China’s coal futures hit all-time high as floods worsen energy crisis

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Chinese coal futures rose to record levels as floods shut dozens of mines and displaced more than 100,000 people, throttling the country’s main source of the fuel for electricity and compounding a global energy crisis.

Coal futures traded on the Zhengzhou Commodity Exchange climbed as much as 11.6 per cent to an all-time high of Rmb1,408.20 ($218.74) a tonne early on Monday.

The CSI Coal index of big miners listed in Shanghai and Shenzhen rose as much as 2.1 per cent, partly reversing losses from last week, when official orders to boost coal production sent prices tumbling.

Flooding in the central province of Shanxi over the weekend piled further pressure on Beijing to contain a growing energy crisis that threatens to undermine the recovery of the world’s second-largest economy. China’s problems come as price volatility in global energy markets has sent countries scrambling to procure power supplies at ever-higher costs.

The majority of China’s domestic coal comes from Shanxi, neighbouring Shaanxi province and the Inner Mongolia region. Other local factors, including an anti-corruption campaign in the coal industry and mine closures to reduce air pollution around national events, have led to power rationing for industrial and, in some cases, residential users.

“We expect the power cuts and resulting production disruptions to be temporary,” said Michael Taylor, chief credit officer for Asia-Pacific at Moody’s. “But if they continue for an extended period, such as into winter, the effects will spread across the domestic — and potentially global — economy.”

Line chart of Rmb per tonne showing China coal futures shoot higher amid energy crunch

The floods in Shanxi displaced about 120,000 people, forced the closure of 60 coal mines and damaged more than 190,000 hectares of crops, according to figures released by the provincial government.

Other extreme weather events have also contributed to China’s energy crunch, with unexpectedly dry weather in the south this year hobbling hydropower production.

The power shortages, which have strained global supply chains, can also be ascribed to broader policy confusion as China tries to meet ambitious green energy goals.

High international and domestic coal prices and strict caps on what electricity producers can charge have made it financially unviable for many coal-fired power plants to operate.

But last week, the state council, China’s cabinet, said it would allow prices to rise as much as 20 per cent to incentivise power production, a jump from the previous 10 per cent limit. Beijing also ordered miners to dramatically step up production.

Analysts said the impact of the ructions in China’s energy markets could spread beyond global power prices. Taylor, at Moody’s, warned that prolonged power shortages in China could cut into factory output, which “could disrupt supply chains across Asia-Pacific given prevailing linkages, which will also increase prices along the chain”.

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Peru’s radical left government weighs bond issue after wooing investors

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Peru updates

Peru may have recently elected a hard-left president, but its finance minister says foreign investors have shown so much interest in buying bonds that the government may consider a fresh issue to take advantage of their appetite.

The Andean nation alarmed markets in June when it chose its most radical president ever. On the campaign trail, Pedro Castillo, a primary school teacher and union activist from a remote Andean village, promised sweeping nationalisation, the renegotiation of government contracts and a rewrite of the constitution.

But after taking office, Castillo toned down his message and picked Pedro Francke, an academic economist who briefly worked for the World Bank, as his finance minister. This week, the two men toured the US to win over sceptical investors.

“I think the meetings [in the US] have been useful to clear up their doubts about the political scenario which some were worried about, that’s their main concern,” Francke told the Financial Times. “I think the explanations we gave strongly dissipated the doubts the investors had.”

Castillo played his part. Wearing his trademark wide-brimmed straw hat, the president told a business audience in Washington: “We have not come here to scare off capital investment. Go invest in Peru confidently, without doubt and fear.” 

Francke said he and Castillo had a close working relationship and their message in the US about the importance of private investment had been so well received that while Peru did not need to tap international markets again this year, it could now do so.

“It’s possible that we see an opportunity which suits us, in which case we’ll take it,” Francke said. “. . . . There seems to be quite an appetite among buyers for Peruvian bonds, that was quite clear in . . . all the meetings we had”.

