Crypto News: Tightening grip

On the 25th anniversary of Chinese rule over Hong Kong, President Xi Jinping left no doubt that the Communist Party is running the show.

During a stormy day in the financial hub, Xi celebrated Beijing's moves to quash dissent since protests broke out in 2019 from residents seeking competitive elections. He hailed efforts to remove "traitors" from the political system while calling on authorities to improve people's lives, including tackling a perennial shortage of decent and affordable housing.

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Hong Kong has systematically jailed democracy advocates over the past three years. Chinese officials regularly push the narrative that Hong Kong's residents were simply upset about inequality and exploited by foreigners rather than genuinely pushing for democracy.

The comments also suggest that China is inserting itself even more in running Hong Kong's economy — a worrying prospect for those hoping the city will soon break with the mainland and restart international travel.

Xi signaled a potential crackdown on Hong Kong's tycoons, declaring the need for a "better balanced" relationship between the government and the market. While it can keep its capitalist system, he said, all residents should respect Beijing's socialism and Communist Party leaders.

In a similar vein, he closed with a call to help young people find jobs and instill "national pride." On the mainland, the party is used to manipulating public opinion, but in Hong Kong protests indicate it's deeply unpopular.

But with jail looming for Hong Kong residents who resist China, they either need to stay silent or head overseas — a choice already made by tens of thousands in the past few years.

Without a say in picking their leaders, one of the last remaining options for Hong Kongers is to vote with their feet. — Daniel Ten Kate

Students at Scientia Secondary School celebrate the anniversary. Photographer: Billy H.C. Kwok/Bloomberg

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Odesa deaths | Russian missiles hit an apartment building and a recreation center near Ukraine's Black Sea port of Odesa today, killing 18 people. The attack came a day after Russia said its forces left the nearby strategic Snake Island, a retreat hailed by Ukrainian President Volodymyr Zelenskiy. Kremlin troops are closing in on Lysychansk, Ukraine's last major foothold in the eastern Luhansk region, where the governor described the situation as "extremely difficult."

Emergency services fight fires at an apartment building in Odesa today. Source: Ukrainian Emergency Service

Crude return | Russia's oil output is edging back toward pre-war levels, helped by a revival among domestic refineries that were initially hit hard by sanctions. The disruption contributed to a 50% jump in crude prices this year. Russia's ability to sell oil may determine whether it can keep prosecuting the war despite efforts to isolate Moscow economically.

President Vladimir Putin signed a decree to transfer rights to the Sakhalin-2 natural gas project to a new Russian company, a move that could force foreign owners including Shell to abandon their investment in the facility before they have a chance to sell it.

Ukrainian officials are exploring the possibility of debt restructuring with the country's funding options at risk of running out, sources say. Ukraine has until at least Sept. 1, when it faces $1.4 billion in redemption and interest payments, according to Bloomberg calculations.

Home troubles | President Joe Biden left Europe upbeat over NATO's expansion in reaction to Russian's invasion of Ukraine, but he returned to the US facing a host of domestic problems — principally the Supreme Court's decision to end nationwide abortion rights. In a seeming acknowledgment of his challenges, Biden joked Wednesday, while meeting Spanish King Felipe VI, that "we may not go back" to the US.

Republican Senator Pat Toomey said yesterday the congressional committee investigation of the attack on the Capitol has damaged former President Donald Trump's chances of winning back the White House in 2024.
Biden's climate-change agenda suffered a major blow when the Supreme Court restricted the Environmental Protection Agency's ability to curb power-plant emissions.

Climate setback | German Chancellor Olaf Scholz pushed his Group of Seven counterparts to agree a summit deal that opens the door to investment in new gas projects amid threats to existing supplies. His climate envoy, Jennifer Morgan, wasn't impressed. "It's not what I would have hoped to have seen the G-7 do," she said in an interview.

"New republic" | Tunisian President Kais Saied unveiled constitutional changes that will be put to a referendum this month that critics are calling a power grab just as the country needs to secure help from the International Monetary Fund. The revisions will update a 2014 charter that emerged from painstaking negotiations between the North African nation's myriad factions in the aftermath of its Arab Spring revolt.

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Boris Johnson's deputy chief whip resigned his position as a government enforcer after an incident involving excessive drinking, adding to the UK prime minister's woes.
Representatives of indigenous organizations and Ecuador's embattled government signed an agreement yesterday to end more than two weeks of nationwide protests over fuel prices and the high cost of living.
North Korea blamed its Covid-19 outbreak on "alien things" likely sent by balloon across its border with South Korea, saying a teenage soldier and a five-year-old girl in April were the first people in the country infected by the coronavirus.
President Jair Bolsonaro's proposal for cash handouts to help Brazilians cope with inflation is becoming more expensive as lawmakers add benefits to the original bill about three months before elections.

Pop quiz, readers (no cheating!). Which leader at the G-7 summit asked whether he and his colleagues should keep their jackets on in the heat to show they were tough like Putin? Send your answers to balancepower@bloomberg.net.

And finally ... Tokyo is experiencing its worst heatwave for this time of year in more than a century, as temperatures soar above 36 degrees Celsius (96.8 Fahrenheit). Japan's capital this week saw its second major power crunch of the year, stretching the grid and forcing offices to turn off lights to conserve electricity. With the national meteorologist expecting a greater chance of blistering heat in July, the NHK broadcaster reported the government is urging nationwide energy conservation for the first time in seven years.