1 China leaders flag more stimulus (Straits Times) China's
leaders signaled they will take further steps to support growth, including
widening the fiscal deficit and stimulating the housing market, to put a floor
under the economy's slowdown.
While the leadership also endorsed structural
reforms and reining in China's increasing reliance on credit, the macroeconomic
policy statements indicated concern about letting the economy's expansion slow
too much.
The government's annual growth target is typically
set at the gathering, though not announced. President Xi Jinping has previously
suggested the nation must meet a minimum annual average growth pace of 6.5
percent through 2020. The growth target this year was for a rate of about 7 per
cent. Even meeting that, China would see its weakest expansion since 1990.
Officials also pledged assistance for rural
residents seeking to buy homes in urban areas and encouraged cheaper
residential prices, which would help shrink a glut of unsold properties. Monetary
policy flexibility has been a theme in recent months as China's central bank
moves toward creating what it calls an interest-rate corridor to guide
borrowing costs, away from the old model of setting lending and deposit rates
directly.
The People's Bank of China recently surveyed banks
on the possibility and potential impact of removing its benchmark deposit and
lending rates, people familiar with the matter said. The latest round of
economic data showed signs the economy is stabilizing after policy makers
unleashed several rounds of monetary and fiscal stimulus. Industrial output
climbed 6.2 per cent in November from a year earlier, while retail sales gained
11.2 per cent for the best reading of 2015.
2 Oil falls to 11-year low (Sean Farrell in The
Guardian) Oil has fallen to an 11-year low as traders took fright at the
prospect of a glut caused by fresh supplies that will outstrip global demand. Brent crude prices dropped almost 2% to as low as
$36.17 a barrel, the lowest since July 2004 and weaker than during the worst of
the financial crisis. The price fell to $36.20 on Christmas Eve 2008 as the
global economy headed for recession following the collapse of Lehman Brothers.
The price of the global benchmark nudged back up to
$36.42 but prices were still below those of the previous trading day. Global
production is hovering around a record high and the market faces fresh supplies
from Iran as western sanctions are lifted and Iran seeks to win back customers
from Saudi Arabia and Russia. Extra supplies are also looming from the US,
where stockpiles are growing as extra drilling rigs are put into operation.
Oil prices have fallen by more than two thirds since
summer 2014 as demand has slowed with the global economy and higher production
in the US and elsewhere has increased supplies. Prices revived partly in May
but have almost halved since. US West Texas Intermediate (WTI) futures, which
show the value of the US benchmark, fell 36 cents to $34.37 a barrel, close to
last week’s 2015 lows.
Moody’s, the credit rating agency, slashed its 2016
Brent crude price forecast by $10 a barrel to $43 last week, highlighting
excess supply and the re-entry of Iran to the global market. Some analysts are
gloomier, predicting prices falling to near $20 a barrel.
Opec said this month it had no plans to rein in
production. The Saudi-dominated bloc has pumped out hundreds of thousands of
unwanted crude each day in an effort to hold on to its share of the market and
force US shale producers out of business.
Russian production has hit a post-Soviet record and
the number of rigs deployed in the US rose for the first time in five weeks
last week by 17 to 541, according to industry figures supplied by the driller
Baker Hughes. Last week’s increase in US interest rates has also put pressure
on oil prices by strengthening the dollar and reducing the dollar price of
commodities.
3 Record loss, job cuts at Toshiba (Gulf News) Toshiba
Corp. forecast a record 550 billion yen ($4.5 billion) loss and will cut more
jobs and restructure businesses that include chips, televisions, personal
computers and home appliances following a long-running accounting scandal.
The projected net loss for this fiscal year includes
260 billion yen in taxes because of a reversal of deferred income-tax assets,
it said in a statement. The forecast doesn’t include possible impairment of
goodwill and fixed assets at the company’s nuclear power systems business
because Toshiba is still checking that, it said.
Toshiba is trying to recover from an accounting
scandal that padded profits for almost seven years by halting development and
sales of TVs outside Japan, cutting costs at its PC and home appliances
businesses and considering alliances with third parties. Job cuts at these
segments amount to about 30 per cent of the lifestyle division’s workforce.
The company will end consignment of design and
manufacturing to outside vendors for its PC business, while concentrating on
business-to-business sales and focusing the consumer portion of the segment to
the Japan and US markets. Product platforms will be reduced to less than
one-third of the current number, the company said.
Toshiba’s Indonesia TV plant will be sold to China’s
Skyworth for an estimated 3 billion yen, the Tokyo-based company said. Plans
also include accounting training, corporate governance reviews, management
seminars and an evaluation system for the president and chief executive officer.
In addition to workforce cuts in the lifestyle
business, the company will reduce its corporate division by 1,000 people and
chip operations by 2,800 workers. Toshiba had about 198,700 employees as of
March 31, the lowest since at least 2009.
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