Graham Stock, emerging markets sovereign debt strategist at BlueBay Asset Management, said he would take such claims “with a pinch of salt” because investors wanting to increase exposure to Peru could always buy in the secondary market, where the country has not outperformed recently.

“It is generally expected that Peru will issue in the near future . . . and I think there will be decent demand,” he said. “But the uncertainty over the outlook may still mean that they have to offer a larger new issue premium to investors than normal for a high-grade sovereign.”

Nonetheless, Francke’s message of moderation is starting to win over some key investors in Peru, the world’s second-biggest copper producer. This week Freeport-McMoRan boss Richard Adkerson said he was “encouraged” by a recent meeting with Castillo and a BHP executive and complimented the government’s “strategic” approach, Bloomberg reported.

Peru-based investors who are witnessing day-to-day political turmoil in Lima with cabinet members under fire or resigning over links to Maoist guerrillas are less convinced. “It’s hard to believe that anyone will invest in Peru while this . . . .continues,” one business person said.

Peru’s economy was crippled by a long lockdown in 2020 which sent GDP plunging 11.1 per cent but failed to curb coronavirus. The IMF forecasts that growth this year will rebound 8.5 per cent and Francke’s projections to congress show the budget deficit coming down from more than 8 per cent last year to around 4.7 per cent this year.

“Fiscal sustainability should not be something of the left or the right,” Francke said. “It’s something reasonable, it’s good economic management., just like keeping low inflation.”

Where Castillo’s government wants to differentiate itself, he added, is in increasing public investment in infrastructure by raising Peru’s very low rates of tax collection.

“We want to do a tax reform, cut tax evasion, raise fiscal revenues and in that way be able to make a big effort in education, in health, in basic infrastructure for rural areas, in the Andes and the jungle, where there’s a lot of discrimination, lots of inequality and lots of poverty,” Francke explained. “That’s our agenda for change”.

A wealth tax is not on the agenda and changes to income tax will focus on improving collection rather than raising contribution rates, he added. In the mining sector, contracts will not be renegotiated but there will be an initiative to raise the tax take at times of high global prices.

A senior banker with experience of Peru said investors liked what they heard from Francke but their biggest concern about the finance minister was that “he’s not the one calling the shots”. “He’s the best of the lot in that cabinet . . . but can he stop bad ideas emerging from this government?”

Biden to press on with Afghanistan evacuation after bombings

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US president Joe Biden vowed to plough ahead with the evacuation of those trying to flee Afghanistan and punish the perpetrators of an attack outside Kabul’s airport that killed at least 13 US troops and dozens of Afghans.

At the end of what one aide called “maybe the worst day” of his eight-month presidency, Biden attempted to appear both a sombre mourner-in-chief and a resolute leader steeling the nation for what could be a difficult final withdrawal from the Afghan capital, which he aims to complete by Tuesday.

“We will not be deterred by terrorists, we will not let them stop our mission. We will continue the evacuation,” Biden said on Thursday. “We will not forgive. We will not forget. We will hunt you down and make you pay.”

At least 60 Afghan civilians were killed and more than 140 were wounded, according to the Associated Press, though many local Afghans believe the true toll is higher. Isis has claimed responsibility for the suicide bombings.

The attacks were the most recent crisis to beset Biden’s strategy, which has seen the Taliban seize Kabul, a hurried redeployment of thousands of US troops and mass flight from the country in the space of two weeks.

Thursday was the deadliest day for the American military in Afghanistan in a decade and marked the first time US troops were killed in action there since February 2020.

Wounded women arrive at a hospital for treatment after two bombings outside Kabul’s airport on Thursday
Wounded women arrive at a hospital for treatment after blasts outside Kabul’s airport on Thursday © Wakil Kohsar/AFP/Getty

Zabihullah Mujahid, a spokesperson for the Taliban, which views Isis as a rival, condemned the attacks, adding that they had occurred “in an area where US forces are responsible for security”.

The attack has severely disrupted western efforts to wind up the evacuation process, as the Taliban has tightened access to the airport.

