Indonesia signs oil deal with US, minister says
FKS Group and Sorini Agro Asia Corporindo have also signed an agreement to purchase corn from Cargill, the minister said.
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Reuters
26 minutes ago
- Reuters
Russian firms use netting, gold and crypto in transborder payments, watchdog chief tells Putin
MOSCOW, July 8 (Reuters) - Russian companies are successfully using netting, gold, and cryptocurrency to facilitate international payments, the head of Russia's financial watchdog told President Vladimir Putin on Tuesday. Netting involves banks managing export and import payments through verified agents, with transactions centrally balanced to ensure counterparties receive their funds. International payments for Russian trade nearly stalled in the spring of 2024 as banks in Russia's key trading partners, including China, India, Turkey and the United Arab Emirates, came under the threat of secondary U.S. sanctions. The problem has eased substantially since then, with officials saying businesses in Russia and their partners have adapted to the sanctions and found ways to make cross-border payments. "As for cross-border financial flows... our focus has shifted somewhat, it is now the Middle East, Southeast Asia, and the broader Asian region," Russia's financial watchdog chief Yuri Chikhanchin told Putin. "Alternative forms of settlement are actively being used. These include gold and cryptocurrency. And now netting has appeared, clearing operations, which we are currently looking into," he added. Chikhanchin is the first high-ranking Russian official to publicly describe in detail the methods used by Russian firms for international payments. Such methods are rarely discussed in public. Reuters reported in April, citing banking sources who declined to be identified due to the sensitivity of the subject, that major Russian banks had set up a netting payments system for transactions with China. According to a transcript published on the Kremlin's website, Putin was curious to know how netting worked and whether the watchdog was tracking such payments. "Netting is when the exporter allows the importer to use the export proceeds. Instead of the exporter repatriating the funds, the importer brings in goods in advance using that money and settles the payment within the country," Chikhanchin told Putin. Chikhanchin said that gold was also being used in cross-border transactions, but called for more regulation in the gold trade, saying that the current lax regime results in arbitrage between domestic and international gold prices. Gold has recently replaced dollar and euro cash in many illegal transactions, according to the finance ministry, which has called for a $10,000 cap on the amount of gold an individual can take out of the country. Chikhanchin also highlighted a system known as "Transparent Blockchain" being developed by the watchdog with the central bank and Russia's second largest lender VTB, which will enable regulators and banks to monitor cryptocurrency transactions. The new system is due to become operational by the end of this year.
Telegraph
3 hours ago
- Telegraph
Trump has found a way to cut out China
Donald Trump is opening up a new frontier in his trade war. Despite striking a pact with China last month, the US president is threatening to reignite tensions with Beijing by entangling the entirety of Asia in a sprawling web of tariff deals. Even with fresh levies imposed on Japan and South Korea, Trump is racing to land a string of agreements across the continent, including with Indonesia, Thailand and Cambodia. If he pulls that off, he will build a cage around Xi Jinping's ability to use Asian markets to prop up Beijing's strained export-driven economy. 'What we are witnessing is no passing trade war,' says Neil Shearing, an economist at Capital Economics. 'Rather, it is the manifestation of a deeper, more durable superpower rivalry between the world's two largest economies.' Already, Trump's trade pacts with Britain and Vietnam have set a template for his plan to weaken Beijing's trading power. The UK deal revealed tools for the White House to 'veto' Chinese investment in Britain, while the Vietnam agreement aims to stop Beijing from relying on a loophole to avoid US tariffs. Trump has achieved the latter by putting a 40pc levy on 'transshipments' – that is goods imported into Vietnam, mostly from China, and then re-exported to America. This new tariff is double the 20pc levy on Vietnamese-made goods, thereby sending a clear message to Hanoi. While Vietnam is welcome to export to the US if it can cope with a 20pc levy, Trump will come down on the country like a tonne of bricks if it replaces 'Made in Vietnam' stickers with 'Made in China'. The president has also since threatened other South East Asian countries with more aggressive tariffs unless they make a deal in the next three weeks. This includes a potential 25pc levy on Malaysia, 32pc on Indonesia and 36pc on Thailand and Cambodia. Trump's demands will certainly include Vietnam-style measures to increase the squeeze on China. Export-driven economy Trading figures clearly show why Vietnam has emerged as an early candidate for this strategy. Since Trump first came to power in 2017, China's machinery and electrical goods shipments to Vietnam have risen from about 17pc of its total exports to almost half. And since he returned to the White House this year, Vietnam's imports of these goods from China have jumped by almost a quarter. In the year to May, Vietnam imported $174bn (£129bn) of goods from China and exported $132bn to the US. The ebb and flow of these two figures tend to track each other remarkably closely. Exports to Asia are integral to Xi's attempt to keep China's economy expanding by at least 5pc a year. Beijing juices up GDP by pumping subsidies and investments into manufacturing. This is because Chinese households simply don't spend enough to allow consumption to power the economy. 'Whenever Chinese domestic spending growth sags, export growth accelerates,' says David Lubin, a senior research fellow at the think tank Chatham House. 