Saturday, September 3, 2016

Central banks nearing limit to stimulate economies; Theresa May sees 'difficult times' for UK; China 'snub' for US president

1 Central banks nearing limit to stimulate economies (Gulf News) The world’s central banks are “pretty close” to the limits of their ability to stimulate economies, Angel Gurria, head of the Organisation for Economic Cooperation and Development (OECD), has said.

In the absence of “breakthrough, collective” policies, global growth is likely to remain weak, Gurria said ahead of a meeting of leaders of the world’s 20 biggest economies, the G20, in the eastern Chinese city of Hangzhou. “We have left our good central bankers to do all the heavy lifting,” said Gurria.

“It has to be like a relay. Continued accommodative monetary policy, and then you get to the second relay like in the four-by-100s and the baton passes. Now you need to get it to the finance ministers, to the economy ministers, to the trade ministers, to the technology ministers, the science ministers, the education ministers, the competition ministers. Now is the big time for structural change.”

Echoing remarks by China’s vice finance minister on Friday, Gurria emphasised that a combination of coordinated monetary, fiscal and structural adjustment policies are now necessary to revive growth worldwide, including in China.

Nonetheless, he was relatively upbeat on the outlook for China’s growth, despite a rising debt burden and mixed progress on tackling low efficiency and overcapacity in key state-owned sectors. Gurria said that China likely could continue growing at around 6.5 to 7 per cent during its current five-year plan period (to 2020) without major distortions in the structure of the economy.


2 Theresa May sees ‘difficult times’ for UK (BBC) Britain needs to be prepared for some "difficult times" ahead as it leaves the European Union, Prime Minister Theresa May has said. Mrs May warned Brexit would not be "plain sailing" for the UK.

She said formal EU talks will not begin until 2017, but vowed the process would not be "kicked into the long grass". Mrs May also ruled out a snap general election, as the UK needs "stability".

She insisted the country would "make a success" of leaving the EU, saying she was also "optimistic" about new opportunities for Britain outside the EU. The prime minister said she wanted "an independent Britain, forging our own way in the world".

Asked about immigration, she said the referendum result had shown voters did not want "free movement to continue in the way that it has done in the past". She said ministers were looking at "options" for new EU migration controls.


3 China ‘snub’ for US president (Tom Phillips in The Guardian) China’s leaders have been accused of delivering a calculated diplomatic snub to Barack Obama after the US president was denied a red-carpet welcome during his chaotic arrival in Hangzhou ahead of the start of the G20.

Chinese authorities have rolled out the red carpet for leaders including India’s prime pinister Narendra Modi, Russian president Vladimir Putin, South Korean president Park Geun-hye, Brazil’s president Michel Temer and British prime minister Theresa May, who touched down on Sunday morning.

But the leader of the world’s largest economy, who is on his final tour of Asia, was forced to disembark from Air Force One through a little-used exit in the plane’s belly after no rolling staircase was provided when he landed in the eastern Chinese city on Saturday afternoon.

When Obama did find his way onto the tarmac, there were heated altercations between US and Chinese officials, with one Chinese official caught on video shouting: “This is our country! This is our airport!”

Jorge Guajardo, Mexico’s former ambassador to China, said he was convinced Obama’s treatment was part of a calculated snub. “These things do not happen by mistake. Not with the Chinese,” Guajardo said.

Bill Bishop, a China expert whose Sinocism newsletter tracks the country’s political scene, agreed that Obama’s no-carpet welcome looked suspiciously like a deliberate slight intended “to make the Americans look diminished and weak”. He said, “It sure looks like a straight up snub,” Bishop said. “This clearly plays very much into the [idea]: ‘Look, we can make the American president go out of the ass of the plane.’”


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