A convoy of seven buses filled with would-be evacuees has been on the road near the airfield since Thursday evening, awaiting clearance to enter, according to locals familiar with the situation.

The UK government said on Friday it had entered the “final stages” of its evacuation programme, and had closed processing facilities inside the Baron Hotel, near the site of one of the bombings. No further people will be called forward to the airport for evacuation.

“It is with deep regret that not everyone has been able to be evacuated during this process,” said Ben Wallace, defence secretary.

About 100 UK troops have departed, leaving 900 military personnel and 60 diplomats and border officials at the airport, a defence official said.

Map showing site of explosions at Hamid Kazai International Airport

Biden said he had ordered military commanders to “develop operational plans to strike Isis-K assets, leadership and facilities”, referring to the Isis branch in central Asia. The US would “respond with force and precision” at a moment and location of Washington’s choosing, he added.

The president called the Americans who died “heroes who have been engaged in a dangerous selfless mission to save the lives of others”, before reiterating his case for ending the 20-year war.

“I have never been of the view that we should be sacrificing American lives to try to establish a democratic government in Afghanistan,” Biden said, arguing that it had never been a “united country” and was made up of tribes that had never “gotten along with one another”.

The mood in Kabul was sombre on Friday morning. Banks have reopened but an acute shortage of cash has meant Afghans could only withdraw small amounts of about $125.

The Taliban has sought to portray its takeover of the country as the start of a new peaceful era. Bilal Karimi, a Taliban official, said the violence would recede once the US troop withdrawal was complete. “When the American control of the airport ends, all this misery ends and will be rooted out,” he said.

Withdrawing from Afghanistan has been a pillar of Biden’s foreign policy and remains popular with the American public. But the chaotic exit has exposed the White House to criticism from US allies and Republicans.

“Terrorists will not stop fighting the United States just because our politicians grow tired of fighting them,” said Mitch McConnell, the top Senate Republican. “I remain concerned that terrorists worldwide will be emboldened by our retreat, by this attack, and by the establishment of a radical Islamic terror state in Afghanistan.”

Biden’s popularity ratings have fallen sharply in the past week, with more Americans expressing disapproval than support for the job he was doing for the first time in his presidency, according to several nationwide polls.

The president’s efforts to project resolve were punctured by a testy exchange with reporters after his statement. Biden was asked by Fox News if he accepted any “responsibility” for the attack on US troops, prompting him to criticise Donald Trump, the former president, for the original withdrawal agreement with the Taliban.

“I bear responsibility for fundamentally all that’s happened of late,” he said. “But here’s the deal . . . you know, as well as I do that, the former president made a deal with the Taliban.”

US officials have noted that the airlift that began in mid-August has led to the evacuation of 104,000 people, including about 5,000 Americans. However, about 1,000 Americans remain and thousands more Afghans have been trying to leave. Biden suggested that some of them would be left behind.

Video: Highlights of an FT subscriber webinar on Afghanistan

Maersk takes biggest step yet to decarbonise container shipping

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Container shipping updates

Maersk is taking the biggest step yet to decarbonise the shipping industry by ordering eight new vessels capable of carrying 16,000 containers each that can run both on traditional bunker fuel and “green” methanol.

It is the first vessel order from the Danish shipping group, the biggest container liner in the world, in six years but Maersk said the new ships would replace older ones rather than add new capacity as freight rates soar.

Maersk expects to take delivery of the eight ships from Hyundai Heavy Industries in early 2024 and has an option for four more the following year, making it the first container shipping company to order large carbon-neutral vessels capable of sailing from China to Europe and across the Pacific. It ordered a small carbon-neutral feeder vessel in February.

Each vessel costs about $175m, about 10-15 per cent more than a traditional ship as it will be able to run on both bunker fuel and carbon-neutral methanol.

Carbon-neutral methanol costs about double bunker fuel, but Maersk executives said they thought customers such as Amazon and H&M were willing to pay up for green transport.

