Oct. 19 (Bloomberg) -- Bank of Israel Governor Stanley Fischer said the global economy’s “center of gravity” is moving to Asia and that the region will dominate in the future.
The U.S. will have less influence with global institutions as nations such as China and India carry more weight, Fischer said. The International Monetary Fund’s first deputy managing director from China is “on his way” in the next few years, he said, adding that it is already known who will occupy the post.
“Now that the center of gravity is moving, these countries want to take a larger role in running the global economy,” Fischer said today at a Tel Aviv University symposium on China, Israel and the world economy. “The crisis has accelerated this process.”
The IMF this month forecast that Asia’s emerging-market economies will expand 6.2 percent in 2009 while the U.S., Europe and Japan all contract. Fischer, 66, who previously served as deputy managing director of the IMF and vice chairman of Citigroup Inc., said China’s economy is 16 times larger today than it was 29 years ago.
The Chinese economy, the third largest in the world after the U.S. and Japan when measured in purchasing power, is likely to overtake the U.S., he said.
“China will catch up reasonably quickly,” Fischer said. Still, the country’s fast growth pace can’t continue “forever” and expansion is likely to slow in the future, he said.
China’s plan to move rapidly toward clean energy could provide an opportunity for Israel in joint development of these types of technologies, Fischer said.
Israel has managed to overcome the worst of the global crisis “relatively well” and growth has been restored, he said. Still, unemployment is “too high” at 8 percent, he said.
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Monday, October 19, 2009
China Economic Growth Raises Industrial Overcapacity Concerns
Oct. 19 (Bloomberg) -- Faster economic growth in China, fueled by the government’s $586 billion stimulus package and record bank lending, is raising concerns about industrial overcapacity, a government official said today.
“While the government is ensuring economic growth, we are also concerned about overcapacity in some industries,” Xiong Bilin, deputy director of the National Development and Reform Commission’s industry department, said at a briefing in Beijing.
China is curbing financing of projects in industries including steel, cement and aluminum to prevent the government’s stimulus package and $1.3 trillion of new bank loans from spurring excess investment. Economic growth may accelerate to 8.9 percent in the third-quarter from 7.9 percent in the second and 6.1 percent in the first three months of this year, according to a Bloomberg News survey of economists.
Achieving growth of more than 7 percent in the first nine months of this year “shouldn’t be a problem” for the world’s third-biggest economy, Xiong said today. China is scheduled to release third-quarter gross domestic product figures Oct. 22.
The economy may grow 8.5 percent this year, with growth in the second half accelerating to more than 9 percent, Caijing Magazine reported on its Web site late yesterday, citing Yu Bin, head of the macro-economic research department at the State Council Development and Research Center.
China’s State Council, or cabinet, approved plans last month to curb overcapacity in industries including steel, glass and aluminum. The government halted construction of new aluminum smelters, cement plants and the expansion of coking coal projects and shipyards.
Projects that fail to meet government guidelines may not raise capital through sales of bonds or stock, the State Council said on Sept. 29.
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China Government Researcher Sees 2009 GDP at 8.5% (Bloomberg)
China orders crackdown on industrial overcapacity (seattletimes.nwsource.com)
“While the government is ensuring economic growth, we are also concerned about overcapacity in some industries,” Xiong Bilin, deputy director of the National Development and Reform Commission’s industry department, said at a briefing in Beijing.
China is curbing financing of projects in industries including steel, cement and aluminum to prevent the government’s stimulus package and $1.3 trillion of new bank loans from spurring excess investment. Economic growth may accelerate to 8.9 percent in the third-quarter from 7.9 percent in the second and 6.1 percent in the first three months of this year, according to a Bloomberg News survey of economists.
Achieving growth of more than 7 percent in the first nine months of this year “shouldn’t be a problem” for the world’s third-biggest economy, Xiong said today. China is scheduled to release third-quarter gross domestic product figures Oct. 22.
