets to confiscating them could risk “breaking the international order that you want to protect.”

The Times also cited academics who said that any plan to use these assets would test the legal principle of state immunity, whereby no country can be sued by the courts of another if they do not agree it has jurisdiction over it.

“Our international legal system doesn’t have a police force ... it really does rest on fundamental respect for international law,” said Philippa Webb of King’s College London, who has authored a European parliament study on the legality of confiscating Russia’s assets.

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“The risk is that if we just start ignoring these principles, they can equally be used against us by other states and that we set a precedent that can have unintended effects down the line,” she explained.

The European officials who spoke to FT said it was easier for the US to adopt a hardline stance because with Washington only holding around $5 billion in Russian state assets, they have “little skin in the game” compared to Europe.

In April, US President Joe Biden signed a bill permitting the seizure of Russian assets that are sitting in American banks.

Moscow has repeatedly stated that confiscation of its frozen assets would undermine the trust of international investors in the Western financial system, which would be very difficult to restore.

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Raiffeisen Bank will start a sharp reduction of its Russian business by the end of this year, its CEO has announced

Austria’s Raiffeisen Bank International (RBI), one of the last major Western lenders in Russia, will start its withdrawal from the country in the third quarter of this year following pressure from the EU regulator, CEO Johann Strobl announced on Thursday.

The Vienna-based lender said in April it was expecting to receive a request from the European Central Bank (ECB) to speed up its business reduction in Russia. The ECB’s draft of the requirements demands that RBI slash loans to customers by a further 65% by 2026 and “significantly” decrease international payments originating from Russia.

“The expectation is that implementation will begin in the third quarter. We’ll now draw up the plan and analyze what we can do and what the impact will be,” Strobl said during a conference call.

RBI earlier described the ECB’s proposals as going “far beyond RBI’s own plans,” adding that they could “adversely impact” the lender’s attempts to sell its Russian division.

According to the group’s first quarter earnings report published on Thursday, the lender has reduced its customer loans in Russia by 58% since its peak in 2022 to €5.8 billion ($6.2 billion). The bank also recorded net income of €644 million ($691 million) in the first three months of the year, with about half of that profit coming from operations in Russia and Belarus.

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“We’re taking a careful approach, we’re not scaling back our business in Russia very quickly and are trying to preserve the asset’s value to be able to sell it,” Strobl explained.

RBI has long been resisting demands from the US and EU to speed up its Russia exit, while Austrian officials have expressed hope of reviving relations with Moscow after the conflict in Ukraine ends, according to Reuters.

In its latest report the bank said it continues to work on selling or spinning off its Russian subsidiary, noting that both options require approval from Russian and EU authorities.

“The process is therefore not entirely in RBI’s own hands,” making it difficult to put a date on a complete Russia exit, the report said.

RBI is one of the few foreign banks to have stayed in Russia despite sanctions imposed by Western countries since the start of the Ukraine conflict in 2022. The lender plays an important role in the Russian economy, enabling euro and dollar payments to and from the country.

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Gazprom’s record net loss follows a decline in revenues, according to an earnings report

Russian energy major Gazprom reported its first annual loss since 1999 on Thursday, in the wake of dwindling gas exports due to Western sanctions pressure.

According to the state-owned company’s earnings report, Gazprom Group posted a net loss of 629 billion rubles ($6.7 billion) in 2023, its first annual loss in 25 years. The result comes in contrast to a net profit of $13.2 billion in 2022.

The firm’s total revenue fell to $92 billion in 2023 from $126 billion in the previous year.

According to the report, revenue from gas sales fell by 40% to $47.4 billion while revenue from oil business increased by 4%, to $38 billion. Sales at its power utilities business increased by nearly 9% to $6.6 billion.

Gazprom’s shares plunged more than 4% following Thursday’s earnings report.

Russian gas exports to its traditional markets in the EU have dwindled due to sanctions related to the Ukraine conflict and to the sabotage of the Nord Stream pipelines, previously Russia’s major gas route to the region.

According to Reuters’ calculations, Gazprom’s natural gas supplies to Europe plummeted 55.6% to 28.3 billion cubic meters (bcm) in 2023. Exports dropped to their lowest level since the early 1970s, according to International Energy Agency estimates.

However, Gazprom has reoriented its energy trade to Asia, with China emerging as one of its largest buyers. The volume of Russian gas supplies to China could reach nearly 100 bcm annually when the Power of Siberia pipelines are fully operational. Once that happens, China will fully substitute the EU in terms of purchases of Russian gas, according to Gazprom.

READ MORE: Russian gas giant starts connecting key Asian pipelines

The company’s CEO Aleksey Miller had said previously that Gazprom would also strengthen its cooperation with Central Asian countries as part of a strategy to replace the EU market.

For more stories on economy & finance visit RT’s business section

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The Russian economy is growing faster than those of Western countries, the chair of the Treasury Select Committee has admitted

A senior British MP and chair of the Treasury Select Committee has admitted that sanctions on Russia are not working, as the country’s economy is growing faster than many of those in the West.

Harriet Baldwin told the Financial Times on Monday that sanctions had failed to weaken Russia as Moscow had found ways to work around them.

“There’s a general consensus that sanctions are not working in terms of their stated intent – causing real trouble for the Russian economy,” she said.

The MP referred to the latest forecast issued earlier this month by the International Monetary Fund (IMF). It predicted that Russia’s economy would grow by 3.2% this year – more than the US, the UK, Germany and France.

Baldwin chairs the Treasury committee tasked with investigating whether the UK’s program of economic sanctions has succeeded in reducing Moscow’s export revenues. It launched an inquiry into the matter in February, and MPs are expected to hold oral evidence sessions on Tuesday.

The committee has already received written evidence which, according to the FT, indicates that “a more robust approach” is needed towards sanctions evasion. The inquiry is due to report on its findings in July.

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Britain, along with the US and the European Union, launched an unprecedented sanctions campaign against Russia in 2022 after the start of Moscow’s special military operation in Ukraine. The Western nations targeted Russia’s financial and industrial sectors, banning or restricting trade in raw materials and energy resources that provide the bulk of Russia’s export revenues. Baldwin pointed out that some of the restrictions are more than two years old.

“The longer sanctions are in place, the more ways people find to get around them, and it’s pretty obvious that patterns of trade are changing to allow exactly that,” she said.

London banned imports of Russian oil products in December 2022. However, a loophole in the legislation has allowed the UK to continue buying Russian oil. The Guardian reported last week that Britain’s imports of refined oil from India, China and Turkey – which Moscow supplies with crude – have increased dramatically over the past two years. Russian oil refined in another country is no longer considered to have originated in Russia, allowing it to avoid the trade ban, the newspaper explained.

Moscow has repeatedly said that it has adapted to Western sanctions on its critical industries and has become more self-sufficient. High oil prices have allowed Russia to maintain robust oil export revenues.

For more stories on economy & finance visit RT's business section

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Elon Musk has reportedly joined with Chinese internet giant Baidu to develop autonomous driving technology

Shares in Tesla have surged following reports that CEO Elon Musk has agreed to partner with Chinese tech giant Baidu for mapping and navigation features to support autonomous driving technology in the world’s biggest auto market.

Shares rose nearly 14% in premarket US trading, while Baidu jumped by more than 5.5% in Hong Kong.

Baidu, China’s main internet search company, has agreed to provide the US electric vehicle (EV) maker with access to its mapping license for data collection on China’s public roads, Reuters reported on Monday morning, citing people familiar with the matter.

The sources highlighted that the agreement clears final regulatory obstacles for the rollout of Tesla’s Full Self Driving (FSD), the latest version of its Autopilot technology.

On Sunday, the US billionaire visited China, where he held talks with Prime Minister Li Qiang. Media reports suggested that Musk was seeking approval for the FSD software rollout in China, as well as permission to transfer data overseas during the talks.

Chinese officials have given tentative approval for the rollout of Tesla’s driver-assistance service in the country, the Wall Street Journal reported, citing sources. The company also managed to meet requirements for how it handles data security and privacy issues, people familiar with the matter told Bloomberg.

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Under Chinese law, automakers need to obtain a mapping qualification to start operating autonomous driving systems on public roads. Foreign enterprises must cooperate with local tech firms to get a license. The deal with Baidu is expected to allow the US company to legally operate the software in China, while its cars would be able to collect data about surroundings, including road layouts, traffic signs, and nearby buildings.

Tesla rolled out its FSD four years ago, but the technology hasn’t been available in China due to regulatory hurdles. Earlier this month, in response to a query on X (formerly Twitter), Musk said the feature would appear in the country “very soon.”

The approval for the technology in China is expected to significantly improve Tesla’s balance sheet. The company recently recorded its first year-on-year decline in quarterly revenue since 2020, showing a 9% drop for sales. Earlier this month, the automaker said it was cutting more than 10% of its global staff as part of a plan for “cost reductions and increasing productivity.”

Musk’s surprise visit to China was “a watershed moment,” Wedbush Securities senior analyst Dan Ives told Bloomberg, adding that it could “open up FSD in China, unlocking what really could be the golden opportunity for them.”

For more stories on economy & finance visit RT’s business section

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Raiffeisen, UniCredit and others with a presence in Russia have seen profits increase threefold since 2021

The largest EU-based banks operating in Russia saw profits soar last year and paid four times more in taxes than before the start of the Ukraine conflict, the Financial Times reported on Monday.

A number of foreign banks have left Russia since 2022 due to the Western sanctions. However, several lenders, including some from within the Eurozone, opted to remain but reduced their operations. The European Central Bank (ECB) has been pressuring the remaining lenders to quit the Russian market.

Austria’s Raiffeisen Bank International (RBI), Italy’s UniCredit, Dutch lender ING, Germany’s Commerzbank and Deutsche Bank, as well as Italy’s Intesa Sanpaolo and Hungary’s OTP reported a combined profit in Russia of more than €3 billion ($3.2 billion) last year, three times more than in 2021, the FT wrote. The profits were partly generated by funds that the banks cannot withdraw from the country, the outlet explained.

The soaring income resulted in the EU banks paying about €800 million ($857 million) in taxes, up from €200 million in 2021, the Financial Times said, citing its own analysis.

More than half of the €800 million tax payments were made by RBI, which has the largest presence in Russia.

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RBI’s profits obtained in Russia more than tripled to €1.8 billion between 2021 and 2023, the newspaper said. They now account for half of the Austrian group’s total profits, compared with about a third before the conflict, it added.

Regulatory restrictions imposed by the Russian government in 2022 prohibit dividend payouts from Russian subsidiaries to businesses from “unfriendly” Western countries.

“We can’t do anything with Russian deposits apart from keeping them with the central bank. So as interest rates went up, so did our profits,” said a senior executive at a European bank with a Russian subsidiary, as quoted by the FT.

The banks also require personal authorization by President Vladimir Putin for the sale of their Russian assets.

Raiffeisen said earlier this month that it was being pressured by the ECB to more rapidly reduce its presence in the sanctions-hit country.

READ MORE: Russia freezes assets of largest US bank

According to Reuters, the regulator is also planning to require UniCredit, Italy’s second-largest bank, to limit its business in Russia. The ECB has argued that doing business in the sanctioned country poses a reputational risk.

Raiffeisen and UniCredit, which have been operating in Russia for more than three decades, have attracted scrutiny from financial authorities in the US as well, sources told Reuters. Both banks play a crucial role in the Russian economy, enabling euro payments to and from the country. They are also the only foreign entities on the Russian central bank’s list of 13 systemically important credit institutions.

For more stories on economy & finance visit RT's business section

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The Tesla CEO has met with Prime Minister Li Qiang to promote autonomous driving technology

Tesla CEO Elon Musk met with Chinese Prime Minister Li Qiang on Sunday morning to discuss the company’s further operations in the world’s biggest car market.

Neither Musk nor Chinese officials had announced the visit, which coincides with the Beijing International Automotive Exhibition, China’s largest auto show, which kicked off two days ago. Tesla is not exhibiting its models at the event and last attended in 2021.

Reuters earlier reported, citing sources, that Musk had gone to China to discuss with senior Chinese officials the rollout of Full Self-Driving (FSD) software and also obtain permission to transfer data overseas.

During the meeting with Musk, Li pledged that Beijing would “continue working hard to expand market access,” according to Chinese state media reports. It was not mentioned whether FSD or data issues were discussed at the meeting.

Honored to meet with Premier Li Qiang.

We have known each other now for many years, since early Shanghai days. pic.twitter.com/JCnv6MbZ6W

— Elon Musk (@elonmusk) April 28, 2024

“China’s very large-scale market will always be open to foreign-funded firms,” the news agency AFP cited the prime minister as saying.

Tesla rolled out its FSD software, which is the latest version of the Autopilot technology, four years ago. However, the company has yet to make it available in China. Earlier this month, in response to a query on X (formerly Twitter), Musk pledged that the option would appear in the country “very soon.”

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China is the second biggest market for Tesla after the US. It has sold over 1.7 million cars in China since entering the market, which is considered the world’s largest, in 2012, and opened its biggest factory in Shanghai.

According to Chinese state media, Musk also met with Ren Hongbin, a government official who heads the China Council for the Promotion of International Trade, to exchange views on further cooperation. The CEO reportedly traveled to China at the invitation of the organization.

Meanwhile, Tesla’s Autopilot feature has been under intense scrutiny from US federal regulators. Earlier this week, the US Transportation Department’s National Highway Traffic Safety Administration stated it had opened an investigation after receiving reports of 20 crashes involving vehicles that had the new Autopilot software updates installed under Tesla’s recall.

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Market for middlemen is reportedly flourishing amid US threat of sanctions against Chinese banks

Up to half of transactions between Russia and China are facilitated by means of intermediaries to avoid exposure by Chinese lenders to the risk of secondary sanctions, Reuters reported on Friday, citing trade consultants and bankers, as well as importers and exporters.

In December, US President Joe Biden signed an executive order that takes additional steps against facilitating transactions with Russia. At the time, the US Treasury was calling on foreign banks to boost compliance with anti-Russia sanctions.

In March, newspaper Izvestia revealed that several Chinese banks, including the Industrial and Commercial Bank of China, stopped accepting payments in yuan from Russia for fear of secondary sanctions, with almost 80% of payments to China coming back.

According to informed sources speaking with Reuters on condition of anonymity, middlemen helping Moscow and Beijing to carry out cross-border payments are represented by legal entities in Hong Kong, Kyrgyzstan, Kazakhstan, the UAE and other nations that have opted not to back sanctions policies targeting Russia.

Some companies have reportedly switched to the services of payment agents, creating chains of temporary firms to make payment processes faster.

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Two Russian consultants working with intermediaries told the news agency that nearly half of Russian entities working with Chinese firms are opting for their services, while major Russian businesses, most of which were targeted by Ukraine-related sanctions, established schemes with middlemen a year ago.

Shipment delays and prolonged transactions have reportedly forced businesses to turn to intermediaries, despite increased fees that may amount to several thousand dollars for each transaction, as well as a major risk of sanctions-related shipment seizures in third countries. According to one of the sources, a large batch of servers being transferred to Russia from China via Kazakhstan was confiscated after the shipment fell under the scope of US sanctions.

The use of intermediaries doesn’t provide companies with guarantees, as payments can still be refused by Chinese banks, while the less official nature of those settlements means that Russian firms may struggle to get their money back. Only a fifth of Russian firms reportedly have full access to their Chinese bank accounts, while 30% have limited access.

Some businesses, according to Reuters’ sources, have expressed hope that President Vladimir Putin’s visit to China next month will help resolve the issue, while others are less optimistic, one remarking that Russia is not a top priority for Chinese banks, despite booming trade between the nations.

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Banning Russian liquefied natural gas will benefit US producers but hit the bloc’s industrial sector, Dmitry Peskov says

Russian producers will seek ways to overcome potential sanctions against Moscow’s exports of liquefied natural gas (LNG), Kremlin spokesman Dimitry Peskov told journalists on Saturday.

On Thursday, Western media cited unnamed diplomatic sources as saying the EU’s 14th package of Ukraine-related sanctions would propose curbs on Russian LNG – which so far hasn’t been targeted by any bans. The new measures are expected to include a prohibition on trans-shipments in the bloc, and hit Russia’s three LNG production projects.

Peskov stressed that any restrictions against Russian super-chilled gas along with efforts to “squeeze” the country out of energy markets will only lead to higher gas prices for EU consumers.

“The shift towards more expensive supplies is, primarily, beneficial for the US and a number of other nations,” he said, adding that end-use customers, particularly the EU industrial sector, will have to pay a heavy price.

The spokesman pledged that Russia “will look for ways to overcome these illegal obstacles,” decrying the sanctions as “unfair and illegal competition.”

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Earlier this week, an intention to add restrictions against Russian LNG to the bloc’s next sanctions package was voiced by Swedish Foreign Minister Tobias Billstrom.

Last year, Brussels approved measures allowing individual member states to block gas supplies coming from Russia on a voluntary basis, although the lion’s share of the continuing flows are bound by long-term contracts.

EU member states still depend on Russia for their gas supplies. Imports from the sanctions-hit state accounted for about 40% of EU demand before the launch of Moscow’s military campaign against Ukraine.

Earlier this month, Reuters reported that a notable increase in LNG exports had pushed the share of Russian gas in the EU supply up to nearly 15%. Russia reportedly sent over 15.6 million metric tons of LNG to EU ports last year, marking a slight increase versus 2022, and a 37.7% jump compared to the previous year.

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The grim warning comes as growth falls short of estimates

The latest macroeconomic data released by the US Department of Commerce indicates that the country’s economy could be moving towards stagflation, Business Insider has reported. The gloomy signs hint at tough challenges ahead, the outlet added.

Thursday’s report revealed that American GDP increased at an annualized rate of only 1.6% in the first quarter of the current year, well behind projections of 2.5%. The slower than expected growth followed a 3.4% gain recorded in October-December 2023 and 4.9% in the previous quarter.

“This was a worst of both worlds report – slower than expected growth, higher than expected inflation,” David Donabedian, chief investment officer of CIBC Private Wealth US, told the media outlet.

Weak growth and soaring consumer prices are distinct signs of stagflation, which is characterized by economic sluggishness and rising inflation over a prolonged period of time. The US was last hit with stagflation in the 1970s, when inflation surged into double digits as the economy tumbled. US policymakers responded by hiking the key interest rate to as much as 20%, cooling down prices but sending the economy into a deep recession.

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In March, the US Federal Reserve skipped an interest rate hike, leaving it unchanged between the 5.25%–5.5% target range. The next meeting of the Fed’s Open Market Committee is scheduled on May 1.

At the same time, the personal consumption expenditures price index, used as a key inflation measure by the Fed, increased at a 3.4% annualized pace, marking the biggest gain in a year. Consumer spending in the US saw a 2.5% increase in January through March, down from a 3.3% gain in the fourth quarter of 2023, and below the projected 3%, the Bureau of Economic Analysis reported.

According to Business Insider, this puts serious limits on the Fed’s ability to take action, as the regulator has made clear it needs inflation to decline before any rate cuts can happen.

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American lawmakers approved a bill allowing the confiscation of another state’s funds earlier this week

Russia’s financial stability will not be affected if the US seizes its frozen assets, Bank of Russia Governor Elvira Nabiullina told journalists on Friday.

The US and its allies have blocked around $300 billion in Russian central bank assets as part of Ukraine-related sanctions, most of which are being held in the EU. On Wednesday, US President Joe Biden signed a bill allowing the White House to seize some $6 billion in Russian state assets that are sitting in US banks.

“As for the possible confiscation of our gold and foreign exchange reserves, it will not have any impact on financial stability, as we have halted operations with them long ago, we do not use them,” Nabiullina said at a news conference.

The Bank of Russia has been diversifying its forex reserves for several years, and is currently conducting operations with reserves that are not affected by sanctions, she added.

“This will help mitigate financial stability risks if they arise, but currently there are no such threats,” the head of the regulator stressed.

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The White House has long insisted on confiscating the funds to aid Ukraine in its war effort against Russia. Meanwhile, EU lawmakers, as well as G7 finance chiefs, have raised deep concerns over the legal ramifications of any asset seizure. EU nations, which hold the lion’s share of frozen Russian funds, are concerned that expropriating them would trigger an outflow of investment and destabilize the euro.

Nabiullina previously warned that the seizure of profits from frozen Russian funds, as well as the confiscation of the funds themselves, would lower the attractiveness of the euro and the dollar as reserve currencies in international markets.

Moscow has repeatedly said the seizure of its assets would be “theft.” After the US House of Representatives approved the bill authorizing the confiscation of Russian money, Kremlin spokesman Dmitry Peskov warned that Moscow would immediately retaliate to the move.

Russian Deputy Foreign Minister Sergey Ryabkov has said Moscow could downgrade diplomatic relations with Washington if the assets are seized.

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Many of the city’s residents are against new admission charge for visitors, introduced to reduce overcrowding

Hundreds of Venetians took to the streets of their sinking city on Thursday in protest against an entrance fee that the local authorities have started charging visitors, to protect the UNESCO world heritage site from the effects of over-tourism.

The new fee of about $5.50 (€5) is being sought from visitors entering the famous Italian city between 8:30am and 4pm local time and came into force on Thursday as part of a pilot program. Outside of those hours, access is free. Day-trippers failing to pay the fee may face fines of over $300.

Local authorities have erected signs to warn tourists about the new payment, while municipal workers started carrying out random checks at five main arrival points. Overnight visitors are exempt from the charge, but are obliged to obtain a QR code to get through the gates located at the city’s main access points.

The scheme, the aims of which are to reduce crowds at peak hours, to encourage longer visits and to improve the quality of life for residents, has outraged many locals. Several hundred Venetians clashed with riot police over the regulation, with some protesters trying to break through a blockade of officers at Piazzale Roma.

Demonstrators were holding banners reading “No to ticket, Yes to housing and services for all,” “Venice is not sold, it is defended” and “Venice for all, end the ticket wall,” as well as mock tickets that read “Welcome to Veniceland,” a protest against turning the city into a “theme park.”

The measure will be “ineffective in containing mass tourism” according to the local branch of Arci, a cultural and social rights association, as cited by the Guardian, but would generate “unequal treatment between different categories of visitors.” Arci’s spokesperson highlighted the “dubious constitutional legitimacy” of the measure, in terms of restricting free movement.

Ruggero Tallon, one of the protest organizers and the spokesperson for anti-cruise ship campaign group No Grandi Navi, told CNN that they are campaigning against a closed city that would look like museum.

“A ticket does nothing, it doesn’t stop the monoculture of tourism, it doesn’t ease the pressure on Venice, it’s a medieval tax and it’s against freedom of movement,” the activist argued.

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The country’s share of global GDP will drop below 2%, the fund has projected

Slow economic growth will push France out of the list of the world’s ten largest economies within five years, according to an updated global outlook from the International Monetary Fund.

The Washington-based institution expects France’s share of global GDP in purchasing power parity (PPP) terms to drop to 1.98% in 2029, compared to 2.2% recorded by IMF analysts last year.

The fund’s latest projections indicate that France’s budget deficit will remain above 4% until 2029, with public debt expected to exceed 115% of gross domestic product (GDP). The European Commission previously signaled potential conflicts with EU fiscal rules in its response to France’s 2024 budget plan, stressing that the current outlook poses the risk of a negative adjustment by global rating agencies.

According to the database, which was updated by the organization earlier this month, Britain – whose share of global GDP in 2029 is expected to represent 2.2% on a PPP basis – will be ranked the world’s tenth largest economy. Meanwhile, Türkiye is projected to take ninth place, as its share over the next five years will reach 2.09%.

The top five contributors to the global economy will be China, projected to account for 19.48% of the world’s GDP through 2029, the US (14.72%), India (9.23%), Japan (3.21%) and Indonesia (2.79%). The top ten is also expected to include Germany (2.77%), Russia (2.71%) and Brazil (2.19%).

READ MORE: IMF warns about confiscating Russian assets

Earlier this month, the IMF raised its global growth forecast for the current year, concluding that the world economy had proved “surprisingly resilient.” The economists expect global GDP growth to amount to 3.2% in 2024, up by a modest 0.1 percentage point from its earlier January forecast. Next year, growth is expected to expand at the same pace of 3.2%.

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American lawmakers approved a bill allowing the confiscation of funds on Wednesday

The “weaponization” of the US dollar through the seizure of frozen Russian assets could prompt a global shift away from the greenback, Bloomberg reported on Wednesday, citing a former International Monetary Fund (IMF) official.

US President Joe Biden signed a bill this week allowing the administration to seize Russian state assets held in America.

Washington has long insisted on the confiscation of the funds to aid Ukraine in its war effort against Moscow. Meanwhile, G7 finance chiefs and EU officials continue to express concerns about the legal precedent of any asset seizure. The US and its allies have frozen around $300 billion in Russian central bank assets, around $5 billion of which is sitting in US banks as part of Ukraine-related sanctions.

As quoted by Bloomberg, former IMF official Eswar Prasad has warned that “America’s supercharged weaponization of its currency through the seizure of dollar reserves will certainly cause US rivals [to look at de-dollarization].”

The so-called REPO Act, which Biden signed on Wednesday along with a $61 billion military aid package for Kiev, authorized the US president to seize Russian state assets held in American banks and transfer them to a Ukraine reconstruction fund.

“It is necessary and urgent for our international coalition to unlock the value of immobilized Russian sovereign assets,” US Treasury Secretary Janet Yellen said in a statement on Wednesday.

