Year: 2022

BEIJING (TIP): A property downturn, slowing economy and war in Ukraine loom large over this week’s annual convening of China’s legislature, with policymakers expected to focus on shoring up faltering growth. The rubber-stamp parliament starting March 4 in Beijing gathers some 3,000 members of the National People’s Congress (NPC) for highly choreographed meetings over bills, budgets and personnel changes. The ruling Communist Party uses the opportunity to tout its achievements while also setting the country’s economic blueprint and GDP target for the year ahead. Much of the NPC’s agenda is unknown until during — or even after — the multi-day meeting, with many sessions taking place behind closed doors. But this year, concerns are bound to centre on the country’s sluggish economic growth, partly down to a crunch in the crucial property sector — which makes up as much as a quarter of national output. Stringent “zero-Covid” measures including harsh lockdowns and closed borders have also been a major blow to manufacturing hubs, tourist centres and port cities. Meanwhile, the Russian invasion of Ukraine has raised the prospect of spiking food and oil prices, with fears over supplies of crucial commodities from the region being affected. Commerce Minister Wang Wentao admitted to journalists this week that China’s economy faces “huge” pressure this year.

GDP and stability

Beijing traditionally announces its new economic growth target at Premier Li Keqiang’s annual “state of the nation” speech at the NPC, followed by his rare -but heavily stage-managed – press conference. China’s GDP growth slowed sharply in the final months of 2021 despite an earlier pandemic bounceback, as it grappled with tepid domestic demand and a property downturn. The country’s communist leaders have long based their legitimacy on the argument that their model of government represents economic growth and continuity for China’s massive population. But as much of the rest of the world now reopens, China is increasingly out of step, as continued Covid-19 restrictions weigh on consumer confidence. Maintaining stability will be crucial as the Communist Party gears up for a pivotal meeting this fall the -20th party congress -that is expected to easily secure President Xi Jinping a third term. In 2020, there was no GDP target set at all, and last year Li announced a modest goal of “above six percent”. Amid the unpredictability, analysts expect Beijing to announce a similarly open and attainable target this year. “We expect the growth target to be set at ‘above five percent’,” UOB economist Ho Woei Chen said in a recent report, adding that pace would match the past two years’ average of 5.1 percent. Iris Pang, ING’s chief economist for Greater China, expected the range could be higher after the country easily exceeded last year’s target. And infrastructure would probably form a key part of the government’s support for the economy, predicted ANZ Research senior China strategist Zhaopeng Xing. He expected “double-digit growth in infrastructure investment” in the first quarter, on top of tax cuts and the central bank’s earlier interest rate cuts. (AFP)

Moscow (TIP): Companies and investors across the world faced Russian dilemmas on March 4 as they weighed up an offer from Moscow to fast-track their exits from the country and allow them to hand over holdings to local managers until they return. The options offered by First Deputy Prime Minister Andrei Belousov came one week since Russia’s invasion of Ukraine and a day after French bank SocieteGenerale warned that it could be stripped of its Russian operations, which sent a chill through companies seeking to stay put in the country. Belousov outlined three alternatives for foreign firms. “The company continues to work fully in Russia,” he said in a statement. “Foreign shareholders transfer their share to be managed by Russian partners and can return to the market later,” he added, and: “The company permanently terminates operations in Russia, closes production and dismisses employees.” No route comes without risks. Those staying on could face a backlash in Western markets where the public have rallied to Ukraine’s cause, those transferring shares could be handing over the keys with few guarantees, while those quitting may face a big loss at best, or might have to sell for a nominal sum. Russia’s invasion has prompted the United States and Europe to impose sweeping sanctions, affecting everything from global payments systems to a range of hi-tech products, which make doing business in Russia increasingly complex and precarious. For ordinary Russians, it means deep economic pain. Some multinationals such as energy majors BP and Shell have already said they are quitting, while others have held off signing off from Russia for now. TotalEnergies has said it would stay but would not invest more. IKEA announced plans to close stores on Thursday but said it would pay its 15,000 Russian staff for at least three months.Italian tyre maker Pirelli said on Friday it was constantly monitoring developments through a specially constituted “crisis committee”, adding it did not expect to halt either of its two Russian plants. Its rival, Finland’s NokianTyres, said last week it was shifting production of some product lines out of Russia. But there are no easy fixes even for those looking for the exit, when there are limited trading counterparties. (Reuters)

Kyiv (TIP): Russian troops are shelling Europe’s largest nuclear power station in Ukraine.  “We demand that they stop the heavy weapons fire,” AndriyTuz, spokesperson for the plant in Enerhodar, said in a video posted on Telegram. “There is a real threat of nuclear danger in the biggest atomic energy station in Europe.”    The plant accounts for about one quarter of Ukraine’s power generation. Tuz told Ukrainian television that shells were falling directly on the Zaporizhzhia plant and had set fire to one of the facility’s six reactors. That reactor is under renovation and not operating, but there is nuclear fuel inside, he said. Firefighters cannot get near the fire because they are being shot at, Tuz said. A live-streamed security camera linked from the homepage of the nuclear power plant showed what appeared to be armouredvehicles rolling into the facility’s parking lot and shining spotlights on the building where the camera was mounted. There are then what appear to be bright muzzle flashes from vehicles and then nearly simultaneous explosions in the surrounding buildings. Smoke then rises and drifts across the frame. (AP)

NEW YORK (TIP): Nearly 4,000 luxury cars like Porsches, Lamborghinis, Bentleys and Volkswagen — along with several high-end electric vehicles — have sunk aboard a cargo ship in the Atlantic that caught fire last month.Felicity Ace ship was carrying both electric and non-electric vehicles, and a fire broke out on the ship as it was travelling from Germany to the US, reports Insider.While it’s unclear exactly what started the fire, captain Joao Mendes Cabecas of the port of Hortas said lithium-ion batteries in EVs aboard the ship caught fire.

A salvage team was able to board the ship over the last weekend but to no avail. The ship management company, MOL Ship Management Singapore, said the ship sank about 253 miles off the coast of the Azores, an archipelago in the mid-Atlantic that’s an autonomous region of Portugal. All 22 crew members were evacuated from the ship and were safe. “The 22 crew members did not need medical assistance on arrival, having been taken to a local hotel. The owner of the ship ‘Felicity Ace’ is in contact with the logistic agent in order to draw up a plan for the towing of the ship,” the navy had said. The Felicity Ace ship was heading from Germany to a port in Rhode Island, the US, when it issued distress signals this week. According to Importinfo.com, the electric vehicles may have been Audi E-tronSportbacks.

(Source: IANS)