The economy may grow 8.5 percent this year, with growth in the second half accelerating to more than 9 percent, Caijing Magazine reported on its Web site late yesterday, citing Yu Bin, head of the macro-economic research department at the State Council Development and Research Center.
China’s State Council, or cabinet, approved plans last month to curb overcapacity in industries including steel, glass and aluminum. The government halted construction of new aluminum smelters, cement plants and the expansion of coking coal projects and shipyards.
Projects that fail to meet government guidelines may not raise capital through sales of bonds or stock, the State Council said on Sept. 29.
Related articles
China Government Researcher Sees 2009 GDP at 8.5% (Bloomberg)
China orders crackdown on industrial overcapacity (seattletimes.nwsource.com)
Sunday, October 18, 2009
China Government Researcher Sees 2009 GDP at 8.5%, Caijing Says
Oct. 19 (Bloomberg) -- China’s economy may grow 8.5 percent this year as the government’s stimulus package boosts investment and consumer spending, Caijing Magazine reported, citing a top researcher with the State Council, or cabinet.
Growth in the second half of this year may accelerate to more than 9 percent, Yu Bin, head of the macro-economic research department at the State Council Development and Research Center, was quoted as saying. China’s economy expanded 9 percent in 2008 and grew 7.9 percent between April and June from a year earlier.
Exports, which are likely to drop by 17 percent this year, will resume growth in 2010, rising 8 percent to 10 percent, Yu said.
The outlook for the property sector is uncertain, Yu said, adding that surging house prices may curb demand and sales.
Related article
China Growth to Slow in Mid-2010 as Stimulus Fades
Growth in the second half of this year may accelerate to more than 9 percent, Yu Bin, head of the macro-economic research department at the State Council Development and Research Center, was quoted as saying. China’s economy expanded 9 percent in 2008 and grew 7.9 percent between April and June from a year earlier.
Exports, which are likely to drop by 17 percent this year, will resume growth in 2010, rising 8 percent to 10 percent, Yu said.
The outlook for the property sector is uncertain, Yu said, adding that surging house prices may curb demand and sales.
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China Growth to Slow in Mid-2010 as Stimulus Fades
Wednesday, October 14, 2009
Australia hopes for surplus 2 years early
CANBERRA, Oct 15 - Australia's government hopes to return to a budget surplus in 2014, two years earlier than forecast, thanks to stronger tax receipts and reduced expenses, a newspaper said on Thursday.
The Australian Financial Review, citing no sources, said government officials have begun identifying higher tax receipts and spending cuts that could reduce government debt by A$60 billion and balance the budget.
Treasurer Wayne Swan said in May it would take six years to return to surplus as the government borrowed heavily for stimulus spending to help steer around a global recession.
Swan predicted the deficit would balloon to a record A$57.6 billion in 2009-10 and net debt would climb to 13.8 percent of GDP in 2014 before dropping to 3.7 percent of GDP in 2020.
The government hoped reduced borrowing could see net debt peak at A$130 billion rather than the A$188 billion originally expected, trimming more than A$2 billion off the government's annual interest bill, the paper said.
Swan and Prime Minister Kevin Rudd will give a mid-year budget update next month and are expected to revise the government's deficit position as well as forecasts for unemployment to reach 8.5 percent next year.
Australia this month became the first G20 nation to raise official interest rates in the aftermath of the international downturn, lifting the cash rate by 25 basis points to 3.25 percent and kicking off what most economists expect to be a gradual tightening to around 4.0 percent in 2010.
The Australian Financial Review, citing no sources, said government officials have begun identifying higher tax receipts and spending cuts that could reduce government debt by A$60 billion and balance the budget.
Treasurer Wayne Swan said in May it would take six years to return to surplus as the government borrowed heavily for stimulus spending to help steer around a global recession.
