Hydraulic fracturing – or fracking – has been at the center of controversies about contaminating water sources and causing earthquakes. Now France’s biggest bank will no longer do business with companies whose main business stems from oil and gas obtained from shale, covering those companies that are involved in activities ranging from exploration to marketing and trading. This policy also includes no more financing for projects in the oil sands or Arctic. “We’re a long-standing partner to the energy sector and we’re determined to support the transition to a more sustainable world,” said Paribas’ CEO Jean-Laurent Bonnafe.
According to an Arab Monetary Fund analysis, most of the Arab oil-exporting countries have had to readjust owing to unfavorable global economic developments. As for economic growth expectations for 2017, the Arab economies are expected to see a reduced growth of 2.3 percent in 2017 and 2.8 percent in 2018, reflecting the decline in the growth rate of the Arab oil-exporting countries to 1.8 percent through the OPEC production adjustment. Growth in the Gulf Cooperation Council countries is expected to reach 1.7 percent in 2017 compared to 1.9 percent in 2016.
Lavrov-Tillerson Meeting With Putin: Frank And Extensive Talks
04/14/17 •lweb.es/f2767 •bit.ly/2q8bYK4
Key points from the Lavrov-Tillerson meeting with Putin in Moscow: When Moscow and Washington cooperate, the world benefits, Both nations are focused on an uncompromising war on terror, Both nations share a common interest in achieving a political settlement in the Syrian conflict, Moscow can see Washington’s readiness to continue contacts to implement the Minsk agreements, Washington and Moscow agree that North Korea has to be denuclearized, Russia expects the United States to take part in the Moscow conference on Afghanistan in April, Both nations are interested in close cooperation in the fight against crimes in cyberspace.
Global clean energy investment was $53.6 billion in the first quarter of 2017, down 17 per cent from the same period in 2016. Highlights were $1.4 billion of public market share issues by Tesla, and Enel’s estimated $650 million financing of its 754 MW solar photovoltaic complex in Mexico. This year’s first quarter “reflects once again the declines in average capital costs per megawatt for wind and solar. This trend means that year-by-year it’s possible to finance equivalent amounts of capacity in these technologies for fewer dollars,” according to Bloomberg.
National Interest Interview: Russian Foreign Minister Sergey Lavrov
03/24/17 •lweb.es/f2691 •bit.ly/2oQr6Ov
The interview covers various topics: Ukraine, Syria, U.S. presidential election, U.S.-Russia cooperation: “I don’t believe that we are having another Cold War … we have much clearer common threats, like terrorism, like chaos in the Middle East … so this absolutely makes it necessary to reassess where we are and what kind of cooperative structure we need … President Trump is emphasizing the need to concentrate on U.S. interests … in this he certainly holds the same position as we do in Moscow that we don’t want to meddle in other people’s matters.” (Sergey Lavrov)
Saudi Arabian King Salman bin Abdul-Aziz al-Saud and Japan PM Shinzo Abe met in Tokyo and agreed to launch a feasibility study on setting up special deregulated economic zones to attract Japanese firms to the Middle Eastern country. A joint statement entitled Saudi Japan Vision 2030 identified nine main areas of cooperation, including energy, competitive industry, investment and finance, health care and medicine, and high-quality social infrastructure. This was the first visit to Japan by a Saudi Arabian king in 46 years, and considered “historic.” Saudi Arabia is Japan’s largest oil supplier.
As China’s foreign exchange reserves threaten to tumble below the critical $3 trillion mark, there are fears that it will set off a vicious cycle of more outflows and currency depreciation. China has stepped into both its onshore and offshore yuan markets to shore up the yuan, but if forex reserves continue to be depleted at a fast pace and capital flight continues, some strategists believe China may have to sanction another big “one-off” devaluation that could set off competitive currency devaluations by other struggling emerging economies.
A five-year plan, 2016-2020, to save energy and cut emissions was issued by the Chinese State Council, setting a goal to cut energy consumption by 15 percent in 2020 compared with 2015. A carbon emissions trading market will be set up in 2017, and supportive policies will also be pursued, including a pricing mechanism for resources, monetary and tax incentives and financing support; an environmental protection tax will also be levied. Recyclable energy sources will be encouraged, as well as some substitution of coal by gas.
The Chinese Ministry of Commerce and the National Development and Reform Commission are revising the foreign investment industry catalogue. Areas that will be opened up to foreign companies in the services sector include road transportation, credit surveys and ratings; and in the manufacturing sector include rolling stocks, automotive electronics, motorcycles and corn processing. China expects that the foreign companies will pass on their expertise to domestic companies, thus not contradicting the “Made in China 2025” strategy that calls for core technologies to be mastered by domestic industry.
The Chinese economy stabilized during the middle of 2016, but there is disagreement about the country’s growth outlook. Three forces are likely to determine economic trends in 2017: property development, infrastructure spending and manufacturing investment, but they bring with them much uncertainty about the future of economic policy. China’s challenge is not how to support the creation of new industries but how to facilitate the smooth exit of old industries. And this begs the question: will the government have the courage to bankrupt those inefficient and unprofitable zombie State Owned Enterprises?
China has lost the top position as an investment destination to India, and has now opened up more sectors for foreign investors in order to catch up in the race between the two countries. It is offering a slice of tightly controlled segments like public transport and railway equipment to foreign players. But what prompted Beijing to bite the bullet despite resistance from state-owned enterprises is not just slipping numbers of foreign direct investments, but worries about US President-elect Trump using China’s partially closed market as a reason to launch negative trade actions.
According to the director of the Center for Economic Diplomacy, Fudan University, Shanghai, China’s reputation as the world’s factory is increasingly threatened by rising costs, the accelerated manufacturing resurgence in various developed countries and the growing competitiveness of emerging economies. This situation has prompted numerous Chinese manufacturers to move their factories offshore. Manufacturing has long been at the foundation of China’s rise into a global economic power and the country needs to consolidate this manufacturing foundation. Otherwise China will risk hollowing out its real economy before it grows strong enough.