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The REPO provision has intensified debate over the potential consequences of foreign demand for US Treasuries and use of the dollar, Bloomberg noted. The outlet also said it is unlikely that the US will seize Russian assets without agreement from other G7 nations and the EU.

JPMorgan analyst Katherine Lei was quoted as saying that “China may accelerate the process of de-dollarization.” About 70% of Chinese international trade is still denominated in dollars, according to JPMorgan estimates.

“Countries that use the dollar for international trade and finance need to be sure that their assets will not be seized on the whim of the US,” Paola Subacchi, author of The Cost of Free Money, told the outlet.

Russian Deputy Foreign Minister Sergey Ryabkov warned on Thursday that Moscow could downgrade diplomatic relations with Washington if the US expropriates frozen Russian funds.

Moscow’s response to the seizure of its assets could include economic and diplomatic countermeasures, Ryabkov said.

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The anarcho-capitalist president had wanted to scrap the national coin for US dollars

Argentinian President Javier Milei’s controversial “shock therapy” has bolstered the country’s currency in a key foreign-exchange market, performing at levels unmatched across the globe, according to Bloomberg.

The “parallel peso” trading on the blue-chip swap exchange has risen 25% against the US dollar over the past three months, more than any of the 148 other currencies tracked.

The outlet called it a “shocking statistic” given that the peso was inflating at an annual rate of 300% when Milei took power last December. Since then, the self-described anarcho-capitalist has managed to slash government spending and “choke off” demand for everything – including dollars – in order to tame runaway inflation.

“The great novelty in Argentina is that the person in charge is not worried about paying the political cost that comes with austerity – that’s unusual,” the outlet quoted Javier Casabal, head of research at AdCap Grupo Financiero in Buenos Aires.

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Milei’s budget cuts may not be “the largest in the history of humankind,” as he described them, but have in percentage terms been more severe than about 90% of austerity programs carried out around the world in the last several decades.

The president has slashed almost 4% off Argentina’s GDP. On paper, this has caused a deep recession and layoffs. It has also propelled the peso to steadily rise since January. The standard that gauges Argentina’s actual purchasing power shows it is up by 72%, for example.

This has enabled Argentina’s central bank to buy dollars and replenish the previously depleted hard-currency reserves. It is also no longer financing government spending by printing money and has lowered interest rates, for the fourth time since Milei took office.

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“Under this government, economic policy is starting to become rational,” said Carlos Perez, director of the consulting firm Fundacion Capital.

Argentines also appear to have more confidence in their currency, which has lowered the demand for dollars. Perez noted that many people who had bought up the US currency as an inflation hedge are now selling it back, to get the pesos they need for everyday business.

Bloomberg has described the peso rally as “an ironic twist” for Milei, given that he called the currency “excrement” on the campaign trail and called for scrapping it entirely in favor of the dollar.

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A court ruling supported the lawsuit filed by state bank VTB, which seeks to recover funds blocked under Western sanctions

A St. Petersburg court ordered the freezing of funds owned by US banking giant JPMorgan Chase in Russia on Wednesday. The ruling was made in favor of the country’s second-largest lender, VTB, which had filed a lawsuit seeking to recover $439.5 million blocked abroad under US-led sanctions.

VTB sued JPMorgan and its subsidiaries in the Arbitration Court of St. Petersburg and Leningrad Region on April 17, court filings showed on Monday. The order targeted funds in JPMorgan’s Russian accounts and “movable and immovable property,” including the bank’s stake in a Russian subsidiary.

The dispute centers on $439.5 million in funds that VTB held in a JPMorgan account in the US, which were blocked by Washington as part of Ukraine-related sanctions in 2022.

The court ordered the seizure of all funds in JPMorgan bank accounts in Russia, including correspondent accounts and those opened in the name of a subsidiary.

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It also revealed that VTB had requested interim steps because the respondents were “taking measures to withdraw their assets” from Russia, while the Russian lender was seeking to recover money from the US bank.

In its own lawsuit against VTB last week in the Southern District of New York, JPMorgan sought to block the Russian bank’s efforts, noting that US law prohibited the bank from releasing the $439.5 million owned by VTB.

JPMorgan is concerned that VTB will try to seize its Russian assets, Reuters reported on Wednesday, citing the US lender.

The Wall Street bank admitted to the outlet that VTB’s prospects were good, since Russian courts had granted at least six other local lenders relief against US and EU banks that were required to comply with sanctions laws.

The next hearing in the JPMorgan case is scheduled for July 17.

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Russia could downgrade relations with the US if its assets are confiscated, the deputy foreign minister has warned

Moscow could downgrade diplomatic relations with Washington if the US expropriates frozen Russian assets, Deputy Foreign Minister Sergey Ryabkov warned on Thursday.

The US and its allies have frozen around $300 billion in Russian central bank assets as part of Ukraine-related sanctions, most of which are being held in the EU.

Washington has long advocated for confiscating the funds, so that the money would then be handed over to Kiev for its war effort against Russia. The latest push came on Saturday, after the US House of Representatives approved a bill authorizing the confiscation of Russian money.

The so-called REPO Act, which lawmakers in Washington passed last weekend along with a $61 billion military aid package for Ukraine, authorized the US president to confiscate Russian funds held in American banks and hand them over to Kiev. More than $6 billion of the $300 billion in frozen Russian assets is sitting in US banks. US Senator Rand Paul, who is skeptical of the proposal, warned earlier this year that the move would be “an act of economic war.”

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Officials in several Western nations, notably the US and the UK, have insisted on the outright confiscation of Russian assets despite widespread concerns that this would have no legal basis. In contrast, the EU has been reluctant to do so, reportedly fearing Russian retaliation. EU nations, which are holding the lion’s share of the frozen funds, are reportedly concerned that expropriating the money would destabilize the euro.

Moscow’s response to the confiscation of its assets by the G7 countries could include economic and diplomatic countermeasures, Ryabkov was cited by RIA Novosti as saying.

“We are now studying the appropriate form of reaction, where among the countermeasures there are actions against the assets of our Western opponents and diplomatic measures of response,” Ryabkov told the media outlet. “One does not cancel the other, but there are simply no solutions yet, because there are no solutions on the other side either,” he added.

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The senior diplomat has previously warned that the US should not “act under an illusion... that Russia is clinging with both hands to diplomatic relations with that country.”

Moscow has repeatedly said the seizure of its assets would be “theft.” Kremlin spokesman Dmitry Peskov has warned the US will damage its own economy, as well as the global financial system, if it follows through on its threat to expropriate the funds and give them to Ukraine.

“This would be nothing short of a breakdown of all foundations of the [global] economic system,” according to Peskov.

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Billionaire financier has bought $400 million of debt owed by radio platform Audacy, which was going through a bankruptcy process

A US Congressman has accused billionaire George Soros of trying to fast-track his acquisition of American radio giant Audacy through the Federal Communications Commission (FCC), Fox News has reported.

Soros has bought a major stake in what is the US’ second-largest radio company and could gain “effective control” of more than 220 radio stations across the country, according to previous media reports.

Republican congressman Chip Roy from Texas wrote in a letter seen by Fox that he was concerned that the Soros groups are asking the FCC to approve a change in ownership in Audacy without the commission “running its normal, statutorily required process.”

“This transaction, which affects radio stations that reach millions of listeners across the US, including in Texas’ 21st congressional district, should – at minimum – be subject to rigorous FCC oversight to ensure US radio stations are not subject to undue influence,” the congressman argued.

Soros’ investment firm has become the largest shareholder in Audacy, after purchasing around $400 million of debt owed by the media group during its bankruptcy process. After years of declining revenue, Audacy filed for bankruptcy early last month, with $1.9 billion in debt. Should the deal go ahead, the billionaire financier would reportedly part-own broadcasters in 45 US states.

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Audacy owns 227 music, sports, and talk radio stations in 45 US states. The company also owns CBS Radio, which operates 11 news stations, including San Francisco’s KCBS and New York’s WCBS.

Congressman Roy pointed out in his letter that, instead of going through the usual petition for declaratory ruling process, the Soros group has asked the FCC to waive that process and “put it off until sometime down the road — indicating that those foreign stakeholders will be given ‘special warrants’ in the meantime.”

The Texas lawmaker also told Fox News Digital that he’d heard from constituents who “reached out and raised issues and concerns about the extent to which it’s very clear that Soros is, you know, making a move in the radio world.”

A hedge-fund manager who shot to infamy for crashing the British pound in 1992, George Soros is among the wealthiest men on Earth, with an estimated net worth of around $7 billion. That’s on top of the $32 billion he’s donated to a web of NGOs, charities and political campaigns through his Open Society Foundations.

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Ottawa has granted the company a waiver from its own sanctions

The Canadian government has allowed Airbus to use Russian-produced titanium in its manufacturing processes despite being the first Western state to sanction the strategic metal.

Ottawa banned supplies from Russian manufacturing giant VSMPO-AVISMA – the world’s largest producer of processed titanium – in a sanctions package against Moscow unveiled in February. The metal is important to the aerospace industry and is prized for its strength relative to its weight.

“Airbus is aware of the Canadian government imposing sanctions on VSMPO and has obtained the necessary authorization to secure Airbus operations in compliance with the applicable sanctions,” Airbus Canada told Reuters on Tuesday, without elaborating on the timeline.

While the EU has extensively sanctioned Moscow following the escalation of the Ukraine conflict in February 2022, it has held off on blacklisting VSMPO-AVISMA. The exemption from the Canadian government is designed to give Airbus leeway in importing jets produced in the EU and built with Russian titanium, Reuters said.

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Airbus announced it was “decoupling” from Russian titanium in 2022. “It will be a matter of months not years,” Airbus Defense and Space CEO Michael Schoellhorn said in December of that year.

Rival aviation giant Boeing also claimed to have stopped purchasing supplies of the strategic metal from Russia in 2022. However, major suppliers for the US company – such as the Safran group and Rolls-Royce – have continued purchasing titanium from VSMPO-AVISMA, the Washington Post reported last month, saying it illustrated how the West remains dependent on Russia for the metal.

Only Canada and Ukraine have sanctioned the Russian titanium giant, while Ukraine’s biggest sponsor, the US, placed export controls on the corporation in September. The limitations prohibit American exports to the company but allow its titanium into the US.

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Gross domestic product is expected to expand by 2.8% this year

The Russian Ministry of Economic Development has raised its 2024 forecast for the country’s growth, citing domestic consumer and investment demand.

Gross domestic product will expand by 2.8% this year, Economy Minister Maksim Reshetnikov told a government meeting on Tuesday. This compares favorably with the previous forecast of 2.3% GDP for 2024.

“The Russian economy has not only adapted to the new external economic conditions, but has also demonstrated the ability to develop sustainably,” the ministry stated.

It identified the tightening of sanctions and a slowdown in the global economy as key external risks for the country’s growth. A potential imbalance of supply and demand, as well as labor market-related issues could also negatively affect the Russian economy, according to the forecast.

For 2025, the ministry’s GDP growth estimate remains the same, at 2.3%.

The ministry expects inflation to slow to 5.1% by the end of this year, above its previous estimate and the central bank’s 4% target.

Forecasts for real disposable incomes and retail trade have been sharply improved, with incomes seen increasing 5.2% in 2024, up from 2.7% growth in the previous forecast.

Growth in retail sales is projected to reach 7.7% in real terms this year, up from 6.4% in 2023.

READ MORE: IMF sharply raises Russia’s economic growth forecast

Last week, the IMF significantly increased its growth forecast for the Russian economy in 2024. The Washington-based institution now expects Russia’s GDP to grow 3.2% this year, a sharp increase from its January projection of 2.6% and its October prediction of 1.1% growth. The forecast for 2025 has also been raised to 1.8% from the January figure of 1.1%.

According to the IMF, Russia’s economic growth is expected to outpace that of a number of major Western economies this year, including the US (2.7%), UK (0.5%), France (0.7%) and Germany (0.2%).

For more stories on economy & finance visit RT’s business section

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Apple has continued to shed market share to local smartphone makers, including Huawei

Apple’s smartphone sales in China dropped 19% in the first quarter of 2024 due to increased competition from local brands, a new report by Counterpoint Research has shown.

The US tech giant fell to third place in the hotly contested market amid pressure from fast-rising rival Huawei, the researcher said on Tuesday.

Shenzhen-based Huawei saw sales of its smartphones soar a whopping 69.7% in the first quarter. It is now the fourth-largest smartphone maker in China, according to the report.

Huawei’s strong performance comes in the wake of US sanctions, which nearly wiped out the Chinese company’s global smartphone business.

Overall, China’s smartphone market expanded about 1.5% year-on-year in the first quarter of 2024, marking the second quarter of positive growth for the industry.

Vivo became the top smartphone vendor in China during the quarter with a 17.4% share, driven by strong sales of the Y35 Plus and Y36 models in the low-end segment and the S18 in the mid-end segment. Honor ranked second with a 16.1% share, followed by Apple with a 15.7% share.

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“Apple’s sales were subdued during the quarter as Huawei’s comeback has directly impacted Apple in the premium segment,” senior Counterpoint analyst Ivan Lam stated. “Besides, the replacement demand for Apple has been slightly subdued compared to previous years.”

The sales drop highlights the challenges Apple faces in its third-largest market, where some Chinese companies and government entities bar the use of its devices in retaliation to restrictions the US placed on Chinese apps for supposed security reasons.

Analysts anticipate increased pressure on Apple’s sales in 2024. Research firm IDC previously warned that the US tech giant’s presence in China has been dented by rival products and limited product upgrades by Apple, which has reduced the overall attractiveness of iPhones.

Apple, once the world’s most valuable company, has seen its shares fall 14% this year, underperforming the overall market. Its market valuation is still $2.56 trillion, second only to Microsoft Corporation.

For more stories on economy & finance visit RT’s business section

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Lawmakers in Washington are reportedly working on measures to cut off sanctioned lenders from the global financial system

US lawmakers are drafting sanctions targeting Chinese banks in a bid to disrupt Beijing’s continued cooperation with Russia, the Wall Street Journal (WSJ) reported on Monday, citing people familiar with the matter.

The new measures are reportedly aimed at cutting off some Chinese financial institutions from the global financial system. The sanctions in question would then serve as “diplomatic leverage” for US Secretary of State Antony Blinken, who is due to visit China this week. According to WSJ sources, he plans to use the sanctions threat as a last resort in case diplomatic dialogue fails to persuade Beijing to curb its alleged military-related exports to Russia.

At a press briefing following a meeting of G7 foreign ministers earlier this week, Blinken called China the key contributor to Russia’s military operation against Kiev through its provision of critical components for weaponry.

“We see China sharing machine tools, semiconductors, other dual use items that have helped Russia rebuild the defense industrial base,” he stated.

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In December last year, US President Joe Biden issued a decree which enabled sanctions on foreign financial institutions that continue to deal with Russia. It targeted lenders outside US and EU jurisdictions that help Russia source sensitive items, which reportedly include semiconductors, machine tools, chemical precursors, ball bearings, and optical systems.

The decree has already affected Russia’s work with Chinese banks to a certain extent. Izvestia news outlet reported in February that some Chinese banks stopped accepting certain payments from Russia. Later, Aleksey Potapov, the deputy CEO of Russia’s MSP Bank, also stated that some Chinese banks have started to reject transactions from Russian banks. Kremlin spokesman Dmitry Peskov confirmed last month that such problems exist, but insisted they are surmountable and “cannot become an obstacle to the further development of trade and economic relations” between Russia and China.

Beijing has maintained a policy of neutrality on the Ukraine conflict, with Chinese officials repeatedly stating that the country is not selling weapons to either Russia or Ukraine. Earlier this month, Chinese Foreign Ministry spokesman Mao Ning insisted that China “regulates the export of dual-use articles in accordance with laws and regulations,” urging “relevant countries” not to “smear or attack the normal relations between China and Russia.”

For more stories on economy & finance visit RT's business section

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The value of the funds dropped by nearly $2 billion last year, Swiss authorities have revealed

Switzerland is holding an estimated 13 billion francs ($14.3 billion) in Russian assets frozen in its financial institutions, around half of which belongs to the state and half to private individuals, the national agency overseeing sanctions revealed on Tuesday.

While the value of Russia’s state assets remains unchanged, Swiss authorities reported a sharp drop in the value of privately owned funds.

As of the end of December, a total of 5.8 billion francs ($6.3 billion) in funds and properties belonging to sanctioned Russian individuals or entities was frozen in Switzerland, authorities have said. The figure represents a 1.7 billion franc ($1.9 billion) decline from the 7.5 billion francs registered at the end of 2022, according to the Swiss State Secretariat for Economic Affairs (SECO).

“The decrease is explained by a loss in value of certain blocked assets – particularly securities related to Russia – as a result of international sanctions,” SECO said in a statement.

The sum is separate from the 7.24 billion francs ($7.9 billion) in assets belonging to the Russian central bank, which has also been blocked in Switzerland.

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Swiss authorities said last year that they had frozen an additional 580 million francs ($636 million) in financial assets and two more properties, following their own investigations and “detailed clarifications” by banks. The current estimate includes 17 properties, luxury cars, works of art, furniture and musical instruments belonging to sanctioned Russians.

The agency also revealed that 140 million francs ($153.5 million) in frozen funds had been released “after further investigations found the legal requirements for their freezing were not met.”

Despite not being an EU member and considering itself to be a neutral state, Switzerland has supported the West’s Ukraine-related sanctions on Russia. The Swiss government said on more than one occasion that it had been closely following EU discussions on the prospect of seizing frozen Russian assets to aid Ukraine, but has yet to outline plans to do so.

Moscow has repeatedly challenged the legitimacy of the asset freezes, slamming the practice as “theft” and warning of countermeasures should the West move to confiscate the funds.

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Russian miner Norilsk Nickel will create a joint venture to construct a new copper producing plant, its CEO has said

Russian mining giant Norilsk Nickel will move some copper smelting production to China in the wake of Western sanctions pressure, the company’s chief executive Vladimir Potanin said in an interview with Interfax on Monday.

The US and UK have targeted Russian-origin aluminum, copper, and nickel in an attempt to reduce Moscow’s export revenues.

“This [sanctions] pressure forced us to think about how to get our goods to the distribution market in the right way,” Potanin told the news outlet, adding that “one of these non-standard solutions is to transfer part of production to markets of direct consumption.”

The businessman highlighted that Norilsk Nickel would create a joint venture in China to build a new plant, which is expected to be constructed by mid-2027, and would supply it with about 2 million metric tons of copper concentrate a year.

According to Potanin, the final product will be sold as Chinese goods, which are “much more difficult to sanction in China than Russian goods coming to China.”

The initiative would reportedly also protect the company’s exports from growing sanctions pressure on financial transactions with Russia. “Settlements are one of the biggest obstacles even in friendly jurisdictions, they don’t let exporters and importers work normally,” Potanin argued.

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According to a recent Bloomberg report, as part of a shift away from the US dollar in settlements Norilsk Nickel is selling metal on the spot market in yuan using a mix of London and Shanghai prices.

Potanin also told Interfax that the company was seeking to gain access to China’s battery technologies in order to scale up domestic production.

China has become a major destination for Russian commodity exports in the wake of Western sanctions. This month, the US and UK prohibited metals exchanges from accepting new Russian-origin aluminum, copper, and nickel and barred imports of the metals.

However, the Kremlin described the new sanctions as a weapon that cuts both ways, claiming the “illegal” restrictions will backfire on the countries that imposed them.

Russia currently accounts for 6% of the global nickel supply, 5% of aluminum, and 4% of copper. According to Forbes, most analysts agree that the new sanctions will lead to an increase in Russian supplies of metals to China.

China, the world’s top copper consumer, is expected to account for more than half of Norilsk Nickel’s metal sales, according to Potanin.

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The bloc plans to target liquefied natural gas in its 14th package of restrictions, Sweden’s foreign minister has said

The EU plans to target supplies of Russian liquefied natural gas (LNG) in its 14th package of sanctions against Moscow, Swedish Foreign Minister Tobias Billstrom announced on Monday.

Speaking ahead of a meeting with his EU counterparts, Billstrom told reporters that the next round of sanctions may include an import ban on Russian LNG as well as “measures to curb the Russian shadow fleet.”

Russia has rerouted practically all of its energy flows to Asia following the introduction of Western restrictions linked to the Ukraine conflict. It has also reportedly begun to move its crude exports on a ‘shadow fleet’ of ageing tankers, over which international sanctions have limited power.

Although Brussels has banned purchasing oil and petroleum products from Russia, pipeline gas and LNG have not been affected by the restrictions. Several countries, including Sweden, Finland, and the Baltic states, have been pushing for the EU to impose a total embargo on Russian LNG, although Hungary has strongly opposed the move. A complete ban would require unanimity among members of the bloc.

Some EU states still rely heavily on Russian LNG, which continues to flow into the continent, mostly through ports in Spain, Belgium, and France. In 2023, the EU increased LNG purchases from Russia, despite pledging to phase out fuel imports from the country by 2027, Reuters reported earlier this month, citing the bloc’s trade statistics.

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The EU’s Agency for the Cooperation of Energy Regulators (ACER) warned last week against drastic reductions in LNG imports from Russia, given the impending end of the supply of pipeline gas from the country later this year.

ACER was referring to the expiration in December of a five-year transit contract for gas pipeline supplies from Russia to Europe via Ukraine. Kiev said last month that it has no plans to prolong the deal. If the flow stops, the EU could potentially lose about 4% of last year’s total consumption.

Western countries will continue to impose sanctions on Russia even though restrictions have largely backfired on their own economies, Kremlin spokesperson Dmitry Peskov said, commenting on the potential LNG ban.

“No one here wears rose-colored glasses. We understand that ‘exercises’ with the sanctions will continue,” he said. “It is obvious that, gritting their teeth, they are ready to face a negative impact on themselves,” Peskov added.

Since February 2022, when the Ukraine conflict began, Brussels has imposed 13 packages of sanctions on Russia.

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Tehran is preparing the financial infrastructure for the Visa and Mastercard alternative, a trade envoy has said

Iran could start accepting Russian Mir debit and credit cards within the next few months, the trade attaché from Tehran’s embassy in Moscow told the Izvestia newspaper on Monday.

According to Mohsen Rahimi, work on preparing the necessary technical infrastructure is already underway, although implementing the system will take time. The move comes as Russia and Iran continue to build stronger economic ties, Rahimi stressed.

Moscow and Tehran have strengthened relations in the face of Western sanctions. Trade turnover between the two countries amounted to $4 billion last year and has potential for further growth, particularly in manufacturing, mechanical engineering, and transport, according to associate professor at the Financial University in Moscow, Mikhail Khachaturyan.

Testing of the Mir system, the Russian alternative to Visa and Mastercard, may start in Iran as early as the end of summer or the beginning of autumn, he told the outlet.

Moscow was hit by a wave of sanctions in 2022 in response to its military operation in Ukraine, including cutting many Russian banks off from SWIFT, Visa, and Mastercard. In response, the Russian government started promoting the domestic Mir system as a reliable alternative.

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Iran’s economy has adapted despite being under sweeping international sanctions for decades, experts have noted, adding that Russia could use Tehran’s experience in resisting outside pressure.

The move to launch Mir in Iran is a logical forward step in developing bilateral cooperation after Tehran joined the BRICS economic group this year, said Tatiana Monaghan, secretary general of the International Chamber of Commerce (ICC).

Last year, the two countries announced at the KazanForum that they had completed all preliminary settlements for the use of Mir cards. Iran and Russia have also agreed to integrate the system with its Iranian analog, Shetab, to facilitate mutual transactions.

The decision to use Mir in Iran has grown in importance since a number of so-called ‘friendly’ countries, including Armenia, Kyrgyzstan, and Kazakhstan, placed restrictions on the system over fears of being targeted by secondary sanctions, experts say.

Mir cards are currently freely accepted in Abkhazia, Ossetia, and Belarus, and can be used with certain limits in Armenia, Kazakhstan, Kyrgyzstan, Tajikistan, Cuba, Venezuela, and Vietnam.

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Technocrats have staked their legitimacy not so much on a carbon-neutral future as on a vision of prosperity that is rapidly receding

Lenin famously defined communism as Soviet power plus electrification of the whole country. In other words, the ideological project of building communism was supplemented by the technocratic project of electrification, the latter being an important source of legitimacy for the new regime.

The present-day European Union is engaged in its own expansive electrification project – the energy transition – that similarly inhabits ground where ideology meets technocracy and underpins legitimacy.

Yet in the past year or so, something has gone badly wrong, and a backlash against the climate agenda and its technocratic enforcers has been spreading across Europe. The energy crisis – far from catapulting the continent further along the path toward a carbon-neutral future as it should have – has exposed just how elusive the goal is, as Europe has scrambled to sign expensive LNG deals and even restart coal-fired plants. Farmers dissatisfied with EU policies that they regard as devastating to their livelihoods have been grumbling for years, but recently their protests have reached a crescendo, and built up political weight. Right-leaning and far-right parties, meanwhile, are gaining ground by the day. Standards of living are dropping and industry is shutting down or moving elsewhere.

Discontent with suffocating bureaucracy and regulation is widespread. A recent survey among German small and medium-sized companies – has registered a massive shift in sentiment against the EU. This is particularly concerning because the so-called German Mittelstand used to be among the strongest pillars of support for European integration.

What is embroiling Europe is deeper than a political crisis – it is approaching what can be called a crisis of legitimacy for the ruling elite. This can be thought of as a metaphysical event that precedes political upheaval, the latter being merely confirmation that such a crisis has taken place. Legitimacy is, of course, a rather nebulous concept, and it defies objective measurement.

