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Good morning. We have an exclusive story today about McKinsey’s business in China. It raises fresh questions over the consulting firm’s denial that it ever worked for Beijing.
McKinsey claimed in marketing materials that it had advised the Chinese central government on boosting domestic consumption and reforming healthcare policy.
“McKinsey’s impact in China goes well beyond our work in the corporate sector,” it said, according to an archived copy of a website, mckinseychina.com, which was shut down in 2019 but now redirects to McKinsey’s main international site. “In the past decade alone, we’ve served over 20 different central, provincial and municipal government agencies on a wide range of economic planning, urban redevelopment and social sector issues.”
Some US lawmakers are saying McKinsey should be barred from contracting work for the federal government because of alleged inconsistencies in its statements about its business in China.
Bob Sternfels, McKinsey’s global managing partner, told a US Congressional hearing earlier this month that the firm had never worked for the Chinese central government.
Asked about the marketing claims by the FT this week, the firm said they were “inaccurate” and that it has never worked for Beijing.
Here’s what else we know about McKinsey’s business in China.
And here’s what else I’m keeping tabs on today:
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Economic data: Australia releases January CPI inflation rate data, while the US publishes revised fourth-quarter GDP figures.
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Monetary policy: New Zealand’s central bank announces its cash rate decision.
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G20: Finance ministers meet in São Paulo, Brazil to prepare for the annual presidential summit in November.
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Hong Kong: Financial secretary Paul Chan Mo-po presents the 2024-25 Budget to the Legislative Council.
Five more top stories
1. Shein is considering London as a back-up option for a blockbuster flotation if US regulators block the online fast-fashion group’s preferred choice of a New York IPO over its ties to China. The Singapore-headquartered group had also considered Hong Kong, according to one investor in the company, but had decided against listing in the city, citing its stock market’s recent poor performance. Here’s more on Shein’s IPO pursuit.
2. China’s southern technology hub Shenzhen has rolled out plans for a big expansion of car exports, a plan that is likely to fuel western fears about rising Chinese competition for domestic manufacturers. The strategy includes 24 measures aimed at turning Shenzhen into “a new generation world-class auto city” and comes as global concerns grow that China’s car industry has vastly overbuilt domestic capacity and that many of the cars rolling off domestic production lines will flood into western markets.
3. Germany’s deputy chancellor said there was “no chance” of sending ground troops to Ukraine and, in a rebuff to France, told Paris it should instead supply Kyiv with more weapons. Robert Habeck rejected French President Emmanuel Macron’s suggestion that a troop deployment to Ukraine should not be ruled out, as Nato leaders also rounded on the idea.
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Related: Europe must curb welfare spending and tax cuts to deter a “more aggressive Russia” with prolonged defence and security funding increases, Denmark’s prime minister told the FT.
4. Apple has cancelled its efforts to build an electric car as it pivots to focus research funding on generative artificial intelligence, according to a person familiar with the matter. The cancellation of the secretive decade-long effort comes as the EV industry has slowed in recent months and as Apple prepares to announce more details of its work in the fast-growing generative AI sector.
5. Ecommerce giant Amazon’s lobbyists are to be banned from the European parliament as part of an escalating dispute over transparency and working conditions. The European parliament said the company had repeatedly refused to engage with it about its approach to workers’ rights and labour conditions. It is only the second time that a company’s lobbyists have been banned from entering the European parliament.
News in-depth
India’s arms industry passed a milestone in January when it unveiled the country’s first intelligence drone. The Drishti-10 Starliner was made by the defence arm of the Adani conglomerate in a joint venture with Israeli military producer Elbit. While India remains the world’s biggest arms importer, the new drone highlights how Adani and other private conglomerates have heeded calls by the government of Narendra Modi for more “indigenisation” of arms production, often in partnership with foreign companies that New Delhi has been pressing to invest.
We’re also reading . . .
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Media: The death of a New York City owl last week revealed two different approaches to news in the 21st century, writes Stephen Bush.
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Chinese economy: Beijing needs to embrace private companies as part of the solution to what ails the Chinese economy — not part of the problem, writes Diana Choyleva of Enodo Economics.
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Books: What’s the secret of a bestseller? Rather than algorithms, there is nothing more powerful than a reader who truly loves a book, writes Nilanjana Roy.
Chart of the day
Morgan Stanley, UBS and Bank of America have some of the biggest gender pay gaps in Australia, according to a government survey, more than twice as high as the average of 19 per cent.
Take a break from the news
. . . and check out cocktail maestro Ryan ‘Mr Lyan’ Chetiyawardana’s 13 favourite bars around the world, including a Hong Kong tea house and a Melbourne cottage known for Guinness and milk punch.
Additional contributions from Irwin Cruz and Gordon Smith
