<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="552" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/107361656-17056708822024-01-16t100740z_243850206_rc2yi5adu5sj_rtrmadp_0_davos-meeting-820x552.jpeg" alt="" class="wp-image-500325" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/107361656-17056708822024-01-16t100740z_243850206_rc2yi5adu5sj_rtrmadp_0_davos-meeting-820x552.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/107361656-17056708822024-01-16t100740z_243850206_rc2yi5adu5sj_rtrmadp_0_davos-meeting-300x202.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/107361656-17056708822024-01-16t100740z_243850206_rc2yi5adu5sj_rtrmadp_0_davos-meeting-134x90.jpeg 134w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/107361656-17056708822024-01-16t100740z_243850206_rc2yi5adu5sj_rtrmadp_0_davos-meeting-768x517.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/107361656-17056708822024-01-16t100740z_243850206_rc2yi5adu5sj_rtrmadp_0_davos-meeting-1536x1033.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/107361656-17056708822024-01-16t100740z_243850206_rc2yi5adu5sj_rtrmadp_0_davos-meeting-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">China’s Premier Li Qiang speaks during the 54th annual meeting of the World Economic Forum in Davos, Switzerland, January 16, 2024.  Denis Balibouse | Reuters</figcaption></figure>



DALIAN, China — Chinese Premier Li Qiang on Tuesday defended the country’s technological development while criticizing efforts to restrict global cooperation.



His remarks, at the opening of the World Economic Forum’s “Summer Davos” meeting in Dalian, China, came amid rising tensions with the EU over imports of Chinese electric cars.



“The rapid rise of China’s new industries is rooted in our unique comparative advantages,” Li said via an official English translation of his Mandarin-language remarks.



He noted the country’s large market, industrial network, labor force, diverse application scenarios and receptive consumers.



“That is how China’s emerging industries get their competitiveness,” Li said.



Earlier this month, the EU announced plans for tariffs on imports of Chinese electric cars. The U.S. has said it will raise duties on the vehicles to 100%.



China and the EU have reportedly agreed to discuss the potential tariffs.



“In many ways the depth of international cooperation determines the height of human development, so it’s essential that we embrace each other with open arms,” Li said, noting the need to “reject” confrontation.



Andrzej Duda, president of Poland, and Pham Minh Chinh, prime minister of Vietnam, gave remarks after Li.



The Chinese premier held state-level meetings in China with the two leaders ahead of the “Summer Davos.” Li had said in his meeting with Duda that China hoped the EU would view the country’s development objectively and create a fair market, according to state media. Poland is part of the EU.



At the Forum’s annual conference in Davos, Switzerland, in January, Li had said in a speech that technological innovation shouldn’t be used as a way to restrict other countries.



Beijing has repeatedly asked Washington to remove restrictions on Chinese companies that prevent them from buying advanced technology from U.S. firms.



<h2 class="wp-block-heading" id="h-economic-outlook"><a></a>Economic outlook</h2>



Li on Tuesday said China’s economic growth would remain “steady” in the second quarter, and that he was “confident” the country was “capable” of achieving the official growth target of 5% for this year.



China earlier this month reported data for May that showed retail sales grew by 3.7% from a year ago, beating expectations, while figures on industrial activity grew less than forecast. Real estate’s drag on the economy persisted, the data showed, while exports have held up as a supporter of growth.



When asked by World Economic Forum founder Klaus Schwab on stage about China’s economic policy, Li drew analogies from traditional Chinese medicine and boxing for explaining why Beijing was pursuing a more targeted and compilation-of-parts approach.



“In the past years we’ve been taking a lot of measures and done a lot that are aimed at keeping the [economic] roots healthy,” Li said, noting Beijing’s efforts to support technological innovation and businesses.



He said that China was adding support for its aging population and looking to it as a new driver of growth. Li did not elaborate on efforts to boost consumption beyond a previously announced trade-in policy.

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<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/106886069-1621527756504-gettyimages-1232996080-porzycki-bitcoinc210519_npFCy-820x462.jpeg" alt="" class="wp-image-500011" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/106886069-1621527756504-gettyimages-1232996080-porzycki-bitcoinc210519_npFCy-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/106886069-1621527756504-gettyimages-1232996080-porzycki-bitcoinc210519_npFCy-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/106886069-1621527756504-gettyimages-1232996080-porzycki-bitcoinc210519_npFCy-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/106886069-1621527756504-gettyimages-1232996080-porzycki-bitcoinc210519_npFCy-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/106886069-1621527756504-gettyimages-1232996080-porzycki-bitcoinc210519_npFCy.jpeg 929w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">A photo illustration depicting the cryptocurrency bitcoin. Jakub Porzycki | NurPhoto via Getty Images</figcaption></figure>



Bitcoin continued its descent to $60,000 on Monday.



The price of the flagship cryptocurrency was last down by more than 4% at $61,211.00, according to Coin Metrics. Earlier, it fell to $60,666.30, its lowest level in more than a month. It’s down more than 8% in the past week.



Digital asset investment products notched a second consecutive week of outflows, according to CoinShares. Last week crypto investment products saw their lowest trading volumes globally since the U.S. bitcoin ETFs launched in January.