“We are putting our money where our mouth is. We do feel sufficiently secure that the technology is there to order this series of vessels,” Henriette Hallberg Thygesen, head of fleet and strategic brands, told the Financial Times.

Maersk said in 2018 that it needed carbon-neutral ships by 2030 to reach its net-zero goal for 2050 given the 20- to 25-year lifecycle of a vessel.

But in the past few years, the technology advances at shipbuilders have increased so that the Danish group now expects only to order new vessels with dual-fuel or single green fuel technology, including its largest vessels that can carry more than 20,000 containers.

Thygesen said the biggest challenge was to secure enough green methanol for the vessels.

“We need a significant ramp-up in production. We do feel there has been a lot of chicken and egg. So we find by going out with this announcement that we can break this cycle,” she added.

Maersk has not made a new order for a large vessel since 2015 after it emerged from the financial crisis by building some of the biggest ships ever made, although it exercised an option for two additional ships in 2017.

Other container shipping lines have been rushing to place new orders as freight rates rocket amid a shortage of vessels to deal with the large demand following the Covid-19 lockdowns last year, even though building them takes several years.

“We would all love to have more capacity today, so we could alleviate some of the pain customers are feeling. But that is not solved by vessel ordering in the short term,” Thygesen said.

She added that it was Maersk’s “clear ambition” that the new ships run purely on green methanol in which case they would displace more than 1m tonnes of carbon dioxide per year, but that as “risk mitigation” each vessel would have the dual-fuel technology.

“The vessels will last 20-25 years. We don’t yet know what will be the winning technology,” she said.

Some critics argue that green methanol makes little sense because CO2 is first absorbed in production and then emitted again when burnt, instead of sequestering the greenhouse gas.

Maersk said last week that the green methanol for its feeder vessel would come from “biogenic” CO2, which means from natural sources, as well as renewable energy.

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High-profile rape allegations revive China’s #MeToo movement

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Sexual misconduct allegations updates

A surge of public anger over a pair of high-profile sexual assault cases in China has revitalised efforts by the country’s struggling #MeToo movement to tackle widespread discrimination and harassment.

But women’s rights activists warned that the ruling Chinese Communist party remained wary of mass feminist activism, which continues to suffer from censorship and nationalist attacks.

Kris Wu, a Canadian-Chinese pop star celebrity, was formally arrested by Beijing police on Monday on suspicion of rape after an influencer known as Du Meizhu, a 19-year-old university student, accused him of date rape and seducing underage girls. Wu is the most famous celebrity to face criminal charges since the global #MeToo movement took root in China in 2018. Wu denies the charges.

This month, an Alibaba employee accused her boss and business clients of sexually assaulting her in an account published online after she was pressured to drink at a work event. Police detained two men last weekend.

That the police reacted to two public accusations has rekindled hope in China’s #MeToo movement, even as activists hesitated to attribute law enforcement action in these cases to greater tolerance from the Communist party for their cause.

“We all know about the crackdown on civil movements in China, so we don’t want these kinds of cases to become an excuse for the government to strengthen their power and punish certain companies or industries,” said Xiong Jing, a China-based feminist activist. “That’s my worry, but there’s not much we can do about it.”

That fear is especially pronounced in the case of the entertainment and technology industries, both of which are facing pressure to “rectify” behaviour that the party considers damaging to its vision of a healthy and stable society.

Chinese-Canadian pop star Kris Wu
Chinese-Canadian pop star Kris Wu was arrested on suspicion of rape © Marechal Aurore/ABACA

Chinese state media has largely avoided women’s rights in its commentaries on the allegations against Wu and the Alibaba manager, who the company said had since been fired.

The People’s Daily, the party’s official newspaper, cast the Alibaba scandal as one of corporate governance, writing that, “the crux is, what kind of culture does a business advocate and establish?”.

In Wu’s case, the party newspaper took aim at obsessive fan culture and misbehaviour by celebrities: “If you use fame to indulge selfish desires, the final result will be self-destruction.”

Chinese feminists did not deny that changing male-dominated workplace culture and celebrity narcissism in the entertainment industry were important steps towards combating harassment and assault.