Ruling classes throughout history have always advanced various claims about their own legitimacy, without which a stable political order is impossible. In tracing the contours of the current crisis, it’s important to establish what exactly the claims Europe's technocratic elite have put forth and how they are becoming increasingly difficult to believe.

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Ostensibly, the EU’s ruling elite has staked out the green transition as its raison d’être. They claim to have the mandate, vision and competence to see it through and have set clear targets to measure their success.

The headline targets and dates are well-known: reduce greenhouse gas emissions by 55% by 2030 and become climate-neutral by 2050. There are many other secondary targets. But the goals themselves, which will almost certainly prove elusive, are actually not where Europe’s technocracy has staked its credibility, and the failure to achieve them will not prove its undoing. What is in fact being promised in the energy transition lies somewhere adjacent to the carbon reductions and phase-out of fossil fuels. It is a vision of growth and prosperity wrapped up in a deeper narrative imbued with quasi-religious meaning, and a technocratic path toward achieving it. It is partly a promise of prosperity itself, partly a story about that prosperity, and partly a belief in the power of the anointed managerial class to achieve it.

The EU Green Deal is an ambitious and far-reaching program that can be parsed at many levels. It will certainly go down as a cultural artifact of our era. What is underappreciated, however, is the extent to which it has hitched its wagon to those very notions of growth and prosperity, albeit, of course, with a shiny green luster. In the discourse surrounding the initiative, words such as “emissions” and “renewables” are interspersed with ideas about a “prosperous society,” a “competitive economy,” and a “jobs bonanza.” When launching the Green Deal, European Commission President Ursula von der Leyen called the program “our new growth strategy – a strategy for growth that gives more back than it takes away.”

The Commission’s press release announcing the Green Deal – tantamount to a statement of creed – makes a startling juxtaposition. Climate change and environmental degradation, we are told, “present an existential threat to Europe and the world.” A more stark description of an apocalyptic crisis cannot be formulated. But the solution, which is couched in the typical corporate jargon of our era, makes clear what the vision is really about: “to overcome this challenge” – it’s merely a challenge now – “Europe needs a new growth strategy that transforms the Union into a modern, resource-efficient and competitive economy… where economic growth is decoupled from resource use and where no one and no place is left behind.” This is the future that Europe’s technocratic class has promised, and it will live and die by this promise.

In other words, climate targets are set and inevitably missed, but the prospect of missing them hardly threatens the legitimacy of the EU technocracy: if anything, the EU has been quite transparent about falling short of targets, because this only means that efforts need to be redoubled, regulations tightened, and more resources devoted to the cause. The most recent monitoring report by the European Environmental Agency readily admits that the majority of the 2030 green objectives will likely be missed.

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But it’s a very different story when the EU becomes not more modern but less, as innovation falls behind. And instead of becoming more resource-efficient, it begins drastically overpaying for the same non-green energy sources and even returning to coal. Or when the economy loses rather than gains competitiveness and many companies simply pack up shop and move abroad. And what happens when Europe itself is left behind?

One of the implications of the green transition essentially being envisioned as a preservation of the current economic system but plopped down onto a new, sustainable foundation is that all the current rules must still apply: those governing investment, economic viability, and profit. As much of some on the fringe of the climate movement may yearn to implement a system-demolishing ‘eco-Leninism’, to use a term coined by radical activist Andreas Malm, the official EU narrative firmly inhabits the neoliberal framework.

And this leads us to the next great conceit of the energy transition: that there is no trade-off between green investing and making money and that much of the green transition would be quite profitably financed by the private sector. As money poured into green projects, the thinking went, those companies would surge ahead, leaving their non-green counterparts languishing and starved of capital.

And in fact, a strong emphasis has been placed on tapping the deep-pocketed world of institutional managed money. According to the EU’s own estimates, around €400 billion will be needed each year from 2021 to 2030 and €520-575 billion per year in the subsequent decades until 2050. Since the EU cannot pony up anywhere close to that amount, the idea has been to lean heavily on the private and financial sector, with public funds directed to making projects profitable for investors.

For a while, it seemed things might in fact be moving in the direction of a merger of green policy and capitalist profits. When Ford launched an electric Mustang and pickup truck, its market value surged to over $100 billion for the first time. A portfolio put together by The Economist in mid-2021 featuring stocks that stood to benefit from the energy transition doubled the returns of the S&P 500 over a period of a year and a half. Previously the domain of niche sustainable funds, green stocks broke out into the wider market and began receiving inflows from conventional funds. Investors inevitably began drawing comparisons between clean energy today and tech at the turn of the millennium in its market-altering potential.

Meanwhile, various green special-purpose acquisition vehicles (SPACs) proliferated. SPACS are a novel way for smaller companies to list without having to make an initial public offering, although they are indelibly associated with the now-departed era of low interest rates and abundant and cheap capital, when investors were looking to gain exposure to as many small prospective companies as possible in the hopes of hitting the jackpot with the next Tesla. Meanwhile, companies fully reliant on government subsidies with unproven technology were raising money.

A sense emerged that practically any well-marketed endeavor in tune with the prevailing zeitgeist could raise capital, and trendy political ones all the more so. In fact, the implicit unspoken expectation was that in the low-interest-rate world, enterprises supported by the Western elite were, perhaps not sure bets, but at least more attractive than they otherwise might be.

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Alas, this world was not meant to last. Surging inflation and the sharp rise in interest rates to fight it in tandem with the energy crisis in 2022 blew a cold and menacing wind through the green investment boom and revealed much of it to be a fad. The S&P Global Clean Energy Index fell more than 20% in 2023. ESG funds in the US bled more than a net $5 billion in the final three months of 2023, while Europe saw a huge decline in the pace of inflows. Danish offshore wind developer Orsted, one of the darlings in the renewable space, canceled two US projects and has seen its share price plummet 75% since its 2021 highs. After declining for several years, the cost of wind and solar began rising.

Perhaps most symbolic is that Climate Action 100+, the world’s largest investor engagement initiative on climate change, has recently seen a spate of high-level desertions. In just a few days JPMorgan Asset Management, State Street and Pimco withdrew, while BlackRock moved its membership to its much smaller international business in what is a clear downgrade.

Many reasons are cited for the moves but what BlackRock attributed its decision to is probably closest to the truth: the potential conflict between the aim of Climate Action 100+ to get companies to decarbonize and its own fiduciary duty to customers to prioritize returns. In other words, the green economy and making money aren’t quite so compatible after all.

The last year or so has laid bare the reality that the energy transition will not be propelled by a wave of private investment. That puts the onus squarely on policymakers, who will have to mandate the necessary measures rather than hoping that the market delivers them on its own accord. And indeed, what we have seen is that EU institutions and European governments have used executive-heavy measures to push through climate policies, tempered by sporadic and reluctant concessions to farmers and other constituents. In this sense, the EU technocracy has indulged its worst impulses: a penchant for intricate and all-encompassing regulation and classification that almost seems to be a green reincarnation of the mind-boggling complexity of late medieval Scholasticism that set out to codify and order every aspect of the world in accordance with Christian theology.

And here we circle back to the question of legitimacy. Reality has come to resemble almost the mirror opposite of what the European Commission’s “new growth strategy” prescribes. The continent is deindustrializing and plunging headlong into a deep economic decline, yet Europe’s ruling class has staked its legitimacy on the exact opposite: a potent vision of prosperity.

Quite telling is that in 2023, Germany’s carbon emissions fell by a whopping 10% in just one year. For those convinced of the “existential threat to Europe and the world” of climate change, this figure should have been celebrated, regardless of how it was achieved. But because the reduction came thanks not to steps toward a “modern and competitive economy” but quite the opposite – factories shutting down – it was met not with jubilation but embarrassment. This is not how carbon reductions were supposed to happen, and it is why Europe’s ruling elite is facing a deeper crisis.

Regimes whose legitimacy has been compromised but which nevertheless plough ahead with unpopular measures and intrusive regulations enter a very dangerous place. Veteran European analyst Wolfgang Munchau believes that the hyperactive phase of the green agenda will end with the European elections in June and that some of it might even go into reverse. This may be true and if so it would be a prudent political compromise that could stave off a more acute crisis. But it would represent a profound retreat, and it will not restore the lost legitimacy.

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The country has enjoyed a rebound in consumption and an uptick in real wages, analyst Alfred Kammer has said

The Russian economy will keep growing steadily in 2024, the head of the IMF’s European Department has predicted.

Speaking at a press briefing following the release of the agency’s latest European Economic Outlook, Alfred Kammer noted the resilience of the Russian economy in the face of the wide-ranging sanctions.

“What we have been forecasting for Russia is actually growth this year, and we also have seen quite strong growth last year, that was explained by economic activity that has remained strong because oil export volumes remained while prices were high,” the analyst stated.

According to Kammer, the country has been enjoying a rebound in consumption, growth in real wages and a strong labor market. He noted that much of the economic growth can be explained by a “boom in investment” in state-owned enterprises, particularly those in the security and defense sectors, as well as a surge in investment related to import substitution.

“There is not much support from the fiscal side, but it was there as well. Most of the fiscal support was lent to security and defense. So that explains also the upgrade of our numbers for 2023 for Russia and the growth outlook for this year,” Kammer concluded.

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Earlier this week, the IMF once again upgraded its growth estimate for the Russian economy, expecting the country’s GDP to expand by 3.2% this year, up from its January projection of 2.6%. Its latest projections put Russia ahead of a number of major Western economies in terms of growth this year, including the US (2.7%), UK (0.5%), France (0.7%), and Germany (0.2%).

Russia’s Economy Ministry expects GDP growth this year to come in at 3.6%, the same as last year.

Many analysts have attributed the resilience of the Russian economy in the face of Western sanctions to its swift pivot to the East for trade and the economic policies implemented to offset the effect of the restrictions.

For more stories on economy & finance visit RT's business section

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The Dutch government has halted drilling in Groningen over earthquake fears

The Netherlands officially shut down the Groningen gas field on Friday after the authorities approved a permanent halt to drilling operations at the site to limit seismic risks in the northern region.

Since October 2023, the gas field has been producing only a fraction of its full capacity following years of production cuts aimed at reducing the risk of earthquakes that the process causes in the region, which have damaged thousands of buildings over the years. However, its 11 wells remain open in case of a severe winter and due to the uncertain international situation with regard to the Russia-Ukraine conflict.

Earlier this week, the Dutch Senate approved a law to close the gas field for good after the government pledged that production would never be resumed in order to limit seismic risks in the region.

Senators had originally planned to pass the law two weeks ago, but postponed the final vote after several parties raised concerns over the country’s supply.

That move angered both the government and local officials in the northern province. Mining Minister Hans Vijlbrief, who advocated the shutdown, said he would resign if it led to a long delay and further uncertainty regarding the risk of earthquakes for people living in the region. The Groningen authorities accused the parliament of backtracking on its promise to end gas drilling.

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Opened in 1963, Europe’s largest gas field became a major contributor to the Dutch economy, and still has huge reserves of gas. It produced more than 50 billion cubic meters of gas at its peak ten years ago. However, the region has recorded over 1,600 earthquakes since 1986 which have damaged 85,000 buildings. It is not clear whether the halt to production is enough to prevent seismic activity in the region, as empty cavities remain underground.

In February, Shell and Exxon joint venture NAM, which operates the Groningen field, asked an arbitration court to decide whether the government should provide compensation for shutting down gas production at the site.

According to Reuters, gas profits have delivered €363 billion ($385 billion) to the Netherlands since production was launched, while Shell and Exxon’s profits from Groningen amounted to nearly €66 billion over the same period.

Prior to the launch of Moscow’s military operation against Ukraine, a quarter of the Netherlands’ gas imports were sourced from Russia, according to country’s statistics agency. In 2023, the share of Russian natural gas accounted for less than 9% of the country’s imports. Meanwhile, liquified natural gas from the US increased and accounted for two-thirds of the country’s gas imports last year.

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Italy’s UniCredit could reportedly face sanctions for continuing to do business in the country

The European Central Bank (ECB) is planning to require UniCredit, Italy’s second-largest bank, to limit its business in Russia, Reuters reported on Friday, citing two unnamed people with knowledge of the discussions.

UniCredit is one of the few foreign lenders to have kept operations in the sanction-hit country despite the Western sanctions imposed on Moscow since the beginning of the Ukraine conflict.

The demands of the ECB are reportedly similar to those the regulator previously sent to Austria’s Raiffeisen Bank International, the largest Western financial institution still active in Russia.

The sources told the news agency that the regulator intends to send UniCredit a legally binding request that it pare back its operations in Russia. This request is reportedly the penultimate step before possible penalties, such as fines, are imposed.

According to another person with knowledge of the issue, a formal warning from the ECB to UniCredit would offer the Milan-based lender a final opportunity to avert an enforcement procedure that could lead to sanctions.

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Earlier this week, Raiffeisen said that the EU regulator was building up pressure and demanding that the lender decrease loans to customers and significantly reduce international payments originating from Russia.

Raiffeisen and UniCredit, which have been operating in Russia for more than three decades, have drawn scrutiny from financial authorities in the US as well, the sources told Reuters.

In 2023, the Russian unit of UniCredit reported pre-tax profit of €890 million, about 7.7% of the group’s total compared to pre-tax profit of €210 million recorded in the pre-conflict year 2021. In February, UniCredit CEO Andrea Orcel said the bank’s Russia strategy remained unchanged, and that the lender was continuing to scale back its business in the country.

As per Reuters, the Russian unit’s loans in 2023 halved versus the previous year, while the number of employees declined by nearly 8% to 3,150. Nevertheless, revenues saw a year-on-year increase of 17% as bank fees rose.

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Seizing the country’s reserves could undermine the global financial system, the fund has warned

Any steps towards seizing Russia’s frozen reserves should be backed by legal support in order to avoid the risk of undermining the global financial system, Alfred Kammer, the director of the IMF European Department, has said.

The EU and other G7 nations have blocked an estimated $300 billion in assets belonging to the Russian central bank since the start of the Ukraine conflict in 2022. Of that amount, €196.6 billion ($211 billion) is being held by the Belgium-based clearinghouse Euroclear. Since last year, those funds accumulated nearly €4.4 billion in interest.

“With regard to the seizure of Russia’s assets … our view is that is something for the relevant jurisdictions and courts to determine and to decide,” Kammer told a press briefing on Friday, reiterating the IMF’s previous statements on the matter.

“From our side, what is important is that whatever action is taken, that the implications of the functioning of the international monetary system are being taken into account,” he said.

Kammer recalled IMF managing director Kristalina Georgieva’s words, that “one needs to be wary of unintended consequences” of such actions.

“And again, this is the issue of a multilateral rules-based system and a well-functioning international monetary and financial system, which we all should be respectful for, because it delivered… prosperity over last decades,” Kammer said.

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The IMF has previously cautioned that Western plans to seize frozen Russian assets could pose a threat to the global monetary system and entail unforeseen risks.

Some Western officials have been pushing for the outright seizure of the Russian funds and for transferring proceeds to Ukraine, or at least using the interest generated by the assets.

While Kiev’s Western backers generally agree that the frozen assets should be used to aid Ukraine, they are at odds about whether an outright seizure would be legal. The US and UK support the direct expropriation of the funds, but some EU member states, France and Germany in particular, warn that the move would erode trust in the European financial system.

The EU’s foreign policy chief, Josep Borrell, last month proposed using the profits generated by Russia’s frozen central bank reserves to support Ukraine militarily.

Moscow reacted to the diplomat’s proposal by warning that it would lead to disastrous consequences. Kremlin spokesman Dmitry Peskov stated that all EU nations and officials that back Borrell’s plan would be subject to “legal prosecution for many decades to come.”

Russia has said that any actions taken against its assets would amount to “theft,” stressing that seizing the funds or any similar move would violate international law and undermine Western currencies, the global financial system, and the world economy.

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The quadrennial slashing of the crypto reward, known as ‘halving,’ is expected to take place this week

The price of Bitcoin, the world’s highest-valued cryptocurrency, surged past $64,000 on Friday, rebounding from a drop below the $60,000 mark. The crypto continues to experience volatility ahead of an upcoming ‘halving’ event, which has sparked controversy over its potential impact.

The latest Bitcoin halving – a mechanism to limit supply that takes place every four years – is expected late on Friday night or early Saturday. Halving is when the rewards for Bitcoin miners are slashed in half to slow the supply of the crypto into the market.

This time, the reward for mining new bitcoins will decrease from 6.25 bitcoins to 3.125. The final halving is expected to occur in 2140, when the number of bitcoins circulating will reach the theoretical maximum supply of 21 million. As of March 2024, about 19.65 million bitcoins were in circulation, leaving just around 1.35 million to be released via mining rewards.

Experts say the impending halving event comes with heightened expectations that the reduced amount of bitcoin entering into circulation will create a kind of supply shock that will drive prices up.

The last halving, in 2020, preceded a five-fold increase in Bitcoin’s price, following a pattern that has seen record-breaking rallies for the cryptocurrency after each previous such event, in 2016 and 2012, respectively.

“The halving helps naturally increase price due to supply and demand over a medium- to long-term outlook, which in turn brings new people in as the price increases past previous all-time highs. So, indirectly, it plays a huge part in shaping investor sentiment and market speculation,” Danny Scott, chief executive of crypto platform CoinCorner, told The Independent.

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“Historically, the value of Bitcoin has increased after each halving event. This trend is likely to continue during the current market cycle, considering the high amount of institutional interest,” according to Kadan Stadelmann, Chief Technology Officer of blockchain firm Komodo Platform.

In January, the US Securities and Exchange Commission approved the first ever Bitcoin spot exchange-traded funds (ETFs), bringing billions of dollars’ worth of institutional investment to the market for the first time. This increase in demand, combined with the upcoming reduction in supply, has led some analysts to believe that Bitcoin could hit new heights in the coming months.

Despite some kind of volatility in recent weeks, Bitcoin remains a strongly performing asset, up 40% so far in 2024 and more than double where it was at the same time last year.

Investors anticipate the price could break above its previous all-time high of $70,105, reached last month. Meanwhile, the founder of Draper Associates, Tim Draper, has projected the halving could even push the price of Bitcoin as high as $250,000 by July.

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Employees in banking and finance are particularly concerned about being replaced by innovative technology

The majority of Russians believe the world will be dependent on artificial intelligence (AI) in the near future, while 39% fear their jobs could be replaced by the technology, a survey by VTB bank has found.

According to the poll results published on Thursday, 55% of Russians working in banking and finance believe AI could jeopardize their jobs. Their concerns are shared by 45% of IT specialists and 44% of those employed in trade and catering. Workers in transportation (39%), healthcare (38%), manufacturing (37%), education (34%,) and construction (31%) also fear they could be displaced by automation, the study by the Russian bank showed.

More than half of those polled (58%) are concerned about AI potentially getting out of control, although 67% of respondents believe industries cannot develop without innovative technology.

Of those surveyed, 10% said they would hand over management of their personal finances to AI. Only 8% would be willing to entrust their lives and health to a machine, data showed.

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“Sooner or later, machine-learning technologies will dominate most of the services around us. But such technologies can never replace human intelligence,” said Maksim Konovalikin, head of the data analysis department at VTB, as cited by a press release.

Last year, the Organization for Economic Co-operation and Development (OECD) warned that the AI “revolution” could jeopardize 27% of jobs within the 38-member bloc. Even though there are currently few signs that AI could cause significant disruption to the labor market, numerous jobs are already at risk, the Paris-based organization said in its 2023 Employment Outlook.

Goldman Sachs also predicted last year that generative AI such as ChatGPT could replace up to 300 million full-time jobs worldwide. According to the investment bank’s estimates, roughly two-thirds of jobs in the US and Europe are exposed to “some degree of AI automation,” while generative AI could be used as a substitute for a quarter of current jobs.

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The country’s confrontation with Iran has raised geopolitical risks, S&P has said

International ratings agency S&P Global downgraded Israel’s long-term credit rating on Thursday, citing the risk of a military escalation with Iran.

S&P has become the second major US credit ratings agency to do so after Moody’s lowered Israel’s credit score in February due to the “ongoing military conflict with Hamas” in the country’s first-ever sovereign downgrade.

The agency cut Israel’s long-term foreign and local currency sovereign credit ratings to ‘A+’ from ‘AA-’ and the short-term ratings to ‘A-1’ from ‘A-1+’.

S&P explained that the negative outlook reflected the “risk that the Israel-Hamas war and the confrontation with Hezbollah could escalate or affect Israel’s economic, fiscal, and balance-of-payments parameters more significantly than we currently expect.”

The decision came hours before Israel carried out a series of strikes on Iran in the early hours of Friday. It came less than a week after Tehran fired a barrage of drones and missiles at Israel in response to a suspected Israeli strike on its consulate in Syria.

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“The recent increase in confrontation with Iran heightens already elevated geopolitical risks for Israel,” S&P said. A wider regional conflict will likely be avoided, but the Israel-Hamas war appears set to continue throughout 2024, whereas it was previously assumed that the military activity wouldn’t last more than six months, the agency said.

The ongoing war is weighing on Israel’s budget, economists have warned. The hostilities have prompted all three US credit ratings agencies – Moody’s, S&P, and Fitch – to place the country on negative ratings watch since Israel declared war on Hamas in response to a surprise attack by the militant group in October, which killed around 1,200 Israelis.

“Now that geopolitical relations have broadened and worsened, and the war budget likely to be in place for an extended period of time, the one-notch downgrade and retaining the negative outlook is more than justified,” Brendan McKenna, an economist at Wells Fargo & Co, told Bloomberg.

S&P has forecast that Israel’s general deficit will widen to 8% of gross domestic product this year, higher than the government’s estimate of 6.6% – mostly due to higher defense spending. Larger shortfalls are expected to persist over the medium term and net general government debt is set to peak at 66% of GDP in 2026, the ratings agency said.

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The tech giant claims it was ordered by Beijing to pull WhatsApp, Threads, Telegram, and Signal from the local AppStore

Apple has pulled several popular messaging apps from its storefront in China at the request of the government in Beijing over alleged national security concerns, the US-tech giant announced on Friday.

Meta’s WhatsApp and Threads apps, as well as messaging services Telegram and Signal, are no longer available for download on the AppStore in China, Bloomberg reported. The Wall Street Journal has claimed that Korean Line has also been made inaccessible to Chinese users.

Before their removal, none of the apps were widely used in China, where Tencent’s WeChat is the overwhelmingly dominant service.

In a statement to Reuters on Friday, Apple said China’s Cyberspace Administration had requested the removal of instant messengers from the App Store for reasons of national security, but stressed that the apps remain available on all other storefronts. The US-based tech giant noted that it is obliged to comply with the laws of the countries in which it operates, even if it does not agree with them.

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At the same time, other Meta apps such as Facebook, Instagram, and Messenger are still available for download on the Chinese AppStore. However, as was the case with the removed messaging apps, it is still difficult to access these platforms without special proxy tools such as a virtual private network (VPN) to circumvent Beijing’s Great Firewall.

The four removed apps remain available in China’s two special administrative regions of Hong Kong and Macau, Reuters noted.

While the specific reasons for the request to remove the apps remain unknown, the step may be tied to a law passed in China last year which requires all apps operating in the country to register with the local regulatory body.

In August, Chinese authorities called on foreign developers to adhere to this rule by the end of March 2024 or be forced to remove their apps from the marketplace.

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An escalation in the Middle East would send energy prices skyrocketing, analysts have warned

Global prices for crude oil jumped by as much as 3.5% shortly after Israel carried out a series of strikes on Iran in the early hours of Friday.

Both oil benchmarks soared over $3 a barrel in early trading before retreating. By 12:00 GMT, Brent crude oil futures for June delivery were down $0.50 at $86.63 per barrel. The May contract for US West Texas Intermediate (WTI) dropped $0.43, or 0.52%, to $82.30 per barrel.

Israel launched an attack on Iranian territory in the early morning hours, a senior US official confirmed in an interview with ABC News. Al Jazeera reported that Iranian state television had also confirmed the strikes, and that air defenses had been activated. Flights across several areas, including Tehran and Isfahan, were suspended.

The attack, the latest tit-for-tit exchange between the two nations, came nearly a week after Iran unleashed a barrage of 300 aerial drones and missiles on Israel. The shelling was conducted in response to a suspected Israeli strike on an Iranian consular building in Syria that killed 12 people, including three senior Iranian military officers. Tehran believes Israel was behind the bombing, although West Jerusalem has neither claimed nor denied responsibility.

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Iran is the world’s seventh largest oil producer, according to the US Energy Information Administration, and the third-largest OPEC member. It produces around 3.2 million barrels of crude per day, and last year ranked as the world’s second largest source of oil supply growth after the US.

The spike in oil prices is seen by analysts as a self-evident market reaction to mounting concerns about a renewed escalation of hostilities between Israel and Iran.

“Rising geopolitical risk premiums translate to a risk-off environment at this juncture with a heightened risk of oil supply disruption at least in the short-term,” Kelvin Wong, an analyst at OANDA in Singapore, told Reuters.

Earlier this week, energy experts at Bank of America warned that an all-out war between Israel and Iran, which will inevitably impact energy infrastructure and disrupt Iranian crude supplies, is expected to drive oil prices up by $30-$40 per barrel.

Increased tensions in the region could also jeopardize shipping through the Strait of Hormuz between Oman and Iran. About a fifth of the world’s total oil supply passes through the crucial shipping route.

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Share of EU single currency dipped below 22% in March, data shows

The share of the euro currency in global cross-border settlements via the SWIFT messaging system last month declined to an all-time low, transaction data compiled by the global financial service showed on Thursday.

