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China has called an end to a six-month streak of dumping US Treasuries and returned in December to being a net buyer of US government debt again for the first time since last May. The move is part of a series of measures the country has introduced to manage capital flight. China’s foreign exchange reserves slipped below $3tn in January, its lowest for nearly six years.
Foreign property investment plunged 84 per cent last month as Beijing moved to choke off the flow of foreign acquisitions. Four government agencies, including the commerce ministry and the central bank, said in December they would apply tighter scrutiny to “irrational” outbound deals including property, hotels, entertainment assets and sports clubs.
Despite its Treasuries purchases in December, China’s total holdings of US government debt dropped by the greatest amount annually, falling by $188bn in 2016. Of the 30 largest disclosed holders of Treasuries, half reduced their positions last year. (FT, Bloomberg, Reuters)
In the news
Snapchat aims for $22bn valuation The US messaging app has set a price range of $14 to $16, which will put its valuation at $19.5bn to $22.2bn at its forthcoming IPO. The pricing is at the low end of the expected range, but it will still make the largest US-listed tech offering since Alibaba Group in 2014. Snap has earned the ire of investors by offering shares with no voting power. (FT, WSJ)
Second suspect arrested in Malaysia Police in Malaysia have arrested another woman as they hunt for suspects over the murder of the brother of North Korean supreme leader Kim Jong Un. Kim Jong Nam had pleaded with his brother to spare his life after escaping an earlier assassination attempt. (FT)
A big shift on Mideast stance President Donald Trump on Wednesday retreated from two decades of US policymaking in the Middle East when he said the two-state solution was not the only way to resolve the Israeli-Palestinian conflict. (FT)
“Very un-American!” intelligence Donald Trump responded to the crisis engulfing the White House over its Russia relationship by rekindling a feud with the intelligence community. He also asked former Navy Seal Robert Harward to be his new national security adviser — Mr Harward asked for time to consider it. Another Trump cabinet pick, Andrew Puzder, withdrew from consideration for US labour secretary. Here is a breakdown of the three main Trump-Russia scandals. (FT, WSJ, Vox)
Asia bucks trend of public distrust While public distrust of the government, business and the media appears to be growing in the west, some Asian countries are bucking the trend, according to US public relations consultancy Edelman. While respondents in Japan and South Korea had deep distrust of institutions, those in India, Indonesia, China and Singapore held broadly positive opinions. (NAR)
It’s a big day for
The euro The European Central Bank will release the minutes of its January meeting, throwing the spotlight back on to the euro. Will the common currency head towards dollar parity or stall? (FT)
Russia-US relations A meeting is planned between Russian foreign minister Sergei Lavrov and US secretary of state Rex Tillerson on the sidelines of a gathering of G20 foreign ministers in Germany. (Reuters)
Food for thought
Israel has high hopes for marijuana Israel has global ambitions to become a major medical marijuana supplier and has taken the first steps to amend laws that will allow the export of medical marijuana products. (FT)
Donald Trump’s tweets explained The FT has launched an annotated guide to interpreting the US president’s Twitter feed including a fact checking service. (FT)
Gary Cohn is embarrassing Goldman Sachs The former president of the bank is leading the Trump administration’s charge to gut financial regulations as head of the National Economic Council, sending his former employer’s stock to record highs. But the FT’s John Gapper says Mr Cohn’s tactless behaviour in government is doing his company no favours: “The idea is not for them to transfer from making money to making it easier for Goldman to make money. That is not how it should work, nor how it should look.” (FT)
Tata in turmoil The feud between Ratan Tata and his successor Cyrus Mistry has left an iconic company fighting for its reputation. Here’s how the battle inside India’s biggest business turned so sour. (FT)
The great facial-recognition push In the future you will never lose your boarding pass because it will be your face. And that future is coming sooner than you may think. (Quartz)
Vitamin D supplements could help ward off flu Researchers have found people who take vitamin D regularly suffer fewer respiratory tract infections. Deficiency of the so-called sunshine vitamin is already known to cause rickets, but too much vitamin D can also lead to medical problems. (BMJ, BBC)
Video of the day
Flynn’s exit: four questions The resignation of Donald Trump’s national security adviser raises questions over US-Russia relations. Could it have been avoided? Is the president now vulnerable? (FT)