But they also hope for broader official acknowledgment of gender discrimination and sexual harassment, as well as stronger legal protections for women who speak out.

Activists said that police action against Wu and the former Alibaba manager could prove critical for raising awareness of sexual harassment and assault because it suggested there was strong evidence to back up the allegations.

“These are very special cases because many of the previous #MeToo cases [in China] were dependent on recollection of events that happened many years ago,” Xiong said.

In 2018, a rapid succession of #MeToo allegations over sexual harassment in universities, non-profit organisations and media captured public attention.

But the movement has faded from public prominence after facing widespread censorship, online attacks on feminist activists and stalled progress in high-profile cases.

A landmark sexual harassment lawsuit against Zhu Jun, one of China’s most prominent state television hosts, stalled in December after he refused to face his accuser in court. Zhu denies the charges.

In 2018, Zhou Xiaoxuan, who commonly goes by her nickname “Xianzi”, accused Zhu of groping and attempting to kiss her when she was a 21-year-old intern at the broadcaster. Zhu later sued Zhou for defamation.

Online vilification and censorship have shown no sign of letting up. This month, a Chinese women’s labour rights blog on WeChat called Pepper Tribe announced it was closing, a move that supporters said reflected shrinking tolerance for activism. 

In April, nationalist commentators launched attacks at a number of well-known Chinese feminists, accusing them of working with “foreign forces”. In May, a group of student WeChat blogs that raised awareness of LGBT+ issues were also shuttered.

“Celebrating this moment and predicting bright prospects are totally different things,” Lü Pin, founder of online Chinese publication Feminist Voices who lives in New York, wrote in a blog post about the recent cases.

“Many victims still lack a voice, lots of [social media] accounts continue to disappear, women’s rights are still a ‘reactionary force’,” she said. “Recently, I have asked myself countless times: how can our movement continue? . . . The fall from grace of Kris Wu cannot provide an answer.”

Taliban prepares to govern Afghanistan as exiled leaders return

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Afghanistan updates

The Taliban is rushing to work out how to govern Afghanistan after the militant Islamist group’s exiled leaders came back to a country that has changed profoundly since it was driven from power 20 years ago.

While the Taliban has been setting up shadow governors and administrators to rule its conquered territory, the US has been struggling to repair a bungled evacuation plan for thousands of people trying to flee Kabul.

Washington sent 1,000 more troops to Kabul in an attempt to reassert control over the city’s airport after it was overrun by desperate Afghans and foreign citizens.

Many local residents were reportedly still struggling to reach the airport on Wednesday. Taliban militants have set up checkpoints around the city and were turning back some Afghans.

General Frank McKenzie, commander of US troops in the region, said he had warned Taliban leaders “against interference in our evacuation”.

American citizens in the country were also told that the US government “cannot guarantee” their security as they attempted to make their way to the airport. The US wants to evacuate as many as 9,000 people a day, a big increase from the hundreds being flown out of the country currently.

Map showing the Taliban's march to seize control of Afghanistan

Zabihullah Mujahid, a Taliban spokesperson who appeared in the group’s first press conference since taking Kabul, said on Tuesday that preparations were under way to form a government.

The militants are trying to consolidate power after seizing control of Afghanistan in just over a week and driving President Ashraf Ghani and most senior government officials into exile.

Abdul Ghani Baradar, the Islamist group’s top political leader, arrived in Afghanistan after two decades on Tuesday, flying into the southern city of Kandahar from Qatar, where he has lived since the US secured his freedom from a Pakistani jail in 2018.

Baradar, who helped negotiate the 2020 deal with Donald Trump’s administration to withdraw US troops from Afghanistan, is expected to take a leading role in an Islamist government in the coming days.

“They have a lot of consolidation to do,” said Rudra Chaudhuri, a senior lecturer at King College London’s Department of War Studies.

“They don’t have a civil service, there is no cadre of administrators,” he said. “They will need parts of the old government to keep this system together and that will require a discussion on transition.”

