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China's factory activity expands, but job losses quicken amid weak exports: Caixin PMI

BEIJING (Reuters) – China’s factory activity grew at a faster clip in June after the government lifted coronavirus lockdown measures and ramped up support steps, but the health crisis continues to pressure exports and jobs, a private business survey showed on Wednesday.

The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) rose to 51.2 last month, the fastest pace of growth since December, and up from May’s 50.7. The 50-mark separates growth from contraction on a monthly basis.

Analysts polled by Reuters had expected a reading of 50.5.

China’s economy is gradually emerging from a sharp 6.8% contraction in the first quarter, with much of the country reopened after weeks of disruptions early in the year due to strict lockdown measures.

But demand remained subdued, as many manufacturers are still struggling with reduced or cancelled overseas orders amid faltering global demand.

While some of China’s trading partners are easing curbs and re-booting their economies, many are still grappling with the pandemic while a surge of worldwide infections over the past week has raised the risk of a deeper and prolonged global recession.

Consumers have also remained cautious amid job losses and fears of a fresh wave of infections in China as a cluster emerged in Beijing last month.

New export orders stayed firmly in contractionary territory, the survey showed, although the downturn eased from the sharp slump in May.

“Overall manufacturing demand recovered at a fast clip, but overseas demand remained a drag,” said Wang Zhe, senior economist at Caixin Insight Group.

The government has already rolled out a raft of easing steps this year, including reserve requirement cuts and targeted lending support and tax breaks for virus-hit firms. It has also ramped up local bond issuance in the hopes of spurring infrastructure growth.

Despite a pick-up in domestic orders, the uncertain outlook forced factories to cut payrolls for the sixth consecutive month, with the pace of job shedding accelerating. Avoiding mass unemployment is a top government priority, with a target to create over 9 million urban jobs this year.

“We should still pay attention to the pressure on employment. Top policymakers have repeatedly stressed the importance of expanding employment channels. For some time to come, increasing employment will remain an arduous task,” Wang said.

Given the uncertain outlook, the government said in late May it was not setting an annual growth target, for the first time since 2002.

An official survey on Tuesday also showed China’s factory activity grew at a quicker pace in June but smaller firms were still suffering and exporters struggled with shrinking orders, pointing to an uneven recovery.

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World News

WTO official explains beoutQ piracy ruling and logo policy

Spokesman says WTO logo should not be used ‘to endorse a position’ after Saudi mission superimposed logo on statement.

The World Trade Organization’s spokesman Keith Rockwell has told Al Jazeera the use of the WTO logo to indicate that the body endorses a certain position is unacceptable after Saudi authorities superimposed the WTO logo on a press release related to a recent WTO ruling on the pirate broadcaster, beoutQ.

In a landmark ruling on June 16, the WTO said Saudi Arabia had actively promoted and supported the beoutQ TV operation and had breached its obligations under international law to protect intellectual property rights.

Following the ruling, the Saudi mission to the WTO issued a press release containing erroneous statements related to the case. The release featured a superimposed WTO logo at the top of the document, indicating it was an official WTO transmission, and claimed the global trade body had supported measures undertaken by Riyadh on the grounds they were taken to protect Saudi security interests.

In comments broadcast on Al Jazeera on June 29, Rockwell said the WTO is a neutral body and its logo is not allowed to be used to “endorse a position”.

“If there is an instance in which someone is using our logo in a way that might indicate that there is a position being taken by the secretariat, then we have the responsibility to inform this member of our logo policy,” Rockwell said.

“The logo is not to be used in any sort of way for endorsing a position or for a product or anything of that nature.”

After Rockwell’s interview was broadcast, the Saudi government’s communication office’s Twitter account deleted the post showing the press release from the social media platform.

In the Al Jazeera interview, Rockwell also explained the findings of the recent ruling.

“The [WTO ruling] found that beoutQ had been using broadcast transmission without permission from beIN and broadcasting around Saudi Arabia,” Rockwell said.

“What [the panel] found also is that the Saudi system did not provide them due process under the law. They did not have legal counsel and they were unable to bring any judicial proceedings against beoutQ.”

The WTO judgement also said Saudi government officials and entities, including Saud Al-Qahtani, an aide to Saudi Crown Prince Mohammed bin Salman (MBS), publicly promoted beoutQ, including with official tweets.

Qatari sports network beIN Media Group, which holds exclusive rights to broadcast international tournaments in the Middle East and North Africa (MENA) and parts of Europe, has long claimed beoutQ is stealing its signal and broadcasting it as its own.

BeoutQ began broadcasting after Saudi Arabia, the United Arab Emirates (UAE), Bahrain, and Egypt severed all ties with Qatar and imposed a land, sea, and air blockade against it in June 2017. The four countries accused Qatar of “supporting terrorism” and meddling in neighbouring countries’ affairs. Qatar rejected the allegations.

Shortly after the blockade was enforced, all beIN Sports channels were banned in the blockading nations and their equipment was confiscated in Saudi Arabia.

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