Tagged: China’s Rise Implies US Decline

China car sales pass 12 million

BBC NEWS | 2009/12/07 | 09:05:26 GMT

Chinese annual car sales and production both exceeded 12 million units in the first 11 months of the year, state media has said. The China Association of Automobile Manufacturers expects car sales and output to top 13 million for the full year, the Xinhua News Agency reported. China has never produced more than 10 million cars in one year before. Despite the downturn and falling sales at most global carmakers, demand for cars in China is booming. In November alone, sales reached 1.35 million units, according to the preliminary figures.

The country’s largest carmaker, Shanghai Automotive Industry, sold 2.44 million cars to the end of November, a rise of more than 50% compared with the same period a year earlier, Xinhua said. State incentives, such as tax cuts on small cars, have boosted sales in China. Like many other governments around the world, China has also introduced subsidies to trade in older vehicles. Previously, only the US and Japan had produced 10 million cars in a single year. Domestic Chinese car sales overtook those in the US for the first time in December of last year.

NATO allies to add 7000 to surge

BBC NEWS | 2009/12/04 | 12:15:33 GMT

AFGHANISTAN SURGE

  • US calling for about 10,000 extra foreign troops
  • NATO expects 7,000 troops from 25 of 43 nations in Afghanistan
  • Not all have gone public with their intentions
  • Britain has pledged extra 500; Italy “about 1,000”; Poland 600; Portugal 150; Spain 200; Slovakia 250; Macedonia 80
  • Non-NATO member Georgia sending 900, South Korea 500
  • France still considering response; Germany may delay decision until January 2010

NATO’s top official says countries will send at least 7,000 extra troops to support the US surge in Afghanistan. Speaking at a NATO summit in Brussels, Anders Fogh Rasmussen said there would be “more [troops] to come.” “At least 25 countries will send more forces to the mission in 2010,” the NATO secretary general told reporters. US Secretary of State Hillary Clinton described the response from NATO allies as “positive,” and urged them to rally behind the US’s new Afghan strategy. Some major countries are holding back, however. France and Germany, for instance, have not yet committed themselves to sending extra troops.

‘Solidarity in action’

Earlier this week, US President Barack Obama announced he was sending an additional 30,000 troops to help battle the Taliban insurgency. The US is calling on allies among the 43 nations with troops in Afghanistan to send about 10,000 extra soldiers. Speaking at the Brussels talks,      Continue reading

Consumer Spending in US Rises More Than Forecast

Bloomberg | November 25, 2009 | 09:17 EST

Spending by U.S. consumers rebounded in October more than anticipated, an indication that mounting unemployment has yet to stifle American’s willingness to buy. The 0.7 percent increase in purchases was larger than the median estimate of economists surveyed by Bloomberg News and followed a 0.6 percent September drop, Commerce Department figures showed today in Washington. Incomes climbed 0.2 percent, also exceeding expectations. A jobless rate that is projected to exceed 10 percent through the first half of next year means households will probably contribute less to growth as the economy recovers. Nonetheless, retailers such as J.Crew Group Inc. are among companies seeing improving demand heading into the holiday shopping season.

“People have been too negative for too long on the consumer,” said John Herrmann, chief economist at Herrmann Forecasting in Summit, New Jersey, who accurately forecast the gain in spending. “We’re seeing very positive spending signals for November.” A separate report from the Labor Department today showed the number of Americans filing claims for unemployment benefits fell last week to the lowest level since September 2008. Claims declined to 466,000 in the week ended Nov. 21 from 501,000 a week earlier, the report showed.         Continue reading

China Should Consider Raising Rates, World Bank’s Kuijs Says

Bloomberg | November 24, 2009 | 04:23 EST

China should consider raising interest rates to help prevent excessive liquidity in the financial system from creating asset-price bubbles, World Bank economist Louis Kuijs said. The “pros of higher interest rates seem to outweigh the cons,” the lender’s senior Beijing-based economist said in an e-mailed note today. The comments were first posted on his blog on the World Bank’s Web site on Nov. 19. Unprecedented lending by Chinese banks and a benchmark one- year lending rate at a five-year low of 5.31 percent have helped to fuel the nation’s economic rebound this year. The loose fiscal and monetary policies could lead to an asset bubble similar to Japan’s in the 1980s, according to BNP Paribas.