The portion of transactions involving the European single currency amounted to 21.93% in March, marking a month-over-month decline by 1.32 percentage points and dropping well below the 24.4% level logged when SWIFT introduced the new scale.

The data has been collected since 2010, but since July the figures reflect a technical adjustment by SWIFT to trade-reporting standards.

Over the past year, the euro’s share in international payments has nearly halved. In January 2023, settlements with the currency stood at 37.88%, while figures for December 2023 registers a drop to 22.41%.

The US dollar ranked first, gaining 0.81 percentage points from February to reach 47.37% and marking the highest level since December 2023. It was followed by the euro, pound and yuan currencies.

The share of the UK national currency in transactions conducted by SWIFT amounted to 6.57%, while the portion of settlements with Chinese yuan saw another increase, reaching 4.69%.

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The dominance of the euro, a distant second after the US dollar, as a global currency, has been shaken by the rise of China, as well as by the deterioration of ties with Russia and the notable efforts to attain financial independence pursued by emerging economies from India to Brazil.

In Russia, major banks controlling over 80% of country’s banking assets were cut off from SWIFT as part of Ukraine-related sanctions. This, according to financial experts, has propelled the increase of China’s national currency in global trade and finance, as Beijing hasn’t joined the sanctions, opting to strengthen trading ties with Russia.

The use of yuan has been enlarged after China developed its own international-payments network CIPS, separate from SWIFT. CIPS has been welcomed not only by banks in sanctions-hit Russia, but also by financial institutions operating across emerging economies. The move has boosted the rise of the yuan as one of the world’s most used currencies.

SWIFT, or the Society for Worldwide Interbank Financial Telecommunication, provides financial transaction and payment services for more than 11,000 global financial organizations. The tracked data doesn’t blanket the entirety of the $7.5 trillion-per-day foreign-exchange market, but the reports commonly span the vast pools of currency flows that drive global trade over time.

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Raiffeisen says it expects to be asked by the EU Central Bank to further reduce operations in the sanctioned country

Raiffeisen, the largest foreign-owned bank in Russia, said on Thursday it is being pressured by the EU regulator to more rapidly reduce its presence in the country. Raiffeisen Bank International (RBI) said it is expecting to receive a request from the European Central Bank (ECB) to that effect “in the near term.”

RBI is one of the few foreign banks to have stayed in Russia despite sanctions imposed on Moscow by the EU, the US and their allies since the start of Russia’s military operation in Ukraine in February 2022. The Austria-based lender plays a crucial role in the Russian economy, enabling euro and dollar payments to and from the country.

RBI has been gradually reducing its operations in Russia over the past two years, it said in the statement. According to the Financial Times, the lender has reduced its corporate loan book in the country by 56% over the past two years.

The ECB’s new draft of the requirements demands that RBI decrease loans to customers by a further 65% by 2026, compared to the third quarter of 2023, and “significantly” decrease international payments originating from Russia, the statement says.

RBI has described the new proposals as going “far beyond RBI’s own plans” and added that they may “adversely impact” the lender’s attempts to sell its Russian division.

In March 2023, the Austrian lender revealed it was in talks with two potential customers for the sale of its Russian banking arm. According to the Financial Times, there has been little sign of progress on either side so far.

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In December, the banking group announced that it had agreed to buy a stake in construction company Strabag SE from the sanctioned Russian businessman Oleg Deripaska. The transaction was aimed at lowering the two Austrian firms’ exposure to the Russian market, according to Bloomberg.

The Financial Times reported last month that the ECB had urged lenders to speed up their withdrawal from Russia due to increased risks of doing business in the sanctioned country. The outlet cited top banking supervisor Claudia Buch as saying her team was continuing to put pressure on European banks with operations in Russia to downsize and exit the country.

In March, Washington warned Austria’s banking giant that it risks “being cut off from the US financial system” if it is found to have helped fund Russia’s military, Reuters quoted the US Treasury Department as saying.

A number of other EU banks, namely Italy’s UniCredit, Dutch lender ING, Germany’s Commerzbank and Deutsche Bank, Hungary’s OTP Bank, Italy’s Intesa SanPaolo, and Sweden’s SEB maintain a presence on the Russian market.

For more stories on economy & finance visit RT's business section

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A six-month reprieve has been ended due to concerns surrounding upcoming presidential elections in the South American country

The US has reinstated sanctions on Venezuela’s crucial energy industry, over what Washington describes as Caracas’ failure to adhere to democratic principles. The move comes as the nation prepares for presidential elections.

President Joe Biden’s administration said on Wednesday it would not renew a license agreed in Barbados in October in which Venezuela’s President Nicolas Maduro and the country’s opposition agreed to hold free and fair elections, monitored by international observers. In exchange for the election commitment the US temporarily lifted some of its sanctions on Venezuelan oil, gas, gold, and sovereign debt. The deal expired early on Thursday.

“Nicolas Maduro and his representatives have not fully met the commitments made under the electoral roadmap agreement,” US State Department spokesperson Matthew Miller stated.

“Therefore, General License 44 – which authorized transactions related to the oil and gas sector with Venezuela – will expire after midnight and not be renewed,” he added.

The US Treasury Department announced on Wednesday that it had issued a replacement license giving companies 45 days to “wind down” their business and transactions in the OPEC member-state’s oil and gas sector.

Washington has repeatedly threatened in recent months to reinstate energy sanctions unless Maduro made good on his promises.

Senior US officials reportedly said that Maduro has honored some commitments under last year’s deal, but has failed to meet others, including allowing the opposition to run the candidate of its choice against him in the July 28 election.

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Venezuelan officials have insisted they are ready for any scenario and can weather renewed sanctions.

“We are open [for business], willing to keep progressing along with all foreign companies that want to come,” Oil Minister Pedro Tellechea was cited as telling reporters after the US announcement. “Venezuela is ready to secure the stability of global oil markets that we need so much,” the minister stressed.

According to a recent Reuters report, Venezuela’s oil exports in March soared to their highest level since early 2020 as customers rushed to complete purchases ahead of the predicted expiration of the license.

Caracas has been under US sanctions for over 15 years. The latest round of restrictions was imposed after Washington refused to recognize Nicolas Maduro as the country’s president following the 2018 election, and instead declared the head of the National Assembly, Juan Guaido, to be the ‘interim leader’ of the country. In 2019, Guaido called for a popular uprising against Maduro, which ultimately failed. He then moved to live in Miami under US protection.

Meanwhile, all Venezuelan government assets were frozen in the US and any dealings with US citizens and companies were barred.

Maduro had previously called for a “new era” of US-Venezuela relations “based on respect and collaboration.” Venezuela demands the permanent lifting of all US sanctions against the country, according to the president, who says Caracas has abided by the deal signed in Barbados.

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Digital banking will create sovereignty, VTB chief Andrey Kostin says

A move away from conducting financial transactions through Western payment systems, including SWIFT, is vital for Russia and its trading partners, the head of the country’s second-largest lender has said.

Speaking on Thursday at the Data Fusion 2024 conference, VTB CEO Andrey Kostin called for the promotion of digital financial settlements in Russia and allied nations. Such a step would end the dominance of the dollar and gain full sovereignty in the financial sector, he claimed.

“SWIFT has announced plans to carry out digital payments soon, but we need to kill SWIFT in our settlements, we need to completely get away from it and involve our partners in this as well,” the banking executive insisted, highlighting major work that is being done by the Bank of Russia to achieve the goal.

According to Kostin, VTB is currently working on a pilot project to bring the digital ruble into general use, including in cross-border payments.

The senior executive said he appreciated efforts by the Central Bank of Russia over the past decade to create an effective system of import phase-out in the financial sector.

READ MORE: Two more Russian allies stop accepting payment card

“At a time when many of our colleagues in the manufacturing sector were happy to use French engines in domestic aircraft or German gearboxes in cars, the Bank of Russia firmly took the line of creating an independent system,” he said, pointing to the Mir card, the Faster Payments System (SBP) and the country's stock exchange infrastructure.

Earlier this month, Kostin admitted that the latest US sanctions had forced banks in several ‘friendly’ countries – Armenia, Kyrgyzstan and Kazakhstan – to halt transactions with Russia and stop accepting Russia’s Mir payment cards. In February, the US Treasury updated its backlist of Russian individuals and entities, adding the operator of Russia’s Mir payment card system to it.

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Brazil will promote its neighbor’s candidacy, according to a joint statement

Colombia is seeking to become a full-fledged member of the BRICS group as soon as possible, and Brazil will promote its candidacy, according to a joint statement from the leaders of Brazil and Colombia, published after their meeting in Bogota on Tuesday.

BRICS – which previously comprised Brazil, Russia, India, China, and South Africa – has seen a major wave of expansion. Four more countries – Ethiopia, Iran, Egypt, and the United Arab Emirates – joined the group at the start of this year, and further additions are expected in the future.

“President [Petro expressed Colombia’s interest in joining BRICS as a full member as soon as possible, and President Lula welcomed this initiative and promised to promote Colombia’s candidacy,” the statement from Luiz Inacio Lula da Silva and Gustavo Petro reads.

Several other nations have expressed an interest in joining the group of non-Western economies, and some have already formally submitted applications, including Venezuela, Thailand, Senegal, Cuba, Kazakhstan, Belarus, Bahrain, and Pakistan.

In February, Venezuela announced it is hoping to secure BRICS membership at the group’s next summit in Russia in October. Venezuelan President Nicolas Maduro has stated that the emergence of a new multipolar world is “irreversible,” describing the group as the “future of humanity.”

Nigeria in March announced its plans to join BRICS within the next two years, viewing membership as a way to make its voice heard on the global stage.

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Some 25 countries are expecting to apply for membership during the group’s summit in the Russian city of Kazan in October, the South African ambassador to Russia, Mzuvukile Jeff Maqetuka, told TASS news agency in February.

According to the International Monetary Fund (IMF), BRICS currently accounts for as much as 36% of global GDP in terms of purchasing power parity (PPP), compared to just over 30% for the G7 group.

The head of the New Development Bank (NDB), Dilma Rousseff, said in February that the BRICS member states will overtake the G7 in their share of nominal global GDP within the next four years. According to her, the group’s share of global economic output will rise to 40% by 2028, while that of the G7 group of developed nations will decline to 27.8%.

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A direct war between Israel and Iran could “substantially” drive prices up, the bank has said in a note cited by CNBC

An all-out war between Israel and Iran could drive oil prices up by $30-$40 per barrel, Bank of America experts have told clients in a research note seen by CNBC.

Tehran and West Jerusalem have traded threats since Iran conducted its first direct military attack on the Jewish state last weekend, in retaliation for a suspected Israeli airstrike on the Iranian diplomatic mission in Syria earlier this month.

If hostilities escalate into a protracted conflict that impacts energy infrastructure and disrupts Iranian crude supplies, the price of global benchmark Brent could rise “substantially” to $130 in the second quarter of this year, a Bank of America research note stated on Tuesday, according to CNBC. It added that US crude oil could soar to $123.

The scenario reportedly assumes that Iranian oil production falls by up to 1.5 million barrels per day (bpd). According to the International Energy Agency (IEA), Iran, a founding member of the Organization of the Petroleum Exporting Countries (OPEC), produces about 3.2m barrels of oil a day. Last year it ranked as the world’s second largest source of supply growth after the US.

If a conflict led to disruptions outside Iran, such as the market losing 2 million bpd or more, prices could spike by $50 a barrel, according to the note. Brent would eventually settle around $100 in 2025, while US benchmark West Texas Intermediate (WTI) would come down to $93, it predicted.

The price of Brent crude spiked to over $91 per barrel earlier this month after Tehran threatened retaliation against Israel. However, as the bank’s global economics team has pointed out, in the days following the retaliatory strike crude oil prices fell due to “[the] limited casualties and damage” it caused.

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Analysts have warned that the market reaction “may not reflect the medium-term economic and geopolitical implications” of Iran’s first-ever direct military attack on Israel.

If a war is limited to the two nations, Bank of America sees little impact on US economic growth and the Federal Reserve’s monetary policy. A general regional war, however, could have a substantial impact on the US, according to the institution.

Brent futures were trading at $86.6 per barrel at 11:29 GMT on the Intercontinental Exchange (ICE). WTI futures were trading at $82 per barrel in New York.

For more stories on economy & finance visit RT's business section

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The confiscation of Moscow’s frozen funds could undermine international order, the head of the European Central Bank warns

US-backed proposals to seize frozen Russian assets could undermine the international order, European Central Bank (ECB) President Christine Lagarde has cautioned. Her comments came during a meeting in Washington on Wednesday, where the G7 finance ministers and central bank governors were discussing the issue of using the immobilized assets of the Russian central bank to support Ukraine.

In a joint statement, the finance ministers and regulators said they would continue working on “all possible avenues” to make use of Russian sovereign assets, according to Reuters. The push to seize Moscow’s money has been led by the US and has caused a rift among the G7 and the EU political elite.

Washington and its allies have blocked some $300 billion of Russian central bank assets due to sanctions adopted in response to the launch of Moscow’s special military operation against Kiev in February 2022. Around $200 billion of that money is held in the EU. The US has been insisting for months that international law allows for the confiscation of the funds, but Germany and France have expressed concerns that such a move could set a dangerous precedent.

”I have seen four different schemes or proposals to circumvent what many other jurists or lawyers… regard as a very serious legal obstacle that can be construed as a violation of the legal international order,” Lagarde, a former lawyer, said, as quoted by the Financial Times.

Moving from freezing the assets to confiscating them could entail “breaking the international order that you want to protect; that you would want Russia to respect,” she added.

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During the meeting in Washington, a senior US Treasury official outlined the options the finance ministers were “doing technical work” on.

”One of them is seizure, but another is collateralizing, or even using the windfall profits or the interest from these assets to fund a loan,” Deputy US Treasury Secretary Wally Adeyemo said, as quoted by Reuters. The outlet reported earlier that the US and its allies were considering using the interest due on the frozen Russian assets as collateral for loans or bonds issued to help Ukraine.

Moscow has repeatedly said that the seizure of its funds would amount to theft and would further undermine global trust in the Western financial system. Russia has also warned that if necessary, it might respond in kind to such a move by the US and its allies.

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Lithuania suspended regular imports from the country in May 2023

Lithuania has resumed purchasing grain from Russia after a lengthy hiatus, importing more than 12,000 metric tons in February, worth around $2 million, RIA Novosti reported on Wednesday, citing statistical data.

The former Soviet nation, one of Russia’s most vocal critics, had stopped regular grain imports from its neighbor in May 2023, receiving its last delivery in July.

Nevertheless, in March 2024, Lithuania, along with Latvia, Estonia, Poland and the Czech Republic, urged the European Commission to impose a full ban on grain imports from Russia and Belarus due to the Ukraine conflict.

Statistics show that Latvia has also increased imports of Russian grain, purchasing 58,800 tons in February compared to 52,600 tons the previous month.

Riga has been one of the most outspoken advocates of imposing EU-wide sanctions on Russian grain. This, however, has not stopped Latvia from increasing its agricultural imports from Russia by almost 40% year-on-year in the first quarter of 2024.

In February, Latvia imposed a unilateral ban on food imports from Russia and Belarus, becoming the first EU state to introduce such an embargo, while Lithuania announced that it would subject cargo to strict inspection.

Despite this, the EU countries in February collectively purchased 92,600 tons of Russian grain, worth almost €17 million.

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Media outlets reported last month that the European Union was preparing to impose tariffs of up to 50% on grain imports from Russia and Belarus, under pressure from protesting farmers and several member states.

Brussels has long resisted pressure from Poland and the Baltic states to restrict agricultural imports from Russia and Belarus, arguing that such a move could disrupt global food markets and hurt developing nations.

Russia is one of the world’s largest exporters of grain, feed and fertilizer. While these commodities have not been outright sanctioned by the US and its allies on account of the Ukraine conflict, their transport by sea has been made more difficult by sanctions on commercial shipping.

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The new owners of the popular coffee chain in the country have rebranded the local franchise

The owners of the remains of the Starbucks chain in Russia have asked a court to terminate legal protection of the American company’s trademarks, a court document has revealed.

Entrepreneur Anton Pinsky, who purchased the US chain's Russian assets in partnership with rapper and businessman Timati (Timur Yunusov), filed a claim with the country's intellectual property rights court on April 12, according to a post on the information portal Digital Justice this week.

Starbucks, which had operated in Russia since 2007, pulled out of the country in 2022 due to Western sanctions linked to the Ukraine conflict.

Pinsky and Yunusov acquired the rental agreements for all 130 Starbucks coffee shops in Russia, as well as the employment contracts of its 2,000 workers. They successfully rebranded the Seattle-based company’s coffee shops in Russia as Stars Coffee.

The new owners also replaced the well-known mermaid logo with an image of a girl in a traditional Russian ‘kokoshnik’ headdress.

The current claim relates to seven trademarks, which include images and text elements registered at various times between 2003 and 2014. However, the expiry periods of exclusive rights to trademarks were extended and are valid, depending on the mark, up until 2033, the court filing said.

READ MORE: Russian ‘Starbucks’ gets new name and logo

According to the court document, the plaintiff has asked the court to terminate the protection of trademarks relating to two classes of services including restaurants, cafes, cafeterias, snack bars, and coffee shops due to their non-use.

In 2022 and 2023, Pinsky applied to register new brand names – Stars Pinskiy Coffee and Stars Kanokov Coffee. Currently, the declared designation of both trademarks is being examined, according to official documents.

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The country’s gross domestic product is projected to grow 3.2% this year

The International Monetary Fund (IMF) has significantly increased its growth forecast for the Russian economy in 2024, in its latest World Economic Outlook published on Tuesday.

The Washington-based institution has once again upgraded its estimate, and now expects Russia’s GDP to grow 3.2% this year, a sharp increase from its January projection of 2.6% and more so from its October prediction of 1.1% growth. The forecast for 2025 has also been increased to 1.8% from the January estimate of 1.1%.

Oil export volumes have “held steady” and government spending has “remained high”, contributing to the uptick, the IMF said. The current revision also reflects strong corporate investment, including by state-owned enterprises, according to the report.

“We have also seen a lot of robustness in private consumption that has underpinned growth,” the IMF added.

Russian economic growth continues, and according to the IMF report, is expected to outpace that of a number of major Western economies this year, including the US (2.7%), UK (0.5%), France (0.7%) and Germany (0.2%).

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The IMF’s projection for 2024 is higher than the Russian Economy Ministry’s preliminary reading, which forecast earlier in April that the country’s GDP will expand 2.3% this year, following 3.5% growth in 2023.

Last week, President Vladimir Putin said that the Russian economy had expanded 3.6% last year, more than previously estimated. Earlier, he described the country’s economic performance as an “amazing” success, given that Russia has had to operate under unprecedented Western sanctions.

The IMF left unchanged its projection for China’s 2024 growth to fall to 4.6% from 5.2% in 2023, with a further decline to 4.1% projected for 2025.

Meanwhile the organization increased India’s GDP growth forecast for this year by 0.3 percentage points to 6.8%, maintaining its 2025 estimate at 6.5%.

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Japanese companies hold minority stakes in Russian fuel projects in the Far East

Japanese companies will continue to participate in Russian energy projects on Sakhalin Island due to their importance for Tokyo’s energy security, the country’s foreign ministry announced on Tuesday.

Tokyo will continue its “close cooperation” with the Group of Seven industrialized nations (G7) to pursue a “policy of tough sanctions” on Russia, the ministry said in its annual Diplomatic Bluebook, which reviews Japan’s foreign affairs activities.

Japan is also set to further cut reliance on Moscow’s energy resources by phasing out oil and coal imports.

However, Tokyo will retain its interests in the Sakhalin-2 liquefied natural gas (LNG) project and the Sakhalin-1 offshore oil and gas venture in Russia’s Far East, according to the foreign ministry.

“In light of ensuring stable supplies in the medium and long term, Japan continues to view these projects as important in the field of energy security and intends to maintain its share,” it stated.

Sakhalin-1 is a consortium for offshore oil and gas production. Its sister project, Sakhalin-2, is one of the world’s largest LNG ventures, supplying around 4% of the global market.

Both projects faced disruptions in 2022 after Western energy majors including US ExxonMobil and Britain’s Shell opted to leave Russia after the West sanctioned the country over its military operation in Ukraine.

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Japan’s Sakhalin Oil and Gas Development Co (SODECO) owns a 30% stake in Sakhalin-1. In 2022, the Russian government allowed SODECO to keep its stake under the new domestic operator of Sakhalin-1 following the exit of ExxonMobil, the previous operator and former owner of a 30% stake.

Exxon Neftegaz was disbanded as the operator of the project and all its assets and equipment were transferred to a new company managed by Rosneft subsidiary Sakhalinmorneftegaz-Shelf.

Mitsui, along with Mitsubishi, have also retained their 22.5% combined stake in the Sakhalin-2 LNG project.

Mitsubishi CEO Katsuya Nakanishi said in February that Russia’s LNG project remained “extremely important” for ensuring that Japan maintains a stable supply of energy.

In the summer of 2022, Russia transferred the project from its Bermuda-based operator, Sakhalin Energy, to a domestic company, Sakhalin Energy LLC, and allowed foreign shareholders to retain their stakes in the new operator proportionate to their old stakes. Last year, the Japanese government estimated that demand for LNG would continue to grow.

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The Biden administration’s fiscal policy is a cause for concern, according to a report

The International Monetary Fund (IMF) has raised concerns about overspending by the US government, warning it has been reigniting inflation risks and undermining financial stability around the world.

The US federal budget deficit jumped from $1.4 trillion in fiscal 2022 to $1.7 trillion last year, according to the latest World Economic Outlook, issued by the IMF on Tuesday.

“The exceptional recent performance of the United States is certainly impressive and a major driver of global growth,” the IMF said. However, the report explained that this “reflects strong demand factors as well, including a fiscal stance that is out of line with long-term fiscal sustainability.”

The ballooning US national debt, which exceeded $34 trillion in December, and the fiscal deficit threatened to exacerbate sky-high levels of inflation while posing a long-term risk to the global economy, according to the report.

“Something will have to give,” the IMF warned.

The US exceeded its debt ceiling, which was legally set at $31.4 trillion, in January 2023. After months of warnings of an imminent and economically disastrous default from the US Treasury, President Joe Biden in June 2023 signed a bipartisan debt bill that suspended the cap until January 2025. This effectively allowed the government to keep borrowing without limits through next year. Debt spiked to $32 trillion less than two weeks after the bill was approved, and has been piling up ever since.

The debt held by the public could surge by $19 trillion over the next decade to surpass the $54 trillion mark, owing to the mounting costs of an aging population and higher interest expenses, according to recent projections by the Congressional Budget Office (CBO).

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Since entering office, Biden has spent trillions on Covid relief as well as on infrastructure. The US has also spent billions on aid for Ukraine. The Biden administration, however, has been insisting that tax cuts signed into law by then-President Donald Trump were to blame for the ballooning national debt.

Last month, Biden unveiled a $7.3-trillion budget plan for 2025 which would push US debt over 100% of GDP, as he laid out a fiscal agenda that boosts spending but plans to save $3 trillion through higher taxes over ten years.

Republicans in the House of Representatives have described the proposed budget as a “roadmap to accelerate America’s decline,” accusing the Biden administration of “reckless spending” and of engaging in a “runaway spending spree” that disregards fiscal responsibility.

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Exports from the country’s major ports surged to 3.95 million barrels a day in the week to April 14, data is showing

Maritime exports of Russian crude almost climbed to a year-on-year high in the second week of April, Bloomberg reported on Tuesday, adding that flows from the country’s major ports were near peak levels.

Russia’s seaborne crude exports in the week to April 14 surged by 560,000 barrels per day (bpd) to 3.95 million bpd, reaching the highest volume since May 2023, the outlet said, citing ship-tracking data.

The less volatile four-week average also rose sharply, climbing by about 250,000 bpd to 3.66 million bpd, the highest since early June 2023.

Weekly average shipments stood at about 365,000 bpd and were reportedly about 490,000 bpd above Russia’s April target, which is part of the OPEC+ alliance’s broader effort to cut output and supplies in a bid to balance oil prices.

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Russia has pledged to cut oil exports by 500,000 bpd below the May-June average during the first quarter of the current year, after several other members of the group agreed to curb further output. The reduction is expected to be shared between Russian crude shipments, which will be cut by 300,000 barrels per day, and refined products.

Flows from the country’s main export terminals gained significantly and were close to historical highs, the outlet said. According to vessel-tracking data, the country’s largest oil-loading Primorsk port in the Gulf of Finland handled ten tankers in three of the past four weeks.

Bloomberg suggested that the trend possibly reflected a diversion to exports of oil that would have been processed at Russian refineries that have recently suffered multiple attacks by Ukrainian drones. Since the start of 2022, the port hasn’t handled more than 11 tankers in a week, data shows.

The jump in exports has been combined with higher prices on Russia’s flagship Urals oil blend. In monetary terms, Russia’s crude exports reportedly jumped to $2.15 billion in the seven days to April 14 versus $1.82 billion previously. At the same time, four-week average income rose by about $170 million to $1.92 billion a week.

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Berlin remains highly dependent on Beijing for various products and raw materials, data shows

It would take decades for German businesses to end their reliance on imports from China, the chief financial officer of industrial giant Siemens told the Financial Times on Sunday.

Last year Berlin drew up a strategy that policymakers called “de-risking,” seeking to reduce economic dependence on China, the world’s second-largest economy. However, a study by the German Economic Institute, published last week, revealed that German manufacturers remain highly dependent on China for various products and raw materials, despite efforts to diversify to other markets.

