Posts tagged ‘Economic growth’

26/08/2015

The World Struggles to Adjust to China’s ‘New Normal’ – China Real Time Report – WSJ

China’s leaders have warned their people they need to accommodate a “new normal” of economic growth far slower than the rate that propelled the economy into the world’s second-largest in the past two decades. As WSJ’s James T. Areddy and Lingling Wei report:

Now, the rest of the world also needs to get used to the new normal: a China in the midst of a tectonic shift in its giant economy that is rattling markets world-wide.

The slowdown deepening this year is part of a bumpy transition away from an era when smokestack industries, huge exports and massive infrastructure spending—underpinned by trillions in state-backed debt—powered China’s seemingly unstoppable rise. Today, debt has swelled to more than twice the size of the economy, and some of those industries, such as construction and steel, are reeling.

Instead of them, China is pushing services, consumer spending and private entrepreneurship as new drivers of growth that rely less on debt and more on the stock market for funding.

via The World Struggles to Adjust to China’s ‘New Normal’ – China Real Time Report – WSJ.

12/08/2015

ChemChina, Camfin to launch tender offer for rest of Pirelli | Reuters

An investment vehicle controlled by China National Chemical Corp (ChemChina) said it will launch a mandatory tender offer for remaining shares in Pirelli (PECI.MI) after on Tuesday taking control of the Italian tyremaker through a deal struck in March.

A Pirelli's tyre is pictured at the headquater in Milan, March 26, 2015. REUTERS/Giorgio Perottino

ChemChina in March agreed to become the majority owner of the world’s fifth-largest tyre manufacturer as part of a 7.3 billion euro ($8 billion) deal.

On Tuesday, Marco Polo Industrial Holding, a company created to facilitate the Chinese takeover, concluded its acquisition of a stake in Pirelli from Italian holding company Camfin, triggering the mandatory takeover bid.

A Camfin spokeswoman said the tender offer was expected to be launched in September.

State-owned ChemChina holds a 65 percent stake in Marco Polo, with the remainder in the hands of Camfin investors, who include Pirelli boss Marco Tronchetti Provera, Italian banks UniCredit (CRDI.MI) and Intesa Sanpaolo (ISP.MI), and Russia’s Rosneft (ROSN.MM).

The tender offer will be launched at 15 euros per share with the goal to acquire all of Pirelli’s share capital and de-list the tyremaker from Milan’s stock exchange. Marco Polo also decided to launch a voluntary tender offer on Pirelli’s savings shares.

In a separate statement, Tronchetti Provera, who will remain Pirelli’s chief executive, said Camfin would invest more than 1 billion euros in the tender offer and will keep a central role in the tyremaker’s future shareholder structure, along with ChemChina.

He reiterated the Chinese investment would boost the company’s international growth, particularly in the industrial tyre sector.

“In this segment, the integration with ChemChina will allow immediate growth in volumes and market share that Pirelli alone would have taken years to achieve,” he said.

via ChemChina, Camfin to launch tender offer for rest of Pirelli | Reuters.

20/05/2015

China Unveils Blueprint to Upgrade Manufacturing Sector – China Real Time Report – WSJ

China unveiled an ambitious plan to enhance the competitiveness of its manufacturing sector by encouraging innovation and raising efficiency in an effort to boost economic growth. As the WSJ reports:

The blueprint, titled “Made in China 2025,” comes as China’s factories are struggling with sluggish demand, increasing competition from other developing economies and a slowing domestic economy.

The manufacturing sector is facing new challenges: bigger constraints from the environment and resources, rising labor costs and a notable slowdown in investment and exports, the State Council, or cabinet, said on the main government website Tuesday.

“The key to creating a new driver of economic growth…lies in the manufacturing sector,” it said.

The government vowed to boost 10 high-technology industrial sectors including robotics, aerospace, new-energy vehicles and advanced transport.

via China Unveils Blueprint to Upgrade Manufacturing Sector – China Real Time Report – WSJ.

18/05/2015

India beats own target to contain fiscal and revenue deficits | Reuters

The government said on Sunday it managed to better its target for containing the fiscal and revenue deficits in the last financial year.

