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China Uses Surprise Data Announcements to Counter Economic Gloom

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(Bloomberg) — Chinese officials are using a new strategy to help shape a positive narrative on their nation’s slowdown: Making early disclosures on flattering economic news in a bid to boost markets.

The latest example came Thursday, when Vice Finance Minister Liao Min highlighted bright spots in the budget data at a press briefing in Beijing. His comments beat the monthly statement which normally provides that information, without commentary, by one hour.

“We believe this will have a positive impact on facilitating the economy’s recovery,” Liao said, spotlighting the fastest execution of budget spending for January and February in nearly five years. He downplayed less rosy numbers that might have got investors’ attention, explaining falling revenue was distorted by base effects.

Premier Li Qiang kicked off the trend back in January by giving early confirmation China had met its 2023 growth goal at a major forum in Switzerland. His reveal came one day before the official figures were due, and allowed China’s No. 2 leader to trumpet Beijing’s ability to hit that target without using major stimulus.

Later that month, central bank governor Pan Gongsheng took the rare step of personally announcing a cut to banks’ reserve requirements, 12 days before the trim took effect. That move sparked rallies in Chinese stocks and bonds. This month, Commerce Minister Wang Wentao unveiled a surprise soar in export numbers at a high-profile briefing one day before the data was due.

The change in operating mode signals officials are stepping up efforts to boost confidence in China’s economy, as a property crisis and weak domestic demand drag on sentiment at home. Foreign investors have described having “promise fatigue” over Beijing’s pledges to improve the business environment for them.

“This suggests that economic officials are feeling a degree of political heat,” said Christopher Beddor, deputy China research director at Gavekal Dragonomics, of the spate in early releases. The “strange reveals” have one message in common, he added: “Either things are better than expected, or officials are taking steps to make it better.”

The new strategy follows a call from top leaders to amplify bullish views about the economy at a December meeting. China’s post-pandemic recovery disappointed last year, partly due to geopolitical tensions and dented investor confidence after years of Covid curbs and policy swings.

In line with that call to create positive news narratives around the economy, Xuan Changneng, a deputy governor of the People’s Bank of China, on Thursday repeated a pledge by his boss earlier this month that there is still room to lower the reserve ratio requirement.

His comments spurred a brief uptick in Chinese shares. Overall, however, the early reveals’ impact on the market has been muted, as investors take time to assess the signals, according to Bruce Pang, chief economist for Greater China at Jones Lang LaSalle Inc.

“The teachers are underlining the key points,” he added. “But it will take investors time and patience to verify how important the messages are.”

Government agencies have previously been accused of trying to bury negative data, including by temporarily suspending the release of some indicators and changing how they’re calculated. Such abrupt moves have only fanned investor fears about the ruling Communist Party’s increasingly opaque policymaking.

The National Bureau of Statistics halted the publication of monthly numbers for industrial profits for several months in 2022 when the figure was declining. After the youth jobless rate hit a record high in June, officials paused publishing that data for months before bringing it back with a rosier number that excluded students.

Another tweak to that high-profile data set came this month: It will no longer be released at the NBS’ monthly press briefing, as has been the norm in recent years. Instead, it will now be published to an online database at an unspecified time. Officials didn’t give an explanation for the change in operations.

With policymakers targeting an ambitious goal of about 5% growth this year, officials will need to steady confidence in the economy. A measure of new foreign direct investment into China fell in 2023 to the lowest level in 30 years, while a market meltdown earlier this year underscored the challenges facing the government. The surprise early data releases are unlikely to be any substitute for a meaningful shift in policies.

But such statements are a positive step, according to Xiaojia Zhi, chief China economist at Credit Agricole CIB, because they signal “more communication” from the government to guide market expectations.

 

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A timeline of events in the bread price-fixing scandal

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Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.

Here’s a timeline of key events in the bread price-fixing case.

Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.

Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.

Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.

Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).

Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.

June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.

Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”

Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.

July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.

Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.

