FormulaE-2

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)

Japan PM Abe Courts Saudi King In Historic Meeting

03/13/17 •lweb.es/f2707 •bit.ly/2oO3GK7

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.

China Burning Through Forex Reserves To Support Yuan

lweb.es/f2531 01.07.2017

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.

China Issues Five-Year Plan To Cut Emissions

lweb.es/f2528 01.06.2017

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.

China Is Looking For A Higher-Quality Foreign Investment

lweb.es/f2508 01.03.2017

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.

China: Difficult Economic Policy Choices For 2017

lweb.es/f2517 01.02.2017

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 Opens Up To More Foreign Direct Investment

lweb.es/f2516 12.31.2016

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.

Rising Costs Threaten China’s Reputation As “World’s Factory”

lweb.es/f2500 12.27.2016

iconAccording 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.

Anti-Dumping Measures Against Chinese Goods to rise in 2017

lweb.es/f2472 12.23.2016

iconIn 2016 there were more than 260 anti-dumping measures or investigations against Chinese goods. This year’s number represents a roughly 17.7% rise from 2015. The measures were aimed at a wide range of Chinese goods but the main target was Chinese steel products. “All these countries like to blame China for their own problems in the steel industry, but China didn’t create the problems for them, it’s sluggish global demand amid weak economic growth that caused the problem,” said a research fellow at the China Institutes of Contemporary International Relations.

China: GDP Up Nearly 7% In First Three Quarters Of 2016

lweb.es/f1825 11.11.2016

iconAccording to the National Bureau of Statistics of China’s preliminary estimates, the country’s gross domestic product in the first three quarters of this year was 52,997.1 billion yuan, a year-on-year increase of 6.7 percent. The value added of primary industry was 4,066.6 billion yuan, up by 3.5 percent year-on-year; the value-added of secondary industry was 20,941.5 billion yuan, up by 6.1 percent; and that of tertiary industry was 27,989.0 billion yuan, up by 7.6 percent. Third quarter GDP rose by 1.8 percent on a quarter-on-quarter basis.

U.S. Oil Inventories: A Mixed Picture

lweb.es/f1823 11.11.2016

iconCrude oil inventories are near record high levels and are rising on a year-on-year basis. Gasoline and ultra-low-sulfur diesel inventories are increasing to a lesser extent. Inventories of all three remain near seasonally-adjusted record highs. However, the pace of this increase – even though still growing – is slowing rapidly, and this is, on balance, welcome news for energy producers and those who have financial exposure to them. It’s a sign that energy supply and demand are moving more closely into alignment.

China Has Problem With Zombie Firms

lweb.es/f1391 9.08.2016

iconOne of the structural flaws driving China’s instability is the existance of a investment situation where profits of state-owned enterprises, known as SOEs, are largely privatised to SOE personnel and losses of SOEs are socialised on to the state budget. This is the cause of the large amount of excess capacity in China’s heavy industries today, and also of the serious non-performing loan problem in state-owned banks. The growing presence of “zombie” firms coincides with the downward trend in the growth of productivity. The social pain resulting from necessary economic adjustments will have to be addressed.