'And that's simply because Chinese companies can't sell stuff domestically, so they sell it abroad.' At home, this economic model has led to overcapacity and oversupply, forcing businesses into damaging price wars. If these companies can't export their surplus to Asia, supply gluts appear inevitable. Yet, the escape valve remains open. Even though China's exports to the US have dropped more than 40pc from a year ago, its total exports worldwide have climbed by almost 5pc. That has included a 15pc increase in shipments to 10 countries in the Association of Southeast Asian Nations. But the pressure is building on China, as revealed in Beijing's strident reaction to the US-Vietnam trade deal. He Yongqian, the commerce ministry spokesman, branded it 'a typical act of unilateral bullying' and vowed that hostile deals would prompt China to 'take resolute countermeasures to safeguard its legitimate rights and interests'. This demonstrates the unenviable position that Vietnam finds itself in, particularly as the US and China are its two largest trading partners. Picking sides Soon, other Asian economies might face an equally painful choice between the battling behemoths. Trump this week has shown he is unafraid to wield a big stick, wherever he thinks it might work. On Monday, he posted on his Truth Social platform that he would slap a new 10pc tariff on 'any country aligning themselves with the Anti-American policies of Brics' – the ever-expanding group of countries led by Brazil, Russia, India, China and South Africa. This came in response to a Brics summit in Brazil, which included not only the wider membership of Egypt, Ethiopia, Indonesia, Iran and the UAE, but also a new set of 'partners' from Latin America, Africa and central Asia – as well as Malaysia, Thailand and Vietnam. In a statement issued after the summit, the participating countries attacked 'the proliferation of trade-restrictive actions'. They didn't name the US, but said 'unilateral' measures could 'reduce global trade, disrupt global supply chains and introduce uncertainty into international economic and trade activities'. Speaking after Trump's post, Mao Ning, the Chinese foreign ministry spokesman, said Brics was 'not a bloc for confrontation, nor does it target any country'. 'Tariffs should not be used as a tool for coercion and pressuring,' she said. 'Arbitrary tariff hikes serve no one's interest.' Beijing's approach is more carrot than stick. China presents itself, accurately or otherwise, as the friend of poorer countries and a defender of multilateral bodies such as the United Nations and the World Trade Organisation. 'As a developing country and a member of the Global South, China breathes the same breath with other developing countries and pursues a shared future with them,' China's state news agency Xinhua recently quoted President Xi as saying. The incentives for developing countries to take China's side in the trade war include the $1 trillion-plus Belt and Road Initiative, which bankrolls global infrastructure projects, and more recently the Shanghai-headquartered New Development Bank, also known as 'the Brics Bank'. In Indonesia, which is scrambling to secure a trade deal with Trump, Beijing has also been in love-bomb mode. Last week, President Prabowo Subianto was on hand for the groundbreaking ceremony on a $6bn Chinese-Indonesian joint venture project to mine nickel and make batteries for electric vehicles. He called it 'colossal, an extraordinary breakthrough', which was no doubt music to Xi's ears. Beijing's response But the Chinese also seem ready to play hard-ball. With India potentially lining up to replace China as the main supplier of iPhones to America, reports surfaced in recent weeks that hundreds of mission-critical Chinese engineers and technicians at Taiwanese firm Foxconn's iPhone plants in India had been recalled to China. Bloomberg has reported that this is part of a broader move: Beijing has informally told companies and regulators to stop exporting key equipment, personnel and know-how to India and Southeast Asia – seemingly to stop multinationals such as Apple being able to shift operations out of China quickly. The Foxconn gambit was less blustery than a Trump tariff, but it shows that Xi is playing the game. And he has a huge head-start, says Chatham House's Lubin. China has been building almost unassailable positions in industries such as solar panels, electric vehicles, batteries and, most importantly, rare earths and magnets. This already shored up Beijing's hand in the trade talks with Trump, forcing him to back down from his most aggressive tariff threats. And it might help mitigate the impact of Trump's iron cage of trade deals. Lubin describes Xi's strategy as an 'asymmetric decoupling' from the US. 'The result of establishing China as a manufacturing powerhouse is to make the world more dependent on China,' he says. 'And that gives China leverage.' The question now is whether Xi's leverage – monopolies in key sectors, plus a shower of money for his Asian partners – is enough to combat Trump's ever-toughening tariff threats. That's the call Asian countries will now have to make.
Reuters
5 hours ago
- Reuters
Gold ETFs drew largest inflow in five years during first half of 2025, WGC says
LONDON, July 8 (Reuters) - Physically backed gold exchange-traded funds recorded their largest semi-annual inflow since the first half of 2020 from January to June, data from the World Gold Council showed on Tuesday. A trade war sparked by U.S. President Donald Trump's tariff policy prompted investors to seek shelter from political and economic volatility in gold ETFs, which account for a major part of investment demand for the precious metal. The active first half of the year follows a modest net inflow to gold ETFs in 2024 after three years of outflows caused by high interest rates. Gold ETFs recorded an inflow of $38 billion in the first half of 2025 with their collective holdings rising by 397.1 metric tons of gold, said the WGC, an industry body whose members are global gold miners. This raised the total holdings to 3,615.9 tons by the end of June, the largest since August 2022. Their record was 3,915 tons in October 2020. U.S.-listed funds led the inflow with 206.8 tons in the first half, while Asia-listed funds drew 104.3 tons, according to the WGC. "Despite slowing momentum in May and June, Asian investors bought a record amount of gold ETFs during the first half of the year, contributing an impressive 28% to net global flows with only 9% of the world's total assets under management," the WGC added. Spot gold prices are up 26% this year, having hit a record high of $3,500 per troy ounce in April.