This report by The Canadian Press was first published Sept. 19, 2024.

Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)

The Canadian Press. All rights reserved.

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S&P/TSX composite up more than 250 points, U.S. stock markets also higher

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TORONTO – Canada’s main stock index was up more than 250 points in late-morning trading, led by strength in the base metal and technology sectors, while U.S. stock markets also charged higher.

The S&P/TSX composite index was up 254.62 points at 23,847.22.

In New York, the Dow Jones industrial average was up 432.77 points at 41,935.87. The S&P 500 index was up 96.38 points at 5,714.64, while the Nasdaq composite was up 486.12 points at 18,059.42.

The Canadian dollar traded for 73.68 cents US compared with 73.58 cents US on Thursday.

The November crude oil contract was up 89 cents at US$70.77 per barrel and the October natural gas contract was down a penny at US2.27 per mmBTU.

The December gold contract was up US$9.40 at US$2,608.00 an ounce and the December copper contract was up four cents at US$4.33 a pound.

This report by The Canadian Press was first published Sept. 19, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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Construction wraps on indoor supervised site for people who inhale drugs in Vancouver

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VANCOUVER – Supervised injection sites are saving the lives of drug users everyday, but the same support is not being offered to people who inhale illicit drugs, the head of the BC Centre for Excellence in HIV/AIDS says.

Dr. Julio Montaner said the construction of Vancouver’s first indoor supervised site for people who inhale drugs comes as the percentage of people who die from smoking drugs continues to climb.

The location in the Downtown Eastside at the Hope to Health Research and Innovation Centre was unveiled Wednesday after construction was complete, and Montaner said people could start using the specialized rooms in a matter of weeks after final approvals from the city and federal government.

“If we don’t create mechanisms for these individuals to be able to use safely and engage with the medical system, and generate points of entry into the medical system, we will never be able to solve the problem,” he said.

“Now, I’m not here to tell you that we will fix it tomorrow, but denying it or ignoring it, or throw it under the bus, or under the carpet is no way to fix it, so we need to take proactive action.”

Nearly two-thirds of overdose deaths in British Columbia in 2023 came after smoking illicit drugs, yet only 40 per cent of supervised consumption sites in the province offer a safe place to smoke, often outdoors, in a tent.

The centre has been running a supervised injection site for years which sees more than a thousand people monthly and last month resuscitated five people who were overdosing.

The new facilities offer indoor, individual, negative-pressure rooms that allow fresh air to circulate and can clear out smoke in 30 to 60 seconds while users are monitored by trained nurses.

Advocates calling for more supervised inhalation sites have previously said the rules for setting up sites are overly complicated at a time when the province is facing an overdose crisis.

More than 15,000 people have died of overdoses since the public health emergency was declared in B.C. in April 2016.

Kate Salters, a senior researcher at the centre, said they worked with mechanical and chemical engineers to make sure the site is up to code and abidies by the highest standard of occupational health and safety.

“This is just another tool in our tool box to make sure that we’re offering life-saving services to those who are using drugs,” she said.

Montaner acknowledged the process to get the site up and running took “an inordinate amount of time,” but said the centre worked hard to follow all regulations.

“We feel that doing this right, with appropriate scientific background, in a medically supervised environment, etc, etc, allows us to derive the data that ultimately will be sufficiently convincing for not just our leaders, but also the leaders across the country and across the world, to embrace the strategies that we are trying to develop.” he said.

Montaner said building the facility was possible thanks to a single $4-million donation from a longtime supporter.

Construction finished with less than a week before the launch of the next provincial election campaign and within a year of the next federal election.

Montaner said he is concerned about “some of the things that have been said publicly by some of the political leaders in the province and in the country.”

“We want to bring awareness to the people that this is a serious undertaking. This is a very massive investment, and we need to protect it for the benefit of people who are unfortunately drug dependent.” he said.

This report by The Canadian Press was first published Sept. 18, 2024.

The Canadian Press. All rights reserved.

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