The group has ordered its fighters not to interfere with the operations of international organisations such as the UN. But was is not clear how much control the political leadership had over fighters on the ground.

“These are people that have not met their own military commanders face-to-face for 10 or 15 years,” Chaudhuri said.

The Taliban insisted its new government would be more moderate than its brutal reign in the 1990s, when the regime erased women’s rights and employed severe punishments for alleged crimes, including public executions and stoning of alleged adulterers.

Mujahid said women’s rights would be respected “within the framework of Islam” and that the group would not seek retribution against former Afghan officials or soldiers.

One Kabul-based security analyst said the Taliban was trying to “build up soft power momentum, versus the hard power of their military thrust and conquering”.

Yet reports from around the country pointed to violence at the hands of victorious Taliban fighters, and many women had been ordered to stay at home.

On Tuesday, a group of more than 40 Democratic and Republican lawmakers called on President Joe Biden to maintain the airlift until all US citizens and Afghan allies had been evacuated.

Chaos at Kabul’s airport had repeatedly halted evacuation flights this week and left at least five dead, with some people falling from the sky after clinging to departing aircraft.

The US Air Force said “human remains” had been discovered in a plane’s wheel well after it landed at Al Udeid Air Base in Qatar.

Video: How the 20-year war changed Afghanistan | FT Film

Chinese police detain ex-Alibaba manager in sexual assault case

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Chinese business & finance updates

A former Alibaba manager has been detained in China on suspicion of sexual assault, in a case that has rallied the country’s #MeToo movement against tech corporate culture as the sector faces a wide-ranging regulatory crackdown.

The scandal has turned renewed scrutiny on China’s biggest ecommerce company as authorities have stepped up sweeping policy changes and regulatory interventions in recent weeks that have wiped billions of dollars from the market capitalisations of the country’s largest tech companies.

The alleged assaults took place last month at a work-related dinner and later at a hotel, according to a statement released on Saturday by police in Jinan, the capital of Shandong province in eastern China.

An Alibaba client has also been detained on suspicion of assaulting the woman, according to the police statement, which added that there was no evidence of rape.

A former Alibaba employee had accused her supervisor of sexually assaulting her after she was pressured into drinking. She also accused Alibaba of initially failing to respond to her request for an investigation. 

Alibaba, founded by billionaire Jack Ma, has been struggling to contain the widening fallout from the case. The company announced last week that the manager had been fired, while chief executive Daniel Zhang called the incident a “humiliation” and vowed improvements to Alibaba’s company culture.

But increasingly outspoken tech employees, including at internet giant Tencent and other tech groups, have demanded greater changes. Their complaints have shone a light on intense pressure on young employees to drink heavily at work events.

Alibaba did not immediately respond to requests for comment on Sunday.

The allegations at Alibaba have already sparked condemnation of corporate drinking culture by the Chinese Communist party’s anti-corruption watchdog, the Central Commission for Discipline Inspection.

Those warnings also came against a broader backdrop of intensifying official focus on behaviour deemed inappropriate and damaging to Chinese society. Authorities last week announced a five-year plan to institute a new legislative framework that would centralise the party’s control over strategic sectors including technology and healthcare and “meet people’s ever-growing demands for a good life.”

On Saturday, a commentary published by China National Radio, a state broadcaster, called for further regulatory scrutiny of online gaming, urging authorities to show “zero tolerance” for titles that “wantonly falsify history”, which it warned could “easily lead to misleading views”.

Under President Xi Jinping, who has touted China’s national rejuvenation as a critical theme of his leadership, the treatment of historical episodes also has become an increasingly sensitive issue.

State media commentary is closely watched by tech companies and their shareholders after previous warnings spooked investors and sent stock prices tumbling.

Tencent, which garners almost one-third of its revenues from gaming, was forced to announce restrictions on how long minors can play its online games after a state-run newspaper labelled gaming “spiritual opium”.

China’s culture ministry last week also signalled a crackdown on songs at karaoke venues that might spread “harmful information”.

