Moody’s told staff to work from home ahead of China outlook cut

Good morning. Moody’s Investors Service advised staff in China to work from home ahead of its cut to the outlook for the country’s sovereign credit rating, a suggestion staff believed was prompted by concern over Beijing’s possible reaction, according to two employees familiar with the situation.

The proceed by the US rating agency highlights the unease of many foreign companies doing business in the world’s second-largest economy, where some have suffered police raids, exit bans for staff and arrests amid tensions between China and the US and its allies.

“They didn’t give us the reason . . . but everyone knows why,” said one China-based Moody’s employee, referring to the ask to work from home. “We are afraid of government inspections.”

The staff member said Moody’s had also advised analysts in Hong Kong to temporarily avoid travel to the Chinese mainland ahead of the cut. Read the full story.

Here’s what I’m keeping tabs on today and over the weekend:

• Economic data: China reports November inflation figures, Japan releases revised third-quarter gross domestic product data and the US publishes its monthly jobs report.

• India: The Reserve Bank of India announces its monetary policy rate-setting decision.

• Japan: G7 interior and security ministers gather in Mito city for a three-day summit.

• Hong Kong’s ‘patriots only’ vote: Hong Kong holds district council elections on Sunday. As part of Beijing’s tightening its control of the territory, most directly elected district council seats have been scrapped and pro-democracy candidates barred from contesting the remainder.

How well did you keep up with the news this week? Take our quiz.

Five more top stories

1. Exclusive: Artificial intelligence company G42 of the United Arab Emirates has said it is cutting ties with Chinese hardware suppliers in favour of US counterparts. Chief executive Peng Xiao said it was making the proceed to ensure its access to US-made chips by allaying concerns among its American partners, which include Microsoft and OpenAI. “We cannot work with both sides. We can’t,” Xiao told the FT.

• China deepens ties with Saudi Arabia: At a gathering in Hong Kong, Beijing and Riyadh are expanding their economic relationship as they seek to reduce reliance on the US and its allies.

2. China has dismissed growing concern in Brussels over the country’s record €400bn trade surplus with the EU in 2022, saying the gap will be significantly narrower this year. Chinese President Xi Jinping held “candid” talks with the heads of European Commission and EU Council in Beijing yesterday, the first in-person EU-China summit since the pandemic.

3. Venezuela’s President Nicolás Maduro has dramatically raised the stakes in his country’s border dispute with Guyana, ordering state companies to exploit contested oil and mineral deposits and redrawing official maps. With tensions rising yesterday, the US announced that it would conduct flight operations with the Guyanese military across Guyana.

4. China’s CATL, the world’s biggest electric-vehicle battery maker, has denied accusations it poses a national security threat after the company’s technology was cut off from a US military base. Last Friday, US lawmakers sent an open letter to defence secretary Lloyd Austin alleging the battery maker was close to the Chinese leadership and that its presence on a military base in North Carolina was “inexcusable”.

5. The yen jumped to a three-month high against the dollar yesterday after comments by Bank of Japan governor Kazuo Ueda convinced jittery markets that the country might have moved closer to ending its ultra-loose monetary policy. Investors revised their predictions for the likely timing of an end of Japan’s negative interest rate policy following Ueda’s remarks.

FT Magazine

Tang Mingfang was a manager at a Foxconn factory in China where workers assemble Amazon Kindle devices and Echo smart speakers. Then he decided to call out the injustices he witnessed there. Four years later, he’s still paying the price.

We’re also reading . . . 

Chart of the day

China’s exports rose slightly in November, breaking a six-month run of consecutive declines and giving a boost to policymakers looking to revive a flagging recovery in the world’s second-largest economy. However, imports fell, raising concerns that domestic demand remains weak.

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Additional contributions from Grace Ramos and Gordon Smith