International News 05 November 2025
-
China Ends Full VAT Exemption on Gold Retailers, Pressuring Domestic Demand
China’s Ministry of Finance has officially ended the full value-added tax (VAT) exemption for certain gold retailers starting Saturday (Nov 1, 2025), a move that could dampen domestic demand and weigh on global gold prices. Under the new policy, retailers will now receive only a 6% VAT exemption, down from 13%, on gold purchased from the Shanghai Gold Exchange or Shanghai Futures Exchange, effective until December 31, 2027. UBS precious metals analyst Joni Teves said the tax adjustment would likely increase retail gold prices as sellers pass higher costs to consumers. However, VAT exemptions for standard gold trading on exchanges remain intact. The policy shift comes amid a surge in global gold demand—particularly in China, where strong retail buying had recently helped push gold prices to a record high of US$ 4,381 per ounce on October 20. Since then, spot gold has fallen around 9%, hovering near US$ 4,000 per ounce. The announcement also triggered a sell-off in Chinese jewelry stocks: Laopu Gold and Chow Tai Fook plunged up to 9% and 12%, respectively, while major gold miners Zijin Mining and Zhongjin Gold fell nearly 2%. The move follows Beijing’s recent decision to end VAT exemptions for platinum trading, signaling a broader effort to normalize taxation in the precious metals sector.
Fed Governor Stephen Miran Warns Against Overreliance on Markets, Urges Deeper Rate Cuts
Federal Reserve Governor Stephen Miran warned that U.S. monetary policy risks becoming too dependent on stock and corporate credit markets, arguing that the current stance remains overly restrictive and could heighten the risk of an economic slowdown. Speaking to Bloomberg Surveillance on Monday (Nov 3, 2025), Miran said financial markets are influenced by many factors beyond monetary policy and defended his dissenting vote in last week’s FOMC meeting, where he called for a 50-basis-point rate cut instead of the approved 25. He argued that despite rising equity prices and narrow corporate credit spreads, interest-rate-sensitive sectors such as housing remain weak, suggesting overall financial conditions are still tight. Miran’s remarks underscore the deep divisions within the Fed following the 10–2 vote to lower rates to 3.75%–4.00%, marking one of the sharpest policy disagreements since 1990. While Chair Jerome Powell emphasized that further easing in December was “far from certain,” Kansas City Fed’s Jeffrey Schmid opposed last week’s cut, insisting inflation remains above the 2% target. In contrast, Miran, a former economic adviser to President Donald Trump, argued that demographic shifts and structural changes have lowered the U.S. natural rate of interest, effectively tightening policy even after recent cuts. He called for continued aggressive easing in 50-basis-point increments until reaching a neutral rate, as debate over the Fed’s next move intensifies ahead of upcoming speeches from other governors, including Lisa Cook, whose legal battle with the Trump administration remains unresolved.
Global Manufacturing Slows in October 2025 Amid Weak Demand and U.S. Tariff Pressure
Major economies around the world saw a slowdown in manufacturing activity in October 2025, as weakening global demand and renewed U.S. import tariffs under President Donald Trump weighed on factory orders, especially among key exporting nations. Business surveys released Monday (Nov 3) revealed that the eurozone’s manufacturing sector stagnated, dragged down by flat new orders and falling employment. Germany, Europe’s industrial powerhouse, reported a sharp drop in machinery orders, while France and Italy remained weak. Only Spain showed a slight rebound. According to Oxford Economics’ Paolo Grignani, “Growth is being propped up mainly by domestic demand, while export orders — particularly from France and the U.S. — continue to flash warning signs.” The U.K., in contrast, posted its strongest factory performance in a year, largely due to a temporary boost from Jaguar Land Rover resuming production after a cyberattack. Across Asia, manufacturing activity also weakened, with China and South Korea both reporting declines in export orders. China’s official PMI contracted for the seventh straight month, signaling fading momentum despite a one-year tariff truce reached between Presidents Xi Jinping and Donald Trump. Capital Economics’ Zichun Huang noted that China’s manufacturing and construction sectors both slowed, suggesting limited benefits from the new trade deal. While Beijing aims to maintain 5% GDP growth without major stimulus, exports to the U.S. fell 27% year-on-year even as shipments to new markets rose. South Korea’s trade agreement with the U.S. eased tariffs on select goods but was seen as a modest compromise. Meanwhile, India bucked the regional trend, with strong domestic demand driving manufacturing expansion, while Vietnam and Indonesia also posted growth improvements, highlighting their resilience amid a sluggish global industrial environment.