Additional reporting by Emma Zhou in Beijing

Afghanistan replaces army chief as UN warns of humanitarian disaster

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Afghanistan updates

The Afghan government has replaced its army chief for the third time in just over a year, highlighting the disarray in the country as the Taliban sweeps aside the government’s security forces.

General Wali Mohammad Ahmadzai, who was only appointed army chief in June, was replaced on Wednesday by General Hibatullah Alizai as the Taliban pushed closer to encircling Kabul and forcing the surrender of President Ashraf Ghani’s government

As the US prepares to withdraw the last of its troops, the Islamist rebels have captured nine provincial capitals and seized control of Kunduz airport.

Fighting is raging around the northern town of Mazar-i-Sharif, once a bastion of anti-Taliban resistance, and the city of Ghazni, which is strategically located on the highway to Kabul from western Afghanistan.

However, many analysts were sceptical that leadership changes in the armed forces would do much to bolster Afghan troops, many of whom appear to have melted away in the face of the insurgents’ onslaught.

“It’s really late in the day for something like this to make a difference,” a senior Pakistani official told the Financial Times.

Afghans fleeing the heavy fighting as well as punishments meted out by the Taliban have sparked warnings from the UN of an imminent humanitarian crisis. The UN estimated in late July that 270,000 people had been displaced this year by the conflict.

Afghanistan Taliban status map

Michelle Bachelet, UN High Commissioner for Human Rights, warned that “the already atrocious situation for so many Afghans will become so much worse” if hostilities do not cease.

Critics have blamed the US decision to withdraw from Bagram air base and pull out its troops for the Taliban’s rapid gains.

But diplomats said the insurgent group had been gaining ground slowly on Afghan security forces even when the national army enjoyed the full logistic support of US troops and air cover.

“Are we surprised that a force that was just about keeping up with the Taliban starts to crumble? Obviously not,” a western diplomat said.

The US has been pressing Pakistan to use its influence on the Taliban to broker a peace deal. But Washington’s relationship with Islamabad has deteriorated.

Last week, Imran Khan’s security adviser complained that Joe Biden had not bothered to phone Pakistan’s prime minister.

On Wednesday, Khan said the US considered his country useful only “in the context of somehow settling this mess which has been left behind after 20 years of trying to find a military solution when there was not one”.

Pakistan has long played an ambiguous role in Afghanistan. Washington and the Afghan government believe Islamabad has covertly supported the Taliban, even while publicly claiming its support for a US-backed peace process.

Fawad Chaudhry, Pakistan’s information minister, told reporters: “The people of Afghanistan and the United States must ask their governments exactly what use came from over $1tn that the US spent on the Afghan war. Why is the Afghan army coming apart like leaves?”

Biden said this week he did not regret his decision to withdraw US troops and that Afghans should unite to fight the Taliban, who are moving to reinstate strict Islamic law in areas they have captured.

Additional reporting by Farhan Bokhari in Islamabad

Video: How the 20-year war changed Afghanistan | FT Film

Chinese music group pulls $1bn Hong Kong IPO after tech crackdown

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IPOs updates

China’s second-largest music streaming service has scrapped a $1bn initial public offering in Hong Kong as concerns about a growing regulatory crackdown on the country’s technology groups have hit investor confidence.

Cloud Village, the music streaming business of tech group NetEase, will not go ahead with an IPO that was scheduled to launch this week due to a disappointing response from investors, according to three people familiar with the matter. The company intended to wait for better market conditions to potentially restart its listing plans, one of the people said.

The IPO would have been among the largest share sales in Hong Kong this year and the first big one by a Chinese technology company since Beijing launched a crackdown on foreign listings last month.

Tough new rules from Chinese regulators, rolled out in the wake of the US IPO of ride-hailing company Didi Chuxing in June, have prompted a sharp sell-off in Chinese technology and internet groups. All planned US IPOs by mainland Chinese companies have been put on hold.