A money lender counts rupee currency notes at his shop in Ahmedabad, May 6, 2015. REUTERS/Amit Dave/Files

The fiscal target was 4 percent of gross domestic product for the year ending March 31, compared with a goal of 4.1 percent, the government said in a statement. The revenue target was 2.8 percent, compared with the aim of 2.9 percent.

Over the past year, Prime Minister Narendra Modi has taken a slew of measures to stabilize the economy and attract investment. But while inflation has cooled, in large measure due to the dramatic fall in global oil prices, recovery in India’s domestic demand-driven economy remains sluggish.

via India beats own target to contain fiscal and revenue deficits | Reuters.

07/05/2015

China pulls out stops to avoid lay-offs as economy cools | Reuters

As growth in China’s sagging economy looks on the verge of spilling below 7 percent, officials worried about a spike in unemployment are pulling out all the stops to avoid mass lay-offs.

State firms are encouraged to keep idle workers employed, subsidies and tax breaks are given to companies that do not fire their workers, and some businesses are even enticed into hiring despite the slackening economic growth.

The measures appear to be working for now, said a senior economist at the Development Research Center, a think-tank affiliated to China’s cabinet.

“There is no big problem in employment. They (top leaders) are more worried about financial risks and debt risks,” said the economist, who declined to be named.

But things could change quickly.

In one of the first signs of distress in China’s labor market, the Liaoning government said in April it had slashed its 2015 job creation target to 400,000 from 700,000, to reflect a “severe” employment trend.

That came in the wake of data that showed Liaoning, one of three rustbelt provinces in northeastern China, grew just 1.9 percent in the first three months of the year, the slowest of China’s 31 provinces and regions.

Disappearing job opportunities or a spike in unemployment are always a concern for China’s stability-obsessed government, especially with 7.5 million university graduates estimated to join the labor market this year.

via China pulls out stops to avoid lay-offs as economy cools | Reuters.

08/04/2015

Cabinet amends real estate bill to stamp out illegal practices | Reuters

The cabinet has amended a bill to regulate the real estate sector, protect home buyers and curb undeclared “black money” in property markets that costs the exchequer billions of dollars in lost taxable income.

Labourers work at the construction site of a residential building in Mumbai's central financial district April 6, 2015. REUTERS/Danish Siddiqui

The decision by Prime Minister Narendra Modi‘s government to amend the bill, which was submitted by the previous government in 2013 but not passed by the upper house, aims to boost investor confidence and stamp out illegal practices.

The new rules, applicable to residential and commercial developments, will make it mandatory for all projects and brokers to be registered with the real estate regulator who will oversee transactions and settle disputes.

“The bill seeks to ensure accountability and transparency, which will in turn enable the real estate sector to access capital and financial markets essential for its long-term growth,” the government said in a statement on Tuesday.

During recent years sluggish economic growth and delays in getting approvals stalled several real estate projects, leaving buyers waiting for their homes and developers holding high debt.

“This will be a game-changer for the sector,” Rajeev Talwar, executive director at DLF Ltd, India’s top real estate developer.

via Cabinet amends real estate bill to stamp out illegal practices | Reuters.

01/04/2015

China to unveil measures to fight water pollution | Reuters

China is to launch an action plan to protect the quality of its scarce water resources after years of rapid economic growth that have left much of its water supply too polluted for human consumption or for growing food.

The plan, expected to be published this month, will require firms in heavily polluting industries such as paper mills and dye and chemical plants to treat discharged water and it will set higher penalties for those that violate rules on discharging pollutants, according to official media reports.

One third of China’s major river basins and 60 percent of its underground water are contaminated, according to official data, posing a major threat to public health and food security.

The long-awaited action plan is expected to be approved by the cabinet this month to give it legal powers to hold polluters and local authorities responsible.

“The plan will ring an alarm bell with local authorities who did little to protect water and will help to remove the regional segregation that constrained the growth of the water treatment business,” said He Yuanping, executive vice president of Originwater, a private clean water technology company.

He estimated the treatment business could be worth more than 2 trillion yuan ($323 billion) in terms of the total investment involved, including assets owned by local governments.

via China to unveil measures to fight water pollution | Reuters.

31/03/2015

What could happen in China in 2015? | McKinsey & Company

What could happen in China in 2015?

