Odd Lots: How a Trade War With China Could Become a Hot War
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HSBC posts lower-than-expected profits for first half of 2025
HSBC has warned that it expects lending to 'remain muted' for the rest of 2025 after posting lower-than-expected profits for the first half of the year. Profit before tax fell by 5.7 billion US dollars (£4.3 billion) from the first half of 2024 to 15.8 billion dollars (£11.8 billion). HSBC attributed 3.6 billion dollars (£2.7 billion) of the decline to the sale of its Argentina and Canada operations while the 'dilution and impairment losses' of Bank of Communications accounted for 2.1 billion dollars (£1.6 billion). Profit after tax fell by 30% year on year to 12.4 billion dollars (£9.3 billion). Constant currency profit before tax excluding notable items increased by 900 million dollars (£674 million) to 18.9 billion dollars (£14.2 billion), with a strong performance in international wealth and premier banking and HSBC's Hong Kong business segments cited. Revenue fell by 3.2 billion dollars (£2.4 billion) to 34.1 billion dollars (£25.5 billion), reflecting the disposals of the Canada and Argentina operations. HSBC said results from the first six months of 2025 'included allowances to reflect heightened uncertainty and a deterioration in the forward economic outlook due to geopolitical tensions and higher trade tariffs', and 'included higher spend and investment in technology'. A company statement said: 'The group is well-positioned to manage the changes and uncertainties prevalent within the global environment in which we operate, including in relation to tariffs. 'We have modelled a disruptive tariff scenario that includes significant reductions in policy rates, together with broader macroeconomic deterioration. 'The group remains on track to deliver on our cost target. Our growth in target basis operating expenses in 2025 compared with 2024 remains approximately 3%. 'Our cost target includes the impact of simplification-related saves associated with our announced reorganisation. 'We continue to expect demand for lending to remain muted during 2025.' HSBC Group chief executive officer Georges Elhedery said: 'We're making positive progress in becoming a simple, more agile, focused organisation built on our core strengths. 'In the first half, we continued to execute our strategy with discipline and each of our four businesses sustained momentum in their earnings with each growing revenue. 'This gives us confidence in our ability to deliver our targets. We continue to navigate this period of economic uncertainty and market volatility from a position of strength, putting the changing needs of our customers at the heart of everything we do.'
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Apple's supply chain makeover just gave India a massive win over China
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Mystery of country's most expensive airport that has no planes or passengers
With no passengers and no planes, Pakistan's newest and most expensive airport is a bit of a mystery. Entirely financed by China to the tune of $240 million, it's anyone's guess when New Gwadar International Airport will open for business. Located in the coastal city of Gwadar and completed in October 2024, the airport is a stark contrast to the impoverished, restive southwestern Balochistan province around it. For the past decade, China has poured money into Balochistan and Gwadar as part of a multibillion dollar project that connects its western Xinjiang province with the Arabian Sea, called the China-Pakistan Economic Corridor or CPEC. Authorities have hailed it as transformational but there's scant evidence of change in Gwadar. The city isn't connected to the national grid — electricity comes from neighboring Iran or solar panels — and there isn't enough clean water. An airport with a 400,000 passenger capacity isn't a priority for the city's 90,000 people. 'This airport is not for Pakistan or Gwadar,' said Azeem Khalid, an international relations expert who specializes in Pakistan-China ties. 'It is for China, so they can have secure access for their citizens to Gwadar and Balochistan.' CPEC has catalyzed a decadeslong insurgency in resource-rich and strategically located Balochistan. Separatists, aggrieved by what they say is state exploitation at the expense of locals, are fighting for independence — targeting both Pakistani troops and Chinese workers in the province and elsewhere. Members of Pakistan's ethnic Baloch minority say they face discrimination by the government and are denied opportunities available elsewhere in the country, charges the government denies. Pakistan, keen to protect China's investments, has stepped up its military footprint in Gwadar to combat dissent. The city is a jumble of checkpoints, barbed wire, troops, barricades, and watchtowers. Roads close at any given time, several days a week, to permit the safe passage of Chinese workers and Pakistani VIPs. Intelligence officers monitor journalists visiting Gwadar. The city's fish market is deemed too sensitive for coverage. Many local residents are frazzled. 'Nobody used to ask where we are going, what we are doing, and what is your name,' said 76-year-old Gwadar native Khuda Bakhsh Hashim. 'We used to enjoy all-night picnics in the mountains or rural areas." 'We are asked to prove our identity, who we are, where we have come from,' he added. "We are residents. Those who ask should identify themselves as to who they are.' Hashim recalled memories, warm like the winter sunshine, of when Gwadar was part of Oman, not Pakistan, and was a stop for passenger ships heading to Mumbai. People didn't go to bed hungry and men found work easily, he said. There was always something to eat and no shortage of drinking water. But Gwadar's water has dried up because of drought and unchecked exploitation. So has the work. The government says CPEC has created some 2,000 local jobs but it's not clear whom they mean by 'local' — Baloch residents or Pakistanis from elsewhere in the country. Authorities did not elaborate. Gwadar is humble but charming, the food excellent and the locals chatty and welcoming with strangers. It gets busy during public holidays, especially the beaches. Still, there is a perception that it's dangerous or difficult to visit — only one commercial route operates out of Gwadar's domestic airport, three times a week to Karachi, Pakistan's largest city, located at the other end of Pakistan's Arabian Sea coastline. There are no direct flights to Balochistan's provincial capital of Quetta, hundreds of miles inland, or the national capital of Islamabad, even further north. A scenic coastal highway has few facilities. Since the Baloch insurgency first erupted five decades ago, thousands have gone missing in the province — anyone who speaks up against exploitation or oppression can be detained, suspected of connections with armed groups, the locals say. People are on edge; activists claim there are forced disappearances and torture, which the government denies. Hashim wants CPEC to succeed so that locals, especially young people, find jobs, hope and purpose. But that hasn't happened. 'When someone has something to eat, then why would he choose to go on the wrong path," he said. 'It is not a good thing to upset people.' Militant violence declined in Balochistan after a 2014 government counterinsurgency and plateaued toward the end of that decade, according to Pakistan Institute for Conflict and Security Studies. Attacks picked up after 2021 and have climbed steadily since. Militant groups, especially the outlawed Baloch Liberation Army, were emboldened by the Pakistani Taliban ending a ceasefire with the government in November 2022. Security concerns delayed the inauguration of the international airport. There were fears the area's mountains — and their proximity to the airport — could be the ideal launchpad for an attack. Instead, Pakistani Prime Minister Shehbaz Sharif and his Chinese counterpart Li Qiang hosted a virtual ceremony. The inaugural flight was off limits to the media and public. Abdul Ghafoor Hoth, district president of the Balochistan Awami Party, said not a single resident of Gwadar was hired to work at the airport, "not even as a watchman.' 'Forget the other jobs, how many Baloch people are at this port that was built for CPEC,' he asked. In December, Hoth organized daily protests over living conditions in Gwadar. The protests stopped 47 days later, once authorities pledged to meet the locals' demands, including better access to electricity and water. No progress has been made on implementing those demands since then. Without local labor, goods or services, there can be no trickle-down benefit from CPEC, said international relations expert Khalid. As Chinese money came to Gwadar, so did a heavy-handed security apparatus that created barriers and deepened mistrust. 'The Pakistani government is not willing to give anything to the Baloch people, and the Baloch are not willing to take anything from the government,' said Khalid.