Wall Street bankers have started to redirect billions of dollars of planned listings from New York to Hong Kong following the effective freeze on US listings by Chinese tech groups.

However, the lack of investor appetite in the Cloud Village IPO could signal that deepening tensions between Washington and Beijing may not deliver a windfall to Hong Kong, which has long sought to attract China’s tech companies away from the Nasdaq and New York Stock Exchange.

Chinese tech companies planned to raise at least $9bn by listing in Hong Kong this year, according to data from Dealogic.

“Now we have one IPO withdrawal, and I don’t think that’s the end,” said Dickie Wong, head of research at brokerage Kingston Securities. Wong said he expected more Chinese tech groups to delay or cancel their listing plans in the months ahead.

“It’s not an easy job any more to list Chinese tech companies, whether that’s in Hong Kong [or elsewhere], due to the regulatory risk,” he added.

ByteDance, the Chinese parent company of TikTok, is preparing for a Hong Kong IPO early next year, the Financial Times reported. Its plans to list have been beset by delays and earlier this year it halted preparations for a possible float in New York or Hong Kong after data security warnings from Chinese regulators.

A fund manager in Hong Kong said the Cloud Village deal appeared to be “struggling” last week. Bankers had “asked what price we would take it for rather than us begging for allocation”, the fund manager said.

One banker close to the deal said some of the cornerstone investors in Cloud Village would not agree to have their shares locked up — which would have prevented them from selling for a number of months after the IPO.

The discussions with investors took place at the same time as shares in Hong Kong-listed short video app Kuaishou fell by a record 15 per cent last week after a post-IPO lock-up expired, allowing cornerstone backers to sell out.

The last-minute U-turn for Cloud Village comes despite antitrust regulators delivering a massive blow to rival Tencent last month that bankers had expected to bolster the former’s valuation. On June 24, China’s State Administration for Market Regulation ordered Tencent Music to give up exclusive rights to music labels within 30 days.

However, NetEase was caught in a wave of selling of Chinese tech stocks last week as Beijing signalled it would clamp down on online gaming. Shares in NetEase, China’s second-largest gaming group after Tencent, were down about 11 per cent since the news broke last Tuesday.

A person familiar with Cloud Village’s IPO plans said the company was “closely monitoring market conditions and looking for an optimal launch window”. NetEase did not immediately respond to a request for comment.

Coronavirus latest: UK retail recovery stalls as many shoppers stay away

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The US monthly trade deficit ballooned to a record in June as a strong domestic recovery boosted American imports. The number of Americans actively collecting jobless benefits fell to its lowest level of the pandemic late last month, as states wind down unemployment programmes launched in response to the economic crisis.

The Australian state of Victoria imposed a snap lockdown, the state’s sixth, in an effort to contain an outbreak of the Delta strain of coronavirus

Moderna’s Covid-19 vaccine remains 93 per cent effective six months after the second dose, the US drugmaker has said, as sales of the jab lifted the company to its second ever quarterly profit.

France is looking at administering booster shots at the beginning of the academic year for the “oldest and most fragile”, the president has said.

The UK is “past the peak” of the third wave of the pandemic, according to the Zoe Covid study, which found that the average number of daily cases being reported had fallen by more than a fifth in a week.

Alerts sent by the UK’s NHS Covid-19 app fell for the first time in months in the week to July 28. The drop came even before changes were made to the app to reduce the number of people told to self-isolate.

UK transport secretary Grant Shapps said the latest overhaul to ease England’s travel restrictions for many countries will be maintained throughout August.

The UK has postponed the Rugby League World Cup, which England had been due to host this year, after Australia and New Zealand decided it was to unsafe to play because of the pandemic.

WPP, the world’s largest advertising group by revenues, said it had returned to pre-pandemic levels of revenues a year sooner than expected

Hospitals in Florida are struggling with more Covid-19 patients than at any point in the pandemic, as the fast spreading Delta variant strains US states with low vaccination rates and few Covid restrictions.

Tokyo Olympics organisers on Thursday reported 31 new Games-related Covid-19 cases — another daily record.