Swan predicted the deficit would balloon to a record A$57.6 billion in 2009-10 and net debt would climb to 13.8 percent of GDP in 2014 before dropping to 3.7 percent of GDP in 2020.
The government hoped reduced borrowing could see net debt peak at A$130 billion rather than the A$188 billion originally expected, trimming more than A$2 billion off the government's annual interest bill, the paper said.
Swan and Prime Minister Kevin Rudd will give a mid-year budget update next month and are expected to revise the government's deficit position as well as forecasts for unemployment to reach 8.5 percent next year.
Australia this month became the first G20 nation to raise official interest rates in the aftermath of the international downturn, lifting the cash rate by 25 basis points to 3.25 percent and kicking off what most economists expect to be a gradual tightening to around 4.0 percent in 2010.
Tuesday, October 13, 2009
GLOBAL MARKETS - Asia stocks at 14-mth high before earnings
By Kevin Plumberg HONG KONG, Oct 13 (Reuters) - Asian stocks rose to a 14-month high and the U.S. dollar steadied on Tuesday, with some investors taking bets that third-quarter U.S. corporate earnings, expected to shrink for the ninth quarter, will be good enough to keep a rally going.
Major European stock markets were little changed in early trade ahead of company results this week from such bellwethers as Intel , Goldman Sachs and General Electric .
Investors are looking for stronger revenues to both confirm a global economic recovery and justify higher share price valuations after a seven-month-long equity rally. Profits last quarter were largely underpinned by cost cutting, not a rebound in consumer or business demand.
Oil prices rose for a fourth day after settling at a seven-week high on Monday. A steady 11 percent decline in the U.S. dollar against a basket of currencies since March has supported commodity prices.
Wall Street finished higher on Monday, but late session profit-taking made some investors unsure how to play results from Intel, the world's biggest chip maker, which is due to report after New York market close on Tuesday. The focus will be on the outlook for business spending given Intel's global reach.
"When Intel reports earnings, its outlook will likely be particularly in focus. If chipmakers were to say they expect demand to increase, that would mean the economy is on the mend," said Mitsuo Shimizu, deputy general manager at Cosmo Securities in Tokyo.
ASIAN ENERGY, FINANCIAL STOCKS GAIN After a long holiday weekend, Japan's Nikkei share average <.N225> rose 0.6 percent, with electronics and car maker stocks among the main supports to the index.
The MSCI index of Asia Pacific shares outside Japan rose 0.7 percent in choppy trading to the highest since Aug 12. The energy, financial and telecommunications sectors outperformed, while industrials, IT and consumer discretionary underperformed.
The all-country world equities index hit a 1-year high on Monday and looked set to test that high on Tuesday.
South Korea's benchmark KOSPI <.KS11> fell 0.7 percent, the worst performing major market in the region, on fears earnings may peak in the third quarter. A report that Norea Korea was preparing to fire more short-range missiles a day after it launched five off its east coast had a limited impact on financial markets.
This week 29 companies in the S&P 500 will post results. The entire S&P 500 is expected to show earnings shrank 25 percent in the third quarter compared with a year ago, though financials will reflect the highest growth rate of any industry, at 58 percent, Thomson Reuters research showed.
In currency markets, the U.S. dollar had a respite. The euro was largely unchanged at $1.4780 and the dollar was trading up 0.3 percent to 90.07 yen .
The ICE Futures U.S. dollar index <.DXY>, which gauges its value against a basket of six other major currencies, was up 0.1 percent but still close to a 14-month low hit last Thursday.
After a drubbing last week, U.S. Treasuries rose, with the benchmark 10-year yield slipping to 3.35 percent from 3.38 percent late on Friday in New York.
Minutes of the last Federal Reserve policy meeting due on Wednesday will be of particular interest given recent comments from Fed Chairman Ben Bernanke that were interpreted by dealers as being hawkish on interest rates.
U.S. crude for November delivery rose 11 cents to $73.38 a barrel , after rising for three straight sessions to settle at a seven-week high the previous day. Brent was at $71.56 .
