China’s State Council Information Office on Wednesday released a white paper titled “A More Just and Equitable Global Governance: China’s Principles, Proposals and Actions.”

The white paper was issued to introduce China’s principles, proposals, and actions regarding global governance, to foster a broader consensus within the international community, to enable more effective responses to global challenges, and to build a more just and equitable global governance system.

The document states that global governance is a common endeavor concerning the well-being of all humanity, and that building a just and equitable global governance system is a shared vision long pursued by people around the world. It also emphasizes that China has always been an active participant, contributor, and builder of global governance.

According to the white paper, in the new era, Chinese President Xi Jinping has put forward the vision of building a community with a shared future for mankind. Advancing a global governance system shaped on the basis of extensive consultation, joint contribution, and shared benefits, Xi has called for true multilateralism to promote an equal and orderly multipolar world and an economic globalization that is inclusive and beneficial for all.

In 2025, Xi proposed the Global Governance Initiative (GGI). This initiative was designed to offer China’s solutions to two urgent questions of the era: What kind of global governance system should be established, and how should global governance be reformed and improved?

The white paper notes that shortly after its introduction, the GGI received support from approximately 160 countries and international organizations, with more than 60 countries joining the Group of Friends of the Global Governance Initiative. It states that the international community is of the view that the GGI sends a clear message: to defend multilateralism, join forces, and strive for a just future.

According to the white paper, the GGI aligns with the growing trend toward greater democracy in international relations and strengthens international confidence in the practice of multilateralism. The initiative provides a clear and actionable roadmap for the improvement of global governance, injecting valuable stability and positive energy into a turbulent world.

The white paper emphasizes that China proposed the GGI to accelerate the construction of a more just and equitable global governance system. The document states that firmly defending the authority and status of the United Nations is of fundamental importance for the effective implementation of this initiative.

According to the white paper, success will also depend on major countries acting with a sense of responsibility and all nations working together in unity to bridge deficits in peace and development. It states that rather than attempting to reinvent the wheel, all countries must firmly defend the international system with the UN at its core, maintain the international order based on international law, and uphold the fundamental norms of international relations based on the purposes and principles of the UN Charter.

In addition to the preface and conclusion, the white paper consists of five chapters: “Today’s World Faces Severe and Complex Challenges,” “The Global Governance Initiative Responds to the Challenges of Our Era,” “China’s Contribution to the Development of Global Governance,” “Directing the Course of Change Toward a Bright Future,” and “Advancing Hand in Hand at a Critical Juncture in History.”

The Bank of Japan (BoJ) has raised its short-term policy interest rate to “about 1%”, lifting borrowing costs to their highest level in 31 years as the country seeks to adapt to a persistent inflationary environment.

The 0.25 percentage point increase, which was widely anticipated by financial markets, brings Japan to what analysts view as a critical milestone in the central bank’s efforts to normalize monetary policy after decades of ultra-low interest rates and deflation.

The BoJ’s policy rate was last at the 1% level in 1995. At that time, the central bank was in the process of cutting borrowing costs following the collapse of the Japanese asset price bubble in the late 1980s.

In its accompanying statement, the BoJ signaled its intention to continue the normalization process, stating it would adjust the policy rate and the degree of monetary easing in accordance with developments in economic activity, prices, and financial conditions.

The BoJ also announced that it will halt the reduction of its monthly Japanese government bond purchases starting in April 2027, stabilizing the pace of purchases at approximately 2 trillion yen per month. This move was also largely expected by the market.

Following the announcement, the yen traded flat against the US dollar at approximately 160.2.

While noting that high crude oil prices continue to weigh on economic activity, the BoJ stated that “the risk of a significant slowdown in the economy appears to have diminished compared to some time ago.”

The central bank also observed that the pass-through of high fuel prices has progressed relatively quickly, spreading from business-to-business transactions to consumer prices, which could keep core consumer inflation above its 2% target.

Having exited negative interest rates in 2024, the BoJ raised rates twice in 2025. The bank is widely expected to settle into a pattern of gradual tightening roughly every six months. Some economists believe another 0.25 percentage point hike could come as early as October.

This week’s rate decision was approved by a 7-to-1 vote on the bank’s Policy Board. The board convened with eight members due to Governor Kazuo Ueda’s hospitalization last week.

Toichiro Asada, the sole dissenting member, argued that the situation in the Middle East poses downside risks to production and employment for Japan, rather than upside risks to prices.

“The vote distribution is interesting and suggests the board has become a bit more balanced; previously, the board had a noticeably hawkish tilt,” said Stefan Angrick, senior economist and head of Japan at Moody’s Analytics.

Speaking to the Financial Times, Angrick added: “The reality is that the BoJ has no good options. They can raise rates to strengthen the yen and reduce inflationary pressure, but that hurts the economy.”

Ueda, who is receiving treatment for a liver condition, did not attend the meeting and did not cast a vote. He is expected to return for the July meeting. This week’s meeting was chaired by BoJ Deputy Governor Ryozo Himino.

The afternoon press conference will be led by the bank’s other deputy governor, Shinichi Uchida. Uchida’s remarks will be closely monitored for indications of how the BoJ continues to assess the adverse economic impacts of the war involving Iran.

China’s factory-gate prices recorded their fastest increase in nearly four years last month, official data released on Wednesday showed, highlighting the impact of rising energy prices following the conflict in Iran on the world’s second-largest economy.

According to figures published by China’s National Bureau of Statistics, the producer price index (PPI) rose 3.9% in May from a year earlier. The increase was the strongest since July 2022 and marked the third consecutive month of expansion.

The index returned to positive territory in March after years of decline. The turnaround came shortly after the outbreak of the US-Israel war in Iran, which sharply reduced oil and gas shipments through the Strait of Hormuz.

Lynn Song, ING’s chief economist for Greater China, noted that prices in the oil and gas extraction sectors rose by 36%.

“The Iran war has clearly accelerated the return to positive PPI inflation that had previously been expected to be more gradual,” Song said.

The United States and Israel launched new attacks on Iran this week, further complicating President Donald Trump’s efforts to extend the ceasefire reached in April and restore energy flows through the strait.

Abhijit Surya, senior APAC economist at Capital Economics, said the May data showed that “the ripple effects of the Middle East supply shock are still being felt,” although he added that consumer price inflation was “showing signs of easing.”

China’s consumer price inflation rose 1.2% year-on-year in May, unchanged from the previous month.

On a monthly basis, however, consumer prices fell 0.1%, underscoring persistent demand pressures in an economy where policymakers continue to grapple with a prolonged property-market slowdown and intense domestic competition.

Beijing remains heavily reliant on trade to support economic growth as it confronts weak consumer and household confidence alongside stagnation in the real estate sector.

Fresh data released on Tuesday showed exports rose 19.4% in May. Shipments to the United States surged compared with the same period last year, shortly after the launch of President Trump’s tariff campaign, which has so far failed to curb China’s export machine.

Song also pointed to a 9.2% increase in raw material prices, saying the figure appeared poised to move into double-digit territory.

“This is likely to feed through to other prices in the coming months because many manufacturers operating with thin margins will have little choice but to pass these costs on to consumers,” he said.

On a monthly basis, producer prices rose 0.5% in May.

China has set an official consumer inflation target of 2% for 2026, while its GDP growth target stands at between 4.5% and 5%.