Tuesday, March 1, 2016
Moody's cuts China outlook to 'negative'; Global factories hit hard; Dead sold as 'brides' in China
1 Moody’s cuts China outlook to negative (BBC) US ratings agency Moody's has cut its outlook for China from "stable" to "negative". While reaffirming its current debt rating, the agency warned that reforms were needed to avoid a downgrade. Moody's said the change in outlook was based on expectations that Beijing's fiscal strength would continue to decline.
The negative outlook comes on the heels of fresh data suggesting China's economy is continuing to lose steam. "Without credible and efficient reforms, China's GDP growth would slow more markedly as a high debt burden dampens business investment and demographics turn increasingly unfavourable," Moody's said.
But the ratings agency did confirm China's current Aa3 rating, saying that there was still time to address the current economic imbalances and implement reforms. At the G20 meeting in Shanghai, the country's finance minister Lou Jiwei insisted Beijing could tackle the pressures it is currently facing.
China's economy, the second-biggest in the world, is growing at the slowest rate in 25 years as it attempts to move from an export-led nation to one led by consumption and services. The slowdown in China's economy has created considerable uncertainty in financial markets and has led to sharp falls in commodity prices.
2 Global factories hit hard (Khaleej Times) Manufacturing activity across much of Asia shrank in February while factory growth waned throughout Europe, dealing a further blow to policymakers who are struggling to stimulate their economies and spur inflation.
Chinese producers suffered a seventh straight month of decline in February, a Purchasing Managers' Index (PMI) survey showed just a day after the People's Bank of China resumed a policy easing cycle in a fresh effort to drive growth.
Sister surveys showed factories in the eurozone raised production at the weakest pace for a year as deep discounting failed to put a floor under slowing orders growth. Their British counterparts had their worst month in nearly three years. A survey of manufacturing output from the US is likely to show a fifth straight month of contraction there. None of the 88 economists polled by Reuters expected growth.
Tuesday's downbeat data may sharpen the focus of officials from the world's leading economies who declared at a weekend G20 meeting they needed to look beyond ultra-low rates and printing money to reanimate growth.
The survey showed factories cut prices at the steepest rate since mid-2013. The ECB wants inflation near two per cent but prices across the bloc fell 0.2 per cent last month, short of already depressed expectations and virtually ensuring another round of policy easing.
Australia's central bank governor, Glenn Stevens, observed that conditions have become more difficult for a number of emerging market economies. German manufacturing plunged to a 15-month low. Japan's factories saw their weakest growth in eight months, while Indonesia and Malaysia contracted for the 17th and 11th month respectively, according to Markit.
Taiwan went into reverse gear for the first time in three months as orders wilted. India was perhaps the only standout, and for merely maintaining modest growth driven by cutting prices to attract demand.
3 Dead sold as ‘brides’ in China (The Sunday Telegraph/Johannesburg Times) Grave robbers in rural China are stealing women's corpses to feed new demand for "ghost weddings" - an ancient ritual whereby elderly bachelors are given a "bride" to be buried with when they die.
Under a rural tradition that began nearly three millennia ago, families in rural areas consider it bad luck for a single man to pass into the after-life without a female companion at his side. While the ghoulish practice has long been outlawed, it has now revived as newly wealthy country dwellers pay up to R225000 per "bride".
"Who knows where they took my mother?" said Li Fucai, 53, standing over a tomb in the village of Dongbao where his father now rests alone. "She is ill-gotten gains for thieves." Ancestor worship is deeply rooted in China, and many people will burn fake money and other tributes to the dead at this year's annual Tomb Sweeping Festival in April.
For those who have been the victims of grave robbers, the yearly festival visit to the family tombs can be a difficult one. "My grandmother must now be wandering other villages, experiencing a painful after-life," said Jiang Chaohui, 43, who had the remains of his great aunt and great-grandmother stolen.