A monthly report by producer group OPEC, due later in the day, as well as the direction of equity markets, could also offer clues on the outlook for global oil demand.
"Sentiment is moderately positive, and while fundamentals do not necessarily justify higher prices, the trend of a weaker dollar has been a big boost," said Sumisho Sano, General Manager of Research at SCM Securities in Tokyo.
Major European stock markets were little changed in early trade ahead of company results this week from such bellwethers as Intel , Goldman Sachs and General Electric .
Investors are looking for stronger revenues to both confirm a global economic recovery and justify higher share price valuations after a seven-month-long equity rally. Profits last quarter were largely underpinned by cost cutting, not a rebound in consumer or business demand.
Oil prices rose for a fourth day after settling at a seven-week high on Monday. A steady 11 percent decline in the U.S. dollar against a basket of currencies since March has supported commodity prices.
Wall Street finished higher on Monday, but late session profit-taking made some investors unsure how to play results from Intel, the world's biggest chip maker, which is due to report after New York market close on Tuesday. The focus will be on the outlook for business spending given Intel's global reach.
"When Intel reports earnings, its outlook will likely be particularly in focus. If chipmakers were to say they expect demand to increase, that would mean the economy is on the mend," said Mitsuo Shimizu, deputy general manager at Cosmo Securities in Tokyo.
ASIAN ENERGY, FINANCIAL STOCKS GAIN After a long holiday weekend, Japan's Nikkei share average <.N225> rose 0.6 percent, with electronics and car maker stocks among the main supports to the index.
The MSCI index of Asia Pacific shares outside Japan rose 0.7 percent in choppy trading to the highest since Aug 12. The energy, financial and telecommunications sectors outperformed, while industrials, IT and consumer discretionary underperformed.
The all-country world equities index hit a 1-year high on Monday and looked set to test that high on Tuesday.
South Korea's benchmark KOSPI <.KS11> fell 0.7 percent, the worst performing major market in the region, on fears earnings may peak in the third quarter. A report that Norea Korea was preparing to fire more short-range missiles a day after it launched five off its east coast had a limited impact on financial markets.
This week 29 companies in the S&P 500 will post results. The entire S&P 500 is expected to show earnings shrank 25 percent in the third quarter compared with a year ago, though financials will reflect the highest growth rate of any industry, at 58 percent, Thomson Reuters research showed.
In currency markets, the U.S. dollar had a respite. The euro was largely unchanged at $1.4780 and the dollar was trading up 0.3 percent to 90.07 yen .
The ICE Futures U.S. dollar index <.DXY>, which gauges its value against a basket of six other major currencies, was up 0.1 percent but still close to a 14-month low hit last Thursday.
After a drubbing last week, U.S. Treasuries rose, with the benchmark 10-year yield slipping to 3.35 percent from 3.38 percent late on Friday in New York.
Minutes of the last Federal Reserve policy meeting due on Wednesday will be of particular interest given recent comments from Fed Chairman Ben Bernanke that were interpreted by dealers as being hawkish on interest rates.
U.S. crude for November delivery rose 11 cents to $73.38 a barrel , after rising for three straight sessions to settle at a seven-week high the previous day. Brent was at $71.56 .
A monthly report by producer group OPEC, due later in the day, as well as the direction of equity markets, could also offer clues on the outlook for global oil demand.
"Sentiment is moderately positive, and while fundamentals do not necessarily justify higher prices, the trend of a weaker dollar has been a big boost," said Sumisho Sano, General Manager of Research at SCM Securities in Tokyo.
S.Korea president: world economic crisis not over
SEOUL, Oct 13 - South Korean President Lee Myung-bak said on Tuesday it was premature for the country to end its crisis management status, saying the world economy was not out of the woods yet.