“Global value chains have been building up over the last 50 years. How naive do you need to be to believe that this can be changed within six or 12 months?” company CFO Ralf Thomas told the British newspaper. “This is about decades.”

His remarks came after German Chancellor Olaf Scholz embarked on a high-profile three-day visit to China on Sunday, seeking to strengthen economic relations at a time of growing tensions between Western countries and Beijing over trade and geopolitical issues.

“It would be a gross misunderstanding to think that it was the intention of this government [to reduce trade with China]. We want to further expand trade with China, taking into account the need for de-risking and diversification,” the FT cited a German government official as saying.

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“Regarding critical dependencies, we have to tackle those. We don’t want to close ourselves off, but we want to have balanced partnerships.”

China is Germany’s single largest economic partner, with trade worth €254 billion ($269.8 billion) last year, according to the German statistics agency.

While overall imports from China fell by nearly a fifth between 2022 and 2023, the share of product groups for which Germany relies on China for more than half of its imports has barely changed, including chemicals, computers and solar cells, the data shows.

The economic ties across German industries encompass major firms such as Volkswagen and BASF, and also small and medium-sized businesses, which have long been seen as a pillar of the country’s economic power, the FT noted.

Last year, the Bundesbank warned that Germany’s “business model is in danger” due to an excessive dependence on China.

However, Thomas said Siemens “cannot afford not to be [in China]” and that rise of aggressive local competitors was a “challenge.”

“If you can stand the heat of the Chinese kitchen, you are successful in other places as well,” he added.

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The layoffs are reportedly expected to impact at least 14,000 employees

Tesla will lay off more than 10% of its salaried workforce, according to an internal company-wide email sent to employees by CEO Elon Musk and seen by media outlets.

Reuters on Monday cited an email sent to at least three US employees notifying them that their dismissal was effective immediately.

According to EV blog Electrek, which was the first to report on the layoffs, it is not clear which teams at Tesla will be impacted. With the company’s headcount sitting at around 140,000 workers globally, the reduction is likely to affect at least 14,000 employees.

“As we prepare the company for our next phase of growth, it is extremely important to look at every aspect of the company for cost reductions and increasing productivity,” Musk reportedly said in the memo sent to all staff.

“As part of this effort, we have done a thorough review of the organization and made the difficult decision to reduce our headcount by more than 10% globally. There is nothing I hate more, but it must be done,” the memo said.

Commenting on the layoff reports, Musk posted on X (formerly Twitter): “About every five years, we need to reorganize and streamline the company for the next phase of growth.”

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The last time Musk announced major job cuts was in 2022, after telling executives he had a “super bad feeling” about the US economy. He indicated at the time that he believed that the company was overstaffed.

The latest reports on jobs cuts come as the US carmaker has been grappling with falling sales and fierce competition from Chinese electric vehicle (EV) makers.

According to a Reuters report earlier this month, which was later denied by Musk, Tesla has scrapped a long-planned project for a low-cost vehicle and will instead focus on a new robotaxi.

This month, the company reported its first annual decline in vehicle deliveries since 2020. On Tuesday, Tesla is scheduled to report first-quarter financial results and may provide more details about the layoffs, according to media reports.

For more stories on economy & finance visit RT's business section

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The category outpaced vodka in quarterly growth at the beginning of this year, according to the regulator

Vodka, Russia’s stereotypical national beverage, is beginning to lose out to lower-alcohol alternatives in terms of domestic sales, according to newly released data.

Among alcoholic beverages, those classified as low-alcohol (meaning up to 9% alcohol content) were among the categories that grew the fastest in the first quarter of 2024, according to statistics shared with the media by Russia’s national alcohol and tobacco regulator. Sales in this category grew by 8.2% year-on-year, compared to just 1.6% for vodka.

However, vodka still outpaced peers in terms of total sales volumes. A total of 18.37 million decaliters of vodka were sold between January and March, compared to 4.59 million decaliters of low-alcohol drinks.

The strongest growth was registered in the category of beverages that includes whiskey and gin, which saw sales surge by 18.8% to 3.3 million decaliters. Sales in the category called ‘cognacs’, which is used in Russia to denote types of brandy, grew by 9.6% to 3.5 million decaliters.

Wine remains one of the most popular alcohol products in Russia, with 13.25 million decaliters purchased over the first quarter. Overall, sales of alcoholic beverages stronger than beer grew by 5.4% in the first quarter on a year-on-year basis, reaching over 56 million decaliters.

READ MORE: ‘Zelensky Vodka’ project fails

According to industry expert Pavel Shapkin, the growth in overall volumes is not entirely the result of increased consumption. He told the newspaper Rossiyskaya Gazeta that the uptick was mainly due to a crack-down on illegal production and sale of spirits, as well as a shift in the tourism habits of Russians. As people switch to vacationing domestically, they now buy and consume inside the country what used to be consumed abroad.

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Expropriating frozen funds would have long-ranging legal ramifications, experts warn

The UK might not actually confiscate Russia’s immobilized assets despite political pledges to do so because such a step would violate the rule of law and lead to a litany of legal quandaries, according to sanctions experts cited by Politico in an article on Monday.

London has blocked £26 billion ($32.1 billion) in assets belonging to the Russian state since the beginning of the Ukraine conflict, according to the Bank of Russia, and over £18 billion ($22.4 billion) in private Russia-linked assets, the British government has said.

Many UK officials have long been pushing to confiscate the money and use it to pay reparations to Ukraine.

Politico noted that in 2022 British MP Michael Gove proposed seizing the mansions of wealthy Russians in the UK capital, nicknamed “Londongrad” for its reputation as a destination for Russian magnates, and use them to house Ukrainian refugees. Other UK officials have insisted that Russia’s sovereign assets should be used to help rebuild Ukraine.

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However two years on, little has been done to actually seize the assets despite much “grandstanding,” the outlet noted.

The sanctions lawyers and experts who spoke to Politico said that regardless of the “political peacocking” there will never be any legal standing to take the frozen Russian money or property.

“The British government is unlikely to be comfortable forging a brave new legal order,” Anna Bradshaw, a sanctions lawyer at Peters and Peters told the outlet.

While blocking the assets could be viewed as a temporary sanctions tool, outright seizure would make the UK a “kleptocratic regime,” according to MP Harriett Baldwin, who chairs the Commons Treasury Committee.

Other lawyers agree that permanent confiscation of the underlying assets would have “massive” legal ramifications. Despite ongoing discussions among Western countries on the potential seizure of the interest earned from Russia’s frozen central bank reserves, there’s little chance that assets belonging to individuals would ever be tapped.

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According to Bradshaw, governments that seize privately owned assets “start rewriting the basic principles that underpin most legal systems.”

While Kiev’s Western backers generally agree that the frozen assets should be used to aid Ukraine, they are at odds over legal ways of tapping them.

“Even if only the net profits, rather than the underlying assets, are seized, there are going to be years if not decades of international lawsuits,” Francis Bond, a sanctions lawyer at Macfarlanes said.

In total, the West has frozen about $300 billion in Russian state assets and more than $80 billion worth of assets belonging to Russian citizens and businesses.

Russia has repeatedly said these actions constitute theft and warned it would respond in kind if necessary.

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New sanctions have triggered a market rally, Dmitry Peskov has noted

New Western sanctions against Russian metals are a weapon that cuts both ways, Kremlin spokesman Dmitry Peskov has said. The US and UK have targeted Russian-origin aluminum, copper, and nickel, aiming to reduce Moscow’s export revenues.

The “illegal” restrictions introduced last week will backfire on the countries that imposed them, Peskov claimed on Monday. He noted there has been a “certain destabilization” on the metals market following the ban, referring to a rally on a leading commodity exchange earlier the same day.

Washington banned the import of Russian-origin aluminum, copper, and nickel into the US on Friday, and has coordinated with the UK to crack down on global trade in these metals.

The decision affects aluminum, copper, and nickel produced in Russia after April 13, 2024, and the world’s leading commodity exchanges – the London Metal Exchange (LME) and Chicago Mercantile Exchange (CME) – are obliged to prohibit their trade.

Aluminum jumped as much as 9.4% on the LME on Monday, the most since the current form of the contract was launched in 1987, according to Bloomberg. Nickel rose as much as 8.8%.

The rally is being fueled by “worries that the sanctions will reduce Russian flows to Western markets,” the outlet reported. The new restrictions “inject major uncertainties” into metals markets that have already been reshaped since the start of Russia’s military operation in Ukraine and the Western sanctions campaign against Moscow, it added.

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The LME confirmed to Bloomberg on Saturday that “old” Russian aluminum, namely metal produced before April 13, 2024, will continue to be delivered.

As of March 2024, the share of Russian aluminum in the LME warehouse system was 91%, while the share of Russian copper stood at 62% and nickel at 36%, according to LME calculations.

Russia currently accounts for 6% of the global nickel supply, 5% of aluminum, and 4% of copper. According to Forbes, most analysts agree that the new sanctions will lead to an increase in Russian metal supplies to China.

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Samsung has regained the leading position as iPhone sales slide amid the US-China trade spat

Samsung has overtaken Apple to reclaim its position as the globe’s top smartphone maker, preliminary data released by the research firm International Data Corporation (IDC) on Sunday showed. The South Korean tech giant lost the top spot to its US rival last year.

Apple’s smartphone shipments dropped by around 10% in the first quarter of 2024 owing to intensifying competition from Asian manufacturers, IDC data shows. Apple shipped 50.1 million iPhones in January-March of this year, down from 55.4 million units during the same period in 2023, according to the IDC.

Although Samsung saw its sales growth decline by 0.7%, it seems to be “in a stronger position overall” than either company was in recent quarters, the IDC notes. It added that Samsung’s market share stood at 20.8% in 1Q24, compared to Apple’s 17.3%.

Chinese makers Xiaomi, Transsion and OPPO follow Samsung and Apple to round out the top five smartphone makers, according to the research firm. Overall, global smartphone shipments increased by 7.8% year-on-year in 1Q24, the IDC stated.

Apple’s sales decline comes after its strong performance in the fourth quarter of 2023, when it overtook Samsung as the world’s leading phone maker, thus ending twelve years of dominance by the South Korean tech giant. Apple's gains owed to the growing popularity of high-end devices.

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However, the California company’s drop in sales this year has been attributed to its challenges in key markets, particularly China. Sales of the iPhone in the company’s largest overseas market fell 24% year-on-year in the first six weeks of 2024, according to the research firm Counterpoint. Some corporations and government agencies in China have limited employees’ use of Apple devices, mirroring US government restrictions on Chinese apps, citing alleged security concerns.

Washington and Beijing have been embroiled in an escalating trade standoff since 2018. The US president at the time, Donald Trump, began imposing tariffs on Chinese goods imported by the US on grounds that Beijing was allegedly adopting unfair trade practices and engaging in intellectual property theft.

President Joe Biden has continued the tough stance on trade with China and not only left in place the tariffs imposed by his predecessor but has also implemented restrictions that block access to innovative technologies, such as in the artificial intelligence sector.

China has decried Washington’s policies as an attempt to thwart the development of the world’s second biggest economy.

For more stories on economy & finance visit RT's business section

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Speaking in Shanghai, Olaf Scholz has said the only prerequisite is that “competition must be fair”

German Chancellor Olaf Scholz has spoken in favor of opening the European market to Chinese automakers as long as they compete “fairly” with other manufacturers.

Scholz arrived in China on Sunday for his second visit to the country as chancellor. He is being accompanied by several German chief executives, including the bosses of carmakers Mercedes-Benz and BMW and the chemical giant BASF.

The chancellor visited the major industrial hub of Chongqing on Sunday, and is expected to meet Chinese President Xi Jinping and Prime Minister Li Qiang before leaving late on Wednesday.

Speaking to students at Tongji University in Shanghai on Monday, Scholz cited the initial fears associated with the entry of Japanese and South Korean cars into Europe, but said they had not ended up dominating the market or skewing its balance.

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“There are Japanese cars now in Germany and German cars in Japan,” Scholz stated, adding that “at some point there will also be Chinese cars in Germany and Europe.

According to the chancellor, “the only thing that must always be clear is that competition must be fair… [that] there is no dumping, that there is no overproduction, that copyrights are not infringed.”

Scholz also stressed the importance of a “level playing field,” clarifying that German companies should be allowed to establish production facilities in China and vice versa with as little red tape as possible.

Beijing remained Berlin’s top trading partner for the eighth straight year in 2023.

Chinese automakers have actively penetrated foreign markets in recent years and are steadily closing the gap with Western rivals, particularly in terms of electric cars.

In Russia, Chinese vehicles have quickly filled the vacuum left by a number of major European car manufacturers after they exited the market due to the Ukraine conflict.

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Kiev’s top diplomat has suggested the US and other donors need to give more military aid to stop attacks on Russian refineries

Kiev would be more receptive to appeals from the US and its allies to stop attacking Russian oil infrastructure if the West boosted its military aid, Ukraine’s top diplomat has revealed.

Foreign Minister Dmitry Kuleba offered his suggestion for how the West can earn Ukraine’s cooperation in a local broadcast interview on Sunday. His comments came after US defense chief Lloyd Austin expressed concern earlier this month that Ukrainian drone strikes against Russian refineries and oil storage facilities could trigger a jump in international energy prices.

“You need to think in your own interests,” Kuleba told Rada TV. “If your partners are saying: ‘We are giving you seven Patriot batteries, but we have a request for you, please don’t do this and that’ – then there is something to talk about.”

On the other hand, if “no batteries, no aid package” are being offered in connection with the entreaty – then there is nothing to talk about. “Everyone survives as best they can,” he added.

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Weapons shipments from Washington, the biggest sponsor of Kiev’s war effort against Russia, have slowed in recent months amid struggles by US President Joe Biden to secure congressional approval for more Ukraine aid. Republican lawmakers have balked at Biden’s request for more than $60 billion in additional spending after his administration burned through $113 billion in previously approved funding.

Kiev’s donors had previously expressed worries that Ukrainian strikes deep into Russian territory with weapons that NATO members provided could trigger a wider conflict. US Secretary of State Antony Blinken said earlier this month that Washington does not support Ukrainian attacks on Russian soil. Austin later suggested that Kiev could focus on military targets because hitting petroleum infrastructure could roil international markets.

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Kuleba said he listened to Austin, but he sees no “cause-and-effect relationship in this matter.” When a refinery in Russia “explodes,” the resulting problems are confined to the Russian energy market, he claimed, and in any case, Ukraine has to prioritize its own interests.

Ukrainian drone attacks have targeted several Russian refineries since early March. Russian Defense Minister Sergey Shoigu suggested that Kiev has resorted to terrorism and long-range strikes against Russia’s civilian population in an attempt to “convince its Western sponsors of its ability to resist the Russian Army.” That’s despite the fact that Kiev has not had any actual success on the battlefield, the minister added.

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Contracts Austria signed with Gazprom are presently set to expire in 2040

Austrian Energy Minister Leonor Gewessler has revealed a plan to eliminate the country’s energy reliance on Moscow in less than half a decade, the Kurier newspaper reported on Friday, citing the draft legislation.

The sanctions imposed by the EU on Russia due to the Ukraine conflict do not target gas imports. Nevertheless, Russian supplies to the bloc have dropped sharply due to the restrictions and the September 2022 sabotage of the Nord Stream pipelines.

In response to a request by the Austria Press Agency, the country’s energy ministry confirmed details about the bill, which would need the approval of Austria’s ruling party and at least a two-thirds vote of support in Parliament to pass.

In February, Gewessler urged that radical steps be taken to cut the country’s reliance on Russian gas, including breaking a long-term deal that the state energy company OMV has with Russia’s Gazprom until 2040. The minister admitted that the share of Austria’s gas imports from Russia was growing, and hit a record high of 98% in December.

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Gewessler has reportedly sent the bill, which is obligates the government to diversify the nation’s gas supplies, to the Austrian People’s Party (ÖVP) led by Chancellor Karl Nehammer. The minister’s proposal would make amendments to the Gas Industry Act, the Gas Diversification Act and the Energy Steering Act, Kurier stated.

The proposed changes are intended to reduce Austrian gas imports, which overwhelmingly come from Russia, to zero as soon as 2027.

According to the outlet, every gas supplier in Austria would be obliged to demonstrate an increasing proportion of non-Russian gas in their volumes from the 2024/25 gas year that begins in October.

In 2023, Austria’s imports of Russian gas reached pre-Ukraine conflict levels, OMV reported earlier this year, as the country imported almost double the amount of gas its economy needed. Data cited by Bloomberg showed that stable Russian gas supplies and increased shipments allowed Vienna to become a net energy exporter for the first time in twenty years.

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Washington and London have limited trading of Russian aluminum, copper, and nickel on their exchanges

Washington has banned the import of Russian-origin aluminum, copper, and nickel into the US, and coordinated with the UK to crack down on the trade of these metals on global exchanges.

The decision will affect metals produced in Russia after April 13, 2024, with the world’s leading commodity exchanges – the London Metal Exchange (LME) and Chicago Mercantile Exchange (CME) – set to ban trade in these metals.

The new prohibitions will “continue to target the revenue Russia can earn” to fund its military operation in Ukraine, US Treasury Secretary Janet Yellen said in a press release on Friday.

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The US aims to “reduce Russia’s earnings while protecting our partners and allies from unwanted spillover effects,” Yellen added.

According to Moscow’s ambassador to the US, Anatoly Antonov, this “unjustified and politicized step” will inevitably backfire.

Washington’s decision is “probably based on calculations that commodity prices will not skyrocket in the US itself,” Antonov said, noting that the US has already reduced its own imports of Russian metals to a minimum.

READ MORE: China tells US it won’t be bullied on Russia

However, with this new “illegal” move, the US administration actually “provokes imbalances on the global markets by involving its satellite states in sanctions,” he added.

Russia will take further steps to work around Western sanctions and diversify its foreign trade, Russian Foreign Minister Sergey Lavrov said on Tuesday on a visit to China. He discussed the “economic gaps” resulting from the “illegal policy of unilateral sanctions,” as well as plans regarding how to tackle them within the framework of BRICS and the Shanghai Cooperation Organization with his Chinese counterpart, Wang Yi.

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American air carriers have argued that the use of Russian airspace gives their rivals an “artificial” cost advantage

US airlines have tried to fend off increased competition from Chinese rivals by appealing to the administration of President Joe Biden for help, arguing that Beijing has given its carriers unfair advantages through “anti-competitive” policies and by routing flights through Russian airspace.

Trade groups for the airlines and their employee unions urged the Biden administration this week to halt approvals of additional flights to the US from China. Beijing halted inbound flights from overseas during the Covid-19 pandemic and imposed new requirements that continue to affect US carriers.

The Chinese government also provides “certain protections” to the country’s airlines, the US airline groups said on Thursday in a letter to Secretary of State Antony Blinken and Secretary of Transportation Pete Buttigieg. “These actions demonstrated the clear need for the US government to establish a policy that protects US aviation workers, industry and air travelers.”

Air traffic between the countries remains far below pre-pandemic levels, even after the Biden administration increased the number of round trips that Chinese airlines can fly each week to 50 from 35, effective at the end of March. US carriers were given the same number of flights to and from China, but they are reportedly using only part of that approved capacity.

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“If the growth of the Chinese aviation market is allowed to continue unchecked and without concern for equality of access in the market, flights will continue to be relinquished to Chinese carriers at the expense of US workers and businesses,” the airline groups said in their letter.

Biden and Chinese President Xi Jinping agreed during a summit last November in San Francisco to increase the number of direct flights between the countries, the Chinese Foreign Ministry said on Friday. Boosting air traffic “will help the two peoples strengthen exchanges and enhance mutual understanding.”

The US carriers argued that their Chinese rivals have gained an “artificial” competitive advantage by continuing to fly through Russian airspace, which gives them shorter routes. US airlines stopped using Russian airspace after the Ukraine crisis escalated in February 2022.

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An anti-China committee formed by the US House of Representatives also has urged Biden to stop giving Chinese airlines more flights. Like US airlines, the lawmakers lamented China’s Russia advantage in a letter to Blinken and Buttigieg this week.

Any approvals of new routes should require Chinese carriers to steer clear of Russia, the House Select Committee on the Chinese Communist Party said in its letter. “US citizens traveling between the US and China should not unknowingly be subject to the risks associated with traveling through Russian airspace, and this practice should end,” the lawmakers argued.

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Carrying out prohibited transactions and trade with Russia will now be considered a criminal offence, according to a new law

The Council of the European Union adopted a law on Friday that criminalizes the violation and circumvention of EU sanctions.

According to a press release published on the council’s website, the law covers bloc-wide minimum rules for the prosecution of sanctions evasion.

“Certain actions will now be considered criminal offences in all member states, for example helping to bypass a travel ban, trading in sanctioned goods or performing prohibited financial activities,” the statement reads. Inciting, aiding and abetting these offences can also incur penalties.

According to the report, the directive will enter into force on the 20th day following publication in the Official Journal of the EU. Member states will have 12 months to incorporate the provisions into national legislation.

The European Commission proposed the directive in December 2022 in order to limit sanctions circumvention and tighten enforcement. The press release noted that the EU has adopted an “unprecedented number of restrictive measures” against Russia over the Ukraine conflict.

In February, Brussels adopted its 13th package of sanctions against Moscow ahead of the second anniversary of the beginning of the Ukraine conflict. The new sanctions restrict trade in dual-use goods, as well as technologies and electronic components that could be used by Russia’s defense industry.

READ MORE: EU’s Russia sanctions ‘massively circumvented’ – study

The previous measures target a broad range of sectors and include trade embargoes, travel bans, and individual sanctions against Russian businessmen and public officials.

Many reports have indicated that EU sanctions on Russia are being “massively circumvented” via third countries. Nations friendly to Russia have reportedly been re-exporting high-priority items to the country.

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The rally has been attributed to rising tensions in the Middle East that have spurred safe-haven demand

The price of gold reached an all-time high on Friday, soaring above $2,400 per ounce as a global safe-haven rush continues.

Spot gold prices rose 2.4% to a record high of $2,431.52 per ounce before pairing some gains. Prices were up 4% for the week and 16% so far this year, exceeding the 13% advance registered for all of 2023.

Analysts attribute the rally to investor demand for safe-haven assets amid global uncertainty and rising geopolitical tensions in the Middle East.

US officials claimed on Friday that Iran could launch a massive strike on Israel within the next 24 to 48 hours. Tehran has been threatening a harsh response since Israel killed two senior Iranian generals in an airstrike earlier this month.

“The positive factors for gold outweigh the negative. The heightened tensions in the Middle East are the main driver for gold’s recent surge,” Chris Gaffney, president of world markets at EverBank, was quoted as saying by Reuters.

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Head of market analysis at StoneX Financial Ltd., Rhona O’Connell, also said that “geopolitical risk is the fulcrum here,” and that in a year with more than 50 local and national elections, continuing tensions in the Middle East are adding “further fuel to the fire.”

Some experts indicated that continued strong buying from China has also underpinned prices.

Investors traditionally turn to gold in times of market uncertainty to hedge risks and as a store of value. For thousands of years, bullion has been seen as a safe haven during periods of economic instability, stock market crises, military conflicts, and pandemics.

Other precious metals were also on the rise, with silver going up 4% to $29.60 per ounce, its highest price since early 2021. Palladium went up 2.7% to $1,075 and platinum rose above the key psychological level of $1,000 per ounce to its highest in nearly four months.

For more stories on economy & finance visit RT’s business section

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The tech giant has reportedly complied with an Indian request to drop the term ‘state-sponsored’ from malware attack notifications

US tech giant Apple has warned its users in 92 countries that they were possible victims of a “mercenary spyware attack,” backtracking on the term ‘state-sponsored’ it had used in previous alerts to refer to such malware attacks.

The company reportedly sent a notification email to targeted users on Thursday, claiming it had discovered that attackers tried to “remotely compromise” their iPhones.

On Wednesday, Apple posted on its website that the threat notifications were designed to help users “who might have been individually targeted by mercenary spyware attacks.”

In its previous statements the company had linked sending such threat notifications to state-sponsored attacks. It also claimed such attacks have been historically associated with state actors, including private companies developing mercenary spyware on their behalf, such as Pegasus spyware from Israeli-based firm NSO Group.

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Meanwhile, Reuters reported on Thursday, citing a source with direct knowledge, that the removal of the term ‘state-sponsored’ from the description of threat notifications follows increased pressure from the Indian government. The company reportedly held extensive talks with Indian officials before releasing the latest set of alerts, according to the source.

Last October, India’s opposition politicians accused Prime Minister Narendra Modi’s government of trying to hack into their mobile phones after they received Apple’s messages warning of state-sponsored attacks.

New Delhi then immediately asked the tech company to assist in investigating the matter and provide “real” and “accurate” information. According to Reuters, it was not clear if other governments also raised similar concerns.

Apple said in its notification email to users this week that it had sent similar alert notices multiple times a year since 2021. Users in more than 150 countries have been notified to date.

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The US president has targeted 319 companies and citizens from the Asian nation, more than any other administration

The White House has blacklisted more Chinese entities and individuals under Joe Biden’s administration than it did during Donald Trump’s presidency, as the long-running trade spat between the two nations continues to escalate, Bloomberg reported on Friday.

The US Department of Commerce added eight Chinese companies to its export blacklist in February, taking Biden past Trump’s record. Six more were added this week, bringing the tally of new targets under the current administration to 319. Some 306 entities were blacklisted by the department during Trump’s presidency.