What do you get when you add slower economic growth, greater volatility, and rising competition to more international flights and genuine Chinese innovation? McKinsey director Gordon Orr’s annual predictions.

December 2014 | byGordon Orr

It seemed harder to prepare my “look ahead” this year. On reflection, I believe this is because political and economic leaders in China have clear plans and supporting policies that they are sticking to. You can debate the pace at which actions are being taken, but not really the direction in which the country is traveling. This means a number of the themes I highlighted for this year will remain relevant in 2015:

What could happen in China in 2015?

Author Gordon Orr discusses his China predictions with McKinsey director Nick Leung and principal Yougang Chen.

Improving productivity and efficiency will remain the key to maintaining profitability for many companies, given lower economic growth (overall and at a sector level) and the impact of producer price deflation on multiple sectors.

The impact of technology as it eliminates jobs in services and manufacturing will become even greater (but still not in government).

As a result, the government will keep a sharper focus on net job creation and the quality of those new positions. Companies will hire even more information technologists to keep up in the race to exploit technology better than their competitors.

The push to lower pollution, and now carbon emissions, will lead to even greater investment in domestic solar and wind farms, boosting the global position of Chinese producers.

High-speed-rail construction will continue domestically and increasingly abroad, as Chinese companies become the builder of choice for high-speed rail globally.

Beyond these, there are several additional themes that will be important in 2015. I describe them below.

What else may happen in 2015? – see article:

via What could happen in China in 2015? | McKinsey & Company.

14/03/2015

China’s greener energy efforts help global carbon emissions stall after almost 40 years of gains | South China Morning Post

China burned less coal and generated more electricity from renewable sources last year, which helped halt the rise in global carbon dioxide emissions in the energy sector.

China burned less coal last year and generated more electricity from renewable sources to help halt the global rise in  carbon dioxide emissions. Photo: Reuters

Emissions of carbon dioxide were flat at 32.3 billion tonnes last year, as they were in 2013, the International Energy Agency (IEA)  reported yesterday.

It ended steady gains over the past four decades except in years with an economic downturn.

“This is both a welcome surprise and a significant one,” IEA chief economist Fatih Birol said in a statement.

“This gives me even more hope that humankind will be able to work together to combat climate change, the most important threat facing us today.”

The IEA, which is based in France, and advises governments of developed nations, said the halt in emissions growth was linked to greener patterns of energy consumption in China – the top carbon emitter ahead of the United States – and in developed nations.

“In China, [last year] saw greater generation of electricity from renewable sources, such as hydropower, solar and wind, and less burning of coal,” it said.

via China’s greener energy efforts help global carbon emissions stall after almost 40 years of gains | South China Morning Post.

05/03/2015

China 2015 defense budget to grow 10.1 pct, lowest in 5 years – Xinhua | English.news.cn

China on Thursday announced a 10.1-percent rise in its national defense budget in 2015, the lowest growth in five years as the country confronts mounting pressure in the face of an economic slowdown.

According to a budget report released shortly before the country’s top legislature starts its annual session, the government plans to raise defense budget to 886.9 billion yuan (about 144.2 billion U.S. dollars).

That would make China the second largest military spender in the world following the U.S., whose defense budget amounted to 600.4 billion U.S. dollars in 2013.

Nonetheless, the 10.1-percent rise represented the lowest expansion in China since 2010, when the defense budget was set to grow by 7.5 percent.

The figure has thereon been riding on a multi-year run of double-digit increases, expanding 12.2 percent last year.

Thursday’s budget report did not explain the rationale behind this year’s abated growth, but a government work report to be presented by Chinese Premier Li Keqiang may offer some clues.

According to the report, national defense development would be coordinated with the country’s economic growth.

The Chinese economy grew 7.4 percent in 2014, registering the weakest annual expansion in more than two decades. The government set this year’s growth target to approximately 7 percent, brewing new concerns that the world’s economic powerhouse is losing steam.

But the report played down such concerns, stressing that China is now in a “new normal” state, where a balance ought to be stricken between growth and structural optimization.

via China 2015 defense budget to grow 10.1 pct, lowest in 5 years – Xinhua | English.news.cn.

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