"I believe our government must maintain its crisis management system for the time being because the world economy has not come out of the crisis yet," a statement from the presidential Blue House quoted Lee as saying during a scheduled cabinet meeting.
Later, Finance Minister Yoon Jeung-hyun told a parliamentary session government mortgage lending controls imposed last month were taking effect as real estate prices in the capital area were showing signs of stabilising.
"Real estate prices that had been growing fast in the capital areas are now stabilising after the introduction of DTI measures," he said, referring to the government's move last month to limit the amount of mortgage loans depending on the borrower's income.
The comments came after the central bank chief's remarks giving credit to the lending controls and calling for caution about economic optimism dampened expectations among investors for an interest rate increase this year.
The Bank of Korea has held the benchmark 7-day repurchase agreement rate steady at a record-low 2.0 percent for the past eight consecutive months after reductions totalling 3.25 percentage points over four months since last October.
Its governor, Lee Seong-tae, expressed in August and September his concern about rising housing prices, convincing investors to price in heightened risk of an early increase in interest rates.
Related articles
The Coming Korean Bubble (online.wsj.com)
"I believe our government must maintain its crisis management system for the time being because the world economy has not come out of the crisis yet," a statement from the presidential Blue House quoted Lee as saying during a scheduled cabinet meeting.
Later, Finance Minister Yoon Jeung-hyun told a parliamentary session government mortgage lending controls imposed last month were taking effect as real estate prices in the capital area were showing signs of stabilising.
"Real estate prices that had been growing fast in the capital areas are now stabilising after the introduction of DTI measures," he said, referring to the government's move last month to limit the amount of mortgage loans depending on the borrower's income.
The comments came after the central bank chief's remarks giving credit to the lending controls and calling for caution about economic optimism dampened expectations among investors for an interest rate increase this year.
The Bank of Korea has held the benchmark 7-day repurchase agreement rate steady at a record-low 2.0 percent for the past eight consecutive months after reductions totalling 3.25 percentage points over four months since last October.
Its governor, Lee Seong-tae, expressed in August and September his concern about rising housing prices, convincing investors to price in heightened risk of an early increase in interest rates.
Related articles
The Coming Korean Bubble (online.wsj.com)
Thursday, October 1, 2009
IMF: world economy recovering faster than expected
ISTANBUL, Turkey (AP) -- The International Monetary Fund said Thursday that the global economy is recovering faster than expected -- but warned governments against premature withdrawal of stimulus efforts.
The positive report card was likely to feed a cautious but widespread relief that -- despite continuing unemployment woes and halting efforts to improve regulation of financial markets -- the downturn is easing and may prove less devastating than initially feared.
According to the twice-yearly World Economic Outlook, the world is poised to grow by 3.1 percent in 2010 with much of the recovery driven by emerging economies such as China and India. That is up from the 2.5 percent in the IMF's previous set of estimates. And for 2009, the IMF now finds a 1.1 percent decline of global GDP instead of the 1.4 percent contraction it predicted in July.
But it warned against premature withdrawal of stimulus efforts and said uncertain growth in the developed world could soon put governments in a vise -- between keeping their stimulus spending going, or cutting it back to avoid ruining their finances with debt and deficits.
Related articles
The positive report card was likely to feed a cautious but widespread relief that -- despite continuing unemployment woes and halting efforts to improve regulation of financial markets -- the downturn is easing and may prove less devastating than initially feared.
According to the twice-yearly World Economic Outlook, the world is poised to grow by 3.1 percent in 2010 with much of the recovery driven by emerging economies such as China and India. That is up from the 2.5 percent in the IMF's previous set of estimates. And for 2009, the IMF now finds a 1.1 percent decline of global GDP instead of the 1.4 percent contraction it predicted in July.
But it warned against premature withdrawal of stimulus efforts and said uncertain growth in the developed world could soon put governments in a vise -- between keeping their stimulus spending going, or cutting it back to avoid ruining their finances with debt and deficits.
Related articles
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