The trade war between the world’s two biggest economies has been escalating since 2018, when Trump began imposing massive tariffs on Chinese goods imported by the US during his term in office. The Republican leader justified the measures by accusing Beijing of adopting unfair trade practices and intellectual property theft.

Biden has continued the tough stance on trade with China. He not only left in place tariffs imposed by his predecessor, but also increased the pressure, focusing on restrictions that block access to innovation, including those in the artificial intelligence sector.

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Chinese authorities have decried Washington’s policies, calling the restrictions an attempt to thwart the development of the worlds’ second biggest economy.

Earlier this week, Chinese Ministry of Commerce spokesman He Yadong said export controls imposed by the US are “typical economic coercion and unilateral bullying behavior.”

“The US should immediately correct its wrongdoings and stop the unreasonable suppression of Chinese companies,” He said, adding that Beijing would defend its legal rights and the interests of the country’s businesses.

On Thursday, the Chinese Foreign Ministry announced sanctions against US defense industry firms General Atomics Aeronautical Systems and General Dynamics Land Systems over arms sales to Taiwan, accusing Washington of continuing to “undermine its sovereignty.”

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Purchases surged by 75% in 2024, data shows

French purchases of liquefied natural gas (LNG) from Russia have increased by a massive 75% since the beginning of 2024 compared to the same period a year ago, Politico reported on Thursday, citing data provided by the Center for Research on Energy and Clean Air (CREA).

In the first quarter of this year, imports of Russian LNG by the EU’s second-biggest economy reportedly amounted to €600 million in monetary terms – more than any other member of the bloc.

France topped the table in terms of both total volumes imported in 2024, which amounted to 1.5 million tons, and the surge in purchases versus the same period last year, when imports totalled 882,209 tons.

Following the beginning of the conflict with Ukraine and subsequent sanctions imposed on Moscow by Brussels, the EU sought to reduce its energy dependence on Russia. Russian gas supplies had previously made up nearly half of all the bloc’s gas imports.

Gas has not been targeted by the EU’s sanctions on Moscow, which banned seaborne exports of Russian oil and significantly narrowed the scope of trade between Russia and the bloc overall. However, gas supplies from Russia to the bloc have seen a sharp drop due to the restrictions and the September 2022 sabotage of the Nord Stream pipelines.

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The EU also unveiled a plan to end the bloc’s dependence on fossil imports from Russia by 2027 shortly after the launch of Russia’s military campaign against Ukraine.

Commenting on the impressive increase in France’s gas imports from Russia despite the bloc’s official stance on the issue, an unnamed French Energy Ministry official told Politico that it “isn’t an easy topic.”

“If we continue to pay for gas we do not import, there is no point,” they added, referring to long-term contracts signed by French oil and gas major TotalEnergies.

Last year, TotalEnergies СEO Patrick Pouyanne said the company would purchase the chilled gas from Russia’s Arctic LNG 2 project when it is launched due to contractual liabilities. The enterprise is being developed by private energy giant Novatek.

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Stocks reportedly could be in for a decade of next-to-nothing returns

The US stock market is headed for a crash which could see dismal returns for the next 10–15 years, a veteran fund manager told Business Insider this week.

One of Wall Street’s biggest bears, Bill Smead, Chief Investment Officer with Smead Capital Management, has warned that stocks appear to be in the midst of a speculative bubble, which could set investors up for a ‘dead ball’ era of performance.

The skepticism comes despite the S&P 500 rising sharply in recent months, even hitting new record highs in March, after a 24% surge in 2023. The index is up around 8% so far this year.

Smead believes the bear market wil last for a decade and will only end once all the enthusiasm for the market’s most expensive stocks has bled out. The process could lead to losses on par with the dot-com bubble and the Great Financial Crisis, he forecast.

“It will be more like the ‘00-’03 bear market, or more like ‘07-’09,” Smead told Business Insider. “We’ll probably get two full-blown bear markets in a 10-year time period that will basically negate making any money in the S&P 500 index. You won’t want to buy the S&P 500 index until it becomes kind of a swear word,” the veteran fund manager warned.

READ MORE: US facing worst risks since WWII – JPMorgan boss

He also pointed out that the losses could be fueled by stubbornly high inflation. The Bureau of Labor Statistics’ latest CPI report showed on Wednesday that the consumer price index has come in hotter-than-expected for the last three months, with prices rising 3.8% year-over-year in March.

That’s making the economic landscape look precariously similar to the 1970s, Smead cautioned, right before inflation spiraled out of control, hitting the stock market.

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Stocks have plummeted in Trump Media, forcing the former US president off a daily ranking of the world’s richest people

Donald Trump has dropped off the Bloomberg Billionaires Index on the back of dismal stock market performance by Trump Media, the parent company behind the US Republican presidential candidate’s online platform, Truth Social.

The share price for Trump Media, which has been steadily declining over the past week, was down 8.57% at $34.26 per share at the close of trading on Wednesday. That figure is well below the $70.90 mark that the stock opened at on March 26, its first day as a publicly traded company. The nosedive put Trump Media’s market value at around $4.7 billion.

As a result, Trump’s net worth has dropped below $5.8 billion, sending him off the Bloomberg Billionaires Index of the world’s 500 richest people. However, the former president still ranks as the planet’s 652nd wealthiest person, according to Investing.com. Forbes currently pegs Trump’s total wealth at $4.8 billion, making him the world’s 697th richest person on the outlet’s list.

In late March, Trump Media & Technology Group merged with the shell company Digital World Acquisition Corporation. It began trading under the ticker DJT on March 26. Trump, who holds around 60% of Trump Media with 78.75 million shares, saw the value of his stake reach as much as $6 billion shortly after the company went public, earning the businessman a spot on the Bloomberg Billionaires Index.

READ MORE: Trump richer than Soros – Bloomberg

As of Wednesday, Trump’s stake was valued at less than $3 billion. The presidential candidate cannot offload his shares until September without approval from the company’s board.

Trump Media, which owns the Truth Social app, reported revenue of just $4.1 million for 2023, and a net loss of $58 million for the year.

For more stories on economy & finance visit RT's business section

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Four countries recently joined the economic bloc, and the door has been left open for further additions

Vietnam is actively working on a bid to join the BRICS economic group, the Izvestia newspaper has reported, citing Hanoi’s embassy in Russia.

BRICS members Brazil, Russia, India, China, and South Africa were joined by four more countries at the start of this year, when Ethiopia, Iran, Egypt, and the United Arab Emirates formed part of a major expansion. Saudi Arabia has also been approved as a member but is reportedly considering final ratification of its accession.

Vietnam has yet to make a decision on a formal membership bid, although it is establishing a framework for BRICS participation and a potential request to join the group, Izvestia said, citing the Asian nation’s diplomatic mission in Moscow. Hanoi has not revealed if Vietnam will send a delegation to the BRICS summit scheduled for the Russian city of Kazan in October.

The bloc’s political and economic influence has increased significantly since sanctions were imposed on Moscow by the US and its allies following the start of the Ukraine conflict in 2022. BRICS members have not joined the Western campaign and have continued or boosted trade with Russia.

Numerous other nations have expressed interest in becoming BRICS members, and some have already formally submitted applications, including Venezuela, Thailand, Senegal, Cuba, Kazakhstan, Belarus, Bahrain, and Pakistan.

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Vietnam’s economy has been a development success story, according to the World Bank. Economic reforms undertaken over the past four decades have helped propel the country from being one of the world’s poorest nations to a middle-income economy in one generation. The Vietnamese economy grew by 5.05% in 2023, missing the official growth target of 6.5%, although the World Bank has forecast steady GDP growth in the coming years.

Vietnam's manufacturing sector includes industries such as textiles and garments, electronics, machinery, footwear, and food processing, and has attracted significant foreign investment.

Hanoi has adopted a neutral stance towards Russia’s conflict with Ukraine. Vietnam abstained on four of the UN General Assembly resolutions condemning Moscow’s actions, and voted against a motion to remove Russia from the UN Human Rights Council.

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The bloc’s top court ruled that the 2022 blacklisting of two top bankers was not justified, but the restrictions remain in place

The European Union Court of Justice ruled on Wednesday to take Russian banking tycoons Mikhail Fridman and Petr Aven off the bloc’s 2022 sanctions list, imposed over the Ukraine conflict – but subsequent restrictions against them will remain in force.

The court overturned the original decision by the EU Council that imposed sanctions against the co-founders of Russia’s biggest private lender, Alfa Bank, thereby canceling the restrictive measures that were in effect from February 2022 to March 2023. The original decision justified sanctions against the billionaires, alleging that they “supported actions and policies that undermine or threaten the territorial integrity, sovereignty and independence of Ukraine.”

According to the statement issued by the Luxembourg-based court, the billionaires managed to prove that that “the evidence adduced by the Council is neither reliable nor credible, and that the Council’s assessments are incorrect.”

“The General Court considers that none of the reasons set out in the initial acts is sufficiently substantiated and that the inclusion of Mr Aven and Mr Fridman on the lists at issue was therefore not justified,” the statement reads.

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In March 2023, the Council revisited the wording regarding the grounds allowing it to impose sanctions on Russian business figures. The updated criteria allow Brussels to blacklist Russian individuals “involved in economic sectors providing a substantial source of revenue” to the Russian government. The decision re-imposed the restrictive measures on Aven and Fridman – who lodged a separate appeal against that action, which is still pending.

According to Forbes, the fortunes of Aven and Friedman amount to $4.3 billion and $13.1 billion respectively.

Commenting on the latest court decision, Kremlin spokesman Dmitry Peskov reiterated that Moscow considers all sanctions illegal, unfair, destructive “and, probably, even somewhat disgraceful to the agencies that introduce them.”

Since the launch of Moscow’s military operation in Ukraine in February 2022, Brussels has targeted hundreds of high-profile Russians, including top officials, business leaders and their family members over their alleged roles in the conflict. The penalties commonly include targeted asset freezes and travel bans.

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The regulator has improved its 2024 forecast, despite sanctions

The current year could prove even more profitable for Russian banks than record-breaking 2023, Central Bank Deputy Governor Olga Polyakova said at a conference on Tuesday.

Last year, a sharp rise in mortgages as well as consumer and corporate lending resulted in banks posting profits of 3.3 trillion rubles ($35.4 billion), despite Western sanctions on the economy. The increase in lending took place despite the sharp rise of the key interest rate, from 7.5% to 16%. The record earnings were also attributed to the restoration of basic income, a significant reduction in expenses associated with reserves, and income received from a currency revaluation.

“We expect banking sector profits to be either at 2023 levels or slightly above,” Polyakova said.

This represents an increase from the previous forecast, as in March the regulator estimated the sector’s 2024 profits to be between 2.3-2.8 trillion rubles ($24.6 - $30 billion).

The Russian banking sector found itself under unprecedented sanctions pressure in 2022, following the start of Moscow’s special military operation in Ukraine. Most Russian banks were cut off from the Western financial system. The key financial institutions were banned from using the SWIFT clearing mechanism.

The Bank of Russia, however, had been prepared to deal with the situation, however. The West initially imposed sanctions on Moscow in 2014 following the Crimean referendum that resulted in the region joining Russia.

At the time, the financial sector was targeted with sanctions. Major banks were restricted from access to Western debt and capital markets. In response, the central bank started to ramp up the country’s financial sovereignty by developing its own payment system. The regulator also obliged Western payment systems like Visa and MasterCard to transfer card transaction processing in Russia to a newly created national payment system. The measures helped avoid a collapse in payments when Russian banks were cut off from Visa and MasterCard in 2022.

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In 2022, the central bank provided the Russian banking sector with unprecedented regulatory relief, which also helped them withstand the shock. At that time, banks set aside enough financial reserves, and when the country’s economy adjusted to the sanctions, the banks were able to start increasing profits.

The share of non-performing loans (NLP) remains low in Russia, especially in mortgage lending. According to a recent estimate, the share of NPLs stood at 0.5% of the mortgage segment in 2023.

Prime Minister Mikhail Mishustin suggested last week that the bank’s dividends could be used as a means of redistributing the lenders’ soaring profits to the federal budget. The PM proposed the idea in response to lawmakers suggesting the introduction of an excess profits tax.

For more stories on economy & finance visit RT's business section

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The Chinese currency now accounts for the largest share of forex trading, the regulator reports

The share of the Chinese yuan on Russia’s foreign exchange market hit an all-time high in March, the Bank of Russia (CBR) reported in its financial risk review on Monday.

Russia’s shift away from major Western currencies started with the US and EU sanctions imposed on the country over the Ukraine conflict. The financial restrictions made cross-border trade in euros and dollars more difficult and their presence on the domestic foreign exchange market less important.

The turnover of exchange-traded yuan amounted to 53% last month compared to 46.6% in February, according to the CBR. The share of renminbi in over-the-counter trading also posted a record high, reaching 39.6%.

Meanwhile, the share of Western currencies, including the US dollar and the euro, dropped to 46.4% on the exchange in March from 52.8% the previous month, data showed. In the over-the-counter segment, the share of the greenback and euro also continued to decline, decreasing to 54.7% from 59.8% in February.

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Analysts say the changes in the yuan and dollar trading volumes reflect Russia’s shift away from transacting in the currencies of so-called ‘unfriendly’ countries against the backdrop of international sanctions.

The restrictions include the blacklisting of a number of Russian banks and their removal from the SWIFT interbank messaging system, as well as bans on transactions with Russian financial entities and the freezing of foreign exchange reserves.

Meanwhile, Russia continues to establish the conditions for settlements in various national currencies, according to CBR Governor Elvira Nabiullina. Over the past year, the volume of settlements in currencies other than the dollar and euro has surged from 39% to 67%, according to her.

A number of Russian officials including Finance Minister Anton Siluanov, have repeatedly said the country no longer trusts the US currency, calling it “a completely unreliable instrument.”

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Geopolitical tensions and political polarization at home threaten “America’s global leadership role,” Jamie Dimon has warned

The US is facing grave risks in the wake of rising global geopolitical tensions and the nation’s domestic political polarization, Jamie Dimon, JPMorgan Chase chief executive, has warned.

In an annual shareholder letter on Monday the CEO of the largest US bank cited large amounts of government spending and efforts by the Federal Reserve to shrink its balance sheet, as well as the Ukraine conflict and the Israel-Hamas war, as creating an environment that “may very well be creating risks that could eclipse anything since World War II.”

“America’s global leadership role is being challenged outside by other nations and inside by our polarized electorate,” Dimon wrote.

“We need to find ways to put aside our differences and work in partnership with other Western nations in the name of democracy. During this time of great crises, uniting to protect our essential freedoms, including free enterprise, is paramount,” the chief executive urged.

The 68-year-old banker added that there is “a growing need for increased spending as we continue transitioning to a greener economy, restructuring global supply chains, boosting military expenditure and battling rising healthcare costs.”

Dimon said he was not as optimistic as the broader market that the US economy will achieve a ‘soft landing,’ in which it sees modest growth and declining inflation rates. Chances of a soft landing are “a lot less” than the 70% to 80% expected by some investors, he said.

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“These significant and somewhat unprecedented forces cause us to remain cautious,” the JPMorgan boss concluded.

Meanwhile, Dimon said, China has been establishing itself as a “potential superpower” and strategically focusing on its economic security, while the West “slept.”

“Over the last 20 years, China has been executing a more comprehensive economic strategy than we have,” he said.

He also weighed in on the future of AI, saying he is “completely convinced” that the consequences of the technology will be “extraordinary” and transformational. JPMorgan is already exploring the use of AI in software development and employee production plans, particularly in the fraud and risk departments, he said.

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The initiative attracted thousands of foreign investors since 2013, with most buying real estate

Spain is planning to scrap its so-called ‘golden visa’ program, which grants residency rights to property buyers from outside the European Union, as Madrid attempts to increase the amount of affordable housing available to locals.

Prime Minister Pedro Sanchez told reporters on Monday that his cabinet would take the first steps this week towards eliminating the program. Golden visas were introduced in 2013 and have enabled non-EU citizens who spent at least €500,000 ($543,000) on real estate to obtain the right to live and work in Spain for three years.

Ending the initiative would help make access to affordable housing “a right instead of a speculative business,” Sanchez stated.

“Today, 94 out of every 100 such visas are linked to real-estate investment...in major cities that are facing a highly stressed market and where it’s almost impossible to find decent housing for those who already live, work and pay their taxes there,” Sanchez said.

Government figures show Spain issued almost 5,000 golden visa permits from the start of the scheme until November 2022. According to a 2023 Transparency International report cited by Reuters, Chinese investors top the list, followed by Russians, who invested more than €3.4 billion.

Proponents of the removal of the golden visa initiative have been insisting that it resulted in soaring housing prices.

Many economists, however, have pointed out that Spain’s housing problem was not caused by the golden visa scheme, but rather by a lack of supply and a spike in demand.

“The measure announced today, which focuses on international buyers rather than encouraging new homes to come onto the market, is yet another misdiagnosis,” property website Idealista told Reuters.

READ MORE: Europe on verge of housing crisis – Bloomberg

Spain has become the latest EU country to eliminate golden visas, following Portugal and Ireland’s decision to do so in 2023. In each of the three countries, the program was introduced to attract overseas investment to fuel a recovery from financial crises driven by crashes in their respective real estate markets.

The European Commission has long called for an end to such programs, citing security risks as well as concerns over possible corruption, money laundering and tax evasion.

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Latvia has been calling on the bloc to ban agriculture exports from its neighbor over the Ukraine conflict

Latvia significantly increased the volume of grain bought from Russia in the first quarter of 2024, the state revenue service in Riga announced on Monday. The Baltic nation recently announced a ban on some Russian imports, but exempted two key products.

Riga has been one of the most outspoken advocates of imposing EU sanctions on Russian grain, citing the Ukraine conflict. This has not stopped Latvia from increasing its agricultural imports from Russia by almost 40% compared to the first quarter of 2023.

A total of 158,325 tons of grain – mainly corn – came in across the border in the first three months, 39.8% more than in Q1 last year, the Latvian customs agency told the Baltic News Service. The value of imports was estimated at just over €27 million ($29 million).

In addition to 135,539 tons of corn, Latvia brought in 8,530 tons of rye and 8,744 tons of wheat and wheat-rye mixture, among other grains. Rye imports rose by 70% year over year, while corn imports increased by 26.5%.

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The authorities in Riga do not have information about how much of the imported grain was actually consumed in the country and how much was exported to other EU member states. Latvia has a population of 1.88 million, making a domestic-consumption explanation highly unlikely.

Moreover, 596,807 tons of Russian grain – mainly wheat, corn and barley – intended for other countries transited through Latvia in the first quarter of this year, 78.9% more than in the same period of 2023.

In February, the Latvian parliament imposed a ban on importing animal feed from Russia and Belarus, in order to show solidarity with Ukraine. However, the ban contained exemptions for two key products.

Sunflower cake, which is used as chicken feed by egg and poultry farmers, is not produced in the EU. Latvia buys about €50 million worth of it from Russia every year and likely exports some of it elsewhere into the bloc, according to the state broadcaster LSM.

Another product exempt from the ban is beet pulp with molasses, used to feed cows and pigs. Latvia imported more than €25 million worth from Russia last year.

Russia is one of the world’s largest exporters of grain, feed and fertilizer. While these commodities have not been outright sanctioned by the US and its allies on account of the Ukraine conflict, their transport by sea has been made more difficult by sanctions on commercial shipping.

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Local authorities have reportedly lowered the debt threshold and employed mobile phone tracking to find the digital assets of evaders

A city government in South Korea plans to confiscate crypto assets from citizens who owe the equivalent of several hundred dollars or more in taxes, Korean media have reported. This comes as part of a wider crackdown on evaders.

The authorities of the city of Pohang, a large municipal center in the country’s east, will seize and freeze the digital assets of those who owe 500,000 won (about $368.76) or more to the local tax office, according to the daily newspaper Kyongbuk Maeil Shinmun.

The value of virtual assets owned by local tax ‘delinquents’ has soared recently, with over $12 million being owed in overdue arrears to the city, the publication writes. Local authorities are investigating whether over 5,200 tax evaders have digital assets on exchanges such as Bithumb, Upbit, Korbit and Coinone, it adds.

If confirmed, the crypto account of a person with tax arrears will be immediately seized and transaction activities such as sales or withdrawals will be stopped, the report goes on to explain. If the arrears are not voluntarily paid after seizure, the virtual assets will be sold on the exchange market to cover the delinquent taxes, the publication states.

“We will do our best to raise awareness about chronic delinquent taxpayers by not only seizing and selling virtual assets but also introducing various customized collection techniques suitable for the digital age,” the newspaper quoted the head of the local tax office, Won Ki-ho, as saying.

Pohang city is the latest South Korean municipality to employ tax-related cryptocurrency confiscations. Last year, authorities in the city of Cheongju said it intended to target those who owed roughly $750 in local taxes.

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Also in 2023, Gyeonggi Province, the most populous in South Korea, collected $4.6 million from tax evaders by tracking their crypto assets on several centralized exchanges, according to Yonhap News Agency.

The authorities in Gyeonggi used a new digital system that includes tracking mobile numbers to identify users’ accounts on cryptocurrency exchanges. The technique has helped reduce the time it takes to investigate whether a tax evader owns digital assets from six months to around two weeks, Yonhap wrote.

According to the crypto currency news outlet Cointelegraph, in 2022 and 2021 combined, the South Korean government confiscated as much as $180 million worth of digital assets from tax evaders. Similar practices have been employed in Hungary and the UK.

For more stories on economy & finance visit RT's business section

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The country’s economy is projected to expand by 5.3% next year, according to a macroeconomic research agency

The Chinese economy is expected to grow by 5.3% this year as the property sector recovers and external demand improves, the ASEAN+3 Macroeconomic Research Office (AMRO) said on Monday.

In its latest report, the Singapore-based group noted that stabilization in China’s property sector along with ongoing policy support will boost real estate investment and drive growth in the ASEAN+3 region, which consists of Southeast Asian nations plus Japan, China, and South Korea.

AMRO’s projection is higher than China’s official growth target of about 5% and Bloomberg’s forecast, which expects the country’s economy to grow 4.6% this year.

“China will continue to be a powerhouse in the region and the main driver of growth,” AMRO chief economist Hoe Ee Khor told Bloomberg. Weakness in the real estate sector “will take a bit of time to overcome, but it will happen and we expect the drag on growth will bottom out maybe this year.”

The Chinese property sector crisis was sparked by the financial distress of major real estate developers, including property giants China Evergrande Group and Country Garden, which have defaulted on their debt.

READ MORE: Debt-ridden Chinese developer Evergrande liquidated

AMRO also revised upwards its overall growth outlook for ASEAN nations, predicting an expansion of 4.5% this year from 4.3% last year. According to the report, domestic demand is likely to remain resilient, underpinned by recovering investment and firm consumer spending.

Within ASEAN specifically, its six major economies will continue to anchor growth. Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam are expected to contribute an average of 10% to global growth between 2024 and 2030, experts said.

The organization also forecast the semiconductor industry to rebound from a multiyear slump driven by a “brisk” recovery in chips demand from China. Global semiconductor sales are expected to rise by 9.5% a year on average in 2025–2026, the group said.

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The company is not abandoning production of low-cost electric vehicles, the billionaire claims

Tesla CEO Elon Musk has dismissed a report by Reuters claiming the US carmaker has canceled a project for a low-cost vehicle owing to fierce competition from Chinese electric-vehicle (EV) makers.

On Friday, Reuters wrote, citing sources familiar with the matter and company messages, that the automaker will focus on developing self-driving robotaxis instead of pursuing Musk’s longstanding goal of bringing affordable electric cars to the masses.

“Reuters is lying (again),” Musk wrote on X (formerly Twitter), commenting on a post about the outlet’s report.

According to Reuters, the now-defunct vehicle, sometimes described as the Model 2, was supposed to start at $25,000. Musk first teased the model at a company event in September 2020.

Sources claimed they learned of Tesla’s decision to scrap the Model 2 in a meeting attended by numerous employees, one of whom claimed the gathering happened in late February.

“Elon’s directive is to go all in on robotaxi,” that person reportedly said.

Reuters is lying (again)

— Elon Musk (@elonmusk) April 5, 2024

Another source confirmed the cancellation and said that the new plans called for robotaxis to be produced, but in much lower volumes than had been projected for the Model 2.

Several company messages reviewed by Reuters about the decision reportedly included one from March 1. It came from an unnamed program manager for the affordable car who was discussing the project’s demise with engineering staff and advising them to hold off on telling suppliers about the cancellation of the program.

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“The stark reversal comes as Tesla faces fierce competition globally from Chinese electric-vehicle makers flooding the market with cars priced as low as $10,000,” Reuters wrote, adding that the plan for driverless robotaxis presents a stiffer engineering challenge and more regulatory risk.

The article also pointed out that the US automaker was late to the segment partly due to a pivotal decision by Musk to focus on the highly experimental Cybertruck instead of an affordable car.

Chinese car giant BYD has overtaken Tesla as the world’s top EV producer, selling more than 526,000 vehicles in the fourth quarter of 2023. The result marked the first quarter in which BYD’s sales exceeded Tesla’s in unit terms, and capped a year in which the Chinese carmaker achieved almost double the growth rate of its US rival.

Musk dismissed BYD when asked in a 2011 Bloomberg interview about the company becoming an EV rival. At the time, he questioned the quality of the Chinese company’s products and pointed out what he perceived as its technological shortcomings.

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A court has ruled that retail chain Tegut must comply with centuries-old legislation despite not having human employees

A court in the central German state of Hesse has banned local vending machine chain Tegut from operating on Sundays, citing the country’s century-old law, Financial Times reported on Friday.

