The Economic Corner || What Are The Latest Important Developments From China And Japan?

• First news on the Economic Corner is the US President’s tougher stance on China. The White House stepped up scrutiny of Chinese software and apps in an executive order. The latest executive order, which aims to protect the personal data of Americans, including health and genetic information, is taken to tighten the screws on China.

• The Senate this week passed a bipartisan bill that would provide $250 billion to help the United States maintain a competitive edge over China in critical technologies such as artificial intelligence and quantum computing. 

• Japan’s wholesale prices rose at their fastest annual pace in 13 years reflecting higher commodity costs. This is a sign that global inflationary pressures are pinching firms already struggling amid the coronavirus pandemic. With companies seen slow in passing on the higher costs on to households, the uptick in wholesale inflation is unlikely to prod the Bank of Japan into withdrawing its massive stimulus any time soon. 

• The corporate goods price index (CGPI), which measures the prices companies charge each other for their goods, rose 4.9 per cent in May from a year earlier, more than a median market forecast for a 4.5 per cent increase.

• China also saw factory gate prices rise at their fastest annual pace in over 12 years. The rise in raw material costs is particularly damaging for Japan, where state of emergency curbs to combat the pandemic are cooling consumption and making it difficult for retailers to charge households more for their goods.  

• Moving on to the next news coming in from another country in Asia. China’s factory-gate prices rose at their highest annual rate in 12 years in May. The record surge was driven by a spike in commodity prices. The rise in prices raised concerns that inflationary pressures could spread globally and force central banks to tighten monetary policy, derailing global recovery.

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