“We have now seen $1.2 billion of outflows from crypto ETFs over the last two weeks which all began after the FOMC meeting. Our belief is that continued pessimism over the number of rate cuts is weighing on sentiment for crypto,” James Butterfill, head of research at the crypto-focused asset manager, told CNBC. “The Fed have indicated they need to see further evidence of inflation falling before they become more dovish, so any macro say that highlights inflation continues to fall will likely support prices, and conversely, an inflationary date will weigh on prices.”



Eleanor Gaywood, head of strategy at Coincover, said there are often market jitters ahead of the personal consumption expenditure index, the Fed’s preferred inflation gauge, which is due this Friday. She said signs of a rate cut in September could ease investor nerves and steady bitcoin’s price.

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<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1600" height="900" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/107430853-1718793840829-gettyimages-1998366297-20240210_city_thames_sunset_004.jpeg" alt="" class="wp-image-498426" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/107430853-1718793840829-gettyimages-1998366297-20240210_city_thames_sunset_004.jpeg 1600w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/107430853-1718793840829-gettyimages-1998366297-20240210_city_thames_sunset_004-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/107430853-1718793840829-gettyimages-1998366297-20240210_city_thames_sunset_004-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/107430853-1718793840829-gettyimages-1998366297-20240210_city_thames_sunset_004-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/107430853-1718793840829-gettyimages-1998366297-20240210_city_thames_sunset_004-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/107430853-1718793840829-gettyimages-1998366297-20240210_city_thames_sunset_004-1536x864.jpeg 1536w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /><figcaption class="wp-element-caption">Photo: via CNBC</figcaption></figure>



LONDON — The U.K. had some cause for celebration on Wednesday morning, as headline inflation hit the Bank of England’s 2% target for the first time in nearly three years.



But the print only served to further convince&nbsp;traders that an interest rate cut is not imminent.



Money market pricing by 11 a.m. in London implied just a 5% probability of a reduction of the Bank Rate during Thursday’s BOE meeting — after recording stronger odds&nbsp;earlier in the week. Bets on an August cut were also trimmed to roughly 30%.



While the 2% inflation reading is a significant milestone — not least as British politicians set out their stalls ahead of a general election in just over two weeks — it has been anticipated for some time and was largely driven by the sharp year-on-year decline in energy prices. Fluctuations in the rate over the coming months are expected as the drag from energy fades.



Policymakers are equally focused on services inflation, key to understanding domestic price pressures in the country’s services-oriented economy, which came in at 5.7% — higher than the 5.5% forecast by economists in a Reuters poll.



Core inflation, excluding the volatile components energy, food, alcohol and tobacco, remained well above the central bank’s long-term average at 3.5%.



“We’ve seen some good stuff in terms of seasonality, food prices are coming down as well,” James Sproule, chief economist at Handelsbanken, told CNBC’s “Street Signs Europe” on Wednesday.



“But looking over the rest of the year, even the Bank of England itself is expecting inflation to start to creep up a bit again over the course of the autumn,” he said.



“I think the most disturbing thing lots of economists like myself are looking at right now is what’s happening in services inflation. That’s largely about people’s salaries and earnings. And those numbers have been proving a good deal stickier than we would like,” Sproule said, with the BOE targeting services inflation of around 3%.



Whether the BOE cuts rates in August or September remains a close call, he added.



Average U.K. wage growth excluding bonuses held uncomfortably high for the BOE at 6% in June, though there were signs of a loosening labor market.



At its last meeting in May, the central bank said that recent inflation readings had been “encouraging,” but that the chance of a rate cut would be assessed at each meeting and based on the latest data.



<h2 class="wp-block-heading" id="h-august-in-play"><a></a>August in play?</h2>



Members of the BOE’s Monetary Policy Committee, including Governor Andrew Bailey, will be more tight-lipped than usual on Thursday due to the upcoming national vote. The institution is politically independent and has stressed it would be willing to enact a rate cut if it believed one was required, irrespective of an election.



But both the ruling Conservative Party and its main opposition Labour have centered their platforms on the U.K.’s economic performance, meaning that central bank action — or lack thereof — will be closely watched.



Two members of the MPC voted to cut rates at the May meeting, versus seven who voted to hold.



James Smith, developed markets economist at ING, expects a repeat of&nbsp;that split on Thursday.



“That may be hard to square against the idea that the committee is very close to cutting rates. But the key thing to remember is that the five internal committee members, who hold the key to the first cut, tend to move as a pack,” Smith said in a note on&nbsp;Tuesday, meaning an August rate cut would remain firmly on the table.



A BOE decision to hold rates would come after the European Central Bank began its own path of reductions at its June meeting. Headline inflation in the euro zone came in higher than in the U.K. at 2.6% in May, but the core figure has cooled further.



Economists will be listening out for BOE messaging on liquidity conditions and their impact on the economy, as well as any hints that the Bank’s confidence has been shaken by the latest data, ING’s Smith said.



“But listening to Governor Andrew Bailey back in May, it sounded like he was keen to get on with the job of cutting interest rates. And a bit like the European Central Bank, the BOE seems more confident in its inflation predictions than it had been over the past couple of years,” he added.

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