A mandatory day off on Sunday was first enshrined in the German Constitution in 1919, and was upheld by the Constitutional Court in 2009. The Sunday ban is currently applied to most businesses in Germany, except restaurants, fuel stations, kiosks and pharmacies.

The highest administrative court of the state ruled that the Swiss-owned supermarket chain must observe ‘Sonntagsruhe’, which in German means Sunday rest, even if no human employees are involved in the commerce process.

The retailer launched its fully automated stores in Hesse in 2021, but was dragged into litigation after Germany’s service sector union Verdi raised issues about labor code violations as soon as the first robotic shop was opened.

The union fundamentally opposes Sunday shopping, claiming that retail staff, who have to contend with highly flexible working hours during the rest of the week, need Sunday as a guaranteed day off to spend time with family and friends. Moreover, it raised concerns over potential “knock-on effects” for workers in traditional stores.

Tegut reportedly owns around 300 traditional supermarkets and 40 fully automated mini-shops.

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“This is entirely grotesque,” the retailer’s management board member Thomas Stab told the newspaper, stressing that small automatic stores were “basically walk-in vending machines” that should not be affected by the ban of the kind.

Sunday sales accounted for up to 30% of the automatic shops’ weekly commerce, according to Stab, who stressed that closing them for the day is economically painful for the company.

Tegut’s automated stores, set into in wooden containers that resemble an oversized barrel with a grass roof, offer around 1,000 daily essential items, including milk, butter, and fresh fruit and vegetables, as well as condoms and pregnancy tests.

Over a dozen of Tegut’s self-service shops will stay open on Sundays in other German states, including Bavaria and Baden-Wurttemberg, as the latest ruling applies only to Hesse. However, even there, three shops will be open all weekend, since legal loopholes allow them to work near train stations.

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The fast food chain has reported decreased sales amid boycotts in Muslim countries over the Gaza conflict

McDonald’s has announced that it will be buying back all of its restaurants in Israel after sales in the region plunged due to a boycott of the franchise over its perceived support for the Jewish State in the ongoing Gaza conflict.

The popular burger chain uses a franchise system under which individual operators are licensed to run outlets and employ staff. For over 30 years, all McDonald’s restaurants in Israel were run by the Alonyal company.

In a statement released on Thursday, McDonald’s said it remains “committed to the Israeli Market and to ensuring a positive employee and customer experience in the market going forward.”

The company said it will be purchasing all 225 outlets from Alonyal and that all 5,000 of its employees, as well as its restaurants and operations in Israel, would be retained on “equivalent terms.” No other terms of the sale have been revealed.

McDonald’s faced widespread criticism after its Israeli restaurants were filmed giving away thousands of free meals to Israeli military personnel. The outcry resulted in spontaneous boycotts from consumers across the Middle East and other Muslim-majority countries such as Pakistan, Malaysia, and Saudi Arabia.

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As a result, the company’s fourth-quarter revenues came in significantly below market expectations. McDonald’s CEO Chris Kempczinski said the company is witnessing a “meaningful business impact.”

Others Western brands, such as KFC, Starbucks, and Unilever, have also faced backlash over their perceived position on the Israel-Palestine conflict and have reported financial losses in the fourth quarter of 2023. In Pakistan, anti-Israel protesters torched a KFC restaurant last week.

The boycotts against major Western brands come after Israel launched a military operation in Gaza following an incursion by Hamas militants into the southern part of the country last October. During the attack, over 1,200 people were killed and scores of hostages were taken. The Israeli campaign has left at least 33,000 Palestinians dead, and over 75,000 injured, according to the Palestinian Health Ministry. UN Human Rights Council rapporteur Francesca Albanese has accused Israel of committing “genocide” in the enclave.

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Pricing power in a market long dominated by Western institutional money is moving East and the implications are profound

The gold price has risen to a series of new all-time highs of late, a development that has received only cursory attention in the mainstream financial media. But as is the case with so much else these days, there is much more going on than meets the eye. In fact, the rise in the dollar price of gold is almost the least interesting aspect to this story.

For thousands of years, gold was the ultimate store of value and was synonymous with the concept of ‘money’. Trade was often settled either in gold itself or in bank notes backed by gold and directly exchangeable for it. Currencies backed by nothing but government decree – called 'fiat' currencies – have tended to eventually fail.

However, in 1971, gold found itself cast out of this ancient role when the US unilaterally suspended dollar convertibility into gold as enshrined in the Bretton Woods agreement that established the framework for the post-war economy. Shortly thereafter, in an act that medieval alchemists only dreamed of, gold was created out of thin air in the form of futures contracts, meaning bullion could be bought and sold without any metal changing hands – or even existing.

Besides the obvious ramification of all of this – the removal of gold backing to the dollar and thus implicitly to nearly all currencies – there are two important features of how the gold market has subsequently functioned: first, gold has essentially been reduced to trading like any other cyclical financial asset; second, the price of gold has largely been determined by Western institutional investors.

Both of these longstanding trends are now breaking down. As we will see, the importance of this development is hard to overstate. But let’s begin with a very quick examination of how gold went from being the ultimate source of value to just another ticker moving in predictable patterns in the constellation of financial instruments.

How paper replaced metal

The collapse of Bretton Woods in the late ‘60s and early ‘70s – culminating in the gold window being shut in 1971 – was a messy period of transition, uncertainty, and instability. The dollar devalued and a fixed-rate system was negotiated and soon thereafter abandoned. But what was clear was that the US was steering the world away from gold and toward a dollar standard.

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Jelle Zijlstra, president of the Dutch central bank, chairman of the Bank of International Settlements from 1967 until 1981, and a prominent figure at the time, recalled in his memoirs how “gold disappeared as the anchor of monetary stability” and that “the road… through endless vicissitudes to a new dollar hegemony was paved with many conferences, with faithful, shrewd, and sometimes misleading stories, with idealistic visions of the future and impressive professorial speeches.” But, he concluded, the ultimate political reality was that the “Americans supported or fought any change, depending on whether they saw the dollar’s position strengthened or threatened.”

Nevertheless, gold was lurking in the shadows like a deposed but still-living monarch and thus represented an implicit guard against the abuse of what had become fiat currencies. If nothing else, as dollars continued to be printed, the price of gold would surge and signal a debasement of the greenback. And this is more or less what happened in the 1970s after the gold window was shuttered. After breaking the $35 per-ounce peg in 1971, gold rocketed all the way up to $850 by 1980.

So the US government had a strong interest in managing the perception of the dollar through gold. Most importantly, it didn’t want to see gold recreate a pseudo reserve currency by strengthening substantially. Legendary Fed chairman Paul Volcker once said “gold is my enemy.” And indeed it traditionally had been the enemy of central banks: it forced them to tighten rates when they didn’t want to and imposed on them a certain discipline.

This framework helps make sense of the rise of the unallocated – i.e. ‘paper’ – gold market in the 1980s and the countless gold derivatives that emerged. This actually started in 1974 with the launch of gold futures trading but exploded in the next decade. What happened is that bullion banks began selling paper claims on gold for which there was no actual gold attached. And buyers were not actually required to pay upfront but could simply leave a cash margin.

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The setup is reminiscent of the old communist joke that went “we pretend to work and you pretend to pay us.” In this case, the investor pretends to pay for the gold and the seller pretends to own it. This is about as close as you can get to pure speculation.

Thus was born the fractional-reserve paper gold scheme that persists to this day. And indeed, there is now vastly more paper gold than physical, some $200-300 trillion compared to $11 trillion, according an estimate by Forbes magazine. Others put the discrepancy even higher. Nobody really knows. Comex, the primary futures and options market for gold, has also become more paper-driven. According to analyst Luke Gromen, whereas 25 years ago some 20% of the gold volume on Comex was related to a physical ounce, that number has fallen to around 2%.

Gold as just another cyclical asset

What is important to understand here is that the creation of a derivative market satisfies demand for gold that would otherwise go to the physical market. Only a limited amount of gold exists and can be mined but an unlimited amount of gold derivatives can be underwritten. As Gromen explains, when monetary expansion drives demand for gold (due to the inflation this brings), there are two ways this demand can be dealt with: let the price of gold rise as more dollars chase the same amount of gold; or permit more paper claims to be created on the same amount of gold, which allows the pace of gold’s rise to be managed.

There are several important implications of this. The rise of the paper market has clearly played an important role in defanging gold in its role as exerting a hard limit on expansionary policy, thus implicitly reinforcing the credibility of the dollar. But it has also meant that the gold price has largely been determined by investment flows rather than physical demand. And when we’re talking about investment flows, we mean first and foremost Western institutional investors.

Given that gold trades essentially as a cyclical asset, institutional investors have primarily traded gold based on movements in real US interest rates – meaning interest rates adjusted for inflation. Gold is bought when real rates fall and vice versa. The logic is that when interest rates rise, money managers can earn more by switching to bonds or cash, thus increasing the opportunity cost of holding non-interest-bearing assets such as gold. By the same token, lower rates make gold – seen as a hedge against inflation – more attractive. This correlation has been particularly strong over the last 15 years or so and many analysts date it back further than that.

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So let’s go a step further and pose the following question: If Western institutional money has been driving the price, who has been on the other side of the trade when actual gold does change hands?

To oversimplify a bit, the model worked roughly as follows, as has been explained by gold analyst Jan Nieuwenhuijs: Western institutions essentially controlled the price of gold and bought from the East in bull markets and sold to the East in bear markets. This makes sense, because the Western side of this trade essentially consisted of investors who in any asset class tend to chase the price higher. The East, meanwhile, was characterized more by consumer demand. Because consumers are price-sensitive, they tend to buy when the price is low and are happy to sell into a rising market.

So gold flowed from East to West in bull markets and from West to East in bear markets. But, as we mentioned above, it was the Western institutional investors who were in the driver’s seat in this trade.

This was the well-established state of affairs up until 2022, which happens to be when the Ukraine proxy war began and the US took the bold step of freezing some $300 billion in Russian central bank assets.

The end of a longstanding correlation

A coincidence or not, what happened that year was that the correlation between US real rates and gold broke down and has not been restored. The first sign of an impending shift was that, in first few months after the Fed embarked on a sharp rate-hike cycle in March 2022, gold did drop but proved much more resilient to the rising rates than correlation models would have suggested. But the real breakdown in the correlation started around September of that year, when gold prices actually started climbing even as real rates remained flat. In fact, from late October 2022 through June 2023, the gold price rose 17%.

Meanwhile, over 2023, US real yields rose (despite quite a bit of volatility), which, according to the old correlation, should have meant a decline in gold prices as higher yields elsewhere would make non-yielding gold less attractive. However, gold rose 15% for the year.

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Another notable aspect of this is that Western institutional investors have been net sellers of gold, as evidenced by declining inventory held by Western exchange-traded funds (ETFs) and falling open interest on Comex during the October 2022-June 2023 period mentioned above (when the correlation broke down). In 2023, gold ETFs posted net outflows for the year despite the rising gold price. Meanwhile, so far this year through February, the ETF outflow figure amounted to $5.7 billion, $4.7 billion of which came from North America – all while gold prices have surged to all-time highs.

So coming into focus is a picture of Western institutional investors responding like Pavlov’s dogs to rising interest rates and ditching gold in favor of higher yielding assets such as bonds, stocks, money market funds – you name it. And normally, like clockwork, this would have driven the price down.

But it didn’t. And the two main reasons are the voracious appetite for physical gold on display from central banks and extremely strong private-sector demand for physical gold from China. It is difficult to know exactly which central banks are buying and how much they’re buying because these purchases take place in the opaque over-the-counter market. Central banks report their gold purchases to the IMF, but, as the Financial Times has pointed out, global flows of the metal suggest that the real level of buying by official financial institutions – especially in China and Russia – has far exceeded what has been reported.

According to the World Gold Council, which attempts to track these covert purchases, central banks bought an all-time record 1,082 tonnes in 2022 and nearly matched that figure the following year. By far the largest buyer has been the People’s Bank of China, which as of this past February had added to its reserves for 16 straight months.

Nieuwenhuijs estimates that the People’s Bank of China bought a record 735 tonnes of gold in 2023, about two-thirds of which were purchased covertly. Meanwhile, according to his figures, Chinese private sector net imports totaled 1,411 tonnes in 2023 and a whopping 228 tonnes just in January of 2024.

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Where does this all lead?

Let’s now zoom out a little bit and try to put this into some kind of perspective. The first obvious point here is that gold pricing is increasingly being determined by demand for physical gold rather than mere speculation. Let’s be clear: the People’s Bank of China is not loading up on 25:1 leveraged gold futures contracts with cash settlement. Neither is Russia. They’re backing trucks laden with the real thing into the vaults. And in fact we have seen net exports from wholesale markets in London and Switzerland – i.e. representing Western institutional gold. That gold has been moving East.

Nieuwenhuijs argues that the covert gold purchases represent a sort of “hidden dedollarization.” This is being carried out not only because the weaponization of the dollar has introduced a hitherto unimaginable threat to dollar reserves, but also because of the burgeoning US debt crisis, which is looking more and more like a spiral. What is starting to appear as the inevitable endgame of the US debt saga is a lowering of interest rates in order to reduce the cost of funding the government, because the current interest expense is unsustainable. Lowering interest rates and letting inflation surge probably represents the best of a selection of bad options facing US policymakers.

This will, of course, further debase the dollar. For those holding significant amounts of dollar assets, such as China, this is a grim outlook, and it goes a long way toward understanding the current gold-buying spree.

Another aspect to this is that as BRICS countries increasingly trade in local currencies, a neutral reserve asset is needed to settle trade imbalances. In lieu of a BRICS currency, which may or not be forthcoming in the near future, Luke Gromen believes this role is already starting to be performed by physical gold. If this is the case, it marks the return of gold to a place of prominence in the financial system, both as a store of value and a means of settlement. This, too, represents a hugely important step.

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As these momentous tectonic shifts take shape, the gold selling by Western investors over the past two years has something of a feel of throwing one’s lot in with the Habsburgs around 1913. The denizens of Wall Street have been slow to understand that the wheel has turned. Mainstream Western analysts have repeatedly expressed surprise that the relentless pace of central-bank purchases has not abated.

There are instances in history when events overtake those living through them and when change is so profound that most observers lack the mental categories to perceive it. In 1936, Carl Jung said: “A hurricane has broken loose in Germany while we still believe it is fine weather.”

The hurricane that is bearing down upon the Western world is the debasement of the dollar owing to the weaponization of the financial system and the spiraling US debt crisis. These are epochal developments that have combined to break the familiar financial world beyond repair. The flow of gold from West to East is both a real transfer of wealth, but it is also symbolic of just how profoundly the West has been underestimating the significance of what is happening.

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State subsidies for China’s industrial sector present a risk to the global economy, US Treasury Secretary Janet Yellen claims

US Treasury Secretary Janet Yellen has claimed that China’s industrial sector produces much more goods than its domestic market can absorb. Speaking on Friday to the American business community in the Chinese city of Guangzhou, she warned that Beijing’s state subsidies were creating a surplus of goods globally.

Industrial overcapacity and what the US considers to be unfair trade practices are undercutting American and other firms, according to Yellen, who has called for a level playing field for US companies and workers.

“Direct and indirect government support is currently leading to production capacity that significantly exceeds China’s domestic demand, as well as what the global market can bear,” the Treasury chief said as she visited major industrial and export hubs during her five-day visit to the Asian nation.

“Overcapacity” inevitably creates massive volumes of “exports at depressed prices,” Yellen said, explaining that this can lead to “overconcentration of supply chains, posing a risk to global economic resilience.”

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The accusations are part of a long-running tit-for-tat trade row between Washington and Beijing, with the White House previously taking action against Chinese firms and restricting investment in the country. Chinese officials have repeatedly denounced US trade and tech policy.

Last month, Yellen said China was producing too many batteries, solar panels, and electric cars. She said this was harming American workers, and she once again accused Beijing of excessive support for domestic producers, which “maintained production and employment in China, but forced industry in the rest of the world to contract.”

China previously filed a World Trade Organization (WTO) complaint over what it called Washington’s “discriminatory” requirements for electric vehicle subsidies. Responding to the complaint, the US authorities said the subsidies were a “contribution to a clean energy future,” while China “continues to use unfair, non-market policies and practices to undermine fair competition.”

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Beijing’s “non-market” policies should be rebuffed through appropriate “countermeasures,” Katherine Tai has said

Market-based US and European economies are struggling to survive against China’s “very effective” alternative economic model, a top US trade representative has warned, according to Euractiv.

Katherine Tai told a briefing in Brussels on Thursday that Beijing’s “non-market” policies will cause severe economic and political damage, unless they are tackled through appropriate “countermeasures.” Tai’s remarks came as the EU-US Trade and Technology Council (TTC) kicked off in Leuven, Belgium.

”I think what we see in terms of the challenge that we have from China is… the ability for our firms to be able to survive in competition with a very effective economic system,” Tai said in response to a question from Euractiv.

The trade official described China as a system “that we’ve articulated as being not market-based, as being fundamentally nurtured differently, against which a market-based system like ours is going to have trouble competing against and surviving.”

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Tai argued that unless the US and EU figure out a way to defend the way their economies work, “we know what’s going to happen … and it’s going to have significantly damaging economic and political outcomes for our systems.”

The US trade chief called for “defensive” policies such as tariffs, as well as measures that are “more on the offense,” including “incentive measures to correct for a market dynamic that is not playing out in our favor.”

She pointed to China’s high production of steel, aluminum, solar panels, and electric vehicles as specific causes of concern.

US officials have repeatedly labeled China as America’s top “competitor,” while tightening economic restrictions against the country. US tariffs on Chinese goods were hiked significantly under President Donald Trump, who launched the first volley in a tit-for-tat trade war that began in 2018. A similarly hostile approach has continued under his successor, Joe Biden, who has adopted several policies aimed at the Chinese economy.

READ MORE: US couldn’t handle being the sole superpower – Putin

Beijing has warned that such measures violate the principles of fair competition, and harm the stability of world trade. The US is challenged not by China, but by its own unwillingness to accept that another great power may be its equal, Beijing’s top diplomat, Wang Yi, said last month.

Tai admitted on Thursday that it is China’s “incredible” economic growth that is a key factor in the tensions between the two nations.

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Any decisions on the funds should be backed with “sufficient legal support”, according to a spokesperson

Any steps towards seizing Russia’s frozen reserves should be backed by “sufficient legal support,” IMF spokesperson Julie Kozack said at a regular briefing on Thursday.

The EU and other G7 nations have blocked an estimated $300 billion in assets belonging to the Russian central bank since the start of the Ukraine conflict in 2022. Of that amount, €196.6 billion ($211 billion) is being held by the Belgium-based clearinghouse Euroclear, which last year accumulated nearly €4.4 billion in interest on the funds.

“Decisions related to the seizing of assets are for the relevant country authorities and jurisdictions to decide,” Kozack told reporters, reiterating the IMF’s previous statements on the matter.

“What is important for the IMF is that any action has sufficient legal underpinnings and does not undermine the functioning of the international monetary system,” the spokeswoman stressed.

The IMF has previously cautioned that Western plans to seize frozen Russian assets could pose a threat to the global monetary system and entail unforeseen risks.

Some Western officials have been pushing for the outright seizure of the Russian funds and transferring them to Ukraine, or at least using the interest generated by the assets.

While Kiev’s Western backers generally agree that the frozen assets should be used to aid Ukraine, they are at odds about whether an outright seizure would be legal. The US and UK support the direct expropriation of the funds, but some EU member states, France and Germany in particular, warn the move would erode trust in the European financial system.

The EU’s foreign policy chief, Josep Borrell, proposed last month using the profits generated by Russia’s frozen central bank reserves to support Ukraine militarily.

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The bloc would reportedly use 90% of the revenues to procure arms for Ukraine, while the remaining 10% would be transferred to the EU budget to be used to support Kiev’s defense industry.

Moscow reacted to the diplomat’s proposal by warning that such a move would lead to disastrous consequences. Kremlin spokesman Dmitry Peskov said that Borrell’s plan is “another statement in the spirit of moving towards the destruction of the legal foundations of European and international law” and cautioned that such a seizure would cast serious doubt on the EU’s commitment to the principle of asset immunity.

The spokesman also warned that all EU nations and officials that back Borrell’s plan would be subject to “legal prosecution for many decades to come.”

Russia has repeatedly said that any actions taken against its assets would amount to “theft,” stressing that seizing the funds or any similar move would violate international law and undermine Western currencies, the global financial system, and the world economy.

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The share of the fuel in the bloc’s overall imports amounted to 15% in 2023, calculations show

The EU increased natural gas purchases from Russia in 2023, despite pledging to phase out all Russian fuel imports by 2027, Reuters reported on Wednesday, citing calculations based on the bloc’s trade statistics.

According to news agency, the substantial rise in imports came as the EU boosted deliveries of Russian liquefied natural gas (LNG) to offset the loss of pipeline supplies. The latter have dwindled over the past two years due to Ukraine-related sanctions against Russia, the sabotage of the Nord Stream pipelines, and the refusal of a number of EU member states to pay for their fuel in rubles.

Calculations showed that the EU bought more than 15.6 million metric tons of Russian LNG last year, a nearly 40% jump compared to 2021. The increase brought the share of Russian gas in the bloc’s total supplies to around 15%. That figure is some way below the roughly 37% share that Russian gas occupied prior to the Ukraine conflict, although it is much larger than the roughly 8% that it was reduced to after pipeline imports plunged in 2022.

Spain, which previously did not import Russian pipeline gas, has become the largest re-exporter of Russian gas supplies by sea, having bought around 32% of all Russian LNG cargoes headed to the bloc, the report noted. Belgium and France followed closely behind.

The increase in supplies is reportedly partly due to discounts Russia offers on its LNG. For instance, in late 2023, Russian LNG was sold on the Spanish market at €1 ($1.07) per megawatt-hour cheaper than the European benchmark price (TTF), according to industry and trading sources. Calculations showed that this translated into roughly €920,000 savings on a typical cargo worth €41 million at spot prices. This year, the discounts have reportedly been lowered to between 30-50 eurocents.

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Major Spanish energy companies, including Repsol, Cepsa, Endesa, and Iberdrola, refused to confirm that they were buying Russian gas directly when asked for comment. However, Endesa CEO Jose Bogas said he did not rule out that Russian LNG is being imported along with volumes from third parties.

Russian gas is not subject to the EU’s sanctions on Moscow, which banned seaborne exports of Russian oil and significantly narrowed the scope of trade between Moscow and the bloc overall. Data provided by Reuters correlates with figures revealed in February by Russian Deputy Prime Minister Aleksandr Novak. In an interview with the Expert news outlet, he said Russia’s LNG exports to the EU in 2023 amounted to around 15 million metric tons, roughly a third of the country’s total exports of the fuel that year.

For more stories on economy & finance visit RT's business section

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The US aerospace giant is grappling with the fallout from a major safety crisis

Production of Boeing’s 737 MAX jetliner has declined sharply in recent weeks due to a series of regulatory checks and safety audits, Reuters reported on Wednesday, citing unnamed industry sources.

In February, the US Federal Aviation Administration (FAA) imposed a production ceiling of 38 jets per month, following a blowout on a 737 MAX in January. The monthly output rate, however, has been fluctuating well below the cap, and in late March was as low as single digits, sources told the news agency.

The company’s assembly line has reportedly been slowed down due to the checks, affecting the plane maker’s overall production and having a significant negative impact on supplies as a result.

Significant safety fears were raised after an incident on January 5, when an Alaska Airlines flight bound for California from Portland, Oregon, had to turn back after a door panel blew off at 16,000 feet (4,900 meters), injuring several of the 171 passengers aboard and sucking clothing and cell phones out of the aircraft.

The National Transportation Safety Board reported that four crucial bolts holding the door plug in place were missing, while the FAA said after an initial probe that Boeing’s safety culture leaves much to be desired. The regulator ordered 171 Boeing 737 MAX 9 planes to be grounded after the incident to check for more loose parts. Since the incident, shares in the aerospace giant have plummeted more than 25%.

READ MORE: Boeing mulls sale of defense assets – Bloomberg

In March, Boeing CFO Brian West said the company was taking extensive steps to improve quality and build confidence, including reducing the amount of pending work as the FAA steps up factory checks and audits. According to the executive, the FAA was “deeply involved and undertaking a tougher audit than anything we’ve ever been through before.”

Boeing President and CEO Dave Calhoun recently announced plans to step down by the end of the current year, in a move seen as major management shakeup in the company’s history.

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Risk of US secondary sanctions has forced banks in Kyrgyzstan and Kazakhstan to suspend financial ties and stop honoring Mir transfers

The use of the Mir bank card, which operates through a Russian payments system, will no longer be possible in Kyrgyzstan and in most Kazakh banks, as the former Soviet republics face the risk of Ukraine-related sanctions.

The Russian Mir payment card will stop working in Kyrgyzstan from Friday, April 5, the country’s local payments operator announced on Tuesday, saying that the nation’s tech infrastructure is exposed to the risk of secondary sanctions. Regulators in Kazakhstan have not issued a statement so far.

Last month, the Union of Armenian Banks said that that country’s lenders would stop honoring Mir cards from March 30, attributing its decision to the same reason. Belarus and Tajikistan may also stop accepting Mir cards, according to an unnamed source cited by Kommersant.

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Russia’s National Card Payment System (NSPK), which operates Mir, previously said that it had received a warning from Elkart, the Kyrgyz national payment system, that Mir would stop working in the Central Asian nation later this week.