“Some are reluctant to tighten monetary policy because of low inflation, the traditional trigger for monetary policy action,” Kuijs said. “However, the recent global financial crisis has shown the dangers of neglecting asset-price increases in monetary and financial policy making.” In countries where capital inflows are a big problem, interest-rate increases may be counter-productive because extra money from       Continue reading

Surprise fall in US home building

BBC NEWS | 2009/11/18 | 14:21:13 GMT

The construction of new homes and apartments in the US showed a surprise fall in October. New US housing starts tumbled 10.6% to an annual rate of 529,000 homes – the lowest level since April. The decline in construction was led by a fall in demand for both single-family and multi-family occupancies. Separately, a report showed prices edging up in October. The consumer price index rose 0.3%, pushed up by higher energy prices.

‘A weak number’

The housing figures are a blow to recent signs of recovery in the market. David Resler from Nomura Securities in New York said they were “really disappointing.” “I had convinced myself that we had turned the corner on housing,” he added. “I am no longer convinced. This is really a quite weak number.” Congress has voted to extend a tax credit of up to $8,000 for first-time buyers. It had been due to expire at the end of November. Some analysts said that the uncertainty over whether it would be renewed could have held back construction.     Continue reading

Asia Trip Helped Usher in a New Era of American Engagement -Obama

November 21, 2009 | 6:01 AM | abc news

President Obama hailed his recently concluded Asia trip a success, saying the trip helped to facilitate “a new era of American engagement.” In his weekly address, taped earlier this week while in Seoul, South Korea, the president said that a major focus of the trip was to support and encourage economic recovery in the United States. “As we emerge from the worst recession in generations, there is nothing more important than to do everything we can to get our economy moving again and put Americans back to work, and I will go anywhere to pursue that goal,” President Obama said. In facilitating the economic recovery, the president said that international trade is an important component. “We … need to place a greater emphasis on exports that we can build, produce and sell to other nations – exports that can help create new jobs at home and raise living standards throughout the world,” the president said. Furthermore, the president said that by increasing our exports to Asia by 5 percent, the U.S. could create hundreds of thousands of jobs. Looking forward, President Obama pointed to a forum on job creation with U.S. business leaders on Dec. 3 as a continuation of his commitment to focus on job creation. The president said that while progress has been made, there is more that remains to be done. “I will not let up until businesses start hiring again, unemployed Americans start working again and we rebuild this economy stronger and more prosperous than it was before,” President Obama said.       Continue reading

World economies rebound but China set for best growth

BBC NEWS | 2009/11/19 | 11:55:56 GMT

The Organisation for Economic Co-operation and Development (OECD) says growth and recovery are expected in 2010 in just about all world regions. For its 30 member countries, rich nations including the US and UK, it has more than doubled its growth forecast to 1.9% for next year, from 0.7%. But the OECD warns developed nations not to expect a smooth ride. It said growth was being “held back by still substantial headwinds” and would be “modest” for some time. The very measures that are helping richer nations to recover pose risks to that recovery, the OECD says. The UK, for example, needed to come up with a concrete plan to ease concerns about the stability of the public finances, it added. The OECD said the effectiveness of the UK’s asset purchase programme – the so-called quantitative easing programme – was uncertain.

Jobless recovery?

The main danger for rich countries is unemployment, according to the OECD’s economic outlook. In the US, people are expected to continue to lose their jobs at a faster rate than new ones are created until sometime in the first part of next year. For the European Union, the picture is even worse. Unemployment may continue to rise in that region until 2011. A very different economic outlook is forecast for key emerging nations. China can expect to grow by 10%, India by more than 7%. The other two stand-out nations are Brazil and Russia. The OECD expects Brazil’s economy to rebound and expand by almost 5% after stagnating this year. Russia is also predicted to see that kind of economic improvement next year. But its turnaround will be even more dramatic. This year, it has experienced one of the worst economic slumps in the world – contracting by almost 9%. But those four so-called Bric countries are not part of the 30-strong OECD club. The one member nation whose economy should perform vigorously in 2010 is also an eastern one: South Korea should rebound to grow by 4.5% in both 2010 and 2011, after ending this year with almost no growth.