According to the Interbank Processing Centre (IPC), users of Mir cards will no longer be able to make non-cash payments at point-of-sale terminals, to withdraw cash from ATMs, to transfer from card to card, or to make internet payments.

The Mir payment card system, which soared in popularity after Ukraine-related sanctions, has made it almost impossible for Russia to make cross-border transactions using Western money and payment systems such as SWIFT. In February, the US Treasury updated its backlist of Russian individuals and entities, adding the operator of Russia’s Mir payment card system to it.

The first deputy chairman of the Bank of Russia, Olga Skorobogatova, said that the regulator was working on solving the problem with foreign banks’ refusal to accept the Mir card. The Central Bank is studying the possibilities of expanding the ATM networks of Russian banks’ subsidiaries and using the Faster Payments System (SBP) in other countries.

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The company that launched the product, aimed at raising funds for Ukraine, has gone bust

The project that launched a vodka named after Ukraine’s President Vladimir Zelensky has failed, Russian news outlet Octagon has reported. The Swiss-based startup aimed to raise funds for Kiev, but sales in Europe and the US proved disappointing.

Authorities in Switzerland decided last September to dissolve the company operating the Zelensky Vodka brand, according to an entry in the commercial register of the Canton of Zug. DrinkForPeace AG is to be liquidated in accordance with the provisions on bankruptcy, the entry states.

Octagon reported that DrinkForPeace had reached an agreement with authorities to suspend the dissolution process as it tries to sell leftover stock.

The brand was launched in March 2022, shortly after years-long Russia-Ukraine tensions erupted into military confrontation, by Swiss entrepreneur Tobias Reichmuth and Ukrainian fashion designer Anastasiia Rosinina. Among the founders were Swiss manager Georgia von Gleichen and start-up entrepreneur Matthias Zwingel.

The bottle of Zelensky vodka featured a silhouette of Ukraine’s president in front of the country’s blue and yellow flag, along with the slogan ‘Help Ukraine’ and hashtag “drink for peace.” The beverage was said to be of premium wheat-based quality, made and distilled in Germany and Switzerland.

#drinkforpeace ? pic.twitter.com/U8kQnWJ5Y0

— Oleg Ivanov (@oleg_trasher) November 2, 2022

The founders pledged to transfer all profits to Ukraine until 2026. They also promised to send another €5 per bottle towards selected non-governmental organizations in the country. The recommended price for a 0.7 litre bottle was set at €29.90 (just over $32).

Octagon said the company had tried to promote sales of the vodka in Switzerland, Germany, Austria, the UK, and the US. As of August 2022, 55,000 bottles had been sold in five countries, a far cry from the million-bottle target set for the year at its UK launch.

The founders lamented that promotions in the US didn’t get as much support as they’d hoped, and admitted that they struggled to cover costs, the outlet writes, citing a post from von Gleichen on the LinkedIn social network.

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The company reportedly made a three-tranche payment to a foundation that restores damaged buildings in Ukraine and transferred about $37,000 to a children’s hospital in Kiev. However, according to Octagon, the foundation in question is in fact engaged in helping the Ukrainian army, supplying equipment for drones, among other things.

The vodka is still available for sale in European liquor stores, with prices varying between €18 (about $20) and €40 per bottle. According to Octagon, the DrinkForPeace founders have abandoned the project to pursue other goals.

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Auchan could face a heavy fine following an on-site inspection, the outlet has said

Russian tax authorities could hit French supermarket chain Auchan with a fine of nearly $2 million over suspected fraud, RBK reported on Tuesday, citing the company’s financial data.

The Russian Federal Tax Service (FTS) conducted an on-site inspection of the retailer last year, focusing on its activities in the 2020–2021 financial years, the outlet said. A report on Auchan’s Russian subsidiary indicated that the retailer could additionally be levied 180.9 million rubles ($1.96 million) over unpaid taxes, RBK said. Of this sum, the tax adjustment would cover 125.9 million rubles ($1.36 million).

The reason for the scrutiny has not been disclosed. RBK noted, however, that the first deputy chairman of Russia’s State Duma Committee on Security and Anti-Corruption, Andrey Lugovoy, had called for an inspection in February 2023, citing the need to check any possible hidden commercial activity by the company in Russia. Lugovoy said he wanted to verify information he had received about Auchan’s use of “illegal methods of tax optimization,” according to RBK.

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Auchan’s parent company, French retail giant Association Familiale Mulliez, opted to keep the supermarket chain running in Russia despite sanctions and criticism in the West. The group also owns home improvement chain Leroy Merlin, sportswear retailer Decathlon, and fashion outlet Kiabi.

It is not the first time the Mulliez family’s operations have drawn the attention of tax authorities. In 2016, a series of searches of the group’s properties were carried out in France, Luxembourg, and Belgium over suspected tax evasion and money laundering. Tax authorities particularly targeted the border town of Nechin, where several family members resided in order to pay less taxes. The residence of Patrick Mulliez, founder of the ready-to-wear brand Kiabi, was reportedly searched.

In 2019, chemical manufacturer Soderec, which also belongs to one of the most influential families in France, was ordered to pay an €88.8 million ($95.6 million) adjustment reportedly covered the financial years 2010, 2011, and 2012, according to online media La Lettre.

The Mulliez family is among the richest in the world, with a collective net worth of $34.3 billion, according to Bloomberg. The family patriarch, Gerard Mulliez, founded Auchan in 1961.

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The retailer is reportedly planning to ditch its self-service checkout systems that were designed to work without humans

US retail giant Amazon has hired human workers in India to help its grab-and-go checkout systems, news outlet Engadget reported on Monday. The tech-focused site added that that the company is planning to ditch the unprofitable technology.

Amazon’s Just Walk Out self-checkout tech relies on a host of cameras and sensors, as well as on human input to track what people take from stores and charge them accordingly.

However, the company reportedly had to hire more than 1,000 people in India to scan the camera feeds to ensure checkout tallies were accurate. Installing and maintaining all the necessary equipment is also proving too expensive and makes using the systems unprofitable.

Just Walk Out systems have been installed in 27 of Amazon's 40 Fresh stores across the US, Engadget claims.

Using the systems has also reportedly resulted in a wide range of frustrating issues for Amazon’s consumers, from receipts being sent out hours after purchase to completely mismanaged orders.

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In addition, the company is facing confidentiality challenges, as cameras and sensors are collecting biometric information on shoppers. In September, Amazon was hit by a class-action suit in New York, where plaintiffs accused the company of collecting biometric identifier information without properly disclosing the practices to consumers.

The Seattle-based company is reportedly planning to focus on offering Dash Carts, which allow customers to scan items while shopping, in grocery stores after testing the carts in Whole Foods and Fresh outlets, where the Just Walk Out system is currently used.

Just Walk Out technology will continue to be offered in select stores in the UK.

Founded as an e-commerce business, Amazon opted to enter the physical retail sector five years ago. The company opened its first Amazon Fresh store in 2020, and operates more than 40 around the country. In 2017, Amazon bought the Whole Food grocery chain, which caters for a wealthier clientele. The corporation has also added Amazon Go cashier-less stores to its portfolio.

For more stories on economy & finance visit RT's business section

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The turn away from expansion, production and trade toward lending and speculation has precipitated decline for centuries

One of the curious features of the American landscape is the fact that these days the financialization of the economy is widely condemned as unhealthy, yet little is being done to reverse it. There was a time, back in the 1980s and ‘90s, when finance-driven capitalism was supposed to usher in a time of better capital allocation and a more dynamic economy. This is not a view one hears often anymore.

So, if such a phenomenon is overwhelmingly viewed negatively but isn’t being amended, then perhaps it’s not merely a failure of policymaking but rather something deeper – something more endemic to the very fabric of the capitalist economy. It is of course possible to lay the blame for this state of affairs at the feet of the current crop of cynical and power-hungry elites and to stop one’s analysis there. But an examination of history reveals recurrent instances of financialization that bear remarkable similarities, which invites the conclusion that perhaps the predicament in the American economy in recent decades is not unique and that the ever-rising power of Wall Street was in a sense preordained.

Introducing Giovanni Arrighi: Financialization as a cyclical phenomenon

It is in this context that it pays to revisit the work of the Italian political economist and historian of global capitalism Giovanni Arrighi (1937-2009). Arrighi, who is often simplistically pigeonholed as a Marxist historian, a label far too constricting given the breadth of his work, explored the origins and evolution of capitalist systems dating back to the Renaissance and showed how recurrent phases of financial expansion and collapse underpin broader geopolitical reconfigurations. Occupying a central place in his theory is the notion that the cycle of rise and fall of each successive hegemon terminates in a crisis of financialization. It is this phase of financialization that facilitates the shift to the next hegemon.

Arrighi dates the origin of this cyclical process to the Italian city-states of the 14th century, an era that he calls the birth of the modern world. From the marriage of Genoese capital and Spanish power that produced the great discoveries, he traces this path through Amsterdam, London and, finally, the United States.

In each case, the cycle is shorter and each new hegemon is larger, more complex and more powerful than the previous one. And, as we mentioned above, each terminates in a crisis of financialization that marks the final stage of hegemony. But this phase also fertilizes the soil in which the next hegemon will sprout, thus marking financialization as the harbinger of an impending hegemonic shift. Essentially, the ascending power emerges in part by availing itself of the financial resources of the financialized and declining power.

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Arrighi detected a first wave of financialization starting around 1560, when the Genoese businessmen withdrew from commerce and specialized in finance, thereby establishing symbiotic relations with the Kingdom of Spain. The subsequent wave began around 1740 when the Dutch began to withdraw from commerce to become “the bankers of Europe.” The financialization in Great Britain, which we will examine below, emerged around the end of the 19th century; for the United States, it began in the 1970s.

Hegemony he defines as “the power of a state to exercise functions of leadership and governance over a system of sovereign states.” Central to this concept is the idea that historically such governance has been linked to the transformation of how the system of relations among states functions in itself and also that it consists of both what we would call geopolitical dominance but also a sort of intellectual and moral leadership. The hegemonic power not only rises to the top in the jockeying among states but actually forges the system itself in its own interest. Key to this capacity for the expansion of the hegemon’s own power is the ability to turn its national interests into international interests.

Observers of the current American hegemony will recognize the transformation of the global system to suit American interests. The maintenance of an ideologically charged ‘rules-based’ order – ostensibly for the benefit of everyone – fits neatly into the category of conflation of national and international interests. Meanwhile, the previous hegemon, the British, had their own version that incorporated both free-trade policies and a matching ideology that emphasized the wealth of nations over national sovereignty.

Returning to the question of financialization, the original insight into its epochal aspect first came from the French historian Fernand Braudel, of whom Arrighi was a disciple. Braudel observed that the rise of finance as the predominant capitalist activity of a given society was a sign of its impending decline.

Arrighi adopted this approach and, in his major work called ‘The Long Twentieth Century,’ elaborated his theory of the cyclical pattern of ascendency and collapse within the capitalist system, which he called the ‘systemic cycle of accumulation.’ According to this theory, the period of ascendency is based on an expansion of trade and production. But this phase eventually reaches maturity, at which point it becomes more difficult to profitably reinvest capital in further expansion. In other words, the economic endeavors that propelled the rising power to its perch become increasingly less profitable as competition intensifies and, in many cases, much of the real economy is lost to the periphery, where wages are lower. Rising administrative expenses and the cost of maintaining an ever-expanding military also contribute to this.

This leads to the onset of what Arrighi calls a ‘signal crisis,’ meaning an economic crisis that signals the shift from accumulation by material expansion to accumulation by financial expansion. What ensues is a phase characterized by financial intermediation and speculation. Another way to think about this is that, having lost the actual basis for its economic prosperity, a nation turns to finance as the final economic field in which hegemony can be sustained. The phase of financialization is thus characterized by an exaggerated emphasis on financial markets and the finance sector.

How financialization delays the inevitable

However, the corrosive nature of financialization is not immediately evident – in fact, quite the opposite. Arrighi demonstrates how the turn to financialization, which is initially quite lucrative, can provide a temporary and illusory respite from the trajectory of decline, thus deferring the onset of the terminal crisis. For example, the incumbent hegemon at the time, Great Britain, was the country hardest hit by the so-called Long Depression of 1873-1896, a prolonged period of malaise that saw Britain’s industrial growth decelerate and its economic standing diminished. Arrighi identifies this as the ‘signal crisis’ – the point in the cycle where productive vigor is lost and financialization sets in.

And yet, as Arrighi quotes David Landes’ 1969 book ‘The Unbound Prometheus,’ “as if by magic, the wheel turned.” In the last years of the century, business suddenly improved and profits rose. “Confidence returned—not the spotty, evanescent confidence of the brief booms that had punctuated the gloom of the preceding decades, but a general euphoria such as had not prevailed since…the early 1870s….In all of western Europe, these years live on in memory as the good old days—the Edwardian era, la belle époque.” Everything seemed right again.

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However, there is nothing magical about the sudden restoration of profits, Arrighi explains. What happened is that “as its industrial supremacy waned, its finance triumphed and its services as shipper, trader, insurance broker and intermediary in the world’s system of payments became more indispensable than ever.”

In other words, there was a large expansion in financial speculation. Initially much of the expanding financial income derived from interest and dividends being generated by previous investments. But increasingly a significant portion was financed by what Arrighi calls the “domestic conversion of commodity capital into money capital.” Meanwhile, as surplus capital moved out of trade and production, British real wages began a decline starting after the mid-1890s – a reversal of the trend of the past five decades. An enriched financial and business elite amid an overall decline in real wages is something that should ring a bell to observers of the current American economy.

Essentially, by embracing financialization, Britain played the last card it had to stave off its imperial decline. Beyond that lay the ruin of World War I and the subsequent instability of the interwar period, a manifestation of what Arrighi calls ‘systemic chaos’ – a phenomenon that becomes particularly visible during signal crises and terminal crises.

Historically, Arrighi observes, these breakdowns have been associated with escalation into outright warfare – specifically, the Thirty Years’ War (1618-48), the Napoleonic wars (1803-15) and the two World Wars. Interestingly and somewhat counterintuitively, these wars have typically not seen the incumbent hegemon and the challenger on opposing sides (with the Anglo-Dutch naval wars a notable exception). Rather, it has typically been the actions of other rivals that have hastened the arrival of the terminal crisis. But even in the case of the Dutch and British, conflict co-existed with cooperation as Dutch merchants increasingly directed their capital to London, where it generated better returns.

Wall Street and the crisis of the last hegemon

The process of financialization emerging from a signal crisis was repeated with startling similarities in the case of Britain’s successor, the US. The 1970s was a decade of deep crisis for the US, with high levels of inflation, a weakening dollar after the 1971 abandonment of gold convertibility and, perhaps most importantly, a loss of competitiveness of US manufacturing. With rising powers such as Germany, Japan, and, later, China, able to outcompete it in terms of production, the US reached the same tipping point and, like its predecessors, it turned to financialization. The 1970s was, in the words of historian Judith Stein, the “pivotal decade” that “sealed a society-wide transition from industry to finance, factory floor to trading floor.”

This, Arrighi explains, allowed the US to attract massive amounts of capital and move toward a model of deficit financing – an increasing indebtedness of the US economy and state to the rest of the world. But financialization also allowed the US to reflate its economic and political power in the world, particularly as the dollar was ensconced as the global reserve currency. This reprieve gave the US the illusion of prosperity of the late 1980s and ‘90s, when, as Arrighi says “there was this idea that the United States had ‘come back’.” No doubt the demise of its main geopolitical rival, the Soviet Union, contributed to this buoyant optimism and sense that Western neoliberalism had been vindicated.

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However, beneath the surface, the tectonic plates of decline were still grinding away as the US became ever more dependent on external funding and increasingly ramped-up leverage on a diminishing sliver of real economic activity that was rapidly being offshored and hollowed out. As Wall Street rose in prominence, many quintessential American economies were essentially asset-stripped for the sake of financial profit.

But, as Arrighi points out, financialization merely stalls the inevitable and this has only been laid bare by subsequent events in the US. By the late 1990s, the financialization itself was beginning to malfunction, starting with the Asia crisis of 1997 and subsequent popping of the dotcom bubble, and continuing with a reduction in interest rates that would inflate the housing bubble that detonated so spectacularly in 2008. Since then, the cascade of imbalances in the financial system has only accelerated and it has only been through a combination of increasingly desperate financial legerdemain – inflating one bubble after another – and outright coercion that has allowed the US to extend its hegemony even a bit longer beyond its time.

In 1999, Arrighi, in a piece co-authored with American scholar Beverly Silver, summarized the predicament of the time. It has been a quarter century since these words were penned, but they might as well have been written last week:

“The global financial expansion of the last twenty years or so is neither a new stage of world capitalism nor the harbinger of a ‘coming hegemony of global markets’. Rather, it is the clearest sign that we are in the midst of a hegemonic crisis. As such, the expansion can be expected to be a temporary phenomenon that will end more or less catastrophically… But the blindness that led the ruling groups of [hegemonic states of the past] to mistake the ‘autumn’ for a new ‘spring’ of their…power meant that the end came sooner and more catastrophically than it might otherwise have…A similar blindness is evident today.”

An early prophet of a multipolar world

In his late work, Arrighi turned his attention to East Asia and surveyed the prospects for a transition to the next hegemony. On the one hand, he identified China as the logical successor to American hegemony. However, as a counterweight to that, he did not see the cycle he outlined as continuing in perpetuity and believed there would come a point where it is no longer possible to bring into existence a state with larger and more comprehensive organizational structures. Perhaps, he speculated, the US represents just that expansive capitalist power that has taken the capitalist logic to its earthly limits.

Arrighi also considered the systemic cycle of accumulation to be a phenomenon inherent to capitalism and not applicable to pre-capitalist times or non-capitalist formations. As of 2009, when he died, Arrighi’s view was that China remained a decisively non-capitalist market society. How it would evolve remained an open question.

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While Arrighi was not dogmatic on how the future would shape up and did not apply his theories deterministically, especially with regard to the developments of recent decades, he did speak forcefully about what in today’s language could be called the necessity of accommodating a multipolar world. In their 1999 article, he and Silver predicted “a more or less imminent fall of the West from the commanding heights of the world capitalist system is possible, even likely.”

The US, they believe, “has even greater capabilities than Britain did a century ago to convert its declining hegemony into an exploitative dominion.” If the system does eventually break down, “it will be primarily because of US resistance to adjustment and accommodation. And conversely, US adjustment and accommodation to the rising economic power of the East Asian region is an essential condition for a non-catastrophic transition to a new world order.”

Whether such accommodation is forthcoming remains to be seen, but Arrighi strikes a pessimistic tone, noting that each hegemon, at the end of its cycle of dominance, experiences a “final boom” during which it pursues its “national interest without regard for system-level problems that require system-level solutions.” A more apt description of the current state of affairs cannot be formulated.

The system-level problems are multiplying, but the sclerotic ancien régime in Washington is not addressing them. By mistaking its financialized economy for a vigorous one, it overestimated the potency of weaponizing the financial system it controls, thus again seeing ‘spring’ where there is only ‘autumn.’ This, as Arrighi, predicts, will only hasten the end.

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US President Joe Biden ordered a pause on approvals of the sale of gas from new projects in January

US officials are in talks about unfreezing approvals of new liquefied natural gas (LNG) exports in order to get a Ukraine aid package passed in Congress, Reuters reported on Monday, citing sources close to the discussions.

President Biden ordered a temporary pause on LNG exports from new projects in the country on January 26, citing their potential contribution to climate change. The move was welcomed by climate activists, but has been opposed by many large producers, who say that LNG plays a vital role in the energy transition.

The White House has been pushing Congress to pass a foreign aid bill that includes another $60 billion in military aid for Kiev for months. However, the bill has been stalled by Republicans in the House of Representatives, who are demanding more efforts to increase security on the border with Mexico.

The White House may consider resuming the LNG sales in question in order to move ahead with the Ukraine aid, partly because the pause has no bearing on near-term LNG exports, the White House sources told the news agency.

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In 2023, the US was ranked the world’s number one exporter of the super-chilled gas after the EU switched from Russian piped gas to American LNG. The country’s LNG export capacity is expected to double by the end of the current decade thanks to already-approved projects.

The suggestion to reverse Biden’s pause on LNG export approvals was put forward on Sunday by Republican US House Speaker Mike Johnson, who told Fox News that the move could make it easier for his party to support a new aid package for Ukraine.

An unnamed industry source familiar with the discussions told Reuters that the White House may find it feasible to relent on the LNG export pause, adding that substantively, no new approvals have been granted. This perspective suggests that such a move could be less challenging for the administration, particularly when considering climate concerns.

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Several tankers have reportedly been spotted anchored near the Asian country’s ports

Three tankers loaded with Russian Sokol-grade oil have arrived at Indian ports, despite being targeted by Western sanctions, Bloomberg reported on Monday, citing vessel-tracking data.

Supertanker Nireta has been anchored near Visakhapatnam on India’s east coast, according to the media outlet. Two other vessels, Vostochny Prospect and Erecter, reportedly shipped crude to Jamnagar in the west, both signaling Sikka Port as their destination. Meanwhile, Clyde Noble, another tanker hauling Sokol crude, is currently on its way to Sikka.

According to Bloomberg, in the month to mid-January, ten shipments of Russian crude headed for India failed to discharge at the country’s ports, with at least five vessels returning through the Malacca Strait. Further cargoes added to the backlog, which reached as much as 18 million barrels.

Earlier this year, Reuters reported that Indian state refiners had to stop buying Russian crude last year, after New Delhi advised them against implementing payments in Chinese yuan, due to strained relations with Beijing.

Refiners in India have become major buyers of Russian crude since Western importers opted to stop purchasing it as a sanction against Moscow. However, Indian buyers have, since late last year, faced major difficulties, due to tougher enforcement of restrictions.

READ MORE: India buying more US oil amid Russia sanctions

Washington levied new sanctions on exports of Russian crude in February, having blacklisted Sovcomflot and more than a dozen tankers linked to the Russian state-owned firm. One of the tankers currently off the Indian coast, Vostochny Prospect, is owned and managed by the Russian state-owned corporation.

The news agency noted that it’s not clear if the tankers would discharge in India, or whether issues with delivery and payments due to the sanctions have been overcome.

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The country’s liabilities have been steadily decreasing, according to the central bank

Russia’s government and businesses have been steadily reducing the amount of money they owe to foreign lenders, the latest official data suggests.

The country’s level of external debt dropped by nearly a fifth last year, reaching its lowest point in over a decade, its regulator Bank of Russia says in its annual report, which has just been made public.

The central bank reports in it that, as of January 1 this year, “the external debt of the Russian Federation amounted to $316.8 billion, having decreased by $68.2 billion, or by 17.7%, over the course of [2023].”

External debt is the portion of a country’s national debt borrowed by the state and by private businesses from overseas lenders such as banks, the IMF, foreign companies and other creditors.

The amount owed by Russia’s central bank and other banks remained virtually unchanged at $94.7 billion, while government debt was reduced by 29%, from $46.1 billion to $32.7 billion. Other sectors of the economy reduced their overall external debt by 22.6% to $189.4 billion, the report says.

The regulator also noted that the debt burden on the Russian economy has decreased as the ratio of external debt to GDP fell to 15.8% last year.

According to Bank of Russia, the current level of external debt is at its lowest in a decade.

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President Vladimir Putin said in December that Russian companies were dutifully repaying all loans taken from foreign financial institutions, often ahead of schedule.

Russia’s foreign debt reached a historic high of over $700 billion in 2014. The liabilities began a relatively steady decline since then, due to Western sanctions imposed in 2014 over the Crimean reunification and to the withdrawal of capital by non-residents. The new sanctions campaign unleashed by the West against Moscow since 2022 has further accelerated foreign-debt decline.

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Brent futures approached $90 per barrel on Tuesday

The price of the Brent oil benchmark peaked at $89 per barrel on Tuesday, nearing levels last seen in June 2022, according to Intercontinental Exchange (ICE) data. Industry experts have attributed the surge to an Israeli airstrike on the Iranian consulate in Damascus and Tehran’s threat of retaliation.

Brent futures had risen by nearly 2% since Monday to trade at $89.060 per barrel as of 10:25 GMT, before retreating slightly, according to ICE figures. The US benchmark West Texas Intermediate exceeded $85.

On Monday, Iran – a major oil producer – threatened a “harsh” response against Israel. The attack on the Iranian diplomatic compound in Damascus killed seven Iranian military advisers including three senior commanders.

Israel has repeatedly targeted Iranian installations in Syria, due to Tehran’s alleged support of the Palestinian group Hamas in Gaza. Although Israel has not commented on the latest strike, the New York Times cited four unnamed Israeli officials as acknowledging that Israel was behind it.

Oil prices have rallied in recent months on fears that the Israel-Palestine conflict could spread to the broader Middle East. The region is a crucial supplier of energy and a key oil shipping route. In mid-March the price of Brent climbed to $85 per barrel as Yemen’s Houthi militants stepped up their rocket fire on merchant ships in the Red Sea, calling it retaliation for the actions of Israel and its supporters.

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According to a projection by Bloomberg Economics, oil prices could reach $150 per barrel if Iran joins the conflict.

ICE data suggests that Brent last traded above the current level in June 2022 ($98.460 per barrel on June 28, 2022), during the early stages of the Western sanctions campaign against Russia, a major oil exporter, over the Ukraine conflict.

The advance in crude prices has also been underpinned by OPEC+ production cuts, strong economic data from China, and economists’ expectations of a global deficit this year.

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